Toronto-dominion Bank · TSX:TD

Toronto-dominion Bank — TD Bank Group — Debt Investor Presentation (2017)

46 slides from Toronto-dominion Bank's debt investor presentation, 2017

  1. Slide 1: TD Bank Group Fixed Income Investor Presentation

    TD Bank Group Fixed Income Investor Presentation Q2 2017

  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: Contents

    Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 3

  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 Q2 20171 Canadian U.S. U.S. Retail (C$ except

  5. 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 Aa2 by Moody’s2  Strong employment brand Retail Earnings Focus  Leader in customer service and convenience  Strong organic growth

  6. 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

  7. Slide 7: TD in North America

    TD in North America North Q2 2017 Canadian American C$ except otherwise noted Ranking3 Ranking4 Total assets $1,252B 1st 5th Total deposits $807B 1st 5th Market capitalization $118B 2nd 6th Reported net income (trailing four quarters) $9.7B 2nd 6th Adjusted net income1 (trailing four quarters) $9.9B

  8. 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

  9. 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

  10. Slide 10: Connected Comfort and Convenience

    Connected Comfort and Convenience Digital Enhancements Consistent Strategy How we compete  Connected experiences enable seamless interactions between TD MyAdvantage is a usage-based insurance Send Money is a new person-to-person (P2P) platform customers and the entire (UBI) app that tracks users' d

  11. Slide 11: Corporate Responsibility Performance

    Corporate Responsibility Performance Highlights  Green Bonds to support the transition to a lower-carbon economy:  TD is the only Canadian bank listed on the Dow Jones Sustainability World Index  Issuing: TD was the first commercial bank in Canada to issue a $500  Ranked 58th on the Global 100 M

  12. Slide 12: Contents

    Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 12

  13. Slide 13: 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

  14. Slide 14: Q2 2017 Highlights

    Q2 2017 Highlights Financial Highlights $MM Total Bank Reported Results (YoY) Reported Q2/17 Q1/17 Q2/16 Revenue 8,473 9,120 8,259 EPS up 22% PCL 500 633 584  Adjusted EPS up 12%1 Expenses 4,786 4,897 4,736 Net Income 2,503 2,533 2,052 Revenue up 3% Diluted EPS ($) 1.31 1.32 1.07  Revenue (TEB) up

  15. Slide 15: Gross Lending Portfolio

    Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q1/17 Q2/17 Canadian Retail Portfolio $ 373.0 $ 377.5 Personal $ 309.0 $ 312.0 Residential Mortgages 188.1 188.1 Home Equity Lines of Credit (HELOC) 65.9 68.0 Indirect Auto 20.5 20.9 Unsecured Lines of Credit 9.6 9.7 Credit

  16. Slide 16: Strong Credit Quality

    Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 61 60 63 58 58 57 56 53 50 50 43 39 41 42 37 38 34 34 35 26 31 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1/17 Q2/17 IFRS Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Average Net Loan

  17. Slide 17: Canadian Personal Banking

    Canadian Personal Banking Q2/17 Highlights Gross Loans GIL GIL / Canadian Personal Banking1 ($B) Loans ($MM)  Credit quality remains strong Residential Mortgages 188 360 0.19% in the Canadian Personal Home Equity Lines of Credit (HELOC) 68 129 0.19% portfolio Indirect Auto 21 41 0.20% Unsecured Lin

  18. Slide 18: Canadian Real Estate Secured Lending Portfolio

    Canadian Real Estate Secured Lending Portfolio Canadian Portfolio1 $B Highlights $248 $252 $254 $254 $256  Canadian RESL credit quality remains strong 47% 49% 50% 52% 53%  PCL rate remains stable at 1 bp Uninsured  Uninsured and insured portfolio loan-to-value rates stable Insured 53% 51% 50% 48%

  19. Slide 19: Contents

    Contents 1. TD Bank Group 2. Financial Highlights 3. Treasury & Balance Sheet Management 4. Appendix 19

  20. Slide 20: Bail-in Update

    Bail-in Update  The Budget Implementation Act, providing amendments to the CDIC Act, Bank Act and other statutes to allow for bail-in, was passed in June 2016  The regime provides the Canada Deposit Insurance Corporation ("CDIC") with a new statutory power to convert specified eligible liabilities

  21. Slide 21: TD Credit Ratings

    TD Credit Ratings Issuer Ratings1 Moody's S&P DBRS Ratings Aa2 AA- AA Outlook Negative Stable Negative 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 Canadian Peers U

  22. Slide 22: Non-Common Equity Capital Ratings

    Non-Common Equity Capital Ratings  TD has industry leading ratings1 for both 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 A

  23. Slide 23: Capital & Liquidity

    Capital & Liquidity Common Equity Tier 11 Highlights  Common Equity Tier 1 ratio of 10.8% Q1 2017 CET1 Ratio 10.9%  Leverage ratio of 3.9% Internal capital generation 36 bps Impact of repurchase of common shares (22 bps)  Tier 1 and Total Capital ratios were Actuarial loss on employee pension pla

  24. Slide 24: Robust Liquidity Management

    Robust Liquidity Management HQLA Distribution  Treasury paradigm contributes to stable (Weighted & Includes Excess U.S. HQLA) and growing earnings  Matching funding maturities to term of  Level 1 Cash & assets or stressed trading market depth Central Bank Reserve  Disciplined transfer pricing pr

  25. Slide 25: Term Funding Strategy

    Term Funding Strategy Large base of stable retail and commercial deposits – primary source of funding  Customer service business model delivers stable base of “sticky” and franchise deposits  Reserve assets held for deposit balances based on LCR run-off requirements Wholesale term funding through

  26. Slide 26: Attractive Balance Sheet Composition

    Attractive Balance Sheet Composition1 Funding Mix2 Wholesale Term Debt6 Sub-Debt 1% Trading Covered Personal Non- Deposits5 Bonds Term Deposits 9% 26% 39% Wholesale Senior Term Debt Unsecured 11% Mortgage MTN Personal Term Securitization 54% Deposits 5% 15% Other Deposits3 25% Short Term Liabilities

  27. Slide 27: Wholesale Term Debt Composition

    Wholesale Term Debt Composition1 By Currency2,3 By Term2,3 5 to < 7 Year EUR 18% 56% $17B $55B USD 47% $46B GBP 5% $5B 7+ Year 12% AUD 3% 3 to < 5 Year $12B $3B 21% CAD 27% $21B $27B < 3 Year 11% $10B 1. As of April 30, 2017. 2. Excludes certain private placement notes and mortgage securitization. 2

  28. Slide 28: Debt Maturity Profile F2017 – 2021

    Debt Maturity Profile1 F2017 – 2021 Bullet Debt Maturities (C$ billions)2 27 $23 $20 $21 $19 2017 2018 2019 2020 2021 3 MBS Covered Bond Senior Debt ABS Subordinated Debt Manageable debt maturities 1. For wholesale term debt that has bullet maturities. 2. As of April 30, 2017. 28 3. Based on first p

  29. 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

  30. 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

  31. Slide 31: Economic Outlook

    Economic Outlook Canada beats expectations, but growth will moderate  Real GDP expected to increase by 2.5% in 2017 and 1.9% in 2018  Stimulus from government infrastructure spending is taking a greater role in the forecast than previous years, adding 0.4 p.p. to growth over the next two years  W

  32. Slide 32: Interest Rate Outlook

    Interest Rate Outlook Interest Rates, Canada and U.S.1  With U.S. unemployment nearing (%) post-recession lows, the Federal 7 Reserve is likely to continue to edge US Federal Funds Rate up interest rates 6 Forecast  The Bank of Canada will likely 5 Bank of maintain rates at current levels in Canad

  33. 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

  34. Slide 34: Gross Impaired Loan Formations

    Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,453  Gross Impaired Formations down $142 / 38 bps $127MM quarter-over-quarter $1,224 $1,227 $1,281 and $299MM year-over-year $48 / 13 bps $1,154  Reduction in the quarter largely due to the Canadian $636 / 3

  35. Slide 35: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights  Gross Impaired Loans down $3,567 $3,509 $109MM quarter-over-quarter $3,467 $3,399 $178 / 48 bps $211 / 54 bps $163 / 41 bps $73 / 18 bps $3,290 notwithstanding a $78MM negative $59 / 13 bps impact of foreign exchange $2,356 /

  36. Slide 36: Provision for Credit Losses (PCL)

    Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights $635  PCL rate down 7 bps quarter- $592 $563 $554 over-quarter and year-over-year $48 / 53 bps $9 / 10 bps $1 / NM $518 $40 / NM  U.S. Retail $102MM quarter-over- $ 60 / NM quarter decrease driven by: $392 / 84 bps  $

  37. Slide 37: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Q2/17 Canadian Commercial and Gross Highlights GIL GIL/ Loans/BAs Wholesale Banking ($B) ($MM) Loans  Canadian Commercial and Commercial Banking1 66 204 0.31% Wholesale Banking portfolios Wholesale 44 59 0.13% continue to perform well Total Canadian Commerc

  38. Slide 38: U.S. Personal Banking – U.S. Dollars

    U.S. Personal Banking – U.S. Dollars Q2/17 U.S. Personal Banking1 Gross Loans GIL GIL / Highlights ($B) ($MM) Loans Residential Mortgages 21 355 1.71%  Continued good asset quality Home Equity Lines of Credit (HELOC)2 10 656 6.78% in U.S. Personal Indirect Auto 21 168 0.80%  $59MM GIL decrease dri

  39. Slide 39: U.S. Commercial Banking – U.S. Dollars

    U.S. Commercial Banking – U.S. Dollars Q2/17 Gross Loans / GIL GIL/ Highlights U.S. Commercial Banking1 BAs ($B) ($MM) Loans Commercial Real Estate (CRE) 22 74 0.34%  Sustained good quality in Non-residential Real Estate 17 45 0.28% U.S. Commercial Banking Residential Real Estate 5 29 0.55% Commerc

  40. Slide 40: Contents

    Contents 1. TD Bank Group 2. Economic Outlook 3. Treasury & Balance Sheet Management 4. Appendix • Economic Outlook • Credit Quality • Funding Instruments 40

  41. Slide 41: Canadian Covered Bond Legislation

    Canadian Covered Bond Legislation  The Covered Bond legal framework was announced in the 2012 Federal Budget through amendment to the National Housing Act and was passed into law in June 2012  Issuance must be in accordance with the legislation and issuers are prohibited from using insured mortgag

  42. Slide 42: CMHC Guide Highlights

    CMHC Guide Highlights Asset Coverage Test  To confirm overcollateralization of the covered bond collateral held against covered bonds outstanding  Quarterly indexation of property values provides adjustment for market developments Valuation Calculation  Test to monitor a covered bond program’s ex

  43. Slide 43: TD Legislative Covered Bonds

    TD Legislative Covered Bonds TD Covered Bond Programme Highlights Cover Pool as at April 28, 2017  TD has a C$40B legislative covered bond program  High quality, conventional first lien Canadian Residential  Covered bonds issuance for Canadian issuers governed mortgages originated by TD by CMHC-a

  44. Slide 44: Investor Relations Contacts

    Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: tdir@td.com Best Investor Relations by Website: Sector: Financial Services www.td.com/investor Best Corporate Governance 44

  45. Slide 45: European Covered Bond Council Plenary and Euromoney Conference, 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

  46. Slide 46: TD Bank Group Fixed Income Investor Presentation

    TD Bank Group Fixed Income Investor Presentation Q2 2017

TD Bank Group — Debt Investor Presentation (2017) on 6ix