Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Debt Investor Presentation (2016)
45 slides from Toronto-dominion Bank's debt investor presentation, 2016
Slide 1: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income 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: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 3
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 U.S. Retail top 10 bank4 in Canadian Retail U.S. Retail2 the U.S. with significant 64% 23% organic growth opportunities 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: 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 and Android devices with more than 20 new New Omni-Dial capability will provide a seamless, an
Slide 11: Corporate & Social Responsibility
Corporate & Social Responsibility TD Friends of the Environment Foundation celebrates 25 years with over Highlights C$76 million in funds disbursed in support of more than 24,000 local environmental projects Ranked 54th on the Global 100 Most Sustainable More than 235,000 trees planted through
Slide 12: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 12
Slide 13: Stable Earnings Growth
Stable Earnings Growth Reported Earnings1,2 (C$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 14: Q3 2016 Highlights
Q3 2016 Highlights Financial Highlights $MM Total Bank Reported Results (YoY) Reported Q3/16 Q2/16 Q3/15 Earnings up 4% (6% adjusted1) Revenue 8,701 8,259 8,006 PCL 556 584 437 EPS up 4% (6% adjusted) Expenses 4,640 4,736 4,292 Revenue up 9% Net Income 2,358 2,052 2,266 Diluted EPS ($) 1.24 1.07 1.1
Slide 15: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q2/16 Q3/16 Canadian Retail Portfolio $ 361.9 $ 368.4 Personal $ 300.9 $ 306.0 Residential Mortgages 185.7 187.7 Home Equity Lines of Credit (HELOC) 62.0 63.9 Indirect Auto 19.7 20.4 Unsecured Lines of Credit 9.6 9.8 Credit
Slide 16: 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 17: Canadian Personal Banking
Canadian Personal Banking Q3/16 Highlights Gross Loans GIL GIL / Canadian Personal Banking1 ($B) ($MM) Loans Real Estate Secured Lending: C$252 in gross loans outstanding Residential Mortgages 188 406 0.22% 51% insured Home Equity Lines of Credit (HELOC) 64 155 0.24% Uninsured residential mort
Slide 18: Oil and Gas Exposure
Oil and Gas Exposure Corporate and Commercial Outstandings Highlights by Sector ($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: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 19
Slide 20: Bail-in Update
Bail-in Update On March 22, 2016, the Government of Canada in its 2016 federal budget, proposed to introduce framework legislation for the bail-in regime along with accompanying enhancements to Canada’s bank resolution toolkit. The regime will provide the Canada Deposit Insurance Corporation ("C
Slide 21: TD Credit Ratings
TD Credit Ratings Issuer Ratings1 Moody's S&P DBRS Ratings Aa1 AA- AA Outlook Negative Stable Negative Ratings vs. Peer Group S&P Long-Term Debt Rating Moody’s Long-Term Debt Rating 14 AA-- 18 Aa1 16 Aa2 12 A+- 14 Aa3 10A- 12 A1 8- A- 10A2 8 A3 6- BBB+ 6 Baa1 BBB4 4 Baa2 2 2 2 TD Canadian Peers 2 U.
Slide 22: Non-Common Equity Capital Ratings
Non-Common Equity Capital Ratings TD has industry leading ratings1 for both Additional Tier 1 and Tier 2 capital instruments Ratings vs. Peers NVCC Tier 2 Subordinated Debt Ratings Additional Tier 1 NVCC Preferred Share Ratings S&P Moody’s S&P Moody’s 12 A- 12 A2 12 A- 12 A2 10 A- 10 A3 10 A- 10 A
Slide 23: Capital
Capital Common Equity Tier 11 Highlights Common Equity Tier 1 ratio of Q2 2016 CET1 Ratio 10.1% 10.4% Internal capital generation 33 bps Leverage ratio of 3.8% Actuarial loss on employee pension plans (9) bps RWA increase and other 1 bps Tier 1 and Total Capital ratios for Q3 2016 CET1 Ratio 1
Slide 24: Robust Liquidity Management
Robust Liquidity Management HQLA Distribution Treasury paradigm contributes to (Weighted & Includes Excess U.S. HQLA) stable and growing earnings Level 1 Cash & Matching funding maturities to term of Central Bank Reserve assets or stressed trading market Level 1 depth Sovereign Issued/ 83%
Slide 25: Term Funding Strategy
Term Funding Strategy Large base of stable retail and commercial deposits Customer service business model delivers growing base of “sticky” and franchise based deposits Reserve assets held for deposit balances based on LCR run-off requirements User of mortgage securitization programs via Canada
Slide 26: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt Sub-Debt 1% Trading Covered Personal Non- Deposits5 Term Deposits Bonds 8% 26% 38% Wholesale Term Debt 12% Senior Personal Term Unsecured Assets Mortgage Deposits MTN6 5% Securitized Securitization 20% 16% 54% Other Deposits3 25%
Slide 27: Wholesale Term Debt Composition
Wholesale Term Debt Composition1 By Currency2,3 By Term2,3 5 Year 56% EUR 15% $55B $15B USD 49% $48B GBP 4% $4B 6 Year AUD 3% 4 Year 3% 3% $3B $3B $3B CAD 29% 3 Year 21% $28B $21B 7 Year 8% 10 Year 2% $8B $2B < 2 Year 7% $7B 1. As of July 31, 2016. 2. Excludes certain private placement notes and mor
Slide 28: Debt Maturity Profile F2016 – 2020
Debt Maturity Profile1 F2016 – 2020 Bullet Debt Maturities (C$ billions)2 $25 $23 $20 $18 $17 2016 2017 2018 2019 2020 3 MBS Covered Bond Senior Debt ABS Subordinated Debt Manageable debt maturities 1. For wholesale term debt that has bullet maturities. 2. As of July 31, 2016. 28 3. Based on first p
Slide 29: Key Takeaways
Key Takeaways Strong capital base Industry leading credit ratings Proactive & disciplined risk management Attractive balance sheet composition Diverse funding strategy 29
Slide 30: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 30
Slide 31: Economic Outlook
Economic Outlook Canada’s economy is poised to return to a solid growth path Real GDP expected to increase by 1.1% in 2016 and 1.8% in 2017 The 2016 federal budget and anticipated improvement in the export channel expected to counterbalance the ongoing adjustment to oil prices Forecast unemplo
Slide 32: Interest Rate Outlook
Interest Rate Outlook Interest Rates, Canada and U.S.1 With U.S. unemployment nearing (%) healthy levels, the Federal 7 Reserve is likely to continue to US Federal Funds Rate edge up interest rates 6 Forecast2 In Canada, a modest economic 5 Bank of and inflationary outlook implies the Canada Tar
Slide 33: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 33
Slide 34: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio Highlights GIL Formations1: $MM and Ratios2 Total formations reduced $1,717 $229MM or 4 bps for the quarter U.S. Retail formations quarterly $1,453 decrease of $122MM primarily $1,338 driven by: $1,206 $142 / 38 bps $1,224 $33 / 10bps US$57MM reducti
Slide 35: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio Highlights GIL1: $MM and Ratios2 Canadian Retail GIL rate remains $3,799 $39 / 10 bps $3,567 at cyclically low levels $3,467 $3,244 U.S. Retail GIL quarterly decrease $3,077 $178 / 48 bps $211 / 54 bps $55 / 16 bps of $105MM primarily due to: $36 / 12 bps
Slide 36: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio Highlights PCL1: $MM and Ratios2 $648 Canadian and U.S. credit quality $10 / 11 bps $592 remains strong $563 $550 $65 / NM $48 / 53 bps $9 / 10 bps $34MM increase for U.S. Retail6 $11 / 14 bps $40 / NM driven by volume growth $443 $36 / NM $60 / NM
Slide 37: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Canadian Commercial and Gross Q3/16 Highlights GIL GIL/ Loans/BAs Wholesale Banking ($B) ($MM) Loans Solid loan growth across Commercial Banking1 62 179 0.29% the Canadian Commercial Wholesale 39 211 0.54% and Wholesale Banking Total Canadian Commercial an
Slide 38: U.S. Personal Banking – U.S. Dollars
U.S. Personal Banking – U.S. Dollars Q3/16 U.S. Personal Banking1 Gross Loans GIL GIL / Highlights ($B) ($MM) Loans Residential Mortgages 20 333 1.64% Continued good asset quality Home Equity Lines of Credit (HELOC)2 10 691 6.97% in U.S. Personal Indirect Auto 21 139 0.67% Improving trend in for
Slide 39: U.S. Commercial Banking – U.S. Dollars
U.S. Commercial Banking – U.S. Dollars Q3/16 U.S. Commercial Banking1 Gross Loans GIL GIL/ Highlights / BAs ($B) ($MM) Loans Commercial Real Estate (CRE) 21 129 0.61% Continuing portfolio growth Non-residential Real Estate 16 88 0.55% and good quality in U.S. Residential Real Estate 5 41 0.82% Com
Slide 40: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 40
Slide 41: Canadian Covered Bond Legislation
Canadian Covered Bond Legislation The Covered Bond legal framework was announced in the 2012 Federal Budget through amendment to the National Housing Act and was passed into law in June 2012 Issuance must be in accordance with the legislation and issuers are prohibited from using insured mortgag
Slide 42: CMHC Guide Highlights
CMHC Guide Highlights Asset Coverage Test To confirm overcollateralization of the covered bond collateral held against covered bonds outstanding Indexation requirement (July 1, 2014) provides adjustment for market development Value to be adjusted at least quarterly Valuation Calculation Test
Slide 43: TD Legislative Covered Bonds
TD Legislative Covered Bonds TD Covered Bond Programme Highlights Cover Pool as at July 31, 2016 TD has a C$40B legislative covered bond program High quality, conventional first lien Canadian Residential mortgages originated by TD Covered bonds issuance for Canadian issuers governed by CMHC-ad
Slide 44: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Best Investor Relations by Sector: Financial Services Best Corporate Governance Website: www.td.com/investor 44
Slide 45: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income Investor Presentation Q3 2016