Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — The Toronto-Dominion Bank — Debt Investor Presentation (December 2012)
42 slides from Toronto-dominion Bank's debt investor presentation, December 2012
Slide 1: Fixed Income Presentation
Fixed Income Presentation December 2012
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, The Toronto-Dominion Bank (the “Bank”) makes written and/or oral forward-looking statements, including in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communic
Slide 3: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 3
Slide 4: Snapshot of TD
Snapshot of TD Our Businesses Canadian Personal & Commercial Wealth & Insurance U.S. Personal & Commercial Wholesale Banking Wholesale Our Results 12% Adjusted Earnings1 2012 of C$7.1B, up 10% YoY U.S. P&C 4 Canadian 20% P&C 4 Adjusted Diluted EPS1 2012 of $7.42, 48% up 8% YoY 2,3 TD AMT
Slide 5: Key Takeaways
Key Takeaways Simple Strategy, Consistent Focus Building Building the the Better Better Bank Bank North North America America • Top 10 Bank in North America1 • Leverage platform and brand for growth • One of the few banks in the world rated Aaa by Moody’s2 • Strong employment brand Retail Retail Ear
Slide 6: TD Bank Group: A Top Bank in North America
TD Bank Group A Top 10 Bank in North America Compared to: Q4 20121 Canadian North American (In CAD Billions) Peers7 Peers2,8 Total Assets $811B 2nd 6th Total Deposits $488B 2nd 6th Market Cap (as of October 31, 2012) $74B 2nd 6th Adj. Net Income3 (Trailing 4 Quarters) $7.1B 2nd 6th Rpt. Net Income (
Slide 7: Key Businesses at a Glance
Key Businesses At a Glance Adj. Earnings Canadian Retail (65%) U.S. Retail (23%) Wholesale (12%) 2012 Mix1 Wealth and Insurance Segments Business Canadian P&C2 U.S. P&C2 Wholesale Wealth and Insurance TD Ameritrade3 3 Sub-Brands 2006-20124 2005-20125 2009-20116 Recognized leader in service and conve
Slide 8: Evolution of TD
Evolution of TD Building Franchise Businesses Risk >>> Increasing Retail focus >>> Risk Acquired TD Chrysler Announced Waterhouse Financial acquisition TD Bank Acquired Acquired USA/ Privatized Acquired Commerce Acquired and MBNA of Target and Canada Newcrest 51% of Ameritrade TD Commerce Bank River
Slide 9: Risk Management
Risk Management Our Risk Appetite Integrated risk monitoring and reporting To senior management and Board of Directors Regular review, evaluation and approval of risk framework Structured Risk Appetite governance, from the Business to the Board Executive Committees and Risk Committee of
Slide 10: Q4 2012 Highlights
Q4 2012 Highlights Key Themes Net Income $MM (Adjusted, where applicable)1 Solid adjusted1 EPS growth of 5% Q4/12 QoQ YoY YoY Retail2 $ 1,477 -8% 6% Wholesale 309 72% 10% Strong performances from most Corporate (29) -197% 93% segments Adjusted Net Income $ 1,757 -3% 6% Volume growth was good i
Slide 11: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1,2 48 Overall credit quality remains 46 46 strong 42 38 Key credit ratios increased in 40 Q4/12 due to one-time items in 35 36 37 Canadian and U.S. P&C PCL Ratio Ex MBNA Canada Residential Mortgage, U.S. Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Indir
Slide 12: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 12
Slide 13: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the world’s most competitive economies1 Soundest banking system in the world1 Stable Canadian housing market Home values have held up well More prudent regulatory environment Robust economic fundamentals relative to G-7 economies One of the stron
Slide 14: Solid Financial System in Canada
Solid Financial System in Canada Strong retail and commercial banks Conservative lending standards All major wholesale dealers owned by Canadian banks, with stable retail earnings base to absorb any wholesale write-offs Responsive government and central bank Proactive policies and programs
Slide 15: Well Developed Residential Mortgage Market in Canada
Well Developed Residential Mortgage Market in Canada Canadian chartered banks account for over 70% of the total mortgage market, including securitizations1 Conservative lending practices Strong competition among lenders Favorable legal environment supporting foreclosure and other types of le
Slide 16: Canadian Mortgage Market is Different from the U.S.
Canadian Mortgage Market is Different from the U.S. Canada U.S. Conservative product offerings: fixed or variable Outstanding mortgages include earlier exotic interest rate option products (interest only, options ARMs) Product Default insured mortgages use a 5-year fixed Borrowers often qual
Slide 17: Canadian Housing Market
Canadian Housing Market Highlights The Canadian housing market continues to moderate Canadian RESL credit quality remains strong Topic TD Positioning as of Oct 31, 2012 Canadian RESL $218 billion portfolio (69% insured) Portfolio Average LTV of 51% $31 billion portfolio (74% insured) Condo
Slide 18: North American Economic Outlook
North American Economic Outlook Modest growth in store for North American economy North American economy to expand at a modest pace on U.S. fiscal consolidation and moderating global economic growth Canadian economy to be supported by better U.S. growth, with modest support from domestic deman
Slide 19: Contents
Contents 1. TD Bank Group 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 19
Slide 20: Capital
Capital Highlights Tier 1 Capital Ratio1,2 13.0% 12.6% Tier 1 capital ratio improved QoQ 12.0% 12.2% 11.6% due to strong organic capital growth Remain well-positioned for evolving regulatory environment Pro forma Basel III ratio of 8.2% Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 at Oct 31, 2012 Risk Weight
Slide 21: TD Credit Ratings
TD Credit Ratings Issuer Ratings1 Moody's S&P Fitch DBRS Ratings Aaa AA- AA- AA Outlook Negative Negative Stable Stable Strong credit ratings 21 1. See footnote #2 on slide #5.
Slide 22: Robust Liquidity Management
Robust Liquidity Management Treasury paradigm Contribute to stable and growing revenues “Treasury does not have the authority not to hedge” No black boxes Match terms of assets and liabilities Do not engage in liquidity carry trade Match underlying debt funding maturities to term of as
Slide 23: Term Funding Strategy
Term Funding Strategy Large base of stable retail and commercial deposits Customer service business model delivers growing base of “sticky” deposits Reserve assets held for deposit balance that is not considered permanent Large user of securitization programs, primarily via Canada Mortgage B
Slide 24: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition Funding Mix1 Wholesale Term Debt2 P&C Deposits 64% Commercial Deposits External Personal 20% MBS Sales Term Deposits Short Term 61% 10% Funding & Other 17% Personal Non‐ Term Deposits Wholesale Term Covered Bonds Debt Senior 14% 34% 11% Debt 25% Sub‐ Debt Trading
Slide 25: Debt Maturity Profile
Debt Maturity Profile1 F2013 – F2018 Bullet Debt Maturities (C$ Billions) 2 $20 $18 $17 $15 $13 $10 $10 $8 $5 $3 $0 2013 2014 2015 2016 2017 2018 MBS Covered Bond Senior Debt Subordinated Debt ABS Manageable debt maturities 1. For wholesale term debt that has bullet maturities 25 2. As of October 31
Slide 26: Key Takeaways
Key Takeaways Strong capital base – well positioned for Basel III Industry leading credit ratings Proactive & disciplined risk management Attractive balance sheet composition Diverse funding strategy to support growth plans 26
Slide 27: Contents
Contents 1. TD Bank Group at a glance 2. Canadian Economy 3. Treasury & Balance Sheet Management 4. Appendix 27
Slide 28: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution Adjusted Earnings1,2,3 (C$MM) 4 $7,075 GR 1% e ar CAngs: 1 5-y Earni S: 5% $6,432 d P us t e dE Adj djuste A $5,228 $4,716 $4,189 $3,813 Wholesale Banking U.S. P&C Wealth & Insurance Canadian P&C 2007 2008 2009 2010 2011 2012 Retail Earnings 80%
Slide 29: Global Economic Outlook
Global Economic Outlook World Real GDP Growth1 Y/Y % Change 6 Global economic growth will Forecast1 moderately increase next year 4 2 0 -2 Fiscal consolidation in the U.S. 2000 2002 2004 2006 2008 2010 2012 2014 and weak global growth means North American economy to North American Real GDP Growt
Slide 30: Canadian Economic Outlook
Canadian Economic Outlook Canadian Export and U.S. Activity Index1 Y/Y % Change Forecast1 y g 25 20 15 10 Canadian economy still tightly 5 linked to U.S. fortunes, and 0 -5 better U.S. growth in medium -10 term to help Canada’s -15 U.S. Activity Index -20 Canadian Real Exports U.S. Activity Index
Slide 31: U.S. Economic Outlook
U.S. Economic Outlook Residential Real Estate Contribution to real GDP growth1 (Y/Y % Change) 1.5 Forecast1 1.0 The depressed housing market 0.5 0.0 has seriously hampered the -0.5 U.S. recovery thus far, but -1.0 signs point to housing making -1.5 a positive contribution to -2.0 2001 2002 2003 20
Slide 32: Interest Rate Outlook
Interest Rate Outlook Interest Rates, Canada and U.S.1 (%) 7 US Federal Forecast Funds Rate 6 Modest outlook and risks to the global economy mean North 5 American central banks are set to Bank of Canada Target Rate leave monetary policy at 4 exceptionally accommodative levels for a while 3 This
Slide 33: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/12 Q4/12 Canadian Personal & Commercial Portfolio $ 295.8 $ 299.8 Personal $ 255.0 $ 258.1 Residential Mortgages 150.9 154.3 Home Equity Lines of Credit (HELOC) 64.3 64.2 Indirect Auto 14.0 14.0 Unsecured Lines of Credit
Slide 34: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,218 GIL formations increased $12 / 6 bps $157MM and 4bps over Q3/12 $1,061 due to two one-time $949 $996 $981 $38 / 17 bps reclassifications of certain $6 / NM $4 / NM $395 / 46 bps $9 NM performing loans to
Slide 35: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Positive trend in Gross $2,493 $2,530 $2,518 Impaired Loans ratio, down $3 / NM $3 / NM $2,363 $2,367 $3 / NM 5bps since Q4/11 $45 / 21 bps $41 / 17 bps $3 / NM $3 / NM $76 / 39 bps $45 / 20 bps $79 / 34 bps Excluding a one
Slide 36: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights PCL increased $35MM and $489 2bps over Q3/12 driven by $433 $454 $4 / 7 bps two one-time reclassifications $401 $1 / NM $16 / 28 bps of certain performing loans to $350 $6 / 11 bps impaired status: $175 / 82 bps $1 / N
Slide 37: Canadian Personal Banking
Canadian Personal Banking Q4/12 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 154 0.31% 479 7 Continued strong credit Home Equity Lines of Credit 64 0.51% 327 12 performance (HELOC) Indirect Auto 14 0.26% 37 33 Excluding a one-time U
Slide 38: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q4/12 Gross Highlights Canadian Commercial and Loans/BAs GIL PCL1 Wholesale Banking ($B) ($MM) ($MM) The Canadian Commercial Commercial Banking2 42 150 22 and Wholesale Banking Wholesale 19 76 4 portfolio continues to Total Canadian Commercial and Wholesal
Slide 39: U.S. Personal Banking
U.S. Personal Banking Q4/12 Highlights Gross GIL/ GIL U.S. Personal Banking1 Loans Loans ($MM) PCL2 Credit quality remained stable ($B) ($MM) Residential Mortgages 17 1.16% 200 11 in the quarter Home Equity Lines of Credit 10 1.98% 200 36 Increased GIL and PCL in (HELOC)3 Indirect Auto 14 0.21%
Slide 40: U.S. Commercial Banking
U.S. Commercial Banking Q4/12 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 13 376 28 U.S. Commercial PCL Non-residential Real Estate 10 225 13 increased $27MM over Q3/12 Residential Real Estate 3 151 15 due to inherent lumpiness in Comm
Slide 41: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Best corporate governance Website: Best investment community meetings www.td.com/investor Best investor relations by a CFO: Large cap Best investor relations by a CEO: Large cap Grand prix for best overall investor
Slide 42: Fixed Income Presentation
Fixed Income Presentation December 2012
The Toronto-Dominion Bank — Debt Investor Presentation (December 2012) on 6ix