Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — TD Bank Group — Q4 2013 Earnings Presentation
36 slides from Toronto-Dominion Bank's earnings presentation, Dec 5, 2013
Slide 1: TD Bank Group Quarterly Results Presentation Q4 2013
TD Bank Group Quarterly Results Presentation Q4 2013 Thursday December 5th, 2013
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 document, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, and in other communications. In addition, representativ
Slide 3: Strategic Overview
Strategic Overview n Solid financial results in 2013 q Record adjusted earnings in Canadian P&C, Wealth and U.S. P&C q Strong Basel III CET1 ratio of 9.0%, dividends paid up 12% and stock dividend with 2:1 split effect n Operating environment remains challenging q Low interest rate and tough regulat
Slide 4: Fiscal 2013 Highlights
Fiscal 2013 Highlights Key Themes Net Income $MM (Adjusted, where applicable)1 n Adjusted1 Canadian P&C earnings up 2013 2012 YoY 11% Canadian Retail2 $ 4,673 $ 4,566 2% q Good volume growth, lower credit losses and U.S. Retail3 1,873 1,631 15% record adjusted efficiency ratio Total Retail 6,546 6,1
Slide 5: Q4 2013 Highlights
Q4 2013 Highlights Key Themes Net Income $MM (Adjusted, where applicable) n Adjusted1 EPS growth of 4% YoY Q4/13 QoQ YoY Retail2 $ 1,752 21% 19% n Retail earnings up 19% Wholesale 122 -17% -61% q Strong loan and deposit volume growth in Canada and the U.S. Corporate (53) n/a -83% Adjusted Net Income
Slide 6: Q4 2013 Earnings: Items of Note
Q4 2013 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,622 $1.68 Pre Tax After Tax Items of Note EPS (MM) (MM) Amortization of intangibles1 $91 $59 $0.06 Fair value of derivatives hedging the reclassified available-for-sale securities $17 $15 $0.02 portfolio Integration char
Slide 7: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Key Themes P&L $MM1 Q4/13 QoQ YoY n Adjusted1 net income up 14% YoY Revenue $ 2,831 0% 3% q Favourable credit performance PCL 224 4% -27% q Positive adjusted operating leverage Expenses (adjusted) 1,316 5% 0% n Lending volumes strong in business Net Income (adj
Slide 8: Wealth and Insurance
Wealth and Insurance Key Themes P&L $MM Q4/13 QoQ YoY n Wealth net income up 26% YoY Revenue $ 1,834 6% 11% q Higher fee-based revenue from growth in Insurance claims and related 711 -38% 3% client assets and market appreciation, expenses1 improved trading volume Expenses 730 3% 8% q Positive contri
Slide 9: U.S. Personal & Commercial Banking
U.S. Personal & Commercial Banking Key Themes P&L US$MM1 Q4/13 QoQ YoY n Adjusted1 net income up 13% YoY Revenue (adjusted) $ 1,829 -4% 18% q Strong loan and deposit volume growth PCL (adjusted) 177 -18% -12% q Higher revenue, expense and PCL from Expenses (adjusted) 1,206 3% 29% Target q Security g
Slide 10: Wholesale Banking
Wholesale Banking Key Themes P&L $MM Q4/13 QoQ YoY n Earnings down 61% YoY Revenue $ 602 7% -17% q Reduced security gains and higher non- PCL 5 -78% -38% interest expenses Expenses 422 20% 13% n Revenue impacted by lower security Net Income $ 122 -17% -61% gains in investment portfolio ROE 12.0% n T
Slide 11: Corporate Segment
Corporate Segment Key Themes P&L $MM1 Q4/13 Q3/13 Q4/12 n Lower adjusted net income YoY Net Corporate Expenses $ (140) $ (118) $ (191) q Lower gains from treasury and hedging Other 60 84 136 activities partially offset by positive tax Non-Controlling Interests 27 26 26 items Net Income (adjusted) $
Slide 12: Expenses
Expenses Highlights Efficiency Ratio, Adjusted2 n Core expenses1 up 4% for full year q Adjusted expenses up 11% YoY on Target and growth initiatives q Above our expectations partly due to litigation expense and higher than expected variable expenses in Wealth n Restructuring charges of $90 million a
Slide 13: Capital
Capital Highlights Basel III Common Equity Tier 11 n Basel III Common Equity Tier 1 ratio 9.0% as of October 31, 2013 n Announced stock dividend with 2- for-1 stock split effect in January n During fiscal 2013 we repurchased 9 million shares under buyback program n Dividends paid up 12% in 2013 Grea
Slide 14: New Disclosure: Segment Realignment and EDTF
New Disclosure: Segment Realignment and EDTF Retail Segment Realignment beginning Q1 2014 Canadian Retail U.S. Retail n Canadian P&C n U.S. P&C n Canadian Wealth n U.S. Wealth & Epoch n Insurance n TD Ameritrade Please note that in order to facilitate transition to realigned segment presentation, we
Slide 15: Credit Portfolio Highlights
Credit Portfolio Highlights Highlights PCL Ratio (bps)1 n Strong credit performance 48 q Loss rates for Canadian P&C remain historically low 39 38 37 q Continued improvement in the U.S. 35 Personal and Commercial portfolios n Performance expected to continue through 2014 Q4/12 Q1/13 Q2/13 Q3/13 Q4/1
Slide 16: Appendix
Appendix
Slide 17: Q4 2013 Earnings: Items of Note
Q4 2013 Earnings: Items of Note MM EPS Reported net income and EPS (diluted) $1,622 $1.68 Revenue/ Pre Tax After Tax Items of note EPS Segment Expense Line (MM) (MM) Item2 Amortization of intangibles1 $91 $59 $0.06 Corporate pg 13, line 15 Fair value of derivatives hedging the reclassified available
Slide 18: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking Highlights Net Interest Margin n Margin on average earning assets On Average Earning Assets of 2.81%, down 2 bps both QoQ and YoY q Primarily due to the impact on deposit margins from the low rate environment On Loans On Deposits 18
Slide 19: Canadian P&C Deposit Growth
Canadian Personal & Commercial Banking Deposit Growth Highlights Average Deposits ($ billions) 4% Growth n Average personal deposit volumes YoY increased 2% YoY n Average business deposit volumes $228 $219 $222 $221 $224 increased 8% YoY $71 $74 $75 $70 $71 $149 $151 $150 $150 $153 Q4/12 Q1/13 Q2/13
Slide 20: Canadian P&C Loan Growth
Canadian Personal & Commercial Banking Loan Growth Highlights Average Loans ($ billions) 5% Growth n Solid personal lending volume YoY growth of 3% YoY q Real estate secured lending growth of 4% YoY $304 $308 $314 $300 $302 $47 n Strong business lending volume $42 $43 $45 $46 growth of 12% YoY $15 $
Slide 21: Wealth and Insurance
Wealth and Insurance Highlights Revenue $MM n Wealth revenues of $822 million $1,834 were up 3% versus Q3/13 $1,700 $1,730 $1,651 $1,673 q Increased fee-based revenue from asset growth and equity market appreciation $1,012 n Insurance revenues1 of $1,012 $938 $930 $945 $945 million were up 9% versus
Slide 22: Wealth
Wealth Performance Metrics AUA1 ($B) AUM2 ($B) Mutual Funds AUM2 ($B) Retail vs. Institutional AUM2 ($B) Retail Institutional 1. Assets under administration. 2. Assets under management. From Q2/13, Epoch assets under management are included in Wealth Institutional AUM. As at October 31, 2013, the We
Slide 23: TD Ameritrade
TD Ameritrade Highlights TD Bank Group’s Share of TD Ameritrade’s Net Income1 n TD’s share of TD Ameritrade’s net US$MM income was C$77 million in Q4/13, up 51% YoY mainly due to: q Increased transaction-based and fee- based revenue, and increased investment gains, partially offset by higher operati
Slide 24: U.S. P&C Deposit Growth
U.S. Personal & Commercial Banking Deposit Growth Highlights Average Deposits (US$ billions) 11% Growth n Average personal deposit volumes YoY up 8% YoY n Average business deposit volumes up 7% YoY $187 $191 $178 $182 n Average TD Ameritrade IDAs up $172 17% YoY $73 $67 $71 $62 $66 $52 $53 $54 $51 $
Slide 25: U.S. P&C Loan Growth
U.S. Personal & Commercial Banking Loan Growth Highlights Average Loans (US$ billions) 16% Growth n Average personal loans increased YoY 26% YoY including Target n Average business loans increased 8% YoY $103 $105 $98 $90 $93 $50 $51 $49 $47 $49 $49 $53 $54 $43 $44 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Pers
Slide 26: Canadian Housing Market
Canadian Housing Market Highlights n Canadian RESL credit quality remains strong amidst continued resiliency in the Canadian housing market Portfolio Q4/13 Gross Loans Outstanding $226 B Canadian RESL Average Current LTV 47% Percentage Insured 66% Condo Borrower Gross Loans Outstanding $28 B (Reside
Slide 27: Gross Lending Portfolio
Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/13 Q4/13 Canadian Personal & Commercial Portfolio $ 310.3 $ 314.6 Personal $ 264.1 $ 267.6 Residential Mortgages 161.0 164.7 Home Equity Lines of Credit (HELOC) 62.1 61.3 Indirect Auto 14.5 14.7 Unsecured Lines of Credit
Slide 28: Gross Impaired Loan Formations
Gross Impaired Loan Formations By Portfolio GIL Formations1: $MM and Ratios2 Highlights $1,218 $1,244 n Canadian P&C formations $12 / 6 bps $1,162 $22 / 11 bps remain stable $1,092 $17 / 8 bps $1,041 n U.S. P&C formations $395 / 46 bps increased $91MM (6 bps) over $532 / 50 bps $396 / 42 bps $441 /
Slide 29: Gross Impaired Loans (GIL)
Gross Impaired Loans (GIL) By Portfolio GIL1: $MM and Ratios2 Highlights $2,628 $2,692 n Canadian P&C Gross Impaired $2,518 $2,494 $2,531 $3 / NM Loans continued positive trend $3 / NM $3 / NM $69 / 32 bps $3 / NM $3 / NM $38 / 18 bps $31 / 13 bps $47 / 23 bps due to improved resolutions $76 / 39 bp
Slide 30: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) By Portfolio PCL1: $MM and Ratios2 Highlights n Full year PCL decreased $489 $188MM or 11% resulting in $4 / 7 bps the lowest annual loss rates $402 $407 $420 since 2007 $360 $19 / 34 bps $1 / 2 bps n Canadian P&C loss rate at 5- $175 / 82 bps year lows $181 / 79 bp
Slide 31: Canadian Personal Banking
Canadian Personal Banking Q4/13 Canadian Personal Banking1 Gross Loans ($B) GIL/ Loans GIL ($MM) PCL2 ($MM) Highlights Residential Mortgages 165 0.27% 448 4 n Credit quality remains strong Home Equity Lines of Credit (HELOC) 61 0.52% 321 5 n Real estate secured lending Indirect Auto 15 0.28% 41 37 l
Slide 32: Canadian Commercial and Wholesale Banking
Canadian Commercial and Wholesale Banking Q4/13 Canadian Commercial and Gross GIL PCL1 Highlights Loans/BAs Wholesale Banking ($B) ($MM) ($MM) n Continued strong credit Commercial Banking2 47 117 3 performance Wholesale 21 69 1 n Commercial (including Small Total Canadian Commercial and Wholesale $6
Slide 33: U.S. Personal Banking
U.S. Personal Banking Q4/13 Highlights Gross Loans GIL/ GIL U.S. Personal Banking1 ($B) Loans ($MM) PCL2 n Underlying credit quality of the ($MM) Residential Mortgages 21 1.24% 258 2 U.S. Personal portfolio remains strong Home Equity Lines of Credit (HELOC)3 10 2.07% 220 12 n Normal seasoning of the
Slide 34: U.S. Commercial Banking
U.S. Commercial Banking Q4/13 U.S. Commercial Banking1 Gross Loans/BAs GIL PCL2 Highlights ($MM) ($MM) ($B) Commercial Real Estate (CRE) 16 335 1 n Positive momentum continues Non-residential Real Estate 12 225 1 in U.S. Commercial portfolio Residential Real Estate 4 110 0 n Real Estate values have
Slide 35: Investor Relations Contacts
Investor Relations Contacts Phone: 416-308-9030 or 1-866-486-4826 Email: Grand Prix for Best Overall Investor Relations: Large Cap [email protected] Best Investor Relations by Sector: Financial Services Website: Best Investor Relations www.td.com/investor by a CEO: Large Cap Best Investor Relations by a C
Slide 36: TD Bank Group Quarterly Results Presentation Q4 2013
TD Bank Group Quarterly Results Presentation Q4 2013 Thursday December 5th, 2013