Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Debt Investor Presentation (2013)
44 slides from Toronto-dominion Bank's debt investor presentation, 2013
Slide 1: Fixed Income Presentation Q1-2013
Fixed Income Presentation Q1-2013
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 document, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, representativ
Slide 3: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 2
Slide 4: TD Bank Group
TD Bank Group Our Businesses Canadian Personal & Commercial Personal banking Commercial banking Wealth & Insurance Direct investing Advice-based wealth business Asset management 2,491 Insurance Business Locations1 U.S. Personal & Commercial CAD U.S. Personal banking Q1 20132 (C$) P&C P
Slide 5: Simple Strategy, Consistent Focus
Simple Strategy, Consistent Focus Building 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 convenienc
Slide 6: Competing in Attractive Markets
Competing in Attractive Markets Country Statistics Country Statistics 10th largest economy World’s largest economy Nominal GDP of C$1.7 trillion Nominal GDP of US$15.1 trillion Population of 35 million Population of 314 million Canadian Banking System U.S. Banking System Soundest banki
Slide 7: TD Bank Group in North America
TD Bank Group in North America Compared to: North Canadian Q1 2013 American Peers5 (C$ Billions) Peers6 Total Assets $818B 2nd 6th Total Deposits $494B 3nd 7th Market Cap (as of October 31, 2012) $77B 2nd 6th Adj. Net Income1 (Trailing 4 Quarters) $7.2B 2nd 6th Rpt. Net Income (Trailing 4 Quarters)
Slide 8: Composition of Earnings
Composition of Earnings Highlights Earnings Breakdown Increasing retail focus Strength of retail franchise Wholesale Reliable and steady earnings mix 9% U.S. P&C 21% Canadian P&C $7,075 50% Adjusted Retail Earnings1,4 TD AMTD 2,3 12% 2% Wholesale Earnings 13% 88% Wealth & Insurance 3 18% $2,15
Slide 9: Evolution of TD
Evolution of TD Building Franchise Businesses >>> Increasing Retail focus >>> Acquired TD Chrysler Announced Waterhouse Financial acquisition TD Bank Acquired Acquired USA/ Privatized Acquired Commerce Acquired and MBNA of Target and Canada Newcrest 51% of Ameritrade TD Commerce Bank Riverside credi
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 do not “bet the bank” on any single acquisition,
Slide 11: Q1 2013 Highlights
Q1 2013 Highlights Key Themes Net Income $MM (Adjusted, where applicable) Strong adjusted1 EPS growth of Q1/13 QoQ YoY 8% YoY Retail2 $ 1,706 16% 10% Wholesale 159 -49% -18% Record performance driven by Corporate 51 n/a +100% retail businesses Adjusted Net Income $ 1,916 9% 9% Volume growth wa
Slide 12: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 48 Strong credit performance across 46 46 all portfolios as evidenced by: 42 Decreased delinquencies in the Canadian Personal portfolios 35 Return to normal levels of Gross Impaired Loan formations YoY improvement of 148 bps for combine
Slide 13: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 12
Slide 14: Canada's Relative Strengths
Canada’s Relative Strengths One of the world’s most competitive economies1 Soundest banking system in the world1 Unemployment rate remains below prior recessionary peaks One of the strongest fiscal positions among G-7 industrialized countries Relatively low projected deficits and debt Cana
Slide 15: 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 16: Well Developed Residential Mortgage Market in Canada
Well Developed Residential Mortgage Market in Canada Canadian chartered banks account for over 70% of the total mortgage market, including securitizations1 Conservative lending practices Strong competition among lenders Favorable legal environment supporting foreclosure and other types of le
Slide 17: 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) Product Default insured mortgages use a 5-year fixed Borrowers often qual
Slide 18: Canadian Housing Market
Canadian Housing Market Highlights The Canadian housing market continues to moderate Canadian RESL credit quality remains strong Loss rate for the trailing 4-quarter period was 2 bps Gross Impaired Loans decreased $17MM over Q4/12 Topic TD Positioning Canadian RESL $219 billion portfolio (
Slide 19: North American Economic Outlook
North American Economic Outlook 2013 will be another year of moderate growth for Canada and the U.S. Uncertainty over government policies has somewhat dissipated, but unresolved issues remain in both the U.S. and Europe U.S. economy remains a mix of good news and bad news Residential real es
Slide 20: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 19
Slide 21: Capital
Capital Highlights Basel III Common Equity Tier 11 8.8% Basel III Common Equity Tier 1 7.4% 7.7% 8.2% 7.1% ratio of 8.8% as of Jan 31, 2013 Exceeded 7% regulatory requirement on a fully phased-in basis Includes 30 bps of temporary relief from OSFI on treatment of CVA Discount on the dividend
Slide 22: TD Credit Ratings
TD Credit Ratings Issuer Ratings1 Moody's S&P Fitch DBRS Ratings Aa1 AA- AA- AA Outlook Stable Stable Stable Stable Strong credit ratings 21 1. See footnote 2 on slide 4.
Slide 23: Robust Liquidity Management
Robust Liquidity Management Treasury paradigm Contribute to stable and growing revenues “Treasury does not have the authority not to hedge” No black boxes Match terms of assets and liabilities Do not engage in liquidity carry trade Match underlying debt funding maturities to term of as
Slide 24: Term Funding Strategy
Term Funding Strategy Large base of stable retail and commercial deposits Customer service business model delivers growing base of “sticky” deposits Reserve assets held for deposit balance that is not considered permanent Large user of securitization programs, primarily via Canada Mortgage B
Slide 25: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition Funding Mix1 Wholesale Term Debt2 P&C Deposits 71% Personal Other Deposits3 Assets Securitized Term Deposits 25% 63% 10% Short Term Liabilities 4 11% Personal Non‐ Covered Bonds Term Deposits Wholesale Term 15% 36% Debt Senior Unsecured 10% MTN 22% Sub‐ Trading D
Slide 26: Debt Maturity Profile F2013 – F2018
Debt Maturity Profile1 F2013 – F2018 Bullet Debt Maturities (C$ Billions) 2 $20 $18 $17 $15 $13 $10 $10 $8 $5 $3 $0 2013 2014 2015 2016 2017 2018 MBS Covered Bond Senior Debt ABS Subordinated Debt Manageable debt maturities 1. For wholesale term debt that has bullet maturities. Some maturity dates o
Slide 27: Canada Covered Bond Legislation
Canada Covered Bond Legislation The Covered Bond legal framework was announced in the 2012 Budget and passed into law in June 2012 Canada Mortgage and Housing Corporation (“CMHC”) was given responsibility to administer the covered bond legal framework In December 2012, the CMHC issued the “Can
Slide 28: Key Takeaways
Key Takeaways Strong capital base – well positioned for Basel III Industry leading credit ratings Proactive & disciplined risk management Attractive balance sheet composition Diverse funding strategy to support growth plans 27
Slide 29: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 28
Slide 30: Solid Growth and Returns Across Businesses
Solid Growth and Returns Across Businesses Adjusted Earnings1,2 $7,075 (C$MM) $6,432 $5,228 $4,716 $4,189 $3,813 Wholesale Banking $1,916 U.S. P&C Wealth & Insurance2 Canadian P&C2 2007 2008 2009 2010 2011 2012 YTD 2013 Adjusted Retail Earnings as % of 80% 98% 78% 83% 87% 88% 91% Adjusted Earnings T
Slide 31: Global Economic Outlook
Global Economic Outlook World Real GDP Growth1 Y/Y % Change 6 Global economic growth will Forecast1 moderately increase next year 4 2 0 -2 Fiscal consolidation in the U.S. 2004 2006 2008 2010 2012 2014 and weak global growth means North American economy to North American Real GDP Growth2 expand
Slide 32: Canadian Economic Outlook
Canadian Economic Outlook Canadian Export and U.S. Activity Index1 Y/Y % Change 25 20 Foreca st1 Forecast 15 10 Canadian economy still tightly 5 linked to U.S. fortunes, and 0 better U.S. growth in medium -5 term to help Canada’s -10 -15 U.S. Activi Canadi anty RIe nal deEx x ports prospects CU an
Slide 33: U.S. Economic Outlook
U.S. Economic Outlook Residential Real Estate Contribution to real GDP growth1 (Y/Y % Change) 1.5 Forecast1 1.0 Housing, the culprit of the 0.5 Great Recession, has begun to 0.0 -0.5 recover in earnest. Residential -1.0 investment contributed -1.5 positively to growth last year -2.0 2004 2005 2006
Slide 34: Interest Rate Outlook
Interest Rate Outlook Interest Rates, Canada and U.S.1 % 7 US Federal Forecast Funds Rate Modest outlook and risks to the 6 global economy mean North 5 Bank of American central banks are set to Canada Target Rate leave monetary policy at 4 exceptionally accommodative levels for a while 3 2 1 0 200
Slide 35: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q4/12 Q1/13 Canadian Personal & Commercial Portfolio $ 299.8 $ 301.6 Personal $ 258.1 $ 258.0 Residential Mortgages 154.3 155.2 Home Equity Lines of Credit (HELOC) 64.2 63.5 Indirect Auto 14.0 13.8 Unsecured Lines of Credit
Slide 36: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,218 Gross Impaired Loan $12 / 6 bps formations returned to normal $1,061 levels after the one-time $996 $981 $1,041 $6 NM $38 / 17 bps reclassifications in Q4/12 $4 / NM $395 / 46 bps U.S. P&C GIL formatio
Slide 37: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross Impaired Loans $2,530 $2,518 $2,494 decreased $24MM or 1 bp $3 / NM $2,363 $2,367 $3 / NM $3 / NM over Q4/12 $41 / 17 bps $3 / NM $3 / NM $76 / 39 bps $38 / 18 bps $45 / 20 bps $79 / 34 bps U.S. P&C GIL ratio decrease
Slide 38: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL decreased $129MM or $489 13bps over Q4/12 and $41MM $454 $4 / 7 bps or 7bps since Q1/12 $433 $401 $1 / NM $16 / 28 bps $25MM release of allowance in $6 / 11 bps $360 Corporate Segment due to $175 / 82 bps $147 /
Slide 39: Canadian Personal Banking
Canadian Personal Banking Q1/13 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 155 0.30% 471 2 Continued strong credit Home Equity Lines of Credit (HELOC) 64 0.50% 318 3 performance Indirect Auto 14 0.30% 42 35 Impact of one-time Unse
Slide 40: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q1/13 Canadian Commercial and Gross Highlights GIL PCL1 Loans/BAs Wholesale Banking ($B) ($MM) ($MM) The Canadian Commercial Commercial Banking2 44 134 13 and Wholesale Banking Wholesale 21 38 (9) portfolio continues to Total Canadian Commercial and Wholes
Slide 41: U.S. Personal Banking
U.S. Personal Banking Q1/13 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 Gross Impaired Loans for the ($MM) Residential Mortgages 18 1.27% 234 - Residential Secured portfolio Home Equity Lines of Credit (HELOC)3 10 2.24% 227 17 increased $61MM over Q4/12 primarily a
Slide 42: U.S. Commercial Banking
U.S. Commercial Banking Q1/13 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 13 351 12 Overall credit quality Non-residential Real Estate 10 219 11 continued its positive trend Residential Real Estate 3 132 1 Impaired loans and new Comm
Slide 43: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Grand Prix for Best Overall Investor Relations: Large Cap Email: Best Investor Relations by Sector: Financial Services tdir@td.com Best Investor Relations by a CEO: Large Cap Best Investor Relations by a CFO: Large Cap Website: Best I
Slide 44: Slide 44
The Toronto-Dominion Bank — Debt Investor Presentation (2013) on 6ix