Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Q1 2017 Earnings Presentation
36 slides from Toronto-dominion Bank's earnings presentation, 2017
Slide 1: TD Bank Group Investor Presentation
TD Bank Group Investor Presentation Q1 2017
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: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 4: TD Snapshot
TD Snapshot Our Businesses Canadian Retail Personal banking, credit cards and auto finance Small business and commercial banking Direct investing, advice-based wealth businesses, and asset management Property, casualty, life and health insurance Q1 20171 Canadian U.S. U.S. Retail (C$ except
Slide 5: TD Strategy
TD Strategy To be 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 convenience Strong organic growth
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$1.5 trillion Nominal GDP of US$18.6 trillion Population of 36 million Population of 322 million Canadian Banking System U.S. Banking System One of the sou
Slide 7: TD in North America
TD in North America North Q1 2017 Canadian American C$ except otherwise noted Ranking3 Ranking4 Total assets $1,187B 1st 5th Total deposits $775B 1st 5th Market capitalization $125.1B 2nd 6th Reported net income (trailing four quarters) $9.2B 2nd 6th Adjusted net income1 (trailing four quarters) $9.
Slide 8: Composition of Earnings
Composition of Earnings 2016 Reported Earnings Mix1 Three key business lines Canadian Retail robust retail banking platform in Canada with proven performance U.S. Retail top 10 bank4 in U.S. Retail2 Canadian 26% the U.S. with significant Retail organic growth opportunities 61% Wholesale Bankin
Slide 9: Strategic Evolution of TD
Strategic Evolution of TD Increasing Retail Focus Acquired Acquired Target credit TD card portfolio & Became primary Announced Chrysler Completed strategic Acquired Waterhouse Acquired Commerce Acquired Epoch; and issuer of Aeroplan agreement to Privatized Financial credit card 51% of USA / Commerce
Slide 10: Risk Management Framework
Risk Management Framework Our Risk Appetite We take risks required to build our business, but only if those risks: Fit our business strategy and can be understood and managed Do not expose the enterprise to any significant single loss events; we don’t “bet the bank” on any single acquisition, bu
Slide 11: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 12: Stable Earnings Growth
Stable Earnings Growth Reported Earnings1,2 (C$MM) $8,936 $8,024 Wholesale Banking $7,883 U.S. Retail $6,640 Canadian Retail $6,460 2012 2013 2014 2015 2016 Targeting 7-10% adjusted EPS growth4 over the medium term 1. For the purpose of calculating contribution by each business segment, earnings fro
Slide 13: Solid Total Shareholder Returns
Solid Total Shareholder Returns Total Shareholder Return1 TD Compounded Annual Growth Rates (CAGR) Canadian peer average2 North American peer average3 37.3% 34.6% 31.7% 16.0%14.9% 15.9%14.7%17.1% 13.6% 10.8% 8.2% 3.6% 1 Year 3 Years 5 Years 10 Years Delivering top tier long-term shareholder returns
Slide 14: Strong, Consistent Dividend History
Strong, Consistent Dividend History Dividends Per Share (C$) $2.16 Q1/17: Announced $0.05 dividend increase1 Dividend yield: 3.4%2 Q3/12: $0.22 Increased target payout range to 40%-50%3 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Divi
Slide 15: Q1 2017 Highlights
Q1 2017 Highlights Financial Highlights $MM Total Bank Reported Results (YoY) Reported Q1/17 Q4/16 Q1/16 Revenue 9,120 8,745 8,610 EPS up 13% PCL 633 548 642 Adjusted EPS up 13%1 Expenses 4,897 4,848 4,653 Net Income 2,533 2,303 2,223 Revenue up 6% Adjusted revenue excluding M&A and FX up 7%2 Di
Slide 16: Q1 2017 Segment Results Highlights
Q1 2017 Segment Results Highlights Net income of $1.6 billion, up 4% YoY, revenue growth and lower insurance claims, partially offset by higher non-interest expenses and PCL Canadian PCL up 2% QoQ Expenses up 7% YoY primarily reflecting higher investment in strategic initiatives, Retail includ
Slide 17: Strong Credit Quality
Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 61 60 63 58 58 57 56 50 50 43 39 41 42 37 38 34 34 26 31 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1/17 IFRS Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Average Net Loans and Accept
Slide 18: Oil and Gas Exposure
Oil and Gas Exposure Corporate and Commercial Outstandings Highlights by Sector ($B): Corporate and Commercial Oil and Gas portfolio quality is returning to normalized levels due to stronger commodity prices, improved capital markets, and borrower actions $2.7 including recapitalizations and asset
Slide 19: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 20: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt6 Sub-Debt 1% Personal Non- Trading Covered Term Deposits Deposits5 Bonds 40% 9% 27% Wholesale Senior Personal Term Term Debt Assets Mortgage Unsecured Deposits 11% Securitization MTN Securitized 5% 15% 52% 21% Other Deposits3 25%
Slide 21: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q4/16 Q1/17 Canadian Retail Portfolio $ 372.2 $ 373.0 Personal $ 309.1 $ 309.0 Residential Mortgages 189.0 188.1 Home Equity Lines of Credit (HELOC) 65.0 65.9 Indirect Auto 20.6 20.5 Unsecured Lines of Credit 9.5 9.6 Credit
Slide 22: Capital & Liquidity
Capital & Liquidity Common Equity Tier 11 Highlights Common Equity Tier 1 ratio of 10.9% Q4 2016 CET1 Ratio 10.4% Leverage ratio of 4.0% Internal capital generation 36 bps Actuarial gain on employee pension plans 11 bps Liquidity coverage ratio of 124% RWA increase and other (3 bps) Tier 1 a
Slide 23: TD Credit Ratings
TD Credit Ratings Issuer Ratings1 Accolades Moody's S&P DBRS “Safest Bank in North America & One of the World’s 50 Safest Banks” Ratings Aa1 AA- AA – Global Finance Magazine “Best Bank in Canada” Outlook Negative Stable Negative – Euromoney Magazine Ratings vs. Peer Group S&P Long-Term Debt Rati
Slide 24: TD Bank Group – Key Themes
TD Bank Group – Key Themes 5th largest bank 1 Top 10 North American Bank by Total Assets1 6th largest bank by Market Cap1 Delivering top tier long 2 Proven Performance term shareholder returns2 Highly rated 3 Strong Balance Sheet and Capital Position by major credit rating agencies Targeting 7-10% 4
Slide 25: Canadian Retail
Canadian Retail Consistent Strategy Reported Net Income (C$MM) $5,938 $5,988 How we compete $5,234 $4,463 $4,569 Legendary customer service and convenience Relentless commitment to operational excellence The power of One TD $4,567 $4,681 $5,490 $5,938 $5,988 Adjusted1 Winning culture and tea
Slide 26: Canadian Retail
Canadian Retail Personal Banking #1 or #2 market share in most retail products1 On average 45% longer branch hours than peers2 with 431 branches offering Sunday banking Mobile banking leadership in Canada with the highest number of mobile unique visitors accessing financial services3 Business
Slide 27: U.S. Retail
U.S. Retail Reported Net Income Consistent Strategy (US$MM) $2,234 How we compete $1,938 $2,007 $1,715 Legendary service and convenience $1,318 Grow and deepen customer relationships Differentiated brand as the “human” bank $2,053 $2,234 Adjusted1 Productivity initiatives that enhance $1,611
Slide 28: U.S. Retail
U.S. Retail Personal & Commercial Banking Top 10 bank1 with ~9MM customers, operating retail stores in 15 states and the District of Columbia Open longer than the competition, including Sunday banking in most markets #3 market share in NYC2 and targeting top 5 market share in all of our major
Slide 29: Wholesale Banking
Wholesale Banking Consistent Strategy Net Income (C$MM) $920 How we compete $880 $813 $873 Canada $650 Be a top-ranked integrated investment dealer Fully aligned with TD Bank Group partners Provide superior advice and execution U.S. Growing our US$ product suite across Corporate, 2012 2013 2
Slide 30: Wholesale Banking
Wholesale Banking Focus on client-driven franchise businesses Diversified business mix with a North American focus Presence in key global financial centres Extend our client-focused franchise business through superior advice and execution A North American dealer aligned with our TD partners
Slide 31: Connected Comfort and Convenience
Connected Comfort and Convenience Digital Enhancements Consistent Strategy How we compete Connected experiences enable seamless interactions between TD app for eligible iOS and Android devices now TD ASAP1 capability provides a seamless, customers and the entire allows customers to view TD credit
Slide 32: Corporate & Social Responsibility
Corporate & Social Responsibility TD Friends of the Environment Foundation celebrates 25 years with over C$76 million in funds disbursed in support of more than 24,000 local Highlights environmental projects More than 235,000 trees planted through TD Tree Days, TD’s flagship Ranked 58th on the
Slide 33: Shared Commitments of TD's Framework
Shared Commitments of TD's Framework Our purpose Our vision To enrich the lives of our customers, Be the better bank communities and colleagues Our shared commitments Think like a Act like an owner Execute with Innovate Develop our customer Lead with integrity to speed and impact with colleagues Pro
Slide 34: TD Model Has Proven Its Resilience
TD Model Has Proven Its Resilience Simple Strategy Vision: Consistent Focus To be The Better Bank Lead with service and Headwinds Best Bank in Canada1 convenience Slowing growth in Leverage TD brand Canada Top 10 bank2 in the U.S. across all segments Evolving regulatory One of Canada’s mos
Slide 35: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Best Investor Relations by Sector: Financial Services Website: Best Corporate Governance www.td.com/investor 34
Slide 36: TD Bank Group Investor Presentation
TD Bank Group Investor Presentation Q1 2017