Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — TD Bank Financial Group — Investor Presentation (June 2010)
43 slides from Toronto-Dominion Bank's investor presentation, June 2010
Slide 1: TD Bank Financial Group Investor Overview Presentation
TD Bank Financial Group Investor Overview Presentation June 2010
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and oral forward-looking statements, including in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), and in other communications. In addition, repres
Slide 3: Additional Information
Additional Information The proposed merger transaction involving The Toronto-Dominion Bank and The South Financial Group, Inc. will be submitted to The South Financial Group, Inc.’s shareholders for their consideration. Shareholders are encouraged to read the proxy statement/prospectus regarding the
Slide 4: Contents
Contents TD Bank Financial Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 4
Slide 5: Key Takeaways
Key Takeaways Simple Strategy, Consistent Focus Building Building the the Better Better Bank Bank North North American American • Top 10 Bank in North America1 • Leverage platform and brand for growth • One of the few Aaa-rated banks on NYSE • Strong employment brand Retail Retail Earnings Earnings
Slide 6: A Top Bank in North America
TD Bank Financial Group A Top 10 Bank in North America Compared to: Q2 20101 Canadian North American (In U.S.$B)2 Peers7 Peers8 Total Assets $571 2nd 6th Total North American Deposits $402 1st 4th Market Cap3 $60.7 2nd 6th Adj. Net Income4 (Trailing 4 Quarters) $4.9 2nd 5th Adj. Retail Earnings4,5 (
Slide 7: Financial Results
Financial Results (C$MM)1 Q2 2010 QoQ YoY F2009 YoY Revenue $ 4,767 -5% 10% $ 17,860 22% Provision for Credit Losses 365 -29% -53% 2,480 133% Expenses 2,953 -1% -3% 12,211 29% Adjusted Net Income $ 1,234 -14% 21% $ 4,716 24% Adjusted EPS (diluted) $ 1.36 -15% 19% $ 5.35 10% Tier 1 Capital 12.0% 50bp
Slide 8: Lower Risk Retail Focus
Lower Risk Retail Focus11 Adjusted Earnings Q2 2010 Global Wealth3 TD Ameritrade3,4 C$1.2B U.S. P&C2 8% 4% Canadian P&C2 U.S. Retail 21% 17% 55% Canadian Retail 16% 63% Wholesale About 85% of earnings from retail operations 1. Based on adjusted results as described on slide #5. 2. “P&C” refers to Pe
Slide 9: Strong Focus on Risk-Return
Strong Focus on Risk-Return Return on Risk-Weighted Assets1,2,3 2.57% 2.03% 1.18% TD Canadian Peers U.S. Peers Better return for risk undertaken 1. TD based on Q2/10 adjusted results, as described on slide #5. Return on risk-weighted assets is adjusted net income available to common shareholders div
Slide 10: Managing through Current Environment
TD Bank Financial Group: Managing through through Current Current Environment Environment Get across the recession valley ̶ Carefully manage capital, funding, liquidity and risk Keep our business model intact ̶ Preserve our performance, convenience and service culture Emerge with momentum on our
Slide 11: Strong, Consistent Dividend History
Strong, Consistent Dividend History Dividends Per Share1 (C$) $2.44 th Grow ed nualiz Dividend Dividend An Yield 11% Yield 3.5% 2 $0.38 3.5%2 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Growing dividends over time 1. 2009 dividend per share based on
Slide 12: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution Adjusted Earnings1 $4,716 (C$MM) GR % r CA s: 14 ea ing 5-y Earn PS: 7% ed E d j ust usted $4,189 A Adj $3,813 $3,376 $2,861 $2,664 $2,485 Wholesale Banking U.S. P&C Wealth Management Canadian P&C 2004 2005 2006 2007 2008 2009 Q2 2010 YTD Retail
Slide 13: Key Takeaways
Key Takeaways Building Building the the Better Better Bank Bank North North American American Retail Retail Earnings Earnings Focus Focus Franchise Franchise Businesses Businesses Risk Risk Discipline Discipline 13
Slide 14: Contents
Contents TD Bank Financial Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 14
Slide 15: Key Businesses At a Glance
Key Businesses At a Glance Wealth Management Segments Business Canadian P&C1 U.S. P&C1 Wholesale Global Wealth TD Ameritrade2 Earnings Canadian Retail U.S. Retail Wholesale Mix Brands 1. “P&C” refers to Personal and Commercial Banking. 15 2. TDBFG had a reported investment in TD Ameritrade of 44.8%
Slide 16: Canadian Personal and Commercial Banking Overview
Canadian Personal and Commercial Banking Overview Overview Key Businesses Canadian Banking ̶ Personal Banking • Retail operations provide a full range of financial products and services • Over 11 million personal and small business customers • More than 1,100 branches across Canada • More than 2,7
Slide 17: Canadian Personal and Commercial Banking Key Messages
Canadian Personal and Commercial Banking Key Key Messages Messages Lead in customer service and convenience ̶ Rated #1 by J.D. Power1 and Synovate2, year after year ̶ More than 50% longer branch hours than peers3 Integrated product offerings ̶ #1 or #2 market share in most retail products4 ̶ Cli
Slide 18: Canadian Personal and Commercial Banking Performance
Canadian Personal and Commercial Banking Performance Performance Earnings ($MM) 5-year 5-year $2,424 $2,472 CAGR CAGR 1 $2,253 11% 11%1 $1,966 $1,702 $1,450 $1,481 2004 2005 2006 2007 2008 2009 Q2 2010 YTD 1. See slide #5 for definition of adjusted results. 5-year CAGR is calculated based on compoun
Slide 19: Wealth Management Overview
Wealth Management Overview Key Businesses Online Brokerage ̶ Canada ̶ U.S. - 45% reported equity investment in TD Ameritrade ̶ Europe • U.K., Ireland • Luxembourg: Internaxx Advice-Based Businesses As at Q2 2010 In C$ ̶ Canada • Financial Planning AUA1 $214B • Private Investment Advice – Full se
Slide 20: Wealth Management Key Messages
Wealth Management Key Messages Leading market positions ̶ #1 online brokerage in Canada1 ̶ #1 in long-term mutual fund sales in Canada2 ̶ #1 execution-only brokerage in the U.K.3 Integrated wealth organization ̶ Financial Planners based in retail bank branches ̶ Client referrals from TDBFG retai
Slide 21: Wealth Management Performance
Wealth Management Performance Earnings ($MM) $762 $769 5-year 5-year CAGR CAGR 1 $590 $261 $289 $597 11% 11%1 $180 $432 $252 $352 $108 $311 Investment in TD Ameritrade2 $85 $501 $480 $99 $410 Global Wealth $324 $345 $267 Management $212 2004 2005 2006 2007 2008 2009 Q2 2010 YTD 1. See slide #5 for d
Slide 22: U.S. Personal and Commercial Banking Overview
U.S. Personal and Commercial Banking Overview Overview Key Businesses Personal Banking ̶ Over 1,100 stores ̶ More than 2,700 ATMs ̶ 24/7 live customer support As at Q2 2010 In C$ ̶ More than 6.5 million customers Total Assets $162B Commercial Banking Total Deposits1 $128B ̶ Offers a broad range
Slide 23: U.S. Personal and Commercial Banking Key Messages
U.S. Personal and Commercial Banking Key Key Messages Messages Lead in customer service and convenience ̶ Rated “Highest in Customer Satisfaction” with Small Business Banking three years in a row1 ̶ Unique positioning and culture that is difficult for others to replicate Significant scale and en
Slide 24: U.S. Personal and Commercial Banking Performance
U.S. Personal and Commercial Banking Performance Performance Adjusted Earnings1 (C$MM) $909 4-year $806 4-year CAGR CAGR 55% 1 55%1 $472 $359 $255 C$ $158 US$ $130 $224 $328 $794 $781 $457 2005 2006 2007 2008 2009 Q2 2010 YTD 2 Purchased 51% Acquired Milestones Privatized interest in Commerce TD Ban
Slide 25: Wholesale Banking Overview
Wholesale Banking Overview Key Businesses Investment Banking ̶ Advisory, underwriting, and corporate lending Equities As at Q2 2010 In C$ ̶ Trading, facilitation, execution services, and research Risk Weighted $32B Assets Rates and Foreign Exchange Adjusted $1,291MM ̶ Trading, facilitation, ex
Slide 26: Wholesale Banking Key Messages
Wholesale Banking Key Messages Focus on client-driven franchise businesses ̶ Presence in key global financial centres ̶ Strategic decisions before financial crisis to reduce corporate lending risk profile and exit global structured products ̶ Leveraging strength of TD brand and partners to grow U.
Slide 27: Wholesale Banking Performance
Wholesale Banking Performance Adjusted Earnings1 ($MM) $1,137 $824 $664 $588 $592 $551 $65 2004 2005 2006 2007 2008 2009 Q2 2010 YTD ROIC2 25% 22% 28% 30% 2% 30% 29% 1. See slide #5 for definition of adjusted results. Also see the Wholesale segment discussion in the Business Segment Analysis section
Slide 28: Contents
Contents TD Bank Financial Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 28
Slide 29: Gross Lending Portfolio: Loans and Acceptances
Gross Lending Portfolio: Loans and Acceptances Balances Q2 2010 (C$B) U.S. P&C Commercial 22% Other Personal Banking (incl. Residential $56.8B 12% Small Business Mtgs/Home Equity Banking), 7% 12% Other Personal, 2% Commercial Real Estate 5% Commercial and Residential 2/3 Industrial 8% Mtgs/HELOC ins
Slide 30: Credit Quality
Credit Quality Allowance for GILs / Avg NCOs / Avg (In %)1 Credit Losses / Loans + BAs Loans + BAs GILs 0.84 117.3 0.66 Cdn Peer Avg 1.66 76.4 0.60 U.S. Peer Avg 3.26 109.3 4.21 Well-positioned loan portfolio 1. TD and Canadian Peers results are as of Q2/10. U.S. peers results are as of Q1/10. Canad
Slide 31: Contents
Contents TD Bank Financial Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 31
Slide 32: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the 10 most competitive economies1 Soundest banking system in the world1 Canadian economy outperformed over last decade ̶ Average annual real GDP growth of 2.7% from 1997 to 2009 ̶ Canadian economy beginning to show signs of recovery Strong Canadian ho
Slide 33: 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 34: 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 Outstanding mortgages include earlier exotic variable interest rate option products (interest only, options ARMs) New regulations on default insured mortgages Borrowers often qualified us
Slide 35: Canadian Economy: Canadian Strengths
Canadian Economy Canadian Strengths Average Annual Real GDP1 Growth, 1997 - 2009 Canadian economy 2.69 2.51 outperformed over 2.14 last decade 1.69 0.52 Canada U.S. UK Euro-area Japan Canadian economy out of recession and Canadian Real GDP Growth2 global economic YoY % Change 6 Forecast recovery wil
Slide 36: Canadian Economy: Near Term Slowdown
Canadian Economy Near Term Slowdown TD Commodity Price Index1 Commodity prices Index; 1997=100 Forecast have corrected from 400 350 record high levels, but 300 250 Overall TDCI have most likely 200 bottomed out 150 100 TDCI Ex. Energy 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 37: Canadian Economy: Long Term Support
Canadian Economy Long Term Support Canadian Unemployment1 Unemployment rate Percent has peaked and will 14 12 Forecast remain below prior 10 recessionary peaks 8 6 4 2 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Government finances in sound shape Canadian Federal Finances
Slide 38: Contents
Contents TD Bank Financial Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 38
Slide 39: Comparison to Global Banks
TD Bank Financial Group Comparison to Global Banks Q2 20101 (U.S.$B)2 SAN BBVA RBS BNP CBA Total Assets $571 $1,540 $747 $2,398 $3,175 $551 Total Deposits $402 $724 $457 $991 $1,175 $327 Market Cap3 $60.7 $82.8 $39.6 $39.3 $68.7 $65.9 Tier 1 Capital Ratio 12.0% 10.3% 9.5% 13.7% 10.5% 9.1% Avg. # of
Slide 40: Credit Ratings
Credit Ratings Rating¹ Moody's S&P Fitch DBRS Aaa AA- AA- AA Strong credit ratings 1. As at May 27, 2010. Moody's: Issuer Rating, S&P: LT Foreign Issuer Credit, Fitch: LT Issuer Default Rating, DBRS: Senior Unsecured Debt. 40
Slide 41: Managing Environmental, Social, Governance Risks & Opportunities
Managing Environmental, Social, Governance Risks & Opportunities One of the top 100 most sustainable companies in the world1 ̶ For the second year in a row ̶ One of only 5 companies in Canada Recognized by sustainability indices ̶ Dow Jones Sustainability Index North America ̶ Jantzi Social Inde
Slide 42: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: Best Investor Relations by Sector: Financial Services www.td.com/investor Best Retail Investor Communications 42
Slide 43: Building the better bank every day
Building the better bank every day D Bank Financial Group
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