Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — TD Bank Group — Debt Investor Presentation (September 2011)
37 slides from Toronto-Dominion Bank's debt investor presentation, September 2011
Slide 1: Fixed Income Presentation
Fixed Income Presentation September 2011
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, 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 communications. In addition, represent
Slide 3: Contents
Contents 1. TD Bank Group at a glance 2. Canadian Economy 3. Overview of TD Bank Group 4. Treasury & Balance Sheet Management 5. Appendix 3
Slide 4: TD Bank Group's North American Footprint
TD Bank Group’s North American Footprint In Canada Over 1,100 Branches Coast to Coast In the U.S. Well over 1,200 Stores in 15 States and D.C. on the Eastern Seaboard 4
Slide 5: Key Businesses: At a Glance
Key Businesses: At a Glance Adjusted Earnings1 YTD Q3 2011 ‐ ~C$4.6B Wealth Management4 Segments Business Canadian P&C2 U.S. P&C2 Wholesale Global Wealth TD Ameritrade3 56% 9% 3% 21% 11% Earnings Canadian Retail U.S. Retail Wholesale Mix 65% 24% 11% Brands Over 80% of earnings from Retail5 operation
Slide 6: Contents
Contents 1. TD Bank Group at a glance 2. Canadian Economy 3. Overview of TD Bank Group 4. Treasury & Balance Sheet Management 5. Appendix 6
Slide 7: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the 10 most competitive economies1 Soundest banking system in the world1 Canadian economy outperformed G7 over last decade Strong Canadian housing market Home values have held up well More prudent regulatory environment Unemployment rate remained
Slide 8: 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 9: 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) Updated regulations on default insured mortgages Borrowers often qualifie
Slide 10: Canadian Economy Outlook
Canadian Economy Outlook The global growth outlook has deteriorated in recent months Canadian economic growth to limp along in the second half of the year Global risks and weaker growth should keep interest rates lower for longer Canada is relatively better positioned in the face of near‐ter
Slide 11: Contents
Contents 1. TD Bank Group at a glance 2. Canadian Economy 3. Overview of TD Bank Group 4. Treasury & Balance Sheet Management 5. Appendix 11
Slide 12: 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’s • Strong employment brand Retail Retail Earn
Slide 13: TD Bank Group: A Top Bank in North America
TD Bank Group A Top 10 Bank in North America Compared to: Q3 20111 Canadian North American (In $U.S. Billions)2 Peers8 Peers9 Total Assets $696B 2nd 6th Total Deposits $480B 1st 5th Market Cap3 $70.3B 2nd 6th Adj. Net Income4 (Trailing 4 Quarters) $5.9B 2nd 6th Rpt. Net Income4 (Trailing 4 Quarters)
Slide 14: Strong Focus on Risk-Return
Strong Focus on Risk‐Return Return on Risk‐Weighted Assets1 YTD 2011 2.97% 2.21% 1.66% 2 4 TD Canadian Peers 3 U.S. Peers Better return for risk undertaken 1. Adjusted on a comparable basis to exclude identified non‐underlying items. Return on risk‐weighted assets is adjusted net income available to
Slide 15: Financial Results
Financial Results (C$MM) Q3 2011 QoQ YoY F2010 YoY Revenue $5,347 4% 13% $19,565 10% Provision for Credit Losses $374 9% 10% $1,625 ‐34% Expenses $3,207 <1% 8% $12,163 <1% Adjusted Net Income1 $1,578 9% 21% $5,228 11% Reported Net Income $1,450 9% 23% $4,644 49% Adjusted EPS (diluted)1 $1.72 8% 20%
Slide 16: Managing through Current Environment
TD Bank Group: Managing through Current Environment Crossed the recession valley Carefully managed capital, funding, liquidity and risk ; Kept our business model intact Preserved our performance, convenience and service culture ; Emerged with momentum on our side Increased market share, extend
Slide 17: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution Adjusted Earnings1 $5,228 R (C$MM) ea r CAG s: 13% 5‐y arning % $4,716 E 7 d ju sted ed EPS: $4,617 A st Adju $4,189 $3,813 $3,376 $2,861 Wholesale Banking U.S. P&C Wealth Management Canadian P&C 2005 2006 2007 2008 2009 2010 Q3 2011 YTD Retail a
Slide 18: Key Takeaways
Key Takeaways Building Building the the Better Better Bank Bank North North America America Retail Retail Earnings Earnings Focus Focus Franchise Franchise Businesses Businesses Risk Risk Discipline Discipline 18
Slide 19: Contents
Contents 1. TD Bank Group at a glance 2. Canadian Economy 3. Overview of TD Bank Group 4. Treasury & Balance Sheet Management 5. Appendix 19
Slide 20: Capital Ratios
Capital Ratios 16.3% 14.9% 15.5% Highlights 13.0% Strong capital position 12.0% Continued organic growth in Minimum Total Capital Ratio capital Requirement (10%) ACM currently at 17.4x 12.2% 12.9% 10.3% 9.8% 11.3% Well‐positioned for evolving Minimum Tier 1 Capital Ratio regulatory environme
Slide 21: Basel III Capital Update
Basel III Capital Update1 Key Areas of Focus TD Positioning Higher Risk Weighted Assets (RWA) ‐ $45‐55 billion (lower than previous guidance) Basel III changes expected Higher common equity deductions – estimated $5‐6 billion (no change) Forecast for fiscal Q1’13 Basel III Common Equity Tier 1 R
Slide 22: TD Credit Ratings
TD Credit Ratings Issuer Ratings¹ Moody's S&P Fitch DBRS Aaa AA‐ AA‐ AA Strong credit ratings 22 1. As at July 31, 2011. Moody's: Issuer Rating, S&P: LT Foreign Issuer Credit, Fitch: LT Issuer Default Rating, DBRS: Senior Unsecured Debt.
Slide 23: Risk Management
Risk Management Our Risk Appetite 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 Do not risk harming the TD brand Integrated risk monitoring
Slide 24: Robust Liquidity Management
Robust Liquidity Management Global liquidity risk management framework No reliance on unsecured wholesale funding for liquidity Hold sufficient liquid assets to meet a “Severe Combined Stress” scenario for a minimum 90‐day period Each liquidity management unit has its own policy and continge
Slide 25: Attractive Balance Sheet Composition
Attractive Balance Sheet Composition Funding Mix1 Earning Asset Mix3 Deposits with Banks Common Equity 6% 4% Commercial Deposits Credit 62% Securitization Cards 19% Personal 8% Residential 2% Non‐Common Capital Loans Personal Term Mortgages 1% 19% Deposits 15% Medium Term Notes & 11% Subordinated De
Slide 26: Funding Strategy
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 Bond (CM
Slide 27: 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 27
Slide 28: Contents
Contents 1. TD Bank Group at a glance 2. Canadian Economy 3. Overview of TD Bank Group 4. Treasury & Balance Sheet Management 5. Appendix 28
Slide 29: Canadian Economy: Near-Term Outlook Somewhat Weaker
Canadian Economy Near‐Term Outlook Somewhat Weaker Canadian Real GDP Annualized q/q % change 8 Forecast* 6 Canadian economy to experience 4 modest growth 2 0 -2 -4 -6 -8 2009 2010 2011 2012 2013 *Forecast by TD Economics as at August 2011 Source: Statistics Canada, TD Economics Consumer & Business
Slide 30: Canadian Economy: Medium-Term Headwinds
Canadian Economy Medium‐Term Headwinds Household % Debt to Personal Disposable Income 180 Low interest rates to support 160 consumer spending and housing in 140 United States 2012, but high household debt a constraint 120 100 Canada 80 60 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Sour
Slide 31: Canadian Economy: Longer-Term Support
Canadian Economy Longer‐Term Support TD Commodity Price Index Index, 1997=100 400 Firm commodity prices to 350 Forecast* support employment and 300 Overall investment in the resource 250 sector 200 150 100 TDCI Ex-Energy 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 So
Slide 32: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q2/11 Q3/11 Canadian Personal & Commercial Portfolio $ 191.8 $ 199.6 Personal1 $ 157.6 $ 164.0 Residential Mortgages 65.4 70.6 Home Equity Lines of Credit (HELOC) 59.2 59.4 Indirect Auto2 12.7 ~2/3 insured 13.4 Unsecured Lin
Slide 33: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $918 GIL formations increased $119MM $835 (17%) QoQ, but decreased $21MM $814 $776 (3%) YoY $695 Canadian P&C formations $452 / 79 bps remained stable at 24 bps $386 / 69 bps $347 / 53 bps $317 / 54 bps $247
Slide 34: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights $2,253 $2,258 Gross Impaired Loans remained $2,177 $2,130 $2,132 stable while the portfolio $84 / 46 bps $69 / 39 bps $4 / NM $91 / 51 bps $65 / 38 bps $47/ 23 bps continued to grow Decline of 4 bps over Q2/11 and 11 bps ov
Slide 35: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights Canadian P&C PCL rates remained flat over Q2/11 and $340 $390 down 8 bps over Q3/10 $1 / NM $16 / 35 bps $348 US P&C credit losses declined $303 $318 $18MM (US$21MM) or 19 bps $144 / 104 bps $149 / 105 bps over Q2/11
Slide 36: Investor Relations Contacts
Investor Relations Contacts Phone: 416‐308‐9030 or 1‐866‐486‐4826 Email: tdir@td.com Best Investment Community Meetings Website: Best Investor Relations by a CFO: www.td.com/investor Large Cap Best Investor Relations by a CEO: Large Cap Grand Prix for Best Overall Investor Relations: Large Cap Best
Slide 37: Fixed Income Presentation
Fixed Income Presentation September 2011
TD Bank Group — Debt Investor Presentation (September 2011) on 6ix