Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Q2 2021 Earnings Presentation
36 slides from Toronto-dominion Bank's earnings presentation, May 27, 2021
Slide 1: Q2 2021 Results Presentation
Presentation 0 2 an 5 2 25 a 5 2 Cd Results
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: Our Strategy
Our Strategy We're in this together – Anchored by our proven business model and propelled by our forward-focused strategy, we are supporting our customers, communities and colleagues through these challenging times Proven Business Model Purpose-Driven Forward Focused Deliver consistent earnings grow
Slide 4: Proven Business Model
Proven Business Model Diversification and scale, underpinned by a strong risk culture Reported earnings of $3.7B up $2.2B (adjusted earnings of $3.8B up $2.2B)1 Reported EPS of $1.99 (adjusted EPS of $2.04)1 PCL recovery of $377MM versus $3.2B provision in the prior year Increased customer a
Slide 5: Purpose Driven
5 Purpose Driven Centered on our vision, purpose and shared commitments Environment Social Governance – Global Climate Action Plan, launched in 2020: – Committed to 50% increase in minority – Created Senior Executive Team (SET) Forum to – Target of net-zero greenhouse gas (GHG) executive representat
Slide 6: Forward Focused
Forward Focused Shaping the future of banking 10MM Active Mobile Users across North America Highest in Dealer Satisfaction among Non-Captive Lenders with Retail Credit J.D. Power 2021 Canada Dealer Finance Study Announced agreement to acquire Headlands Tech Global Markets, LLC 6
Slide 7: Forward Focused: Digital Adoption
Forward Focused: Digital Adoption Digital Adoption Active Mobile Users Self-Serve Transactions (% of total customers)2 (millions)3 (as % of all financial transactions)4 +270bps +380 bps YoY YoY +8.9% YoY +12.5% YoY +290 bps +860 bps YoY YoY 62.1 92.1 91.9 6.2 Canadian 6.1 60.6 Retail1 59.4 89.0 5.7
Slide 8: Q2 2021 Highlights
Q2 2021 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q2/21 QoQ YoY EPS of $1.99, up $1.19 Revenue 10,228 (5%) (3%) Adjusted1 EPS of $2.04, up $1.19 PCL (377) ($690) ($3,595) Expenses 5,729 (1%) 12% Revenue down 3% Net Income 3,695 13% +$2,180 Strong volume gro
Slide 9: Canadian Retail
Canadian Retail Highlights (YoY) P&L ($MM) Reported Q2/21 QoQ YoY Net income up 86% (up 82% adj1.) Revenue 6,062 (4%) 1% PCL (37) ($179) ($1,190) Revenue up 1% PCL Ratio (0.03%) (15 bps) (110 bps) Higher fees and volumes, offset by lower margins Insurance Claims 441 (43%) (34%) and premium rebates
Slide 10: U.S. Retail
U.S. Retail Highlights US$MM (YoY) P&L (US$MM) (except where noted) Reported Q2/21 QoQ YoY Net income of $1,047MM Revenue 2,076 0% 2% PCL (173) ($276) ($987) Revenue up 2% Expenses 1,267 (4%) 4% Loan volumes up 1% U.S. Retail Bank Net Income 853 39% +$766 Deposits ex-Schwab up 28% Schwab/ AMTD E
Slide 11: Wholesale Banking
Wholesale Banking Highlights (YoY) P&L ($MM) Reported Q2/21 QoQ YoY Net income up 83% Revenue 1,157 (12%) (8%) PCL (63) ($83) ($437) Revenue down 8% Expenses 705 (1%) 14% Trading-related revenue of $558MM, down 11% Net Income 383 (12%) 83% ROE 20.0% (130 bps) 960 bps PCL lower by $83MM QoQ Impai
Slide 12: Corporate Segment
Corporate Segment Highlights (YoY) P&L ($MM) Reported Q2/21 Q1/21 Q2/20 Reported loss of $186MM Net Income (186) (197) (202) Adjustment for items of note Adjusted1 loss of $106MM Amortization of Acquired Intangibles before income 69 74 68 taxes Acquisition and integration 19 38 - charges related t
Slide 13: Capital
Capital Common Equity Tier 1 ratio of 14.2% Common Equity Tier 1 Ratio Q1 2021 CET 1 Ratio 13.6% Internal capital generation 47 Risk-Weighted Assets down 3% QoQ Actuarial gains on employee benefit plans 17 Decrease in RWA (net of FX)1 8 Leverage ratio of 4.6% Other items 3 Defined benefit pension fu
Slide 14: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2 Gross impaired loan formations 24 23 remained low, reflecting: – The impact of support $1,783 $1,708 15 16 programs 14 bps – Customer resilience $40 / 5 bps $217 / 32 bps – The continued economic recover
Slide 15: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2 Gross impaired loans decreased 51 quarter-over-quarter, reflecting: 47 – Resolutions outpacing formations in the Canadian 42 42 and U.S. consumer lending $3,606 $3,821 portfolios $343 / 52 bps 38 bps $3,157 – The impac
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $3,221 PCL recovery for the quarter $374 reflects: – A performing allowance $554 $2,189 release $123 – Partially offset by cyclically low $217 impaired provisions $1,140 $898 Wholesale $921 $100 Corporate $316 $
Slide 17: Provision for Credit Losses (PCL): Impaired and Performing
Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) Q2/20 Q1/21 Q2/21 Impaired PCL remained at low levels, decreasing $84 million quarter-over-quarter. Total Bank 3,221 316 (373) primarily reflected in: Impaired 970 469 385 – The U.S. consumer lending portfolios Perf
Slide 18: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) ACL1: $B and Ratios2 124 126 122 103 108 bps Highlights $9.2 $9.4 $8.9 74 $8.0 $7.9 ACL decreased by $968MM quarter- over-quarter, reflecting: United States 59% 60% $5.3 59% – A performing allowance release, Canada 62% 58% largely related to improvement in our 61%
Slide 19: Appendix
Appendix 19
Slide 20: Q2 2021: Items of Note
Q2 2021: Items of Note Revenue/ ($MM) EPS ($)1 Segment Expense Line Item5 Pre Tax After Tax Reported net income and EPS (diluted) 3,695 1.99 Items of note Amortization of acquired intangibles2 69 62 0.03 Corporate page 12, line 14 Acquisition and integration charges related to Schwab3 19 18 0.01 Cor
Slide 21: U.S. Strategic Card Portfolio: Accounting
U.S. Strategic Card Portfolio: Accounting Values below are shown for illustrative purposes only. The percent share is representative of the agreements with the retailer card partners, but the exact split differs by partner. Illustrative Example $MM Credit Card Portfolio 1,000 Mechanics: TD collects
Slide 22: Total Bank PTPP & Operating Leverage
Total Bank PTPP1 & Operating Leverage2,7 (Modified for U.S. Strategic Card Portfolio accounting and other items) 1. Pre-tax, pre-provision earnings (PTPP) is a non-GAAP measure that is typically calculated by subtracting expenses from revenues. At the total bank level, TD calculates PTPP as the diff
Slide 23: Canadian Retail
Canadian Retail Net Interest Margin Average Deposits $B2 428 437 396 413 365 35 37 39 2.83% 33 30 143 150 155 2.71% 122 136 2.68% 2.65% 2.61% 213 228 234 240 243 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Personal Business Wealth Efficiency Ratio1 Average Loans $B2 440 440 447 454 4
Slide 24: Canadian Retail Wealth
Canadian Retail Wealth Wealth Revenue $MM Wealth Assets $B1 1500 1,448 1,402 160 1,237 155 514 1,218 1,222 1200 484 161 145 150 306 346 434 433 406 397 234 210 380 238 366 358 900 346 600 941 942 843 877 819 300 0 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Fee & Other Transaction NI
Slide 25: U.S. Retail
U.S. Retail Net Interest Margin1,2 Average Deposits US$B5 353 368 378 343 2.93% 306 153 153 142 144 2.50% 130 2.27% 2.24% 2.15% 105 96 100 102 79 97 106 109 113 120 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 4 Personal Business IDAs Efficiency Ratio3 Average Loans US$B5 167 176 174
Slide 26: U.S. Retail Wealth and Schwab
U.S. Retail Wealth and Schwab TD Wealth Assets US$B1 Schwab2 – Q2 2021 TD’s share of Schwab’s net income was C$222MM3 on a 44 reported basis, of which C$246MM (US$194MM) was 43 recorded in the U.S. Retail segment 40 39 38 TD's share of Schwab's net income was C$272MM on an adjusted basis4 27 Schwa
Slide 27: Schwab Equity Pickup: Reconciliation
Schwab Equity Pickup: Reconciliation U.S. Retail P&L ($MM)1 TDBG Corporate Segment $C $US Reported Schwab Equity Pickup2 222 246 194 (24) Amortization of Acquired Intangibles3 34 0 0 34 Acquisition and Integration Charges3,4 16 0 0 16 Adjusted Schwab Equity Pickup 272 246 194 26 Financial Statement
Slide 28: Wholesale Banking
Wholesale Banking Revenue Loans1 Q2 2021 6% Q2 2021 7% 28% 26% $1.2B $60.3B 66% 67% Corporate and Global Markets Other2 Canada United States International Investment Banking Highlights Our Global Markets business continued to perform well as market activity normalized in the latter part of the qua
Slide 29: Gross Lending Portfolio Includes B/As
Gross Lending Portfolio Includes B/As Balances ($B unless otherwise noted) Q1/21 Q2/21 Canadian Retail Portfolio 456.7 466.8 Personal 371.5 378.9 Residential Mortgages 215.3 220.5 Home Equity Lines of Credit (HELOC) 95.2 97.7 Indirect Auto 27.2 27.4 Credit Cards 14.6 14.5 Other Personal 19.2 18.8 Un
Slide 30: COVID-19 Industries of Focus
COVID-19 Industries of Focus Total Gross Loans & Acceptances: $736B Highlights (Q2 2021) Gross loans and acceptances to industries of heightened focus were $44 billion Residential – Representing ~5.9% of Total Bank Mortgages & HELOC, gross loans and acceptances 49.3% Lending portfolio remained w
Slide 31: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Highlights (Q2 2021) Quarterly Portfolio Volumes ($B) $308 $312 $319 $297 $300 Canadian RESL credit quality remained strong Uninsured 71% 72% 73% 74% 75% Insured Uninsured and insured portfolio loan-to- 29% 28% 27% 26% 25% value rates stable Q2/20 Q3/
Slide 32: Canadian Personal Banking
Canadian Personal Banking Canadian Personal Banking (Q2/21) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%) Gross impaired loans Residential Mortgages 220.5 299 0.14 decreased quarter-over- Home Equity Lines of Credit (HELOC) 97.7 154 0.16 quarter Indirect Auto 27.4 56 0.20 Credit Cards 14.5 8
Slide 33: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q2/21) Gross Loans/ GIL GIL/Loans Quarter-over-quarter gross BAs ($B) ($MM) (%) impaired loan increase largely Commercial Banking1 87.9 495 0.56 reflected in: Wholesale 59.8 69 0.12 – The Wholesale segm
Slide 34: U.S. Personal Banking (USD)
U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q2/21) Gross impaired loans Gross Loans GIL GIL/Loans decreased quarter-over- ($B) ($MM) (%) quarter Residential Mortgages 28.1 335 1.19 Home Equity Lines of Credit (HELOC)2 7.5 294 3.91 Indirect Auto 24.6 179 0.73 Credit Cards 12.1 13
Slide 35: U.S. Commercial Banking (USD)
U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q2/21) Gross Loans/ GIL GIL/Loans Gross impaired loans BAs ($B) ($MM) (%) decreased quarter-over- Commercial Real Estate (CRE) 25.6 144 0.56 quarter largely related to the Non-residential Real Estate 17.8 105 0.59 Commercial & Indu
Slide 36: Investor Relations Contacts
Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 36
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