Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Q3 2020 Earnings Presentation
36 slides from Toronto-dominion Bank's earnings presentation, Aug 27, 2020
Slide 1: Quarterly Results Presentation Q3 2020
TD Bank Group Quarterly Results Presentation Q3 2020 Thursday, August 27, 2020 1
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 Purpose-Driven Forward Focused Proven Business Model Centre everything we do on our v
Slide 4: Purpose Driven
Purpose Driven Committed to enriching the lives of our customers, colleagues and communities TD's Black Employee Network Invites you to join us for a Virtual Townhall Session 2020 TD Ready Challenge Uncomfortable conversations: Innovative solutions for Breaking the Silence communities affected by CO
Slide 5: 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)4,5 +380 bps YoY +12.5% YoY +860 bps YoY 59.4 59.0 93.0 5.8 5.7 Canadian 89.0 Retail1 55.2 5.2 84.4 Q3/19 Q2/20 Q3/20 Q3/19 Q2/20 Q3/
Slide 6: Forward Focused
Forward Focused Shaping the future of banking TD Ready Advice – Helping You Move Forward 6
Slide 7: Proven Business Model
Proven Business Model Diversification and scale, underpinned by a strong risk culture ◼ Reported earnings of $2.2 billion (adjusted $2.3 billion)1 ◼ Reported EPS of $1.21 (adjusted $1.25)1 ◼ Strong volume growth in banking businesses, offset by lower margins ◼ Record Wealth and Wholesale revenue and
Slide 8: Q3 2020 Highlights
Q3 2020 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q3/20 Q2/20 Q3/19 EPS of $1.21 Revenue 10,665 10,528 10,499 ◼ Adjusted1 EPS of $1.25 PCL 2,188 3,218 655 Expenses 5,307 5,121 5,374 Revenue up 2% Net Income 2,248 1,515 3,248 Diluted EPS ($) 1.21 0.80 1.74 Expen
Slide 9: Canadian Retail
Canadian Retail Highlights (YoY) P&L ($MM) Reported Q3/20 QoQ YoY Net income down 33% (reported & adj1.) Revenue 6,026 0% (2%) Insurance Claims 805 20% 13% Revenue down 2% Revenue Net of Claims2 5,221 (2%) (4%) ◼ Loan volumes up 3% PCL 951 -$202 +$635 ◼ Deposit volumes up 18% Expenses 2,533 (2%) 0%
Slide 10: U.S. Retail
U.S. Retail Highlights US$MM (YoY) P&L (US$MM) (except where noted) Reported Q3/20 QoQ YoY Net income of $490MM Revenue 2,085 2% (7%) PCL 655 -$159 +$464 Revenue down 7% Expenses 1,205 (1%) 0% ◼ Loan volumes up 11% U.S. Retail Bank Net Income 260 199% (65%) ◼ Deposits ex-TD Ameritrade up 24% TD AMTD
Slide 11: Wholesale Banking
Wholesale Banking Highlights (YoY) P&L ($MM) Reported Q3/20 QoQ YoY Net income up 81% Revenue 1,397 11% 53% PCL 123 -$251 +$122 Revenue up 53% Expenses 669 9% 13% ◼ Trading-related revenue of $942MM, up 88% Net Income 442 111% 81% ROE 19.7% PCL down 67% QoQ ◼ Impaired: $52MM (-$142MM) ◼ Performing:
Slide 12: Corporate Segment
Corporate Segment Highlights (YoY) P&L ($MM) Reported Q3/20 Q2/20 Q3/19 Reported loss of $130MM Net Income (130) (202) (173) ◼ Adjusted1 loss of $76MM Adjusted1 Q3/20 Q2/20 Q3/19 Net Corporate Expenses (153) (199) (156) Other 77 56 47 Net Income (76) (143) (109) 1. Adjusted results are defined in fo
Slide 13: Capital
Capital Common Equity Tier 1 ratio of 12.5% Common Equity Tier 1 Ratio Q2 2020 CET1 Ratio 11.0% Risk-Weighted Assets down 9% QoQ Decrease in RWA 82 OSFI transitional arrangements for ECL provisioning 26 ◼ Primarily reflecting lower Credit Risk RWA Elimination of the shortfall deduction 5 Internal ca
Slide 14: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2 24 24 ◼ Gross impaired loan formations 23 bps 22 stable quarter-over-quarter at 23 21 basis points, primarily reflecting: – A decrease in the U.S. and $1,689 $1,783 $1,708 Canadian consumer lending $40 / 5
Slide 15: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2 ◼ Gross impaired loans increased 51 bps quarter-over-quarter primarily 47 related to: 45 42 43 – The U.S. and Canadian commercial lending portfolios $3,821 $3,606 – The Canadian real estate $3,207 $343 / 52 bps secured l
Slide 16: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $3,221 ◼ Provision for credit losses decreased across all segments $374 quarter-over-quarter $554 $2,189 ◼ Provisions for credit losses $123 remained elevated in the current quarter, primarily due to the $217 ongo
Slide 17: Provision for Credit Losses: Impaired and Performing
Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) ◼ Impaired PCL decreased quarter-over-quarter Q3/19 Q2/20 Q3/20 driven by: Total Bank 664 3,221 2,189 – Less credit migration in the Wholesale Impaired 590 970 832 Banking segment Performing 74 2,251 1,357 Canadian Re
Slide 18: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) COVID-19 Impacts ACL1: $B and Ratios2 124 bps 103 Highlights $9.2 71 74 $7.9 69 ◼ Allowance for Credit Losses increased $1.3 billion quarter-over-quarter primarily United States 59% $5.0 $5.3 related to higher performing allowances Canada $4.9 62% due to the impact
Slide 19: Loans Under Bank-Led Deferral Programs
Loans Under Bank-Led Deferral Programs Highlights Deferrals by Product % of Portfolio1 ◼ Loan balances under Bank-led Q2 Total deferral programs decreased $14 Canada U.S. Bank Q3 billion from the second quarter 14% 12% ◼ Deferral requests have steadily decreased from their peak in April. 8% 8% 8% 7%
Slide 20: Appendix
Appendix 20
Slide 21: Q3 2020: Items of Note
Q3 2020: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item4 Pre Tax After Tax Reported net income and EPS (diluted) 2,248 1.21 Items of note Amortization of intangibles1 63 54 0.03 Corporate page 12, line 14 Charges associated with the Greystone Acquisition2 25 25 0.01 Canadian Retail p
Slide 22: Canadian Retail
Canadian Retail Net Interest Margin Average Deposits $B 2.96% 2.96% 2.94% 396 344 355 365 2.83% 337 33 25 26 30 24 122 136 2.68% 113 116 120 200 203 209 213 228 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Personal Business Wealth Efficiency Ratio1 Average Loans $B 427 434 437 440 440
Slide 23: Canadian Retail Wealth
Canadian Retail Wealth Wealth Revenue $MM Wealth Assets $B1 1,218 1,222 1,163 1,129 1,123 161 145 439 434 170 422 167 165 419 406 238 234 365 366 136 353 128 127 350 346 834 831 857 819 843 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Fee & Other Transaction NII AUA AUM 1. Canadian Re
Slide 24: U.S. Retail
U.S. Retail Net Interest Margin1,2 Average Deposits US$B 3.27% 343 3.18% 306 265 272 279 3.07% 2.93% 142 111 130 103 106 79 96 2.50% 70 73 75 92 92 94 97 105 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 4 Personal Business TD Ameritrade IDAs Efficiency Ratio3 Average Loans US$B 167 17
Slide 25: U.S. Retail Wealth and TD Ameritrade
U.S. Retail Wealth and TD Ameritrade TD Wealth Assets US$B1 TD Ameritrade2 – Q3 2020 TD’s share of TD Ameritrade’s net income was 44 44 US$230MM, up 5% YoY reflecting: 43 40 ◼ Higher trading volumes and growth in interest-earning 38 assets, partially offset by reduced trading commissions, the impact
Slide 26: 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 27: Wholesale Banking
Wholesale Banking Revenue Loans1 Q3 2020 Q3 2020 3% 25% 1% 28% $1.4B $69.4B 69% 74% Corporate and Other2 Global Markets Canada United States International Investment Banking Highlights ◼ Our Global Markets business delivered strong trading-related revenue, reflecting high levels of client activity ◼
Slide 28: Gross Lending Portfolio Includes B/As
Gross Lending Portfolio Includes B/As Balances ($B unless otherwise noted) Q2/20 Q3/20 Canadian Retail Portfolio 438.7 442.2 Personal 354.1 358.4 Residential Mortgages 202.9 206.1 Home Equity Lines of Credit (HELOC) 91.8 92.1 Indirect Auto 25.4 26.7 Credit Cards 16.0 15.9 Other Personal 18.0 17.6 Un
Slide 29: COVID-19 Industries of Focus
COVID-19 Industries of Focus Total Gross Loans & Acceptances: $746B Highlights (Q3 2020) ◼ Gross loans and acceptances to industries of heightened focus were 46.9% $55 billion Residential Mortgages & HELOC – Representing ~7.4% of Total Bank gross loans and acceptances ◼ Lending portfolio remains wel
Slide 30: Oil and Gas Exposure
Oil and Gas Exposure Corporate and Commercial Gross Loans & BAs by Sector ($B) Highlights (Q3 2020) Investment Grade / Non-Investment Grade ◼ Oil and Gas Producers and Services Producers 8% 92% $4.3 continued to represent less than 1% of total gross loans and acceptances 1 Midstream 27% 73% $3.6 ◼ E
Slide 31: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Highlights (Q3 2020) Quarterly Portfolio Volumes ($B) $292 $293 $297 $300 $288 Canadian RESL credit quality remained strong Uninsured 68% 69% 70% 71% 72% ◼ Uninsured and insured portfolio loan-to- Insured value rates stable 32% 31% 30% 29% 28% Q3/19 Q4/
Slide 32: Canadian Personal Banking
Canadian Personal Banking Highlights Canadian Personal Banking (Q3/20) Gross Loans ($B) GIL ($MM) GIL/Loans (%) ◼ Gross impaired loans Residential Mortgages 206.1 385 0.19 increased quarter-over- 92.1 225 0.24 Home Equity Lines of Credit (HELOC) quarter largely in the RESL Indirect Auto 26.7 59 0.22
Slide 33: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q3/20) Gross Loans/ GIL GIL/Loans ◼ Gross impaired loans BAs ($B) ($MM) (%) increased largely in the Commercial Banking1 83.8 484 0.58% Canadian Commercial Wholesale 66.5 343 0.52% portfolio Total Canadia
Slide 34: U.S. Personal Banking (USD)
U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q3/20) Gross Loans GIL GIL/Loans ◼ Gross impaired loans ($B) ($MM) (%) decreased quarter-over- Residential Mortgages 28.6 333 1.17 quarter in U.S. Personal Home Equity Lines of Credit (HELOC)2 8.4 338 4.00 Banking Indirect Auto 24.7 198
Slide 35: U.S. Commercial Banking (USD)
U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q3/20) ◼ Gross impaired loans Gross Loans/ GIL GIL/Loans BAs ($B) ($MM) (%) increased quarter-over- Commercial Real Estate (CRE) 25.8 86 0.33 quarter Non-residential Real Estate 18.3 54 0.30 Residential Real Estate 7.5 32 0.43 Commer
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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