Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Debt Investor Presentation (March 2011)
37 slides from Toronto-dominion Bank's debt investor presentation, March 2011
Slide 1: Fixed Income Presentation
Fixed Income Presentation March 2011
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 presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, represent
Slide 3: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 3
Slide 4: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the 10 most competitive economies1 Soundest banking system in the world1 Canadian economy outperformed G7 over last decade Average annual real GDP growth of 2.7% from 1997 to 2009 Canadian economy enjoying a robust recovery Strong Canadian housing
Slide 5: Solid Financial System in Canada
Solid Financial System in Canada Strong retail and commercial banks Conservative lending standards All major wholesale dealers owned by Canadian banks, with stable retail earnings base to absorb any wholesale write‐offs Responsive government and central bank Proactive policies and programs
Slide 6: Canadian Mortgage Market is Different from the U.S.
Canadian Mortgage Market is Different from the U.S. Canada U.S. Conservative product offerings: fixed or variable Outstanding mortgages include earlier exotic interest rate option products (interest only, options ARMs) New regulations on default insured mortgages Borrowers often qualified us
Slide 7: Canadian Economy: Near-Term Outlook Somewhat Brighter
Canadian Economy Near‐Term Outlook Somewhat Brighter Canadian Real GDP (Annualized q/q% change) 8 Fcst as of March 2011 6 Fcst as of December 2010 Forecast 4 2 Canadian economy enjoying a 0 robust recovery ‐2 Forecast Y/Y % Chg. (Q4/Q4 % growth) ‐4 2010F 3.0% (3.1) 2011F 2.9% (3.0) ‐6 2012F 2.5% (
Slide 8: Canadian Economy: Medium-Term Headwinds
Canadian Economy Medium‐Term Headwinds Household Debt to Personal Disposable Income 180 % 160 United States 140 Gradual rise in interest rates to take steam out of debt‐fueled 120 consumer spending 100 Canada 80 60 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Source: Statistics Canada, T
Slide 9: Canadian Economy: Long-Term Support
Canadian Economy Long‐Term Support Canadian Unemployment Percent 14 12 Forecast 10 Unemployment rate has 8 peaked and continues to 6 4 trend downward 2 0 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Canadian Business Investment Spending Qtr/Qtr % Chg. 20 Forecast* Healthy corporat
Slide 10: Outlook for the Canadian Economy
Outlook for the Canadian Economy Unemployment rate to continue to trend down Inflation to remain in check Interest rates to rise gradually, but remain low Healthy business and relatively stable government balance sheets Overall GDP to grow at a healthy, modest rate 10
Slide 11: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 11
Slide 12: Key Businesses: At a Glance
Key Businesses: At a Glance Adjusted Earnings1 Q1 2011 ‐ ~C$1.6B Wealth Management4 Segments Business Canadian P&C2 U.S. P&C2 Wholesale Global Wealth TD Ameritrade3 55% 8% 3% 20% 14% Earnings Canadian Retail U.S. Retail Wholesale Mix 63% 23% 14% Brands Over 80% of earnings from retail operations 1.
Slide 13: TD's North American Footprint
TD’s North American Footprint In Canada Over 1,100 Branches Coast to Coast In the U.S. Over 1,200 Stores in 15 States and D.C. on the Eastern Seaboard 13
Slide 14: Financial Results
Financial Results (C$MM) Q1 2011 QoQ YoY F2010 YoY Revenue $5,460 9% 8% $19,565 10% Provision for Credit Losses $414 3% ‐20% $1,625 ‐34% Expenses $3,193 ‐2% 7% $12,163 Not Material Adjusted Net Income1 $1,588 26% 11% $5,228 11% Adjusted EPS (diluted)2 $1.74 26% 9% $5.77 8% Tier 1 Capital 12.7% 50 Bp
Slide 15: Key Takeaways
Key Takeaways Simple Strategy, Consistent Focus Building Building the the Better Better Bank Bank North North America America • Top 10 Bank in North America1 • Leverage platform and brand for growth • One of the few banks in the world rated Aaa by Moody’s • Strong employment brand Retail Retail Earn
Slide 16: TD Bank Group: A Top Bank in North America
TD Bank Group A Top 10 Bank in North America Compared to: Q1 20111 Canadian North American (In $U.S. Billions)2 Peers8 Peers9 Total Assets $615.5 2nd 6th Total North American Deposits $437.8 1st 5th Market Cap3 $66.0 2nd 6th Adj. Net Income4 (Trailing 4 Quarters) $5.4 2nd 6th Adj. Retail Earnings5 (
Slide 17: Strong Focus on Risk-Return
Strong Focus on Risk‐Return Return on Risk‐Weighted Assets1 3.06% 2.38% 1.34% 2 TD Canadian Peers3 U.S. Peers4 Better return for risk undertaken 1. Adjusted on a comparable basis to exclude identified non‐underlying items. Return on risk‐weighted assets is adjusted net income available to common sha
Slide 18: TD Bank Group: Managing through Current Environment
TD Bank Group: Managing through Current Environment Crossed the recession valley Carefully managed capital, funding, liquidity and risk Kept our business model intact Preserved our performance, convenience and service culture Emerged with momentum on our side Increased market share, extend
Slide 19: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution Adjusted Earnings1 $5,228 (C$MM) AGR : 13% a r C 5‐ye Earnings % 7 sted ed EPS: $4,716 A d ju st Adju $4,189 $3,813 $3,376 $2,861 Wholesale Banking U.S. P&C $1,588 Wealth Management Canadian P&C 2005 2006 2007 2008 2009 2010 Q1 2011 Retail as % o
Slide 20: Key Takeaways
Key Takeaways Building Building the the Better Better Bank Bank North North America America Retail Retail Earnings Earnings Focus Focus Franchise Franchise Businesses Businesses Risk Risk Discipline Discipline 20
Slide 21: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 21
Slide 22: Tier 1 Capital Ratio
Tier 1 Capital Ratio 12.7% 12.2% 11.3% Highlights 10.3% 9.8% Strong capital position Continued organic growth in capital Well‐positioned for evolving regulatory environment Lower‐risk, franchise wholesale dealer Risk‐weighted assets are about one‐ third of total assets About 80% of Tier
Slide 23: TD Credit Ratings
TD Credit Ratings Issuer Ratings¹ Moody's S&P Fitch DBRS Aaa AA‐ AA‐ AA Strong credit ratings 23 1. As at September 2, 2010. Moody's: Issuer Rating, S&P: LT Foreign Issuer Credit, Fitch: LT Issuer Default Rating, DBRS: Senior Unsecured Debt.
Slide 24: Disciplined Risk Management
Disciplined Risk Management Enterprise‐wide risk management policies and practices Risk measurement and quantification Scenario analysis Stress testing Integrated risk monitoring and reporting To senior management and Board of Directors Regular review, evaluation, and approval of risk
Slide 25: Robust Liquidity Management
Robust Liquidity Management Global liquidity risk management policy Low reliance on wholesale funding Incorporates off‐balance sheet exposures into liquidity plan Monitors global funding market conditions and potential impacts to our funding access on a daily basis Match terms of assets an
Slide 26: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition Funding Mix1 Earning Asset Mix3 Deposits with Banks Common Equity 4% 6% Credit 62% Commercial Deposits Cards 19% Securitization Personal Residential 2% 9% Loans Personal Term Mortgages 19% Deposits 14% Non‐Common Capital 13% Business and 1% Medium Term Notes & Go
Slide 27: Funding Strategy
Funding Strategy Large base of stable retail and commercial deposits Limits on amount of deposits we can hold from any one depositor Large user of securitization program, primarily via Canada Mortgage Bond (CMB) Minimal reliance on wholesale funding historically Wholesale funding diversifi
Slide 28: Funding Programs
Funding Programs Euro Medium Term Note program US$20B of senior or subordinated notes Maximum US$5B of subordinated notes U.S. shelf program US$15B of Senior Debt Securities Covered Bond program €10B of covered bonds (senior debt) Other funding sources Domestic Medium Term Notes
Slide 29: Key Takeaways
Key Takeaways Strong capital base Excellent credit ratings Proactive and disciplined risk management Attractive balance sheet composition Diverse funding strategy to support growth plans 29
Slide 30: Contents
Contents 1. Canadian Economy 2. Overview of TD Bank Group 3. Treasury & Balance Sheet Management 4. Appendix 30
Slide 31: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q4/10 Q1/11 Canadian Personal & Commercial Portfolio $ 182.9 $ 187.8 Personal1 $ 151.1 $ 154.7 Residential Mortgages 60.6 64.2 2/3 insured Home Equity Lines of Credit (HELOC) 59.0 58.8 Unsecured Lines of Credit 9.2 9.1 Credi
Slide 32: Credit Portfolio Highlights at Q1 2011
Credit Portfolio Highlights at Q1 2011 Canadian Personal Continued solid credit performance Canadian Commercial and Wholesale Strong credit performance is expected to continue U.S. Personal Default rate was stable and loss rate improved High quality loan growth in the residential mortg
Slide 33: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights Gross Impaired Loan Formations $1,062 decreased $286MM or 27% YoY $23 / 12 bps Continued stability in Canadian $918 P&C formation rates $852 $835 $776 U.S. P&C formations decreased $526 / 92 bps $135MM (US$
Slide 34: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross Impaired Loans remained $2,315 $2,218 $2,177 $2,253 $2,258 stable while the impaired rate $206 / 108 bps $84 / 46 bps $69 / 39 bps continued to decline $190 / 100 bps $91 / 51 bps Gross Impaired Loans in Canadian P&C
Slide 35: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL rate was down 28 bps YoY due to improving economic $507 environment $4 / NM $417 PCL in Canadian P&C was down $2 / NM $390 4 bps QoQ driven by a reduction in $1 / NM $340 $209 / 147 bps $348 Commercial PCL $1 / N
Slide 36: Investor Relations Contacts
Investor Relations Contacts Phone: 416‐308‐9030 or 1‐866‐486‐4826 Email: tdir@td.com Best Investment Community Meetings Website: Best Investor Relations by a CFO: www.td.com/investor Large Cap Best Investor Relations by a CEO: Large Cap Grand Prix for Best Overall Investor Relations: Large Cap Best
Slide 37: Fixed Income Presentation
Fixed Income Presentation March 2011
TD Bank Group — Debt Investor Presentation (March 2011) on 6ix