Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — The Toronto-Dominion Bank — Q2 2024 Earnings Presentation

54 slides from Toronto-dominion Bank's earnings presentation, May 23, 2024

  1. Slide 1: Quarterly Results Presentation

    Quarterly Results Presentation TD Bank Group Q2 2024 May 23, 2024

  2. Slide 2: Caution Regarding Forward-Looking Statements

    Caution Regarding Forward-Looking Statements From time to time, the Bank (as defined in this document) makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the United States (U.S.) Securities and Exchange Commission (SEC), and

  3. Slide 3: Our Strategy

    Our Strategy Proven Business Model Forward-Focused Purpose-Driven Leading Customer Reimagining Financial Relentless Customer Franchises Services Focus Strong Balance Sheet Delivering OneTD Diverse Talent and with Conservative Risk Inclusive Culture Appetite Consistent and Investing for Growth Creati

  4. Slide 4: Proven Business Model

    Proven Business Model Diversification and scale, underpinned by a strong risk culture Net Income EPS2 PTPP1,3 Growth (YoY) Total Assets Reported: $1.35 Reported: $2.6B Reported: (4.0%) $2.0T Adjusted1: $2.04 Adjusted1: $3.8B Adjusted1: 13.0% Efficiency Ratio2 ROE2 ROTCE2 CET 14 Reported: 60.8% Repor

  5. Slide 5: Proven Business Model: Customer Activity

    Proven Business Model Customer Activity Canadian Personal and Commercial U.S. Retail Average Volumes Global Wealth Assets2 Banking Average Volumes ($B) (US$B)1 ($B) 600 7% 300 2 Year CAGR 1,200 +5% 3% -3% 500 121 250 9% 1,000 112 101 112 105 103 652 400 170 415 157 444 156 200 800 582 601 395 98 300

  6. Slide 6: Forward Focused

    Forward Focused Shaping the future of banking TD and Google Cloud announced a Agreement with HDFC Bank, India's leading multi-year strategic relationship private sector bank, to refer students to TD's International Student GIC Program As part of Blue Jays sponsorship, eligible TD credit cardholders

  7. Slide 7: Forward Focused: Digital Metrics

    Forward Focused: Digital Metrics Innovating for our Customers Canadian P&C1 U.S. Retail1 Digital Adoption (% of total customers)2  New navigation bar and simplified +120 bps +420 bps experiences on our redesigned Canadian Mobile App 63.6 64.8 57.0 52.7  Launched U.S. Small Business Dashboard, prov

  8. Slide 8: Purpose Driven: ESG Highlights

    Purpose Driven: ESG Highlights Environmental Social Governance  Confirmed that TD's Climate Action Plan is the  Disclosed five new targets for our social  Continued to integrate sustainability Bank's transition plan, which describes the framework, TD Pathways to Economic considerations into our b

  9. Slide 9: Purpose Driven

    Purpose Driven Centered on our vision, purpose and shared commitments Through TD Ready Challenge, awarded ten $1M grants to organizations in Canada and U.S. focused on TD Bank, America's Most Convenient Bank® named finding innovative solutions to address systemic Best Employer for Diversity by Forbe

  10. Slide 10: Q2 2024 Highlights

    Q2 2024 Highlights Strong quarter EPS of $1.35, down 20% YoY  Adjusted1 EPS of $2.04, up 7% YoY P&L ($MM) Reported Q2/24 QoQ YoY Revenue up 11% YoY (Adj1 up 10% YoY) Revenue 13,819 1% 11%  Higher trading-related revenue, underwriting fees PCL 1,071 +$70 +$472 and lending fees in Wholesale Banking,

  11. Slide 11: Restructuring Program

    Restructuring Program This quarter, the Bank continued to undertake certain measures to reduce its cost base and achieve greater efficiency – and identified additional opportunities to drive productivity  What is the size of the restructuring program? – $363MM pre-tax / $266MM after-tax was incurre

  12. Slide 12: Canadian Personal & Commercial Banking

    Canadian Personal & Commercial Banking Strong quarter with volume growth and positive operating leverage P&L ($MM) Reported Q2/24 QoQ YoY Net income up 7% YoY Revenue 4,839 (1%) 10% PCL 467 +$44 +$220 Revenue up 10% YoY Impaired 397 +$33 +$163  Volume growth and higher margins Performing 70 +$11 +$

  13. Slide 13: U.S. Retail

    U.S. Retail Operating momentum with earnings and loan growth QoQ P&L (US$MM) (except where noted) Net income down 58% YoY (Adj1 down 17% YoY) Reported Q2/24 QoQ YoY Revenue 2,540 (2%) (3%) Revenue down 3% YoY PCL 280 -$5 +$140  Lower deposit margins and volumes, partially Impaired 229 -$50 +$92 off

  14. Slide 14: Wealth Management & Insurance

    Wealth Management & Insurance Strong business momentum P&L ($MM) Net income up 19% YoY Reported Q2/24 QoQ YoY Revenue 3,114 (1%) 11% Revenue up 11% YoY Insurance Service Expenses  Higher insurance premiums and fee income in 1,248 (9%) 12% (ISE) wealth Revenue, net of ISE 1,866 5% 11% Insurance serv

  15. Slide 15: Wholesale Banking

    Wholesale Banking Record revenue reflecting broad based growth across the business P&L ($MM) Reported Q2/24 QoQ YoY Net income up 141% YoY (Adj1 up 107% YoY) Revenue 1,940 9% 37% Global Markets 1,081 (1%) 62% Revenue up 37% YoY Investment Banking 869 23% 19%  Reflects the inclusion of TD Cowen PCL

  16. Slide 16: Corporate Segment

    Corporate P&L ($MM) Segment Reported Q2/24 Q1/24 Q2/23 Reported net loss of $737MM Net Income (Loss) (737) (628) (399)  Adjusted1 loss of $284MM Adjustments for items of note Amortization of acquired intangibles2 72 94 79 Acquisition and integration charges related 21 32 30 to the Schwab transactio

  17. Slide 17: Capital

    Capital1 Strong capital and liquidity management supporting future growth Common Equity Tier 1 Ratio Q1 2024 CET 1 Ratio 13.9% Common Equity Tier 1 ratio of 13.4% Internal capital generation 28 Leverage Ratio of 4.3% Increase in RWA (excluding impact of FX)2 (36) Repurchase of common shares3 (23) Li

  18. Slide 18: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Business Segment GIL Formations1: $MM and Ratios2 Highlights  Gross impaired loan formations 22 21 bps were stable quarter-over-quarter 18 18 14 $2,005 $1,937 $1,677 $1,599 $1 / 1 bp $55 / 6 bps $927 / $1,259 $932 / 17 bps $678 / 16 bps $2 / 3 bps $699 / 12 bps 13

  19. Slide 19: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Business Segment GIL1: $MM and Ratios2 Highlights 40 41 bps  Gross impaired loans were 36 33 stable quarter-over-quarter 30 $3,895 $3,709 $5 / 6 bps $5 / 6 bps $3,299 $27 / $46 / $2,980 $5 / 7 bps 3 bps 5 bps $2,659 $4 / 5 bps $84 / $1,685/ 9 bps $1,612/ 30 bps $5 / 7

  20. Slide 20: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Business Segment PCL1: $MM and Ratios2,3,4 Highlights Wealth Management & Insurance $1,071 $1,001  PCL increase quarter-over- Wholesale Banking $10 $55 quarter, largely reflected in: Canadian Personal & Commercial Banking $878 – Canadian Commercial $766 U.S. Ret

  21. Slide 21: Provision for Credit Losses: Impaired and Performing

    Provision for Credit Losses (PCL) Impaired and Performing PCL1,2 ($MM) Highlights Q2/23 Q1/24 Q2/24  Impaired PCL decreased Total Bank 599 1,001 1,071 quarter-over-quarter, due to: Impaired 551 934 870 – Lower provisions in the U.S. Performing 48 67 201 Commercial lending portfolio Canadian Persona

  22. Slide 22: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) ACL1: $B and Coverage Ratios2 Highlights 89 91 bps 87 89 87 74  ACL increased $282 million quarter-over-quarter, related to: United States – $129 million impact of foreign Canada $8.3 $8.6 $8.2 exchange, $7.6 $7.8 – Current credit conditions, $5.3 57% 56% 56% 58% 5

  23. Slide 23: Appendix

    Appendix 23

  24. Slide 24: Q2 2024: Items of Note

    Q2 2024: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item1 Pre-Tax After Tax Reported net income and EPS (diluted) 2,564 1.35 Items of note Amortization of acquired intangibles2 72 62 0.04 Corporate Page 4, L13, L27 & L40 Acquisition and integration charges related to the Schwab transa

  25. Slide 25: U.S. Strategic Card Portfolio: Accounting

    U.S. Strategic Card Portfolio: Accounting Illustrative Example Values below are shown for illustrative purposes only. The percent share is representative of the agreements with the retailer card partners, but the exact split differs by partner. Illustrative Example $MM Credit Card Portfolio 1,000 Me

  26. Slide 26: Q2 2024: PTPP & Operating Leverage

    1,2 1,3 Q2 2024: PTPP & Operating Leverage Modified for partners' share of SCP PCL, FX and Insurance Service Expense Q2 2024 Q1 2024 Q2 2023 TOTAL BANK SFI Reference Revenue Expenses Revenue Expenses Revenue Expenses 1 Reported Results ($MM) 13,819 8,401 13,714 8,030 12,397 6,756 Page 2, L3 & L6 2 P

  27. Slide 27: Net Interest Income Sensitivity (NIIS)

    Net Interest Income Sensitivity (NIIS) Strong deposit base and disciplined ALM management 25 bps change in short-term interest rates 100 bps change in interest rates across the curve  25 bps increase: $88MM increase in NII over a 12-month  100 bps increase: $875MM increase in NII over a 12-month p

  28. Slide 28: Well-Diversified Deposit Base

    Well-Diversified Deposit Base Deposit Concentration by Top Depositors $499B $321B $125B $945B 32% 21% 14% 2% 3% 4% 3% 5% 7% 2% 4% 5% CAD P&C + WM&I U.S. Retail 1 Wholesale Banking Total Bank 2 1, 3, 4 Top 5 Top 10 Top 20 Total Business Deposit Concentration by Industry5, $B Insured / Secured Deposit

  29. Slide 29: Canadian Personal & Commercial Banking: Margins, Volumes and Efficiency

    Canadian Personal & Commercial Banking Margins, Volumes and Efficiency Net Interest Margin (NIM) Average Loans $B1 539 552 560 564 527 2.84% 2.84% 114 117 119 121 2.78% 112 2.74% 2.74% 415 425 436 441 444 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Personal Business Efficiency Ratio

  30. Slide 30: U.S. Retail: Margins, Volumes and Efficiency

    U.S. Retail Margins, Volumes and Efficiency NIM1,2 Average Loans US$B3 183 188 191 192 179 3.25% 96 98 93 94 95 3.00% 3.07% 3.03% 2.99% 87 89 93 95 95 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Personal Business Efficiency Ratio US$B Average Deposits US$B3 75.2% 68.8% 345 334 334 32

  31. Slide 31: U.S. Retail: Wealth Assets and Schwab EPU

    U.S. Retail Wealth Assets and Schwab EPU TD Wealth Assets US$B Schwab1 – Q2 2024 TD’s share of Schwab’s net income was C$194MM on a reported basis, of which C$183MM (US$136MM) was recorded in the U.S. Retail segment  TD's share of Schwab's net income was C$229MM on an adjusted2 basis 40 40 40 40 39

  32. Slide 32: Schwab Equity Pickup

    Schwab Equity Pickup Q2 2024 Reconciliation U.S. Retail P&L ($MM)1 TDBG Corporate Segment $C $US Reported Schwab Equity Pickup2 194 183 136 11 Amortization of acquired intangibles3 30 0 0 30 Acquisition and integration charges related 5 0 0 5 to the Schwab transaction3,4 Adjusted5 Schwab Equity Pick

  33. Slide 33: Wealth Management & Insurance: Volumes and Efficiency

    Wealth Management & Insurance Volumes and Efficiency Insurance Premiums ($MM) Average Loans $B 1,658 1,616 1,460 6.5 6.5 1,316 1,337 6.4 6.4 6.2 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Efficiency Ratio Average Deposits $B 62.3% 57.2% 59.4% 59.2% 55.0% 34.4% 33.1% 32.4 32.4% 33.4%

  34. Slide 34: Wealth Management & Insurance

    Wealth Management & Insurance Wealth Revenue $MM Wealth Assets $B 1,600 600 1,481 1,409 1,366 1,344 1,313 217 201 596 188 184 559 576 1,200 186 549 531 185 157 489 154 141 479 145 500 460 460 441 800 418 400 369 358 355 400 334 1,024 1,019 1,051 1,079 982 0 300 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q2/23 Q3

  35. Slide 35: Wholesale Banking

    Wholesale Banking Revenue Loans1 Q2 2024 Q2 2024 -1% 4% 45% 34% $1.9B $96.3B 56% 62% Corporate and Canada Global Markets Other2 United States International Investment Banking 35

  36. Slide 36: Gross Lending Portfolio

    Gross Lending Portfolio Includes B/As Period-End Balances ($B unless otherwise noted) Q1/24 Q2/24 Canadian Personal & Commercial Portfolio 563.9 569.8 Personal 441.6 446.5 Residential Mortgages 263.9 266.4 Home Equity Lines of Credit (HELOC) 117.9 119.2 Indirect Auto 28.8 29.0 Credit Cards 19.0 19.6

  37. Slide 37: Commercial Real Estate (CRE)

    Commercial Real Estate (CRE) Commercial Real Estate Portfolio Overview: Highlights $95B  Commercial Real Estate represents $95B or 10% of Total Bank gross loans and acceptances1 Office Retail – Portfolio is well diversified across 11% 18% geographies and sub segments Other – 56% of CRE portfolio in

  38. Slide 38: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Highlights Secured Lending Portfolio  Total Canadian real estate secured lending portfolio at $388B Maturity Schedule ($B)1 – 92% of RESL portfolio is amortizing4, of $113.9 which 73% of HELOC portfolio is $79.1 $32.1 $86.9 amortizing Variable Rate $8.3 $32.9 $46.8 $39.6 Fixed

  39. Slide 39: Canadian Personal Banking

    Canadian Personal Banking Canadian Personal Banking (Q2/24) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%)  Gross impaired loans were Residential Mortgages 266.4 222 0.08 stable quarter-over-quarter Home Equity Lines of Credit (HELOC) 119.2 170 0.14 Indirect Auto 29.0 107 0.37 Credit Cards 19.

  40. Slide 40: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Canadian Commercial and Wholesale Banking (Q2/24) Highlights Gross Loans/ GIL GIL/Loans BAs ($B) ($MM) (%)  Gross impaired loans Commercial Banking1 123.3 997 0.81 increased quarter-over- Wholesale Banking 96.7 27 0.03 quarter, driven by: Total Canadian Com

  41. Slide 41: U.S. Personal Banking

    U.S. Personal Banking U.S. Personal Banking1 (Q2/24) Highlights Gross Loans GIL GIL/Loans In USD unless otherwise specified ($B) ($MM) (%)  Gross impaired loans were Residential Mortgages 41.6 335 0.80 stable quarter-over-quarter Home Equity Lines of Credit (HELOC)2 7.9 182 2.31 Indirect Auto 30.4

  42. Slide 42: U.S. Commercial Banking

    U.S. Commercial Banking U.S. Commercial Banking1 (Q2/24) Highlights Gross Loans/ GIL GIL/Loans In USD unless otherwise specified BAs ($B) ($MM) (%)  Gross impaired loans Commercial Real Estate (CRE) 29.2 387 1.33 quarter-over-quarter Non-residential Real Estate 20.1 268 1.33 increase related to a f

  43. Slide 43: Endnotes on Slides 4-5

    Endnotes on Slides 4-5 Slide 4 1. The Bank prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), the current generally accepted accounting principles (GAAP), and refers to results prepared in accordance with IFRS as the “reported” resul

  44. Slide 44: Endnotes on Slides 6-12

    Endnotes on Slides 6-12 Slide 6 1. J.D. Power 2024 Canada Dealer Financing Satisfaction Study. For J.D. Power 2024 award information, visit jdpower.com/awards. Slide 7 1. Canadian Personal and Commercial: based on Canadian Personal & Small Business banking. U.S. Retail: based on U.S. Retail and Smal

  45. Slide 45: Endnotes on Slides 13-15

    Endnotes on Slides 13-15 Slide 13 1. Please refer to Slide 4, Endnote 1. 2. Net interest margin is calculated by dividing U.S. Retail segment’s net interest income by average interest-earning assets. For the U.S. Retail segment, this calculation excludes the impact related to sweep deposits arrangem

  46. Slide 46: Endnotes on Slides 16-17

    Endnotes on Slides 16-17 Slide 16 1. Please refer to Slide 4, Endnote 1. 2. Amortization of acquired intangibles relates to intangibles acquired as a result of asset acquisitions and business combinations, including the after-tax amounts for amortization of acquired intangibles relating to the share

  47. Slide 47: Endnotes on Slides 18-22

    Endnotes on Slides 18-22 Slide 18 1. Gross Impaired Loan formations represent additions to Impaired Loans & Acceptances during the quarter; excludes the impact of acquired credit- impaired loans. 2. GIL Formations Ratio: Gross Impaired Loan Formations/Average Gross Loans & Acceptances. Slide 19 1. G

  48. Slide 48: Endnotes on Slides 24-26

    Endnotes on Slides 24-26 Slide 24 1. This column refers to specific page(s) and line items of the Bank's Q2 2024 Supplementary Financial Information package. 2. Please refer to Slide 16, Endnote 2. 3. Please refer to Slide 16, Endnote 3. 4. Please refer to Slide 16, Endnote 4. 5. Please refer to Sli

  49. Slide 49: Endnotes on Slides 28-30

    Endnotes on Slides 28-30 Slide 28 1. U.S. Retail deposits exclude deposits from the Schwab Insured Deposit Agreement. 2. Wholesale deposit concentration by top depositors includes all global transaction banking (i.e., corporate deposits). 3. Total Bank deposit concentration by top deposits does not

  50. Slide 50: Endnotes on Slides 31-32

    Endnotes on Slides 31-32 Slide 31 1. TD's share of net income in US$ is the corresponding C$ net income contribution of Schwab to the U.S. Retail segment included in the Bank's Report to Shareholders (www.td.com/investor) for the relevant quarters, divided by the average FX rate. For additional info

  51. Slide 51: Endnotes on Slides 33-37

    Endnotes on Slides 33-37 Slide 33 1. Please refer to Slide 4, Endnotes 1 and 2. Slide 34 1. Please refer to Slide 14, Endnote 2. Slide 35 1. Average gross lending portfolio includes gross loans and bankers' acceptances relating to Wholesale Banking, excluding letters of credit, cash collateral, cred

  52. Slide 52: Endnotes on Slides 38-39

    Endnotes on Slides 38-39 Slide 38 1. Excludes revolving HELOC, Wholesale mortgage portfolio. 2. RESL Portfolio Current Loan to Value is calculated with the Teranet-National Bank House Price Index™ and weighted by the total exposure, based on outstanding mortgage balance and/or the HELOC authorized c

  53. Slide 53: Endnotes on Slides 40-42

    Endnotes on Slides 40-42 Slide 40 1. Includes Small Business Banking and Business Credit Cards. 2. Consumer includes: Food, Beverage and Tobacco; Retail Sector. 3. Industrial/Manufacturing includes: Industrial Construction and Trade Contractors; Sundry Manufacturing and Wholesale Banking. 4. Other i

  54. Slide 54: Investor Relations Contacts

    Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 54

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