Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — Debt Investor Presentation (2018)
46 slides from Toronto-dominion Bank's debt investor presentation, 2018
Slide 1: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income Investor Presentation Q2 2018
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
Slide 3: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 3
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 Q2 20181 Canadian U.S. ▪ Property, casualty, life and health (C$) Retail Retail insurance Fina
Slide 5: TD Framework
TD Framework Our purpose Our vision To enrich the lives of our Be the better bank customers, communities and colleagues Our shared commitments Think like a Act like an owner Execute with Innovate Develop our customer Lead with integrity to speed and impact with colleagues Provide legendary drive bus
Slide 6: TD Strategy
TD Strategy We will be the premier Canadian retail bank, a peer-leading U.S. retail bank, and a leading Wholesale business Customer- centric experiences One TD Operational excellence Unique and inclusive Strong employee risk culture culture Customer-centric Operational Unique and Inclusive Strong Ri
Slide 7: Competing in Attractive Markets
Competing in Attractive Markets Country Statistics Country Statistics ▪ 10th largest economy ▪ World’s largest economy ▪ Nominal GDP of C$2.2 trillion ▪ Nominal GDP of US$19.5 trillion ▪ Population of 37 million ▪ Population of 323 million Canadian Banking System U.S. Banking System ▪ One of the sou
Slide 8: Top 10 North American Bank
Top 10 North American Bank North Q2 2018 Canadian American C$ except otherwise noted Ranking4 Ranking5 Total assets $1,284B 1st 5th Total deposits $830B 1st 5th Market capitalization $133B 2nd 6th Reported net income (trailing four quarters) $10.8B 2nd 5th Adjusted net income1 (trailing four quarter
Slide 9: Diversified Business Mix
Diversified Business Mix Fiscal 2017 Reported Earnings Mix1 Three key business lines ▪ Canadian Retail robust retail banking platform in Canada with proven performance Canadian Retail ▪ U.S. Retail top 10 bank4 in 60% U.S. Retail2 26% the U.S. with significant organic growth opportunities ▪ Wholesal
Slide 10: Growing platform / North American scale
Growing platform / North American scale… Increasing Retail Focus Acquired Acquired Target TD Became primary Chrysler credit card portfolio Completed strategic Acquired Waterhouse Acquired Commerce Acquired issuer of Aeroplan Completed Completed Privatized Financial & Epoch; and credit card 51% of US
Slide 11: Connected Experiences
Connected Experiences Consistent Strategy Q2 2018 Highlights How we compete ▪ Enabling seamless interactions 12 MILLION 4.4 MILLION 2.8 MILLION ACTIVE ONLINE & between customers and the CANADIAN MOBILE U.S. MOBILE USERS MOBILE CUSTOMERS USERS entire organization ▪ Leveraging industry leading Experie
Slide 12: The Ready Commitment
Im THE READY The Better Bank COMMITMENT Our Purpose: To enrich the lives of our customers, communities and colleagues The Ready Commitment targets Financial Security Helping increase access to the opportunities people need to $1 billion by 2030 improve their financial security TD is refocusing our c
Slide 13: Corporate Responsibility Performance
Corporate Responsibility Performance Highlights ▪ TD's low carbon commitment will target $100B by 2030 to support the transition to a low-carbon economy, Low Carbon Early UN PRI Top Green Bond drive innovation, accelerate renewable energy Commitment signatory underwriter targets $100B by and UNEP FI
Slide 14: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 14
Slide 15: Consistent Earnings Growth
Consistent Earnings Growth Targeting 7-10% adjusted EPS growth over the medium term4 Reported Earnings1,2 (C$MM) $10,517 $8,936 Wholesale Banking $8,024 U.S. Retail $7,883 Canadian Retail $6,640 $6,460 2012 2013 2014 2015 2016 2017 1. For the purpose of calculating contribution by each business segm
Slide 16: Q2 2018 Financial Highlights
Q2 2018 Financial Highlights Total Bank Reported Results (YoY) Financial Highlights $MM Reported Q2/18 Q1/18 Q2/17 EPS up 18% Revenue 9,467 9,360 8,473 ▪ Adjusted EPS up 21%1 PCL 556 693 500 Expenses 4,822 4,846 4,786 Revenue up 12% Net Income 2,916 2,353 2,503 ▪ Revenue (TEB) up 6% Diluted EPS ($)
Slide 17: High Quality Loan Portfolio
High Quality Loan Portfolio Balances (C$B unless otherwise noted) Q1/18 Q2/18 Canadian Retail Portfolio $395.6 $401.3 Personal $325.3 $328.5 Residential Mortgages 190.6 190.4 Home Equity Lines of Credit (HELOC) 76.8 79.5 Indirect Auto 22.5 22.8 Unsecured Lines of Credit 9.9 9.9 Credit Cards 17.8 18.
Slide 18: Strong Credit Quality
Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 63 61 60 58 58 56 50 49 47 50 43 41 39 38 37 37 36 34 34 31 2007 2008 2009 1 2010 2011 2012 2013 2014 2015 2016 2017 Q2/18 2 IFRS IFRS 9 Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Average Net Loans
Slide 19: Canadian Personal Banking
Canadian Personal Banking Q2/18 Highlights Gross GIL GIL / Canadian Personal Banking1 ▪ Credit quality remains strong Loans ($B) ($MM) Loans Residential Mortgages 190 253 0.13% in the Canadian personal Home Equity Lines of Credit (HELOC) 80 114 0.14% portfolio Indirect Auto 23 60 0.26% Credit Cards
Slide 20: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Quarterly Portfolio Volumes $B Highlights $256 $261 $265 $267 $269 Canadian RESL credit quality remains strong 53% 56% 58% 59% 61% Uninsured ▪ Gross impaired loan formations and gross Insured impaired loans reduced year-over-year 47% 44% 42% 41% 39% ▪ P
Slide 21: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 21
Slide 22: Strong Capital Position
Strong Capital Position Common Equity Tier 11 Highlights ▪ Common Equity Tier 1 ratio of 11.8% Q1 2018 CET1 Ratio 10.6% Internal capital generation 37 ▪ Leverage ratio of 4.1% Regulatory floor RWA decrease 120 Organic RWA increase and other (34) ▪ Tier 1 and Total Capital ratios were 13.5% and 15.8%
Slide 23: Industry-Leading Credit Ratings
Industry-Leading Credit Ratings Issuer Ratings1 Moody's S&P DBRS Ratings Aa2 AA- AA Outlook Negative Stable Stable Ratings vs. Peer Group S&P Long-Term Debt Rating Moody’s Long-Term Debt Rating 14- AA 18 Aa1 16 Aa2 12 A+ 14 Aa3 10 A 12 A1 8 A- 10 A2 8 A3 6 BBB+ 6 Baa1 BBB4 4 Baa2 2 2 3 2 2 3 TD Cana
Slide 24: Leading Non-Common Equity Capital Ratings
Leading Non-Common Equity Capital Ratings Industry leading ratings1 for Additional Tier 1 and Tier 2 capital instruments NVCC Tier 2 Subordinated Debt Ratings S&P Moody’s 12 A- 12 A2 10 A- 10 A3 8 BBB+ 8 Baa1 6 BBB- Baa26 4 BBB- Baa34 2 BB+ Ba1 2 a 0 a 0 TD TD Canadian Peer Peers Group 12 TD TD Peer
Slide 25: Robust Liquidity Management
Robust Liquidity Management Liquidity Risk Management Framework High Quality Liquid Assets (HQLA) ▪ Target a 90-day survival horizon under a combined ▪ TD holds a variety of liquid assets Bank-specific and market-wide stress scenario, and a commensurate with liquidity needs in the minimum buffer ove
Slide 26: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Large base of stable retail and commercial deposits Maturity Profile6,7 (To first par redemption date) (C$B) 45 Issuance Maturity Personal and commercial deposits are TD's 40 primary sources of funds 35 ▪ Customer service business model delivers 30 stable base o
Slide 27: Wholesale Term Debt Composition
Wholesale Term Debt Composition1 Funding Strategy Wholesale term funding through diversified sources across domestic and international markets ▪ Well-established C$40 billion Legislative Covered Bond Program is an important pillar in global funding strategy ▪ Programmatic issuance for the establishe
Slide 28: Deposit Overview
Deposit Overview Domestic Leader in Deposits Large base of personal and business deposits that make up 68% of the Bank's total funding ▪ TD Canada Trust (TDCT) ranked #1 in Total Personal Deposits1 ▪ TDCT remains a leader in service and convenience, leveraging the strength of our customer service bu
Slide 29: Bail-in Update
Bail-in Update Regulation Status ▪ On April 18, 2018, the Government of Canada published final regulations under CDIC Act and the Bank Act providing details of the bank recapitalization "bail-in" regime and final Total Loss Absorbing Capacity (TLAC) guidelines. ▪ The issuance regulations under the B
Slide 30: Key Takeaways
Key Takeaways ▪ Strong capital base ▪ Industry leading credit ratings ▪ Proactive & disciplined risk management ▪ Attractive balance sheet composition ▪ Diverse funding strategy 30
Slide 31: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 31
Slide 32: Economic Outlook
Economic Outlook Global: Still-Bright Global Growth Prospects Hide Diverging Paths ▪ Growth momentum slowed slightly in Q1 as temporary factors took over, however, global growth is expected to remain close to last year's performance (3.8% versus 3.7%). ▪ Divergence in the inflation outlook across th
Slide 33: Interest Rate Outlook
Interest Rate Outlook Interest Rates, Canada and U.S. ▪ The Federal Reserve is expected to (%) raise interest rates five more times 7 Forecast before the end of next year, bringing U.S. Federal 6 Funds Rate the federal funds rate to 3.00%. ▪ By contrast, the Bank of Canada is 5 Bank of Canada expect
Slide 34: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 34
Slide 35: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights ▪ Gross impaired loan formations decreased quarter-over-quarter 20 and stable year-over-year 19 19 18 18 bps $1,257 $1,154 $1,189 $1,149 $1,100 $718 / 38 bps $620 / 33 bps $669 / 36 bps $648 / 34 bps $601 / 32 bp
Slide 36: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights 53 ▪ Gross impaired loans decreased 49 49 49 quarter-over-quarter and year- 47 bps over-year $3,290 ▪ The $55MM decrease in the $3,085 quarter is due to: $59 / 13 bps $2,985 $3,048 $37 / 8 bps $2,993 ▪ Continued strong credit $
Slide 37: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights $702 ▪ PCL decreased $140MM or 9 $602 $562 basis points quarter-over- $183 $518 $512 $16 quarter driven by: $132 $117 ▪ Seasonal trends in the U.S. $117 $86 credit card and indirect auto $256 portfolios $226 $170 $188 $2
Slide 38: Provision for Credit Losses (PCL) by Business Segment
Provision for Credit Losses (PCL)1,2 By Business Segment IAS 39 IFRS 9 Highlights PCL (C$MM) Q2/17 Q1/18 Q2/18 ▪ Impaired PCL decrease Total Bank $ 518 $ 702 $ 562 quarter-over-quarter reflects: Impaired $ 451 $ 566 $ 526 ▪ Continued strong credit Performing 67 136 36 performance in Canadian Canadia
Slide 39: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Canadian Commercial and Gross Q2/18 Highlights GIL GIL/ Loans/BAs Wholesale Banking1 ($B) ($MM) Loans ▪ Canadian commercial and Commercial Banking2 73 175 0.24% Wholesale Banking portfolios Wholesale 49 0 0.00% continue to perform well Total Canadian Commerc
Slide 40: U.S. Personal Banking – U.S. Dollars
U.S. Personal Banking – U.S. Dollars Q2/18 U.S. Personal Banking1 Gross Loans GIL GIL / Highlights ($B) ($MM) Loans Residential Mortgages 22 366 1.63% ▪ Continued good asset quality Home Equity Lines of Credit (HELOC)2 10 663 6.96% in U.S. personal Indirect Auto 22 173 0.77% Credit Cards 12 217 1.78
Slide 41: U.S. Commercial Banking – U.S. Dollars
U.S. Commercial Banking – U.S. Dollars Q2/18 Highlights Gross Loans / GIL GIL/ U.S. Commercial Banking1 BAs ($B) ($MM) Loans ▪ Sustained good credit Commercial Real Estate (CRE) 23 114 0.50% quality in U.S. Commercial Non-residential Real Estate 17 90 0.53% banking Residential Real Estate 6 24 0.40%
Slide 42: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 42
Slide 43: Canadian Registered Covered Bond Program
Canadian Registered Covered Bond Program Key Highlights ■ Canadian residential real estate property with no more than 4 residential units Covered Bond Collateral ■ Uninsured conventional first lien assets with original loan to value ratio that is 80% or less Housing Market Risks ■ Latest property va
Slide 44: TD Global Legislative Covered Bond Program
TD Global Legislative Covered Bond Program TD Covered Bond Programme Highlights Cover Pool as at April 30, 2018 ▪ 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 gove
Slide 45: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: www.td.com/investor
Slide 46: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income Investor Presentation Q2 2018
Toronto-Dominion Bank — Debt Investor Presentation (2018) on 6ix