Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Debt Investor Presentation (2018)
46 slides from Toronto-dominion Bank's debt investor presentation, 2018
Slide 1: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income Investor Presentation Q1 2018
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: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 3
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 U.S. Retail 2,373 Personal banking, credit c
Slide 5: TD Framework
TD Framework Our purpose Our vision To enrich the lives of our Be the better bank customers, 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 Provide legendary drive bus
Slide 6: TD Strategy
TD Strategy We will be the premier Canadian retail bank, a peer-leading U.S. retail bank, and a leading Wholesale business Customer- centric experiences One TD Operational excellence Unique and inclusive Strong employee risk culture culture Customer-centric Operational Unique and Inclusive Strong Ri
Slide 7: Competing in Attractive Markets
Competing in Attractive Markets Country Statistics Country Statistics 10th largest economy World’s largest economy Nominal GDP of C$2.2 trillion Nominal GDP of US$19.5 trillion Population of 37 million Population of 323 million Canadian Banking System U.S. Banking System One of the sou
Slide 8: Top North American Bank
Top 10 North American Bank North Q1 2018 Canadian American C$ except otherwise noted Ranking4 Ranking5 Total assets $1,261B 2nd 6th Total deposits $813B 1st 5th Market capitalization $137.9B 2nd 6th Reported net income (trailing four quarters) $10.3B 2nd 5th Adjusted net income1 (trailing four quart
Slide 9: Diversified Business Mix
Diversified Business Mix Fiscal 2017 Reported Earnings Mix1 Three key business lines Canadian Retail robust retail banking platform in Canada with proven performance Canadian Retail U.S. Retail top 10 bank4 in 60% U.S. Retail2 26% the U.S. with significant organic growth opportunities Wholesal
Slide 10: Growing platform / North American scale
Growing platform / North American scale… Increasing Retail Focus Acquired Acquired Target TD Became primary Chrysler credit card portfolio Completed strategic Acquired Waterhouse Acquired Commerce Acquired issuer of Aeroplan Completed Completed Privatized Financial & Epoch; and credit card 51% of US
Slide 11: Connected Experiences
Connected Experiences Consistent Strategy Q1 2018 Highlights How we compete 12 MILLION 4.2 MILLION 2.6 MILLION Enabling seamless ACTIVE ONLINE & CANADIAN MOBILE U.S. MOBILE USERS interactions between MOBILE CUSTOMERS USERS customers and the entire organization Leveraging industry leading Experie
Slide 12: Corporate Responsibility Performance
Corporate Responsibility Performance Highlights TD's low carbon commitment will target $100B by 2030 to support the transition to a low-carbon economy, Low Carbon Early UN PRI Top Green Bond drive innovation, accelerate renewable energy Commitment signatory underwriter targets $100B by and UNEP FI
Slide 13: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 13
Slide 14: Consistent Earnings Growth
Consistent Earnings Growth Targeting 7-10% adjusted EPS growth over the medium term4 Reported Earnings1,2 (C$MM) $10,517 $8,936 Wholesale Banking $8,024 U.S. Retail $7,883 Canadian Retail $6,640 $6,460 2012 2013 2014 2015 2016 2017 1. For the purpose of calculating contribution by each business segm
Slide 15: Q1 2018 Financial Highlights
Q1 2018 Financial Highlights Total Bank Reported Results (YoY) Financial Highlights $MM Reported Q1/18 Q4/17 Q1/17 EPS down 6% Revenue 9,360 9,270 9,120 PCL 693 578 633 Adjusted EPS up 17%1 Expenses 4,846 4,828 4,897 Revenue up 3% (up 4% adjusted)1 Net Income 2,353 2,712 2,533 Net interest incom
Slide 16: High Quality Loan Portfolio
High Quality Loan Portfolio Balances (C$B unless otherwise noted) Q4/17 Q1/18 Canadian Retail Portfolio $ 391.2 $395.6 Personal $ 323.1 $325.3 Residential Mortgages 190.5 190.6 Home Equity Lines of Credit (HELOC) 75.0 76.8 Indirect Auto 22.3 22.5 Unsecured Lines of Credit 9.8 9.9 Credit Cards 18.1 1
Slide 17: Strong Credit Quality
Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 63 61 60 58 58 56 50 49 49 50 43 41 39 38 39 37 37 34 34 31 2007 2008 2009 1 2010 2011 2012 2013 2014 2015 2016 2017 Q1/18 2 IFRS IFRS 9 Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Average Net Loans
Slide 18: Canadian Personal Banking
Canadian Personal Banking Q1/18 Highlights Gross GIL GIL / Canadian Personal Banking1 Credit quality remains strong Loans ($B) ($MM) Loans Residential Mortgages 191 274 0.14% in the Canadian personal Home Equity Lines of Credit (HELOC) 77 117 0.15% portfolio Indirect Auto 22 79 0.35% Credit Cards
Slide 19: Canadian Real Estate Secured Lending Portfolio
Canadian Real Estate Secured Lending Portfolio Quarterly Portfolio Volumes $B Highlights $254 $256 $261 $265 $267 Canadian RESL credit quality remains strong 52% 53% 56% 58% 59% Gross impaired loan formations and gross Uninsured impaired loans reduced year-over-year Insured PCL remains stable in
Slide 20: Contents
Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 20
Slide 21: Strong Capital & Liquidity Positions
Strong Capital & Liquidity Positions Common Equity Tier 11 Highlights Common Equity Tier 1 ratio of 10.6% Q4 2017 CET1 Ratio 10.7% Internal capital generation 38 Leverage ratio of 4% Impact of U.S. tax reform (12) Organic RWA increase and other (7) Liquidity coverage ratio of 122% Regulatory f
Slide 22: Industry-Leading Credit Ratings
Industry-Leading Credit Ratings Issuer Ratings1 Moody's S&P DBRS Ratings Aa2 AA- AA Outlook Negative Stable Stable Ratings vs. Peer Group S&P Long-Term Debt Rating Moody’s Long-Term Debt Rating 14- AA 18 Aa1 16 Aa2 12 A+ 14 Aa3 10 A 12 A1 8 A- 10 A2 8 A3 6 BBB+ 6 Baa1 BBB4 4 Baa2 2 2 3 2 2 3 TD Cana
Slide 23: Leading Non-Common Equity Capital Ratings
Leading Non-Common Equity Capital Ratings Industry leading ratings1 for Additional Tier 1 and Tier 2 capital instruments Ratings vs. Peers NVCC Tier 2 Subordinated Debt Ratings Additional Tier 1 NVCC Preferred Share Ratings S&P Moody’s S&P Moody’s 12 A- 12 A2 12 A- 12 A2 10 A- 10 A3 10 A- 10 A3 8 BB
Slide 24: Robust Liquidity Management
Robust Liquidity Management Liquidity Risk Management Framework High Quality Liquid Assets (HQLA) TD holds a variety of liquid assets Target a 90-day survival horizon under a combined commensurate with liquidity needs in the Bank-specific and market-wide stress scenario, and a organization. mini
Slide 25: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition1 Large base of stable retail and commercial deposits Maturity Profile6,7 (To first par redemption date) (C$B) 50 Personal and commercial deposits are TD's Issuance Maturity primary sources of funds 40 Customer service business model delivers 30 stable base of “
Slide 26: Wholesale Term Debt Composition
Wholesale Term Debt Composition1 Funding Strategy Wholesale term funding through diversified sources across domestic and international markets Well-established C$40 billion Legislative Covered Bond Program is an important pillar in global funding strategy Programmatic issuance for the establishe
Slide 27: Deposit Overview
Deposit Overview Domestic Leader in Deposits Large base of personal and business deposits that make up 68% of the Bank's total funding TD Canada Trust (TDCT) remains a leader in service and convenience, leveraging the strength of our customer service business model to drive growth TDCT is ranked
Slide 28: Bail-in Update
Bail-in Update Regulation Status Bail-in will come into force 180 days following publication of the final regulations which is expected in the coming months. November 1, 2021. Under timelines proposed by OSFI, all Canadian domestic systemically important banks (D-SIBs) will have to comply with t
Slide 29: Key Takeaways
Key Takeaways Strong capital base Industry leading credit ratings Proactive & disciplined risk management Attractive balance sheet composition Diverse funding strategy 29
Slide 30: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 30
Slide 31: Economic Outlook
Economic Outlook Global: Inflation Shifting Up a Gear Stronger activity in the U.S. and Europe likely to push global growth to just shy of 4% over the next two years. Above-trend growth and tightening labor markets point to building inflationary pressures. G7 central banks are looking for signs
Slide 32: Interest Rate Outlook
Interest Rate Outlook Interest Rates, Canada and U.S. The Federal Reserve is on track to (%) raise its benchmark rate by 25 bps 7 Forecast on March 21st, and is expected to U.S. Federal 6 Funds Rate raise five more times before the end of next year, bringing the federal 5 Bank of funds rate at 3.0
Slide 33: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 33
Slide 34: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,281 $1,257 Gross impaired loan formations $1,154 $1,189 stable quarter-over-quarter and $1,100 year-over-year $650 / 35 bps $718 / 38 bps $620 / 33 bps $669 / 36 bps $601 / 32 bps $631 / 17 bps $534 / 14 bps
Slide 35: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights Gross impaired loans stable $3,399 $3,290 quarter-over-quarter and down 8 $73 / 18 bps $2,985 $3,085 $3,048 $59 / 13 bps basis points year-over-year $37 / 8 bps $31 / 6 bps $37 / 8 bps U.S. Retail gross impaired loans decre
Slide 36: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1,2: $MM and Ratios3 Highlights $698 $635 $602 PCL increased $96MM quarter- over-quarter driven by $1 / NM The U.S. credit card and $518 $512 Indirect auto portfolios due $439 / 93 bps largely to seasonal trends $392 / 84 bps The expected credi
Slide 37: Provision for Credit Losses By Business Segment
Provision for Credit Losses (PCL)1,2,3 By Business Segment IAS 39 IFRS 9 (C$MM unless otherwise noted) Q1/17 Q4/17 Q1/18 Highlights Total Bank4 $ 635 $ 602 $ 698 Impaired PCL stable quarter- Impaired $ 505 $ 556 $ 566 over-quarter Performing 130 46 132 Canadian Retail Portfolio $ 268 $ 243 $ 270
Slide 38: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q1/18 Canadian Commercial and Gross Highlights GIL GIL/ Loans/BAs Wholesale Banking1 ($B) ($MM) Loans Canadian commercial and Commercial Banking2 70 183 0.26% Wholesale Banking portfolios Wholesale 48 31 0.06% continue to perform well Total Canadian Commer
Slide 39: U.S. Personal Banking – U.S. Dollars
U.S. Personal Banking – U.S. Dollars Q1/18 U.S. Personal Banking1 Gross Loans GIL GIL / Highlights ($B) ($MM) Loans Residential Mortgages 22 363 1.63% Continued good asset quality Home Equity Lines of Credit (HELOC)2 10 663 6.89% in U.S. personal Indirect Auto 23 211 0.92% US$52MM quarter-over-
Slide 40: U.S. Commercial Banking – U.S. Dollars
U.S. Commercial Banking – U.S. Dollars Q1/18 Highlights Gross Loans / GIL GIL/ U.S. Commercial Banking1 BAs ($B) ($MM) Loans Sustained good credit Commercial Real Estate (CRE) 23 95 0.42% quality in U.S. commercial Non-residential Real Estate 17 67 0.40% banking Residential Real Estate 6 28 0.47%
Slide 41: Contents
Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 41
Slide 42: Canadian Registered Covered Bond Program
Canadian Registered Covered Bond Program Key Highlights ■ Canadian residential real estate property with no more than 4 residential units Covered Bond Collateral ■ Uninsured conventional first lien assets with original loan to value ratio that is 80% or less Housing Market Risks ■ Latest property va
Slide 43: TD Global Legislative Covered Bond Program
TD Global Legislative Covered Bond Program TD Covered Bond Programme Highlights Cover Pool as at January 31, 2018 High quality, conventional first lien Canadian Residential TD has a C$40B legislative covered bond program mortgages originated by TD Covered bonds issuance for Canadian issuers go
Slide 44: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Website: www.td.com/investor
Slide 45: April 18 – 19, 2018
Presenting the 27th European Covered Bond Council (ECBC) Plenary and Euromoney Covered Bond Conference In Vancouver, Canada April 18 – 19, 2018 Canada is the first non-European nation to host the ECBC Plenary. Please join us for this inaugural event. This event is kindly supported by the Canadian Co
Slide 46: TD Bank Group Fixed Income Investor Presentation
TD Bank Group Fixed Income Investor Presentation Q1 2018