Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Q1 2024 Earnings Presentation
56 slides from Toronto-dominion Bank's earnings presentation, Feb 29, 2024
Slide 1: Quarterly Results Presentation
Quarterly Results Presentation TD Bank Group Q1 2024 February 29, 2024
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 Proven Business Model Forward-Focused Purpose-Driven Leading Customer Reimagining Financial Relentless Customer Franchises Services Focus Strong Balance Sheet Delivering OneTD Diverse Talent and with Conservative Risk Inclusive Culture Appetite Consistent and Investing for Growth Creati
Slide 4: Proven Business Model
Proven Business Model Diversification and scale, underpinned by a strong risk culture ■ Reported earnings of $2.8B, up 79% (adjusted1 $3.6B, down 12%) ■ Reported EPS2 of $1.55, up 89% (adjusted1 $2.00, down 10%) ■ Good quarter reflecting higher fee income in our markets-driven businesses and volume
Slide 5: Proven Business Model: Customer Activity
Proven Business Model Customer Activity Canadian Personal and Commercial U.S. Retail Average Volumes Global Wealth Assets2 Banking Average Volumes ($B) (US$B)1 ($B) 2 Year CAGR 2% 600 7% 300 1,200 3% -2% 500 119 250 9% 1,000 110 97 114 109 105 800 629 400 441 158 200 601 591 390 170 414 162 300 150
Slide 6: Forward Focused
Forward Focused Shaping the future of banking Recognized by the Business Over 700 patents across 10-year milestone as the primary credit card Intelligence Group in its annual Canada and the U.S. issuer for Aeroplan Innovation awards Added Tap to Pay for iPhone and Zelle for Small Business, providing
Slide 7: Forward Focused: Digital Metrics
Forward Focused: Digital Metrics Canadian P&C1 U.S. Retail1 Innovating for our Customers Digital Adoption (% of total customers)2 ■ In the U.S., serving small business +150 bps +250 bps clients with innovative solutions 62.7 64.2 56.1 53.6 – Added Tap to Pay on iPhone – one of the first banks global
Slide 8: Purpose Driven: ESG Highlights
Purpose Driven: ESG Highlights Environment Social Governance ■ Expanded Scope 3 financed emissions footprint ■ Announced TD Pathways to Economic ■ Continued to educate Board of Directors and disclosure to include the automotive, shipping, Inclusion, our new social framework focusing Senior Executive
Slide 9: Purpose Driven
Purpose Driven Centered on our vision, purpose and shared commitments Listed on the DJSI North America Index for the twelfth consecutive year Named a 2024 S&P Global Sustainability Yearbook Member, awarded to banks in the top 15% of S&P's Corporate Sustainability Assessment worldwide TD Bank, Americ
Slide 10: Q1 2024 Highlights
Q1 2024 Highlights Good quarter EPS of $1.55, up 89% YoY ■ Adjusted1 EPS of $2.00, down 10% YoY P&L ($MM) ■ Adjusted1 EPS includes $0.06 impact from provision Reported Q1/24 QoQ YoY relating to industry-wide U.S. record keeping matter Revenue 13,714 4% 12% PCL 1,001 +$123 +$311 Revenue up 12% YoY (A
Slide 11: Restructuring Program
Restructuring Program The Bank continued to undertake certain measures in the first quarter of 2024 to reduce its cost base and achieve greater efficiency ■ What is the size of the restructuring program? – $363MM pre-tax / $266MM after-tax was incurred in Q4'23 – $291MM pre-tax / $213MM after-tax wa
Slide 12: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Strong quarter supported by volume growth and margin P&L ($MM) expansion Reported Q1/24 QoQ YoY Revenue 4,884 3% 6% Net income up 3% YoY PCL 423 +$33 +$96 Revenue up 6% YoY Impaired 364 +$90 +$144 Performing 59 -$57 -$48 ■ Volume growth Expenses 1,984 -3% 6% ■
Slide 13: U.S. Retail
U.S. Retail Loan growth and operating momentum in a challenging P&L (US$MM) (except where noted) environment Reported Q1/24 QoQ YoY Net income down 43% YoY (Adj1 down 27% YoY) Revenue 2,587 0% -6% Revenue down 6% YoY PCL 285 +$72 +$136 Impaired 279 +$52 +$121 ■ Lower deposit volumes and margins, par
Slide 14: Wealth Management & Insurance
Wealth Management & Insurance Good performance reflecting strength of diversified businesses P&L ($MM) Reported Q1/24 QoQ YoY Net income flat YoY Revenue 3,135 6% 8% Insurance Service Expenses 1,366 1% 17% Revenue up 8% YoY (ISE) Revenue net of Insurance ■ Higher insurance premiums and higher fee in
Slide 15: Wholesale Banking
Wholesale Banking Record revenue Net income down 38% YoY (Adj1 down 14% YoY) P&L ($MM) ■ Reported net income includes acquisition and Reported Q1/24 QoQ YoY integration-related costs for TD Cowen2 Revenue 1,780 20% 32% ■ Adjusted net income up 15% YoY excluding Trading-related revenue 730 24% 10% $1
Slide 16: Corporate Segment
Corporate P&L ($MM) Segment Reported Q1/24 Q4/23 Q1/23 Reported net loss of $628MM Net Income (Loss) (628) (591) (2,617) ■ Adjusted1 loss of $218MM Adjustments for items of note Amortization of acquired intangibles2 94 92 54 Acquisition and integration charges related 32 31 34 to the Schwab transact
Slide 17: Capital
1 Capital Strong capital and liquidity management supporting future growth Common Equity Tier 1 Ratio Q4 2023 CET 1 Ratio 14.4% Common Equity Tier 1 ratio of 13.9% Internal capital generation 25 Increase in RWA (excluding impact of FX)2 (26) Leverage Ratio of 4.4% Repurchase of common shares3 (33) R
Slide 18: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Business Segment GIL Formations1: $MM and Ratios2 Highlights ■ Gross impaired loan formations 22 bps increased quarter-over-quarter, 16 18 18 driven by: 14 – The Canadian Commercial lending portfolio – Continued normalization of $2,005 credit performance in the $1,6
Slide 19: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Business Segment GIL1: $MM and Ratios2 Highlights 40 bps 33 36 ■ Gross impaired loans 30 30 increased quarter-over- quarter, recorded in: $3,709 $5 / 6 bps – The Canadian & U.S. $3,299 Commercial and consumer $5 / 7 bps $46 / lending portfolios $2,980 5 bps $4 / 5 bps $
Slide 20: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Business Segment PCL1: $MM and Ratios2 Highlights Wealth Management & Insurance $1,001 $10 ■ PCL increase quarter-over- Wholesale Banking quarter, largely reflected in: $878 Canadian Personal & Commercial Banking $766 $57 – U.S. Retail $690 $25 $423 – Corporate U
Slide 21: Provision for Credit Losses (PCL): Impaired and Performing
Provision for Credit Losses (PCL) Impaired and Performing PCL1,2 ($MM) Highlights Q1/23 Q4/23 Q1/24 ■ Impaired PCL increased quarter- Total Bank 690 878 1,001 over-quarter, due to: Impaired 553 719 934 – Continued credit Performing 137 159 67 normalization in the consumer lending portfolios, includi
Slide 22: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) ACL1: $B and Coverage Ratios2 Highlights 89 89 bps 86 87 87 74 ■ ACL increased $79 million quarter-over-quarter, related to: United States $8.2 $8.3 – Current credit conditions, Canada $7.6 $7.8 $7.5 including: $5.3 57% 56% − Credit migration 57% 58% 57% – Volume gr
Slide 23: Appendix
Appendix 23
Slide 24: Q1 2024: Items of Note
Q1 2024: Items of Note Revenue/ ($MM) EPS ($)1 Segment Expense Line Item2 Pre Tax After Tax Reported net income and EPS (diluted) 2,824 1.55 Items of note Amortization of acquired intangibles3 94 79 0.04 Corporate Page 4, L13, L26 & L39 Acquisition and integration charges related to the Schwab trans
Slide 25: U.S. Strategic Card Portfolio: Accounting
U.S. Strategic Card Portfolio: Accounting Illustrative Example 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 $MM Credit Card Portfolio 1,000 Me
Slide 26: Q1 2024: PTPP & Operating Leverage
1,2 1,3 Q1 2024: PTPP & Operating Leverage Modified for partners' share of SCP PCL, FX and Insurance Service Expense Q1 2024 Q4 2023 Q1 2023 TOTAL BANK SFI Reference Revenue Expenses Revenue Expenses Revenue Expenses 1 Reported Results ($MM) 13,714 8,030 13,178 7,628 12,201 8,112 Page 2, L3 & L6 2 P
Slide 27: Net Interest Income Sensitivity (NIIS)
Net Interest Income Sensitivity (NIIS) Strong deposit base and disciplined ALM management 25 bps change in short-term interest rates 100 bps change in interest rates across the curve ■ 25 bps increase: $138MM increase in NII over a 12-month ■ 100 bps increase: $969MM increase in NII over a 12-month
Slide 28: Well-Diversified Deposit Base
Well-Diversified Deposit Base Deposit Concentration by Top Depositors $492B $309B $120B $921B 30% 20% 13% 2% 3% 4% 3% 4% 6% 2% 3% 5% CAD P&C + WM&I U.S. Retail 1 Wholesale Banking Total Bank 2 1, 3, 4 Top 5 Top 10 Top 20 Total Business Deposit Concentration by Industry5, $B Insured / Secured Deposit
Slide 29: Canadian Personal & Commercial Banking: Margins, Volumes and Efficiency
Canadian Personal & Commercial Banking Margins, Volumes and Efficiency Net Interest Margin (NIM) Average Loans $B1 539 552 560 524 527 2.84% 2.80% 112 114 117 119 2.78% 110 2.74% 2.74% 414 415 425 436 441 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Personal Business Efficiency Ratio
Slide 30: U.S. Retail: Margins, Volumes and Efficiency
U.S. Retail Margins, Volumes and Efficiency NIM1,2 Average Loans US$B3 183 188 191 175 179 3.29% 3.25% 93 94 95 96 90 3.07% 3.03% 3.00% 85 87 89 93 95 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Personal Business Efficiency Ratio US$B Average Deposits US$B3 68.8% 362 345 334 334 329
Slide 31: U.S. Retail: Wealth Assets and Schwab EPU
U.S. Retail Wealth Assets and Schwab EPU TD Wealth Assets1 US$B Schwab2 – Q1 2024 TD’s share of Schwab’s net income was C$141MM on a reported basis, of which C$194MM (US$144MM) was recorded in the U.S. Retail segment ■ TD's share of Schwab's net income was C$230MM on an adjusted basis3 40 40 40 39 S
Slide 32: Schwab Equity Pickup
Schwab Equity Pickup Q1 2024 Reconciliation U.S. Retail P&L ($MM)1 TDBG Corporate Segment $C $US Reported Schwab Equity Pickup2 141 194 144 (53) Amortization of acquired intangibles3 31 0 0 31 Share of restructuring and other charges 49 0 0 49 from investment in Schwab3 Acquisition and integration c
Slide 33: Wealth Management & Insurance: Volumes and Efficiency
Wealth Management & Insurance Volumes and Efficiency Insurance Premiums ($MM) Average Loans $B 1,658 1,616 6.7 1,316 1,337 6.5 6.4 6.5 1,188 6.2 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Efficiency Ratio Average Deposits $B 62.3% 57.6% 57.2% 59.4% 59.2% 34.6% 34.4% 33.1% 32.4% 33.4
Slide 34: Wealth Management & Insurance
Wealth Management & Insurance Wealth Revenue $MM Wealth Assets1 $B 1,600 600 1,409 1,377 1,366 1,344 1,313 201 576 220 188 184 559 1,200 186 541 549 531 157 160 154 141 479 145 500 460 460 452 441 800 400 369 356 358 400 355 334 997 982 1,024 1,019 1,051 0 300 Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q1/23 Q2/
Slide 35: IFRS 17, Insurance Contracts
IFRS 17, Insurance Contracts The Bank adopted IFRS 17, Insurance Contracts, effective November 1, 2023. Quarterly comparative results for the year ended October 31, 2023 have been restated in alignment with the new standard. ■ IFRS 17 requires revenue from insurance contracts to be recognized as the
Slide 36: Wholesale Banking
Wholesale Banking Revenue Loans1 Q1 2024 Q1 2024 -1% 4% 33% 40% $1.8B $96.2B 61% 63% Corporate and Canada Global Markets Other2 United States International Investment Banking 36
Slide 37: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Period-End Balances ($B unless otherwise noted) Q4/23 Q1/24 Canadian Personal & Commercial Portfolio 557.6 563.9 Personal 438.4 441.6 Residential Mortgages 261.3 263.9 Home Equity Lines of Credit (HELOC) 117.6 117.9 Indirect Auto 28.8 28.8 Credit Cards 18.8 19.0
Slide 38: Commercial Real Estate (CRE)
Commercial Real Estate (CRE) Commercial Real Estate Portfolio Overview: Highlights $93B ■ Commercial Real Estate represents $93B or 10% of Total Bank gross loans and acceptances1 Office Retail – Portfolio is well diversified across 11% 17% geographies and sub segments Other – 57% of CRE portfolio in
Slide 39: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Highlights Secured Lending Portfolio Total Canadian real estate secured lending portfolio at $384B Maturity Schedule ($B)1 $114.4 ■ 92% of RESL portfolio is amortizing4, of $32.8 which 74% of HELOC portfolio is $79.0 $79.0 amortizing $8.6 Variable Rate $42.2 $47.1 ■ 35% variable
Slide 40: Canadian Personal Banking
Canadian Personal Banking Canadian Personal Banking (Q1/24) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%) ■ Gross impaired loans Residential Mortgages 263.9 209 0.08 increased quarter-over- Home Equity Lines of Credit (HELOC) 117.9 162 0.14 quarter, reflective of Indirect Auto 28.8 109 0.38 –
Slide 41: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Canadian Commercial and Wholesale Banking (Q1/24) Highlights Gross Loans/ GIL GIL/Loans BAs ($B) ($MM) (%) ■ Gross impaired loans Commercial Banking1 122.3 950 0.78 increased quarter-over- Wholesale Banking 96.6 46 0.05 quarter, recorded in: Total Canadian C
Slide 42: U.S. Personal Banking
U.S. Personal Banking U.S. Personal Banking1 (Q1/24) Highlights Gross Loans GIL GIL/Loans In USD unless otherwise specified ($B) ($MM) (%) ■ Gross impaired loans Residential Mortgages 41.3 336 0.81 increased quarter-over- Home Equity Lines of Credit (HELOC)2 7.7 171 2.21 quarter, reflective of Indir
Slide 43: U.S. Commercial Banking
U.S. Commercial Banking U.S. Commercial Banking1 (Q1/24) Highlights Gross Loans/ GIL GIL/Loans In USD unless otherwise specified BAs ($B) ($MM) (%) ■ Gross impaired loans Commercial Real Estate (CRE) 28.6 341 1.19 increased quarter-over- Non-residential Real Estate 19.9 234 1.18 quarter, driven by t
Slide 44: Endnotes on Slides 4-5
Endnotes on Slides 4-5 Slide 4 1. The Bank prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), the current generally accepted accounting principles (GAAP), and refers to results prepared in accordance with IFRS as the “reported” resul
Slide 45: Endnotes on Slides 7-10
Endnotes on Slides 7-10 Slide 7 1. Canadian Personal and Commercial: based on Canadian Personal & Small Business banking. U.S. Retail: based on U.S. Retail and Small Business banking. 2. Active digital users as a percentage of total customer base. Canadian Personal & Small Business Banking excludes
Slide 46: Endnotes on Slides 12-15
Endnotes on Slides 12-15 Slide 12 1. Please refer to Slide 4, Endnote 1. 2. Net interest margin (NIM) is calculated by dividing net interest income by average interest-earning assets. Average interest-earning assets used in the calculation of NIM is a non-GAAP financial measure. NIM and average inte
Slide 47: Endnotes on Slides 16-17
Endnotes on Slides 16-17 Slide 16 1. Please refer to Slide 4, Endnote 1. 2. Amortization of acquired intangibles relates to intangibles acquired as a result of asset acquisitions and business combinations, including the after-tax amounts for amortization of acquired intangibles relating to the share
Slide 48: Endnotes on Slides 18-22
Endnotes on Slides 18-22 Slide 18 1. Gross Impaired Loan (GIL) formations represent additions to Impaired Loans & Acceptances during the quarter; excludes the impact of acquired credit-impaired loans. 2. GIL Formations Ratio: Gross Impaired Loan Formations/Average Gross Loans & Acceptances. Slide 19
Slide 49: Endnotes on Slide 24
Endnotes on Slide 24 Slide 24 1. EPS is computed by dividing net income available to common shareholders by the weighted-average number of shares outstanding during the period. Numbers may not add due to rounding. 2. This column refers to specific page(s) and line items of the Bank's Q1 2024 Supplem
Slide 50: Endnotes on Slide 26
Endnotes on Slide 26 Slide 26 1. Please refer to Slide 4, Endnote 1. 2. Pre-tax, pre-provision earnings (PTPP) is a non-GAAP financial measure that is typically calculated by subtracting expenses from revenues. At the total Bank level, TD calculates PTPP as the difference between adjusted revenue (U
Slide 51: Endnotes on Slides 28-30
Endnotes on Slides 28-30 Slide 28 1. U.S. Retail deposits exclude deposits from the Schwab Insured Deposit Agreement. 2. Wholesale deposit concentration by top depositors includes all global transaction banking (i.e., corporate deposits). 3. Total Bank deposit concentration by top deposits does not
Slide 52: Endnotes on Slides 31-32
Endnotes on Slides 31-32 Slide 31 1. Effective the first quarter of 2024, certain asset management businesses which were previously reported in the U.S. Retail segment are now reported in the Wealth Management and Insurance segment. Comparative period information has been adjusted to reflect the new
Slide 53: Endnotes on Slides 33-38
Endnotes on Slides 33-38 Slide 33 1. Efficiency ratio, net of ISE is calculated by dividing non-interest expenses by total revenue, net of ISE. Total revenue, net of ISE – Q1 2024: $1,769 million, Q4 2023: $1,610 million, Q3 2023: $1,572 million, Q2 2023: $1,683 million, Q1 2023: $1,751 million. Tot
Slide 54: Endnotes on Slides 39-41
Endnotes on Slides 39-41 Slide 39 1. Excludes revolving HELOC, Wholesale mortgage portfolio. 2. RESL Portfolio Current Loan to Value is calculated with the Teranet-National Bank House Price Index™ and weighted by the total exposure, based on outstanding mortgage balance and/or the HELOC authorized c
Slide 55: Endnotes on Slides 42-43
Endnotes on Slides 42-43 Slide 42 1. Excludes acquired credit-impaired loans. 2. Please refer to Slide 37, Endnote 1. 3. Loan To Value is calculated with the Loan Performance Home Price Index, based on outstanding mortgage balance and/or the HELOC authorized credit limit. Slide 43 1. Please refer to
Slide 56: Investor Relations Contacts
Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 56
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