Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q4 2015 Earnings Presentation
30 slides from Toronto-dominion Bank's earnings presentation, Dec 3, 2015
Slide 1: TD Bank Group Quarterly Results Presentation Q4 2015
TD Bank Group Quarterly Results Presentation Q4 2015 Thursday December 3rd, 2015
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: Strategic Overview
Strategic Overview Strong performance in 2015 Achieved 8% growth in adjusted1 EPS and net income Dividend paid per share up 9% from 2014 Good financial results in Q4 2015 Adjusted earnings of $2.2B, up 17% YoY Adjusted EPS up 16% YoY Strong results in Canadian and U.S. Retail; solid qu
Slide 4: Fiscal 2015 Highlights
Fiscal 2015 Highlights Key Themes Financial Highlights $MM P&L Summary Adjusted1 Adjusted1 Canadian Retail earnings up 8% Adjusted1 2015 2014 YoY Good loan, deposit and wealth asset growth, Revenue2 $ 28,937 26,848 8% lower credit losses, higher insurance earnings and Expenses 17,076 15,863 8% p
Slide 5: Q4 2015 Highlights
Q4 2015 Highlights Key Themes Financial Highlights $MM Adjusted1 EPS of $1.14, up 16% YoY P&L Summary Adjusted1 Adjusted1 Q4/15 Q3/15 Q4/14 Adjusted Net Income up 17% YoY Revenue2 $ 7,459 7,385 6,732 Strong results for Canadian and U.S. Retail; solid Expenses 4,480 4,261 4,188 quarter for Whol
Slide 6: Q4 2015 Earnings: Items of Note
Q4 2015 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,839 $0.96 Pre Tax After Tax Items of Note EPS (MM) (MM) Restructuring charges1 $349 $243 $0.13 Amortization of intangibles2 $73 $65 $0.03 Charge related to the acquisition of Nordstrom's credit card portfolio and $82 $51
Slide 7: Canadian Retail
Canadian Retail Key Themes P&L $MM Adjusted, where applicable1 Adjusted1 net income up 10% YoY Q4/15 QoQ YoY Continued good loan, deposit and wealth asset growth and higher insurance earnings Revenue $ 4,997 0% 2% Good credit and expense performance Insurance Claims 637 6% -12% Revenue Net of
Slide 8: U.S. Retail
U.S. Retail Key Themes P&L US$MM Adjusted, where applicable1 Q4/15 QoQ YoY Adjusted1 net income up 6% YoY Revenue (adjusted) $ 1,959 3% 6% Adjusted revenue up 6% YoY Revenue (reported) 1,903 0% 3% Strong organic volume and fee growth, PCL 184 14% 47% Nordstrom acquisition Expenses (adjusted) 1
Slide 9: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Net income up 23% YoY Q4/15 QoQ YoY Revenue $ 666 -13% 10% Revenue up 10% YoY PCL 14 N/A N/A Higher trading and corporate lending growth, partially offset by lower underwriting fees Expenses 390 -10% 2% Net Income $ 196 -18% 23% Expenses up 2% YoY ROE 13.
Slide 10: Corporate Segment
Corporate Segment Key Themes P&L $MM Adjusted, where applicable1 Adjusted1 net income up $4MM Q4/15 Q3/15 Q4/14 YoY Net Corporate Expenses $ (192) $ (193) $ (233) Lower net corporate expenses, partially Other 2 4 41 offset by higher provisions for incurred but not yet identified credit losses No
Slide 11: Capital & Liquidity
Capital & Liquidity Highlights Basel III Common Equity Tier 11 Basel III Common Equity Tier 1 ratio 9.9% 10.1% 9.9% 9.9% Decrease QoQ driven mainly by 9.5% 9.4% Q4 restructuring charge and RWA growth Leverage ratio of 3.7% Liquidity coverage ratio of 126% Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Anno
Slide 12: Restructuring
Restructuring Earlier this year we announced a comprehensive review of parts of TD's operating business and corporate functions and in Q2 2015 we recorded restructuring charges of $337MM pre-tax / $228MM after-tax During Q4 2015 we completed this review and recorded a further charge The focus
Slide 13: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 40 Ongoing good performance and volume growth across the broad 33 33 portfolio 32 29 PCL ratio increase of 7 bps largely 28 attributed to: 3 bps due to one-time provisions Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 for South Carolina floods An
Slide 14: Appendix
Appendix
Slide 15: Q4 2015 Earnings: Items of Note
Q4 2015 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,839 $0.96 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense (MM) (MM) Line Item5 Restructuring charges1 $349 $243 $0.13 Corporate pg 9, line 10 Amortization of intangibles2 $73 $65 $0.03 Corporate pg 9, line 1
Slide 16: Canadian Retail Metrics
Canadian Retail Metrics Net Interest Margin Average Deposits $B 265 269 On Average Earning Assets 255 259 260 18 19 19 19 18 83 81 84 84 81 2.92% 2.88% 2.89% 2.88% 2.84% 157 158 160 162 166 On Loans Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Personal Business Wealth 2.01% 1.98% 1.97% 1.94% 1.97% Average Loans $B
Slide 17: Canadian Wealth
Canadian Wealth Wealth Revenue Wealth Retail vs. Institutional AUM1 $MM $B 856 875 864 837 841 112 117 113 130 116 118 128 127 131 116 115 129 124 121 121 119 117 117 115 112 592 599 613 642 636 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Wealth Fee & Other Wealth Transaction Wealth
Slide 18: US Retail
US Retail Loans and Deposit Growth Average Deposits Average Loans US$B US$B 214 127 204 206 119 122 200 201 114 117 75 80 75 75 75 65 68 58 61 63 57 57 58 61 57 56 56 56 57 59 68 69 72 73 73 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 1 Personal Business TD Ameritrade IDAs Personal C
Slide 19: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 TD’s share of TD Ameritrade’s net US$MM income was C$109 MM in Q4/15, up 31% YoY mainly due to: FX translation and increased transaction revenue and asset-based revenue, partially offset by higher operating expenses $8
Slide 20: Canadian Housing Market
Canadian Housing Market Portfolio Q4/15 Gross Loans Outstanding $246 B Canadian RESL Percentage Insured 56% Uninsured Residential Mortgages Current LTV1 61% Condo Borrower Gross Loans Outstanding $31 B (Residential Mortgages) Percentage Insured 67% Gross Loans Outstanding $6 B Condo Borrower 33% (HE
Slide 21: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/15 Q4/15 Canadian Retail Portfolio $ 350.6 $ 355.9 Personal $ 293.6 $ 298.6 Residential Mortgages 180.2 184.5 Home Equity Lines of Credit (HELOC) 60.9 61.2 Indirect Auto 18.3 19.0 Unsecured Lines of Credit 9.5 9.6 Credit
Slide 22: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,338 New Formations stable in $1,206 Canadian retail portfolio $1,163 $1,168 $1,124 $33 / 10 bps U.S. GIL Formations increase $14 / 5bps $16 / 5bps driven by ongoing renewal of legacy interest-only HELOCs.
Slide 23: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights $3,244 TD Gross Impaired Loans ratio $3,077 $2,967 $2,905 $55 / 16 bps stable at 58bps. $2,731 $36 / 12 bps $13 / 4 bps $28 / 9 bps U.S. Gross Impaired Loans $12 / 5 bps increase driven by ongoing renewal of legacy interest
Slide 24: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights $550 PCL increase driven by: $11 / NM One-time provision of $34MM $443 $36 / NM USD for South Carolina $397 $396 floods $1 / NM $368 $18MM provision relating to $6 / NM $283 / 69 bps two borrowers in the oil & gas
Slide 25: Canadian Personal Banking
Canadian Personal Banking Q4/15 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 185 0.22% 396 5 Credit quality remains strong in Home Equity Lines of Credit (HELOC) 61 0.29% 180 2 the Canadian Personal portfolio Indirect Auto 19 0.25% 47
Slide 26: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Gross Q4/15 Highlights Canadian Commercial and Loans/BAs GIL PCL1 Wholesale Banking ($B) ($MM) ($MM) Canadian Commercial and Commercial Banking2 57 170 -2 Wholesale Banking portfolios Wholesale 34 55 11 continue to perform well Total Canadian Commercial an
Slide 27: U.S. Personal Banking - U.S. Dollars
U.S. Personal Banking- U.S. Dollars Q4/15 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Continued good asset quality ($MM) Residential Mortgages 21 1.45% 298 1 in U.S. Personal Home Equity Lines of Credit (HELOC)3 10 6.22% 634 10 Gross Impaired Loans Indirect Auto
Slide 28: U.S. Commercial Banking - U.S. Dollars
U.S. Commercial Banking - U.S. Dollars Q4/15 U.S. Commercial Banking1 Gross Loans/BAs GIL ($MM) PCL2 ($MM) Highlights ($B) Commercial Real Estate (CRE) 18 173 4 Strong portfolio growth and Non-residential Real Estate 14 113 3 sustained good quality in U.S. Residential Real Estate 4 60 1 Commercial
Slide 29: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: Grand Prix for Best Overall tdir@td.com Investor Relations: Large Cap Best Investor Relations by Sector: Financial Services Website: Best Investor Relations www.td.com/investor by a CFO: Large Cap Best Investor Relations Office
Slide 30: TD Bank Group Quarterly Results Presentation Q4 2015
TD Bank Group Quarterly Results Presentation Q4 2015 Thursday December 3rd, 2015