Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — TD Bank Group — Debt Investor Presentation (2016)

45 slides from Toronto-dominion Bank's debt investor presentation, 2016

  1. Slide 1: TD Bank Group Fixed Income Investor Presentation Q2 2016

    TD Bank Group Fixed Income Investor Presentation Q2 2016

  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: Contents

    Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 3

  4. Slide 4: TD Snapshot

    TD Snapshot Our Businesses Canadian Retail  Personal banking, credit cards and auto finance  Small business and commercial banking  Direct investing, advice-based wealth businesses, and asset management  Property, casualty, life and health insurance Q2 20161 Canadian U.S. U.S. Retail (C$ except

  5. Slide 5: TD Strategy

    TD Strategy To be the Better Bank North America  Top 10 Bank in North America1  Leverage platform and brand for growth  One of only a few banks globally to be rated Aa1 by Moody’s2  Strong employment brand Retail Earnings Focus  Leader in customer service and convenience  Strong organic growth

  6. Slide 6: Competing in Attractive Markets

    Competing in Attractive Markets Country Statistics Country Statistics  11th largest economy  World’s largest economy  Nominal GDP of C$2.0 trillion  Nominal GDP of US$17.3 trillion  Population of 36 million  Population of 319 million Canadian Banking System U.S. Banking System  Soundest banki

  7. Slide 7: TD in North America

    TD in North America North Q2 2016 Canadian American C$ except otherwise noted Ranking4 Ranking5 Total assets $1,125B 2nd 6th Total deposits $715B 2nd 6th Market capitalization $104B 2nd 6th Adjusted net income1 (trailing four quarters) $9.0B 2nd 6th Reported net income (trailing four quarters) $8.4B

  8. Slide 8: Composition of Earnings

    Composition of Earnings 2015 Adjusted Earnings Mix1,2 Three key business lines  Canadian Retail robust retail banking platform in Canada with proven performance  U.S. Retail top 10 bank5 in Canadian Retail U.S. Retail3 the U.S. with significant 64% 23% organic growth opportunities  Wholesale Bank

  9. Slide 9: Strategic Evolution of TD

    Strategic Evolution of TD Increasing Retail Focus Acquired TD Acquired Target credit Became primary issuer Chrysler Completed strategic Acquired Waterhouse Acquired Commerce Acquired card portfolio & Epoch; of Aeroplan Visa; Privatized Financial credit card 51% of USA / Commerce Bank Riverside and a

  10. Slide 10: Omni Comfort and Convenience

    Omni Comfort and Convenience Consistent Strategy Digital Enhancements How we compete  Customer-centricity allows customers to choose how, when and where they bank TD MySpend allows customers to track and TD Bank offers Apple Pay 2, Android Pay3 and modify their spending behaviours on Samsung Pay™4

  11. Slide 11: Corporate & Social Responsibility

    Corporate & Social Responsibility  TD Friends of the Environment Foundation celebrates 25 years with over Highlights C$76 million in funds disbursed in support of more than 24,000 local environmental projects  Highest in Customer Satisfaction Among the Big Five  More than 235,000 trees planted th

  12. Slide 12: Contents

    Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 12

  13. Slide 13: Stable Earnings Growth

    Stable Earnings Growth Adjusted Earnings1,2 (C$MM) 8,754 8,127 20112: Wholesale Banking 7,136 7,064 Wealth & Insurance 6,432 U.S. P&C Canadian P&C 2012 – 20153: Wholesale Banking U.S. Retail Canadian Retail 2011 Segment 2012 2013 2014 2015 realignment Targeting 7-10% adjusted EPS growth1 over the me

  14. Slide 14: Q2 2016 Highlights

    Q2 2016 Highlights Financial Highlights $MM Total Bank (Adjusted1 YoY) Adjusted1 Q2/16 Q1/16 Q2/15 EPS of $1.20 up 5% Revenue 8,317 8,564 7,742 PCL 584 642 375 Net Income up 5% Expenses 4,556 4,579 4,243 Net Income 2,282 2,247 2,169 Revenue up 7% Diluted EPS ($) 1.20 1.18 1.14  Up 4% ex FX and acqu

  15. Slide 15: Gross Lending Portfolio

    Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q1/16 Q2/16 Canadian Retail Portfolio $ 359.2 $ 361.9 Personal $ 299.8 $ 300.9 Residential Mortgages 185.9 185.7 Home Equity Lines of Credit (HELOC) 61.2 62.0 Indirect Auto 19.2 19.7 Unsecured Lines of Credit 9.6 9.6 Credit

  16. Slide 16: Canadian Personal Banking

    Canadian Personal Banking Q2/16 Highlights Gross Loans GIL GIL / Canadian Personal Banking1 (C$B) (C$MM) Loans Real Estate Secured Lending:  C$248 in gross loans outstanding Residential Mortgages 186 428 0.23%  53% insured Home Equity Lines of Credit (HELOC) 62 164 0.26%  Uninsured residential mo

  17. Slide 17: Strong Credit Quality

    Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 61 60 63 58 56 50 50 43 39 37 38 34 34 26 31 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 IFRS Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Average Net Loans and Acceptances (bps) Credit qual

  18. Slide 18: Oil and Gas Exposure

    Oil and Gas Exposure Corporate and Commercial Outstandings Highlights by Sector (C$B):  Oil and Gas Producers and Services $3.8 outstandings remain less than 1% of total gross loans and acceptances:  Four new formations in Wholesale in Oil & $1.4 / 37% Gas  C$45MM increase in specific allowances

  19. Slide 19: Contents

    Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 19

  20. Slide 20: Bail-in Update

    Bail-in Update  On March 22, 2016, the Government of Canada in its 2016 federal budget, proposed to introduce framework legislation for the bail-in regime along with accompanying enhancements to Canada’s bank resolution toolkit.  The regime will provide the Canada Deposit Insurance Corporation ("C

  21. Slide 21: TD Credit Ratings

    TD Credit Ratings Issuer Ratings1 Moody's S&P DBRS Ratings Aa1 AA- AA Outlook Negative Stable Negative Ratings vs. Peer Group S&P Long-Term Debt Rating Moody’s Long-Term Debt Rating 18 Aa1 AA- 16 Aa2 A+ 14 Aa3 A 12 A1 A- 10 A2 8 A3 BBB+ 6 Baa1 BBB 4 Baa2 2 TD Canadian Peers 2 U.S. Peers 3 TD Canadia

  22. Slide 22: Non-Common Equity Capital Ratings

    Non-Common Equity Capital Ratings  TD has industry leading ratings1 for both Additional Tier 1 and Tier 2 capital instruments Ratings vs. Peers NVCC Tier 2 Subordinated Debt Ratings Additional Tier 1 NVCC Preferred Share Ratings S&P Moody’s S&P Moody’s 12 A- 12 A2 12 A- 12 A2 10 A- 10 A3 10 A- 10 A

  23. Slide 23: Capital

    Capital Common Equity Tier 11 Highlights  Common Equity Tier 1 ratio of Q1 2016 CET1 Ratio 9.9% 10.1% Internal capital generation 25 bps  Leverage ratio of 3.8% Unrealized gains on AFS securities within AOCI 6 bps Increase in common shares 3 bps  Liquidity coverage ratio of 128% RWA increase and

  24. Slide 24: Robust Liquidity Management

    Robust Liquidity Management HQLA Distribution  Treasury paradigm contributes to (Weighted & Includes Excess U.S. HQLA) stable and growing earnings  Level 1 Cash &  Matching funding maturities to term of Central Bank Reserve assets or stressed trading market  Level 1 depth Sovereign Issued/ 82% 

  25. Slide 25: Term Funding Strategy

    Term Funding Strategy Large base of stable retail and commercial deposits  Customer service business model delivers growing base of “sticky” and franchise based deposits  Reserve assets held for deposit balances based on LCR run-off requirements User of mortgage securitization programs via Canada

  26. Slide 26: Attractive Balance Sheet Composition

    Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt Sub-Debt 1% Trading Covered Personal Non- Deposits5 Bonds Term Deposits 7% 26% 39% Wholesale Term Debt 12% Mortgage Personal Term Senior Assets Securitization Deposits Unsecured Securitized 18% 6% MTN6 Other 21% 53% Deposits3 24%

  27. Slide 27: Wholesale Term Debt Composition

    Wholesale Term Debt Composition1 By Currency2,3 By Term2,3 5 Year 58% USD 53% $54B EUR 16% $50B $15B 6 Year 4 Year 3% 3% GBP 5% $3B 3 Year 22% $3B $4B CAD 23% $20B $21B AUD 3% 7 Year 6% $3B 10 Year 2% $6B $2B 2 Year 5% $4B 1.5 Year 1% $1B 1. As of April 30, 2016. 2. Excludes certain private placemen

  28. Slide 28: Debt Maturity Profile F2016 – 2020

    Debt Maturity Profile1 F2016 – 2020 Bullet Debt Maturities (C$ billions)2 $23 $22 $18 $18 $15 2016 2017 2018 2019 2020 MBS Covered Bond Senior Debt ABS Subordinated Debt 3 Manageable debt maturities 1. For wholesale term debt that has bullet maturities. 2. As of April 30, 2016. 28 3. Based on first

  29. Slide 29: Key Takeaways

    Key Takeaways  Strong capital base  Industry leading credit ratings  Proactive & disciplined risk management  Attractive balance sheet composition  Diverse funding strategy 29

  30. Slide 30: Contents

    Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 30

  31. Slide 31: Economic Outlook

    Economic Outlook Canada’s economy is poised to return to a solid growth path  Real GDP expected to increase by 1.9% in 2016 and 2.0% in 2017  The 2016 federal budget and an improving export channel expected to counterbalance the ongoing adjustment to oil prices  Unemployment rate expected to reac

  32. Slide 32: Interest Rate Outlook

    Interest Rate Outlook Interest Rates, Canada and U.S.1  With U.S. unemployment (%) nearing healthy levels, the 7 Federal Reserve is likely to US Federal Funds Rate continue to edge up interest 6 Forecast2 rates 5  In Canada, a modest economic Bank of Canada Target and inflationary outlook implies

  33. Slide 33: Contents

    Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 33

  34. Slide 34: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Portfolio GIL Formations1: C$MM and Ratios2 Highlights $1,717  Canadian Retail Formations constant at 19bps over the past $1,453 five quarters $1,338 $1,206 $142 / 38 bps  U.S. GIL Formations quarterly $1,124 $33 / 10bps decrease of C$384MM driven $14 / 5bps $1,02

  35. Slide 35: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Portfolio GIL1: C$MM and Ratios2 Highlights $3,799 $3,567  Canadian Retail GIL stable for $39 / 10 bps $3,244 the past five quarters $3,077 $178 / 48 bps $2,905 $55 / 16 bps  U.S. GIL quarterly decrease of $36 / 12 bps $28 / 9 bps C$353MM driven by:  C$297MM due to s

  36. Slide 36: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Portfolio Highlights PCL1: C$MM and Ratios2 $648  Canadian and U.S. Retail credit $10 / 11 bps $592 quality remains strong with loss $550 $65 / NM rates of 30 bps and 51 bps $48 / 53 bps $11 / 14 bps respectively $443 $36 / NM $60 / NM  U.S. Retail6 $123MM quar

  37. Slide 37: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Canadian Commercial and Gross Q2/16 Highlights GIL GIL/ Loans/BAs Wholesale Banking (C$B) (C$MM) Loans  Canadian Commercial Commercial Banking1 61 169 0.28% portfolio continues to Wholesale 37 178 0.48% perform well Total Canadian Commercial and Wholesale $

  38. Slide 38: U.S. Personal Banking – U.S. Dollars

    U.S. Personal Banking – U.S. Dollars Q2/16 U.S. Personal Banking1 Gross Loans GIL GIL / Highlights ($B) ($MM) Loans Residential Mortgages 20 328 1.62%  Good asset quality in U.S. Home Equity Lines of Credit (HELOC)2 10 822 8.19% Personal Indirect Auto 20 135 0.67%  U.S. GIL decrease primarily Cred

  39. Slide 39: U.S. Commercial Banking – U.S. Dollars

    U.S. Commercial Banking – U.S. Dollars Q2/16 U.S. Commercial Banking1 Gross Loans GIL GIL/ Highlights / BAs ($B) ($MM) Loans Commercial Real Estate (CRE) 20 151 0.76%  Continuing portfolio growth Non-residential Real Estate 15 98 0.65% and good quality in U.S. Residential Real Estate 5 53 1.06% Com

  40. Slide 40: Contents

    Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 40

  41. Slide 41: Canadian Covered Bond Legislation

    Canadian Covered Bond Legislation  The Covered Bond legal framework was announced in the 2012 Federal Budget through amendment to the National Housing Act and was passed into law in June 2012  Issuance must be in accordance with the legislation and issuers are prohibited from using insured mortgag

  42. Slide 42: CMHC Guide Highlights

    CMHC Guide Highlights Asset Coverage Test  To confirm overcollateralization of the covered bond collateral held against covered bonds outstanding  Indexation requirement (July 1, 2014) provides adjustment for market development  Value to be adjusted at least quarterly Valuation Calculation  Test

  43. Slide 43: TD Legislative Covered Bonds

    TD Legislative Covered Bonds TD Covered Bond Programme Highlights Cover Pool as at April 30, 2016  TD has a C$40B legislative covered bond program  High quality, conventional first lien Canadian Residential mortgages originated by TD  Covered bonds issuance for Canadian issuers governed by CMHC-a

  44. Slide 44: Investor Relations Contacts

    Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Best Investor Relations by Sector: Financial Services Best Corporate Governance Website: www.td.com/investor 44

  45. Slide 45: TD Bank Group Fixed Income Investor Presentation

    TD Bank Group Fixed Income Investor Presentation Q2 2016

TD Bank Group — Debt Investor Presentation (2016) on 6ix