Earnings News
Release • Three months ended January 31, 2024
This quarterly Earnings
News Release should be read in conjunction with the Bank's
unaudited first quarter 2024 Report to Shareholders for the three
months ended January 31, 2024, prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB), which is available
on our website at http://www.td.com/investor/. This analysis is
dated February 28, 2024. Unless otherwise indicated, all amounts
are expressed in Canadian dollars, and have been primarily derived
from the Bank's Annual or Interim Consolidated Financial Statements
prepared in accordance with IFRS. Certain comparative amounts have
been revised to conform to the presentation adopted in the current
period. Additional information relating to the Bank is available on
the Bank's website at http://www.td.com, as well as on SEDAR+ at
http://www.sedar.com and on the U.S. Securities and Exchange
Commission's (SEC) website at http://www.sec.gov (EDGAR filers
section).
|
Reported results conform to generally accepted accounting
principles (GAAP), in accordance with IFRS. Adjusted results are
non-GAAP financial measures. For additional information about the
Bank's use of non-GAAP financial measures, refer to "Non-GAAP and
Other Financial Measures" in the "How We Performed" section of this
document.
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FIRST QUARTER FINANCIAL HIGHLIGHTS, compared with
the first quarter last year:
- Reported diluted earnings per share were $1.55, compared with $0.82.
- Adjusted diluted earnings per share were $2.00, compared with $2.23.
- Reported net income was $2,824
million, compared with $1,581
million.
- Adjusted net income was $3,637
million, compared with $4,154
million.
FIRST QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The first quarter reported earnings figures included the
following items of note:
- Amortization of acquired intangibles of $94 million ($79
million after-tax or 4 cents
per share), compared with $54 million
($46 million after-tax or
3 cents per share) in the first
quarter last year.
- Acquisition and integration charges related to the Schwab
transaction of $32 million
($26 million after-tax or
2 cents per share), compared
with $34 million ($28 million after-tax or 2
cents per share) in the first quarter last year.
- Share of restructuring and other charges from investment in
Schwab of $49 million (or
3 cents per share).
- Restructuring charges of $291
million ($213 million
after-tax or 12 cents per
share).
- Acquisition and integration charges related to the Cowen
acquisition of $117 million
($93 million after-tax or
5 cents per share).
- Impact from the terminated FHN acquisition-related capital
hedging strategy of $57 million
($43 million after-tax or
2 cents per share).
- FDIC special assessment of $411 million ($310
million after-tax or 17 cents
per share).
TORONTO, Feb. 29,
2024 /CNW/ - TD Bank Group ("TD" or the "Bank") today
announced its financial results for the first quarter ended
January 31, 2024. Reported earnings
were $2.8 billion, up 79% compared
with the first quarter last year, and adjusted earnings were
$3.6 billion, down 12%.
"TD had a good start to the year, with revenue growth reflecting
higher fee-income from our markets-driven businesses, including the
contribution from TD Cowen, and higher volumes and deposit margins
in the Canadian Personal and Commercial Bank," said Bharat Masrani,
Group President and Chief Executive Officer, TD Bank Group.
"Expense growth moderated from last quarter as we made progress on
our restructuring initiatives, delivering efficiencies across the
Bank."
Canadian Personal and Commercial Banking delivered a strong
quarter supported by volume growth and margin
expansion
Canadian Personal and Commercial Banking net
income was $1,785 million, an
increase of 3% compared to the first quarter last year. The
increase reflects revenue growth, partially offset by higher
non-interest expenses and provisions for credit losses (PCL).
Revenue was $4,884 million, an
increase of 6%, reflecting 8% growth in net interest income driven
by volume growth and margin expansion.
Canadian Personal and Commercial Banking delivered another
strong quarter for New to Canada
account openings and continued momentum in credit cards. TD
launched the Low Rate Visa card, further enhancing its
award-winning line up of credit cards. In addition, TD Auto Finance
delivered strong performance in prime retail auto lending and
accelerated acquisition of dealer relationships in its commercial
business year-over-year. Small Business Banking helped over 165,000
clients conveniently repay or refinance Canada Emergency Business Account loans.
The U.S. Retail Bank delivered loan growth and operating
momentum in a challenging environment
U.S. Retail
reported net income of $907 million,
a decrease of 43% (43% in U.S. dollars) compared with the first
quarter last year. On an adjusted basis, net income was
$1,217 million, a decline of 27% (27%
in U.S. dollars). TD Bank's investment in The Charles Schwab
Corporation ("Schwab") contributed $194
million in earnings, a decrease of 36% (35% in U.S. dollars)
compared with the first quarter last year.
The U.S. Retail Bank, which excludes the Bank's investment in
Schwab, reported net income of $713
million (US$526 million), a
decrease of 44% (45% in U.S. dollars) from the first quarter last
year, primarily reflecting the Federal Deposit Insurance
Corporation (FDIC) special assessment, lower revenue and higher
PCL. On an adjusted basis net income was $1,023 million (US$752
million), a decrease of 25% (26% in U.S. dollars) from the
first quarter last year.
The U.S. Retail Bank continued to deliver loan growth while
maintaining its through-the-cycle underwriting standards, with
total average loan balances up 9% compared with the first quarter
last year and up 2% from last quarter. Average deposit volumes
declined 9% year-over-year and 1% quarter-over-quarter. Excluding
sweep deposits, total personal and business deposit average
balances were down 2% year-over-year and flat quarter-over-quarter,
reflecting competitive market conditions.
During the quarter, TD Bank, America's Most Convenient Bank® (TD
AMCB) announced a three-year US$20
billion Community Impact Plan to support lending,
philanthropy, and banking access in diverse and underserved
communities across its footprint. TD AMCB continued to deliver
innovative solutions to small business clients with the launch of
Tap to Pay on iPhone and Zelle for Small Business, offering
enhanced convenience and payment functionality.
Wealth Management and Insurance delivered good performance
reflecting the strength of its diversified businesses
Wealth
Management and Insurance net income was $555
million, relatively flat compared with the first quarter
last year, as positive top-line momentum was partially offset by
higher insurance service expenses. This quarter's revenue growth of
8% reflected insurance premium growth and higher fee-based revenue
in the asset management and advice-based businesses.
This quarter, Wealth Management and Insurance's investments in
client-centric innovation continued to drive momentum and gain
recognition.TD Direct Investing ranked as the #1 Direct Investing
Brokerage in Canada by the Globe
and Mail for the second consecutive year. Eighteen mutual funds and
ETFs managed by TD Asset Management received 2023 FundGrade A+
Awards by Fundata Canada Inc. for demonstrating strong
risk-adjusted performance relative to industry peers, underscoring
the expertise of the Bank's investment teams.
Wholesale Banking delivered record
revenue
Wholesale Banking reported net income for the
quarter was $205 million, a decrease
of $126 million compared with the
first quarter last year, reflecting higher non-interest expenses
which include integration-related costs of $117 million and a provision of $102 million taken in connection with the
industry-wide U.S. record keeping matter, partially offset by
higher revenues. On an adjusted basis, net income was $298 million, a decrease of $49 million or 14%. Revenue for the quarter was
$1,780 million, an increase of
$435 million, or 32%, compared with
the first quarter last year, reflecting the segment's expanded
capabilities from the inclusion of TD Cowen and strong performance
across Global Markets and Corporate and Investment Banking.
This quarter, the Wholesale Bank continued to demonstrate its
leadership in Environmental, Social, and Governance (ESG). TD
Securities was joint lead manager on a 3-year (US$1.5 billion) Social Bond for the International
Finance Corporation (IFC) to support low-income communities in
emerging markets. The transaction represents IFC's largest social
bond ever issued. TD Securities was also joint lead manager on a
new (AUD$1.5 billion) Green Bond issued by KFW Development Bank,
the issuer's largest ever transaction in the Australian market.
Continuing to innovate for customers
The Bank
continued to enhance TD Invent, its enterprise approach to
innovation, including reaching a milestone with over 700 patents
across Canada and the U.S. as of
this quarter. For the third consecutive year, the Bank was
recognized by the Business Intelligence Group's annual BIG
Innovation Awards, ranking highest in the Organization and Product
categories for the TD Accessibility Adapter, a colleague-developed
browser plug-in that helps to make online experiences more
inclusive.
Capital
TD's Common Equity Tier 1 Capital ratio was
13.9%.
Conclusion
"Looking ahead, TD is well-positioned from
both a capital and funding perspective, with the capacity to
continue to invest in our business and return capital to
shareholders," said Masrani. "I want to thank our more than 95,000
TD bankers who continue to deliver for our customers, communities,
and shareholders."
The foregoing contains
forward-looking statements. Please refer to the "Caution Regarding
Forward-Looking Statements" on page 3.
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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 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, and are intended to be
forward-looking statements under, applicable Canadian and U.S.
securities legislation, including the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements
include, but are not limited to, statements made in this document,
the Management's Discussion and Analysis ("2023 MD&A") in the
Bank's 2023 Annual Report under the heading "Economic Summary and
Outlook", under the headings "Key Priorities for 2024" and
"Operating Environment and Outlook" for the Canadian Personal and
Commercial Banking, U.S. Retail, Wealth Management and Insurance,
and Wholesale Banking segments, and under the heading "2023
Accomplishments and Focus for 2024" for the Corporate segment, and
in other statements regarding the Bank's objectives and priorities
for 2024 and beyond and strategies to achieve them, the regulatory
environment in which the Bank operates, and the Bank's anticipated
financial performance. Forward-looking statements can be identified
by words such as "anticipate", "believe", "could", "estimate",
"expect", "forecast", "goal", "intend", "may", "outlook", "plan",
"possible", "potential", "predict", "project", "should", "target",
"will", and "would" and similar expressions or variations thereof,
or the negative thereof, but these terms are not the exclusive
means of identifying such statements.
|
By their very nature,
these forward-looking 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 physical, financial, economic, political, 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 forward-looking
statements. Risk factors that could cause, individually or in the
aggregate, such differences include: strategic, credit, market
(including equity, commodity, foreign exchange, interest rate, and
credit spreads), operational (including technology, cyber security,
and infrastructure), model, insurance, liquidity, capital adequacy,
legal, regulatory compliance and conduct, reputational,
environmental and social, and other risks. Examples of such risk
factors include general business and economic conditions in the
regions in which the Bank operates; geopolitical risk; inflation,
rising rates and recession; regulatory oversight and compliance
risk; the ability of the Bank to execute on long-term strategies,
shorter-term key strategic priorities, including the successful
completion of acquisitions and dispositions and integration of
acquisitions, the ability of the Bank to achieve its financial or
strategic objectives with respect to its investments, business
retention plans, and other strategic plans; technology and cyber
security risk (including cyber-attacks, data security breaches or
technology failures) on the Bank's technologies, systems and
networks, those of the Bank's customers (including their own
devices), and third parties providing services to the
Bank; model risk; fraud activity; insider risk; the failure of
third parties to comply with their obligations to the Bank or its
affiliates, including relating to the care and control of
information, and other risks arising from the Bank's use of third
parties; the impact of new and changes to, or application of,
current laws, rules and regulations, including without limitation
tax laws, capital guidelines and liquidity regulatory guidance;
increased competition from incumbents and new entrants (including
Fintechs and big technology competitors); shifts in consumer
attitudes and disruptive technology; environmental and social risk
(including climate change); exposure related to significant
litigation and regulatory matters; ability of the Bank to attract,
develop, and retain key talent; changes to the Bank's credit
ratings; changes in foreign exchange rates, interest rates, credit
spreads and equity prices; the interconnectivity of Financial
Institutions including existing and potential international debt
crises; increased funding costs and market volatility due to market
illiquidity and competition for funding; Interbank Offered Rate
(IBOR) transition risk; critical accounting estimates and changes
to accounting standards, policies, and methods used by the Bank;
the economic, financial, and other impacts of pandemics; and the
occurrence of natural and unnatural catastrophic events and claims
resulting from such events. The Bank cautions 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 refer to the "Risk Factors and
Management" section of the 2023 MD&A, as may be updated in
subsequently filed quarterly reports to shareholders and news
releases (as applicable) related to any events or transactions
discussed under the heading "Significant Events" in the relevant
MD&A, which applicable releases may be found on www.td.com. All
such factors, as well as other uncertainties and potential events,
and the inherent uncertainty of forward-looking statements, should
be considered carefully when making decisions with respect to the
Bank. The Bank cautions readers not to place undue reliance on the
Bank's forward-looking statements.
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Material economic
assumptions underlying the forward-looking statements contained in
this document are set out in the 2023 MD&A under the heading
"Economic Summary and Outlook", under the headings "Key Priorities
for 2024" and "Operating Environment and Outlook" for the Canadian
Personal and Commercial Banking, U.S. Retail, Wealth Management and
Insurance, and Wholesale Banking segments, and under the heading
"2023 Accomplishments and Focus for 2024" for the Corporate
segment, each as may be updated in subsequently filed quarterly
reports to shareholders.
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Any forward-looking
statements contained in this document 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, 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 law.
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TABLE 1: FINANCIAL
HIGHLIGHTS
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
|
|
January
31
|
|
October 31
|
|
January 31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
Results of
operations
|
|
|
|
|
|
|
|
|
|
Total revenue –
reported1
|
$
|
13,714
|
|
$
|
13,178
|
|
$
|
12,201
|
|
Total revenue –
adjusted1,2
|
|
13,771
|
|
|
13,242
|
|
|
13,077
|
|
Provision for (recovery
of) credit losses
|
|
1,001
|
|
|
878
|
|
|
690
|
|
Insurance service
expenses (ISE)1
|
|
1,366
|
|
|
1,346
|
|
|
1,164
|
|
Non-interest expenses –
reported1
|
|
8,030
|
|
|
7,628
|
|
|
8,112
|
|
Non-interest expenses –
adjusted1,2
|
|
7,125
|
|
|
6,988
|
|
|
6,337
|
|
Net income –
reported1
|
|
2,824
|
|
|
2,866
|
|
|
1,581
|
|
Net income –
adjusted1,2
|
|
3,637
|
|
|
3,485
|
|
|
4,154
|
|
Financial
position (billions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
Total loans net of
allowance for loan losses
|
$
|
904.3
|
|
$
|
895.9
|
|
$
|
836.7
|
|
Total assets
|
|
1,910.9
|
|
|
1,955.1
|
|
|
1,926.6
|
|
Total
deposits
|
|
1,181.3
|
|
|
1,198.2
|
|
|
1,220.6
|
|
Total equity
|
|
112.4
|
|
|
112.1
|
|
|
112.0
|
|
Total risk-weighted
assets3
|
|
579.4
|
|
|
571.2
|
|
|
531.6
|
|
Financial
ratios
|
|
|
|
|
|
|
|
|
|
Return on common equity
(ROE) – reported1,4
|
|
|
10.9
|
%
|
|
10.5
|
%
|
|
5.9
|
%
|
Return on common equity
– adjusted1,2
|
|
|
14.1
|
|
|
12.9
|
|
|
16.1
|
|
Return on tangible
common equity (ROTCE)1,2,4
|
|
|
14.9
|
|
|
14.3
|
|
|
8.0
|
|
Return on tangible
common equity – adjusted1,2
|
|
|
18.7
|
|
|
17.1
|
|
|
21.1
|
|
Efficiency ratio –
reported1,4
|
|
|
58.6
|
|
|
57.9
|
|
|
66.5
|
|
Efficiency ratio –
adjusted, net of ISE1,2,4,5
|
|
|
57.4
|
|
|
58.7
|
|
|
53.2
|
|
Provision for (recovery
of) credit losses as a % of net
|
|
|
|
|
|
|
|
|
|
average
loans and acceptances
|
|
0.44
|
|
|
0.39
|
|
|
0.32
|
|
Common share
information – reported (Canadian dollars)
|
|
|
|
|
|
|
|
|
|
Per share
earnings1
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.55
|
|
$
|
1.48
|
|
$
|
0.82
|
|
Diluted
|
|
1.55
|
|
|
1.48
|
|
|
0.82
|
|
Dividends per
share
|
|
1.02
|
|
|
0.96
|
|
|
0.96
|
|
Book value per
share4
|
|
57.34
|
|
|
56.56
|
|
|
55.07
|
|
Closing share
price6
|
|
81.67
|
|
|
77.46
|
|
|
92.06
|
|
Shares outstanding
(millions)
|
|
|
|
|
|
|
|
|
|
Average
basic
|
|
|
1,776.7
|
|
|
1,806.3
|
|
|
1,820.7
|
|
Average
diluted
|
|
|
1,778.2
|
|
|
1,807.8
|
|
|
1,823.1
|
|
End of
period
|
|
|
1,772.1
|
|
|
1,790.7
|
|
|
1,828.9
|
|
Market capitalization
(billions of Canadian dollars)
|
$
|
144.7
|
|
$
|
138.7
|
|
$
|
168.4
|
|
Dividend
yield4
|
|
4.9
|
%
|
|
4.7
|
|
|
4.3
|
%
|
Dividend payout
ratio4
|
|
65.7
|
|
|
64.6
|
|
|
116.6
|
|
Price-earnings
ratio1,4
|
|
13.1
|
|
|
14.0
|
|
|
11.1
|
|
Total shareholder
return (1 year)4
|
|
(6.9)
|
|
|
(6.9)
|
|
|
(5.7)
|
|
Common share
information – adjusted (Canadian
dollars)1,2
|
|
|
|
|
|
|
|
|
|
Per share
earnings1
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.01
|
|
$
|
1.82
|
|
$
|
2.24
|
|
Diluted
|
|
2.00
|
|
|
1.82
|
|
|
2.23
|
|
Dividend payout
ratio
|
|
50.7
|
%
|
|
52.4
|
|
|
42.9
|
%
|
Price-earnings
ratio1
|
|
10.6
|
|
|
9.8
|
|
|
10.8
|
|
Capital
ratios3
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
Capital ratio
|
|
|
13.9
|
%
|
|
14.4
|
%
|
|
15.5
|
%
|
Tier 1 Capital
ratio
|
|
|
15.7
|
|
|
16.2
|
|
|
17.5
|
|
Total Capital
ratio
|
|
|
17.6
|
|
|
18.1
|
|
|
19.9
|
|
Leverage
ratio
|
|
|
4.4
|
|
|
4.4
|
|
|
4.8
|
|
TLAC ratio
|
|
|
30.8
|
|
|
32.7
|
|
|
36.6
|
|
TLAC Leverage
ratio
|
|
8.6
|
|
|
8.9
|
|
|
9.9
|
|
1
|
For the three months
ended October 31, 2023 and January 31, 2023, certain amounts have
been restated for the adoption of IFRS 17, Insurance
Contracts (IFRS 17). Refer to Note 2 of the Bank's first
quarter 2024 Interim Consolidated Financial Statements for further
details.
|
2
|
The Toronto-Dominion
Bank ("TD" or the "Bank") prepares its Interim Consolidated
Financial Statements in accordance with IFRS, the current GAAP, and
refers to results prepared in accordance with IFRS as the
"reported" results. The Bank also utilizes non-GAAP financial
measures such as "adjusted" results and non-GAAP ratios to assess
each of its businesses and to measure overall Bank performance. To
arrive at adjusted results, the Bank adjusts reported results for
"items of note". Refer to the "How We Performed" section of this
document for further explanation, a list of the items of note, and
a reconciliation of adjusted to reported results. Non-GAAP
financial measures and ratios used in this document are not defined
terms under IFRS and, therefore, may not be comparable to similar
terms used by other issuers.
|
3
|
These measures have
been included in this document in accordance with the Office of the
Superintendent of Financial Institutions Canada's (OSFI's) Capital
Adequacy Requirements, Leverage Requirements, and Total Loss
Absorbing Capacity (TLAC) guidelines. Refer to the "Capital
Position" section in the first quarter of 2024 MD&A for further
details.
|
4
|
For additional
information about this metric, refer to the Glossary in the first
quarter of 2024 MD&A, which is incorporated by
reference.
|
5
|
Efficiency ratio –
adjusted, net of ISE is calculated by dividing adjusted
non–interest expenses by adjusted total revenue, net of ISE.
Adjusted total revenue, net of ISE – Q1 2024: $12,405 million,
Q4 2023: $11,896 million, Q1 2023: $11,913 million. Effective the
first quarter of 2024, the composition of this non-GAAP ratio and
the comparative amounts have been revised.
|
6
|
Toronto Stock
Exchange closing market price.
|
SIGNIFICANT EVENTS
a) Restructuring Charges
The Bank
continued to undertake certain measures in the first quarter of
2024 to reduce its cost base and achieve greater efficiency. In
connection with these measures, the Bank incurred $291 million of restructuring charges which
primarily relate to employee severance and other personnel-related
costs and real estate optimization. The Bank continues to expect to
incur restructuring charges in the first half of calendar 2024 that
are of a similar magnitude to the restructuring charges incurred in
the fourth quarter of 2023.
b) Federal Deposit Insurance
Corporation Special Assessment
On November 16, 2023, the FDIC announced a final
rule that implements a special assessment to recover the losses to
the Deposit Insurance Fund arising from the protection of uninsured
depositors during the U.S. bank failures in the spring of 2023. The
FDIC special assessment resulted in the recognition of $411 million (US$300
million) pre-tax in non-interest expenses in the first
quarter of the Bank's fiscal 2024. On February 23, 2024, the FDIC notified all
institutions subject to the special assessment that its estimate of
total losses has increased compared to the amount communicated with
the final rule in November 2023. The
FDIC plans to provide institutions subject to the special
assessment an updated estimate with its first quarter 2024 special
assessment invoice, to be released in June
2024. At this time, it is not known what the final FDIC
special assessment will be, but the Bank expects the FDIC special
assessment to increase.
HOW WE PERFORMED
HOW THE BANK REPORTS
The Bank prepares its
Interim Consolidated Financial Statements in accordance with IFRS
and refers to results prepared in accordance with IFRS as
"reported" results.
Non-GAAP and Other Financial Measures
In addition to
reported results, the Bank also presents certain financial
measures, including non-GAAP financial measures that are
historical, non-GAAP ratios, supplementary financial measures and
capital management measures, to assess its results. Non-GAAP
financial measures, such as "adjusted" results, are utilized to
assess the Bank's businesses and to measure the Bank's overall
performance. To arrive at adjusted results, the Bank adjusts for
"items of note" from reported results. Items of note are items
which management does not believe are indicative of underlying
business performance and are disclosed in Table 3. Non-GAAP ratios
include a non-GAAP financial measure as one or more of its
components. Examples of non-GAAP ratios include adjusted basic and
diluted earnings per share (EPS), adjusted dividend payout ratio,
adjusted efficiency ratio, net of ISE, and adjusted effective
income tax rate. The Bank believes that non-GAAP financial measures
and non-GAAP ratios provide the reader with a better understanding
of how management views the Bank's performance. Non-GAAP financial
measures and non-GAAP ratios used in this document are not defined
terms under IFRS and, therefore, may not be comparable to similar
terms used by other issuers. Supplementary financial measures
depict the Bank's financial performance and position, and capital
management measures depict the Bank's capital position, and both
are explained in this document where they first appear.
U.S. Strategic Cards
The Bank's U.S. strategic cards
portfolio is comprised of agreements with certain U.S. retailers
pursuant to which TD is the U.S. issuer of private label and
co-branded consumer credit cards to their U.S. customers. Under the
terms of the individual agreements, the Bank and the retailers
share in the profits generated by the relevant portfolios after
credit losses. Under IFRS, TD is required to present the gross
amount of revenue and PCL related to these portfolios in the Bank's
Interim Consolidated Statement of Income. At the segment level, the
retailer program partners' share of revenues and credit losses is
presented in the Corporate segment, with an offsetting amount
(representing the partners' net share) recorded in Non-interest
expenses, resulting in no impact to Corporate's reported net income
(loss). The net income (loss) included in the U.S. Retail segment
includes only the portion of revenue and credit losses attributable
to TD under the agreements.
Investment in The Charles Schwab Corporation and IDA
Agreement
On October 6, 2020,
the Bank acquired an approximately 13.5% stake in The Charles
Schwab Corporation ("Schwab") following the completion of Schwab's
acquisition of TD Ameritrade Holding Corporation ("TD Ameritrade")
of which the Bank was a major shareholder (the "Schwab
transaction"). On August 1, 2022, the
Bank sold 28.4 million non-voting common shares of Schwab, at a
price of US$66.53 per share for
proceeds of $2.5 billion
(US$1.9 billion), which reduced the
Bank's ownership interest in Schwab to approximately 12.0%.
The Bank accounts for its investment in
Schwab using the equity method. The U.S. Retail segment reflects
the Bank's share of net income from its investment in Schwab. The
Corporate segment net income (loss) includes amounts for
amortization of acquired intangibles, the acquisition and
integration charges related to the Schwab transaction, and the
Bank's share of restructuring and other charges incurred by Schwab.
The Bank's share of Schwab's earnings available to common
shareholders is reported with a one-month lag. For further details,
refer to Note 7 of the Bank's first quarter 2024 Interim
Consolidated Financial Statements.
On November 25,
2019, the Bank and Schwab signed an insured deposit account
agreement (the "2019 Schwab IDA Agreement"), with an initial
expiration date of July 1, 2031.
Under the 2019 Schwab IDA Agreement, starting July 1, 2021, Schwab had the option to reduce the
deposits by up to US$10 billion per
year (subject to certain limitations and adjustments), with a floor
of US$50 billion. In addition, Schwab
requested some further operational flexibility to allow for the
sweep deposit balances to fluctuate over time, under certain
conditions and subject to certain limitations.
On May 4,
2023, the Bank and Schwab entered into an amended insured
deposit account agreement (the "2023 Schwab IDA Agreement"), which
replaced the 2019 Schwab IDA Agreement. Pursuant to the 2023 Schwab
IDA Agreement, the Bank continues to make sweep deposit accounts
available to clients of Schwab. Schwab designates a portion of the
deposits with the Bank as fixed-rate obligation amounts (FROA).
Remaining deposits over the minimum level of FROA are designated as
floating-rate obligations. In comparison to the 2019 Schwab IDA
Agreement, the 2023 Schwab IDA Agreement extends the initial
expiration date by three years to July 1,
2034 and provides for lower deposit balances in its first
six years, followed by higher balances in the later years.
Specifically, until September 2025, the aggregate FROA will
serve as the floor. Thereafter, the floor will be set at
US$60 billion. In addition, Schwab
has the option to buy down up to $6.8
billion (US$5 billion) of FROA
by paying the Bank certain fees in accordance with the 2023 Schwab
IDA Agreement, subject to certain limits. Refer to the "Related
Party Transactions" section in the 2023 MD&A for further
details.
During the first quarter of 2024, Schwab
exercised its option to buy down the remaining $0.7 billion (US$0.5
billion) of the US$5 billion
FROA buydown allowance and paid $32
million (US$23 million) in termination fees to the Bank
in accordance with the 2023 Schwab IDA Agreement. The fees are
intended to compensate the Bank for losses incurred this quarter
from discontinuing certain hedging relationships, and for lost
revenues. The net impact is recorded in net interest income.
The following table provides the operating results on a reported
basis for the Bank.
TABLE 2: OPERATING
RESULTS – Reported
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
|
|
|
|
January
31
|
October 31
|
January 31
|
|
|
|
|
2024
|
2023
|
2023
|
|
|
Net interest
income
|
$
|
7,488
|
$
|
7,494
|
$
|
7,733
|
|
|
Non-interest
income1
|
|
6,226
|
|
5,684
|
|
4,468
|
|
|
Total
revenue1
|
|
13,714
|
|
13,178
|
|
12,201
|
|
|
Provision for (recovery
of) credit losses
|
|
1,001
|
|
878
|
|
690
|
|
|
Insurance service
expenses1
|
|
1,366
|
|
1,346
|
|
1,164
|
|
|
Non-interest
expenses1
|
|
8,030
|
|
7,628
|
|
8,112
|
|
|
Income before income
taxes and share of net income from
|
|
|
|
|
|
|
|
|
|
investment in
Schwab1
|
|
3,317
|
|
3,326
|
|
2,235
|
|
|
Provision for (recovery
of) income taxes1
|
|
634
|
|
616
|
|
939
|
|
|
Share of net income
from investment in Schwab
|
|
141
|
|
156
|
|
285
|
|
|
Net income –
reported1
|
|
2,824
|
|
2,866
|
|
1,581
|
|
|
Preferred dividends and
distributions on other equity instruments
|
|
74
|
|
196
|
|
83
|
|
|
Net income available
to common shareholders1
|
$
|
2,750
|
$
|
2,670
|
$
|
1,498
|
|
|
1
|
For the three months
ended October 31, 2023 and January 31, 2023, certain amounts
have been restated for the adoption of IFRS 17. Refer to Note 2 of
the Bank's first quarter 2024 Interim Consolidated Financial
Statements for further details.
|
The following table provides a reconciliation between the Bank's
adjusted and reported results. For further details refer to the
"Significant Events" section.
TABLE 3: NON-GAAP
FINANCIAL MEASURES – Reconciliation of Adjusted to Reported Net
Income
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
|
|
|
January
31
|
October 31
|
January 31
|
|
|
2024
|
2023
|
2023
|
|
Operating results –
adjusted
|
|
|
|
|
|
|
|
Net interest
income1
|
$
|
7,545
|
$
|
7,558
|
$
|
7,862
|
|
Non-interest
income1,2
|
|
6,226
|
|
5,684
|
|
5,215
|
|
Total
revenue2
|
|
13,771
|
|
13,242
|
|
13,077
|
|
Provision for (recovery
of) credit losses
|
|
1,001
|
|
878
|
|
690
|
|
Insurance service
expenses2
|
|
1,366
|
|
1,346
|
|
1,164
|
|
Non-interest
expenses2,3
|
|
7,125
|
|
6,988
|
|
6,337
|
|
Income before income
taxes and share of net income from investment in
Schwab
|
|
4,279
|
|
4,030
|
|
4,886
|
|
Provision for income
taxes
|
|
872
|
|
779
|
|
1,060
|
|
Share of net income
from investment in Schwab4
|
|
230
|
|
234
|
|
328
|
|
Net income –
adjusted2
|
|
3,637
|
|
3,485
|
|
4,154
|
|
Preferred dividends and
distributions on other equity instruments
|
|
74
|
|
196
|
|
83
|
|
Net income available
to common shareholders – adjusted
|
|
3,563
|
|
3,289
|
|
4,071
|
|
Pre-tax adjustments
for items of note
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles5
|
|
(94)
|
|
(92)
|
|
(54)
|
|
Acquisition and
integration charges related to the Schwab
transaction3,4
|
|
(32)
|
|
(31)
|
|
(34)
|
|
Share of restructuring
and other charges from investment in Schwab4
|
|
(49)
|
|
(35)
|
|
–
|
|
Restructuring
charges3
|
|
(291)
|
|
(363)
|
|
–
|
|
Acquisition and
integration-related charges3
|
|
(117)
|
|
(197)
|
|
(21)
|
|
Charges related to the
terminated First Horizon (FHN) acquisition3
|
|
–
|
|
–
|
|
(106)
|
|
Impact from the
terminated FHN acquisition-related capital hedging
strategy1
|
|
(57)
|
|
(64)
|
|
(876)
|
|
Litigation
(settlement)/recovery3
|
|
–
|
|
–
|
|
(1,603)
|
|
FDIC special
assessment3
|
|
(411)
|
|
–
|
|
–
|
|
Less: Impact of
income taxes
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles
|
|
(15)
|
|
(9)
|
|
(8)
|
|
Acquisition and
integration charges related to the Schwab transaction
|
|
(6)
|
|
(5)
|
|
(6)
|
|
Restructuring
charges
|
|
(78)
|
|
(97)
|
|
–
|
|
Acquisition and
integration-related charges
|
|
(24)
|
|
(36)
|
|
(5)
|
|
Charges related to the
terminated FHN acquisition
|
|
–
|
|
–
|
|
(26)
|
|
Impact from the
terminated FHN acquisition-related capital hedging
strategy
|
|
(14)
|
|
(16)
|
|
(216)
|
|
Litigation
(settlement)/recovery
|
|
–
|
|
–
|
|
(445)
|
|
FDIC special
assessment
|
|
(101)
|
|
–
|
|
–
|
|
Canada Recovery
Dividend (CRD) and federal tax rate increase for fiscal
20226
|
|
–
|
|
–
|
|
585
|
|
Total adjustments
for items of note
|
|
(813)
|
|
(619)
|
|
(2,573)
|
|
Net income available
to common shareholders – reported
|
$
|
2,750
|
$
|
2,670
|
$
|
1,498
|
|
1
|
Prior to May 4,
2023, the impact shown covers periods before the termination of the
FHN transaction and includes the following components, reported in
the Corporate segment: i) mark-to-market gains (losses) on interest
rate swaps recorded in non-interest income – Q1 2023: ($998)
million, ii) basis adjustment amortization related to de-designated
fair value hedge accounting relationships, recorded in net interest
income – Q1 2023: $122 million, and iii) interest income (expense)
recognized on the interest rate swaps, reclassified from
non-interest income to net interest income with no impact to total
adjusted net income – Q1 2023: $251 million. After the termination
of the merger agreement, the residual impact of the strategy is
reversed through net interest income – Q1 2024: ($57) million, Q4
2023: ($64) million.
|
2
|
For the three months
ended October 31, 2023 and January 31, 2023, certain amounts
have been restated for the adoption of IFRS 17. Refer to Note 2 of
the Bank's first quarter 2024 Interim Consolidated Financial
Statements for further details.
|
3
|
Adjusted non-interest
expenses exclude the following items of note:
|
|
i.
|
Amortization of
acquired intangibles – Q1 2024: $63 million, Q4 2023: $62 million,
Q1 2023: $24 million, reported in the Corporate segment;
|
|
ii.
|
The Bank's own
integration and acquisition costs related to the Schwab transaction
– Q1 2024: $23 million, Q4 2023: $18 million, Q1 2023: $21 million,
reported in the Corporate segment;
|
|
iii.
|
Acquisition and
integration-related charges – Q1 2024: $117 million, Q4 2023: $197
million, Q1 2023: $21 million, reported in the Wholesale Banking
segment;
|
|
iv.
|
Charges related to the
terminated FHN acquisition – Q1 2023: $106 million, reported in the
U.S. Retail segment;
|
|
v.
|
Stanford litigation
settlement – Q1 2023: $1,603 million, reported in the Corporate
segment;
|
|
vi.
|
Restructuring charges –
Q1 2024: $291 million, Q4 2023: $363 million, reported in the
Corporate segment; and
|
|
vii.
|
FDIC special assessment
– Q1 2024: $411 million, reported in the U.S. Retail
segment.
|
4
|
Adjusted share of net
income from investment in Schwab excludes the following items of
note on an after-tax basis. The earnings impact of these items is
reported in the Corporate segment:
|
|
i.
|
Amortization
of Schwab-related acquired intangibles – Q1 2024: $31 million,
Q4 2023: $30 million, Q1 2023: $30 million;
|
|
ii.
|
The Bank's share of
acquisition and integration charges associated with Schwab's
acquisition of TD Ameritrade – Q1 2024: $9 million, Q4 2023: $13
million, Q1 2023: $13 million;
|
|
iii.
|
The Bank's share of
restructuring charges incurred by Schwab – Q1 2024: $27 million, Q4
2023: $35 million; and
|
|
iv.
|
The Bank's share of the
FDIC special assessment charge incurred by Schwab – Q1 2024: $22
million.
|
5
|
Amortization of
acquired intangibles relates to intangibles acquired as a result of
asset acquisitions and business combinations, including the
after-tax amounts for amortization of acquired intangibles relating
to the Share of net income from investment in Schwab, reported in
the Corporate segment. Refer to footnotes 3 and 4 for
amounts.
|
6
|
CRD and impact
from increase in the Canadian federal tax rate for fiscal 2022
recognized in the first quarter of 2023, reported in the Corporate
segment.
|
TABLE 4:
RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER
SHARE1
|
|
(Canadian
dollars)
|
|
For the three months
ended
|
|
|
January
31
|
October 31
|
January 31
|
|
|
2024
|
2023
|
2023
|
|
Basic earnings per
share – reported2
|
$
|
1.55
|
$
|
1.48
|
$
|
0.82
|
|
Adjustments for items
of note
|
|
0.45
|
|
0.34
|
|
1.41
|
|
Basic earnings per
share – adjusted2
|
$
|
2.01
|
$
|
1.82
|
$
|
2.24
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share – reported2
|
$
|
1.55
|
$
|
1.48
|
$
|
0.82
|
|
Adjustments for items
of note
|
|
0.45
|
|
0.34
|
|
1.41
|
|
Diluted earnings per
share – adjusted2
|
$
|
2.00
|
$
|
1.82
|
$
|
2.23
|
|
1
|
EPS is computed by
dividing net income available to common shareholders by the
weighted-average number of shares outstanding during the period.
Numbers may not add due to rounding.
|
2
|
For the three months
ended October 31, 2023 and January 31, 2023, certain amounts
have been restated for the adoption of IFRS 17. Refer to Note 2 of
the Bank's first quarter 2024 Interim Consolidated Financial
Statements for further details.
|
Return on Common Equity
The consolidated Bank
ROE is calculated as reported net income available to common
shareholders as a percentage of average common equity. The
consolidated Bank adjusted ROE is calculated as adjusted net income
available to common shareholders as a percentage of average common
equity. Adjusted ROE is a non-GAAP financial ratio and can be
utilized in assessing the Bank's use of equity.
ROE for the business segments is calculated
as the segment net income attributable to common shareholders as a
percentage of average allocated capital. The Bank's methodology for
allocating capital to its business segments is largely aligned with
the common equity capital requirements under Basel III. Capital
allocated to the business segments was increased to 11.5% Common
Equity Tier 1 (CET1) Capital effective the first quarter of 2024,
compared with 11% in fiscal 2023.
TABLE 5: RETURN ON
COMMON EQUITY
|
(millions of Canadian
dollars, except as noted)
|
|
For the three months
ended
|
|
|
|
January
31
|
|
October 31
|
|
January 31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
Average common
equity
|
$
|
100,269
|
|
$
|
100,998
|
|
$
|
100,441
|
|
Net income available
to common shareholders – reported1
|
|
2,750
|
|
|
2,670
|
|
|
1,498
|
|
Items of note, net of
income taxes
|
|
813
|
|
|
619
|
|
|
2,573
|
|
Net income available
to common shareholders – adjusted1
|
$
|
3,563
|
|
$
|
3,289
|
|
$
|
4,071
|
|
Return on common
equity – reported1
|
|
10.9
|
%
|
|
10.5
|
%
|
|
5.9
|
%
|
Return on common
equity – adjusted1
|
|
14.1
|
|
|
12.9
|
|
|
16.1
|
|
1
|
For the three months
ended October 31, 2023 and January 31, 2023, certain amounts
have been restated for the adoption of IFRS 17. Refer to Note 2 of
the Bank's first quarter 2024 Interim Consolidated Financial
Statements for further details.
|
Return on Tangible Common Equity
Tangible common
equity (TCE) is calculated as common shareholders' equity less
goodwill, imputed goodwill and intangibles on the investments in
Schwab and other acquired intangible assets, net of related
deferred tax liabilities. ROTCE is calculated as reported net
income available to common shareholders after adjusting for the
after–tax amortization of acquired intangibles, which are treated
as an item of note, as a percentage of average TCE. Adjusted ROTCE
is calculated using reported net income available to common
shareholders, adjusted for all items of note, as a percentage of
average TCE. TCE, ROTCE, and adjusted ROTCE can be utilized in
assessing the Bank's use of equity. TCE is a non-GAAP financial
measure, and ROTCE and adjusted ROTCE are non-GAAP ratios.
TABLE 6: RETURN ON
TANGIBLE COMMON EQUITY
|
(millions of Canadian
dollars, except as noted)
|
|
For the three months
ended
|
|
|
|
January
31
|
|
October 31
|
|
January 31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
Average common
equity
|
$
|
100,269
|
|
$
|
100,998
|
|
$
|
100,441
|
|
Average
goodwill
|
|
18,208
|
|
|
18,217
|
|
|
17,486
|
|
Average imputed
goodwill and intangibles on investments in Schwab
|
|
6,056
|
|
|
6,094
|
|
|
6,160
|
|
Average other acquired
intangibles1
|
|
615
|
|
|
635
|
|
|
442
|
|
Average related
deferred tax liabilities
|
|
(231)
|
|
|
(114)
|
|
|
(174)
|
|
Average tangible
common equity
|
|
75,621
|
|
|
76,166
|
|
|
76,527
|
|
Net income available
to common shareholders – reported2
|
|
2,750
|
|
|
2,670
|
|
|
1,498
|
|
Amortization of
acquired intangibles, net of income taxes
|
|
79
|
|
|
83
|
|
|
46
|
|
Net income available
to common shareholders adjusted for
|
|
|
|
|
|
|
|
|
|
|
amortization of
acquired intangibles, net of income
taxes2
|
|
2,829
|
|
|
2,753
|
|
|
1,544
|
|
Other items of note,
net of income taxes
|
|
734
|
|
|
536
|
|
|
2,527
|
|
Net income available
to common shareholders – adjusted2
|
$
|
3,563
|
|
$
|
3,289
|
|
$
|
4,071
|
|
Return on tangible
common equity2
|
|
14.9
|
%
|
|
14.3
|
%
|
|
8.0
|
%
|
Return on tangible
common equity – adjusted2
|
|
18.7
|
|
|
17.1
|
|
|
21.1
|
|
1
|
Excludes intangibles
relating to software and asset servicing rights.
|
2
|
For the three months
ended October 31, 2023 and January 31, 2023, certain amounts
have been restated for the adoption of IFRS 17. Refer to Note 2 of
the Bank's first quarter 2024 Interim Consolidated Financial
Statements for further details.
|
HOW OUR BUSINESSES
PERFORMED
For management reporting purposes, the Bank's business
operations and activities are organized around the following four
key business segments: Canadian Personal and Commercial Banking,
U.S. Retail, Wealth Management and Insurance, and Wholesale
Banking. The Bank's other activities are grouped into the Corporate
segment.
Results of each business segment reflect
revenue, expenses, assets, and liabilities generated by the
businesses in that segment. Where applicable, the Bank measures and
evaluates the performance of each segment based on adjusted results
and ROE, and for those segments, the Bank indicates that the
measure is adjusted. For further details, refer to the "How We
Performed" section of this document, the "Business Focus" section
in the Bank's 2023 MD&A, and Note 28 of the Bank's Consolidated
Financial Statements for the year ended October 31, 2023.
Effective the first quarter of 2024, certain asset management
businesses which were previously reported in the U.S. Retail
segment are now reported in the Wealth Management and Insurance
segment. Comparative period information has been adjusted to
reflect the new alignment.
PCL related to performing (Stage 1 and Stage
2) and impaired (Stage 3) financial assets, loan commitments, and
financial guarantees is recorded within the respective segment.
Net interest income within Wholesale Banking
is calculated on a taxable equivalent basis (TEB), which means that
the value of non-taxable or tax-exempt income, including certain
dividends, is adjusted to its equivalent pre-tax value. Using TEB
allows the Bank to measure income from all securities and loans
consistently and makes for a more meaningful comparison of net
interest income with similar institutions. The TEB increase to net
interest income and provision for income taxes reflected in
Wholesale Banking results is reversed in the Corporate segment. The
TEB adjustment for the quarter was $29 million, compared with
$44 million in the prior quarter and
$57 million in the first quarter last year.
Share of net income from investment in
Schwab is reported in the U.S. Retail segment. Amounts for
amortization of acquired intangibles, the acquisition and
integration charges related to the Schwab transaction, and the
Bank's share of restructuring and other charges incurred by Schwab
are recorded in the Corporate segment.
TABLE 7: CANADIAN
PERSONAL AND COMMERCIAL BANKING
|
(millions of Canadian
dollars, except as noted)
|
|
|
|
For the three months
ended
|
|
|
|
January
31
|
|
October 31
|
|
January 31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
Net interest
income
|
$
|
3,833
|
|
$
|
3,705
|
|
$
|
3,539
|
|
Non-interest
income
|
|
1,051
|
|
|
1,049
|
|
|
1,050
|
|
Total
revenue
|
|
4,884
|
|
|
4,754
|
|
|
4,589
|
|
Provision for (recovery
of) credit losses – impaired
|
|
364
|
|
|
274
|
|
|
220
|
|
Provision for (recovery
of) credit losses – performing
|
|
59
|
|
|
116
|
|
|
107
|
|
Total provision for
(recovery of) credit losses
|
|
423
|
|
|
390
|
|
|
327
|
|
Non-interest
expenses
|
|
1,984
|
|
|
2,039
|
|
|
1,863
|
|
Provision for (recovery
of) income taxes
|
|
692
|
|
|
646
|
|
|
670
|
|
Net
income
|
$
|
1,785
|
|
$
|
1,679
|
|
$
|
1,729
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Return on common
equity1
|
|
34.6
|
%
|
|
35.1
|
%
|
|
39.9
|
%
|
Net interest margin
(including on securitized assets)2
|
|
2.84
|
|
|
2.78
|
|
|
2.80
|
|
Efficiency
ratio
|
|
40.6
|
|
|
42.9
|
|
|
40.6
|
|
Number of Canadian
retail branches
|
|
1,062
|
|
|
1,062
|
|
|
1,060
|
|
Average number of
full-time equivalent staff
|
|
29,271
|
|
|
29,069
|
|
|
28,803
|
|
1
|
Capital allocated to
the business segment was increased to 11.5% CET1 Capital effective
the first quarter of 2024 compared with 11% in the prior
year.
|
2
|
Net interest margin is
calculated by dividing net interest income by average
interest-earning assets. Average interest-earning assets used in
the calculation of net interest margin is a non-GAAP financial
measure. Refer to "Non-GAAP and Other Financial Measures" in the
"How We Performed" section of this document and the Glossary in the
Bank's first quarter 2024 MD&A for additional information about
these metrics.
|
Quarterly comparison – Q1 2024 vs. Q1 2023
Canadian Personal and Commercial Banking net income for the quarter
was $1,785 million, an increase of
$56 million, or 3%, compared with the
first quarter last year, reflecting higher revenue, partially
offset by higher non-interest expenses and PCL. The annualized ROE
for the quarter was 34.6%, compared with 39.9% in the first quarter
last year.
Revenue for the quarter was $4,884 million, an increase of
$295 million, or 6%, compared with the first quarter last
year.
Net interest income was $3,833 million, an increase of
$294 million, or 8%, compared with the first quarter last
year, primarily reflecting volume growth. Average loan volumes
increased $36 billion, or 7%, reflecting 7% growth in personal
loans and 8% growth in business loans. Average deposit volumes
increased $14 billion, or 3%, reflecting 6% growth in personal
deposits, partially offset by 2% decline in business deposits. Net
interest margin was 2.84%, an increase of 4 basis points
(bps), primarily due to higher margins on deposits, partially
offset by lower margins on loans.
Non-interest income was $1,051 million, relatively flat compared with the
first quarter last year.
PCL for the quarter was $423 million, an increase of $96 million, compared with the first quarter last
year. PCL – impaired for the quarter was $364 million, an increase of $144 million, or 65%, reflecting further
normalization of credit performance in the consumer lending
portfolios, and credit migration in the commercial lending
portfolios. PCL – performing was $59
million, a decrease of $48
million, reflecting a lower build in the current quarter.
The performing provisions this quarter largely reflect credit
conditions, including some continued normalization of credit
performance in the consumer lending portfolios, credit migration in
the commercial lending portfolios, and volume growth. Total PCL as
an annualized percentage of credit volume was 0.30%, an increase of
5 bps compared with the first quarter last year.
Non-interest expenses for the quarter were
$1,984 million, an increase of
$121 million, or 6%, compared with
the first quarter last year, reflecting higher spend supporting
business growth including employee-related expenses and technology
costs.
The efficiency ratio for the quarter was
40.6%, flat compared with the first quarter last year.
Quarterly comparison – Q1 2024 vs. Q4 2023
Canadian Personal and Commercial Banking net income for the quarter
was $1,785 million, an increase of
$106 million, or 6%, compared with
the prior quarter, reflecting higher revenue and lower non-interest
expenses, partially offset by higher PCL. The annualized ROE for
the quarter was 34.6%, compared with 35.1%, in the prior
quarter.
Revenue increased $130 million, or 3%,
compared with the prior quarter. Net interest income increased
$128 million, or 3%, reflecting
volume growth and higher margins. Average loan volumes increased
$7 billion, or 1%, reflecting 1%
growth in personal loans and 2% growth in business loans. Average
deposit volumes increased $8 billion,
or 2%, reflecting 3% growth in personal deposits, partially offset
by 1% decline in business deposits. Net interest margin was 2.84%,
an increase of 6 bps, primarily due to higher deposit margins.
Non-interest income increased
$2 million, relatively flat compared with the prior
quarter.
PCL for the quarter was $423 million, an increase of $33 million compared with the prior quarter. PCL
– impaired was $364 million, an
increase of $90 million, or 33%,
reflecting further normalization of credit performance in the
consumer lending portfolios, and credit migration in the commercial
lending portfolios. PCL – performing was $59
million, a decrease of $57
million, reflecting a lower build in the current quarter.
The performing provisions this quarter largely reflect credit
conditions including some continued normalization of credit
performance in the consumer lending portfolios, credit migration in
the commercial lending portfolios, and volume growth. Total PCL as
an annualized percentage of credit volume was 0.30%, an increase of
2 bps compared with the prior quarter.
Non-interest expenses decreased $55 million, or 3% compared with the prior
quarter, primarily reflecting higher non-credit provisions in the
prior quarter and lower operating expenses within our support
functions, partially offset by higher employee-related expenses in
Branch Banking.
The efficiency ratio was 40.6%, compared
with 42.9%, in the prior
quarter.
TABLE 8: U.S.
RETAIL
|
(millions of dollars,
except as noted)
|
For the three months
ended
|
|
|
|
January
31
|
|
October 31
|
|
January 31
|
|
Canadian
Dollars
|
|
2024
|
|
|
2023
|
|
|
2023
|
|
Net interest
income
|
$
|
2,899
|
|
$
|
2,951
|
|
$
|
3,167
|
|
Non-interest
income
|
|
604
|
|
|
572
|
|
|
560
|
|
Total
revenue
|
|
3,503
|
|
|
3,523
|
|
|
3,727
|
|
Provision for (recovery
of) credit losses – impaired
|
|
377
|
|
|
308
|
|
|
212
|
|
Provision for (recovery
of) credit losses – performing
|
|
8
|
|
|
(19)
|
|
|
(12)
|
|
Total provision for
(recovery of) credit losses
|
|
385
|
|
|
289
|
|
|
200
|
|
Non-interest expenses –
reported
|
|
2,410
|
|
|
2,045
|
|
|
2,040
|
|
Non-interest expenses –
adjusted1,2
|
|
1,999
|
|
|
2,045
|
|
|
1,934
|
|
Provision for (recovery
of) income taxes – reported
|
|
(5)
|
|
|
117
|
|
|
204
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
96
|
|
|
117
|
|
|
230
|
|
U.S. Retail Bank net
income – reported
|
|
713
|
|
|
1,072
|
|
|
1,283
|
|
U.S. Retail Bank net
income – adjusted1
|
|
1,023
|
|
|
1,072
|
|
|
1,363
|
|
Share of net income
from investment in Schwab3,4
|
|
194
|
|
|
197
|
|
|
301
|
|
Net income –
reported
|
$
|
907
|
|
$
|
1,269
|
|
$
|
1,584
|
|
Net income –
adjusted1
|
|
1,217
|
|
|
1,269
|
|
|
1,664
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Dollars
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
2,141
|
|
$
|
2,175
|
|
$
|
2,348
|
|
Non-interest
income
|
|
446
|
|
|
421
|
|
|
415
|
|
Total
revenue
|
|
2,587
|
|
|
2,596
|
|
|
2,763
|
|
Provision for (recovery
of) credit losses – impaired
|
|
279
|
|
|
227
|
|
|
158
|
|
Provision for (recovery
of) credit losses – performing
|
|
6
|
|
|
(14)
|
|
|
(9)
|
|
Total provision for
(recovery of) credit losses
|
|
285
|
|
|
213
|
|
|
149
|
|
Non-interest expenses –
reported
|
|
1,779
|
|
|
1,505
|
|
|
1,512
|
|
Non-interest expenses –
adjusted1,2
|
|
1,479
|
|
|
1,505
|
|
|
1,434
|
|
Provision for (recovery
of) income taxes – reported
|
|
(3)
|
|
|
87
|
|
|
151
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
71
|
|
|
87
|
|
|
170
|
|
U.S. Retail Bank net
income – reported
|
|
526
|
|
|
791
|
|
|
951
|
|
U.S. Retail Bank net
income – adjusted1
|
|
752
|
|
|
791
|
|
|
1,010
|
|
Share of net income
from investment in Schwab3,4
|
|
144
|
|
|
146
|
|
|
222
|
|
Net income –
reported
|
$
|
670
|
|
$
|
937
|
|
$
|
1,173
|
|
Net income –
adjusted1
|
|
896
|
|
|
937
|
|
|
1,232
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Return on common equity
– reported5
|
|
8.5
|
%
|
|
12.2
|
%
|
|
15.5
|
%
|
Return on common equity
– adjusted1,5
|
|
11.3
|
|
|
12.2
|
|
|
16.3
|
|
Net interest
margin1,6
|
|
3.03
|
|
|
3.07
|
|
|
3.29
|
|
Efficiency ratio –
reported
|
|
68.8
|
|
|
58.0
|
|
|
54.7
|
|
Efficiency ratio –
adjusted1
|
|
57.2
|
|
|
58.0
|
|
|
51.9
|
|
Assets under
administration (billions of U.S. dollars)7
|
$
|
40
|
|
$
|
40
|
|
$
|
38
|
|
Assets under management
(billions of U.S. dollars)7,8
|
|
7
|
|
|
7
|
|
|
7
|
|
Number of U.S. retail
stores
|
|
1,176
|
|
|
1,177
|
|
|
1,161
|
|
Average number of
full-time equivalent staff
|
|
27,985
|
|
|
28,182
|
|
|
27,587
|
|
1
|
For additional
information about the Bank's use of non-GAAP financial measures,
refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document.
|
2
|
Adjusted non-interest
expenses exclude the following items of note:
|
|
i.
|
Charges related to the
terminated First Horizon acquisition – Q1 2023: $106 million or
US$78 million ($80 million or US$59 million after-tax);
and
|
|
ii.
|
FDIC special assessment
– Q1 2024: $411 million or US$300 million ($310 million or
US$226 million after-tax).
|
3
|
The Bank's share
of Schwab's earnings is reported with a one-month lag. Refer
to Note 7 of the Bank's first quarter 2024 Interim Consolidated
Financial Statements for further details.
|
4
|
The after-tax amounts
for amortization of acquired intangibles, the Bank's share of
acquisition and integration charges associated with Schwab's
acquisition of TD Ameritrade, the Bank's share of Schwab's
restructuring charges, and the Bank's share of Schwab's FDIC
special assessment charge are recorded in the Corporate
segment.
|
5
|
Capital allocated to
the business segment was increased to 11.5% CET1 Capital effective
the first quarter of 2024, compared with 11% in the prior
year.
|
6
|
Net interest margin is
calculated by dividing U.S. Retail segment's net interest income by
average interest-earning assets. For the U.S. Retail segment, this
calculation excludes the impact related to sweep deposits
arrangements, intercompany deposits, and cash collateral. The value
of tax-exempt interest income is adjusted to its equivalent
before-tax value. For investment securities, the adjustment to fair
value is included in the calculation of average interest-earning
assets. Management believes this calculation better reflects
segment performance. Net interest income and average
interest-earning assets used in the calculation are non-GAAP
financial measures.
|
7
|
For additional
information about this metric, refer to the Glossary in the Bank's
first quarter 2024 MD&A.
|
8
|
Refer to "How Our
Businesses Performed" section regarding alignment of certain asset
management businesses from the U.S. Retail segment to the Wealth
Management and Insurance segment.
|
Quarterly comparison – Q1 2024 vs. Q1 2023
U.S. Retail reported net income for the quarter was $907 million (US$670
million), a decrease of $677
million (US$503 million), or
43% (43% in U.S. dollars), compared with the first quarter last
year. On an adjusted basis, net income for the quarter was
$1,217 million (US$896 million), a decrease of $447 million (US$336 million), or 27% (27%
in U.S. dollars). The reported and adjusted annualized ROE for the
quarter were 8.5% and 11.3%, respectively, compared with 15.5% and
16.3%, respectively, in the first quarter last year.
U.S. Retail net income includes
contributions from the U.S. Retail Bank and the Bank's investment
in Schwab. Reported net income for the quarter from the Bank's
investment in Schwab was $194 million
(US$144 million), a decrease of
$107 million (US$78 million), or 36% (35% in U.S. dollars).
U.S. Retail Bank reported net income was
$713 million (US$526 million), a decrease of $570 million (US$425
million), or 44% (45% in U.S. dollars), compared with the
first quarter last year, primarily reflecting the FDIC special
assessment in non-interest expenses, lower revenue and higher PCL.
U.S. Retail Bank adjusted net income was $1,023 million (US$752
million), a decrease of $340 million (US$258 million), or 25% (26% in U.S. dollars),
compared with the first quarter last year, reflecting lower
revenue, higher PCL and higher non-interest expenses.
Revenue for the quarter was US$2,587 million, a decrease of US$176 million, or 6%, compared with the first
quarter last year. Net interest income of US$2,141 million, decreased US$207 million, or 9%, driven by lower deposit
volumes and margins, partially offset by higher loan volumes. Net
interest margin of 3.03%, decreased 26 bps, due to lower deposit
margins reflecting higher deposit costs and lower margins on loans.
Non-interest income of US$446 million
increased US$31 million, or 7%,
compared with the first quarter last year, primarily reflecting fee
income growth from increased customer activity.
Average loan volumes increased US$16 billion, or 9%, compared with the first
quarter last year. Personal loans increased 11%, reflecting lower
mortgage prepayments in the higher rate environment and strong auto
originations. Business loans increased 7%, reflecting good
originations from new customer growth and slower payment rates.
Average deposit volumes decreased US$33
billion, or 9%, reflecting a 23% decrease in sweep deposits,
a 4% decrease in business deposits, and a 1% decrease in personal
deposit volumes.
Assets under administration (AUA) were
US$40 billion as at January 31, 2024, an increase of US$2 billion, or 5%, compared with the first
quarter last year, reflecting net asset growth. After giving effect
to realignment of certain asset management businesses from U.S.
Retail to Wealth Management and Insurance, Assets under Management
(AUM) were US$7 billion as at
January 31, 2024, flat compared with
the first quarter last year.
PCL for the quarter was US$285 million, an increase of US$136 million compared with the first quarter
last year. PCL – impaired was US$279
million, an increase of US$121
million, or 77%, primarily reflecting further normalization
of credit performance in the consumer lending portfolios and credit
migration in the commercial lending portfolios, largely related to
commercial real estate. PCL – performing was a build of
US$6 million, compared with a
recovery of US$9 million in the prior year. U.S. Retail
PCL including only the Bank's share of PCL in the U.S. strategic
cards portfolio, as an annualized percentage of credit volume was
0.61%, an increase of 27 bps, compared with the first quarter last
year.
Reported non-interest expenses for the
quarter were US$1,779 million, an
increase of US$267 million, or 18%,
compared with the first quarter last year, reflecting the FDIC
special assessment, and higher employee-related expenses, partially
offset by acquisition and integration-related charges for the
terminated First Horizon transaction in the first quarter last
year. On an adjusted basis, non-interest expenses increased
US$45 million, or 3%, reflecting
higher employee-related expenses.
The reported and adjusted efficiency ratios
for the quarter were 68.8% and 57.2%, respectively, compared with
54.7% and 51.9%, respectively, in the first quarter last year.
Quarterly comparison – Q1 2024 vs. Q4 2023
U.S. Retail reported net income of $907
million (US$670 million), a
decrease of $362 million
(US$267 million), or 29% (28% in U.S.
dollars), compared with the prior quarter. On an adjusted basis,
net income for the quarter was $1,217
million (US$896 million), a
decrease of $52 million (US$41 million), or 4% (4% in U.S. dollars). The
reported and adjusted annualized ROE for the quarter were 8.5% and
11.3%, respectively, compared with 12.2%, respectively, in the
prior quarter.
The contribution from Schwab of $194 million (US$144
million) decreased $3 million
(US$2 million), or 2% (1% in U.S.
dollars).
U.S. Retail Bank reported net income was
$713 million (US$526 million), a decrease of $359 million (US$265
million), or 33% (34% in U.S. dollars), compared with the
prior quarter, primarily reflecting the FDIC special assessment in
non-interest expenses and higher PCL. U.S. Retail Bank adjusted net
income was $1,023 million
(US$752 million), a decrease of
$49 million (US$39 million), or 5% (5% in U.S. dollars),
primarily reflecting higher PCL, partially offset by lower
non-interest expenses.
Revenue for the quarter was US$2,587 million, a decrease of US$9 million, relatively flat compared with the
prior quarter. Net interest income of US$2,141 million decreased US$34 million, or 2%, primarily reflecting lower
deposit volumes, partially offset by higher loan volumes. Net
interest margin of 3.03% decreased 4 bps quarter over quarter due
to lower deposit margins reflecting higher deposit costs, partially
offset by the benefit of higher reinvestment rates. Non-interest
income of US$446 million increased US$25 million, or 6%,
primarily reflecting higher deposit-related fees.
Average loan volumes increased US$3 billion, or 2%, compared with the prior
quarter. Personal loans increased 2%, reflecting lower mortgage
prepayments, strong auto originations, and seasonal credit card
growth. Business loans increased 1%, reflecting good originations
from new customer growth and slower payment rates. Average deposit
volumes decreased US$5 billion, or
1%, compared with the prior quarter, reflecting a 5% decrease in
sweep deposits and a 1% decrease in business deposits, partially
offset by a 1% increase in personal deposit volume.
AUA were US$40
billion as at January 31, 2024,
flat compared with the prior quarter. After giving effect to
realignment of certain asset management businesses from U.S. Retail
to Wealth Management and Insurance, AUM were US$7 billion, flat compared with the prior
quarter.
PCL for the quarter was US$285 million, an increase of US$72 million compared with the prior quarter.
PCL – impaired was US$279 million, an
increase of US$52 million, or 23%,
reflecting further normalization of credit performance in the
consumer lending portfolios, including seasonal trends in the
credit card and auto portfolios. PCL – performing was a build of
US$6 million, compared with a
recovery of US$14 million in the prior quarter. U.S. Retail
PCL including only the Bank's share of PCL in the U.S. strategic
cards portfolio, as an annualized percentage of credit volume was
0.61%, an increase of 15 bps, compared with the prior quarter.
Reported non-interest expenses for the
quarter were US$1,779 million, an
increase of US$274 million, or 18%,
compared to the prior quarter, primarily reflecting the FDIC
special assessment. On an adjusted basis, non-interest expenses
decreased US$26 million, or 2%,
reflecting higher legal costs in the prior quarter, partially
offset by higher employee-related expenses.
The reported and adjusted efficiency ratios
for the quarter were 68.8% and 57.2%, respectively, compared with
58.0%, respectively, in the prior quarter.
TABLE 9: WEALTH
MANAGEMENT AND INSURANCE
|
(millions of Canadian
dollars, except as noted)
|
|
|
|
For the three months
ended
|
|
|
|
January
31
|
|
October 31
|
|
January 31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
Net interest
income
|
$
|
285
|
|
$
|
265
|
|
$
|
283
|
|
Non-interest
income1
|
|
2,850
|
|
|
2,691
|
|
|
2,632
|
|
Total
revenue
|
|
3,135
|
|
|
2,956
|
|
|
2,915
|
|
Provision for (recovery
of) credit losses – impaired
|
|
–
|
|
|
–
|
|
|
–
|
|
Provision for (recovery
of) credit losses – performing
|
|
–
|
|
|
–
|
|
|
–
|
|
Total provision for
(recovery of) credit losses
|
|
–
|
|
|
–
|
|
|
–
|
|
Insurance service
expenses1
|
|
1,366
|
|
|
1,346
|
|
|
1,164
|
|
Non-interest
expenses1
|
|
1,047
|
|
|
957
|
|
|
1,009
|
|
Provision for (recovery
of) income taxes
|
|
167
|
|
|
161
|
|
|
188
|
|
Net
income
|
$
|
555
|
|
$
|
492
|
|
$
|
554
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Return on common
equity1,2
|
|
37.5
|
%
|
|
33.9
|
%
|
|
39.1
|
%
|
Efficiency
ratio1
|
|
33.4
|
|
|
32.4
|
|
|
34.6
|
|
Efficiency ratio, net
of ISE1,3
|
|
59.2
|
|
|
59.4
|
|
|
57.6
|
|
Assets under
administration (billions of Canadian
dollars)4
|
$
|
576
|
|
$
|
531
|
|
$
|
541
|
|
Assets under management
(billions of Canadian dollars)
|
|
479
|
|
|
441
|
|
|
452
|
|
Average number of
full-time equivalent staff
|
|
15,386
|
|
|
15,674
|
|
|
16,400
|
|
1
|
For the three months
ended October 31, 2023 and January 31, 2023, certain amounts
have been restated for the adoption of IFRS 17. Refer to Note 2 of
the Bank's first quarter 2024 Interim Consolidated Financial
Statements for further details.
|
2
|
Capital allocated to
the business segment was increased to 11.5% CET1 Capital effective
the first quarter of 2024, compared with 11% in the prior
year.
|
3
|
Efficiency ratio, net
of ISE is calculated by dividing non-interest expenses by total
revenue, net of ISE. Total revenue, net of ISE – Q1 2024: $1,769
million, Q4 2023: $1,610 million, Q1 2023: $1,751
million. Total revenue, net of ISE is a non-GAAP financial measure.
Refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document and the Glossary in the Bank's
first quarter 2024 MD&A for additional information about this
metric.
|
4
|
Includes AUA
administered by TD Investor Services, which is part of the Canadian
Personal and Commercial Banking segment.
|
Quarterly comparison – Q1 2024 vs. Q1 2023
Wealth Management and Insurance net income for the quarter was
$555 million, an increase of
$1 million, or relatively flat compared with the first quarter
last year, reflecting higher revenue, offset by higher insurance
service expenses and non-interest expenses. The annualized ROE for
the quarter was 37.5%, compared with 39.1% in the first quarter
last year.
Revenue for the quarter was $3,135 million, an increase of
$220 million, or 8%, compared with the first quarter last
year. Non-interest income was $2,850 million, an increase of
$218 million, or 8%, reflecting higher insurance premiums, and
higher fee-based revenue in the wealth management business. Net
interest income was $285 million, an increase of
$2 million, or 1%, compared with the first quarter last
year.
AUA were $576
billion as at January 31,
2024, an increase of $35
billion, or 6%, compared with the first quarter last year,
reflecting market appreciation and net asset growth. AUM were
$479 billion as at January 31, 2024, an increase of $27 billion, or 6%, compared with the first
quarter last year, reflecting market appreciation.
Insurance service expenses for the quarter
were $1,366 million, an increase of
$202 million, or 17%, compared with
the first quarter last year, reflecting increased claims severity
and less favourable prior years' claims
development.
Non-interest expenses for the quarter were
$1,047 million, an increase of
$38 million, or 4%, compared with the
first quarter last year, reflecting higher variable compensation
commensurate with higher revenues, and technology costs.
The efficiency ratio for the quarter was
33.4%, compared with 34.6% in the first quarter last year. The
efficiency ratio, net of ISE for the quarter was 59.2%, compared
with 57.6% in the first quarter last year.
Quarterly comparison – Q1 2024 vs. Q4 2023
Wealth Management and Insurance net income for the quarter was
$555 million, an increase of
$63 million, or 13%, compared with
the prior quarter, reflecting higher revenue, partially offset by
higher non-interest expenses. The annualized ROE for the quarter
was 37.5%, compared with 33.9%, in the prior quarter.
Revenue increased $179 million, or 6%, compared with the prior
quarter. Non-interest income increased $159 million, or 6%,
reflecting higher insurance premiums, as well as higher fee-based
and transaction revenue in the wealth management business. Net
interest income increased $20
million, or 8%, reflecting higher deposit margins.
AUA increased $45
billion, or 8%, and AUM increased $38
billion, or 9%, compared with the prior quarter, both
primarily reflecting market appreciation and net asset
growth.
Insurance service expenses for the quarter
increased $20 million, or 1%,
compared with the prior quarter, reflecting less favourable prior
years' claims development, partially offset by fewer severe
weather-related events.
Non-interest expenses increased $90 million, or 9%, compared with the prior
quarter, primarily reflecting higher employee-related expenses
including variable compensation commensurate with higher
revenues.
The efficiency ratio for the quarter was
33.4%, compared with 32.4% in the prior quarter. The efficiency
ratio, net of ISE for the quarter was 59.2%, compared with 59.4% in
the prior quarter.
TABLE 10: WHOLESALE
BANKING1
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
|
|
January
31
|
|
October 31
|
|
January 31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
Net interest income
(TEB)
|
$
|
198
|
|
$
|
245
|
|
$
|
525
|
|
Non-interest
income
|
|
1,582
|
|
|
1,243
|
|
|
820
|
|
Total
revenue
|
|
1,780
|
|
|
1,488
|
|
|
1,345
|
|
Provision for (recovery
of) credit losses – impaired
|
|
5
|
|
|
–
|
|
|
1
|
|
Provision for (recovery
of) credit losses – performing
|
|
5
|
|
|
57
|
|
|
31
|
|
Total provision for
(recovery of) credit losses
|
|
10
|
|
|
57
|
|
|
32
|
|
Non-interest expenses –
reported
|
|
1,500
|
|
|
1,441
|
|
|
883
|
|
Non-interest expenses –
adjusted2,3
|
|
1,383
|
|
|
1,244
|
|
|
862
|
|
Provision for (recovery
of) income taxes (TEB) – reported
|
|
65
|
|
|
(27)
|
|
|
99
|
|
Provision for (recovery
of) income taxes (TEB) – adjusted2
|
|
89
|
|
|
9
|
|
|
104
|
|
Net income –
reported
|
$
|
205
|
|
$
|
17
|
|
$
|
331
|
|
Net income –
adjusted2
|
|
298
|
|
|
178
|
|
|
347
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Trading-related revenue
(TEB)4
|
$
|
730
|
|
$
|
590
|
|
$
|
662
|
|
Average gross lending
portfolio (billions of Canadian dollars)5
|
|
96.2
|
|
|
93.0
|
|
|
96.9
|
|
Return on common equity
– reported6
|
|
5.3
|
%
|
|
0.5
|
%
|
|
9.4
|
%
|
Return on common equity
– adjusted2,6
|
|
7.6
|
|
|
4.9
|
|
|
9.9
|
|
Efficiency ratio –
reported
|
|
84.3
|
|
|
96.8
|
|
|
65.7
|
|
Efficiency ratio –
adjusted2
|
|
77.7
|
|
|
83.6
|
|
|
64.1
|
|
Average number of
full-time equivalent staff
|
|
7,100
|
|
|
7,346
|
|
|
5,365
|
|
1
|
Effective March 1,
2023, Wholesale Banking results include the acquisition of Cowen
Inc.
|
2
|
For additional
information about the Bank's use of non-GAAP financial measures,
refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document.
|
3
|
Adjusted non-interest
expenses exclude the acquisition and integration-related charges
primarily for the Cowen acquisition – Q1 2024: $117 million ($93
million after-tax), Q4 2023: $197 million ($161 million
after-tax), Q1 2023: $21 million ($16 million
after-tax).
|
4
|
Includes net interest
income (loss) TEB of ($54) million (Q4 2023: $61 million, Q1
2023: $261 million), and trading income (loss) of $784 million (Q4
2023: $529 million, Q1 2023: $401 million). Trading-related
revenue (TEB) is a non-GAAP financial measure. Refer to "Non-GAAP
and Other Financial Measures" in the "How We Performed" section of
this document and the Glossary in the Bank's first quarter of 2024
MD&A for additional information about this metric.
|
5
|
Includes gross loans
and bankers' acceptances relating to Wholesale Banking, excluding
letters of credit, cash collateral, credit default swaps, and
allowance for credit losses.
|
6
|
Capital allocated to
the business segment was increased to 11.5% CET1 Capital effective
the first quarter of 2024 compared with 11% in the prior
year.
|
Quarterly comparison – Q1 2024 vs. Q1 2023
Wholesale Banking reported net income for the quarter was
$205 million, a decrease of
$126 million, or 38%, compared with
the first quarter last year, primarily reflecting higher
non-interest expenses, partially offset by higher revenues. On an
adjusted basis, net income was $298
million, a decrease of $49
million or 14%.
Revenue for the quarter, including TD Cowen,
was $1,780 million, an increase of
$435 million, or 32%, compared with
the first quarter last year. Higher revenue primarily reflects
higher equity commissions, lending revenue primarily from
syndicated and leveraged finance, underwriting fees, and
trading-related revenue.
PCL for the quarter was $10 million, a decrease of $22 million compared with the first quarter last
year. PCL – impaired was $5 million.
PCL – performing was $5 million, a
decrease of $26 million due to prior
period build.
Reported non-interest expenses for the
quarter, including TD Cowen, were $1,500
million, an increase of $617
million, or 70%, compared with the first quarter last year,
primarily reflecting TD Cowen and the associated acquisition and
integration-related costs and higher variable compensation
commensurate with higher revenues as well as a provision of
$102 million taken in connection with
the U.S. record keeping matter. On an adjusted basis, non-interest
expenses were $1,383 million, an
increase of $521 million, or 60%.
Quarterly comparison – Q1 2024 vs. Q4 2023
Wholesale Banking reported net income for the quarter was
$205 million, an increase of
$188 million compared with the prior
quarter, primarily reflecting higher revenues, partially offset by
higher non-interest expenses. On an adjusted basis, net income was
$298 million, an increase of
$120 million, or 67%.
Revenue for the quarter increased
$292 million, or 20%, compared with
the prior quarter. Higher revenue primarily reflects higher
trading-related revenue, lending revenue, and underwriting
fees.
PCL for the quarter was $10 million, a decrease of $47 million compared with the prior quarter. PCL
– impaired was $5 million. PCL –
performing was $5 million, a decrease of $52 million due to prior quarter build.
Reported non-interest expenses for the
quarter, increased $59 million, or
4%, compared with the prior quarter, primarily reflecting a
provision of $102 million taken in
connection with the U.S. record keeping matter, partially offset by
lower acquisition and integration related costs. On an adjusted
basis, non-interest expenses increased $139
million or 11%.
TABLE 11:
CORPORATE
|
(millions of Canadian
dollars)
|
For the three months
ended
|
|
|
January
31
|
October 31
|
January 31
|
|
|
2024
|
2023
|
2023
|
Net income (loss) –
reported
|
$
|
(628)
|
$
|
(591)
|
$
|
(2,617)
|
Adjustments for
items of note
|
|
|
|
|
|
|
Amortization of
acquired intangibles
|
|
94
|
|
92
|
|
54
|
Acquisition and
integration charges related to the Schwab transaction
|
|
32
|
|
31
|
|
34
|
Share of restructuring
and other charges from investment in Schwab
|
|
49
|
|
35
|
|
–
|
Restructuring
charges
|
|
291
|
|
363
|
|
–
|
Impact from the
terminated FHN acquisition-related capital hedging
strategy
|
|
57
|
|
64
|
|
876
|
Litigation
settlement
|
|
–
|
|
–
|
|
1,603
|
Less: impact of
income taxes
|
|
|
|
|
|
|
CRD and federal tax
rate increase for fiscal 2022
|
|
–
|
|
–
|
|
(585)
|
Other items of
note
|
|
113
|
|
127
|
|
675
|
Net income (loss) –
adjusted1
|
$
|
(218)
|
$
|
(133)
|
$
|
(140)
|
|
|
|
|
|
|
|
|
Decomposition of
items included in net income (loss) – adjusted
|
|
|
|
|
|
|
Net corporate
expenses2
|
$
|
(254)
|
$
|
(227)
|
$
|
(191)
|
Other
|
|
36
|
|
94
|
|
51
|
Net income (loss) –
adjusted1
|
$
|
(218)
|
$
|
(133)
|
$
|
(140)
|
|
|
|
|
|
|
|
|
Selected
volumes
|
|
|
|
|
|
|
Average number of
full-time equivalent staff
|
|
23,437
|
|
23,491
|
|
21,844
|
1
|
For additional
information about the Bank's use of non-GAAP financial measures,
refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document.
|
2
|
For additional
information about this metric, refer to the Glossary in the first
quarter of 2023 MD&A, which is incorporated by
reference.
|
Quarterly comparison – Q1 2024 vs. Q1 2023
Corporate segment's reported net loss for the quarter was
$628 million, compared with a
reported net loss of $2,617 million
in the first quarter last year. The lower net loss primarily
reflects the impact of the Stanford
litigation settlement in the prior year, the net effect of the
terminated FHN acquisition-related capital hedging strategy, and
prior year recognition of a provision for income taxes in
connection with the CRD and increase in the Canadian federal tax
rate for fiscal 2022, partially offset by restructuring charges in
the current quarter. Net corporate expenses increased $63 million compared to the prior year, mainly
reflecting investments in our risk and control infrastructure. The
adjusted net loss for the quarter was $218
million, compared with an adjusted net loss of $140 million in the first quarter last year.
Quarterly comparison – Q1 2024 vs. Q4 2023
Corporate segment's reported net loss for the quarter was
$628 million, compared with a
reported net loss of $591 million in
the prior quarter. The higher net loss reflects lower revenue in
treasury and balance sheet management activities and higher risk
and control expenses, partially offset by lower restructuring
charges. Net corporate expenses increased $27 million compared to the prior quarter, mainly
reflecting investments in our risk and control infrastructure. The
adjusted net loss for the quarter was $218
million, compared with an adjusted net loss of $133 million in the prior quarter.
SHAREHOLDER AND INVESTOR
INFORMATION
Shareholder Services
If you:
|
And your inquiry
relates to:
|
Please
contact:
|
Are a registered
shareholder (your name appears
on your TD share certificate)
|
Missing dividends, lost
share certificates, estate
questions, address changes to the share register,
dividend bank account changes, the dividend
reinvestment plan, eliminating duplicate mailings of
shareholder materials or stopping (or resuming)
receiving annual and quarterly reports
|
Transfer
Agent:
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Company
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and U.S. only)
or
416-682-3860
Facsimile:
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shareholderinquiries@tmx.com or www.tsxtrust.com
|
Hold your TD shares
through the
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System
in the United
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|
Missing dividends, lost
share certificates, estate
questions, address changes to the share register,
eliminating duplicate mailings of shareholder
materials or stopping (or resuming) receiving annual
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|
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Company, N.A.
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or
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Email inquiries:
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|
Beneficially own TD
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|
Your TD shares,
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dividend reinvestment plan and mailings of
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|
Your
intermediary
|
For all other shareholder inquiries, please contact TD
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Access to Quarterly Results Materials
Interested investors, the media and others may view the first
quarter earnings news release, results slides, supplementary
financial information, and the Report to Shareholders on the TD
Investor Relations website at www.td.com/investor/.
Quarterly Earnings Conference Call
TD Bank Group will host an earnings conference call in Toronto, Ontario on February 29, 2024. The call will be audio webcast
live through TD's website at 8:30 a.m. ET. The call will
feature presentations by TD executives on the Bank's financial
results for first quarter and discussions of related disclosures,
followed by a question-and-answer period with analysts. The
presentation material referenced during the call will be available
on the TD website at www.td.com/investor on February 29, 2024, in advance of the call. A
listen-only telephone line is available at 416–641–6150 or
1-866-696-5894 (toll free) and the passcode is 2727354#.
The audio webcast and presentations will be archived at
www.td.com/investor. Replay of the teleconference will be available
from 5:00 p.m. ET on February 29, 2024, until
11:59 p.m. ET on March 15, 2024, by calling 905-694-9451 or
1-800-408-3053 (toll free). The passcode is 7300743#.
Annual Meeting
Thursday, April
18, 2024
Toronto, Ontario
About TD Bank Group
The Toronto-Dominion Bank and its
subsidiaries are collectively known as TD Bank Group ("TD" or the
"Bank"). TD is the sixth largest bank in North America by assets and serves over
27.5 million customers in four key businesses operating in a number
of locations in financial centres around the globe: Canadian
Personal and Commercial Banking, including TD Canada Trust and
TD Auto Finance Canada; U.S. Retail, including TD Bank, America's
Most Convenient Bank®, TD Auto Finance U.S., TD
Wealth (U.S.), and an investment in The Charles Schwab Corporation;
Wealth Management and Insurance, including TD Wealth (Canada), TD Direct Investing, and TD
Insurance; and Wholesale Banking, including TD Securities and TD
Cowen. TD also ranks among the world's leading online financial
services firms, with more than 17 million active online and mobile
customers. TD had $1.91 trillion in
assets on January 31, 2024. The
Toronto-Dominion Bank trades under the symbol "TD" on the
Toronto and New York Stock
Exchanges.
SOURCE TD Bank Group