Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — TD Bank Financial Group — Citi Financial Services Conference 2009
19 slides from Toronto-Dominion Bank's conference presentation, Jan 28, 2009
Slide 1: Citi Financial Services Conference
Colleen Johnston Citi Financial Services Group Head Finance & CFO Conference TD Bank Financial Group January 28, 2009
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, the Bank makes written and oral forward-looking statements, including in this presentation, in filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), and in other communications. In addition, the Bank’s s
Slide 3: TD Bank Financial Group
TD Bank Financial Group n The first truly North American bank • Leading in service and convenience in Canada and the U.S. o Lower risk retail focus • Over 90% adjusted earnings from retail1 • Best return for risk undertaken1 p Disciplined execution • Robust liquidity, risk and capital management • S
Slide 4: Main Businesses
Main Businesses Adjusted Earnings Breakdown1 Fiscal 2008 C$3.8B TDW Canada Canadian Retail 12% 71% Canadian P&C TD AMTD 7% 59% U.S. P&C U.S. Retail 20% 27% Wholesale 2% Over 90% of earnings from retail operations 1. Based on adjusted earnings as described on slide #3. For the purpose of calculating
Slide 5: Top Issues on Investors Minds
Top 10 Issues on Investors Minds n Canadian Economic Outlook o Our Business Philosophy p Earnings Environment q Capital r Dividends s Deposit Growth t Loan Growth u Credit v Commerce Securities Portfolio w U.S. Acquisitions 5
Slide 6: Canadian Economic Outlook
n Canadian Economic Outlook The good news: • Strongest fundamentals of G7 • Low debt load • Stable banking system • Significant fiscal and monetary stimulus The bad news: • We’re in a recession now • Steep decline in commodity prices Well positioned to weather the downturn 6
Slide 7: Our Business Philosophy
o Our Business Philosophy Get across the recession “valley” • Carefully manage capital, funding, liquidity and risk Keep our business model intact • Preserve our performance, convenience and service culture Emerge with momentum on our side • Continue to invest in our core growth engines Contin
Slide 8: Earnings Environment
p Earnings Environment Headwinds • Margin compression & deposit competition • Weak and uncertain capital markets • Increasing PCL’s Tailwinds • Loan & Deposit volume growth • Strong on-line brokerage activity • Prudent cost management • Weaker Canadian dollar Stable retail earnings base attracti
Slide 9: Capital
q Capital Well capitalized Proforma Tier 1 ratio above 9.5% Strong tangible common equity ratio (TCE) $3.3 billion capital issuance since November 1st • Manage uncertainty • Support profitable growth • Investor comfort Comfortable level given business mix 9
Slide 10: Dividends
r Dividends No Dividend cut expected Increased dividend twice during 2008 Dividend growth will track earnings growth over time Fundamental to our philosophy 10
Slide 11: Deposit Growth
s Deposit Growth Excellent deposit franchise • Intense competition for deposits Æ especially in the U.S. • Very strong growth in Canada • Underlying growth in U.S. as branches mature Margin compression • Narrower spreads and liquidity premiums Growth in a competitive market 11
Slide 12: Loan Growth
t Loan Growth Disciplined approach across TD U.S. – “triple play” • Where did we lend • What did we lend • How did we lend Unique opportunity to take share Disciplined approach to gain share 12
Slide 13: Credit – Exposure to Canadian Housing
u Credit – Exposure to Canadian Housing Outstanding Loan Balances as of end of Q4/08 (C$B) Canada $156 Personal Loans $131 Business Loans & Acceptances $25 U.S.A. $53 Personal Loans $18 Business Loans & Acceptances $35 TD Securities (incl. Bankers Acceptance) $23 Gross Lending Portfolio $232
Slide 14: Credit – Positive outlier today
u Credit – Positive outlier today GILs / Avg Allowance for NCOs / Avg Total TDBFG Loans + BAs Credit Losses / Loans (%) (%) GILs (%) 0.50 133 0.37 Cdn Peer Avg 0.87 103 0.48 U.S. Peer Avg 1.62 162 1.83 NPLs / Loans Reserves / NCOs / Avg U.S. P&C1 (%) NPLs (%) Loans (%) 0.74 164 0.30 North East Peer
Slide 15: Commerce Securities Portfolio
v Commerce Securities Portfolio US$8.7 billion of non agency CMO’s Write-downs as at March 31/08 deal close Comfortable with the intrinsic value Conservative valuation approach Watching portfolio closely 15
Slide 16: U.S. Acquisitions
w U.S. Acquisitions Priority is Integration of TD Banknorth and Commerce Difficult to assess asset quality Compelling opportunities will be considered Cautious approach 16
Slide 17: TD Bank Financial Group
TD Bank Financial Group n The first truly North American bank o Lower risk retail focus p Disciplined execution 17
Slide 18: Appendix
Building the better bank every day D Bank Financial Group Appendix
Slide 19: Canadian mortgage market is better
Canadian mortgage market is better Mortgage Insurance Mandatory if LTV>80% for full mortgage value, for full term Broker Deals <25% Common Terms Mandatory 5 years or less, renewable at maturity Low/No doc loans Uncommon Exotic mortgage options No Subprime ~5% mortgage originations (vs. 22% in U.S.)
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