Toronto-Dominion Bank · TSX:TD
Toronto-Dominion Bank — TD Bank Financial Group — Q3 2000 Earnings Presentation
32 slides from Toronto-Dominion Bank's earnings presentation, 2000
Slide 1: Bank Financial Group - Third Quarter 2000
Bank Financial Group THIRD QUARTER 2000 Bank Financial Group Dan Marinangeli EVP & CFO 1
Slide 2: Highlights; Key Goals - How Did We Do?
Highlights* • EPS of $0.80 up 21% • Revenue up 41% • ROE 18.1% versus 18.2% last year • Canada Trust contribution $0.10 per share • TD Canada Trust net income up 70% • PCL $135MM versus $25MM last year * Results exclude special items and are on a cash basis. 3 Key Goals - How Did We Do? Goals Q3/00
Slide 3: Cash EPS; Revenue Growth
Cash EPS CT contributed $0.10 per share in Q3 $0.80 $0.70 $0.66 TDCT $$0.11 TDCT 0.11 $0.53 TDAM $$0.01 TDAM 0.01 OTHER OTHER(prefs) $(0.02) (prefs) $(0.02) Total $$0.10 Total 0.10 Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 Includes funding cost, excludes restructuring charge and special gains 5 Reve
Slide 4: EPS Growth; Segment Performance
EPS Growth Base = Q3/99 150 125 * 4 Bank Cdn. Peer 100 ** U.S. Peers 75 50 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 * Based on Q3/00 consensus analyst estimates (accrual estimates have been adjusted for estimated goodwill amortization. BMO & CM adjusted for special items in Q1/00 & Q2/00). ** Universe includes
Slide 5: Operating Performance; Net Interest Margin
Operating Performance Cash Net Revenue $ Millions Income $ Millions $1,356 $1,393 $238 $211 $819 $140 Q3/99 Q2/00 Q3/00 Q3/99 Q2/00 Q3/00 9 Margin Net Interest Margin 3.89% 3.80% 3.84% 3.66% 3.67% Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 10 5
Slide 6: Segment Performance: TD Waterhouse
SEGMENT PERFORMANCE 2 TD Waterhouse Revenue Cash Net $ Millions Income $ Millions $688 $105 $500 $360* $53 $47* Q3/99 Q2/00 Q3/00 Q3/99 Q2/00 Q3/00 * Excludes special gains. 12 6
Slide 7: TD Waterhouse Group, Inc.
TD Waterhouse Group, Inc. 1999 2000 Yr/Yr July 31 Apr 30 July 31 Change ($US) Active Accounts (000) 2,066 2,813 3,011 46% New accounts (000) 169 418 172 2% Trades/day (000) 109 255 157 44% Online penetration 64% 74% 74% 16% Customer Assets($B) $113 $160 $163 44% 13 TD Waterhouse Assets Under Adminis
Slide 8: Segment Performance: TD Asset Management
SEGMENT PERFORMANCE 3 TD Asset Management Cash Net Revenue Income $ Millions $ Millions $85 $30 $68 $55 $20 $17 Q3/99 Q2/00 Q3/00 Q3/99 Q2/00 Q3/00 16 8
Slide 9: Assets Under Management; Mutual Funds
TD Asset Management Assets Under Management $ Billions $102.5 $97.0 100 $74.4 80 $67.4 $69.0 $32.4 $36.0 60 $27.8 $23.4 $24.2 40 $20.7 $21.5 $17.1 $18.0 $19.0 20 $28.8 $29.2 $16.7 $16.7 $17.3 0 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Other Assets Quantitative Capital: Institutional TD WAM Retail Funds TDAM Re
Slide 10: Segment Performance: TD Securities Revenue
SEGMENT PERFORMANCE 4 TD Securities: Revenue $ Millions $788 $610 $650 Q3/99 Q2/00 Q3/00 20 10
Slide 11: TD Securities: Trading Revenue
TD Securities: Trading Revenue Trading related revenue (TEB) as a percent of total bank revenue (TEB) Trading 100% 8.5% related 8.5% 10.5% 9.8% 8.0% revenue Other Revenue Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 21 TD Securities: Trading Revenue Composition of total trading related revenue $ million $350 Tradi
Slide 12: Accounting Anomaly for Derivative Transactions
Accounting Anomaly for Derivative Transactions At inception of transaction Client Sell a 1 year forward on the basket: eg. Contract @ $54/share TD raises wholesale funds: eg. Interest at 6%/year Use wholesale funds to purchase a basket of securities Purchase a basket of stock: eg. 1 MM shares @ $50/
Slide 13: TD Securities; Risk Management
TD Securities Cash Net ROE Income % $ Millions 27% $236 20% 20% $186 $179 Q3/99 Q2/00 Q3/00 Q3/99 Q2/00 Q3/00 25 THIRD QUARTER 2000 RISK MANAGEMENT Bank Financial Group Tom Spencer EVP, Risk Management 13
Slide 14: Strong Asset Quality
Strong Asset Quality Ratio of PCL to Loans & BAs % 1.00 0.80 TD 4 Bank Peer 0.60 41 bps 0.40 0.20 0.00 1994 1995 1996 1997 1998 1999 Q1/00 Q2/00 Q3/00 Notes: Excludes special general provisions and reverse repos. 27 General Reserves & Net Impaired Loans General Reserves General Reserves $ Millions a
Slide 15: Business Loans; Market Risk
Business Loans Net Impaired Loans (before General As a % of $ Millions Reserves) Loans BA’s & $1,500 4% $1,250 3% $1,000 133 bps $750 2% $500 1% $250 $0 0% 1993 1994 1995 1996 1997 1998 1999 Q1/00 Q2/00 Q3/00 29 Market Risk Distribution of Daily Net Trading Revenues Q3 FY 2000 Number of Days 35 30 2
Slide 16: Integration Update: Our Plan
Integration Update Ed Clark Chairman & CEO TD Canada Trust Our Plan Maintain business momentum Integrate successfully Build a better bank 32 16
Slide 17: Momentum: Revenue and Cash Net Income
Momentum Revenue $ Millions $1,393 » Top-line growth continues: • Revenue is $37 million or 3% higher than Q2/00 $432 $440 • Growth of 14% over the same quarter last year on a comparable basis $924 $953 » Further improvement in the $819 efficiency ratio: • To 65% this quarter from 67% in Q2/00 • Eff
Slide 18: Personal Loans & Mortgages; Cards
Personal Loans & Mortgages 7%year 7% yearover over $ Billions yeargrowth year growth $100 24% $95 23% $90 $85 22% $80 $75 21% Q3/98 Q1/99 Q3/99 Q1/00 Q3/00 Volume Cdn. Bank Mkt. Share to June/00 Note: Data restates TD and CT as a combined entity and includes securitized loans.(Canadian Currency) 35
Slide 19: Personal Deposits; Integrate Successfully
Personal Deposits 6%year 6% yearover over year growth growth $ Billions year $80 26% $76 25% 24% $72 23% $68 22% $64 21% $60 20% Q3/98 Q1/99 Q3/99 Q1/00 Q3/00 Volume Cdn. Bank Mkt. Share to June/00 Note: Data restates TD and CT as a combined entity. (Canadian Currency) 37 Integrate Successfully A ba
Slide 20: Integrate Successfully; Integration on Track
Integrate Successfully …that permeates the entire management structure. CEO CEO EVP EVP SVP SVP VP VP TD Bank Canada Trust 39 Integration on Track To date: » FTE reductions ahead of schedule » Expense reductions ahead of schedule » Systems • finalized branch platform - TD systems modified to deliver
Slide 21: Integration on Track; Build a Better Bank
Integration on Track To come: » Merger of mutual funds under TD Asset Management set for October 2000 (unit holders meeting August 18th) » Integration of web and telephone banking platform, by end of March 2001 » Conversion of retail platform in waves, beginning March 2001 to be completed by August
Slide 22: Electronic Financial Services
Build a Better Bank Customer Focus: Customer Satisfaction Index 86.6 CT 86.3 84.3 % 80.8 79.8 TD Established 79.6% as a Announcement Close floor for TD branches Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Average teller hours per week at TD Branches* have increased 20% to 37.1 hours/week s
Slide 23: Electronic Financial Services; Strong Brands in a Virtual World
Electronic Financial Services TD BANK FINANCIAL GROUP Topics • Current position • Canada • U.S.A. • Global • Conclusion 45 Strong Brands in a Virtual World TD BANK FINANCIAL GROUP Bank, N.A. 46 23
Slide 24: Currently Well Positioned; Canada Strategy
Currently Well Positioned TD BANK FINANCIAL GROUP Ø TD Canada Trust - # 2 in North America on-line penetration 1 - # 1 Financial Site in Canada - Media Metrix 2 - Only bank in the e25, Bain & Company’s survey of top 25 e-businesses in Canada 3 Ø TD Waterhouse - World’s second largest broker for self
Slide 25: Online Leadership
Online Leadership ## 22 in in North North America America CANADA 20% TRUST 15% 14% 13% US Peer Avg. 11% 6% CDN 5 Peer Avg. 6% Wells Fargo First Union Chase Royal Bank Goldman Sachs estimate of online penetration (percentage of retail banking customer base on-line February 9, 2000) 49 Leadership posi
Slide 26: Leadership Position in Canada; Leverage/Scale
Leadership position in Canada Reach Unique visitors as a percentage of all Canadian home Internet users in the month of June, 2000. 8.2% 5.5% 5.7% 4.7% 3.2% BNS CM BMO RY TD On average, a unique visitor surfed to a TD Canada Trust property 4.5 days in the month of June. Source: June 2000 Media Metri
Slide 27: Momentum: Telephone and Web Banking
Momentum Run rate for telephone and web banking 35,784 Average weekly sign-ups UP 75% 20,363 Jan-00* June-00 Since implementing payment to branches for signing up customers, signup rates are climbing * Pro-forma including CT in January 53 Momentum Internet banking transactions 9,204 (000) UP 20% 7,6
Slide 28: Momentum; U.S. Bank, N.A. Strategy
Momentum Products sold 13,753 UP 47% 9,382 Jan-00* Jun-00 Higher transaction leads to higher sales * Pro-forma including CT in January 55 U.S. Bank, N.A. Strategy • Primarily an electronic financial services company leveraging our leadership position in self directed brokerage • Integral to TWE’s gr
Slide 29: Leverage TWE Bank, N.A.
Leverage TWE Bank, N.A. Full suite of banking products • CDs • Credit card • Checking • Debit cards • Overdraft protection • Mortgage • Bill payment • HELOCs • LOCs 57 Leverage TWE Bank, N.A. FDIC Insured Deposits Number of accounts* (US$B) (000) UP 31% UP 117% 76 5.1 3.9 35 June-99 June-00 June-99
Slide 30: Momentum; Global
Momentum Bank, N.A. Growth in monthly banking transactions (000) 588 UP 75% » ATM Withdrawls 336 » Debit transactions » Checks Written » ACH Debits/Credit June-99 June-00 Growth in sweep accounts leads to Growth in transaction volumes 59 Global Bank, N.A. » Will be a global financial services Compan
Slide 31: Conclusion; Forward Looking Statements
Conclusion TD BANK FINANCIAL GROUP » Leadership position in Canada » Recognized brand leadership in US » Strongest customer momentum » Global opportunities with TWE » Leadership in telephone banking is catalyst to leadership in on-line Our goal is to make on-line purchases as easy for our customers
Slide 32: Bank Financial Group - Third Quarter 2000
THIRD QUARTER 2000 Bank Financial Group 32
TD Bank Financial Group — Q3 2000 Earnings Presentation on 6ix