Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — TD Bank Group — Q1 2012 Earnings Presentation
35 slides from Toronto-Dominion Bank's earnings presentation, Mar 1, 2012
Slide 1: TD Bank Group Q1 2012 Investor Presentation
TD Bank Group Q1 2012 Investor Presentation Thursday March 1st, 2012
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: Strategic Overview
Strategic Overview 1. Strong adjusted earnings1, 2 of over $1.7B, up 9% versus Q1 2011 2. Record retail adjusted earnings of $1.6B 3. Strong returns from Wholesale despite mixed markets 4. Managing expenses proactively to target positive operating leverage 5. Dividend increase of $0.04 per share pay
Slide 4: Q1 2012 Highlights
Q1 2012 Highlights Key Themes Net Income $MM (Adjusted, where applicable)1 Q1/12 QoQ YoY • Record adjusted EPS Retail 2 1,551 12% 11% Wholesale 194 -31% -17% • Delivered positive adjusted Corporate 17 +100% +100% operating leverage Adjusted Net Income $ 1,762 6% 9% Reported Net Income $ 1,478 -7% -5
Slide 5: Q1 2012 Earnings: Items of Note
Q1 2012 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,478 $1.55 Pre Tax After Tax Items of note EPS (MM) (MM) Amortization of intangibles $931 $601 $0.07 Increase (decrease) in fair value of derivatives hedging the $53 $45 $0.05 reclassified available-for-sale securities po
Slide 6: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Key Themes P&L $MM1 Q1/12 QoQ YoY • Adjusted net income1 up 11% YoY Revenue (adjusted) $ 2,584 5% 10% • Record low efficiency ratio PCL 283 33% 32% • Improving credit trends • Adjusted operating leverage of 2% Expenses (adjusted) 1,142 -4% 8% Net Income (adjust
Slide 7: Wealth and Insurance
Wealth and Insurance Key Themes P&L $MM Q1/12 QoQ YoY • Net income up 14% YoY Revenue $ 999 -4% 1% • Wealth earnings up 11% YoY Expenses 639 -4% -3% • Strong fee growth and proactive Net Income, Wealth $ 144 4% 11% expense management offset by Net Income, Insurance $ 150 0% 17% weaker trading revenu
Slide 8: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Key Themes P&L US$MM1 (except where mentioned) Q1/12 QoQ YoY • Record adjusted net income1 up 6% Revenue $ 1,465 0% 5% YoY despite Durbin amendment PCL 155 19% -25% • Continued strong organic loan Expenses (adjusted) 870 -10% 8% growth, particularly in residential
Slide 9: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Q1/12 QoQ YoY • Strong quarter for Wholesale Revenue $ 683 -6% -6% PCL 12 +100% 100% • Strong trading related income Expenses 406 3% 2% exceeded expectations Net Income $ 194 -31% -17% ROE1 18.7% • Risk weighted assets increased due to the revisions to the Basel
Slide 10: Corporate Segment
Corporate Segment Key Themes P&L $MM1 Q1/12 QoQ YoY • Corporate segment includes: Net Corporate Expenses $ (92) -5% -5% • Net treasury and capital management related activities Other 83 48% 60% • Corporate expenses and other Non-Controlling Interests 26 0% 0% items not fully allocated to Net Income
Slide 11: Expenses
Expenses Highlights Efficiency Ratio, Adjusted1 58.3% 59.4% • Committed to managing core expense growth very tightly in 2012 56.3% 55.8% 55.3% • Proactively managing the rate of expense growth with focus now on Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 2013 • Initiatives underway to permanently Expenses, Adjust
Slide 12: Capital
Capital Basel III Internal Capital Allocation • Current pro forma Basel III • Aligning internal capital allocation Common Equity Tier 1 ratio is with future Basel III requirements approximately 7.1% at a 7% Common Equity Tier 1 ratio • We remain comfortable with our Basel III guidance • Methodology
Slide 13: Outlook
Outlook Total Bank Performance Expect positive operating leverage for 2012 Revenue growth remains a challenge Committed to managing expense growth very tightly Segment Performance Loan growth in Canada expected to continue, but at a slower pace. Commercial loan growth expected to remain stro
Slide 14: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 • Continued strong asset quality in the 42 42 37 38 36 Canadian Personal and Commercial, and Wholesale Banking Portfolios 35 PC L R at io Ex M B N A C anad a • The MBNA Canada acquisition added $7B in Canadian credit card Q1/11 Q2/11 Q3/11 Q4/1
Slide 15: Appendix
ID Appendix
Slide 16: Q1 2012 Earnings: Items of Note
Q1 2012 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,478 $1.55 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense (MM) (MM) Line Item2 Amortization of intangibles $931 $601 $0.07 Corporate pg 13, line 15 Increase (decrease) in fair value of derivatives hedging th
Slide 17: Tier 1 Capital Ratio
Tier 1 Capital Ratio Highlights Tier 1 Capital Ratio2 12.7% 12.7% 12.9% 13.0% • Tier 1 capital ratio down as expected 11.6% in the quarter • Risk Weighted Asset growth due to: • MBNA portfolio ($4.3 billion) and Basel II Market Risk Framework ($15.5 billion) Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 • Capital d
Slide 18: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Highlights Net Interest Margin On Average Earning Assets • Margin on average earning assets was down 2 bps versus Q1 2011 2.79% (14 bps excluding MBNA) due to: 2.71% 2.81% • Low interest rate environment 2.77% 2.77% • Portfolio mix • Competitive pricing pressur
Slide 19: Canadian Personal & Commercial Banking: Deposit Growth
Canadian Personal & Commercial Banking Deposit Growth Highlights Average Deposits 6% 6% Growth Growth YoY YoY • Personal deposit volumes increased 4% YoY $206 • Business deposit volumes $195 $198 $200 $194 increased 12% YoY $64 $66 $59 $61 $62 $135 $134 $136 $136 $140 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 P
Slide 20: Canadian Personal & Commercial Banking: Loan Growth
Canadian Personal & Commercial Banking Loan Growth Highlights Average Loans 10% 10% Growth Growth YoY YoY • Generated good, but slower, personal lending volume growth, and strong business lending $277 $286 $271 volume growth $260 $264 $38 $37 • Real estate secured lending $33 $35 $36 $14 volume incr
Slide 21: Wealth and Insurance
Wealth and Insurance1 Highlights Revenue $MM • Wealth revenues of $675 million $1,029 $1,039 were down 2% versus Q1/11 $992 $980 $999 • Lower transaction revenue due to lower client trading levels, higher Insurance 340 342 fee income due to growth in Net Revenue 305 274 324 AUA/AUM and client accoun
Slide 22: Wealth
Wealth Performance Metrics AUA1 ($B) AUM2 ($B) $186 $190 $191 $189 $196 $250 $248 Institutional $102 $104 $106 $104 $109 $242 $242 $241 Retail $84 $86 $85 $85 $87 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Mutual Funds AUM2 ($B) $63.2 $62.4 $61.8 $61.3 $60.3 Q1/11 Q2/11 Q3/11 Q4/11
Slide 23: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 • TD’s share of TD Ameritrade’s net US$MM income: C$55 million in Q1/12 • TD Ameritrade’s net income $58 $55 $54 US$152 million in Q1/12 up 5% $48 $49 from last year • Average trades per day were 367,000, down 1% YoY • Con
Slide 24: U.S. Personal & Commercial Banking: Deposit Growth
U.S. Personal & Commercial Banking Deposit Growth Highlights Average Deposits 14% 14% (US$ billions) Growth Growth YoY YoY • Average deposits, excluding TD Ameritrade IDAs1 and Government deposits were up $160 $164 9% YoY $148 $151 $143 • Gains driven by strong cross selling in commercial and small
Slide 25: U.S. Personal & Commercial Banking: Loan Growth
U.S. Personal & Commercial Banking Loan Growth Highlights Average Loans 20% 20% (US$ billions) Growth Growth YoY YoY • Continued momentum in residential mortgage volumes, up 34% YoY $80 $76 $77 • Commercial loans growth $67 $71 continued, up 5% YoY • Core growth excluding $44 $43 $43 acquisitions of
Slide 26: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q4/11 Q1/12 Canadian Personal & Commercial Portfolio $ 277.2 $ 286.8 Personal $ 240.6 $ 248.4 Residential Mortgages 142.5 144.1 Home Equity Lines of Credit (HELOC) 64.5 64.2 Indirect Auto 13.6 13.5 Unsecured Lines of Credit
Slide 27: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $996 Gross Impaired Loan $949 $6 / NM Formation ratio remained $919 $927 $9 / NM stable $815 Canadian P&C formation ratio $337 / 45 bps $317 / 53 bps $347 / 53 bps $346 / 50 bps is consistent with the strong
Slide 28: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross Impaired Loans $2,581 $2,432 $2,493 $2,538 increased $45MM over $2,447 $3 / NM $3 / NM Q4/11 due to MBNA Canada $69 / 39 bps $4 / NM $45 / 21 bps $41 / 17 bps $65 / 38 bps $47 / 23 bps Gross Impaired Loan resolutions
Slide 29: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL increased $51MM over Q4/11 due to $73MM PCL for MBNA Canada $401 Excluding MBNA Canada, PCL decreased $22MM and 3 $350 $6 /11 bps $355 bps over Q4/11 and $320 1/NM decreased $27MM and 7 bps $309 $113 / 61 bps sin
Slide 30: Canadian Personal Banking
Canadian Personal Banking Q1/12 Canadian Personal Banking 1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 144 0.42% 610 (2) Continued strong credit Home Equity Lines of Credit (HELOC) 64 0.31% 200 3 performance Indirect Auto 13 0.32% 43 37 Unsecured Lines of Cre
Slide 31: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Gross Q1/12 Highlights Canadian Commercial and Loans/BAs GIL PCL1 Wholesale Banking ($B) ($MM) ($MM) The Canadian Commercial Commercial Banking2 39 128 26 and Wholesale Banking Wholesale 24 41 6 portfolio continued to Total Canadian Commercial and Wholesal
Slide 32: U.S. Personal Banking
U.S. Personal Banking Q1/12 Highlights 1 Gross Loans GIL/ GIL U.S. Personal Banking PCL2 ($B) Loans ($MM) Credit quality remained ($MM) Residential Mortgages 14 1.35% 186 4 stable in the quarter Home Equity Lines of Credit (HELOC)3 10 1.12% 110 22 GIL ratios held steady over Indirect Auto 11 0.0
Slide 33: U.S. Commercial Banking
U.S. Commercial Banking Q1/12 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 12 572 52 Continued positive trend in Non-residential Real Estate 10 337 31 U.S. Commercial Banking Residential Real Estate 3 235 21 credit quality Commercial &
Slide 34: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: Best corporate governance www.td.com/investor Best investment community meetings Best investor relations by a CFO: Large cap Best investor relations by a CEO: Large cap Grand prix for best overall investor
Slide 35: TD Bank Group Q1 2012 Investor Presentation
TD Bank Group Q1 2012 Investor Presentation Thursday March 1st, 2012