Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — TD Bank Group — Q3 2020 Earnings Presentation

59 slides from Toronto-dominion Bank's earnings presentation, 2020

  1. Slide 1: TD Bank Group Investor Presentation Q3 2020

    TD Bank Group Investor Presentation Q3 2020

  2. 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

  3. Slide 3: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q3 2020 Financial Results 2 For the three months ended July 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Balan

  4. Slide 4: Our Strategy

    Our Strategy We're in this together – Anchored by our proven business model and propelled by our forward-focused strategy, we are supporting our customers, communities and colleagues through these challenging times Purpose-Driven Forward Focused Proven Business Model Centre everything we do on our v

  5. Slide 5: TD Framework

    TD Framework Execute Own Innovate Think Customer Develop Our Vision Our Purpose Be the better bank To enrich the lives of our customers, communities TD Framework and colleagues Our Shared Commitments Think like a Act like an owner; Execute with Innovate with Develop our customer; lead with integrity

  6. Slide 6: 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 Q3 20201 Canadian U.S. (C$) Retail

  7. Slide 7: Competing in Attractive Markets

    Competing in Attractive Markets Country Statistics Country Statistics  10th largest economy  World’s largest economy  Real GDP of C$2.1 trillion  Real GDP of US$19 trillion  Population of 37 million  Population of 332 million Canadian Banking System U.S. Banking System  One of the soundest ba

  8. Slide 8: Top 10 North American Bank

    Top 10 North American Bank Canadian North American Q3 2020 (C$ except otherwise noted) TD Bank Group Ranking4 Ranking5 Total assets $1,697B 1st 5th Total deposits $1,091B 1st 5th Market capitalization $107.5B 2nd 6th Reported net income (trailing four quarters) $9.6B 2nd 6th Adjusted net income1 (tr

  9. Slide 9: Diversified Business Mix

    Diversified Business Mix Three Key Business Lines Fiscal 2019 Reported Earnings Mix1  Canadian Retail Robust retail banking platform in Canada with proven performance  U.S. Retail Top 10 bank4 in the U.S. with significant organic growth opportunities U.S. Retail2 31%  Wholesale Banking North Amer

  10. Slide 10: Growing Platform / North American Scale

    Growing Platform / North American Scale 2000-2004 – A Canadian Leader 2005-2010 – Building U.S. Platform 2011-2015 – Acquiring Assets New Capabilities and Partnerships • Acquisition of Canada Trust (2000) • TD Waterhouse USA / Ameritrade • Acquired Chrysler Financial auto • Acquired Epoch (2013) • T

  11. Slide 11: Connected Experiences

    Connected Experiences Consistent Strategy Q3 2020 Highlights How we compete:  Enabling seamless interactions 5.8M between customers and the 14.3M 3.6M Active Active Digital Active U.S. entire organization Canadian Mobile Users Customers1 Mobile Users  Leveraging industry leading Experience Design

  12. Slide 12: ESG Performance

    ESG Performance Highlights  TD's low carbon commitment targets $100B, in total, towards initiatives in low-carbon lending, financing, asset management and internal corporate programs by 2030. TD has contributed $43 billion since 2017. $43+BN TD has been carbon Insurance discount Towards low-carbon

  13. Slide 13: The Better Bank

    The Better Bank The Ready Commitment Targeting $1 billion in community giving by 2030, opening doors for a more inclusive and sustainable tomorrow Financial Security Vibrant Planet Connected Communities Better Health Q3 Highlight Introduced the TD Community Resilience Initiative, allocating $25MM to

  14. Slide 14: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q3 2020 Financial Results 2 For the three months ended July 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Balan

  15. Slide 15: Q3 2020 Highlights

    Q3 2020 Highlights Total Bank Reported Results (YoY) Financial Highlights ($MM) Reported Q3/20 Q2/20 Q3/19 EPS of $1.21 Revenue 10,665 10,528 10,499  Adjusted1 EPS of $1.25 PCL 2,188 3,218 655 Expenses 5,307 5,121 5,374 Revenue up 2% Net Income 2,248 1,515 3,248 Diluted EPS ($) 1.21 0.80 1.74 Expen

  16. Slide 16: Q3 2020 Segment Highlights

    Q3 2020 Segment Highlights Canadian Retail  Reported net income was $1,263 million and adjusted1 net income was $1,288 million, both down 33% YoY, reflecting higher PCL, lower revenue, and higher insurance claims.  Revenue was $6,026 million, down 2%, reflecting lower margins, partially offset by

  17. Slide 17: Strong Capital and Liquidity Positions

    Strong Capital and Liquidity Positions Common Equity Tier 1 ratio of 12.5% Common Equity Tier 1 Ratio Q2 2020 CET1 Ratio 11.0% Risk-Weighted Assets down 9% QoQ Decrease in RWA 82 OSFI transitional arrangements for ECL provisioning 26  Primarily reflecting lower Credit Risk RWA Elimination of the sh

  18. Slide 18: High Quality Loan Portfolio

    High Quality Loan Portfolio Balances ($B unless otherwise noted) Q2/20 Q3/20 Canadian Retail Portfolio 438.7 442.2 Personal 354.1 358.4 Residential Mortgages 202.9 206.1 Home Equity Lines of Credit (HELOC) 91.8 92.1 Indirect Auto 25.4 26.7 Credit Cards 16.0 15.9 Other Personal 18.0 17.6 Unsecured Li

  19. Slide 19: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $3,221  Provision for credit losses decreased across all segments $374 quarter-over-quarter $554 $2,189  Provisions for credit losses $123 remained elevated in the current quarter, primarily due to the $217 ongo

  20. Slide 20: Allowance for Credit Losses (ACL)

    Allowance for Credit Losses (ACL) COVID-19 Impacts ACL1: $B and Ratios2 124 bps 103 $9.2 Highlights 71 74 $7.9 69  Allowance for Credit Losses increased $1.3 billion quarter-over-quarter primarily United States 59% $5.0 $5.3 related to higher performing allowances $4.9 62% Canada due to the impact

  21. Slide 21: Loans Under Bank-Led Deferral Programs

    Loans Under Bank-Led Deferral Programs Highlights Deferrals by Product % of Portfolio1  Loan balances under Bank-led Q2 Total deferral programs decreased $14 Canada U.S. Bank Q3 billion from the second quarter. 14% 12%  Deferral requests have steadily decreased from their peak in April. 8% 8% 8% 7

  22. Slide 22: COVID-19 Industries of Focus

    COVID-19 Industries of Focus Total Gross Loans & Acceptances: $746B Highlights (Q3 2020)  Gross loans and acceptances to industries of heightened focus were 46.9% $55 billion. Residential Mortgages & HELOC – Representing ~7.4% of Total Bank gross loans and acceptances  Lending portfolio remains we

  23. Slide 23: Oil and Gas Exposure

    Oil and Gas Exposure Corporate and Commercial Gross Loans & BAs by Sector ($B) Highlights (Q3 2020) Investment Grade / Non-Investment Grade  Oil and Gas Producers and Services Producers 8% 92% $4.3 continued to represent less than 1% of total gross loans and acceptances. 1 Midstream 27% 73% $3.6 

  24. Slide 24: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q3 2020 Financial Results 2 For the three months ended July 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Balan

  25. Slide 25: Consistent Earnings Growth

    Consistent Earnings Growth Reported Earnings (C$MM)1 $11,686 $11,334 $10,517 $8,936 $8,024 Wholesale Banking $7,883 U.S. Retail Canadian Retail 2014 2015 2016 2017 2018 2019 1. For the purpose of calculating contribution by each business segment, earnings from the Corporate segment are excluded. 2.

  26. Slide 26: Strong, Consistent Dividend History

    Strong, Consistent Dividend History Dividends Per Share (C$) $3.012 Q3/20: Removed DRIP discount at 2% Dividend yield: 5.3%1 $0.46 Target payout range: 40%-50% 1. As of Q3/20. Dividend yield is calculated as the dividend per common share divided by the average daily closing stock price in the releva

  27. Slide 27: Solid Total Shareholder Returns

    Solid Total Shareholder Returns Canadian North American TD Bank Group Ranking1 Ranking2 One-Year -19.5% 4th 6th Three-Year 1.3% 2nd 4th Five-Year 6.4% 2nd 4th Ten-Year 8.9% 2nd 3rd Above North American peer2 average total shareholder return3 for 3, 5 and 10 year periods. 1. Canadian Peer Ranking bas

  28. Slide 28: Canadian Retail

    Canadian Retail Consistent Strategy Reported Net Income (C$MM) How we compete: $7,183 $6,863  Legendary personal connected $6,525 customer service $5,938 $5,988  Focus on underrepresented products and markets  The power of One TD  Winning culture and team $5,490 $5,938 $6,525 $7,183 $7,421 Highe

  29. Slide 29: Canadian Retail

    Canadian Retail Personal Banking Credit Cards  #1 or #2 market share in most retail products1  #1 card issuer in Canada measured by outstanding card loan  Adapting to the COVID-19 environment with continued health & safety balances1 measures for our colleagues and customers, enabling remote advic

  30. Slide 30: U.S. Retail

    U.S. Retail Consistent Strategy Reported Net Income (US$MM) How we compete: $3,750  Legendary service and convenience $3,253  Grow and deepen customer relationships $2,234 $2,536 $2,007  Differentiated brand as the “human” bank  Productivity initiatives that enhance both the employee and custome

  31. Slide 31: U.S. Retail

    U.S. Retail Personal & Commercial Banking Wealth  Top 10 bank1 with over 9MM customers, operating retail stores in 15 states  Building U.S. wealth capability in the high net worth and private banking and the District of Columbia space  Rated #1 SBA lender in our footprint for third year in a row

  32. Slide 32: Wholesale Banking

    Wholesale Banking Consistent Strategy Net Income (C$MM) How we compete: $1,054 $1,039  Continue to build an integrated North American dealer franchise $920 with global execution capabilities. $873 – In Canada, be the top-ranked investment dealer. – In the U.S., continue to grow client relationships

  33. Slide 33: Wholesale Banking

    Wholesale Banking Positioned for Growth  Lead mandates and awards highlighting TD Securities' objective to build an integrated North American dealer franchise with global execution capabilities are: – Joint Active Bookrunner on Air Canada's C$1.6 billion share offering and private placement of conv

  34. Slide 34: TD Bank Group Key Themes

    TD Bank Group Key Themes Top 10 North American Bank 1 5th largest bank by Total Assets1 6th largest bank by Market Cap1 Q3 2020 Financial Results 2 For the three months ended July 31, 2020. Proven Performance, Future Growth Opportunities 3 Delivering solid long term shareholder returns2 Strong Balan

  35. Slide 35: TD TLAC Requirements

    TD TLAC Requirements  Canadian D-SIBs will be required to meet TD Regulatory Capital Ratios2,3 their regulatory TLAC requirements by the November 1, 2021 implementation date.  OSFI has stipulated that D-SIBs will be Notional TLAC: 24.1% subject to 2 supervisory ratios: Minimum risk-based TLAC Rati

  36. Slide 36: Industry-Leading Credit Ratings

    Industry-Leading Credit Ratings Issuer Ratings1 Rating Agencies Senior Debt Ratings2 Outlook Moody's Aa3 Stable S&P A Stable DBRS Aa Stable Ratings vs. Peer Group1 Moody’s Senior Debt2 / HoldCo5 Rating S&P Senior Debt2 / HoldCo5 Rating Aa1 AA- Aa2 A+ Aa3 A A1 A- A2 BBB+ A3 Baa1 BBB TD Canadian Peers

  37. Slide 37: Leading Non-Common Equity Capital Ratings

    Leading Non-Common Equity Capital Ratings NVCC Tier 2 Subordinated Debt Ratings Moody’s S&P A2 A A3 A- Baa1 BBB+ Baa2 BBB Baa3 BBB- Ba1 BB+ TD Peers 2 Canadian Peers TD Canadian Peers TD Canadian TD Canadian Peers2 Additional Tier 1 NVCC Preferred Share Ratings Moody’s S&P A2 A A3 A- Baa1 BBB+ Baa2

  38. Slide 38: Robust Liquidity Management

    Robust Liquidity Management Liquidity Risk Management Framework Liquidity Risk Management Framework  Target a 90-day survival horizon under a combined  TD holds a variety of liquid assets commensurate with Bank-specific and market-wide stress scenario, and a liquidity needs in the organization. mi

  39. Slide 39: Deposit Overview

    Deposit Overview Domestic Leader in Deposits Large base of personal and business deposits1 that make up 72% of the Bank's total funding  TD Canada Trust ("TDCT") ranked #1 in Total Personal Deposits2 – legendary customer service and the power of One TD  U.S. Retail is a top 103 bank in the U.S. wi

  40. Slide 40: Low Risk, Deposit Rich Balance Sheet

    Low Risk, Deposit Rich Balance Sheet1 Large base of stable retail and commercial Maturity Profile6,7 (C$B) (To first par redemption date) deposits 50 Issuance Maturity  Personal and business deposits are TD's primary sources of funds 40 – Customer service business model delivers stable base of “sti

  41. Slide 41: Wholesale Term Debt Composition

    Wholesale Term Debt Composition1 Funding Strategy  Wholesale term funding through diversified sources across domestic and international markets  Well-established C$80 billion Legislative Covered Bond Program is an important pillar in global funding strategy  Programmatic issuance for the establis

  42. Slide 42: Canadian Registered Covered Bond Program

    Canadian Registered Covered Bond Program Key Highlights Covered Bond Collateral  Canadian residential real estate property with no more than 4 residential units  Uninsured conventional first lien assets with original loan to value ratio that is 80% or less Housing Market Risks  Latest property va

  43. Slide 43: TD Global Legislative Covered Bond Program

    TD Global Legislative Covered Bond Program Highlights Cover Pool as at July 31, 2020  TD has a C$80B Legislative Covered Bond Program  High quality, conventional first lien Canadian  Covered bonds issuance for Canadian issuers is governed by CMHC-administered guidelines Residential mortgages orig

  44. Slide 44: Bail-in Implementation

    Bail-in Implementation Regulation Overview  On April 18, 2018, the Government of Canada published final regulations under the CDIC Act and the Bank Act providing details of the bank recapitalization "bail-in" regime and final Total Loss Absorbing Capacity (TLAC) guideline.  The issuance regulation

  45. Slide 45: Bail-in Overview

    Bail-in Overview Scope of Bail-in  In Scope Liabilities. Senior unsecured long-term debt (original term to maturity of 400 or more days) that is tradable and transferable (has a CUSIP, ISIN or other similar identification) and issued on or after September 23, 20181. Unlike other jurisdictions, Cana

  46. Slide 46: Appendix: Economic Outlook

    Appendix Economic Outlook

  47. Slide 47: TD Economics Update

    TD Economics Update Global Outlook: Gradual Recovery from Unprecedented Shock  The global economy is in the early stages of recovery from virus-related economic shutdowns. Economic indicators have moved from contraction to expansion, however growth is nascent and uneven.  The course of the virus i

  48. Slide 48: Interest Rate Outlook

    Interest Rate Outlook Interest Rates, Canada and U.S. % 7 Forecast  The federal funds rate is at the zero lower bound and expected to remain there for the foreseeable U.S. Federal 6 Funds Rate future. In addition to the considerable interventions it has made to date, the Federal Reserve is likely t

  49. Slide 49: Appendix: Credit Quality

    Appendix Credit Quality

  50. Slide 50: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Business Segment Highlights GIL Formations1: $MM and Ratios2 24 24  Gross impaired loan formations 23 bps 22 stable quarter-over-quarter at 23 21 basis points, primarily reflecting: – A decrease in the U.S. and $1,783 $1,708 $1,689 Canadian consumer lending $40 / 5

  51. Slide 51: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Business Segment Highlights GIL1: $MM and Ratios2  Gross impaired loans increased 51 bps quarter-over-quarter primarily 47 related to: 45 42 43 – The U.S. and Canadian commercial lending portfolios. $3,821 $3,606 – The Canadian real estate $3,207 $343 / 52 bps secured

  52. Slide 52: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Business Segment Highlights PCL1: $MM and Ratios2 $3,221  Provision for credit losses decreased across all segments $374 quarter-over-quarter. $554 $2,189  Provisions for credit losses $123 remained elevated in the current quarter, primarily due to the $217 ong

  53. Slide 53: Provision for Credit Losses (PCL) Impaired and Performing

    Provision for Credit Losses (PCL) 1,2 Impaired and Performing Highlights PCL ($MM)  Impaired PCL increased quarter-over-quarter Q2/19 Q1/20 Q2/20 driven by: Total Bank 636 923 3,221 – Credit migration in the Wholesale segment, Impaired 596 810 970 largely in the Oil & Gas sector Performing 40 113 2

  54. Slide 54: Canadian Personal Banking

    Canadian Personal Banking Highlights Canadian Personal Banking (Q3/20) Gross Loans ($B) GIL ($MM) GIL/Loans (%)  Gross impaired loans Residential Mortgages 206.1 385 0.19 increased quarter-over- 92.1 225 0.24 Home Equity Lines of Credit (HELOC) quarter largely in the RESL Indirect Auto 26.7 59 0.22

  55. Slide 55: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Secured Lending Portfolio Highlights (Q3 2020) Quarterly Portfolio Volumes ($B) $292 $293 $297 $300 $288 Canadian RESL credit quality remained strong Uninsured 68% 69% 70% 71% 72%  Uninsured and insured portfolio loan-to- Insured value rates stable. 32% 31% 30% 29% 28% Q3/19 Q4

  56. Slide 56: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Highlights Canadian Commercial and Wholesale Banking (Q3/20) Gross Loans/ GIL GIL/Loans  Gross impaired loans BAs ($B) ($MM) (%) increased largely in the Commercial Banking1 83.8 484 0.58% Canadian Commercial Wholesale 66.5 343 0.52% portfolio. Total Canadi

  57. Slide 57: U.S. Personal Banking (USD)

    U.S. Personal Banking (USD) Highlights U.S. Personal Banking1 (Q3/20) Gross Loans GIL GIL/Loans  Gross impaired loans ($B) ($MM) (%) decreased quarter-over- Residential Mortgages 28.6 333 1.17 quarter in U.S. Personal Home Equity Lines of Credit (HELOC)2 8.4 338 4.00 Banking. Indirect Auto 24.7 198

  58. Slide 58: U.S. Commercial Banking (USD)

    U.S. Commercial Banking (USD) Highlights U.S. Commercial Banking1 (Q3/20)  Gross impaired loans Gross Loans/ GIL GIL/Loans BAs ($B) ($MM) (%) increased quarter-over- Commercial Real Estate (CRE) 25.8 86 0.33 quarter. Non-residential Real Estate 18.3 54 0.30 Residential Real Estate 7.5 32 0.43 Comme

  59. Slide 59: Investor Relations Contacts

    Investor Relations Contacts Phone: (416) 308-9030 or 1 (866) 486-4826 Email: tdir@td.com Website: www.td.com/investor 59

TD Bank Group — Q3 2020 Earnings Presentation on 6ix