Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — TD Bank Group — Q4 2020 Earnings Presentation

59 slides from Toronto-dominion Bank's earnings presentation, 2020

  1. Slide 1: TD Bank Group Investor Presentation Q4 2020

    TD Bank Group Investor Presentation Q4 2020

  2. 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

  3. Slide 3: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q4 2020 Financial Results 2 For the three months ended October 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Ba

  4. Slide 4: 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

  5. Slide 5: TD Framework

    TD Framework Execute Own Innovate Think Customer Develop Our Vision Our Purpose Be the better bank To enrich the lives of our customers, communities TD Framework and colleagues Our Shared Commitments Think like a Act like an owner; Execute with Innovate with Develop our customer; lead with integrity

  6. Slide 6: 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 U.S. Retail Q4 20201 Canadian U.S. (C$) Retail

  7. Slide 7: Competing in Attractive Markets

    Competing in Attractive Markets Country Statistics Country Statistics  10th largest economy  World’s largest economy  Real GDP of C$2.1 trillion  Real GDP of US$19 trillion  Population of 37 million  Population of 332 million Canadian Banking System U.S. Banking System  One of the soundest ba

  8. Slide 8: Top North American Bank

    Top 10 North American Bank Canadian North American Q4 2020 (C$ except otherwise noted) TD Bank Group Ranking4 Ranking5 Total assets $1,716B 1st 5th Total deposits $1,135B 1st 5th Market capitalization $106.7B 2nd 6th Reported net income (trailing four quarters) $11.9B 1st 4th Adjusted net income1 (t

  9. Slide 9: Diversified Business Mix

    Diversified Business Mix Three Key Business Lines Fiscal 2020 Reported Earnings Mix1  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 U.S. Retail Bank,2 18%  Wholesale Banking Cana

  10. Slide 10: Growing Platform / North American Scale

    Growing Platform / North American Scale 2000-2004 – A Canadian Leader 2005-2010 – Building U.S. Platform 2011-2015 – Acquiring Assets New Capabilities and Partnerships • Acquisition of Canada Trust (2000) • TD Waterhouse USA / Ameritrade • Acquired Chrysler Financial auto • Acquired Epoch (2013) • T

  11. Slide 11: Connected Experiences

    Connected Experiences Consistent Strategy Q4 2020 Highlights How we compete:  Enabling seamless interactions 5.9M between customers and the 14.5M 3.7M Active Active Digital Active U.S. entire organization Canadian Mobile Users Customers1 Mobile Users  Leveraging our industry-leading Experience Des

  12. Slide 12: ESG Performance

    ESG Performance Highlights  TD announced its commitment to a global climate action plan, which includes a target to achieve net-zero greenhouse gas (GHG) emissions associated with its operations and financing activities by 2050, aligned to the associated principles of the Paris Agreement. The $43+B

  13. Slide 13: TD's ESG Strategy

    TD's ESG Strategy: TD READY COMMITMENT Working together towards an inclusive and sustainable future | By creating the conditions for economic inclusion and environmental health | Environment Bolster environmental health through sustainable financial products & services, and programs Resource Use Soc

  14. Slide 14: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q4 2020 Financial Results 2 For the three months ended October 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Ba

  15. Slide 15: Fiscal 2020 Highlights

    Fiscal 2020 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported 2020 2019 YoY EPS of $6.43, up 3% Revenue 43,646 41,065 6%  Includes a $2.3B after-tax net gain on the sale PCL 7,242 3,029 +$4,213 of the Bank's investment in TD Ameritrade Expenses 21,604 22,020 (2%) ($1.

  16. Slide 16: Q4 2020 Highlights

    Q4 2020 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q4/20 Q3/20 Q4/19 EPS of $2.80, up 82% Revenue 11,844 10,665 10,340  Includes a $2.3B after-tax net gain on the sale PCL 917 2,188 891 of the Bank's investment in TD Ameritrade Expenses 5,709 5,307 5,543 ($1.4

  17. Slide 17: Q4 2020 Segment Highlights (YoY)

    Q4 2020 Segment Highlights (YoY) Canadian Retail  Net income (rep.) was $1,802MM, (up 3%), reflecting lower PCL and lower insurance claims, partially offset by lower revenue and higher non-interest expenses. Net income (adj.) was $1,826MM (up 3%).  Revenue for the quarter was $6,029MM, a decrease

  18. Slide 18: Strong Capital and Liquidity Positions

    Strong Capital and Liquidity Positions Common Equity Tier 1 ratio of 13.1% Common Equity Tier 1 Ratio Q3 2020 CET1 Ratio 12.5% Internal capital generation 30 Risk-Weighted Assets flat QoQ Actuarial gains on employee benefit plans 6 OSFI transitional arrangements for ECL provisioning 6 Leverage ratio

  19. Slide 19: High Quality Loan Portfolio

    High Quality Loan Portfolio Balances ($B unless otherwise noted) Q3/20 Q4/20 Canadian Retail Portfolio 442.2 451.1 Personal 358.4 367.4 Residential Mortgages 206.1 211.7 Home Equity Lines of Credit (HELOC) 92.1 94.5 Indirect Auto 26.7 27.4 Credit Cards 15.9 15.6 Other Personal 17.6 18.2 Unsecured Li

  20. Slide 20: 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 quarter-over-quarter $374 across: $554 $2,189 – All segments $123 – All major asset classes $217  Elevated provisions in the prior $1,140 two quarters reflected a $8

  21. Slide 21: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) COVID-19 Impacts ACL1: $B and Ratios2 124 126 bps 103 $9.4 $9.2 Highlights 71 74 $7.9  Allowance for Credit Losses increased $0.2 billion quarter-over-quarter driven United States 59% 60% $5.0 $5.3 by: Canada 62% – The Business & Government 62% 61% portfolios, refl

  22. Slide 22: Loans Under Bank-Led Deferral Programs

    Loans Under Bank-Led Deferral Programs Highlights  Loan balances under Bank-led deferral programs decreased C$41 billion from the third quarter, and deferral terms have now largely expired.  Deferral and government assistance programs have been effective in helping our customers. Bank-Led Payment

  23. Slide 23: COVID-19 Industries of Focus

    COVID-19 Industries of Focus Total Gross Loans & Acceptances: $743B Highlights (Q4 2020)  Gross loans and acceptances to industries of heightened focus were $48 billion Residential Mortgages & – Representing ~6.4% of Total Bank HELOC, gross loans and acceptances 48.1%  Lending portfolio remains we

  24. Slide 24: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q3 2020 Financial Results 2 For the three months ended July 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Balan

  25. Slide 25: Consistent Earnings Growth

    Consistent Earnings Growth Reported Earnings (C$MM)1 5-year CAGR2 Reported Earnings: 8.2% (2.6% adjusted3) Reported EPS: 8.8% (3.1% adjusted3) $11,334 $11,686 $11,895 $10,517 $8,936 $8,024 Corporate Wholesale Banking U.S. Retail Canadian Retail 2015 2016 2017 2018 2019 2020 Results in 2020 were sign

  26. Slide 26: Strong, Consistent Dividend History

    Strong, Consistent Dividend History Dividends Per Share (C$) $3.11 164-year continuous dividend history Dividend yield: 5.1%1 Target payout $0.22 range: 40%-50% Annual Dividend 1. As of Q4/20. Dividend yield is calculated as the dividend per common share divided by the average daily closing stock pr

  27. Slide 27: Solid Total Shareholder Returns

    Solid Total Shareholder Returns Canadian North American TD Bank Group Ranking1 Ranking2 One-Year -17.9% 4th 4th Three-Year -3.2% 4th 6th Five-Year 5.9% 2nd 5th Ten-Year 8.8% 2nd 5th Above North American peer2 average total shareholder return3 for 1, 3, 5 and 10 year periods. 1. Canadian Peer Ranking

  28. Slide 28: Canadian Retail

    Canadian Retail Consistent Strategy Reported Net Income (C$MM) How we compete: $7,183 $6,863  Legendary personal connected $6,525 $5,988 $6,026 customer service  Focus on underrepresented products and markets  The power of One TD  Winning culture and team $5,938 $6,525 $7,183 $7,421 $6,124 Highe

  29. Slide 29: Canadian Retail

    Canadian Retail Personal Banking Credit Cards  #1 or #2 market share in most retail products1  #1 card issuer in Canada measured by outstanding card loan  Our branch network is now nearly fully open (from temporarily closing balances1 40% of the network in response to COVID-19). TD is again the l

  30. Slide 30: U.S. Retail

    U.S. Retail Consistent Strategy Reported Net Income (US$MM) How we compete: $3,750  Legendary service and convenience $3,253  Grow and deepen customer relationships $2,536  Differentiated brand as the “human” bank $2,234 $2,278  Productivity initiatives that enhance both the customer and colleag

  31. Slide 31: U.S. Retail

    U.S. Retail Personal & Commercial Banking Auto Lending  Top 10 bank1 with over 9MM customers, operating retail stores in 15  Indirect retail lending through dealers across the country states and the District of Columbia  Comprehensive solutions for our dealers, including floor plan,  Rated #1 SB

  32. Slide 32: Wholesale Banking

    Wholesale Banking Consistent Strategy Net Income (C$MM) How we compete: $1,418  Continue to build an integrated North American dealer franchise with global reach. $1,054 $1,039 – In Canada, we will be the top-ranked investment dealer. $920 – In the U.S., we will deliver value and trusted advice in

  33. Slide 33: Wholesale Banking

    Wholesale Banking Positioned for Growth  Lead mandates and awards highlighting TD Securities' objective to build an integrated North American dealer franchise with global reach include: – Lead Manager to the European Union's second social bond financing of the SURE programme. At EUR 14 billion, thi

  34. Slide 34: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q3 2020 Financial Results 2 For the three months ended July 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Balan

  35. Slide 35: TD TLAC Requirements

    TD TLAC Requirements  Canadian D-SIBs will be required to meet TD Regulatory Capital Ratios2,3 their regulatory TLAC requirements by the November 1, 2021 implementation date.  OSFI has stipulated that D-SIBs will be Notional TLAC: 25.2% subject to 2 supervisory ratios: Minimum risk-based TLAC Rati

  36. Slide 36: Industry-Leading Credit Ratings

    Industry-Leading Credit Ratings Issuer Ratings1 Rating Agencies Senior Debt Ratings2 Outlook Moody's Aa3 Stable S&P A Stable DBRS AA Stable Ratings vs. Peer Group1 Moody’s Senior Debt2 / HoldCo5 Rating S&P Senior Debt2 / HoldCo5 Rating Aa1 AA- Aa2 A+ Aa3 A A1 A- A2 BBB+ A3 Baa1 BBB TD Canadian Peers

  37. Slide 37: Leading Non-Common Equity Capital Ratings

    Leading Non-Common Equity Capital Ratings NVCC Tier 2 Subordinated Debt Ratings Moody’s S&P A2 A A3 A- Baa1 BBB+ Baa2 BBB Baa3 BBB- Ba1 BB+ TD Peers 2 Canadian Peers TD Canadian Peers TD Canadian TD Canadian Peers2 Additional Tier 1 NVCC Preferred Share Ratings Moody’s S&P A2 A A3 A- Baa1 BBB+ Baa2

  38. Slide 38: Robust Liquidity Management

    Robust Liquidity Management Liquidity Risk Management Framework Liquidity Risk Management Framework  Target a 90-day survival horizon under a combined  TD holds a variety of liquid assets commensurate with Bank-specific and market-wide stress scenario, and a liquidity needs in the organization. mi

  39. Slide 39: Deposit Overview

    Deposit Overview Domestic Leader in Deposits Large base of personal and business deposits1 that make up 73% of the Bank's total funding  TD Canada Trust ("TDCT") ranked #1 in Total Personal Deposits2 – legendary customer service and the power of One TD  U.S. Retail is a top 103 bank in the U.S. wi

  40. Slide 40: Low Risk, Deposit Rich Balance Sheet

    Low Risk, Deposit Rich Balance Sheet1 Large base of stable retail and commercial Maturity Profile6,7 (C$B) (To first par redemption date) deposits 50 Issuance Maturity 40  Personal and business deposits are TD's primary sources of funds – Customer service business model delivers stable base of “sti

  41. Slide 41: Wholesale Term Debt Composition

    Wholesale Term Debt Composition1 Funding Strategy  Wholesale term funding through diversified sources across domestic and international markets  Well-established C$80 billion Legislative Covered Bond Program is an important pillar in global funding strategy  Programmatic issuance for the establis

  42. Slide 42: Canadian Registered Covered Bond Program

    Canadian Registered Covered Bond Program Key Highlights Covered Bond Collateral  Canadian residential real estate property with no more than 4 residential units  Uninsured conventional first lien assets with original loan to value ratio that is 80% or less Housing Market Risks  Latest property va

  43. Slide 43: TD Global Legislative Covered Bond Program

    TD Global Legislative Covered Bond Program Highlights Cover Pool as at October 30, 2020  TD has a C$80B legislative covered bond program  High quality, conventional first lien Canadian  Covered bonds issuance for Canadian issuers governed by CMHC-administered guidelines Residential mortgages orig

  44. Slide 44: Bail-in Implementation

    Bail-in Implementation Regulation Overview  On April 18, 2018, the Government of Canada published final regulations under the CDIC Act and the Bank Act providing details of the bank recapitalization "bail-in" regime and final Total Loss Absorbing Capacity (TLAC) guideline.  The issuance regulation

  45. Slide 45: Bail-in Overview

    Bail-in Overview Scope of Bail-in  In Scope Liabilities. Senior unsecured long-term debt (original term to maturity of 400 or more days) that is tradable and transferable (has a CUSIP, ISIN or other similar identification) and issued on or after September 23, 20181. Unlike other jurisdictions, Cana

  46. Slide 46: Appendix: Economic Outlook

    Appendix Economic Outlook

  47. Slide 47: TD Economics Update

    TD Economics Update Global Outlook: Downside Risks with the Resurgence in COVID-19 Cases  After a strong rebound seen over the early summer, economic momentum has slowed with the resurgence in COVID-19 infections and subsequent restrictions. This will take a toll on global momentum into the first q

  48. Slide 48: Interest Rate Outlook

    Interest Rate Outlook Interest Rates, Canada and U.S. % 7 Forecast  The federal funds rate is at the effective lower bound and expected to remain there for the U.S. Federal 6 Funds Rate foreseeable future. In addition to the considerable interventions it has made to date, the Federal Reserve has re

  49. Slide 49: Appendix: Credit Quality

    Appendix Credit Quality

  50. Slide 50: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2  Gross impaired loan formations 24 24 decreased 8 basis points quarter- 23 22 over-quarter, primarily reflecting: – The ongoing impact of bank $1,783 $1,708 $1,689 15 bps and government assistance $40 / 5

  51. Slide 51: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2  Gross impaired loans decreased 51 quarter-over-quarter primarily 47 related to: 45 43 – Resolutions outpacing 42 bps formations in the Canadian $3,821 $3,606 and U.S. consumer, U.S. $3,207 $343 / 52 bps $3,157 Commerci

  52. Slide 52: 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 quarter-over-quarter $374 across: $554 $2,189 – All segments $123 – All major asset classes $217  Elevated provisions in the prior $1,140 two quarters reflected a $8

  53. Slide 53: Provision for Credit Losses (PCL): Impaired and Performing

    Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) Q4/19 Q3/20 Q4/20  Impaired PCL decreased quarter-over-quarter largely reflecting: Total Bank 893 2,189 921 – The ongoing impact of bank and government Impaired 741 832 363 assistance programs on the consumer Perform

  54. Slide 54: Canadian Personal Banking

    Canadian Personal Banking Canadian Personal Banking (Q4/20) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%)  Gross impaired loans Residential Mortgages 211.7 376 0.18 decreased quarter-over- Home Equity Lines of Credit (HELOC) 94.5 201 0.21 quarter Indirect Auto 27.4 60 0.22 – Largely reflects

  55. Slide 55: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Secured Lending Portfolio Highlights (Q4 2020) Quarterly Portfolio Volumes ($B) $300 $308 $292 $293 $297 Canadian RESL credit quality remained strong Uninsured 69% 70% 71% 72% 73%  Uninsured and insured portfolio loan-to- Insured value rates stable 31% 30% 29% 28% 27% Q4/19 Q1/

  56. Slide 56: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q4/20) Gross Loans/ GIL GIL/Loans  Gross impaired loans BAs ($B) ($MM) (%) decreased largely due to Commercial Banking1 83.7 492 0.59% resolutions in the Wholesale Wholesale 58.4 97 0.17% lending portfol

  57. Slide 57: U.S. Personal Banking (USD)

    U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q4/20)  Gross impaired loans Gross Loans GIL GIL/Loans decreased quarter-over- ($B) ($MM) (%) quarter Residential Mortgages 29.1 337 1.16 – Largely reflects the ongoing Home Equity Lines of Credit (HELOC)2 8.2 323 3.93 impact of bank an

  58. Slide 58: U.S. Commercial Banking (USD)

    U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q4/20) Gross Loans/ GIL GIL/Loans  Gross impaired loans BAs ($B) ($MM) (%) decreased quarter-over- Commercial Real Estate (CRE) 25.4 112 0.44 quarter Non-residential Real Estate 17.9 75 0.42 Residential Real Estate 7.5 37 0.49 Comme

  59. Slide 59: Investor Relations Contacts

    Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 59

TD Bank Group — Q4 2020 Earnings Presentation on 6ix