Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Financial Group — Q2 2000 Earnings Presentation
43 slides from Toronto-dominion Bank's earnings presentation, 2000
Slide 1: Bank Financial Group
BANK FINANCIAL GROUP
Slide 2: Second Quarter 2000
SECOND QUARTER 2000 BANK FINANCIAL GROUP Dan Marinangeli EVP & CFO
Slide 3: Highlights
Highlights* • EPS up 45% to $0.84 • Total revenue up 58% • ROE up 1.30% pts to 19.5% • Continued strong wealth management performance:TD Waterhouse profits up 100% • Very strong merchant banking gains • $475 million restructuring accrual taken • $225 million charge for goodwill and intangible amorti
Slide 4: Key Goals - How Did We Do?
Key Goals - How Did We Do? Goals Q2/00 Cash basis ROE 16-18 % 19.5% PCL/Loans & BAs 30 bps 41bps (excluding special charges & reverse repos) Efficiency 58% 62.5% (excluding non-cash charges & one-time items) 4
Slide 5: CT Purchase Price Equation
CT Purchase Price Equation $ Billions Fair value of assets acquired $ 49.4 Liabilities assumed 46.4 Equity (Book Value) $ 3.0 Purchase price $ 8.0 less book value 3.0 Excess over book $ 5.0 comprised of: Identifiable intangibles (gross of tax) $ 6.9 Deferred tax liability (3.0) Identifiable intangib
Slide 6: Integration of CT Businesses
Integration of CT Businesses TD TD Canada Canada TD TD TD TD Asset Asset TD TD Other Other Trust Trust Waterhouse Waterhouse Management Management Securities Securities The The CT CT Truscan CT CT Truscan Canada Canada Investment Investment Property Securities Securities Property Trust Trust Managem
Slide 7: Cash EPS
CASH EPS CT CT contributed contributed $0.08 $0.08 per per share share in in Q2 Q2 $0.84 $0.76 $0.72 TDCT TDCT $$0.09 0.09 TDAM TDAM $$0.01 0.01 $0.53 OTHER OTHER(prefs) (prefs) $(0.02) $(0.02) Total Total $$0.08 0.08 Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Includes funding cost, excludes restructuring
Slide 8: Revenue Growth
Revenue Growth Base = Q2/99 * 160 150 140 130 TD excluding CT 120 ** U.S. Peers 110 100 90 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 * Total revenue (TEB) excluding special gains. ** Universe includes a selection of 16 banks with market capitalization greater than $10 billion at May 16, 2000 and 3 brokerage com
Slide 9: EPS Growth
EPS Growth Base = Q2/99 150 125 * 4 Bank Cdn. Peer ** U.S. Peers 100 75 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 * Based on Q2/00 consensus analyst estimates (accrual estimates have been adjusted for estimated goodwill amortization. BMO adjusted for Partners First gain in Q1/00). ** Universe includes a selecti
Slide 10: Segment Performance: TD Canada Trust
SEGMENT PERFORMANCE 1 TD Canada Trust
Slide 11: Operating Performance
Operating Performance Cash Net Revenue $ Millions Income $1,356 $ Millions $211 $147 $870 $779 $101 Q2/99 Q1/00 Q2/00 Q2/99 Q1/00 Q2/00 11
Slide 12: Margin
Margin Net Interest Margin 3.89% 3.72% 3.80% 3.66% 3.67% Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 12
Slide 13: TD Waterhouse Bank
TD Waterhouse Bank Thousands Number of Accounts 85 75 Web Accounts 65 Non-Web Accounts 55 45 35 25 J-99 A-99 J-99 O-99 J-00 A-00 13
Slide 14: Segment Performance: TD Waterhouse
SEGMENT PERFORMANCE 2 TD Waterhouse
Slide 15: TD Waterhouse
TD Waterhouse Revenue Cash Net $ Millions Income $ Millions 800 $688 700 $577 600 500 $434 $548* $103 $105 $93 400 300 $366* $86* 200 $52* 100 0 Q2/99 Q1/00 Q2/00 Q2/99 Q1/00 Q2/00 * Excludes special gains. 15
Slide 16: TD Waterhouse Group, Inc.
TD Waterhouse Group, Inc. 1999 2000 Yr/Yr Apr 30 Jan 31 Apr 30 Change ($US) Active Accounts (000) 1,883 2,372 2,813 49% New accounts (000) 253 260 418 65% Trades/day (000) 118 190 255 116% Online penetration 59% 72% 74% 26% Customer Assets($B) $106 $150 $160 51% 16
Slide 17: TD Waterhouse Assets Under Administration
TD Waterhouse Assets Under Administration $ CDN Billions 250 TD 200 Waterhouse:Other 150 TD Waterhouse:Canada 100 50 TD Waterhouse:USA 0 Q2/99 Q3/99 Q4/99 Q1/00 Q2/00 17
Slide 18: Segment Performance: TD Asset Management
SEGMENT PERFORMANCE 3 TD Asset Management
Slide 19: TD Asset Management
TD Asset Management Cash Net Revenue Income $ Millions $ Millions $20 $68 $55 $13 $43 $11 Q2/99 Q1/00 Q2/00 Q2/99 Q1/00 Q2/00 19
Slide 20: TD Asset Management Assets Under Management
TD Asset Management Assets Under Management $ Billions $97.0 100 80 $74.4 $67.4 $69.0 $63.4 $32.4 60 $27.8 $23.4 $24.2 $22.3 40 $20.7 $15.1 $17.1 $18.0 $19.0 20 $28.8 $16.2 $16.7 $16.7 $17.3 0 Q2/99 Q3/99 Q4/99 Q1/00 Q2/00 Other Assets Quantitative Capital: Institutional TD WAM Retail Funds TDAM Ret
Slide 21: Mutual Funds
Mutual Funds WAF (TDAM) Q2/00 1.33% $ Billions WAF (TWE) Q2/00 0.72% $30 10% $25 $20 $15 5% $10 $5 $0 0% Q2/98 Q4/98 Q2/99 Q4/99 Q2/00 Canada Waterhouse Cdn M.F. Industry Mkt. Share to Mar/00 21
Slide 22: Segment Performance: TD Securities
SEGMENT PERFORMANCE 4 TD Securities
Slide 23: TD Securities: Revenue
TD Securities: Revenue $ Millions $788 $632 $569 Q2/99 Q1/00 Q2/00 23
Slide 24: TD Securities
TD Securities Cash Net ROE Income % $ Millions 27% $236 22% $195 $162 16% Q2/99 Q1/00 Q2/00 Q2/99 Q1/00 Q2/00 24
Slide 25: Risk Management
SECOND QUARTER 2000 RISK MANAGEMENT BANK FINANCIAL GROUP Tom Spencer EVP, Risk Management
Slide 26: Strong Asset Quality
Strong Asset Quality Ratio of PCL to Loans & BAs % 1.00 0.80 TD 4 Bank Peer 0.60 41 bps 0.40 0.20 0.00 00 00 4 5 6 7 8 9 9 9 9 9 9 9 1/ 2/ 19 19 19 19 19 19 Q Q Notes: Excludes special general provisions and reverse repos. 26
Slide 27: General Reserves & Net Impaired Loans
General Reserves & Net Impaired Loans General Reserves General Reserves $ Millions as a % of RWA $849 0.69 0.67 0.68 $753 $744 0.61 $636 0.39 $402 0.18 $159 96 97 98 99 00 00 19 19 19 19 1/ 2/ 96 97 98 99 00 00 Q Q 19 19 19 19 1/ 2/ Q Q Q1/00 4 Bank Peer Average: 0.77% Net Impaired Loans $(174)milli
Slide 28: Business Loans
Business Loans Net Impaired Loans (before General As a % of $ Millions Reserves) Loans & BAs $1,500 4% $1,250 3% $1,000 112 bps $750 2% $500 1% $250 $0 0% 00 00 93 94 95 96 97 98 99 1/ 2/ 19 19 19 19 19 19 19 Q Q 28
Slide 29: Market Risk
Market Risk • TD Securities’ Value-at-Risk (VaR) for Q2/00 was $CAD 32.1MM. • Daily trading losses never exceeded VaR during Q2/00. • Major risk is to credit spreads. 29
Slide 30: Building a Better Bank
Building a Better Bank Ed Clark Chairman & CEO TD Canada Trust
Slide 31: Our Plan
Our Plan • Maintain business momentum • Integrate successfully • Build a better bank 31
Slide 32: Momentum +
Momentum + Momentum continues: » Pre-Closing expense constraint has given us a head start in achieving expense synergies • expenses flat compared to prior year, after removing impact of variable pay and TD MarketSite investment » We have immunized the branches from integration activity to allow them
Slide 33: Momentum +
Momentum + Financial highlights: » Cash net income of $211 million, compared with $147 million for Q1 and $101 million for Q2, 1999 » Canada Trust merger contributed revenue of $432 million and net income of $57 million » Revenue growth of 15% over the same quarter last year on a comparable basis »
Slide 34: TD Canada Trust
TD Canada Trust Revenue Cash Net Income $ Millions $ Millions $211 $1,356 $57 $432 $154 $924 $147 $870 $779 $101 Q2/99 Q1/00 Q2/00 Q2/99 Q1/00 Q2/00 34
Slide 35: Residential Mortgages
Residential Mortgages Insured 5%year 5% yearover over mortgages yeargrowth year growth $ Billions Q2/00: 85% $65 30% $55 25% $45 20% $35 $25 15% Q2/98 Q4/98 Q2/99 Q4/99 Q2/00 Volume Cdn. Bank Mkt. Share to Mar/00 Note: Data restates TD and CT as a combined entity and includes securitized mortgages.
Slide 36: Personal Loans & Cards
Personal Loans & Cards 15%year 15% yearover over $ Billions yeargrowth year growth $32 28% 27% $30 26% $28 25% $26 24% 23% $24 22% $22 21% $20 20% Q2/98 Q4/98 Q2/99 Q4/99 Q2/00 Volume Cdn. Bank Mkt. Share to Mar/00 Note: Data restates TD and CT as a combined entity (excluding Master Card) and includ
Slide 37: Personal Deposits
Personal Deposits 6%year 6% yearover over year growth growth $ Billions year $80 26% $76 25% 24% $72 23% $68 22% $64 21% $60 20% Q2/98 Q4/98 Q2/99 Q4/99 Q2/00 Volume Cdn. Bank Mkt. Share to Mar/00 Note: Data restates TD and CT as a combined entity. (Canadian Currency) 37
Slide 38: Integration on Track
Integration on Track Integration Goals: » 4,900 FTE reduction » Expense reduction of $450 million annually » Contain restructuring costs to $475 million » Branch mergers to reduce branches by approximately 275 » All customers will be notified personally, in writing and well in advance, about any mer
Slide 39: Integration on Track
Integration on Track To date: » FTE reductions on track • initial focus on product management, regional offices and head office » Expense reductions ahead of schedule » Branch platform finalized • TD systems modified to deliver CT’s paperless branch banking » TD Waterhouse on schedule to absorb CT M
Slide 40: Integration on Track
Integration on Track To come: » Integration of mutual funds under TD Asset Management by Fall 2000 » CT head office real estate exited or re-deployed by the end of 2000 » Integration of web and telephone banking platform, by Spring 2001 » Conversion of retail platform by end of Summer 2001 » Branch
Slide 41: Building a Better Bank
Building a Better Bank Customer Focus: » Immediate post-Closing benefits for customers • Price freeze on service charges for one year • Waiver of Interac fees for ABM transactions • Increased teller hours in TD branches • First homogenized product offer: 3% Cash Back Mortgage » Introduced common Cus
Slide 42: Forward Looking Statements
Forward Looking Statements This document may contain forward-looking statements, including statements regarding the business and anticipated financial performance of TD. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those
Slide 43: Bank Financial Group
SECOND QUARTER 2000 BANK FINANCIAL GROUP
TD Bank Financial Group — Q2 2000 Earnings Presentation on 6ix