Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q3 2017 Earnings Presentation
35 slides from Toronto-dominion Bank's earnings presentation, 2017
Slide 1: TD Bank Group Investor Presentation
TD Bank Group Investor Presentation Q3 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), and
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 top tier long 2 Proven Performance 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 Q3 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’s2 Strong employment brand Retail Earnings Focus Leader in customer service and convenience Strong organic growth
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$1.5 trillion Nominal GDP of US$18.6 trillion Population of 36 million Population of 322 million Canadian Banking System U.S. Banking System One of the sou
Slide 7: TD in North America
TD in North America North Q3 2017 Canadian American C$ except otherwise noted Ranking3 Ranking4 Total assets $1,202B 1st 5th Total deposits $774B 2nd 6th Market capitalization $118.8B 2nd 6th Reported net income (trailing four quarters) $10.1B 2nd 6th Adjusted net income1 (trailing four quarters) $1
Slide 8: Composition of Earnings
Composition of Earnings 2016 Reported Earnings Mix1 Three key business lines Canadian Retail robust retail banking platform in Canada with proven performance U.S. Retail2 U.S. Retail top 10 bank4 in Canadian 26% the U.S. with significant Retail 61% organic growth opportunities Wholesale Bankin
Slide 9: Strategic Evolution of TD
Strategic Evolution of TD Increasing Retail Focus Acquired Acquired Target credit TD card portfolio & Became primary Chrysler Completed strategic Announced Acquired Waterhouse Acquired Commerce Acquired Epoch; and issuer of Aeroplan Privatized Financial credit card acquisition of 51% of USA / Commer
Slide 10: Risk Management Framework
Risk Management Framework Our Risk Appetite We take risks required to build our business, but only if those risks: Fit our business strategy and can be understood and managed Do not expose the enterprise to any significant single loss events; we don’t “bet the bank” on any single acquisition, bu
Slide 11: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 12: Stable Earnings Growth
Stable Earnings Growth Reported Earnings1,2 (C$MM) $8,936 $8,024 Wholesale Banking $7,883 U.S. Retail $6,640 Canadian Retail $6,460 2012 2013 2014 2015 2016 Targeting 7-10% adjusted EPS growth4 over the medium term 1. For the purpose of calculating contribution by each business segment, earnings fro
Slide 13: Solid Total Shareholder Returns
Solid Total Shareholder Returns Total Shareholder Return1 TD Compounded Annual Growth Rates (CAGR) Canadian peer average2 North American peer average3 35.1% 17.1%18.7% 17.6% 14.4%14.6% 11.6% 10.5% 8.0% 7.9% 8.6% 4.8% 1 Year 3 Years 5 Years 10 Years Delivering top tier long-term shareholder returns 1
Slide 14: Strong, Consistent Dividend History
Strong, Consistent Dividend History Dividends Per Share (C$) $2.16 Q1/17: Announced $0.05 dividend increase1 Dividend yield: 3.7%2 Q3/12: $0.22 Increased target payout range to 40%-50%3 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Divi
Slide 15: Q3 2017 Highlights
Q3 2017 Highlights Financial Highlights $MM Total Bank Reported Results (YoY) Reported Q3/17 Q2/17 Q3/16 Revenue 9,286 8,473 8,701 EPS up 18% PCL 505 500 556 Adjusted EPS up 19%1 Expenses 4,855 4,786 4,640 Net Income 2,769 2,503 2,358 Revenue up 7% Diluted EPS ($) 1.46 1.31 1.24 Net interest inc
Slide 16: Q3 2017 Segment Results Highlights
Q3 2017 Segment Results Highlights Net income of $1.7 billion, up 14% YoY, reflecting 4% revenue growth, lower insurance claims and PCL. Canadian PCL decreased 8% YoY and increased 1% QoQ Retail Expenses increased 4% YoY, reflecting higher employee-related expenses and higher investment in str
Slide 17: Strong Credit Quality
Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 61 60 63 58 58 57 56 53 50 49 50 43 39 41 42 37 38 34 34 35 33 26 31 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1/17 Q2/17 Q3/17 IFRS Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Aver
Slide 18: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 19: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt6 Sub-Debt 1% Covered Personal Non- Trading Deposits5 Bonds Term Deposits 27% 38% 8% Wholesale Term Debt Senior 11% Mortgage Unsecured Personal Term Securitization MTN Deposits 16% 52% 5% Other Deposits3 26% Short Term Liabilities
Slide 20: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q2/17 Q3/17 Canadian Retail Portfolio $ 377.5 $ 386.1 Personal $ 312.0 $ 318.7 Residential Mortgages 188.1 189.4 Home Equity Lines of Credit (HELOC) 68.0 72.3 Indirect Auto 20.9 21.6 Unsecured Lines of Credit 9.7 9.7 Credit
Slide 21: Capital & Liquidity
Capital & Liquidity Common Equity Tier 11 Highlights Common Equity Tier 1 ratio of 11% Q2 2017 CET1 Ratio 10.8% Leverage ratio of 4.1% Internal capital generation 38 Impact of issuance of common shares 8 Liquidity coverage ratio of 124% Actuarial gains on employee pension plans 7 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 top tier long 2 Proven Performance 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) $5,938 $5,988 How we compete $5,234 $4,463 $4,569 Legendary customer service and convenience Relentless commitment to operational excellence The power of One TD $4,567 $4,681 $5,490 $5,938 $5,988 Adjusted1 Winning culture and tea
Slide 25: Canadian Retail
Canadian Retail Personal Banking #1 or #2 market share in most retail products1 On average 45% longer branch hours than peers2 with 430 branches offering Sunday banking Mobile banking leadership in Canada with the highest number of mobile unique visitors accessing financial services3 Business
Slide 26: U.S. Retail
U.S. Retail Reported Net Income Consistent Strategy (US$MM) $2,234 How we compete $1,938 $2,007 $1,715 Legendary service and convenience $1,318 Grow and deepen customer relationships Differentiated brand as the “human” bank $2,053 $2,234 Adjusted1 Productivity initiatives that enhance $1,611
Slide 27: U.S. Retail
U.S. Retail Personal & Commercial Banking Top 10 bank1 with ~9MM customers, operating retail stores in 15 states and the District of Columbia Open longer than the competition, including Sunday banking in most markets #3 market share in NYC2 and targeting top 5 market share in all of our major
Slide 28: Wholesale Banking
Wholesale Banking Consistent Strategy Net Income (C$MM) How we compete $880 $920 $873 $813 Canada $650 Be a top-ranked integrated investment dealer Fully aligned with TD Bank Group partners Provide superior advice and execution U.S. Growing our US$ product suite across Corporate, 2012 2013 2
Slide 29: Wholesale Banking
Wholesale Banking Focus on client-driven businesses Diversified business mix with a North American focus Presence in key global financial centres Extend our client-focused business through superior advice and execution A North American dealer aligned with our TD partners Focus on integrating
Slide 30: Connected Experiences
Connected Experiences Digital Enhancements Consistent Strategy How we compete Connected experiences enable seamless interactions between TD.com received an exciting new look with a Tablet enabled real time online account opening customers and the entire simple, responsive and modern design that's
Slide 31: Corporate Responsibility Performance
Corporate Responsibility Performance Highlights TD joined 11 leading banks in a project led by the UN to pilot a set of recommendations released by the Financial Stability Board's Task Force TD is the only Canadian bank listed on the Dow Jones on Climate Related Financial Disclosures Sustainabil
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 Q3 2017