Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — Investor Day (October 2015)
75 slides from Toronto-dominion Bank's investor day presentation, Oct 15, 2015
Slide 1: 2015 Canadian Retail Investor Day
2015 Canadian Retail Investor Day October 15, 2015
Slide 2: Caution Regarding Forward-Looking Statements and Additional Information
Caution Regarding Forward-Looking Statements and Additional information 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 Exc
Slide 3: Agenda
Agenda Welcome Break Opening Remarks Part II – Business Presentations • Bharat Masrani • Kenn Lalonde, Insurance • Tim Hockey • Paul Douglas, Business Banking Part I – Business Presentations • Leo Salom, Wealth Management • Tom Dyck, Community Banking Part II – Q&A Session • Nandita Bakhshi, Direct
Slide 4: Bharat Masrani
Bharat Masrani Group President and Chief Executive Officer 3
Slide 5: Tim Hockey
Tim Hockey Group Head Canadian Banking and Wealth Management 4
Slide 6: Key Takeaways
Key Takeaways • Proven outperformance and leadership • Strong growth engine • Evolving our best-in-class retail platform • Relentless commitment to operational excellence • The power of One TD • Winning team and culture 5
Slide 7: At a Glance
At a Glance Our competitive advantage 1 $347 billion in loans1 • Winning culture • Service and convenience model 2 $265 billion in deposits2 • Trusted brand • Leading market share 3 $5.8 billion in adjusted • North American scale earnings3,4 4 44.6% ROE4 Market leadership 6 1. Total Loans based on t
Slide 8: Outperformance: Financials
Outperformance: Financials Revenue Net of Claims1 4-year CAGR Canadian P&C Loan Volume2 4-year CAGR 6.2% 6.0% 5.5% 4.8% 3 3 TD Peer TD Peer Expenses1 4-year CAGR NIAT1 4-year CAGR 9.3% 4.8% 4.8% 6.9% 3 TD Peer 3 TD Peer Proven outperformance 7 1. TD and Peer compound annual growth rate (CAGR) repres
Slide 9: Outperformance: Market Share
Outperformance: Market Share #1 in Real Estate Secured Lending1,2 #1 in Canadian Credit Cards1,2 Maintained Leadership 10% 10% t 19.5% 21.6% 21.5% 9.8% 2011 2015 2011 2015 #1 in Personal Non-Term Deposits1,3 #2 in Business Loans1,3 270 240 bps bps 21.3% 24.0% 15.3% 17.7% 2011 2015 2011 2015 Leading
Slide 10: Outlook On Operating Environment
Outlook On Operating Environment 1 Modest but steady economic growth 2 Continued low rate environment – modest rate increases expected in 2017 and 20181 3 Expect credit to normalize gradually 4 Stabilizing regulatory landscape Continue to perform through an uncertain environment 9 1. Expected rate i
Slide 11: Business Priorities
Business Priorities Legendary Customer Experience Across • Drive efficient revenue growth and All Channels increase our lead in digital +7% Adjusted1 Earnings Strong Growth Target over the Growth Engine • Diverse portfolio of outperforming businesses Medium Term Relentless Commitment to Operational
Slide 12: Medium Term Targets (3 to 5 years)
Medium Term Targets (3 to 5 years) 1 Distribution 2 Personal Banking 3 Business Banking Extending legendary into Extend leadership in High single digit digital channels key products earnings growth 4 Credit Cards 5 Insurance 6 Wealth Management +$500 million in High single digit Double digit increme
Slide 13: Winning Management Team
Winning Management Team Tom Dyck Nandita Bakhshi Kerry Peacock Andrew Pilkington Community Banking Direct Channels Personal Banking Products Canadian Credit Cards & Merchant Services Kenn Lalonde Paul Douglas Leo Salom Insurance Business Banking Wealth Management 12
Slide 14: Tom Dyck
Tom Dyck Executive Vice President Community Banking 13
Slide 15: At a Glance
At a Glance TD banks 40% of Canadians1 1 10th consecutive award for “Highest Customer Satisfaction among 2 1,165 branches Big 5 Retail Banks”3 3 2,873 ATMs 11th consecutive award for "Customer Service Excellence among Big 5 Retail Banks"4 4 15 million customers 2 5 44% longer branch hours Undisputed
Slide 16: Evolving Our Best-in-Class Distribution
Evolving Our Best-in-Class Distribution 2008: Established our Direct Channel Centre of Excellence Today • Includes over 20 North American call • Best-in-class delivery across centres, all ATM and online operations all channels • Leverage scale – reap synergies • Strong partnerships – leverage the •
Slide 17: Sales and Service Transactions
Sales and Service Transactions Branch Transactions1 1% • Total transaction volume is increasing CAGR2 • Service transactions at the branch are declining 2011 2015 • Service transactions are moving from online to mobile 76% Digital Transactions1 12%2 CAGR 37% 2011 2015 Customer behaviour is changing
Slide 18: Sales Transactions
Sales Transactions Sales Transaction Volumes2 Sales transactions tell a different story • Branch sales are rising Branch • Branches remain the overwhelming ATM customer choice for sales, especially 83% Phone complex sales Online Leveraging branches to drive partner referrals Wealth Management Referr
Slide 19: Evolving the Branch Network
Evolving the Branch Network Branches matter Flexible branch formats • Customers will use branches less often but depend on them more Our evolving branch network1 • Opened, on average, 15 branches per year since 2011 in high growth markets • Consolidated, on average, 15 branches per year since 2011 w
Slide 20: Evolving the Delivery Model
Evolving the Delivery Model Average FTE per Branch2 Average Sales Units per Branches more productive FTE2 • Achieved a leading position in all channels while 9% 11% from 2011 containing costs from 2011 640 16.2 • Generating more sales with fewer staff 575 14.8 2011 2015 2011 2015 Modest 2% CAGR1 in
Slide 21: Business Priorities
Business Priorities Legendary Customer • Focus on deepening customer Experience relationships • Routine sales and service transactions are migrating Better Skilled • Increasingly productive advisors Advisors • Investing in our people drives trained to meet complex needs legendary customer experience
Slide 22: Key Takeaways
Key Takeaways • Undisputed leader in service and convenience • Local presence matters – branches continue to play a key role • Smaller, smarter and less expensive branches driving efficiency • Power of One TD – branch referrals are key to bank-wide growth • Our culture and our people are a competiti
Slide 23: Nandita Bakhshi
Nandita Bakhshi Executive Vice President Head of Direct Channels 22
Slide 24: At a Glance
At a Glance 2,480+ branch locations $$$ 4,800+ ATM locations 55+ million phone conversations 4.5+ million active mobile users1 9.3+ million active online users2 Canadian Retail benefits from our North American scale 23 Note: For the purpose of this slide, figures reflect the Bank's North American fo
Slide 25: Leveraging Scale
Leveraging Scale • Build and enhance sales and service capabilities to meet evolving customer needs • Deploy best practices across North America • Industry leading envelope free, image enabled ATMs • One of the first to market in Canada with mobile deposit • Leverage our high performance culture to
Slide 26: Outperformance
Outperformance #1 mobile app in Canada1 #1 in Mobile Subscribers Millions of subscribers1 • Most mobile users of any bank Leadership in Customer Service Excellence2 2.7 • Among the Big 5 Canadian Banks for branch, 1.7 ATM, online, mobile, and live agent phone TD Peers3 Best-in-class across all chann
Slide 27: Business Priorities
Business Priorities Customer Experience • User centered design = industry leading smartphone app Employee Experience • Improve employee digital fluency to enhance customer experience Email Money Transfers % of Transaction on Mobile 53% YoY Relentless Commitment to Operational • One digital platform
Slide 28: Customer-Centric Innovation
Customer-Centric Innovation Service and convenience in all channels 27
Slide 29: Customer-Centric Innovation
Customer-Centric Innovation 28
Slide 30: Key Takeaways
Key Takeaways • Outperforming in digital • North American scale a key differentiator • Bank-wide efficiencies funding investments in digital innovation • Building on our best-in-class distribution model 29
Slide 31: Distribution Summary
Distribution Summary The next five years Non-Branch Sales • Service transactions in branches will continue their modest decline • Sales transactions will migrate to other channels 30% • Fewer employees per branch but higher 17% productivity 2015 2018 - 2020 • Smaller, more flexible branches results
Slide 32: Kerry Peacock
Kerry Peacock Executive Vice President Personal Banking Products 31
Slide 33: At a Glance
At a Glance Our competitive advantage 1 $250 billion in loans1 • Legendary customer service and convenience • Diverse origination channels: Mobile Mortgage 2 $162 billion in deposits1 Specialists, Broker, Remote Sales • Strong customer acquisition and retention • Disciplined margin and risk manageme
Slide 34: Outperformance
Outperformance Personal Non-Term Deposits Portfolio Volume1 ($B) #1 market share in personal deposits1 12% CAGR • Strong Chequing and Savings volume growth vs. 10% $128 Industry3 $112 $121 $86 $99 • Disciplined Term deposit pricing to attract and retain franchise customers 2011 2012 2013 2014 2015 R
Slide 35: Business Priorities
Business Priorities Revenue opportunities RESL Market Share1 Extend RESL Target Opportunity market share Businesses and • Extend lead with "New to 21.8% 21.5% leadership Canada" customers Segments • Recapture HELOC share • Grow share in unsecured 2012 2015 lending Unsecured Personal Lending Market S
Slide 36: RESL: Evolving Our Product Offering
RESL: Evolving Our Product Offering New Flexline product delivering customer +103% convenience and strong results YTD HELOC Monthly Origination Volumes YoY2 • HELOC originations doubled YoY Enhance profitability of existing business • Strong retention rate of 92%, up 250 bps from 20121 • Online rene
Slide 37: Unsecured Lending: Drive to Higher Share
Unsecured Lending: Drive to Higher Share Increase penetration of TD customers Unsecured Personal Lending: Average Portfolio Volume ($B), New Accounts (M) • TD banks 40% of Canadians1 • Well below targeted market share in New Accounts $11.7 unsecured lending Avg. Portfolio Volume $11.5 $11.4 $11.2 St
Slide 38: Business Priorities
Business Priorities Commitment to operational Electronic cheque imaging excellence • Allow customers to deposit cheques anywhere, anytime • Streamline cheque processing, while End-to-end reducing expenses by $30 million • Electronic cheque Approach to imaging Process eStatements • eStatements Improv
Slide 39: Key Takeaways
Key Takeaways • Market leader in key retail products • Significant growth opportunities by targeting businesses and segments • Relentless commitment to operational excellence by enhancing end-to-end customer journey 38
Slide 40: Andrew Pilkington
Andrew Pilkington President Canadian Credit Cards and Merchant Services 39
Slide 41: At a Glance
At a Glance Our competitive advantage 1 $19 billion in loans1 • Best-in-class distribution • Dual card issuer, high value brands Over 7 million active accounts1 2 • Leading direct to consumer issuer (MBNA) • Scale to invest 3 $86 billion of spend volume2 Market leader with multiple card options 40 1
Slide 42: Outperformance
Outperformance Loan Portfolio2 ($B) • #1 market share1 22% • Volumes have more than CAGR2 doubled in the last four years $18.7 $8.4 • Profitable market share growth with margin expansion and 2011 2015 improving credit performance Purchase Volume3 ($B) 23% CAGR3 $86.2 $37.2 2011 2015 Strong organic a
Slide 43: Business Priorities
Business Priorities Revenue opportunities Deepen • Increase total TD credit Customer card customer penetration Relationships • Acquire 1 million new cards per year by 2018 to 50% $500 • Double the penetration of million business cards by adding in incremental annual revenue Invest in 150,000 account
Slide 44: Increase Customer Penetration to 50%
Increase Customer Penetration to 50% What Are You Looking for in a Credit Card? Do You Travel? Fly Faster Travel Flexibility Carry a Balance Get Cash Back Growing organically by deepening TD relationships 43
Slide 45: Double Business Cards
Double Business Cards • A competitive and differentiated product suite • Simplified sales and underwriting process • Customer engagement • Power of One TD: leveraging leading business customer base +150,000 accounts Increase penetration to best-in-class 44
Slide 46: Leverage MBNA Direct Model
Leverage MBNA Direct Model 57% 25% 18% Affinity Core 300 Partners 1,700+ Locations Access to new customers and channels 45
Slide 47: Business Priorities
Business Priorities Commitment to operational excellence Significantly reduce and refine the Rationalize the product lineup Product Suite • Simplify • Provides clearer value, simplifies choices and streamlines processes Continue conversion to e-statements • Every 1% converted saves ~$850,000 Acceler
Slide 48: Key Takeaways
Key Takeaways • Consumer choice across all segments • Robust revenue growth over medium term • Leading distribution and direct-to-consumer models • Streamline processes to drive efficiencies 47
Slide 49: Q&A Session I
2015 Canadian Retail Investor Day Q&A Session I
Slide 50: Kenn Lalonde
Kenn Lalonde Executive Vice President Insurance 49
Slide 51: At a Glance
At a Glance Our competitive advantage 1 $4 billion in premiums1 • Loyal customer base • Direct-to-consumer model 3.4 million Life & Health 2 • Scale and efficiency customers2 • Own end-to-end value chain 3 2.2 million General Insurance • Power of TD brand customers2 4 Strong ROE business Focused mod
Slide 52: Outperformance
Outperformance Leading General Insurance business1 • #1 direct-to-consumer insurer • #1 affinity insurer • #3 personal lines insurer Strong credit protection offering2 • #1 in balance protection 3% 5% CAGR3 CAGR5 • #2 credit protection insurer among Big 5 Policies in Force3 Insurance (MM) Premiums4
Slide 53: The Power of One TD
The Power of One TD Tenure2 (Years) • 80% of TD customers expect TD to offer insurance1 Banking + Insurance 15 • 70% of TD Insurance customers also have a banking relationship with TD Banking Only 13 • Customers with both an Insurance and Banking relationship are more loyal and profitable • Aligned
Slide 54: Delivering the Insurance Moment of Truth
Delivering the Insurance Moment of Truth • Settling insurance claims is the moment of truth • Opportunity to offer a differentiated customer experience, aligned with the TD brand • Advice-based coverage at point of sale • Streamlined, customer-centric claims processes Meeting customer expectations a
Slide 55: Business Priorities
Business Priorities Enhance Insurance Premiums1 ($B) Existing • Legendary customer experience High single digit Business • Sophisticated underwriting and pricing growth • Advanced analytics $6 $4 Accelerate 2015 2020 Growth & • Transform technology platform Capture White Efficiency Ratio2 • Lead in
Slide 56: Key Takeaways
Key Takeaways • Focused model with a distinct competitive advantage • Market leader in priority segments • Strong franchise business • Meeting customer expectations at the moment of truth • Positioned for organic growth 55
Slide 57: Paul Douglas
Paul Douglas Executive Vice President Business Banking 56
Slide 58: At a Glance: Commercial and Small Business
At a Glance: Commercial and Small Business Our competitive advantage 1 $56 billion in loans1 • Customized Commercial Banking delivered through 50 branches 2 $84 billion in deposits1 • Over 500 dedicated Small Business Bankers located in Retail branches Largest number of small • Strong local presence
Slide 59: Outperformance: Commercial and Small Business
Outperformance: Commercial and Small Business Strong volume growth Loan Volumes1 ($B) 12% CAGR2 • 6% growth in the number of commercial bankers since 2011 $56 • Better tools and enhanced sales focus $36 • Growth in underrepresented businesses 2011 2015 Deposit Volumes1 ($B) Power of One TD 8% CAGR2
Slide 60: Business Priorities: Commercial and Small Business
Business Priorities: Commercial and Small Business Strategic growth opportunities • Equipment leasing achieved +100% CAGR since 20111 • Continue growth in target Grow • Grow to target share across industries – Agriculture volume Underrepresented all regions +250% since 2008 Businesses • Increase sha
Slide 61: Business Priorities: TD Auto Finance
Business Priorities: TD Auto Finance Loan Volumes ($B) 8% CAGR3 1 $18 billion in loans1 $13 $18 2 90 relationship managers and reps 2011 2015 3 5,800 dealer relationships Origination volumes #1 or #2 in Prime, Non Prime and up 46% in last 2 years 4 Recreational Marine & Sport2 Leading in Canadian Au
Slide 62: Business Priorities: Business Banking
Business Priorities: Business Banking Productivity opportunities • Immediate TDAF customer credit approvals have lowered deal cost Relentless • Increase proportion of auto Commitment to adjudicated loans • Enhanced pre-approved SBB offer Operational • Automation of SBB strategy – 11,500 new sales in
Slide 63: Key Takeaways
Key Takeaways • Significant momentum and gains in market share • Proven track record of high growth everywhere we choose to compete • Driving for #1 market share • Better, bolder, business bankers motivated to perform • Driving efficiency through automation 62
Slide 64: Leo Salom
Leo Salom Executive Vice President Wealth Management 63
Slide 65: At a Glance: Canadian Wealth
At a Glance: Canadian Wealth 1 Over 2 million clients1 Market leader in Direct Investing • 1.2 million clients and 39% market share3 2 $562 billion in AUM / AUA1 Advice generating accelerated growth • 15% CAGR earnings growth since 20114 3 $24 billion in referrals from TD Leading Institutional Money
Slide 66: Strong Fundamentals in Canadian Wealth
Strong Fundamentals in Canadian Wealth Double Digit NIAT Growth1 ($MM) Improvement in Efficiency Ratio1 12% 500 CAGR1 bps $834 71% $540 66% 2011 2015 2011 2015 Strong Net Asset Growth ($B)2 Industry Leading ROE3 12% 49% 2x CAGR2 Industry ROE $36 $23 19% 2011 2015 Peer TD Proven outperformance 65 1.
Slide 67: Business Priorities
Business Priorities Reaffirm Leadership in Direct Investing • Enrich the client offering Execute Mass Affluent Deliver and High Net Worth • Cross-sell investment Strategies advice solutions Double Digit Earnings Growth Innovate for Leadership • Innovative asset management in Asset Management solutio
Slide 68: Reaffirm Leadership in Direct Investing
Reaffirm Leadership in Direct Investing • 40% of direct investing Active revenues • Launch powerful Increase Traders investing platform and engagement and • 70% of trades robust tools across trade volumes online, mobile and tablet • Expand low cost product suite Diversify revenue • 1.2 million clien
Slide 69: Reaffirm Leadership in Direct Investing
Reaffirm Leadership in Direct Investing 68
Slide 70: Execute on Mass Affluent & HNW Advice Strategies
Execute on Mass Affluent & HNW Advice Strategies • 4.3 million clients 15% industry Mass 500 Affluent • 5% industry asset market share bps CAGR through to 20241 by 2020 Hire 500 advisors by 2018 • 525,000 clients High Net 12% industry • 7% industry asset Worth market share 250 growth through to bps
Slide 71: Innovate for Leadership in Asset Management
Innovate for Leadership in Asset Management • New solution-oriented products: Low • $130 billion AUM Volatility, Risk-Reduction Pools and • 64% of AUM is ranked 1st Retirement Funds Targeting Retail or 2nd quartile1 • Launch ETF and ETF-wrapped solutions #1 in long • 2nd largest Mutual Fund • Over 9
Slide 72: Key Takeaways
Key Takeaways • Strong organic growth model • Solid retail and commercial referral partnership • Investment in advisor base • Relentless commitment to operational excellence • Well-positioned to deliver double digit earnings growth 71
Slide 73: Q&A Session II
2015 Canadian Retail Investor Day Q&A Session II
Slide 74: Key Takeaways
Key Takeaways • Proven outperformance and leadership • Strong growth engine • Evolving our best-in-class retail platform • Relentless commitment to operational excellence • The power of One TD • Winning team and culture 73
Slide 75: 2015 Canadian Retail Investor Day
2015 Canadian Retail Investor Day October 15, 2015