Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Debt Investor Presentation (2019)
49 slides from Toronto-dominion Bank's debt investor presentation, 2019
Slide 1: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income Investor Presentation Q3 2019
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: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 3
Slide 4: Our Strategy
Our Strategy Own the future TD aims to stand out from its peers by having a differentiated brand – anchored in our proven business model, and rooted in a desire to give our customers, communities and colleagues the confidence to thrive in a changing world. Proven business model Purpose-driven Forwar
Slide 5: TD Framework
TD Framework Our vision Be the better bank Own the future 1D efe Develop Our purpose Enrich the lives of our customers, communities TD Framework and colleagues Think like a customer; Act like an owner; lead provide legendary with integrity to drive experiences business results and trusted advice and
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 Q3 20191 Canadian U.S. Property, casualty, life and health (C$) Retail Retail insurance Fina
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$2.0 trillion Real GDP of US$19 trillion Population of 37 million Population of 332 million Canadian Banking System U.S. Banking System One of the soundest ba
Slide 8: Top 10 North American Bank
Top 10 North American Bank North Q3 2019 Canadian American C$ except otherwise noted Ranking4 Ranking5 Total assets $1,405B 2nd 6th Total deposits $870B 2nd 6th Market capitalization $140.4B 2nd 6th Reported net income (trailing four quarters) $11.8B 2nd 6th Adjusted net income1 (trailing four quart
Slide 9: Diversified Business Mix
Diversified Business Mix Fiscal 2018 Reported Earnings Mix1 Three key business lines Canadian Retail robust retail banking platform in Canada with proven performance Canadian Retail U.S. Retail2 U.S. Retail top 10 bank4 in 58% 28% the U.S. with significant organic growth opportunities Wholesal
Slide 10: Growing platform / North American scale
Growing platform / North American scale… Increasing Retail Focus Completed acquisition Acquired Acquired Target of Layer 6 and TD Became primary Chrysler credit card portfolio Completed strategic Greystone, and Acquired Waterhouse Acquired Commerce Acquired issuer of Aeroplan Completed Privatized Fi
Slide 11: Connected Experiences
Connected Experiences Consistent Strategy Q3 2019 Highlights How we compete 13.1 Enabling seamless interactions MILLION 5.2 MILLION 3.2 MILLION CANADIAN MOBILE between customers and the ACTIVE DIGITAL U.S. MOBILE USERS USERS entire organization CUSTOMERS Leveraging industry leading Experience De
Slide 12: The Better Bank
The Better Bank The Ready Commitment: Targeting $1 billion in community giving by 2030 The Ready Commitment targets Financial Security $ 1 billion by 2030 Opening doors Vibrant Planet for a more inclusive and sustainable tomorrow Connected Communities Better Health Q3 Highlights: TD launched the sec
Slide 13: ESG Performance
ESG Performance ENVIRONMENT: Highlights TD's low carbon commitment targets $100B, in total, towards initiatives in low-carbon lending, financing, asset management and internal corporate programs by 2030. TD is the only financial institution globally to participate $30.3B TD has been carbon neutr
Slide 14: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 14
Slide 15: Consistent Earnings Growth
Consistent Earnings Growth Targeting 7-10% adjusted EPS growth over the medium term4 Reported Earnings1,2 (C$MM) $11,334 Canadian Retail $10,517 U.S. Retail $8,936 $8,024 Wholesale Banking $7,883 $6,640 2013 2014 2015 2016 2017 2018 1. For the purpose of calculating contribution by each business seg
Slide 16: Q3 2019 Highlights
Q3 2019 Highlights Total Bank Reported Results (YoY) Financial Highlights $MM Reported Q3/19 Q2/19 Q3/18 EPS up 5% Revenue 10,499 10,228 9,899 Adjusted1 EPS up 8% PCL 655 633 561 Revenue up 6% Expenses 5,374 5,248 5,131 Net Income 3,248 3,172 3,105 Expenses up 5% Diluted EPS ($) 1.74 1.70 1.65 PCL
Slide 17: High Quality Loan Portfolio
High Quality Loan Portfolio Balances ($B unless otherwise noted) Q2/19 Q3/19 Canadian Retail Portfolio $422.3 $429.5 Personal $343.7 $349.6 Residential Mortgages 194.4 197.5 Home Equity Lines of Credit (HELOC) 88.2 90.0 Indirect Auto 24.5 25.2 Credit Cards 18.3 18.5 Other Personal 18.3 18.4 Unsecure
Slide 18: Strong Credit Quality
Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 63 61 60 58 58 56 50 49 47 50 43 42 41 39 38 39 37 37 34 34 31 38 1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019-Q3 2 IFRS IFRS 9 Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Aver
Slide 19: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Quarterly Portfolio Volumes $B Highlights $275 $280 $281 $283 $288 Canadian RESL credit quality 63% 65% 66% 67% 68% remained strong Uninsured Uninsured and insured portfolio loan-to-value Insured rates stable 37% 35% 34% 33% 32% Less than 1% of unin
Slide 20: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 20
Slide 21: Highlights
Highlights Strong capital base Industry leading credit ratings Proactive & disciplined risk management Attractive balance sheet composition Diverse funding strategy 21
Slide 22: Strong Capital & Liquidity Positions
Strong Capital & Liquidity Positions Common Equity Tier 11 Highlights Common Equity Tier 1 ratio of 12.0% Q2 2019 CET1 Ratio 12.0% Internal capital generation 41 Leverage ratio of 4.1% Actuarial losses on employee pension plans (6) Organic RWA increase and other (18) Liquidity coverage ratio o
Slide 23: TD TLAC Requirements
TD TLAC Requirements TD Regulatory Capital Ratios1,3 Canadian D-SIBs will be required to meet their Notional TLAC: 27.8% regulatory TLAC requirements by the November 1, 2021 implementation date. OSFI has stipulated that D-SIBs will be subject to 2 supervisory ratios: Minimum risk-based TLAC rati
Slide 24: Industry-Leading Credit Ratings
Industry-Leading Credit Ratings Issuer Ratings1 Rating Agencies Senior Debt Ratings2 Outlook / Trend 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 A3 BBB+ Baa1 BBB TD Canadi
Slide 25: Leading Non-Common Equity Capital Ratings
Leading Non-Common Equity Capital Ratings Industry leading ratings1 for Additional Tier 1 and Tier 2 capital instruments NVCC Tier 2 Subordinated Debt Ratings Moody’s S&P 12 A2 12 A- 10 A3 A- 10 Baa18 8 BBB+ Baa26 6 BBB- Baa34 4 BBB- 2 Ba1 2 BB+ a 0 a 0 TD TD Canadian Peers2 Peer Group 1 TD TD Canad
Slide 26: Robust Liquidity Management
Robust Liquidity Management Liquidity Risk Management Framework High Quality Liquid Assets (HQLA) TD holds a variety of liquid assets Target a 90-day survival horizon under a combined commensurate with liquidity needs in the Bank-specific and market-wide stress scenario, and a organization. mini
Slide 27: Deposit Overview
Deposit Overview Domestic Leader in Deposits Large base of personal and business deposits4 that make up 68% of the Bank's total funding TD Canada Trust (TDCT) ranked #1 in Total Personal Deposits1 Canadian Retail competes with legendary personal connected customer service and the power of One TD
Slide 28: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Large base of stable retail and commercial deposits Maturity Profile6,7 (To first par redemption date) (C$B) 50 Personal and commercial deposits are TD's Issuance Maturity primary sources of funds 40 Customer service business model delivers 30 stable base of “
Slide 29: Wholesale Term Debt Composition
Wholesale Term Debt Composition1 Funding Strategy Wholesale term funding through diversified sources across domestic and international markets Well-established C$55 billion Legislative Covered Bond Program is an important pillar in global funding strategy Programmatic issuance for the establishe
Slide 30: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Covered Bonds • Bail-in 30
Slide 31: TD Economics Update
TD Economics Update Global: Greenshoots nipped by the frost from trade winds The global economy is likely to post its slowest growth rate in a decade, growing by just 2.9% in 2019. European economic data has been the most disappointing. Its manufacturing sector is in a deep slump, especially in
Slide 32: Interest Rate Outlook
Interest Rate Outlook Interest Rates, Canada and U.S. The Federal Reserve is taking a risk-management approach in the % face of rising global and domestic 7 Forecast uncertainty. TD Economics expects U.S. Federal Funds 6 Rate the Fed to cut rates by at least another 25 basis points to further 5 cu
Slide 33: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Covered Bonds • Bail-in 33
Slide 34: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2 Gross impaired loan formations stable quarter- 26 21 20 21 bps over-quarter at 21 basis 18 points $1,722 $1,459 $1,424 $19 / 4 bps $1,340 $1,182 $1,117 / 55 bps $725 / 36 bps $758 / 36 bps $759 / 36 bps
Slide 35: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2 Gross impaired loans decreased 6 basis points 47 53 48 45 42 bps quarter-over-quarter reflecting: The sale of impaired loans in $3,534 the U.S. Commercial portfolio $3,296 $3,154 $2,945 attributable to the power and
Slide 36: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $855 PCL stable quarter-over- $7 quarter at 38 basis points $675 $664 $227 $8 $636 $1 $567 $83 $155 $132 $107 $311 $264 $249 $229 $228 $310 $280 $316 $246 $263 ($14) ($5) Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 PCL Ratio1
Slide 37: Provision for Credit Losses (PCL) Impaired and Performing
Provision for Credit Losses (PCL)1,2 Impaired and Performing Highlights PCL (C$MM) Q3/18 Q2/19 Q3/19 Impaired PCL stable quarter- Total Bank $ 567 $ 636 $ 664 over-quarter, reflecting Impaired 536 596 590 Credit migration in the Performing 31 40 74 Canadian Retail and Canadian Retail $ 246 $ 280
Slide 38: Canadian Personal Banking
Canadian Personal Banking Q3/19 Highlights Gross GIL GIL / Credit quality remained strong Canadian Personal Banking Loans ($B) ($MM) Loans in the Canadian Personal Residential Mortgages $197.5 $254 0.13% Banking portfolio Home Equity Lines of Credit (HELOC) 90.0 144 0.16% Indirect Auto 25.2 71 0.2
Slide 39: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q3/19 Highlights Gross GIL GIL/ Canadian Commercial and Wholesale Banking Loans/BAs ($MM) Loans Canadian Commercial and ($B) Wholesale Banking gross Commercial Banking1 $79.9 $379 0.47% impaired loans increase not Wholesale 55.5 19 0.03% concentrated in an
Slide 40: U.S. Personal Banking – U.S. Dollars
U.S. Personal Banking – U.S. Dollars Q3/19 Highlights Gross GIL GIL / U.S. Personal Banking1 Continued good asset quality in Loans ($B) ($MM) Loans Residential Mortgages $25.0 $307 1.23% U.S. Personal Home Equity Lines of Credit (HELOC)2 8.9 386 4.34% Gross impaired loans decreased, Indirect Aut
Slide 41: U.S. Commercial Banking – U.S. Dollars
U.S. Commercial Banking – U.S. Dollars Q3/19 Highlights Gross GIL GIL/ U.S. Commercial Banking1 Loans / BAs Sustained good credit quality ($B) ($MM) Loans in U.S. Commercial Banking Commercial Real Estate (CRE) $24.2 $88 0.36% Non-residential Real Estate 17.8 69 0.39% Gross impaired loans Reside
Slide 42: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Covered Bonds • Bail-in 42
Slide 43: Canadian Registered Covered Bond Program
Canadian Registered Covered Bond Program Key Highlights ■ Canadian residential real estate property with no more than 4 residential units Covered Bond Collateral ■ Uninsured conventional first lien assets with original loan to value ratio that is 80% or less ■ Latest property valuation shall be adju
Slide 44: TD Global Legislative Covered Bond Program
TD Global Legislative Covered Bond Program TD Covered Bond Programme Highlights Cover Pool as at July 31, 20193 TD has a C$55B legislative covered bond program High quality, conventional first lien Canadian Residential mortgages originated by TD Covered bonds issuance for Canadian issuers gove
Slide 45: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Covered Bonds • Bail-in 45
Slide 46: 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
Slide 47: 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
Slide 48: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: www.td.com/investor
Slide 49: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income Investor Presentation Q3 2019