Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q3 2016 Earnings Presentation
36 slides from Toronto-dominion Bank's earnings presentation, August 2016
Slide 1: TD Bank Group Investor Presentation Q3 2016
TD Bank Group Investor Presentation Q3 2016
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 6th 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 returns 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 20161 Canadian U.S. U.S. Retail (C$ except
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 Aa1 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$2.0 trillion Nominal GDP of US$18.0 trillion Population of 36 million Population of 322 million Canadian Banking System U.S. Banking System Soundest banki
Slide 7: TD in North America
TD in North America North Q3 2016 Canadian American C$ except otherwise noted Ranking4 Ranking5 Total assets $1,182B 2nd 6th Total deposits $758B 1st 5th Market capitalization $106B 2nd 6th Reported net income (trailing four quarters) $8.5B 2nd 6th Adjusted net income1 (trailing four quarters) $9.1B
Slide 8: Composition of Earnings
Composition of Earnings 2015 Reported Earnings Mix1 Three key business lines Canadian Retail robust retail banking platform in Canada with proven performance Canadian U.S. Retail top 10 bank4 in Retail the U.S. with significant 64% U.S. Retail2 organic growth opportunities 23% Wholesale Bankin
Slide 9: Strategic Evolution of TD
Strategic Evolution of TD Increasing Retail Focus Acquired TD Acquired Target credit Became primary issuer Chrysler Completed strategic Acquired Waterhouse Acquired Commerce Acquired card portfolio & Epoch; of Aeroplan Visa; Privatized Financial credit card 51% of USA / Commerce Bank Riverside and a
Slide 10: Risk Management Framework
Risk Management Framework Our Risk Appetite We take risks required to build our business, but only if those risks: Fit our business strategy and can be understood and managed Do not expose the enterprise to any significant single loss events; we don’t “bet the bank” on any single acquisition, bu
Slide 11: TD Bank Group – Key Themes
TD Bank Group – Key Themes 6th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 12: Stable Earnings Growth
Stable Earnings Growth Reported Earnings1,2 (C$MM) 8,024 7,883 20112: Wholesale Banking 6,640 6,460 Wealth & Insurance 6,045 U.S. P&C Canadian P&C 2012 – 20153: Wholesale Banking U.S. Retail Canadian Retail 2011 Segment 2012 2013 2014 2015 realignment Targeting 7-10% adjusted EPS growth5 over the me
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 13.7% 12.2%12.1% 12.1% 12.3% 11.3% 10.9% 11.0% 8.3% 6.9% 2.4% -3.1% 1 Year 3 Years 5 Years 10 Years Delivering top tier long-term shareholder returns
Slide 14: Strong, Consistent Dividend History
Strong, Consistent Dividend History Dividends Per Share (C$) $2.00 Q1/16: Announced $0.04 dividend increase Dividend yield: 3.8%1 Q3/12: $0.22 Increased target payout range to 40%-50%2 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Dividend h
Slide 15: Q3 2016 Highlights
Q3 2016 Highlights Financial Highlights $MM Total Bank Reported Results (YoY) Reported Q3/16 Q2/16 Q3/15 Earnings up 4% (6% adjusted1) Revenue 8,701 8,259 8,006 PCL 556 584 437 EPS up 4% (6% adjusted) Expenses 4,640 4,736 4,292 Net Income 2,358 2,052 2,266 Revenue up 9% Diluted EPS ($) 1.24 1.07 1.1
Slide 16: Q3 2016 Segment Results Highlights
Q3 2016 Segment Results Highlights Net income down 3% YoY. Revenue growth of 3% was more than offset by higher insurance claims and a higher effective tax rate in the quarter Canadian PCL down 2% QoQ, primarily reflecting lower delinquencies in personal Retail banking. Expenses up 1% YoY In
Slide 17: Strong Credit Quality
Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 65 63 61 60 63 58 59 56 50 50 43 45 39 42 37 38 39 34 34 26 31 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1/16 Q2/16 Q3/16 IFRS Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Average Net Loa
Slide 18: Oil and Gas Exposure
Oil and Gas Exposure Corporate and Commercial Outstandings Highlights by Sector ($B): Oil and Gas Producers and Services outstandings reduced $300MM and $3.5 remain less than 1% of total gross loans and acceptances $2.8 65% of undrawn Oil & Gas exposure is $1.4 / 40% investment grade Excluding
Slide 19: TD Bank Group – Key Themes
TD Bank Group – Key Themes 6th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 20: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt Sub-Debt 1% Personal Non- Trading Covered Deposits5 Bonds Term Deposits 8% 38% 26% Wholesale Term Debt 12% Senior Personal Term Assets Unsecured Mortgage Deposits Securitized MTN6 5% Securitization 20% 16% 54% Other Deposits3 25%
Slide 21: Gross Lending Portfolio
Gross Lending Portfolio Balances Highlights Q3/16 Canadian Retail Portfolio $ 368.4 Personal $ 306.0 Canadian Portfolio Residential Mortgages 187.7 Real estate secured lending gross loans Home Equity Lines of Credit (HELOC) 63.9 outstanding up 4% YoY Indirect Auto 20.4 $252 billion portfolio (51
Slide 22: Capital & Liquidity
Capital & Liquidity Highlights Common Equity Tier 11 Common Equity Tier 1 ratio of 10.4% Q2 2016 CET1 Ratio 10.1% Leverage ratio of 3.8% Internal capital generation 33 bps Actuarial loss on employee pension plans (9) bps Liquidity coverage ratio of 132% RWA increase and other 1 bps Q3 2016 CET1 Rati
Slide 23: Strong Focus on Risk-Adjusted Return
Strong Focus on Risk-Adjusted Return Q3 2016 Adjusted Return on Accolades Risk-Weighted Assets1 “Safest Bank in North America & 2.42% One of the World’s 50 Safest Banks” 2.23% – Global Finance Magazine “Best Big Bank in America” – Money® Magazine 1.42% “Best Bank in Canada” – Euromoney Magazin
Slide 24: TD Bank Group – Key Themes
TD Bank Group – Key Themes 6th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 25: Canadian Retail
Canadian Retail Consistent Strategy Reported Net Income (C$MM) Segment Realignment $5,938 How we compete $5,234 $4,463 $4,569 $4,486 Legendary customer service and convenience $3,051 Relentless commitment to operational excellence The power of One TD $3,051 $4,567 $4,681 $5,490 $5,938 $4,486 A
Slide 26: Canadian Retail
Canadian Retail Personal Banking #1 or #2 market share in most retail products1 On average 44% longer branch hours than peers2 with 431 branches offering Sunday banking Mobile banking leadership in Canada with the highest number of mobile unique visitors accessing financial services3 Business
Slide 27: U.S. Retail
U.S. Retail Reported Net Income1 Consistent Strategy (US$MM) Segment How we compete Realignment $2,007 $1,938 $1,715 $1,698 Legendary service and convenience Grow and deepen customer relationships $1,289 $1,318 Differentiated brand as the “human” bank Productivity initiatives that enhance bo
Slide 28: U.S. Retail
U.S. Retail Personal & Commercial Banking Top 10 bank1 with ~9MM customers, operating retail stores in 15 states and the District of Columbia Open longer than the competition, including Sunday banking in most markets #3 market share in NYC2 and targeting top 5 market share in all of our major
Slide 29: Wholesale Banking
Wholesale Banking Consistent Strategy Net Income (C$MM) How How wewe compete compete $880 $873 $815 $813 Canada $650 $682 Be a top-ranked integrated investment dealer Fully aligned with TD Bank Group partners Provide superior advice and execution U.S. Extend the Canadian franchise’s goals in
Slide 30: Wholesale Banking
Wholesale Banking Focus on client-driven franchise businesses Diversified business mix with a North American focus Presence in key global financial centres Extend our client-centric franchise model through superior advice and execution A North American dealer aligned with our TD partners Foc
Slide 31: Omni Comfort and Convenience
Omni Comfort and Convenience Consistent Strategy Digital Enhancements How we compete Customer-centricity allows customers to choose how, when and where they bank Completely redesigned TD Bank app for iOS New Omni-Dial capability will provide a seamless, and Android devices with more than 20 new an
Slide 32: Corporate & Social Responsibility
Corporate & Social Responsibility TD Friends of the Environment Foundation celebrates 25 years with over Highlights C$76 million in funds disbursed in support of more than 24,000 local environmental projects Ranked 54th on the Global 100 Most Sustainable More than 235,000 trees planted through
Slide 33: A Principled Approach
A Principled Approach Leadership Profile Guiding Principles Deliver Legendary Customer Make an Impact and Value Speed Experiences Build for the Future Be an Extraordinary Place to Work Inspire the Will to Win Operate with Excellence Act Decisively while Working Effectively in Teams U
Slide 34: 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 One of the World’s Most convenience Slowing loan growth in Admired Companies1 Canada Leverage TD brand across all segments One of Canada’s most Low interest rate
Slide 35: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: Best Investor Relations by tdir@td.com Sector: Financial Services Best Corporate Governance Website: www.td.com/investor 34
Slide 36: TD Bank Group Investor Presentation
TD Bank Group Investor Presentation Q3 2016