Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — The Toronto-Dominion Bank — Q4 2020 Earnings Presentation

38 slides from Toronto-dominion Bank's earnings presentation, Dec 3, 2020

  1. Slide 1: Q4 2020 Results Presentation

    December 3, 2020 Presentation 02 o = 5 2 i5 a 5 an © | Results

  2. 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

  3. Slide 3: Our Strategy

    Our Strategy We're in this together – Anchored by our proven business model and propelled by our forward-focused strategy, we are supporting our customers, communities and colleagues through these challenging times Proven Business Model Purpose-Driven Forward Focused Deliver consistent earnings grow

  4. Slide 4: Proven Business Model

    Proven Business Model Diversification and scale, underpinned by a strong risk culture  Fiscal 2020 reported earnings of $11.9 billion (adjusted $10 billion)1  Fiscal 2020 reported EPS of $6.43 (adjusted $5.36)1  Strong volume growth in banking businesses, offset by lower margins  Record Wealth,

  5. Slide 5: Purpose Driven

    Purpose Driven Committed to enriching the lives of our customers, colleagues and communities TD's Ambitious Better Together: 2020 Annual Report Climate Action Plan 2nd annual Diversity & Adapting with purpose Inclusion Summit for Colleagues 5

  6. Slide 6: Forward Focused

    Forward Focused Shaping the future of banking Launched innovative global Announced refreshed suite of Helping customers achieve financial remittance marketplace Aeroplan cards objectives with TD GoalAssist TD Securities' Sustainable Finance Close of Schwab transaction and Corporate Transitions group

  7. Slide 7: Forward Focused: Digital Adoption

    Forward Focused: Digital Adoption Digital Adoption Active Mobile Users Self-Serve Transactions (% of total customers)2 (millions)3 (as % of all financial transactions)4 +380 +360bps YoY bps YoY +12.5% +11.1% YoY YoY +860 +710 bps YoY bps YoY 59.0 59.0 5.9 93.0 5.8 92.0 Canadian Retail1 55.4 5.3 84.9

  8. Slide 8: Fiscal 2020 Highlights

    Fiscal 2020 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported 2020 2019 YoY EPS of $6.43, up 3% Revenue 43,646 41,065 6%  Includes a $2.3B after-tax net gain on the sale PCL 7,242 3,029 +$4,213 of the Bank's investment in TD Ameritrade Expenses 21,604 22,020 (2%) ($1.

  9. Slide 9: Q4 2020 Highlights

    Q4 2020 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q4/20 Q3/20 Q4/19 EPS of $2.80, up 82% Revenue 11,844 10,665 10,340  Includes a $2.3B after-tax net gain on the sale PCL 917 2,188 891 of the Bank's investment in TD Ameritrade Expenses 5,709 5,307 5,543 ($1.4

  10. Slide 10: Canadian Retail

    Canadian Retail Highlights (YoY) P&L ($MM) Reported Q4/20 QoQ YoY Net income up 3% (reported & adj1.) Revenue 6,029 0% (2%) Insurance Claims 630 (22%) (11%) Revenue down 2% Revenue Net of Claims2 5,399 3% (1%)  Loan volumes up 3% PCL 251 -$700 -$149 PCL Ratio 0.22% (64 bps) (15 bps)  Deposit volum

  11. Slide 11: U.S. Retail

    U.S. Retail Highlights US$MM (YoY) P&L (US$MM) (except where noted) Reported Q4/20 QoQ YoY Net income of $658MM Revenue 2,054 (1%) (8%) PCL 433 -$222 +$210 Revenue down 8% Expenses 1,254 4% (1%)  Loan volumes up 7% U.S. Retail Bank Net Income 403 55% (41%)  Deposits ex-TD Ameritrade up 26% TD AMTD

  12. Slide 12: Wholesale Banking

    Wholesale Banking Highlights (YoY) P&L ($MM) Reported Q4/20 QoQ YoY Net income up $326MM Revenue 1,254 (10%) 48% PCL (6) -$129 -$47 Revenue up 48% Expenses 581 (13%) (3%)  Trading-related revenue of $761MM, up 85% Net Income 486 10% +$326 ROE 23.0% PCL down $129MM QoQ  Impaired: -$19MM (-$71MM) 

  13. Slide 13: Corporate Segment

    Corporate Segment Highlights (YoY) P&L ($MM) Reported Q4/20 Q3/20 Q4/19 Reported income of $1,984MM Net Income 1,984 (130) (240) Adjustment for items of note  Includes a $2.3B after-tax net gain on the sale of the Bank's investment in TD Ameritrade Amortization of Intangibles 61 63 74 ($1.4 billion

  14. Slide 14: Capital

    Capital Common Equity Tier 1 ratio of 13.1% Common Equity Tier 1 Ratio Q3 2020 CET1 Ratio 12.5% Internal capital generation 30 Risk-Weighted Assets flat QoQ Actuarial gains on employee benefit plans 6 OSFI transitional arrangements for ECL provisioning 6 Leverage ratio of 4.5% Schwab transaction 2 R

  15. Slide 15: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2  Gross impaired loan formations 24 24 decreased 8 basis points quarter- 23 22 over-quarter, primarily reflecting: – The ongoing impact of bank $1,783 $1,708 $1,689 15 bps and government assistance $40 / 5

  16. Slide 16: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2  Gross impaired loans decreased 51 quarter-over-quarter primarily 47 related to: 45 43 – Resolutions outpacing 42 bps formations in the Canadian $3,821 $3,606 and U.S. consumer, U.S. $3,207 $343 / 52 bps $3,157 Commerci

  17. Slide 17: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $3,221  Provision for credit losses decreased quarter-over-quarter $374 across: $554 $2,189 – All segments $123 – All major asset classes $217  Elevated provisions in the prior $1,140 two quarters reflected a $8

  18. Slide 18: Provision for Credit Losses: Impaired and Performing

    Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM) Q4/19 Q3/20 Q4/20  Impaired PCL decreased quarter-over-quarter largely reflecting: Total Bank 893 2,189 921 – The ongoing impact of bank and government Impaired 741 832 363 assistance programs on the consumer Perform

  19. Slide 19: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) COVID-19 Impacts ACL1: $B and Ratios2 124 126 bps 103 $9.4 Highlights $9.2 71 74 $7.9  Allowance for Credit Losses increased $0.2 billion quarter-over-quarter driven United States 59% 60% $5.0 $5.3 by: Canada 62% – The Business & Government 62% 61% portfolios, refl

  20. Slide 20: Loans Under Bank-Led Deferral Programs

    Loans Under Bank-Led Deferral Programs Highlights  Loan balances under Bank-led deferral programs decreased C$41 billion from the third quarter, and deferral terms have now largely expired.  Deferral and government assistance programs have been effective in helping our customers. Bank-Led Payment

  21. Slide 21: Appendix

    Appendix 21

  22. Slide 22: Fiscal 2020: Items of Note

    Fiscal 2020: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item5 Pre Tax After Tax Reported net income and EPS (diluted) 11,895 6.43 Items of note Amortization of intangibles1 262 225 0.12 Corporate page 12, line 14 Net gain on sale of the investment in TD Ameritrade2 (1,421) (2,250) (1.

  23. Slide 23: Q4 2020: Items of Note

    Q4 2020: Items of Note Revenue/ ($MM) EPS ($) Segment Expense Line Item5 Pre Tax After Tax Reported net income and EPS (diluted) 5,143 2.80 Items of note Amortization of intangibles1 61 53 0.03 Corporate page 12, line 14 Net gain on sale of the investment in TD Ameritrade2 (1,421) (2,250) (1.24) Cor

  24. Slide 24: Canadian Retail

    Canadian Retail Net Interest Margin Average Deposits $B 2.96% 2.94% 413 396 344 355 365 35 2.83% 33 25 26 30 136 143 2.71% 116 120 122 2.68% 203 209 213 228 234 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Personal Business Wealth Efficiency Ratio1 Average Loans $B 434 437 440 440 447

  25. Slide 25: Canadian Retail Wealth

    Canadian Retail Wealth Wealth Revenue $MM Wealth Assets $B1 1,218 1,222 1,237 1,163 1,123 150 161 145 439 434 433 170 422 165 406 234 210 136 238 365 366 358 127 353 346 857 843 877 831 819 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Fee & Other Transaction NII AUA AUM 1. Canadian Re

  26. Slide 26: U.S. Retail

    U.S. Retail Net Interest Margin1,2 Average Deposits US$B 343 353 3.18% 306 3.07% 272 279 2.93% 142 144 111 130 106 2.50% 101 79 96 2.27% 73 75 92 94 97 105 108 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 4 Personal Business IDAs Efficiency Ratio3 Average Loans US$B 167 176 174 162 16

  27. Slide 27: U.S. Retail Wealth and TD Ameritrade

    U.S. Retail Wealth and TD Ameritrade TD Wealth Assets US$B1 TD Ameritrade2 – Q4 2020 TD’s share of TD Ameritrade’s net income was 44 44 US$255MM3, up 16% YoY reflecting: 40  Higher trading volumes and lower operating expenses, 39 38 partially offset by reduced trading commissions and lower asset-ba

  28. Slide 28: U.S. Strategic Card Portfolio: Accounting

    U.S. Strategic Card Portfolio: Accounting Values below are shown for illustrative purposes only. The percent share is representative of the agreements with the retailer card partners, but the exact split differs by partner. Illustrative Example $MM Credit Card Portfolio 1,000 Mechanics: TD collects

  29. Slide 29: Wholesale Banking

    Wholesale Banking Revenue Loans1 Q4 2020 3% Q4 2020 4% 22% 26% $1.3B $61.0B 70% 75% Corporate and Other2 Global Markets Canada United States International Investment Banking Highlights  Our Global Markets business delivered strong trading-related revenue, reflecting high levels of client activity 

  30. Slide 30: Gross Lending Portfolio Includes B/As

    Gross Lending Portfolio Includes B/As Balances ($B unless otherwise noted) Q3/20 Q4/20 Canadian Retail Portfolio 442.2 451.1 Personal 358.4 367.4 Residential Mortgages 206.1 211.7 Home Equity Lines of Credit (HELOC) 92.1 94.5 Indirect Auto 26.7 27.4 Credit Cards 15.9 15.6 Other Personal 17.6 18.2 Un

  31. Slide 31: COVID-19 Industries of Focus

    COVID-19 Industries of Focus Total Gross Loans & Acceptances: $743B Highlights (Q4 2020)  Gross loans and acceptances to industries of heightened focus were $48 billion Residential Mortgages & – Representing ~6.4% of Total Bank HELOC, gross loans and acceptances 48.1%  Lending portfolio remains we

  32. Slide 32: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Secured Lending Portfolio Highlights (Q4 2020) Quarterly Portfolio Volumes ($B) $300 $308 $292 $293 $297 Canadian RESL credit quality remained strong Uninsured 69% 70% 71% 72% 73%  Uninsured and insured portfolio loan-to- Insured value rates stable 31% 30% 29% 28% 27% Q4/19 Q1/

  33. Slide 33: Canadian Personal Banking

    Canadian Personal Banking Canadian Personal Banking (Q4/20) Highlights Gross Loans ($B) GIL ($MM) GIL/Loans (%)  Gross impaired loans Residential Mortgages 211.7 376 0.18 decreased quarter-over- Home Equity Lines of Credit (HELOC) 94.5 201 0.21 quarter Indirect Auto 27.4 60 0.22 – Largely reflects

  34. Slide 34: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q4/20) Gross Loans/ GIL GIL/Loans  Gross impaired loans BAs ($B) ($MM) (%) decreased largely due to Commercial Banking1 83.7 492 0.59% resolutions in the Wholesale Wholesale 58.4 97 0.17% lending portfol

  35. Slide 35: U.S. Personal Banking (USD)

    U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q4/20)  Gross impaired loans Gross Loans GIL GIL/Loans decreased quarter-over- ($B) ($MM) (%) quarter Residential Mortgages 29.1 337 1.16 – Largely reflects the ongoing Home Equity Lines of Credit (HELOC)2 8.2 323 3.93 impact of bank an

  36. Slide 36: U.S. Commercial Banking (USD)

    U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q4/20) Gross Loans/ GIL GIL/Loans  Gross impaired loans BAs ($B) ($MM) (%) decreased quarter-over- Commercial Real Estate (CRE) 25.4 112 0.44 quarter Non-residential Real Estate 17.9 75 0.42 Residential Real Estate 7.5 37 0.49 Comme

  37. Slide 37: Capital Impact: Schwab Transaction

    Capital Impact: Schwab Transaction 12.5% +2 bps 13.1% CET1 Ratio Q3 2020 CET1 Ratio Q4 2020 Capital Impact of Schwab Transaction CET1 Ratio CET1 RWA Supp Pack Schwab / TD Ameritrade Impacts (bps) ($MM) ($MM) Reference Release of imputed goodwill on CET 1 Risk-Weighted Assets ($B) 60 2,897 SRD, Page

  38. Slide 38: Investor Relations Contacts

    Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 38

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