Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q3 2013 Earnings Presentation
34 slides from Toronto-dominion Bank's earnings presentation, Aug 29, 2013
Slide 1: TD Bank Group Quarterly Results Presentation Q3 2013
TD Bank Group Quarterly Results Presentation Q3 2013 Thursday August 29th, 2013
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 Strong Retail results negatively impacted by Insurance losses ─ Adjusted1,2 earnings of $1.6B, down 13% versus Q3 2012; Adjusted EPS down 14% ─ Impact of severe weather-related impacts and higher general insurance claims was $0.45 ─ Other Retail businesses posted record quarters
Slide 4: Q3 2013 Highlights
Q3 2013 Highlights Key Themes Net Income $MM (Adjusted, where applicable) Adjusted1 EPS decline of 14% Q3/13 QoQ YoY YoY driven by Insurance loss Retail2 $ 1,449 -12% -10% Wholesale 147 -33% -18% Record quarter for Canadian Corporate (8) -69% n/a P&C, Wealth Management and Adjusted Net Income $
Slide 5: Q3 2013 Earnings: Items of Note
Q3 2013 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,527 $1.58 Pre Tax After Tax Items of Note EPS (MM) (MM) Amortization of intangibles1 $91 $59 $0.06 Fair value of derivatives hedging the reclassified available-for-sale securities ($82) ($70) ($0.07) portfolio Integratio
Slide 6: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Key Themes P&L $MM1 Q3/13 QoQ YoY Adjusted1 net income up 12% YoY Revenue $ 2,821 6% 3% Record adjusted revenue, net income PCL 216 -12% -25% Positive adjusted operating leverage Expenses (adjusted) 1,248 2% 2% Lending volumes strong in business Net Inc
Slide 7: Wealth and Insurance
Wealth and Insurance Key Themes P&L $MM Q3/13 QoQ YoY Record Wealth net income up 18% Revenue $ 590 -46% -42% YoY Expenses 711 0% 13% Higher fee-based revenue, the addition of Net Income, Wealth $ 181 15% 18% Epoch and improved trading volumes Net Income, Insurance $ (243) n/a n/a Strong growt
Slide 8: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Key Themes P&L US$MM1 Q3/13 QoQ YoY Adjusted1 net income up 22% YoY Revenue $ 1,909 12% 27% Strong loan and deposit volume growth PCL 217 12% 25% Security gains2 of $118 million vs. $80 Expenses (adjusted) 1,170 11% 28% million in Q2/13 and $23 million in Q3/
Slide 9: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Q3/13 QoQ YoY Earnings down 18% YoY Revenue $ 563 -12% -12% Lower trading-related revenue partially offset PCL 23 667% 10% by reduced expenses Expenses 351 -6% -14% Revenue impacted by lower fixed Net Income $ 147 -33% -18% income and credit trading ROE 14.
Slide 10: Corporate Segment
Corporate Segment Key Themes P&L $MM1 Q3/13 QoQ YoY Lower adjusted net income YoY Net Corporate Expenses $ (118) 2% 115% Higher net corporate expenses driven Other 84 31% 42% by increased employee benefit and Non-Controlling Interests 26 0% 0% strategic initiative costs Net Income (adjusted) $ (
Slide 11: Expenses
Expenses Highlights Efficiency Ratio, Adjusted2 Core expenses1 up 6% YoY 58.8% 55.8% Adjusted expenses up 13% YoY on Target and Epoch acquisitions and FX Expect Q4/13 core expenses to rise QoQ but well below YTD 2012 YTD 2013 sequential increase in Q4/12 Targeting core expense1 growth in 201
Slide 12: Capital
Capital Highlights Basel III Common Equity Tier 11 8.8% 8.8% 8.9% Basel III Common Equity Tier 1 8.2% 7.7% ratio of 8.9% as of July 31, 2013 Managing capital volatility - AOCI Dividend increase of $0.04 per share payable in Q4 2013 Share buyback program on track Q3/12 Q4/12 Q1/13 Q2/13 Q3/13
Slide 13: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 Continued solid credit performance: Canadian Credit Cards loss rates continued to improve Lowest charge-off rate for the U.S. Commercial portfolio in over 3 years Increased Gross Impaired Loans due to seasoning of the Target portfolio G
Slide 14: Appendix
Appendix
Slide 15: Q3 2013 Earnings: Items of Note
Q3 2013 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,527 $1.58 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense Line (MM) (MM) Item2 Amortization of intangibles1 $91 $59 $0.06 Corporate pg 13, line 15 Fair value of derivatives hedging the reclassified available
Slide 16: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Highlights Net Interest Margin Margin on average earning assets On Average Earning Assets of 2.83%, down 3 bps YoY but up 3 2.86% 2.83% bps QoQ on an adjusted basis 2.83% 2.79% 2.80% YoY down primarily due to the impact on deposit margins from the low rate
Slide 17: Canadian Personal & Commercial Banking: Deposit Growth
Canadian Personal & Commercial Banking Deposit Growth Highlights Average Deposits ($ billions) 4% Growth Personal deposit volumes YoY increased 3% YoY Business deposit volumes $222 $221 $224 increased 8% YoY $215 $219 $70 $71 $71 $74 $69 $146 $149 $151 $150 $150 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Per
Slide 18: Canadian Personal & Commercial Banking: Loan Growth
Canadian Personal & Commercial Banking Loan Growth Highlights Average Loans ($ billions) 5% Growth Solid personal lending volume YoY growth of 3% YoY Real estate secured lending growth of 4% YoY $300 $302 $304 $308 $295 Strong business lending volume $41 $42 $43 $45 $46 growth of 13% YoY $15 $
Slide 19: Wealth and Insurance
Wealth and Insurance Highlights Revenue $MM $1,077 $1,091 Wealth revenues of $800 million $1,009 $963 were up 5% versus Q2/13 $349 $329 Addition of Epoch $323 $257 $590 Higher fee-based revenue from growth in asset management and advice $113 $112 businesses $113 $118 $114 $136 $140 $128 $131 $
Slide 20: Wealth
Wealth Performance Metrics AUA1 ($B) AUM2 ($B) $247 $246 $275 $279 $270 $258 $207 $211 $249 $204 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Mutual Funds AUM2 ($B) Retail vs. Institutional AUM2 ($B) $74.4 $74.9 $146 $145 $70.7 $114 $115 $115 $68.1 $93 $96 $101 $101 $90 $65.6 Q3/12 Q4
Slide 21: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 TD’s share of TD Ameritrade’s net US$MM income was C$69 million in Q3/13, up 23% YoY mainly due to: Higher TD Ameritrade earnings driven by $68 increased transaction-based revenue from higher trading volumes and increa
Slide 22: U.S. Personal & Commercial Banking: Deposit Growth
U.S. Personal & Commercial Banking Deposit Growth Highlights Average Deposits (US$ billions) 11% Growth Average personal deposit volumes YoY up 9% YoY Average business deposit volumes up 5% YoY $187 $178 $182 Average TD Ameritrade IDAs up $169 $172 18% YoY $67 $71 $62 $66 $60 $51 $52 $53 $50 $
Slide 23: U.S. Personal & Commercial Banking: Loan Growth
U.S. Personal & Commercial Banking Loan Growth Highlights Average Loans (US$ billions) 18% Growth Average personal loans increased YoY 31% YoY including Target Average business loans increased 7% YoY $103 $98 $90 $93 $87 $50 $49 $47 $49 $46 $49 $53 $41 $43 $44 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Perso
Slide 24: Canadian Housing Market
Canadian Housing Market Highlights Housing sales continue to be supported by attractive affordability, demographics and employment stability Canadian RESL credit quality remains strong General Allowance of $65 million taken for the Alberta flood Topic TD Positioning Canadian RESL $223 billio
Slide 25: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q2/13 Q3/13 Canadian Personal & Commercial Portfolio $ 304.5 $ 310.3 Personal $ 259.6 $ 264.1 Residential Mortgages 156.7 161.0 Home Equity Lines of Credit (HELOC) 62.7 62.1 Indirect Auto 14.0 14.5 Unsecured Lines of Credit
Slide 26: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,218 Canadian P&C formations $1,172 remained stable $1,061 $1,115 $1,041 Excluding Target, U.S. P&C formation ratio improved to the lowest level in over 5 years 26 30 25 26 27 bps Other3 Wholesale Portfolio
Slide 27: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights $2,664 Gross Impaired Loans $2,518 $2,494 $2,554 increased $110MM (2 bps) $2,367 over Q2/13 largely due to seasoning in the Target portfolio Canadian P&C Gross Impaired Loans decreased $43MM (2 bps) due to resolutions in th
Slide 28: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL ratio decreased 2 bps $489 over Q2/13 $454 Canadian P&C loss rates at $402 $407 $360 the lowest levels in over 5 years U.S. P&C PCL continued favourable trend when adjusted for Target and the normal build up in
Slide 29: Canadian Personal Banking
Canadian Personal Banking Q3/13 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 161 0.27% 437 5 Continued strong credit Home Equity Lines of Credit (HELOC) 62 0.51% 317 4 performance Indirect Auto 15 0.28% 40 30 Unsecured Lines of Credit
Slide 30: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q3/13 Canadian Commercial and Gross GIL PCL1 Highlights Loans/BAs Wholesale Banking ($B) ($MM) ($MM) Credit quality remains strong Commercial Banking2 46 158 7 Commercial (including Small Wholesale 20 47 19 Business Banking) loss rate Total Canadian Comm
Slide 31: U.S. Personal Banking
U.S. Personal Banking Q3/13 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Loan to Values have improved ($MM) Residential Mortgages 20 1.22% 247 (2) due to housing price appreciation over last year Home Equity Lines of Credit (HELOC)3 10 2.07% 216 6 The proportion o
Slide 32: U.S. Commercial Banking
U.S. Commercial Banking Q3/13 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 15 362 10 Positive momentum continues Non-residential Real Estate 12 239 16 in U.S. Commercial portfolio Residential Real Estate 3 123 (6) Lowest charge-off ra
Slide 33: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: Grand Prix for Best Overall Investor Relations: Large Cap tdir@td.com Best Investor Relations by Sector: Financial Services Website: Best Investor Relations www.td.com/investor by a CEO: Large Cap Best Investor Relations by a C
Slide 34: TD Bank Group Quarterly Results Presentation Q3 2013
TD Bank Group Quarterly Results Presentation Q3 2013 Thursday August 29th, 2013