Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q3 2014 Earnings Presentation
34 slides from Toronto-dominion Bank's earnings presentation, Aug 28, 2014
Slide 1: TD Bank Group Quarterly Results Presentation Q3 2014
TD Bank Group Quarterly Results Presentation Q3 2014 Thursday August 28th, 2014
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements From time to time, the Bank makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, representativ
Slide 3: Strategic Overview
Strategic Overview Record financial performance in Q3 2014 Strong performance from both Retail and Wholesale segments Good organic growth, favourable credit, contribution from acquisitions and higher earnings from insurance business On track to deliver 7 to 10% medium-term EPS growth in Fisc
Slide 4: Q3 2014 Highlights
Q3 2014 Highlights Key Themes Net Income $MM Adjusted, where applicable1 Adjusted1 EPS growth of 40% YoY Q3/14 QoQ YoY Up 10% after adding back the $418 million Retail2 $ 2,004 6% 38% of after-tax insurance charges taken in Wholesale 216 4% 46% Q3/13 Corporate (53) NM NM Retail earnings up 38%
Slide 5: Q3 2014 Earnings: Items of Note
Q3 2014 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $2,107 $1.11 Pre Tax After Tax Items of Note EPS (MM) (MM) Amortization of intangibles1 $91 $60 $0.03 Integration charges relating to the acquisition of the credit card portfolio of $37 $27 $0.02 MBNA Canada Impact of the A
Slide 6: Canadian Retail
Canadian Retail Key Themes P&L $MM1 Strong adjusted1 net income up 54% Q3/14 QoQ YoY YoY Revenue $ 4,934 5% 10% Up 7% after adding back insurance charges PCL 228 -4% 6% taken in Q3/13 Very strong adjusted1 operating leverage of Insurance Claims 771 17% -32% ~380bps Expenses (adjusted) 2,018 2%
Slide 7: U.S. Retail
U.S. Retail Key Themes P&L US$MM Net income up 4% YoY Q3/14 QoQ YoY Strong organic volume growth, favourable Revenue $ 1,891 0% -4% credit, good expense management PCL 118 -24% -46% partially offset by lower security gains1 Expenses 1,220 1% -1% Revenue down 4% YoY Net Income, U.S. Retail Bank
Slide 8: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Q3/14 QoQ YoY Earnings up 46% YoY Revenue $ 680 0% 21% Broad-based performance across core PCL 5 -29% -78% businesses Expenses 392 -3% 12% Revenue up 21% YoY Net Income $ 216 4% 46% Higher trading-related revenue, ROE 18.4% underwriting volumes, and M&A f
Slide 9: Corporate Segment
Corporate Segment Key Themes P&L $MM1 Q3/14 Q2/14 Q3/13 Adjusted1 net income down YoY Net Corporate Expenses $ (170) $ (159) $ (120) Reflects ongoing investment in enterprise Other 90 103 83 projects and initiatives Non-Controlling Interests 27 26 26 Lower adjusted1 net income QoQ Net Income (
Slide 10: Expenses
Expenses Highlights Efficiency Ratio, Adjusted3 Core expenses1 up 4.8% YoY Excluding variable compensation increase 55.4% core expenses grew 2.3% Increase was primarily due to higher investment in regulatory and growth 52.4% 52.5% 52.8% 52.3% initiatives partly offset by productivity gains O
Slide 11: Capital
Capital Highlights Basel III Common Equity Tier 11 Basel III Common Equity Tier 1 ratio 9.3% 9.3% 9.2% Increase of 10 bps QoQ reflects 9.0% 8.9% 8.9% solid organic capital generation partially offset by increase in risk- weighted assets across segments, share buybacks and treatment of Ameritrade
Slide 12: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 Annual loss rates continue to run at cyclically low levels 40 37 38 Good quality broad-based growth 35 across all portfolios 28 Canadian and U.S. Credit Cards performing well Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Favourable improvement in U.S.
Slide 13: Appendix
Appendix
Slide 14: Q3 2014 Earnings: Items of Note
Q3 2014 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $2,107 $1.11 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense (MM) (MM) Line Item2 Amortization of intangibles1 $91 $60 $0.03 Corporate pg 9, line 10 Integration charges relating to the acquisition of the credit
Slide 15: Canadian Retail: Net Interest Margin
Canadian Retail Net Interest Margin Highlights Net Interest Margin Margin on average earning assets On Average Earning Assets of 2.98%, up 1 bp QoQ and up 4 2.97% 2.98% bps YoY 2.94% 2.92% 2.94% Primarily due to the addition of Aeroplan On Loans 1.92% 2.00% 2.00% 1.86% 1.86% On Deposits 1.38% 1.
Slide 16: Canadian Retail: Deposit Growth
Canadian Retail Deposit Growth Highlights Average Deposits $B 4% Growth Average personal deposit volumes YoY increased 3% YoY Chequing and savings accounts up 11%, partially offset by lower term 246 248 247 250 241 deposits 17 17 17 17 17 Average business deposit volumes increased 6% YoY 76 77
Slide 17: Canadian Retail: Loan Growth
Canadian Retail Loan Growth Highlights Average Loans $B 6% Growth Solid personal lending volume YoY growth of 5% YoY Real estate secured lending growth of 3% YoY 321 325 329 311 317 Strong business lending volume 46 47 49 50 51 growth of 11% YoY 16 17 19 19 15 16 15 15 15 15 Credit card bala
Slide 18: Canadian Retail: Personal and Commercial Banking
Canadian Retail Personal and Commercial Banking 25 Revenue Average Card Balances $MM $B 18.5 20 2,919 2,906 3,024 15.4 2,821 2,831 14.9 15 723 729 739 695 680 10 8.3 2,126 2,151 2,196 2,177 2,285 5 0 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 2011 2012 2013 2014 YTD Net Interest Income Non-interest Income Net In
Slide 19: Canadian Retail: Wealth
Canadian Retail Wealth Revenue AUA1 and AUM2 $MM $B 825 754 778 786 737 285 285 115 278 115 116 112 270 112 264 131 136 135 138 136 230 221 213 199 204 527 536 579 489 503 AUA AUM Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Wealth Fee & Other Wealth Transaction Wealth NII Net Income
Slide 20: Canadian Retail: Insurance
Canadian Retail Insurance Revenue Gross Originated Insurance $MM Premiums 1,085 $MM 1,049 1,078 1,012 986 993 930 932 950 839 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Net Income Insurance Claims and Related $MM Expenses $MM 141 1,140 149 132 92 711 771 683 659 -243 Q3/13 Q4/13 Q1/
Slide 21: U.S. Retail: Deposit Growth
U.S. Retail Deposit Growth Highlights Average Deposits US$B 5% Growth Average personal deposit volumes YoY up 6% YoY Average business deposit volumes up 7% YoY 187 191 194 197 197 Average TD Ameritrade IDAs1 up 3% YoY 73 73 72 71 73 56 57 57 53 54 63 64 65 67 68 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 P
Slide 22: U.S. Retail: Loan Growth
U.S. Retail Loan Growth Highlights Average Loans US$B 8% Growth Average personal loans increased YoY 3% YoY Average business loans increased 111 13% YoY 105 107 108 103 53 54 56 50 51 53 54 54 54 55 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Personal Commercial 22
Slide 23: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 TD’s share of TD Ameritrade’s net US$MM income was C$76 million in Q3/14, up 10% YoY mainly due to: Increased earnings in TD Ameritrade and FX translation, partially offset by reduced $73 $68 $70 $69 ownership in TD Am
Slide 24: Canadian Housing Market
Canadian Housing Market Highlights Canadian RESL credit quality remains solid amidst continued resiliency in the Canadian housing market Portfolio Q3/14 Gross Loans Outstanding $231 B Canadian RESL Percentage Insured 63% Uninsured Residential Mortgages Current LTV1 61% Condo Borrower Gross Loans O
Slide 25: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q2/14 Q3/14 Canadian Retail Portfolio $ 326.2 $ 332.5 Personal $ 275.0 $ 280.2 Residential Mortgages 166.7 170.9 Home Equity Lines of Credit (HELOC) 60.2 59.8 Indirect Auto 15.0 15.7 Unsecured Lines of Credit 8.5 8.6 Credit
Slide 26: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,233 GIL formations remained $1,210 $1,167 stable over the quarter $17 / 8 bps $22 / 11 bps $1,125 $1,092 $476 / 42 bps $428 / 42 bps $476 / 45 bps $403 / 34 bps $397 / 33 bps $722 / 23 bps $712 / 23 bps $757
Slide 27: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Improvement in GIL occurred across the portfolio $2,861 $2,746 $2,692 U.S. decrease is due to continued $2,628 $41 / 19 bps $2,636 $69 / 32 bps $41 / 18 bps $21 / 9 bps resolutions in legacy Commercial $47 / 23 bps Real Est
Slide 28: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights Lowest PCL rate in 5 years Continued improvement in U.S. $454 Indirect Auto $407 $420 $395 $ 1 / 2 bps Material one-time recoveries in $19 / 34 bps $3 / NM $329 U.S. Commercial $236/ 84 bps $3 / NM $202 / 80 bps $1
Slide 29: Canadian Personal Banking
Canadian Personal Banking Q3/14 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 171 0.26% 440 4 Credit quality remains strong in Home Equity Lines of Credit (HELOC) 60 0.46% 273 2 the Canadian Personal portfolio Indirect Auto 16 0.26% 40
Slide 30: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q3/14 Canadian Commercial and Gross GIL PCL1 Highlights Loans/BAs Wholesale Banking ($B) ($MM) ($MM) Canadian Commercial and Commercial Banking2 52 142 15 Wholesale Banking portfolio Wholesale 24 21 3 continues to perform well Total Canadian Commercial and
Slide 31: U.S. Personal Banking
U.S. Personal Banking Q3/14 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Solid performance across all of ($MM) Residential Mortgages 22 1.25% 278 0 the consumer credit portfolios Home Equity Lines of Credit (HELOC)3 11 2.53% 285 9 Indirect Auto 18 0.65% 116 27 Credi
Slide 32: U.S. Commercial Banking
U.S. Commercial Banking Q3/14 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 17 277 (12) Portfolio quality continues to Non-residential Real Estate 13 191 (6) improve Residential Real Estate 4 86 (6) Significant recoveries in Commercial
Slide 33: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Grand Prix for Best Overall Investor Relations: Large Cap Best Investor Relations by Website: Sector: Financial Services www.td.com/investor Best Investor Relations by a CEO: Large Cap Best Investor Relations by a C
Slide 34: TD Bank Group Quarterly Results Presentation Q3 2014
TD Bank Group Quarterly Results Presentation Q3 2014 Thursday August 28th, 2014