Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q1 2016 Earnings Presentation
36 slides from Toronto-dominion Bank's earnings presentation, 2016
Slide 1: TD Bank Group Investor Presentation
TD Bank Group Investor Presentation Q1 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: TD Bank Group – Key Themes
TD Bank Group – Key Themes 6th largest bank 1 Top 10 North American Bank by Total Assets1 7th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
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 Q1 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 • 11th largest economy • World’s largest economy • Nominal GDP of C$2.0 trillion • Nominal GDP of US$17.3 trillion • Population of 36 million • Population of 319 million Canadian Banking System U.S. Banking System • Soundest banki
Slide 7: TD in North America
TD in North America North Q1 2016 Canadian American C$ except otherwise noted Ranking5 Ranking6 Total assets $1,174B 2nd 6th Total deposits $737B 2nd 6th Market capitalization $98B 2nd 7th Adjusted net income1 (trailing four quarters) $8.9B 2nd 6th Reported net income (trailing four quarters) $8.2B
Slide 8: Composition of Earnings
Composition of Earnings 2015 Adjusted Earnings Mix1,2 Three key business lines • Canadian Retail robust retail banking platform in Canada with proven performance 9% • U.S. Retail top 10 bank5 in the Canadian U.S Retail3 U.S. with significant organic Retail 23% growth opportunities 64% • Wholesale Ba
Slide 9: Strategic Evolution of TD
Strategic Evolution of TD INCREASING RETAIL FOCUS Became primary Acquired Acquired Target issuer of Completed TD Chrysler credit card Aeroplan Visa; strategic Waterhouse Financial portfolio & Epoch; acquired ~50% credit card TD Bank Acquired Acquired USA / Acquired Commerce Acquired and MBNA and ann
Slide 10: Risk Management Framework
Risk Management Framework Our Risk Appetite We take risks required to build our business, but only if those risks: • Fit our business strategy and can be understood and managed • Do not expose the enterprise to any significant single loss events; we don’t “bet the bank” on any single acquisition, bu
Slide 11: TD Bank Group – Key Themes
TD Bank Group – Key Themes 6th largest bank 1 Top 10 North American Bank by Total Assets1 7th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 12: Stable Earnings Growth
Stable Earnings Growth Adjusted Earnings1,2 (C$MM) 8,754 8,127 20112: Wholesale Banking 7,136 7,064 Wealth & Insurance 6,432 U.S. P&C Canadian P&C 2012 – 20153: Wholesale Banking U.S. Retail Canadian Retail 2011 Segment realignment 2012 2013 2014 2015 Targeting 7-10% adjusted EPS growth1 over the me
Slide 13: Solid Total Shareholder Returns
Solid Total Shareholder Returns Total Shareholder Return1 TD Compounded Annual Growth Rates (CAGR) Canadian peer average2 North American peer average3 12.6% 11.2% 9.2% 9.1% 9.6% 7.9% 8.4% 7.4% 6.9% 5.0% 2.0% 2.4% 1 Year 3 Years 5 Years 10 Years Delivering top tier long-term shareholder returns 1. TS
Slide 14: Strong, Consistent Dividend History
Strong, Consistent Dividend History Dividends Per Share $2.00 Q1/16: (C$) Announced $0.04 dividend increase Dividend yield: 3.9%1 Q3/12: $0.22 Increased target payout range to 40%-50%2 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Dividend h
Slide 15: Q1 2016 Highlights
Q1 2016 Highlights Total Bank (YoY) Financial Highlights C$MM Adjusted1 Q1/16 Q4/15 Q1/15 Adjusted EPS of $1.18 up 5% Revenue 8,564 8,096 7,614 Expenses 4,579 4,480 4,092 Adjusted Net Income up 6% Net Income 2,247 2,177 2,123 Adjusted Revenue up 12% Diluted EPS ($) 1.18 1.14 1.12 Up 4% ex FX and a
Slide 16: Q1 2016 Segment Results Highlights
Q1 2016 Segment Results Highlights • Net income up 4% YoY • Led by loan, deposit and wealth asset growth and higher fee-based Canadian revenue, partially offset by higher PCL and a higher effective tax rate Retail • PCL up 3% QoQ reflecting higher commercial recoveries in the prior quarter • Expense
Slide 17: Q1 2016 Credit Highlights
Q1 2016 Credit Highlights GIL Ratio (bps)1 65 • Canadian Retail and Wholesale GIL stable for the past four quarters 57 57 58 • U.S. GIL quarterly increase driven by the 56 negative impact of FX and ongoing renewal of legacy interest-only HELOCs Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 • Canadian Retail and Who
Slide 18: Oil and Gas Exposure
Oil and Gas Exposure Corporate and Commercial Outstandings Highlights by Sector (C$B): • Oil and Gas Producers and Services $3.5 outstandings represent less than 1% of total gross loans and acceptances: • No new impairments in Wholesale in O&G $1.2 / 34% • C$21MM in Commercial and Mid-Market impaire
Slide 19: TD Bank Group – Key Themes
TD Bank Group – Key Themes 6th largest bank 1 Top 10 North American Bank by Total Assets1 7th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 20: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt Assets Securitized Other Deposits33 23% Other Deposits Covered Bonds Personal Personal 24% Term Deposits 26% 25% Term Deposits 8% 5% Short Term Liabilities 4 Liabilities4 Short Term Mortgage 11% 11% Securitization 20% Senior Pers
Slide 21: Gross Lending Portfolio
Gross Lending Portfolio Balances Highlights C$B (unless otherwise noted) Q1/16 Canadian Retail Portfolio $ 359.2 Canadian portfolio Personal $ 299.8 Residential Mortgages 185.9 • Real estate secured lending volume up 5% YoY Home Equity Lines of Credit (HELOC) 61.2 • $247 billion portfolio (55% insur
Slide 22: Capital & Liquidity
Capital & Liquidity Common Equity Tier 11 Highlights • Common Equity Tier 1 ratio of 9.9% Q4 2015 CET1 Ratio 9.9% Internal capital generation 32 bps • Leverage ratio of 3.7% Common share repurchases (13) bps • Liquidity coverage ratio of 124% Actuarial losses on employee benefit plans (8) bps Unreal
Slide 23: Strong Focus on Risk-Adjusted Return
Strong Focus on Risk-Adjusted Return Accolades Q1 2016 Adjusted Return on Risk-Weighted Assets1 “Safest Bank in North America & One of the 2.23% 2.08% World’s 50 Safest Banks” – Global Finance Magazine 1.37% “Best Big Bank in America” – Money® Magazine “One of the World's Most 2 3 TD Canadian
Slide 24: TD Bank Group – Key Themes
TD Bank Group – Key Themes 6th largest bank 1 Top 10 North American Bank by Total Assets1 7th largest bank by Market Cap1 Delivering 2 Proven Performance top tier long term shareholder returns Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 25: Canadian Retail
Canadian Retail Consistent Strategy Adjusted Net Income1 (C$MM) Segment $5,938 How we compete Realignment $5,490 $4,567 $4,681 • Legendary customer service and convenience $3,051 • Relentless commitment to operational excellence $1,513 • The power of One TD • Winning culture and team 2011 2012 2013
Slide 26: Canadian Retail
Canadian Retail Personal Banking • #1 or #2 market share in most retail products1 • On average 44% longer branch hours than peers2 with nearly 430 branches offering Sunday banking • Mobile banking leadership in Canada with the highest number of mobile subscribers accessing financial services 3 • #1
Slide 27: U.S. Retail
U.S. Retail Consistent Strategy Adjusted Net Income1 ($MM) Segment How we compete Realignment $2,547 • Legendary service and convenience $2,110 $1,852 • Grow and deepen customer relationships $1,619 • Differentiated brand as the “human” bank $1,270 C$ • Productivity initiatives that enhance both the
Slide 28: U.S. Retail
U.S. Retail Personal & Commercial Banking • Top 10 bank1 with 8MM+ customers, operating retail stores in 15 states and the District of Columbia • Open longer than the competition, including Sunday banking in most markets • #3 market share in NYC2 and targeting top 5 market share in all of our major
Slide 29: Wholesale Banking
Wholesale Banking Consistent Strategy Net Income (C$MM) How we compete $880 $873 $815 $815 $813 Canada $650 • Be a top-ranked integrated investment dealer • Fully aligned with TD Bank Group partners • Provide superior advice and execution $161 U.S. 2011 2012 2013 2014 2015 2016 YTD • Extend Canadian
Slide 30: Wholesale Banking
Wholesale Banking Focus on client-driven franchise businesses • Diversified business mix with a North American focus • Presence in key global financial centres • Extend our client-centric franchise model through superior advice and execution A North American dealer aligned with our TD partners • Foc
Slide 31: Omni-Channel Comfort and Convenience
Omni-Channel Comfort and Convenience Consistent Strategy Digital Enhancements How we compete • Customer-centricity allows customers to choose how, when and where they Easily deposit cheques as soon as Confidently deposit cheques and cash at ATMs without envelopes and have the they are received with
Slide 32: Corporate & Social Responsibility
Corporate & Social Responsibility Highlights TD Friends of the Environment Foundation celebrates 25 years with over C$76 million in funds disbursed in • Highest in Customer Satisfaction Among the Big Five Retail Banks support of more than 24,000 local environmental projects in Canada by J.D. Power
Slide 33: A Principled Approach
A Principled Approach Guiding Principles Leadership Profile • Deliver Legendary Customer Experiences • Make an Impact and Value Speed • Be an Extraordinary Place to Work • Build for the Future • Operate with Excellence • Inspire the Will to Win • Understand Our Business • Act Decisively while Workin
Slide 34: TD Model Has Proven Its Resilience
TD Model Has Proven Its Resilience Simple Strategy Vision: Consistent Focus To be The Better Bank • Lead with service and Headwinds • One of the World’s Most convenience • Slowing loan growth Admired Companies1 in Canada • Leverage TD brand across all segments • Low interest rate • One of Canada’s m
Slide 35: 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 34
Slide 36: TD Bank Group Investor Presentation
TD Bank Group Investor Presentation Q1 2016