Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q4 2017 Earnings Presentation
35 slides from Toronto-dominion Bank's earnings presentation, 2017
Slide 1: TD Bank Group Investor Presentation Q4 2017
TD Bank Group Investor Presentation Q4 2017
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), an
Slide 3: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 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 Q4 20171 Canadian U.S. U.S. Retail (C$) Retail
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 Aa2 by Moody’s 2 Strong employment brand Retail Earnings Focus Leader in customer service and convenience Strong organic growt
Slide 6: 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$19.5 trillion Population of 37 million Population of 323 million Canadian Banking System U.S. Banking System One of the sou
Slide 7: TD in North America
TD in North America North Q4 2017 Canadian American C$ except otherwise noted Ranking3 Ranking4 Total assets $1,279B 1st 5th Total deposits $833B 1st 5th Market capitalization $134.9B 2nd 6th Reported net income (trailing four quarters) $10.5B 2nd 6th Adjusted net income1 (trailing four quarters) $1
Slide 8: Composition of Earnings
Composition of Earnings Fiscal 2017 Reported Earnings Mix1 Three key business lines Canadian Retail robust retail banking platform in Canada with proven performance U.S. Retail top 10 bank4 in the U.S. with significant organic growth opportunities Wholesale Banking North American dealer focuse
Slide 9: Strategic Evolution of TD
Strategic Evolution of TD Increasing Retail Focus Acquired Acquired Target credit TD card portf olio & Became primary Chry sler Completed strategic Acquired Waterhouse Acquired Commerce Acquired issuer of Aeroplan Completed Priv atized Financial Epoch; and credit card 51% of USA / Commerce Bank Riv
Slide 10: Risk Management Framework
Risk Management Framework Our Risk Appetite We take risks required to build our business, but only if those risks: Fit our business strategy and can be understood and managed Do not expose the enterprise to any significant single loss events; we don’t “bet the bank” on any single acquisition, bu
Slide 11: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 12: Stable Earnings Growth
Stable Earnings Growth Reported Earnings1,2 (C$MM) Wholesale Banking U.S. Retail Canadian Retail Targeting 7-10% adjusted EPS growth4 over the medium term 1. For the purpose of calculating contribution by each business segment, earnings from the Corporate segment are excluded. 2. Ef f ective Q1 2014
Slide 13: Solid Total Shareholder Returns
Solid Total Shareholder Returns Total Shareholder Return1 TD Compounded Annual Growth Rates (CAGR) Canadian peer average2 North American peer average3 Delivering top tier long-term shareholder returns 1. TSR is calculated based on share price movement and dividends reinvested over the trailing one-,
Slide 14: Strong, Consistent Dividend History
Strong, Consistent Dividend History Dividends Per Share (C$) Q1/17: Announced $0.05 dividend increase1 Dividend yield: 3.5% 2 Q3/12: Increased target payout range to 40%-50%3 Dividend has grown over time 1. For the quarter ended April 2017. 2. As of Q4/17. Dividend yield is calculated as the dividen
Slide 15: Q4 2017 Highlights
Q4 2017 Highlights Financial Highlights $MM Total Bank Reported Results (YoY) Reported Q4/17 Q3/17 Q4/16 Revenue 9,270 9,286 8,745 EPS up 18% PCL 578 505 548 Adjusted EPS up 11%1 Expenses 4,828 4,855 4,848 Revenue up 6% Net Income 2,712 2,769 2,303 Diluted EPS ($) 1.42 1.46 1.20 Net interest inc
Slide 16: Q4 2017 Segment Results Highlights
Q4 2017 Segment Results Highlights Net income of $1.7 billion, up 11% YoY, reflecting 5% revenue growth and lower PCL, Canadian partially offset by higher insurance claims Retail PCL decreased 7% YoY and increased 3% QoQ Expenses increased 1% YoY and had positive operating leverage In U.S. D
Slide 17: Strong Credit Quality
Strong Credit Quality GIL and PCL Ratios (bps) IFRS Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Average Net Loans and Acceptances (bps) Credit quality remains strong Note: Effective Q1/ 09 ratios exclude Debt Securities Classified as Loans and Acquired Cred
Slide 18: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 19: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt6 Personal and commercial deposits are primary sources of funds 1. As of October 31, 2017. 2. Excludes certain liabilities which do not create funding which are: acceptances, trading derivatives, other liabilities, whol esale mort
Slide 20: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/17 Q4/17 Canadian Retail Portfolio $ 386.1 $ 391.2 Personal $ 318.7 $ 323.1 Residential Mortgages 189.4 190.5 Home Equity Lines of Credit (HELOC) 72.3 75.0 Indirect Auto 21.6 22.3 Unsecured Lines of Credit 9.7 9.8 Credit
Slide 21: Capital & Liquidity
Capital & Liquidity Common Equity Tier 11 Highlights Common Equity Tier 1 ratio of 10.7% Q3 2017 CET1 Ratio 11.0% Leverage ratio of 3.9% Internal capital generation 32 Impact of repurchase of common shares (13) Liquidity coverage ratio of 120% Impact of Scottrade transaction (23) Tier 1 and
Slide 22: TD Credit Ratings
TD Credit Ratings Issuer Ratings1 Accolades Moody's S&P DBRS “Safest Bank in North America & One of the World’s 50 Safest Banks” Ratings Aa2 AA- AA – Global Finance Magazine “Best Bank in Canada” Outlook Negative Stable Stable – Euromoney Magazine Ratings vs. Peer Group S&P Long-Term Debt Rating
Slide 23: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 24: Canadian Retail
Canadian Retail Consistent Strategy Reported Net Income (C$MM) $6,525 How we compete Legendary personal connected customer service Focus on underrepresented products and markets The power of One TD Winning culture and team Q4 2017 Highlights Total Deposits2 C$317B Employees4 38,222 Total Loa
Slide 25: Canadian Retail
Canadian Retail Personal Banking #1 or #2 market share in most retail products 1 On average, 37% longer branch hours than peers 2 with 346 branches offering Sunday banking Mobile banking leadership in Canada with the highest number of mobile unique visitors accessing financial services 3 Ran
Slide 26: U.S. Retail
U.S. Retail Reported Net Income Consistent Strategy (US$MM) How we compete Legendary service and convenience Grow and deepen customer relationships Differentiated brand as the “human” bank Productivity initiatives that enhance both the employee and customer experience Q4 2017 Highlights Co
Slide 27: U.S. Retail
U.S. Retail Personal & Commercial Banking Top 10 bank 1 with over 9MM customers, operating retail stores in 15 states and the District of Columbia Open longer than the competition, including Sunday banking in most markets #3 market share in NYC2 and targeting top 5 market share in all of our m
Slide 28: Wholesale Banking
Wholesale Banking Consistent Strategy Net Income (C$MM) How we compete Be a leading North American dealer with global reach Strengthen position as a top dealer in Canada and grow U.S. dollar business Provide superior advice and execution Leverage TD's businesses Maintain a prudent risk pro
Slide 29: Wholesale Banking
Wholesale Banking Positioned for growth Continue to be a top ranked investment dealer in Canada by increasing our origination footprint and competitive advantage with Canadian clients #1 or #2 ranking in key domestic categories, including equity block trading, government and debt underwriting, s
Slide 30: Connected Experiences
Connected Experiences Digital Enhancements Consistent Strategy How we compete Connected experiences enable seamless interactions between TD.com receiv ed an exciting new look w ith a Tablet enabled real time online account opening customers and the entire simple, responsiv e and modern design that
Slide 31: Corporate Responsibility Performance
Corporate Responsibility Performance TD joined 14 leading banks in a project led by the UN to pilot a set of Highlights recommendations released by the Financial Stability Board's Task Force on Climate Related Financial Disclosures TD is the only Canadian bank listed on the Dow Jones Green Bon
Slide 32: Shared Commitments of TD's Framework
Shared Commitments of TD's Framework Our purpose Our vision To enrich the lives of our customers, Be the better bank 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 Pro
Slide 33: TD Model Has Proven Its Resilience
TD Model Has Proven Its Resilience Simple Strategy Vision: Consistent Focus To be The Better Bank Lead with service and Headwinds Best Bank in Canada1 convenience Slowing growth in Leverage TD brand Canada Top 10 bank2 in the U.S. across all segments Evolving regulatory One of Canada’s mos
Slide 34: 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 Website: Best Corporate Governance www.td.com/investor
Slide 35: TD Bank Group
TD Bank Group Investor Presentation Q4 2017