Toronto-dominion Bank · TSX:TD
Toronto-dominion Bank — TD Bank Group — Investor Presentation (December 2010)
43 slides from Toronto-dominion Bank's investor presentation, December 2010
Slide 1: Investor Overview Presentation
Investor Overview Presentation December 2010
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 TD Bank Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 2
Slide 4: 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 Aaa-rated banks on NYSE • Strong employment brand Retail Retail Earnings Earnings Fo
Slide 5: A Top Bank in North America
TD Bank Group A Top 10 Bank in North America Compared to: Q4 20101 Canadian North American (In $U.S. Billions)2 Peers8 Peers9 Total Assets $607 2nd 6th Total North American Deposits $421 1st 4th Market Cap3 $64.1 2nd 6th Adj. Net Income4 (Trailing 4 Quarters) $5.1 2nd 5th Adj. Retail Earnings5 (Trai
Slide 6: Financial Results
Financial Results (C$MM) Q4 2010 QoQ YoY F2010 YoY Revenue $5,017 6% 6% $19,565 10% Provision for Credit Losses $404 19% -22% $1,625 -34% Expenses $3,263 10% 5% $12,163 Not Material Adjusted Net Income1 $1,260 -3% -4% $5,228 11% Adjusted EPS (diluted)2 $1.38 -3% -5% $5.77 8% Tier 1 Capital 12.20% -3
Slide 7: Lower Risk Retail Focus
Lower Risk Retail Focus1 Adjusted Earnings1 Global Wealth3 TD Ameritrade3,4 Q4 2010 C$1.3B 8% 3% Canadian P&C 2 U.S. Retail 20% 23% 54% U.S. P&C2 Canadian Retail 15% 62% Wholesale 85% of earnings from retail operations 1. Based on adjusted results as defined on slide #3. Reported Net Income for Q4 2
Slide 8: Strong Focus on Risk-Return
Strong Focus on Risk-Return Return on Risk-Weighted Assets1 2.47% 2.00% 1.41% 2 4 TD Canadian Peers 3 U.S. Peers Better return for risk undertaken 1. Adjusted on a comparable basis to exclude identified non-underlying items. 2. TD based on Q4/10 adjusted results, as defined on slide #3. Return on ri
Slide 9: Managing through Current Environment
TD Bank Group: Managing through Current Environment Get across the recession valley Carefully manage capital, funding, liquidity and risk Keep our business model intact Preserve our performance, convenience and service culture Emerging with momentum on our side Grown market share, extended
Slide 10: Strong, Consistent Dividend History
Strong, Consistent Dividend History Dividends Per Share1 (C$) $2.44 th Grow d alize nu Dividend Dividend An Yield Yield % 11 3.5%22 3.5% $0.38 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Growing dividends over time 1. 2010 dividend per share ba
Slide 11: Simple Strategy, Consistent Focus, Superior Execution
Simple Strategy, Consistent Focus, Superior Execution Adjusted Earnings1 (C$MM) R CAG s: 13% $5,228 e a r g 5-y EarninS: 7% d P uste dE $4,716 Adj djuste A $4,189 $3,813 $3,376 $2,861 Wholesale Banking U.S. P&C Wealth Management Canadian P&C 2005 2006 2007 2008 2009 2010 Retail as % of Adj. Earnings
Slide 12: Tier 1 Capital Ratio
Tier 1 Capital Ratio 12.5% 12.2% Highlights 12.0% 11.5% Strong capital position 11.3% Continued organic growth in capital Well-positioned for evolving regulatory environment Lower-risk, franchise wholesale dealer More than 1/3 of total assets in low or no-risk assets About 75% of Tier 1
Slide 13: Key Takeaways
Key Takeaways Building Building the the Better Better Bank Bank North North America America Retail Retail Earnings Earnings Focus Focus Franchise Franchise Businesses Businesses Risk Risk Discipline Discipline 12
Slide 14: Contents
Contents TD Bank Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 13
Slide 15: Key Businesses At a Glance
Key Businesses At a Glance Wealth Management Segments Business Canadian P&C1 U.S. P&C1 Wholesale Global Wealth TD Ameritrade2 Earnings Canadian Retail U.S. Retail Wholesale Mix Brands 1. “P&C” refers to Personal and Commercial Banking. 14 2. TD had a reported investment in TD Ameritrade of 45.93% as
Slide 16: Canadian Personal and Commercial Banking: Overview
Canadian Personal and Commercial Banking: Overview Key Businesses Canadian Banking Personal Banking Retail operations provide a full range of financial products and services Approximately 11.5 million personal and small business customers More than 1,100 branches across Canada More than
Slide 17: Canadian Personal and Commercial Banking: Key Messages
Canadian Personal and Commercial Banking: Key Messages Lead in customer service and convenience Rated #1 by J.D. Power1 and Synovate2, year after year More than 50% longer branch hours than peers3 Integrated product offerings #1 or #2 market share in most retail products4 Client referral
Slide 18: Canadian Personal and Commercial Banking: Performance
Canadian Personal and Commercial Banking: Performance Earnings ($MM) 5-year $3,095 CAGR 13%11 $2,472 $2,424 $2,253 $1,966 $1,702 2005 2006 2007 2008 2009 2010 1. 5-year CAGR is calculated based on compound annual growth from 2005 to 2010. 17
Slide 19: Wealth Management: Overview
Wealth Management: Overview Key Businesses Online Brokerage Canada U.S. 45.93% reported equity investment in TD Ameritrade1 Europe U.K., Ireland Luxembourg Advice-Based Businesses Canada As at Q4 2010 In C$ Financial Planning Private Investment Advice AUA2 $224B Full service
Slide 20: Wealth Management: Key Messages
Wealth Management: Key Messages Leading market positions #1 online brokerage in Canada1 #2 in net long-term mutual fund sales in Canada in 20102 #1 execution-only brokerage in the U.K.3 Integrated wealth organization Financial Planners based in retail bank branches Client referrals fro
Slide 21: Wealth Management: Performance
Wealth Management: Performance Earnings ($MM) $762 $769 5-year CAGR 1 $641 8% 1 $590 $261 $597 $289 $194 $180 $432 $252 Investment in TD Ameritrade2 $108 Global Wealth $501 $480 Management $410 $447 $324 $345 2005 2006 2007 2008 2009 2010 1. 5-year CAGR is calculated based on compound annual growth
Slide 22: U.S. Personal and Commercial Banking: Overview
U.S. Personal and Commercial Banking: Overview Key Businesses Personal Banking Over 1,250 stores More than 2,700 ATMs 24/7 live customer support As at Q4 2010 In C$ More than 6.5 million customers Total Assets $180B Total Deposits1 $138B Commercial Banking Total Loans2 $62B Offers a br
Slide 23: U.S. Personal and Commercial Banking: Key Messages
U.S. Personal and Commercial Banking: Key Messages Lead in customer service and convenience More than 44% longer branch hours than peers1 Rated “Highest in Customer Satisfaction” with Small Business Banking three years in a row2 Significant scale and enviable footprint Operating in 15 stat
Slide 24: U.S. Personal and Commercial Banking: Performance
U.S. Personal and Commercial Banking: Performance Adjusted Earnings1 ($MM) $1,042 $909 5-year $806 CAGR 2 46% 2 $359 $255 C$ $158 US$ $130 $224 $328 $794 $781 $1,008 2005 2006 2007 2008 2009 2010 Purchased 51% Acquired Completed Completed FDIC-assisted Milestones Privatized interest in Commerce TD B
Slide 25: Wholesale Banking: Overview
Wholesale Banking: Overview Key Businesses Investment Banking Advisory, underwriting, and corporate lending Equities As at Q4 2010 In C$ Trading, facilitation, execution services, and Risk Weighted research $32B Assets Rates and Foreign Exchange Adjusted Trading, facilitation, execution
Slide 26: Wholesale Banking: Key Messages
Wholesale Banking: Key Messages Focus on client-driven franchise businesses Presence in key global financial centres Strategically reduced corporate lending risk profile and exited global structured products (before financial crisis). Grow U.S. fixed income and global foreign exchange busine
Slide 27: Wholesale Banking: Performance
Wholesale Banking: Performance Adjusted Earnings1 ($MM) $1,137 $987 $824 $664 $551 $65 2005 2006 2007 2008 2009 2010 ROIC2 22% 28% 29% 2% 30% 31% 1. See slide #3 for definition of adjusted results. Also see the Wholesale segment discussion in the Business Segment Analysis section in the 2009, 2008,
Slide 28: Contents
Contents TD Bank Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 27
Slide 29: Gross Lending Portfolio
Gross Lending Portfolio Loans and Acceptances Balances Q4 2010 U.S. P&C (C$B) Commercial 24% Banking (incl. Residential Other Personal $66.3B Small Business Mtgs/Home Equity 11.6% 6.8% Banking), 11.7% Other Personal, 1.9% Commercial Real Estate 5.1% Residential Commercial and 2/3 Mtgs/HELOC insured
Slide 30: Credit Quality
Credit Quality Allowance for GILs / Avg NCOs / Avg (In %)1 Credit Losses / Loans + BAs Loans + BAs GILs 1.23 74.9 0.59 Cdn Peer Avg2 1.49 70.2 0.66 U.S. Peer Avg3 4.45 95.99 2.73 Well-positioned loan portfolio 1. Results are as of Q4/10 for TD & Canadian peers and Q3/10 for U.S. peers. 2. Canadian P
Slide 31: Contents
Contents TD Bank Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 30
Slide 32: Why Canadian Economy Outperforms
Why Canadian Economy Outperforms One of the 10 most competitive economies1 Soundest banking system in the world1 Canadian economy outperformed over last decade Average annual real GDP growth of 2.7% from 1997 to 2009 Canadian economy beginning to show signs of recovery Stable Canadian ho
Slide 33: 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 34: 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 Outstanding mortgages include earlier exotic variable interest rate option products (interest only, options ARMs) New regulations on default insured mortgages Borrowers often qualified us
Slide 35: Canadian Economy
Canadian Economy Canadian Strengths Average Annual Real GDP1 Growth, 1997 - 2009 Canadian economy 2.7 2.5 outperformed over last decade 2.1 1.7 0.5 Canada U.S. UK Euro-area Japan Canadian economy out of recession and global economic Canadian Real GDP Growth2 recovery will spur demand for commodi
Slide 36: Canadian Economy: Near Term Slowdown
Canadian Economy Near Term Slowdown TD Commodity Price Index1 Index; 1997=100 Forecast Commodity markets face 400 growing headwinds 350 300 Overall TDCI 250 200 150 100 TDCI Ex. Energy 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 U.S. and Canadian Housing Prices2 YoY
Slide 37: Canadian Economy: Long Term Support
Canadian Economy Long Term Support Canadian Unemployment1 Unemployment rate has Percent 14 peaked and will remain below 12 prior recessionary peaks Forecast 10 8 6 4 2 0 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Government finances in sound shape relative to other Canadian Fede
Slide 38: Contents
Contents TD Bank Group Overview Key Businesses Credit Portfolio Canadian Economy and Financial System Other Information 37
Slide 39: Comparison to Global Banks
TD Bank Group Comparison to Global Banks Q4 20101 (U.S.$B)2 SAN BBVA RBS BNP CBA Total Assets $607.2 $1,680.7 $758.6 $2,563.1 $2,749 $548.0 Total Deposits $421.4 $817.8 $347.9 $990.3 $1023.7 $317.7 Market Cap3 $64.7 $87.0 $38.6 $36.1 $79.7 $73.3 Tier 1 Capital Ratio 12.2% 9.7% 9.2% 10.2% 11.2% 9.2%
Slide 40: Credit Ratings
Credit Ratings Ratings¹ Moody's S&P Fitch DBRS Aaa AA- AA- AA Strong credit ratings 1. As at October 31, 2010. Moody's: Issuer Rating, S&P: LT Foreign Issuer Credit, Fitch: LT Issuer Default Rating, DBRS: Senior Unsecured Debt. 39
Slide 41: Managing Environmental, Social, Governance Risks & Opportunities
Managing Environmental, Social, Governance Risks & Opportunities 1 One of the top 100 most sustainable companies in the world For the second year in a row One of only 5 companies in Canada Recognized by sustainability indices Dow Jones Sustainability Index North America Jantzi Social Ind
Slide 42: 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 Retail Investor Communications 41
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