Investor Session. Focus on

Transcription

1 Focus on April 13, 2010

2 Introduction Rudy Sankovic 2

3 Caution Regarding Forward-Looking Statements From time to time, the Bank makes written and oral forward-looking statements, including in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), and in other communications. In addition, representatives of the Bank may make forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the safe harbour provisions of applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of Forward-looking statements include, among others, statements regarding the Bank s objectives and priorities for 2010 and beyond and strategies to achieve them, and the Bank s anticipated financial performance. Forward-looking statements are typically identified by words such as will, should, believe, expect, anticipate, intend, estimate, plan, may and could. By their very nature, these statements require the Bank to make assumptions and are subject to inherent risks and uncertainties, general and specific. Especially in light of the uncertainty related to the current financial, economic and regulatory environments, such risks and uncertainties many of which are beyond the Bank s control and the effects of which can be difficult to predict may cause actual results to differ materially from the expectations expressed in the forwardlooking statements. Risk factors that could cause such differences include: credit, market (including equity, commodity, foreign exchange and interest rate), liquidity, operational, reputational, insurance, strategic, regulatory, legal and other risks, all of which are discussed in the Management s Discussion and Analysis (MD&A) in the Bank s 2009 Annual Report. Additional risk factors include changes to and new interpretations of risk-based capital guidelines and reporting instructions; increased funding costs for credit due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank or its affiliates relating to the care and control of information; and the use of new technologies in unprecedented ways to defraud the Bank or its customers and the organized efforts of increasingly sophisticated parties who direct their attempts to defraud the Bank or its customers through many channels. We caution that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank s results. For more detailed information, please see the Risk Factors and Management section of the MD&A, starting on page 65 of the Bank s 2009 Annual Report. All such factors should be considered carefully, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, when making decisions with respect to the Bank and undue reliance should not be placed on the Bank s forward-looking statements. Material economic assumptions underlying the forward-looking statements contained in this presentation are set out in the Bank s 2009 Annual Report under the heading Economic Summary and Outlook, as updated in the First Quarter 2010 Report to Shareholders; and for each of the business segments, under the headings Business Outlook and Focus for 2010, as updated in the First Quarter 2010 Report to Shareholders under the headings Business Outlook. Any forward-looking statements contained in this presentation represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank s shareholders and analysts in understanding the Bank s financial position, objectives and priorities and anticipated financial performance as at and for the periods ended on the dates presented (as applicable), and may not be appropriate for other purposes. The Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation. 3

4 Agenda Strategic Overview Online Brokerage Advice Channels Asset Management Emerging Opportunities Q&A Closing Remarks Bill Hatanaka John See Sandy Cimoroni Brian Murdock Angus Rigby All Bill Hatanaka 4

5 Strategic Overview Bill Hatanaka 5

6 TD Bank Financial Group Building the Better Bank Every Day Strategic Overview Helping clients build, preserve and transition wealth Drive top tier asset growth through integrated model Build on leadership in Online Brokerage Accelerate growth in Advice and Asset Management Sustain investments for the future Seize multiple growth opportunities Integrated approach Leading asset gatherer Premium growth platform 6

7 Integrated Model and Partnership An Integrated Approach within Online Brokerage Advice Channels Asset Management Strong partnering with retail bank Referrals from TD Canada Trust 32% CAGR 1 Referrals to TD Canada Trust 58% CAGR Proven referral ability with #1 #1 retail bank in in Canada 1. Compound Annual Growth Rate 7

8 Asset Growth: Our Key Metric Assets ($B) Retail Asset CAGR = 12% $372 $76 Retail assets more than doubled $210 $39 $200 Total Retail $276B $97 $74 $ Q Institutional AUM Retail AUA Retail AUM Top tier asset growth drives earnings 1. AUM is Assets Under Management 2. AUA is Assets Under Administration 8

9 Wealth Management Business Lines 2009 Revenue Revenue 1 CAGR Q1 10 Assets Market Share 2 Online $742MM 8% $108B Canada #1 U.K. #1 Build on Leadership Advice $820MM 12% $113B Private Investment Counsel #1 Financial Planning #3 Investment Advice #5 Accelerate Growth Asset Management $643MM 8% $54B 3 $96B 4 Retail #2 Institutional #2 Accelerate Growth $2.2B 9% 9% $372B5 5 Multiple growth businesses with significant upside revenue adjusted to exclude the impact of sale of TD Waterhouse U.S. online brokerage to form TD Ameritrade. 2. Bank market share among Canadian Peers (RBC, CM, BMO, BNS). Source: Company filings, Investor Economics. 3. Retail assets under management 4. Institutional assets under management 5. Total does not add due to rounding. 9

10 Diversified Sources of Revenue % Revenue 2009 % Revenue CAGR Primary Influencer Transaction $492MM 38% $616MM 28% 4% Volatility Net Interest Income $176MM 14% $270MM 12% 7% Interest rates Fee-based $620MM 48% $1.3B 60% 13% Asset levels $1.3B $2.2B 9% 62% 62% Recurring Revenue 72% 72% Recurring Revenue Strategic shift: sustainable annuity-like revenue streams revenue adjusted to exclude the impact of sale of TD Waterhouse U.S. online brokerage to form TD Ameritrade. 10

11 Sustainable Investments for the Future Hired 700+ new client facing advisors since 2003 Reduced price points to enhance volume growth in online brokerage Invested in technology to upgrade products, services and client platform Earnings ($MM) Earned through significant investments $324 $501 $345 Built scale and platform through strategic acquisitions $ Strong foundation for future earnings 11

12 The Client Experience Journey Client Client Service Service Index Index (CSI) (CSI) launched for for Private Private Investment Counsel 1 1 & Discount Brokerage CSI CSI Launched for for Private Private Banking & Private Private Trust Trust CSI CSI added added to to Employee Incentive Program Exceptional Experiences launched CSI CSI launched for for Institutional Services CSI CSI launched for for Financial Planning NEW NEW Customer Experience Index Index (CEI) (CEI) for for all all Wealth Wealth businesses Opportunity Call Call Program launched Relentless focus on on improving client experience 1. Private Investment Counsel legacy program from Canada Trust. 12

13 Seize Multiple Growth Opportunities Options & Global Equities New Canadians Retirement Women Building new sources of of earnings 13

14 Driving Future Earnings Online Brokerage in Canada Deepen functionality Advice Channels Asset Management Capitalize on investment in client-facing advisors Deepen channel penetration and expand international equity capability Emerging Opportunities Expand global online presence 14

15 John See Online Brokerage 15

16 Online Brokerage in Canada At a Glance Canada s leading selfdirected online brokerage for retail investors Custody and clearing services for investment counsellors and corporate clients Assets ($B) $102 10% CAGR $ Q1 10 Market Positioning Integrated banking & brokerage offering Comprehensive product offering 24x7 multilingual service High-value client relationship managers 2,000+ in-person client educational seminars #1 Market Share 1 #1 Investing Site 2 #1 Options Platform 3 #1 #1 Online Brokerage in in Canada 1. Source: Investor Economics Online/Discount Brokerage Market Share Report for the quarter ending December 31, Source: Surviscor, Canadian Online Brokerage Study, Winter Source: thinkorswim rating by Barron s Online Broker Survey, March 15,

17 Leadership in Online Brokerage The Rapid Growth of a Leader 24x7 service Online investing Flat-fee pricing Integrated brokerage and banking accounts Specialized services for affluent & active investors Paperless record keeping Biometric voice authentication First Trades per day CAGR: 23% Commissions per trade $40 $13 Executed strategic price reduction Industry leadership: 46% market share in in Canada Source: Investor Economics Online/Discount Brokerage Market Share Report for the quarter ending December 31,

18 Embedded Earnings Deposits deposits + margin Margin Loans loans + margin 219 bps $ bps $8 208 bps 117 bps $3 $ Q1 10 Deposits ($B) Margin on Deposits Q1 10 Margin Loans ($B) Margin on Loans Opportunity to to grow net interest income in in normalized rate environment 18

19 Key Industry Trends Globalization of Securities Markets Increasing Retail Investor Sophistication Demand for Information and Tools Deepening Functionality Adoption of New Technology Focusing on on what matters to to clients to to drive growth 19

20 Growth Opportunities Continue to leverage strong TD partnerships Target new demographic segments Deepen functionality to increase trading volumes Focus on on new sources of of revenue 20

21 Integrated Model: Strong TD Partnership Referrals from TD Canada Trust Referrals to TD Canada Trust 22% CAGR 69% CAGR More reciprocal referral opportunities available 21

22 Target New Demographic Segments New Canadians 1.0M 1.1M Other Asian Community 3 of 5 New Canadians: Asian Community Source: Ipsos Reid 2009 Online Discount Brokerage Report & Statistics Canada 2006 Census Tactics 24x7 access to Mandarin and Cantonese speaking investment representatives Chinese language trading and information online Targeted marketing, Chinese media spokesperson Shifting demographics creating new opportunities 22

23 Deepen Functionality: U.S. Options Growing Demand Leading Platform 3.6B 1.2B Source: Options Clearing Corporation. U.S. Options contract volume growth from 2004 to 2009 Future revenue opportunity 23

24 Deepen Functionality: Global Markets Equity Trade Volumes 1.1B 0.4B Americas Asia Pacific 7.1B 7.0B Offer Canadians access to global markets through multi-currency, multi-exchange platform Source: Worldwide Federation of Exchanges Equity Trades from 2000 to 2009 Future revenue opportunity 24

25 Key Takeaways Leader in online brokerage Embedded earnings growth Strong integrated model that drives asset growth Future revenue opportunities 25

26 Sandy Cimoroni Advice Channels 26

27 Advice Channels At a Glance Investment and wealth advice for every stage of life. Multi-Channel Distribution Financial Planning Private Investment Advice Private Client Group Discrete Segments Mass Affluent Affluent, High Net Worth High Net Worth, Discretionary Assets ($B) $113 15% CAGR $ Q1 10 Market Positioning Client-centric approach Integrated approach to to enhance client experience Focus on on pre-retirement/retirement Preservation and transition of of wealth #1 Private Investment Counsel 1 #2 Estates & Trust 1 #3 Financial Planning 1 #5 Investment Advice 1 Significant scale to to capitalize on on retirement opportunity 1. Bank market share among Canadian Peers (RBC, CM, BMO, BNS). Source: Investor Economics. 27

28 Wealth Advice for Every Stage of Life Business Source Delivery Mass Affluent $ K Affluent >$500K High Net Worth >$1M+ Financial Planning Internal TD Canada Trust Branch Private Investment Advice Private Client Group Internal External Internal External TD Waterhouse Branch Private Client Services Centre Financial Financial plan plan Primarily Primarily mutual funds mutual funds Comprehensive diagnostic Comprehensive diagnostic Investment Policy Investment Statement Policy Statement Broader Broader range of range of products products & solutions solutions Comprehensive diagnostic Comprehensive diagnostic Investment Investment Policy Statement Policy Statement Broader Broader range range of products of products & solutions solutions Discretionary or Discretionary or advised advised money management money management Integrated approach to to solutions as as clients needs grow 28

29 Key Industry Trends Wealth Held by 50+ Demographic 72% of Total Wealth by 2014 $2.9T 50+ demographic shift to preservation and transition will create opportunities $1.2T Consolidator gets 4x more revenue F Source: Investor Economics: 2005 Household Balance Sheet Report Positioned to to be be the consolidator of of choice 29

30 Growth Opportunities Deepen client relationships through comprehensive investment process Use referrals to capture and consolidate client assets Leverage investment in client facing advisors to grow assets Capitalize on on demand for advice to to grow assets 30

31 Deepening Existing Client Relationships Investment and Wealth Planning Process Addresses complex client needs Ability to meet all needs in-house Franchised clients more likely to consolidate with TD Addresses complex client needs Ability to meet all needs inhouse Franchised clients more likely to consolidate with TD Better understand needs acquire more assets 31

32 Deliver Comprehensive Client Solutions Core Investment Products Cash and near cash Term and Fixed Income Mutual Funds Equities Comprehensive Wealth Management Strategic Solutions Discrete Investment Management Private Banking Estates and Trusts Financial Care and Management Tax and Insurance Planning Transfer of of Wealth Business Succession Planning Philanthropy Accumulation Preservation & Transition Growing high-value client relationships 32

33 Providing Advice to Underserved Markets Women 39% 1 67% Men Women 2/3 rds rds controlled by women in Control of investable assets > $US 625K Source: Corporate Executive Board, VIP Forum 2006 Tactics Educational media campaigns Increased focus on women s attendance at client sessions Increasing advice needs of of women = Growing opportunity 33

34 Leveraging TD Canada Trust Referrals to Consolidate Assets $2.11 Additional $1.11 for every $1 referred $1.72 $0.72 $1.11 Additional Assets $1.00 $1.00 Referred Assets Proven ability to to leverage referrals to to consolidate and grow assets 34

35 Leverage our Investment in Client Facing Advisors More Client Facing Advisors 1,209 1,427 Embedded Growth Mature advisor delivers 3x revenue Grew 3x faster than industry 54% of advisors 4yrs + 46% of advisors < 4yrs Organic build strategy Positioned to to deliver earnings lift lift 35

36 U.S. Strategy Delivery Mass Affluent < US$750K Affluent and High Net Worth >US$750K TD TD Ameritrade Online Private Client Group Private Client Service Centre Early stages of execution Piloting referrals to TD Ameritrade from TD Bank stores Private Client Group: Private Banking, Estates & Trust, Investment Counsel Leveraging TD Bank commercial banking relationships Focus on high opportunity markets: New York City, Philadelphia, Boston, Washington DC, Miami Leverage partners to to serve U.S. retail bank customers 36

37 Key Takeaways Deepen client relationships through comprehensive investment process Use referrals to capture and consolidate client assets Leverage investment in client facing advisors to grow assets Capitalize on on demand for advice to to grow assets 37

38 Brian Murdock Asset Management 38

39 Asset Management At a Glance One of Canada s largest asset managers Retail High net worth Institutional Assets ($B) $96 $75 6% total $54 $31 assets CAGR Q1 10 Retail Institutional Market Positioning Superior performance Extensive distribution channels Wide breadth of of scalable offerings High operating leverage #1 Long-term mutual fund net sales 1 #2 Fixed income mutual fund AUA 2 #2 Index manager in Canada 3 Industry leader well positioned for growth 1. Source: Investment Funds Institute of Canada (IFIC) as of October For fiscal year (Jan to Dec) Source: IFIC as of October Source: Investor Economics 39

40 Key Industry Trends Industry Consolidation Commoditization and Fee Pressure Innovative and Customized Products and Solutions Scale is Critical Regulatory Pressure Scalable solutions are key to to success 40

41 Growth Opportunities Deepen channel penetration Broaden institutional relationships Enhance international equity capability Multiple levers to to grow the business 41

42 Deeper Penetration of TD Canada Trust Products that are easy to understand and sell Straightforward way to invest Investment experts that look out for your interest Investment peace of mind TD Comfort Portfolios Assets ($B) Nov-08 Successful client-centric product $2B Feb-10 Best-in-class products and infrastructure Deliver sustainable sales 42

43 Continued Excellence in Non-TD Channel Distribution Sales of Long-Term Mutual Funds +34% -9% Independent Fund Companies Feb-07 Feb-10 Source: Investment Funds Institute of Canada long-term fund Assets Under Management. Success story Potential for further growth 43

44 Broaden Institutional Relationships Core Solutions Economies of scale Deeper stickier relationships Annuity type revenues Drive operating leverage by by growing relationships 44

45 Enhance International Equity Capability Scalable platform and leading asset management practice in fixed income and passive mandates Leadership opportunity in international equity asset management in Canada Focus on enhancing international equity capability Build out capabilities to to create growth opportunities 45

46 Key Takeaways Deepen channel penetration Broaden institutional relationships Enhance international equity capability Multiple levers to to grow the business 46

47 Angus Rigby Emerging Opportunities 47

48 TD Waterhouse International At a Glance Self-directed online brokerage for retail and high net worth investors Custody and clearing services for corporate clients Assets ($B) $6 11% CAGR $ Q1 10 Strategic Acquisitions #1 in the U.K. 1 E*TRADE U.K. Award-winning capabilities and market leadership 1. Source: Compeer Feb Based on daily average trades. 48

49 Diversified Approach TD Waterhouse Investor Services Online retail-only broker business for for U.K. & Ireland Based in in the U.K. TD Waterhouse Corporate Services White-label trading and clearing services for for U.K. institutional clients International Online Private Banking Online private bank for for international self-directed investors Based in in Luxembourg Brokerage for Retail Investors Online and branch trading to to Royal Bank of of Scotland and Natwest clients 50/50 joint venture with Royal Bank of of Scotland Underpinned by by four strong businesses 49

50 Proven Market Leadership TDWIS 1 Web Penetration 90% Active Trader 2 Volume 48% 39% 65% 30% 39% TDWIS 1 Industry Annual Trading Volume 4 Market Share 5 27% 2.9MM 1.4MM 20% CAGR 13% Q TD Waterhouse Investor Services. 2. Active trader: somebody who carries out 31+ trades per quarter 3. Source: Compeer. 4. TD Waterhouse International. 5. Source: Compeer Feb Based on daily average trades. Strong foundation to to drive growth 50

51 Growth Opportunities Drive organic growth Leverage TD brand internationally to develop global hub Expand global online presence 51

52 Drive Organic Growth Investor Services Grow U.K. retail market share and expand into Europe Corporate Services Leverage TD brand to attract new U.K. institutional clients Online Private Banking Grow internationally and take market share from European private banks Brokerage for Retail Investors Embed further into Royal Bank of Scotland and Natwest retail offering Capitalize on on award-winning capabilities 52

53 Drive Organic Growth Best in in class platform U.S. U.S. equities & options Multi-currency/markets Multilingual web web experience Multi-channel leading with with online/mobile Real Real time time movement between currencies Leading platform ripe for expansion 53

54 Leverage TD Brand Internationally to Build Global Hub #1 Market Share in Domestic Markets Canada International Leverage Brand in New Markets Online Population Growth 560M > 938M by Integrated approach to to capturing global leadership positions 1. Forrester Research Internet Population Forecast, 4/09 54

55 Key Takeaways Strong foundation Drive organic growth Leverage TD brand internationally to develop global hub Expand global online presence 55

56 Q & A

57 Closing Remarks Bill Hatanaka

58 TD Bank Financial Group Building the Better Bank Every Day Strategic Overview Helping clients build, preserve and transition wealth Drive top tier asset growth through integrated model Build on leadership in Online Brokerage Accelerate growth in Advice and Asset Management Sustain investments for the future Seize multiple growth opportunities Integrated approach Leading asset gatherer Premium growth platform 58

59 Investor Relations Contacts Phone: or Website: Best Investor Relations by Sector: Financial Services Best Retail Investor Communications

60 Focus on April 13, 2010