Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Q1 2020 Earnings Presentation
32 slides from Toronto-dominion Bank's earnings presentation, Feb 27, 2020
Slide 1: Quarterly Results Presentation Q1 2020
TD Bank Group Quarterly Results Presentation Q1 2020 Thursday, February 27, 2020 1
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: Our Strategy
Our Strategy TD aims to stand out from its peers by having a differentiated brand – anchored in our proven business model, and rooted in a desire to give our customers, communities and colleagues the confidence to thrive in a changing world. Proven Business Model Forward Focused Purpose-Driven Deliv
Slide 4: Proven Business Model
Proven Business Model Consistent earnings growth, underpinned by a strong risk culture ▪ Reported earnings up 24% (adjusted up 4%)1 ▪ Reported EPS up 27% (adjusted up 6%)1 ▪ Revenue up 6% on higher Retail volumes, record Wholesale revenue ▪ Common Equity Tier 1 ratio of 11.7%, including 4.2MM shares
Slide 5: Forward Focused
Forward Focused Shaping the future of banking +12.5% 5.4MM Active Canadian Mobile Users 3.4MM +12.3% Active U.S. Mobile Users Highest in Customer Satisfaction #1 Brand in Canada Among National Banks #13 Banking Brand Globally J.D. Power 2019 Brand Finance U.S. National Banking Satisfaction Study1 1.
Slide 6: Purpose Driven
Purpose Driven Centered on our vision, purpose and shared commitments The TD Ready Challenge Grants Black History Month Bloomberg GEI Index 6
Slide 7: Q1 2020 Highlights
Q1 2020 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q1/20 Q4/19 Q1/19 EPS up 27% Revenue 10,609 10,340 9,998 ▪ Adjusted1 EPS up 6% PCL 919 891 850 Expenses 5,467 5,543 5,855 Revenue up 6% Net Income 2,989 2,856 2,410 Diluted EPS ($) 1.61 1.54 1.27 Expenses down 7
Slide 8: Canadian Retail
Canadian Retail Highlights (YoY) P&L ($MM) Reported Q1/20 QoQ YoY Net income up 30% (down 2% adj.)1 Revenue 6,255 2% 4% Insurance Claims 780 11% 11% Revenue up 4% Revenue Net of Claims2 5,475 1% 4% ▪ Loan volumes up 4% PCL 391 (2%) 26% ▪ Deposit volumes up 7% Expenses 2,636 0% (15%) ▪ Wealth assets3
Slide 9: U.S. Retail
U.S. Retail Highlights US$MM (YoY) P&L (US$MM) (except where noted) Reported Q1/20 QoQ YoY Net income down 7% Revenue 2,204 (1%) (1%) PCL 243 9% 6% Revenue down 1% Expenses 1,210 (4%) 0% ▪ Loan volumes up 5% U.S. Retail Bank Net Income 717 5% 2% ▪ Deposits ex-TD Ameritrade up 7% TD AMTD Equity Picku
Slide 10: Wholesale Banking
Wholesale Banking Highlights (YoY) P&L ($MM) Reported Q1/20 QoQ YoY Net income up $298MM Revenue 1,046 23% 80% PCL 17 (59%) NM Revenue of $1 billion Expenses 652 9% 8% ▪ Challenging market conditions in Q1/19 Net Income 281 76% NM ROE 14.0% Expenses up 8% Earnings ($MM) $244 $281 $221 $160 ($17) Q1/
Slide 11: Corporate Segment
Corporate Segment Highlights (YoY) P&L ($MM) Reported Q1/20 Q4/19 Q1/19 Reported loss of $227MM Net Income (227) (240) (192) ▪ Adjusted1 loss of $168MM Adjusted1 Q1/20 Q4/19 Q1/19 Net Corporate Expenses (179) (201) (182) Other 11 23 39 Non-Controlling Interests 0 0 18 Net Income (168) (178) (125) 1.
Slide 12: Capital and Liquidity
Capital and Liquidity Highlights (YoY) Common Equity Tier 1 Common Equity Tier 1 ratio of 11.7% Q4 2019 CET1 Ratio 12.1% Internal capital generation 35 Leverage ratio of 4.0% Actuarial losses on employee pension plans (3) Liquidity coverage ratio of 137% Repurchase of common shares (7) CET 1 capital
Slide 13: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2 ▪ Gross impaired loan formations 26 22 24 bps increased 2 basis points quarter- 20 21 over-quarter primarily driven by: – Borrower specific idiosyncratic $1,722 $1,689 events in the Wholesale $1,516 segmen
Slide 14: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2 ▪ Gross impaired loans increased 2 basis points quarter-over-quarter 53 48 45 bps 42 43 largely reflected in: – The Wholesale segment $3,534 $3,207 $3,296 $3,032 $2,945 $142 / 25 bps $27 / 5 bps $19 / 3 bps $2,590 / 126
Slide 15: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $923 ▪ PCL stable quarter-over-quarter $893 $855 at 52 bps $41 $17 $7 $192 $664 $155 $227 $636 $1 $83 $132 $297 $323 $311 $264 Wholesale $229 Corporate U.S. Retail $400 $391 $310 $280 $316 Canadian Retail ($5) PCL
Slide 16: Provision for Credit Losses: Impaired and Performing
Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) ▪ Impaired PCL increase quarter-over-quarter Q1/19 Q4/19 Q1/20 primarily driven by: Total Bank $ 855 $ 893 $ 923 – Credit migration in the Wholesale lending Impaired 722 741 810 portfolio Performing 133 152 113 – The
Slide 17: Appendix
Appendix
Slide 18: Q1 2020: Items of Note
Q1 2020: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item4 Pre Tax After Tax Reported net income and EPS (diluted) 2,989 1.61 Items of note Amortization of intangibles1 70 59 0.03 Corporate page 12, line 14 Charges associated with the Greystone Acquisition2 24 24 0.02 Canadian Retail p
Slide 19: Canadian Retail
Canadian Retail Net Interest Margin Average Deposits $B 337 344 355 331 332 2.99% 24 25 26 2.94% 2.96% 2.96% 2.94% 24 25 113 111 113 116 120 194 197 200 203 209 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Personal Business Wealth Efficiency Ratio1 Average Loans $B 419 421 427 434 437
Slide 20: Canadian Retail Wealth
Canadian Retail Wealth Wealth Revenue $MM Wealth Assets $B1 1,163 1,129 1,123 1,094 1,086 439 170 421 419 422 167 165 162 160 396 136 365 128 127 349 350 353 132 137 332 834 831 857 800 789 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Fee & Other Transaction NII AUA AUM 1. Canadian Re
Slide 21: Canadian Retail Digital Metrics
Canadian Retail Digital Metrics1 ▪ #1 average digital reach of any bank in Canada and as compared to major developed markets globally, amongst the leaders in domestic digital reach, according to Comscore.2,3 ▪ According to App Annie, TD (Canada) is ranked #1 in consumer adoption, customer engagement
Slide 22: U.S. Retail
U.S. Retail Net Interest Margin1,2 Average Deposits US$B 3.42% 266 265 265 272 279 3.38% 3.27% 111 109 105 103 106 3.18% 3.07% 68 68 70 73 75 90 92 92 92 94 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 4 Personal Business TD Ameritrade IDAs Efficiency Ratio3 Average Loans US$B 156 157
Slide 23: U.S. Retail Wealth and TD Ameritrade
U.S. Retail Wealth and TD Ameritrade TD Wealth Assets $B1 TD Ameritrade2 – Q1 2020 47 TD’s share of TD Ameritrade’s net income was 46 44 44 US$152MM, down 35% YoY reflecting: 43 ▪ Reduced trading commissions and higher operating expenses, partially offset by increased trading volumes TD Ameritrade Q
Slide 24: U.S. Retail Digital Metrics
U.S. Retail Digital Metrics1 ▪ According to App Annie, TD Bank U.S. mobile app was a top 10 among U.S. National and Regional banks for average smartphone monthly active users between October – December 20192 ▪ The TD Bank U.S. mobile app is highly rated for customer engagement metrics, including ave
Slide 25: Wholesale Banking
Wholesale Banking Revenue Loans1 Q1 2020 Q1 2020 23% 26% 3% 3% $1B $55B 71% 74% Corporate and Other2 Global Markets Canada United States International Investment Banking Highlights ▪ Our Global Markets business performed very well, with broad-based strength across products and geographies. ▪ Our Cor
Slide 26: Gross Lending Portfolio Includes B/As
Gross Lending Portfolio Includes B/As Balances ($B unless otherwise noted) Q4/19 Q1/20 Canadian Retail Portfolio $434.1 $437.3 Personal $353.5 $354.7 Residential Mortgages 200.0 201.3 Home Equity Lines of Credit (HELOC) 91.0 90.9 Indirect Auto 25.7 25.7 Credit Cards 18.5 18.3 Other Personal 18.3 18.
Slide 27: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Highlights Quarterly Portfolio Volumes ($B) $283 $288 $292 $293 $281 Canadian RESL credit quality remained strong Uninsured 66% 67% 68% 69% 70% ▪ Uninsured and insured portfolio loan-to- Insured value rates stable 34% 33% 32% 31% 30% Q1/19 Q2/19 Q3/19 Q
Slide 28: Canadian Personal Banking
Canadian Personal Banking Highlights Canadian Personal Banking (Q1/20) Gross Loans ($B) GIL ($MM) GIL/Loans ▪ Good asset quality in the Residential Mortgages $201.3 $276 0.14% Canadian Personal Banking 90.9 147 0.16% Home Equity Lines of Credit (HELOC) portfolio Indirect Auto 25.7 88 0.34% Credit Ca
Slide 29: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q1/20) Gross Loans/ GIL ▪ Canadian Commercial stable BAs ($B) ($MM) GIL/Loans quarter-over-quarter Commercial Banking1 $82.6 $358 0.43% Wholesale 56.6 142 0.25% ▪ Wholesale Banking GIL Total Canadian Comm
Slide 30: U.S. Personal Banking (USD)
U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q1/20) Gross Loans ($B) GIL ($MM) GIL/Loans ▪ Continued good asset quality Residential Mortgages $27.2 $336 1.23% in U.S. Personal Home Equity Lines of Credit (HELOC)2 8.5 347 4.05% Indirect Auto 24.7 212 0.86% Credit Cards 14.3 279 1.95
Slide 31: U.S. Commercial Banking (USD)
U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q1/20) ▪ Sustained good credit quality Gross Loans/ GIL BAs ($B) ($MM) GIL/Loans in U.S. Commercial Banking Commercial Real Estate (CRE) $25.0 $85 0.34% Non-residential Real Estate 18.0 44 0.24% Residential Real Estate 7.0 41 0.59% C
Slide 32: Investor Relations Contacts
Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 32
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