Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — Debt Investor Presentation (September 2012)
39 slides from Toronto-dominion Bank's debt investor presentation, September 2012
Slide 1: Fixed Income Presentation
Fixed Income Presentation September 2012
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and/or oral forward-looking statements, including in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, represent
Slide 3: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 3
Slide 4: Snapshot of TD
Snapshot of TD Our Businesses Canadian Personal & Commercial Wealth & Insurance U.S. Personal & Commercial Wholesale Banking Our Results Q3 2012 Adjusted Earnings1 of C$1,820, up 11% YoY Adjusted EPS1 of $1.91, up 9% YoY A North American retail focused bank 4 1. See footnote #3 on slide
Slide 5: Key Takeaways
Key Takeaways Simple Strategy, Consistent Focus Building Building the the Better Better Bank Bank North North America America • Top 10 Bank in North America1 • Leverage platform and brand for growth • One of the few banks in the world rated Aaa by Moody’s2 • Strong employment brand Retail Retail Ear
Slide 6: A Top Bank in North America
TD Bank Group A Top 10 Bank in North America Compared to: Q3 20121 Canadian North American (In CAD Billions)2 Peers7 Peers8 Total Assets $806B 2nd 6th Total Deposits $485B 2nd 6th Market Cap (as of July 31, 2012) $72B 2nd 6th Adj. Net Income3 (Trailing 4 Quarters) $6.9B 2nd 6th Rpt. Net Income (Trai
Slide 7: Key Businesses at a Glance
Key Businesses At a Glance YTD 2012 Earnings Canadian Retail (69%) U.S. Retail (20%) Wholesale (11%) Mix1 Wealth Management & Insurance Segments Business Canadian P&C2 U.S. P&C2 Wholesale Wealth & Insurance TD Ameritrade3 Sub-Brands 2006-20124 2005-20125 2009-20116 1. For the purpose of calculating
Slide 8: Evolution of TD
Evolution of TD Building Franchise Businesses Risk >>> Increasing Retail focus >>> Risk TD Bank Acquired Acquired TD Privatized Acquired Commerce Acquired Acquired and Canada Newcrest 51% of Waterhouse Banknorth Commerce Bank Riverside Chrysler Trust merge Capital Banknorth USA/ Bank integration
Slide 9: Risk Management
Risk Management Our Risk Appetite Integrated risk monitoring and reporting To senior management and Board of Directors Regular review, evaluation and approval of risk framework Structured Risk Appetite governance, from the Business to the Board Executive Committees and Risk Committee of
Slide 10: Q3 2012 Highlights
Q3 2012 Highlights Key Themes Net Income $MM (Adjusted, where applicable)1 Q3/12 QoQ YoY • Record quarter for the bank Retail 2 1,610 3% 9% • Adjusted earnings1 up 11% YoY Wholesale 180 -9% 61% • Adjusted EPS1 growth of 9% YoY Corporate 30 nm -33% Adjusted Net Income $ 1,820 5% 11% • Good volume gro
Slide 11: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1,2 46 46 • Continued strong credit performance 38 42 36 in the Canadian Personal and Commercial, and Wholesale Banking 38 35 36 37 Portfolios PC L R at i o Ex M B N A C anad a Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 • MBNA Canada is performing better than
Slide 12: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 12
Slide 13: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the worlds most competitive economies1 Soundest banking system in the world1 Strong Canadian housing market Home values have held up well More prudent regulatory environment Robust economic fundamentals relative to G-7 economies One of the strong
Slide 14: Solid Financial System in Canada
Solid Financial System in Canada Strong retail and commercial banks Conservative lending standards All major wholesale dealers owned by Canadian banks, with stable retail earnings base to absorb any wholesale write-offs Responsive government and central bank Proactive policies and programs
Slide 15: Well Developed Residential Mortgage Market in Canada
Well Developed Residential Mortgage Market in Canada Canadian chartered banks account for over 70% of the total mortgage market, including securitizations1 Conservative lending practices Strong competition among lenders Favorable legal environment supporting foreclosure and other types of le
Slide 16: Canadian Mortgage Market is Different from the U.S.
Canadian Mortgage Market is Different from the U.S. Canada U.S. Conservative product offerings: fixed or variable Outstanding mortgages include earlier exotic interest rate option products (interest only, options ARMs) Product Default insured mortgages use a 5-year fixed Borrowers often qual
Slide 17: Canadian Housing Market
Canadian Housing Market Highlights Housing market has started to show signs of moderation Credit quality of the Canadian RESL portfolio remains strong Continuing to closely monitor and adjust underwriting standards where appropriate Topic TD Positioning Canadian RESL $215 billion portfolio (
Slide 18: North American Economy
North American Economy Outlook Modest growth in store for North American economy Global growth slowdown means economic growth in North America to continue at a more modest pace U.S. growth to outpace Canada on average over the next few years Canadian economy to be supported by U.S. growth an
Slide 19: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 19
Slide 20: Capital
Capital Highlights Tier 1 Capital Ratio1,2 12.9% 13.0% 12.0% 12.2% • Tier 1 capital ratio improved QoQ 11.6% due to strong organic growth • Q1 capital position affected by MBNA portfolio, Basel II Market Risk Framework and IFRS transition Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 • Pro forma Basel III ratio of
Slide 21: TD Credit Ratings
TD Credit Ratings Issuer Ratings1 Moody's S&P Fitch DBRS Ratings Aaa AA- AA- AA Outlook Negative Negative Stable Stable Strong credit ratings 21 1. See Footnote no. 2 on slide 5.
Slide 22: Robust Liquidity Management
Robust Liquidity Management Treasury paradigm Contribute to stable and growing revenues “Treasury does not have the authority not to hedge” No black boxes Match terms of assets and liabilities Do not engage in liquidity carry trade Match underlying debt funding maturities to term of as
Slide 23: Term Funding Strategy
Term Funding Strategy Large base of stable retail and commercial deposits Customer service business model delivers growing base of “sticky” deposits Reserve assets held for deposit balance that is not considered permanent Large user of securitization programs, primarily via Canada Mortgage B
Slide 24: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition Funding Mix1 Wholesale Term Debt2: $70B P&C Deposits 65% Commercial Deposits External Personal 20% MBS Sales Term Deposits Short Term 60% 11% Funding & Other 17% Personal Non‐ Term Deposits Covered Bonds Wholesale Term Senior 15% 34% Debt Debt 11% 25% Sub‐ Tradin
Slide 25: Debt Maturity Profile F2012 – F2017
Debt Maturity Profile1 F2012 – F2017 Debt Maturities (C$ Billions)2 $20 $18 $17 $15 $13 $10 $10 $8 $6 $5 $0 2012 2013 2014 2015 2016 2017 MBS Covered Bond Senior Debt Subordinated Debt ABS Manageable debt maturities 1. For wholesale term debt that has bullet maturities 25 2. As of July 31, 2012
Slide 26: Canada Covered Bond Legislation
Canada Covered Bond Legislation The Covered Bond legislative framework was announced in the 2012 Budget and passed into law in June 2012 Under the legislative framework: The Canada Mortgage and Housing Corporation (“CMHC”) will establish and maintain a registry to include the names of the issu
Slide 27: Key Takeaways
Key Takeaways Strong capital base – well positioned for Basel III Industry leading credit ratings Proactive & disciplined risk management Attractive balance sheet composition Diverse funding strategy to support growth plans 27
Slide 28: Contents
Contents 1. TD Bank Group at a glance 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 28
Slide 29: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution Adjusted Earnings1 (C$MM) CDN GAAP2 IFRS2 & Segment Transfer3 $6,251 $6,432 GR % r CA s: 13 e a in g % 5-y Earn PS: 8 $5,228 e d E u s t t ed Adj Adjus $5,318 $4,716 $4,189 $3,813 $3,376 Wholesale Banking U.S. P&C Wealth & Insurance Canadian P&C
Slide 30: Global Economic Outlook
Global Economic Outlook World Real GDP Growth1 6% Forecast 4% 2% North America is currently facing a global economic 0% growth slowdown -2% 2000 2002 2004 2006 2008 2010 2012 2014 Global growth slowdown means economic growth in North American Real GDP Growth2 North America to continue 4% Forecas
Slide 31: Canadian Economic Outlook
Canadian Economic Outlook Canadian Export and U.S. Activity Index1 25% Forecast 15% 5% Canadian economy still -5% tightly linked to U.S. -15% U.S. Activity Index fortunes, and better U.S. -25% Canadian Exports growth in medium term to 1970 1976 1982 1988 1994 2000 2006 2012 help Canada’s prospects
Slide 32: U.S. Economic Outlook
U.S. Economic Outlook Residential Real Estate1 1% Forecast 0% The depressed housing market has seriously -1% hampered the U.S. Contribution to Real GDP recovery thus far, but signs -2% point to residential real 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 estate making a positi
Slide 33: Interest Rate Outlook
Interest Rate Outlook Interest Rates, Canada and U.S.1 Weaker growth and risks to 7% US Federal Forecast the global economy mean Funds Rate 6% North American central banks Bank of are set to leave monetary 5% Canada Target Rate policy at exceptionally 4% accommodative levels for a while 3% This
Slide 34: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q2/12 Q3/12 Canadian Personal & Commercial Portfolio $ 290.3 $ 295.8 Personal $ 250.8 $ 255.0 Residential Mortgages 146.4 150.9 Home Equity Lines of Credit (HELOC) 64.6 64.3 Indirect Auto 13.7 14.0 Unsecured Lines of Credit
Slide 35: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,061 Gross Impaired Loan $996 $981 $949 $6 / NM $38 / 17 bps formation ratio of 26bps $4 / NM $927 $9 / NM remained consistent with recent quarters $337 / 45 bps $313 / 40 bps $374 / 46 bps $347 / 53 bps $346
Slide 36: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Positive trend in Gross $2,493 $2,538 Impaired Loan ratio continued $2,432 $3 / NM $2,369 $2,383 $4 / NM $3 / NM $41 / 17 bps for the tenth consecutive $45 / 21 bps $3 / NM $3 / NM $47 / 23 bps $45 / 20 bps $79 / 34 bps quart
Slide 37: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL increased $134MM since Q3/11 largely driven by the $454 acquisition of MBNA Canada $433 $16 / 28 bps $401 $1 / NM Excluding MBNA Canada, PCL $6 / 11 bps increased $38MM since Q3/11, $350 $1 / NM $147 / 73 bps whi
Slide 38: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Best corporate governance Website: Best investment community meetings www.td.com/investor Best investor relations by a CFO: Large cap Best investor relations by a CEO: Large cap Grand prix for best overall investor
Slide 39: Fixed Income Presentation
Fixed Income Presentation September 2012
Toronto-Dominion Bank — Debt Investor Presentation (September 2012) on 6ix