Toronto-Dominion Bank · TSX:TD

Toronto-Dominion Bank — TD Bank Group — Debt Investor Presentation (2016)

45 slides from Toronto-Dominion Bank's debt investor presentation, 2016

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

    TD Bank Group Fixed Income Investor Presentation Q4 2016

  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 Q4 20161 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 Aa1 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 Q4 2016 Canadian American C$ except otherwise noted Ranking3 Ranking4 Total assets $1,177B 2nd 6th Total deposits $774B 1st 5th Market capitalization $113B 2nd 6th Reported net income (trailing four quarters) $8.5B 2nd 6th Adjusted net income1 (trailing four quarters) $9.3B

  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. Retail2  U.S. Retail top 10 bank4 in 26% Canadian 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 TD Acquired Target credit Became primary issuer Announced Chrysler Completed strategic Acquired Waterhouse Acquired Commerce Acquired card portfolio & Epoch; of Aeroplan Visa; agreement to Privatized Financial credit card 51% of USA / Commer

  10. Slide 10: Omni Comfort and Convenience

    Omni Comfort and Convenience Consistent Strategy Digital Enhancements How we compete  Customer-centricity allows customers to choose how, when and where they bank Completely redesigned TD Bank app for iOS TD for Me is a feature of the Canadian TD app that and Android devices with more than 20 new a

  11. Slide 11: Corporate & Social Responsibility

    Corporate & Social Responsibility  TD Friends of the Environment Foundation celebrates 25 years with over Highlights C$76 million in funds disbursed in support of more than 24,000 local environmental projects  Ranked 54th on the Global 100 Most Sustainable  More than 235,000 trees planted through

  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 $6,460 $6,640 Canadian Retail 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: Q4 2016 Highlights

    Q4 2016 Highlights Financial Highlights C$MM Total Bank Reported Results (YoY) Reported Q4/16 Q3/16 Q4/15 EPS up 25% (7% adjusted1) Revenue 8,745 8,701 8,047 PCL 548 556 509 Revenue up 9% Expenses 4,848 4,640 4,911  Adjusted revenue up 6% ex FX and acquisitions2 Net Income 2,303 2,358 1,839 Diluted

  15. Slide 15: Gross Lending Portfolio

    Gross Lending Portfolio Includes B/As Balances (C$B unless otherwise noted) Q3/16 Q4/16 Canadian Retail Portfolio $ 368.4 $ 372.2 Personal $ 306.0 $ 309.1 Residential Mortgages 187.7 189.0 Home Equity Lines of Credit (HELOC) 63.9 65.0 Indirect Auto 20.4 20.6 Unsecured Lines of Credit 9.8 9.5 Credit

  16. Slide 16: Strong Credit Quality

    Strong Credit Quality GIL and PCL Ratios (bps) 83 81 78 66 65 63 61 60 63 58 59 58 56 50 50 43 45 39 42 37 38 39 34 37 34 26 31 25 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1/16 Q2/16 Q3/16 Q4/16 IFRS Gross Impaired Loans / Gross Loans and Acceptances (bps) Provision for Credit Losses / Ave

  17. Slide 17: Canadian Personal Banking

    Canadian Personal Banking Q4/16 Highlights Gross Loans GIL GIL / Canadian Personal Banking1 (C$B) (C$MM) Loans Real Estate Secured Lending:  C$254 in gross loans outstanding Residential Mortgages 189 401 0.21%  50% insured Home Equity Lines of Credit (HELOC) 65 149 0.23%  Uninsured residential mo

  18. Slide 18: Oil and Gas Exposure

    Oil and Gas Exposure Corporate and Commercial Outstandings Highlights by Sector ($B):  Oil and Gas Producers and Services outstandings reduced $400MM representing less than 1% of total gross loans and acceptances $3.1 $2.9  65% of undrawn Oil & Gas exposure is investment grade $1.2 / 39%  Excludi

  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  On March 22, 2016, the Government of Canada in its 2016 federal budget, proposed to introduce framework legislation for the bail-in regime along with accompanying enhancements to Canada’s bank resolution toolkit.  The regime will provide the Canada Deposit Insurance Corporation ("C

  21. Slide 21: TD Credit Ratings

    TD Credit Ratings Issuer Ratings1 Moody's S&P DBRS Ratings Aa1 AA- AA Outlook Negative Stable Negative Ratings vs. Peer Group S&P Long-Term Debt Rating Moody’s Long-Term Debt Rating AA-- 14 18 Aa1 16 Aa2 12 A+- 14 Aa3 10A- 12 A1 8 A-- 10A2 8 A3 BBB+- 6 6 Baa1 BBB4 4 Baa2 2 2 2 TD Canadian Peers 2 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

    Capital Common Equity Tier 11 Highlights  Common Equity Tier 1 ratio of 10.4% Q3 2016 CET1 Ratio 10.4%  Leverage ratio of 4.0% Internal capital generation 31 bps RWA increase and other (24) bps  Tier 1 and Total Capital ratios for Q4 Actuarial loss on employee pension plans (4) bps 2016 were 12.2

  24. Slide 24: Robust Liquidity Management

    Robust Liquidity Management HQLA Distribution  Treasury paradigm contributes to (Weighted & Includes Excess U.S. HQLA) stable and growing earnings  Matching funding maturities to term of  Level 1 Cash & Central Bank assets or stressed trading market Reserve depth  Level 1 Sovereign 84%  Level 2

  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 Debt Sub-Debt 1% Personal Non- Covered Trading Term Deposits Bonds Deposits5 40% 26% 8% Wholesale Senior Personal Term Unsecured Term Debt Assets Mortgage Deposits 11% MTN6 5% Securitized Securitization 16% 53% 21% Other Deposits3 26%

  27. Slide 27: Wholesale Term Debt Composition

    Wholesale Term Debt Composition1 By Currency2,3 By Term2,3 EUR 16% 5 to < 7 Year $15B 56% $51B GBP 5% USD 46% $4B $41B AUD 3% $3B 7+ Year 11% 3 to < 5 Year $10B 23% CAD 30% $21B $27B < 3 Year 10% $8B 1. As of October 31, 2016. 2. Excludes certain private placement notes and mortgage securitization.

  28. Slide 28: Debt Maturity Profile F2016 – 2020

    Debt Maturity Profile1 F2016 – 2020 Bullet Debt Maturities (C$ billions)2 $24 $21 $19 $18 $13 2016 2017 2018 2019 2020 3 MBS Covered Bond Senior Debt ABS Subordinated Debt Manageable debt maturities 1. For wholesale term debt that has bullet maturities. 2. As of October 31, 2016. 28 3. Based on firs

  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 Canadian GDP growth is expected to remain modest  Real GDP expected to increase by 1.1% in 2016 and 1.7% in 2017  The 2016 federal budget and a modest recovery in business investment expected to help growth  Unemployment rate of 6.9% forecasted through 2017 Global growth is expec

  32. Slide 32: Interest Rate Outlook

    Interest Rate Outlook Interest Rates, Canada and U.S.1  With U.S. unemployment nearing (%) healthy levels, the Federal 7 Reserve is likely to continue to US Federal Funds Rate edge up interest rates 6 Forecast2  In Canada, a modest economic 5 Bank of and inflationary outlook implies the Canada Tar

  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 Highlights GIL Formations1: C$MM and Ratios2  Total formations stable quarter over quarter at 21bps $1,717  U.S. Retail formations quarterly $1,453 increase of $65MM driven by: $1,338 $142 / 38bps  $21MM negative impact of $33 / 10bps $1,224 $1,227 fore

  35. Slide 35: Gross Impaired Loans (GIL)

    Gross Impaired Loans (GIL) By Portfolio Highlights GIL1: C$MM and Ratios2  Canadian Retail GIL rate remains $3,799 at cyclically low levels $39 / 10 bps $3,567 $3,467 $3,509 $3,244 $178 / 48 bps $163 / 41 bps  U.S. Retail GIL quarterly increase $211 / 54 bps $55 / 16 bps of $101MM due to:  $71MM

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

    Provision for Credit Losses (PCL) By Portfolio Highlights PCL1: C$MM and Ratios2 $648  Canadian and U.S. credit quality remains strong $10 / 11 bps $592 $550 $65 / NM $563 $554  U.S. Retail PCL increase of $9 / 10 bps $1 / NM $11 / 14 bps $48 / 53 bps $40 / NM $35MM attributable to: $ 36 / NM $60

  37. Slide 37: Canadian Commercial and Wholesale Banking

    Canadian Commercial and Wholesale Banking Q4/16 Canadian Commercial and Gross Highlights GIL GIL/ Loans/BAs Wholesale Banking ($B) ($MM) Loans  Canadian Commercial and Commercial Banking1 63 191 0.30% Wholesale Banking Wholesale 39 163 0.41% portfolios performed well Total Canadian Commercial and W

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

    U.S. Personal Banking – U.S. Dollars Q4/16 U.S. Personal Banking1 Gross Loans GIL GIL / Highlights ($B) ($MM) Loans Residential Mortgages 21 336 1.63%  Continued good asset quality Home Equity Lines of Credit (HELOC)2 10 700 7.11% in U.S. Personal Indirect Auto 21 146 0.69%  Increase in gross impa

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

    U.S. Commercial Banking – U.S. Dollars Q4/16 U.S. Commercial Banking1 Gross Loans / GIL GIL/ Highlights BAs ($B) ($MM) Loans Commercial Real Estate (CRE) 21 119 0.57%  Continuing portfolio growth Non-residential Real Estate 16 74 0.46% and good quality in U.S. Residential Real Estate 5 45 0.91% Com

  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 October 31, 2016  TD has a C$40B legislative covered bond program  High quality, conventional first lien Canadian Residential mortgages originated by TD  Covered bonds issuance for Canadian issuers governed by CMHC

  44. Slide 44: Investor Relations Contacts

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

  45. Slide 45: TD Bank Group Fixed Income Investor Presentation

    TD Bank Group Fixed Income Investor Presentation Q4 2016

TD Bank Group — Debt Investor Presentation (2016) on 6ix