Earnings News
Release • Three and six months ended
April 30, 2024
This quarterly Earnings
News Release should be read in conjunction with the Bank's
unaudited second quarter 2024 Report to Shareholders for the three
and six months ended April 30, 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 May 22, 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 with 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.sedarplus.ca and on the U.S. Securities and
Exchange Commission's (SEC) website at http://www.sec.gov (EDGAR
filers section).
|
Reported results conform with 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 "Significant
Events" and "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document.
|
SECOND QUARTER FINANCIAL HIGHLIGHTS, compared with the second
quarter last year:
- Reported diluted earnings per share were $1.35, compared with $1.69.
- Adjusted diluted earnings per share were $2.04, compared with $1.91.
- Reported net income was $2,564
million, compared with $3,306
million.
- Adjusted net income was $3,789
million, compared with $3,707
million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended
April 30, 2024, compared with the
corresponding period last year:
- Reported diluted earnings per share were $2.89, compared with $2.52.
- Adjusted diluted earnings per share were $4.04, compared with $4.14.
- Reported net income was $5,388
million, compared with $4,887
million.
- Adjusted net income was $7,426
million, compared with $7,861
million.
SECOND QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The second quarter reported earnings figures included the
following items of note:
- Amortization of acquired intangibles of $72 million ($62
million after-tax or 4 cents
per share), compared with $79 million
($67 million after-tax or
3 cents per share) in the second
quarter last year.
- Acquisition and integration charges related to
the Schwab transaction of $21 million ($16 million
after-tax or 1 cent per share),
compared with $30 million ($26 million after-tax or
1 cent per share) in the second
quarter last year.
- Restructuring charges of $165 million
($122 million after-tax or 7
cents per share).
- Acquisition and integration charges related to
the Cowen acquisition of $102
million ($80 million after-tax
or 4 cents per share),
compared with $73 million ($63 million after-tax or
4 cents per share) in the second
quarter last year.
- Impact from the terminated FHN acquisition-related
capital hedging strategy of $64
million ($48 million after-tax or 3 cents per share), compared with
$134 million ($101 million after-tax or 6 cents per share) in the second quarter last
year.
- Civil matter provision/Litigation settlement of $274 million ($205
million after-tax or 11 cents
per share), compared with $39 million
($28 million after-tax or
2 cents per share) in the second
quarter last year.
- FDIC special assessment of $103 million ($77 million after-tax or
4 cents per share).
- Provision for investigations related to the Bank's AML
program of $615 million ($615 million after-tax or 35 cents per share).
TORONTO, May 23, 2024
/CNW/ - TD Bank Group ("TD" or the "Bank") today announced its
financial results for the second quarter ended April 30, 2024. Reported earnings were
$2.6 billion, down 22% compared with
the second quarter last year, and adjusted earnings were
$3.8 billion, up 2%.
"TD delivered strong second quarter results, with earnings of
$3.8 billion and solid momentum
across our franchise. We delivered significant positive operating
leverage while continuing to invest in our business, including our
risk and control infrastructure," said Bharat Masrani, Group
President and Chief Executive Officer, TD Bank Group.
Canadian Personal and Commercial Banking delivered a strong
quarter driven by continued volume growth and positive operating
leverage
Canadian Personal and Commercial Banking net income
was $1,739 million, an increase of 7%
compared to the second quarter last year. The increase reflects
revenue growth, partially offset by higher provisions for credit
losses and non-interest expenses. Revenue was $4,839 million, an increase of 10%, driven by
volume growth and margin expansion.
Canadian Personal and Commercial Banking continued to build
momentum, delivering another strong quarter for New to Canada account openings. TD increased its
support for international students with an agreement with HDFC,
India's leading private sector
bank, to help attract new customers with a simplified banking
experience. The Bank also established a new collaboration with
ApplyBoard, a Canadian educational organization that helps
international students prepare their finances to study in
Canada. In addition, TD Auto
Finance was ranked #1 in Dealer Satisfaction with Non-Prime and
Prime Credit Non-Captive Automotive Financing Lenders, according to
the J.D. Power 2024 Canada Dealer Financing Satisfaction
Study1.
____________________________________________
|
1 TD Auto
Finance received the highest score in the retail non-captive
non-prime segment and the retail non-captive prime segment in
the J.D. Power 2024 Canada Dealer Financing Satisfaction
Study, which measure Canadian auto dealers' satisfaction with their
auto finance providers. Visit jdpower.com/awards for more
details.
|
The U.S. Retail Bank delivered operating momentum with
sequential earnings and loan growth in a challenging
environment
U.S. Retail reported net income was $580
million (US$433 million), a
decrease of 59% (58% in U.S. dollars) compared with the second
quarter last year. On an adjusted basis, net income was
$1,272 million, a decline of 16% (17%
in U.S. dollars). TD Bank's investment in The Charles Schwab
Corporation ("Schwab") contributed $183
million in earnings, a decrease of 27% (26% in U.S. dollars)
compared with the second quarter last year.
The U.S. Retail Bank, which excludes the Bank's investment in
Schwab, reported net income of $397
million (US$297 million), a
decrease of 66% (65% in U.S. dollars) from the second quarter last
year, primarily reflecting provisions for investigations related to
the Bank's anti-money laundering program and the Federal Deposit
Insurance Corporation (FDIC) Special Assessment, partially offset
by acquisition and integration-related charges for the terminated
First Horizon transaction in the second quarter last year. On an
adjusted basis net income was $1,089
million (US$803 million), a
decrease of 14% (15% in U.S. dollars) from the second quarter last
year, primarily reflecting higher PCL and lower revenue.
The U.S. Retail Bank continued to deliver loan growth while
maintaining its through-the-cycle underwriting standards, with
total average loan balances up 7% compared with the second quarter
last year and up 1% from last quarter. Excluding sweep deposits,
total personal and business deposit average balances were down 1%
year-over-year, reflecting competitive market conditions, while
quarter–over–quarter, personal and business deposit average
balances were flat. Overall, the U.S. Retail Bank delivered balance
sheet stability in a challenging environment.
During the quarter, TD Bank, America's Most Convenient Bank® (TD
AMCB) launched TD Complete Checking and TD Early Pay, offering
customers more flexible banking options, including earlier access
to eligible direct deposits. TD AMCB surpassed five million active
mobile customers while continuing to deliver new features and
capabilities that enhance the customer experience. TD AMCB was
ranked 9th on Forbes' list of America's Best Employers
for Diversity 2024, leading its peers as the highest ranked
financial institution.
Wealth Management and Insurance results reflect strong
business momentum
Wealth Management and Insurance net income
was $621 million, an increase of 19%
compared with the second quarter last year, as positive top-line
momentum was partially offset by higher insurance service expenses.
This quarter's revenue growth of 11% reflects insurance premium
growth, and higher fee-based and transaction revenue in the Wealth
Management business.
Wealth Management and Insurance continued to invest in
client-centric innovation this quarter. TD Direct Investing
completed its migration of most active traders to the new TD Active
Trader platform and TD Wealth Advice continued to gain market share
as it grows its advisor network2. TD Asset Management
launched seven new actively managed fixed income ETFs,
showcasing the value of its proprietary independent credit research
capabilities, and offering investors the potential to earn a high
rate of interest income. In TD Insurance, Small Business Insurance
expanded its national reach to new customer segments including
business professionals, healthcare, retail, small manufacturing,
and hospitality.
____________________________________________
|
2 Investor
Economics Retail Brokerage and Distribution Quarterly Update,
Winter 2023.
|
Wholesale Banking delivered record revenue reflecting broad-based
growth across the business
Wholesale Banking reported net
income for the quarter was $361
million, an increase of $211
million compared with the second quarter last year,
reflecting higher revenues, partially offset by higher non-interest
expenses. On an adjusted basis, net income was $441 million, an increase of $228 million, or 107%. Revenue for the quarter
was $1,940 million, an increase of
$523 million, or 37%, compared with
the second quarter last year, reflecting higher trading-related
revenue, underwriting fees, and lending revenue.
On April 1, TD Securities and TD
Cowen achieved an important milestone with the implementation of a
unified Investment Banking, Capital Markets and Research platform,
integrating coverage models and streamlining delivery of
capabilities for clients.
Enhancements to TD's anti-money laundering (AML)
program
The Bank has been cooperating with U.S. regulators
and authorities in good faith for many months and is working
diligently to bring these investigations to resolution so that
investors can have more clarity. A comprehensive overhaul of TD's
U.S. AML program is well underway, and will strengthen our program
globally.
Capital
TD's Common Equity Tier 1 Capital ratio was
13.4%.
Conclusion
"Our businesses in Canada, the United
States and across the globe are well-positioned to continue
to meet the needs of our nearly 28 million customers and clients. I
would like to thank our 95,000 TD bankers for everything they do to
deliver for all of our stakeholders," added Masrani.
The foregoing contains forward-looking statements. Please refer
to the "Caution Regarding Forward-Looking Statements" on page
3.
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.
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.
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.
|
This document was reviewed by the Bank's Audit
Committee and was approved by the Bank's Board of Directors, on the
Audit Committee's recommendation, prior to its
release.
|
TABLE 1: FINANCIAL
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
|
For the six months
ended
|
|
|
|
April
30
|
|
|
January 31
|
|
April 30
|
|
April
30
|
|
April 30
|
|
|
|
2024
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Results of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue –
reported1
|
|
$
|
13,819
|
|
$
|
13,714
|
|
$
|
12,397
|
|
$
|
27,533
|
|
$
|
24,598
|
|
Total revenue –
adjusted1,2
|
|
|
13,883
|
|
|
13,771
|
|
|
12,570
|
|
|
27,654
|
|
|
25,647
|
|
Provision for (recovery
of) credit losses
|
|
|
1,071
|
|
|
1,001
|
|
|
599
|
|
|
2,072
|
|
|
1,289
|
|
Insurance service
expenses (ISE)1
|
|
|
1,248
|
|
|
1,366
|
|
|
1,118
|
|
|
2,614
|
|
|
2,282
|
|
Non-interest expenses –
reported1
|
|
|
8,401
|
|
|
8,030
|
|
|
6,756
|
|
|
16,431
|
|
|
14,868
|
|
Non-interest expenses –
adjusted1,2
|
|
|
7,084
|
|
|
7,125
|
|
|
6,462
|
|
|
14,209
|
|
|
12,799
|
|
Net income –
reported1
|
|
|
2,564
|
|
|
2,824
|
|
|
3,306
|
|
|
5,388
|
|
|
4,887
|
|
Net income –
adjusted1,2
|
|
|
3,789
|
|
|
3,637
|
|
|
3,707
|
|
|
7,426
|
|
|
7,861
|
|
Financial
position (billions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans net of
allowance for loan losses
|
|
$
|
928.1
|
|
$
|
904.3
|
|
$
|
849.6
|
|
$
|
928.1
|
|
$
|
849.6
|
|
Total assets
|
|
|
1,966.7
|
|
|
1,910.9
|
|
|
1,924.8
|
|
|
1,966.7
|
|
|
1,924.8
|
|
Total
deposits
|
|
|
1,203.8
|
|
|
1,181.3
|
|
|
1,189.4
|
|
|
1,203.8
|
|
|
1,189.4
|
|
Total equity
|
|
|
112.0
|
|
|
112.4
|
|
|
116.2
|
|
|
112.0
|
|
|
116.2
|
|
Total risk-weighted
assets3
|
|
|
602.8
|
|
|
579.4
|
|
|
549.4
|
|
|
602.8
|
|
|
549.4
|
|
Financial
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common equity
(ROE) – reported1,4
|
|
|
9.5
|
%
|
|
10.9
|
%
|
|
12.4
|
%
|
|
10.2
|
%
|
|
9.1
|
%
|
Return on common equity
– adjusted1,2
|
|
|
14.5
|
|
|
14.1
|
|
|
14.0
|
|
|
14.3
|
|
|
15.0
|
|
Return on tangible
common equity (ROTCE)1,2,4
|
|
|
13.0
|
|
|
14.9
|
|
|
16.5
|
|
|
13.9
|
|
|
12.3
|
|
Return on tangible
common equity – adjusted1,2
|
|
|
19.2
|
|
|
18.7
|
|
|
18.3
|
|
|
18.9
|
|
|
19.7
|
|
Efficiency ratio –
reported1,4
|
|
|
60.8
|
|
|
58.6
|
|
|
54.5
|
|
|
59.7
|
|
|
60.4
|
|
Efficiency ratio –
adjusted, net of ISE1,2,4,5
|
|
|
56.1
|
|
|
57.4
|
|
|
56.4
|
|
|
56.7
|
|
|
54.8
|
|
Provision for (recovery
of) credit losses as a % of net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average loans and acceptances
|
|
|
0.47
|
|
|
0.44
|
|
|
0.28
|
|
|
0.45
|
|
|
0.30
|
|
Common share
information – reported (Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
earnings1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.35
|
|
$
|
1.55
|
|
$
|
1.69
|
|
$
|
2.90
|
|
$
|
2.52
|
|
Diluted
|
|
|
1.35
|
|
|
1.55
|
|
|
1.69
|
|
|
2.89
|
|
|
2.52
|
|
Dividends per
share
|
|
|
1.02
|
|
|
1.02
|
|
|
0.96
|
|
|
2.04
|
|
|
1.92
|
|
Book value per
share4
|
|
|
57.69
|
|
|
57.34
|
|
|
57.08
|
|
|
57.69
|
|
|
57.08
|
|
Closing share
price6
|
|
|
81.67
|
|
|
81.67
|
|
|
82.07
|
|
|
81.67
|
|
|
82.07
|
|
Shares outstanding
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average basic
|
|
|
1,762.8
|
|
|
1,776.7
|
|
|
1,828.3
|
|
|
1,769.8
|
|
|
1,824.4
|
|
Average diluted
|
|
|
1,764.1
|
|
|
1,778.2
|
|
|
1,830.3
|
|
|
1,771.2
|
|
|
1,826.6
|
|
End
of period
|
|
|
1,759.3
|
|
|
1,772.1
|
|
|
1,838.5
|
|
|
1,759.3
|
|
|
1,838.5
|
|
Market capitalization
(billions of Canadian dollars)
|
|
$
|
143.7
|
|
$
|
144.7
|
|
$
|
150.9
|
|
$
|
143.7
|
|
$
|
150.9
|
|
Dividend
yield4
|
|
|
5.1
|
%
|
|
4.9
|
%
|
|
4.5
|
%
|
|
5.0
|
%
|
|
4.4
|
%
|
Dividend payout
ratio4
|
|
|
75.6
|
|
|
65.7
|
|
|
56.7
|
|
|
70.3
|
|
|
76.2
|
|
Price-earnings
ratio1,4
|
|
|
13.8
|
|
|
13.1
|
|
|
10.4
|
|
|
13.8
|
|
|
10.4
|
|
Total shareholder
return (1 year)4
|
|
|
4.5
|
|
|
(6.9)
|
|
|
(7.5)
|
|
|
4.5
|
|
|
(7.5)
|
|
Common share
information – adjusted (Canadian
dollars)1,2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
earnings1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.04
|
|
$
|
2.01
|
|
$
|
1.91
|
|
$
|
4.05
|
|
$
|
4.15
|
|
Diluted
|
|
|
2.04
|
|
|
2.00
|
|
|
1.91
|
|
|
4.04
|
|
|
4.14
|
|
Dividend payout
ratio
|
|
|
49.9
|
%
|
|
50.7
|
%
|
|
50.2
|
%
|
|
50.3
|
%
|
|
46.2
|
%
|
Price-earnings
ratio1
|
|
|
10.5
|
|
|
10.6
|
|
|
9.8
|
|
|
10.5
|
|
|
9.8
|
|
Capital
ratios3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
Capital ratio
|
|
|
13.4
|
%
|
|
13.9
|
%
|
|
15.3
|
%
|
|
13.4
|
%
|
|
15.3
|
%
|
Tier 1 Capital
ratio
|
|
|
15.1
|
|
|
15.7
|
|
|
17.3
|
|
|
15.1
|
|
|
17.3
|
|
Total Capital
ratio
|
|
|
17.1
|
|
|
17.6
|
|
|
19.7
|
|
|
17.1
|
|
|
19.7
|
|
Leverage
ratio
|
|
|
4.3
|
|
|
4.4
|
|
|
4.6
|
|
|
4.3
|
|
|
4.6
|
|
TLAC ratio
|
|
|
30.6
|
|
|
30.8
|
|
|
34.2
|
|
|
30.6
|
|
|
34.2
|
|
TLAC Leverage
ratio
|
|
|
8.7
|
|
|
8.6
|
|
|
9.0
|
|
|
8.7
|
|
|
9.0
|
|
1
|
For the three and six
months ended April 30, 2023, certain amounts have been restated for
the adoption of IFRS 17, Insurance Contracts (IFRS 17).
Refer to Note 2 of the Bank's second 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 "Significant Events" and "How We
Performed" sections 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 second quarter of 2024 MD&A for
further details.
|
4
|
For additional
information about this metric, refer to the Glossary in the second
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 –
Q2 2024: $12,635 million, Q1 2024:
$12,405 million, Q2 2023: $11,452 million, 2024 YTD: $25,040
million, 2023 YTD: $23,365 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) Provision for Investigations Related to
the Bank's AML Program
In the second quarter of 2024, the
Bank recorded an initial provision of $615
million (US$450 million) in
connection with discussions with one of its U.S. regulators,
related to previously disclosed regulatory and law enforcement
investigations of the Bank's U.S. Bank Secrecy Act
(BSA)/Anti-Money Laundering (AML) program. For further details,
refer to Note 19 of the Bank's second quarter 2024 Interim
Consolidated Financial Statements.
b) Restructuring Charges
The Bank
continued to undertake certain measures in the second quarter of
2024 to reduce its cost base and achieve greater efficiency. In
connection with these measures, the Bank incurred $165 million of restructuring charges which
primarily relate to employee severance and other personnel-related
costs and real estate optimization. Next quarter, we expect to
incur additional restructuring charges of approximately
$50 million, and to conclude our
restructuring program.
c) 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 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. Accordingly, the Bank
recognized an additional expense for the special assessment of
$103 million (US$75 million) in the second quarter
of the Bank's fiscal 2024. The final amount of the Bank's special
assessment may be further updated as the FDIC determines the actual
losses to the Deposit Insurance Fund. The FDIC plans to provide
institutions subject to the special assessment with an updated
estimate with its first quarter 2024 special assessment invoice, to
be released in June 2024.
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 second 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 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. By the end of the first quarter of 2024, Schwab had
completed its buy down of the full US$5
billion FROA buydown allowance and had paid a total of
$337 million (US$250 million) in termination fees to the
Bank. The fees were intended to compensate the Bank for losses
incurred from discontinuing certain hedging relationships and for
lost revenues. The net impact was 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
|
For the six months
ended
|
|
|
|
|
April
30
|
January 31
|
April 30
|
April
30
|
April 30
|
|
|
|
|
2024
|
2024
|
2023
|
2024
|
2023
|
|
|
Net interest
income
|
$
|
7,465
|
$
|
7,488
|
$
|
7,428
|
$
|
14,953
|
$
|
15,161
|
|
|
Non-interest
income1
|
|
6,354
|
|
6,226
|
|
4,969
|
|
12,580
|
|
9,437
|
|
|
Total
revenue1
|
|
13,819
|
|
13,714
|
|
12,397
|
|
27,533
|
|
24,598
|
|
|
Provision for (recovery
of) credit losses
|
|
1,071
|
|
1,001
|
|
599
|
|
2,072
|
|
1,289
|
|
|
Insurance service
expenses1
|
|
1,248
|
|
1,366
|
|
1,118
|
|
2,614
|
|
2,282
|
|
|
Non-interest
expenses1
|
|
8,401
|
|
8,030
|
|
6,756
|
|
16,431
|
|
14,868
|
|
|
Income before income
taxes and share of net income from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab1
|
|
3,099
|
|
3,317
|
|
3,924
|
|
6,416
|
|
6,159
|
|
|
Provision for (recovery
of) income taxes1
|
|
729
|
|
634
|
|
859
|
|
1,363
|
|
1,798
|
|
|
Share of net income
from investment in Schwab
|
|
194
|
|
141
|
|
241
|
|
335
|
|
526
|
|
|
Net income –
reported1
|
|
2,564
|
|
2,824
|
|
3,306
|
|
5,388
|
|
4,887
|
|
|
Preferred dividends and
distributions on other equity instruments
|
|
190
|
|
74
|
|
210
|
|
264
|
|
293
|
|
|
Net income available
to common shareholders1
|
$
|
2,374
|
$
|
2,750
|
$
|
3,096
|
$
|
5,124
|
$
|
4,594
|
|
|
1
|
For the three and six
months ended April 30, 2023, certain amounts have been restated for
the adoption of IFRS 17. Refer to Note 2 of the Bank's second
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
|
For the six months
ended
|
|
|
|
April
30
|
January 31
|
April 30
|
April
30
|
April 30
|
|
|
2024
|
2024
|
2023
|
2024
|
2023
|
|
Operating results –
adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income1
|
$
|
7,529
|
$
|
7,545
|
$
|
7,610
|
$
|
15,074
|
$
|
15,472
|
|
Non-interest
income1,2,3
|
|
6,354
|
|
6,226
|
|
4,960
|
|
12,580
|
|
10,175
|
|
Total
revenue2
|
|
13,883
|
|
13,771
|
|
12,570
|
|
27,654
|
|
25,647
|
|
Provision for (recovery
of) credit losses
|
|
1,071
|
|
1,001
|
|
599
|
|
2,072
|
|
1,289
|
|
Insurance service
expenses2
|
|
1,248
|
|
1,366
|
|
1,118
|
|
2,614
|
|
2,282
|
|
Non-interest
expenses2,4
|
|
7,084
|
|
7,125
|
|
6,462
|
|
14,209
|
|
12,799
|
|
Income before income
taxes and share of net income from
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab
|
|
4,480
|
|
4,279
|
|
4,391
|
|
8,759
|
|
9,277
|
|
Provision for income
taxes
|
|
920
|
|
872
|
|
967
|
|
1,792
|
|
2,027
|
|
Share of net income
from investment in Schwab5
|
|
229
|
|
230
|
|
283
|
|
459
|
|
611
|
|
Net income –
adjusted2
|
|
3,789
|
|
3,637
|
|
3,707
|
|
7,426
|
|
7,861
|
|
Preferred dividends and
distributions on other equity instruments
|
|
190
|
|
74
|
|
210
|
|
264
|
|
293
|
|
Net income available
to common shareholders – adjusted
|
|
3,599
|
|
3,563
|
|
3,497
|
|
7,162
|
|
7,568
|
|
Pre-tax adjustments
for items of note
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles6
|
|
(72)
|
|
(94)
|
|
(79)
|
|
(166)
|
|
(133)
|
|
Acquisition and
integration charges related to the Schwab
transaction4,5
|
|
(21)
|
|
(32)
|
|
(30)
|
|
(53)
|
|
(64)
|
|
Share of restructuring
and other charges from investment in Schwab5
|
|
–
|
|
(49)
|
|
–
|
|
(49)
|
|
–
|
|
Restructuring
charges4
|
|
(165)
|
|
(291)
|
|
–
|
|
(456)
|
|
–
|
|
Acquisition and
integration-related charges4
|
|
(102)
|
|
(117)
|
|
(73)
|
|
(219)
|
|
(94)
|
|
Charges related to the
terminated First Horizon (FHN) acquisition4
|
|
–
|
|
–
|
|
(154)
|
|
–
|
|
(260)
|
|
Impact from the
terminated FHN acquisition-related
|
|
|
|
|
|
|
|
|
|
|
|
|
capital hedging
strategy1
|
|
(64)
|
|
(57)
|
|
(134)
|
|
(121)
|
|
(1,010)
|
|
Civil matter
provision/Litigation settlement4
|
|
(274)
|
|
–
|
|
(39)
|
|
(274)
|
|
(1,642)
|
|
FDIC special
assessment4
|
|
(103)
|
|
(411)
|
|
–
|
|
(514)
|
|
–
|
|
Provision for
investigations related to the Bank's AML
program4
|
|
(615)
|
|
–
|
|
–
|
|
(615)
|
|
–
|
|
Less: Impact of
income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles
|
|
(10)
|
|
(15)
|
|
(12)
|
|
(25)
|
|
(20)
|
|
Acquisition and
integration charges related to the Schwab transaction
|
|
(5)
|
|
(6)
|
|
(4)
|
|
(11)
|
|
(10)
|
|
Restructuring
charges
|
|
(43)
|
|
(78)
|
|
–
|
|
(121)
|
|
–
|
|
Acquisition and
integration-related charges
|
|
(22)
|
|
(24)
|
|
(10)
|
|
(46)
|
|
(15)
|
|
Charges related to the
terminated FHN acquisition
|
|
–
|
|
–
|
|
(38)
|
|
–
|
|
(64)
|
|
Impact from the
terminated FHN acquisition-related
|
|
|
|
|
|
|
|
|
|
|
|
|
capital hedging
strategy
|
|
(16)
|
|
(14)
|
|
(33)
|
|
(30)
|
|
(249)
|
|
Civil matter
provision/Litigation settlement
|
|
(69)
|
|
–
|
|
(11)
|
|
(69)
|
|
(456)
|
|
FDIC special
assessment
|
|
(26)
|
|
(101)
|
|
–
|
|
(127)
|
|
–
|
|
Canada Recovery
Dividend (CRD) and federal tax rate
|
|
|
|
|
|
|
|
|
|
|
|
|
increase for fiscal
20227
|
|
–
|
|
–
|
|
–
|
|
–
|
|
585
|
|
Total adjustments
for items of note
|
|
(1,225)
|
|
(813)
|
|
(401)
|
|
(2,038)
|
|
(2,974)
|
|
Net income available
to common shareholders – reported
|
$
|
2,374
|
$
|
2,750
|
$
|
3,096
|
$
|
5,124
|
$
|
4,594
|
|
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 – Q2 2023: ($263)
million, Q1 2023: ($998) million, ii) basis adjustment amortization
related to de-designated fair value hedge accounting relationships,
recorded in net interest income – Q2 2023: $129 million, 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 – Q2
2023: $311 million, Q1 2023: $251 million. After the termination of
the merger agreement, the residual impact of the strategy is
reversed through net interest income – Q2 2024: ($64) million, Q1
2024: ($57) million.
|
2
|
For the three and six
months ended April 30, 2023, certain amounts have been restated for
the adoption of IFRS 17. Refer to Note 2 of the Bank's second
quarter 2024 Interim Consolidated Financial Statements for further
details.
|
3
|
Adjusted non-interest
income excludes the following item of note:
|
|
i.
|
Stanford litigation
settlement – Q2 2023: $39 million. This reflects the foreign
exchange loss and is reported in the Corporate segment.
|
4
|
Adjusted non-interest
expenses exclude the following items of note:
|
|
i.
|
Amortization of
acquired intangibles – Q2 2024: $42 million, Q1 2024: $63 million,
Q2 2023: $49 million, Q1 2023: $24 million, reported in the
Corporate segment;
|
|
ii.
|
The Bank's own
integration and acquisition costs related to the Schwab transaction
– Q2 2024: $16 million, Q1 2024: $23 million, Q2 2023: $18 million,
Q1 2023: $21 million, reported in the Corporate segment;
|
|
iii.
|
Restructuring charges –
Q2 2024: $165 million, Q1 2024: $291 million, reported in the
Corporate segment;
|
|
iv.
|
Acquisition and
integration-related charges – Q2 2024: $102 million, Q1 2024: $117
million, Q2 2023: $73 million, Q1 2023: $21 million, reported in
the Wholesale Banking segment;
|
|
v.
|
Charges related to the
terminated FHN acquisition – Q2 2023: $154 million,
Q1 2023: $106 million, reported in the U.S. Retail
segment;
|
|
vi.
|
Civil matter
provision/Litigation settlement – Q2 2024: $274 million in respect
of a civil matter, Q1 2023: $1,603 million in respect of the
Stanford litigation settlement, reported in the Corporate
segment;
|
|
vii.
|
FDIC special assessment
– Q2 2024: $103 million, Q1 2024: $411 million, reported in the
U.S. Retail segment; and
|
|
viii.
|
Provision for
investigations related to the Bank's AML program – Q2 2024: $615
million, reported in the U.S. Retail segment.
|
5
|
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 – Q2 2024: $30 million, Q1
2024: $31 million, Q2 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 – Q2 2024: $5 million, Q1 2024: $9
million, Q2 2023: $12 million, Q1 2023: $13
million;
|
|
iii.
|
The Bank's share of
restructuring charges incurred by Schwab – Q1 2024: $27 million;
and
|
|
iv.
|
The Bank's share of the
FDIC special assessment charge incurred by Schwab – Q1 2024: $22
million.
|
6
|
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 4 and 5 for
amounts.
|
7
|
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
|
For the six months
ended
|
|
|
April
30
|
January 31
|
April 30
|
April
30
|
April 30
|
|
|
2024
|
2024
|
2023
|
2024
|
2023
|
|
Basic earnings per
share – reported2
|
$
|
1.35
|
$
|
1.55
|
$
|
1.69
|
$
|
2.90
|
$
|
2.52
|
|
Adjustments for items
of note
|
|
0.69
|
|
0.45
|
|
0.22
|
|
1.15
|
|
1.63
|
|
Basic earnings per
share – adjusted2
|
$
|
2.04
|
$
|
2.01
|
$
|
1.91
|
$
|
4.05
|
$
|
4.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share – reported2
|
$
|
1.35
|
$
|
1.55
|
$
|
1.69
|
$
|
2.89
|
$
|
2.52
|
|
Adjustments for items
of note
|
|
0.69
|
|
0.45
|
|
0.22
|
|
1.15
|
|
1.63
|
|
Diluted earnings per
share – adjusted2
|
$
|
2.04
|
$
|
2.00
|
$
|
1.91
|
$
|
4.04
|
$
|
4.14
|
|
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 and six
months ended April 30, 2023, certain amounts have been restated for
the adoption of IFRS 17. Refer to Note 2 of the Bank's second
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
|
|
For the six months
ended
|
|
|
|
April
30
|
|
January 31
|
|
April 30
|
|
April
30
|
|
April 30
|
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Average common
equity
|
$
|
101,137
|
|
$
|
100,269
|
|
$
|
102,800
|
|
$
|
100,573
|
|
$
|
101,750
|
|
Net income available
to common shareholders – reported1
|
|
2,374
|
|
|
2,750
|
|
|
3,096
|
|
|
5,124
|
|
|
4,594
|
|
Items of note, net of
income taxes
|
|
1,225
|
|
|
813
|
|
|
401
|
|
|
2,038
|
|
|
2,974
|
|
Net income available
to common shareholders – adjusted1
|
$
|
3,599
|
|
$
|
3,563
|
|
$
|
3,497
|
|
$
|
7,162
|
|
$
|
7,568
|
|
Return on common
equity – reported1
|
|
9.5
|
%
|
|
10.9
|
%
|
|
12.4
|
%
|
|
10.2
|
%
|
|
9.1
|
%
|
Return on common
equity – adjusted1
|
|
14.5
|
|
|
14.1
|
|
|
14.0
|
|
|
14.3
|
|
|
15.0
|
|
1
|
For the three and six
months ended April 30, 2023, certain amounts have been restated for
the adoption of IFRS 17. Refer to Note 2 of the Bank's second
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
|
For the six months
ended
|
|
|
|
April
30
|
|
January 31
|
|
April 30
|
|
April
30
|
|
April 30
|
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Average common
equity
|
$
|
101,137
|
|
$
|
100,269
|
|
$
|
102,800
|
|
$
|
100,573
|
|
$
|
101,750
|
|
Average
goodwill
|
|
18,380
|
|
|
18,208
|
|
|
17,835
|
|
|
18,322
|
|
|
17,713
|
|
Average imputed
goodwill and intangibles on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investments in
Schwab
|
|
6,051
|
|
|
6,056
|
|
|
6,142
|
|
|
6,062
|
|
|
6,163
|
|
Average other acquired
intangibles1
|
|
574
|
|
|
615
|
|
|
583
|
|
|
595
|
|
|
525
|
|
Average related
deferred tax liabilities
|
|
(228)
|
|
|
(231)
|
|
|
(210)
|
|
|
(230)
|
|
|
(195)
|
|
Average tangible
common equity
|
|
76,360
|
|
|
75,621
|
|
|
78,450
|
|
|
75,824
|
|
|
77,544
|
|
Net income available
to common shareholders – reported2
|
|
2,374
|
|
|
2,750
|
|
|
3,096
|
|
|
5,124
|
|
|
4,594
|
|
Amortization of
acquired intangibles, net of income taxes
|
|
62
|
|
|
79
|
|
|
67
|
|
|
141
|
|
|
113
|
|
Net income available
to common shareholders adjusted for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization of
acquired intangibles, net of income
taxes2
|
|
2,436
|
|
|
2,829
|
|
|
3,163
|
|
|
5,265
|
|
|
4,707
|
|
Other items of note,
net of income taxes
|
|
1,163
|
|
|
734
|
|
|
334
|
|
|
1,897
|
|
|
2,861
|
|
Net income available
to common shareholders – adjusted2
|
$
|
3,599
|
|
$
|
3,563
|
|
$
|
3,497
|
|
$
|
7,162
|
|
$
|
7,568
|
|
Return on tangible
common equity2
|
|
13.0
|
%
|
|
14.9
|
%
|
|
16.5
|
%
|
|
13.9
|
%
|
|
12.3
|
%
|
Return on tangible
common equity – adjusted2
|
|
19.2
|
|
|
18.7
|
|
|
18.3
|
|
|
18.9
|
|
|
19.7
|
|
1
|
Excludes intangibles
relating to software and asset servicing rights.
|
2
|
For the three and six
months ended April 30, 2023, certain amounts have been restated for
the adoption of IFRS 17. Refer to Note 2 of the Bank's second
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 $4 million, compared with
$29 million in the prior quarter and $40 million in the
second 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
|
|
For the six months
ended
|
|
|
|
April
30
|
|
January 31
|
|
April 30
|
|
April
30
|
|
April 30
|
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net interest
income
|
$
|
3,812
|
|
$
|
3,833
|
|
$
|
3,377
|
|
$
|
7,645
|
|
$
|
6,916
|
|
Non-interest
income
|
|
1,027
|
|
|
1,051
|
|
|
1,027
|
|
|
2,078
|
|
|
2,077
|
|
Total
revenue
|
|
4,839
|
|
|
4,884
|
|
|
4,404
|
|
|
9,723
|
|
|
8,993
|
|
Provision for (recovery
of) credit losses – impaired
|
|
397
|
|
|
364
|
|
|
234
|
|
|
761
|
|
|
454
|
|
Provision for (recovery
of) credit losses – performing
|
|
70
|
|
|
59
|
|
|
13
|
|
|
129
|
|
|
120
|
|
Total provision for
(recovery of) credit losses
|
|
467
|
|
|
423
|
|
|
247
|
|
|
890
|
|
|
574
|
|
Non-interest
expenses
|
|
1,957
|
|
|
1,984
|
|
|
1,903
|
|
|
3,941
|
|
|
3,766
|
|
Provision for (recovery
of) income taxes
|
|
676
|
|
|
692
|
|
|
629
|
|
|
1,368
|
|
|
1,299
|
|
Net
income
|
$
|
1,739
|
|
$
|
1,785
|
|
$
|
1,625
|
|
$
|
3,524
|
|
$
|
3,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common
equity1
|
|
32.9
|
%
|
|
34.6
|
%
|
|
37.4
|
%
|
|
33.8
|
%
|
|
38.6
|
%
|
Net interest margin
(including on securitized assets)2
|
|
2.84
|
|
|
2.84
|
|
|
2.74
|
|
|
2.84
|
|
|
2.77
|
|
Efficiency
ratio
|
|
40.4
|
|
|
40.6
|
|
|
43.2
|
|
|
40.5
|
|
|
41.9
|
|
Number of Canadian
retail branches
|
|
1,062
|
|
|
1,062
|
|
|
1,060
|
|
|
1,062
|
|
|
1,060
|
|
Average number of
full-time equivalent staff
|
|
29,053
|
|
|
29,271
|
|
|
28,797
|
|
|
29,163
|
|
|
28,800
|
|
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 second quarter 2024 MD&A for additional information
about these metrics.
|
Quarterly comparison – Q2 2024 vs. Q2 2023
Canadian Personal and Commercial Banking net income for the quarter
was $1,739 million, an increase of
$114 million, or 7%, compared with
the second quarter last year, reflecting higher revenue, partially
offset by higher PCL and non-interest expenses. The annualized ROE
for the quarter was 32.9%, compared with 37.4% in the second
quarter last year.
Revenue for the quarter was $4,839 million, an increase of
$435 million, or 10%, compared with the second quarter last
year. Net interest income was $3,812 million, an increase of
$435 million, or 13%, compared with the second quarter last
year, primarily reflecting volume growth and higher margins.
Average loan volumes increased $37 billion, or 7%, reflecting
7% growth in personal loans and 7% growth in business loans.
Average deposit volumes increased $16 billion, or 4%,
reflecting 6% growth in personal deposits, partially offset by 1%
decline in business deposits. Net interest margin was 2.84%, an
increase of 10 basis points (bps), primarily due to higher
margins on deposits, partially offset by lower margins on loans and
changes to balance sheet mix. Non-interest income was $1,027 million, flat compared with the second
quarter last year.
PCL for the quarter was $467 million, an increase of $220 million compared with the second quarter
last year. PCL – impaired was $397
million, an increase of $163
million, or 70%, reflecting credit migration in the consumer
and commercial lending portfolios. PCL – performing was
$70 million, an increase of
$57 million. The performing
provisions this quarter largely reflect credit conditions,
including credit migration in the commercial and consumer lending
portfolios, and volume growth. Total PCL as an annualized
percentage of credit volume was 0.34%, an increase of 15 bps
compared with the second quarter last year.
Non-interest expenses for the quarter were
$1,957 million, an increase of
$54 million, or 3%, compared with the
second quarter last year, reflecting higher spend supporting
business growth, including higher employee-related expenses and
technology costs, partially offset by higher non-credit provisions
in the second quarter last year.
The efficiency ratio for the quarter was
40.4%, compared with 43.2% in the second quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
Canadian Personal and Commercial Banking net income for the quarter
was $1,739 million, a decrease of
$46 million, or 3%, compared with the
prior quarter, reflecting lower revenue and higher PCL, partially
offset by lower non-interest expenses. The annualized ROE for the
quarter was 32.9%, compared with 34.6% in the prior quarter.
Revenue decreased $45 million, or 1%,
compared with the prior quarter. Net interest income decreased
$21 million, or 1%, reflecting fewer
days in the second quarter, partially offset by volume growth.
Average loan volumes increased $5
billion, or 1%, reflecting 1% growth in personal loans and
2% growth in business loans. Average deposit volumes were
relatively flat compared with the prior quarter, reflecting 1%
growth in personal deposits, offset by 1% decline in business
deposits. Net interest margin was 2.84%, flat compared with the
prior quarter. Non-interest income decreased $24 million, or
2%, compared with the prior quarter, reflecting lower fee
revenue.
PCL for the quarter was $467 million, an increase of $44 million compared with the prior quarter. PCL
– impaired was $397 million, an
increase of $33 million, or 9%,
largely reflecting credit migration in the commercial lending
portfolio. PCL – performing was $70
million, an increase of $11
million. The performing provisions this quarter largely
reflect credit conditions, including credit migration in the
commercial and consumer lending portfolios, and volume growth.
Total PCL as an annualized percentage of credit volume was 0.34%,
an increase of 4 bps compared with the prior quarter.
Non-interest expenses decreased $27 million, or 1% compared with the prior
quarter, primarily reflecting lower technology costs and
employee-related expenses.
The efficiency ratio was 40.4%, compared
with 40.6%, in the prior quarter.
Year-to-date comparison – Q2 2024 vs. Q2 2023
Canadian Personal and Commercial Banking net income for the six
months ended April 30, 2024, was
$3,524 million, an increase of
$170 million, or 5%, compared with
the same period last year, reflecting higher revenue, partially
offset by higher PCL and non-interest expenses. The annualized ROE
for the period was 33.8%, compared with 38.6%, in the same period
last year.
Revenue for the period was $9,723 million, an increase of $730 million,
or 8%, compared with the same period last year. Net interest income
was $7,645 million, an increase
of $729 million, or 11% compared with the same period last
year, reflecting volume growth and higher margins. Average loan
volumes increased $37 billion, or 7%, reflecting 7% growth in
personal loans and 8% growth in business loans. Average deposit
volumes increased $15 billion, or 3%,
reflecting 6% growth in personal deposits, partially offset by a 2%
decline in business deposits. Net interest margin was 2.84%, an
increase of 7 bps, primarily due to higher margins on deposits,
partially offset by lower margins on loans and changes to balance
sheet mix. Non-interest income was $2,078 million, relatively flat compared with the
same period last year.
PCL was $890
million, an increase of $316
million compared with the same period last year. PCL –
impaired was $761 million, an
increase of $307 million, or 68%,
reflecting credit migration in the consumer and commercial lending
portfolios. PCL – performing was $129
million, an increase of $9
million. The current year performing provisions largely
reflect current credit conditions, including credit migration, and
volume growth. Total PCL as an annualized percentage of credit
volume was 0.32%, an increase of 10 bps compared with the same
period last year.
Non-interest expenses were $3,941 million, an increase of $175 million, or 5%, compared with the same
period last year, reflecting higher spend supporting business
growth, including higher employee-related expenses and technology
costs.
The efficiency ratio was 40.5%, compared
with 41.9%, for the same period last year.
(millions of dollars,
except as noted)
|
For the three months
ended
|
|
For the six months
ended
|
|
|
|
April
30
|
|
January 31
|
|
April 30
|
|
April
30
|
|
April 30
|
|
Canadian
Dollars
|
|
2024
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
Net interest
income
|
$
|
2,841
|
|
$
|
2,899
|
|
$
|
3,034
|
|
$
|
5,740
|
|
$
|
6,201
|
|
Non-interest
income
|
|
606
|
|
|
604
|
|
|
523
|
|
|
1,210
|
|
|
1,083
|
|
Total
revenue
|
|
3,447
|
|
|
3,503
|
|
|
3,557
|
|
|
6,950
|
|
|
7,284
|
|
Provision for (recovery
of) credit losses – impaired
|
|
311
|
|
|
377
|
|
|
186
|
|
|
688
|
|
|
398
|
|
Provision for (recovery
of) credit losses – performing
|
|
69
|
|
|
8
|
|
|
4
|
|
|
77
|
|
|
(8)
|
|
Total provision for
(recovery of) credit losses
|
|
380
|
|
|
385
|
|
|
190
|
|
|
765
|
|
|
390
|
|
Non-interest expenses –
reported
|
|
2,597
|
|
|
2,410
|
|
|
2,022
|
|
|
5,007
|
|
|
4,062
|
|
Non-interest expenses –
adjusted1,2
|
|
1,879
|
|
|
1,999
|
|
|
1,868
|
|
|
3,878
|
|
|
3,802
|
|
Provision for (recovery
of) income taxes – reported
|
|
73
|
|
|
(5)
|
|
|
189
|
|
|
68
|
|
|
393
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
99
|
|
|
96
|
|
|
227
|
|
|
195
|
|
|
457
|
|
U.S. Retail Bank net
income – reported
|
|
397
|
|
|
713
|
|
|
1,156
|
|
|
1,110
|
|
|
2,439
|
|
U.S. Retail Bank net
income – adjusted1
|
|
1,089
|
|
|
1,023
|
|
|
1,272
|
|
|
2,112
|
|
|
2,635
|
|
Share of net income
from investment in Schwab3,4
|
|
183
|
|
|
194
|
|
|
250
|
|
|
377
|
|
|
551
|
|
Net income –
reported
|
$
|
580
|
|
$
|
907
|
|
$
|
1,406
|
|
$
|
1,487
|
|
$
|
2,990
|
|
Net income –
adjusted1
|
|
1,272
|
|
|
1,217
|
|
|
1,522
|
|
|
2,489
|
|
|
3,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
2,094
|
|
$
|
2,141
|
|
$
|
2,241
|
|
$
|
4,235
|
|
$
|
4,589
|
|
Non-interest
income
|
|
446
|
|
|
446
|
|
|
387
|
|
|
892
|
|
|
802
|
|
Total
revenue
|
|
2,540
|
|
|
2,587
|
|
|
2,628
|
|
|
5,127
|
|
|
5,391
|
|
Provision for (recovery
of) credit losses – impaired
|
|
229
|
|
|
279
|
|
|
137
|
|
|
508
|
|
|
295
|
|
Provision for (recovery
of) credit losses – performing
|
|
51
|
|
|
6
|
|
|
3
|
|
|
57
|
|
|
(6)
|
|
Total provision for
(recovery of) credit losses
|
|
280
|
|
|
285
|
|
|
140
|
|
|
565
|
|
|
289
|
|
Non-interest expenses –
reported
|
|
1,909
|
|
|
1,779
|
|
|
1,493
|
|
|
3,688
|
|
|
3,005
|
|
Non-interest expenses –
adjusted1,2
|
|
1,384
|
|
|
1,479
|
|
|
1,380
|
|
|
2,863
|
|
|
2,814
|
|
Provision for (recovery
of) income taxes – reported
|
|
54
|
|
|
(3)
|
|
|
140
|
|
|
51
|
|
|
291
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
73
|
|
|
71
|
|
|
168
|
|
|
144
|
|
|
338
|
|
U.S. Retail Bank net
income – reported
|
|
297
|
|
|
526
|
|
|
855
|
|
|
823
|
|
|
1,806
|
|
U.S. Retail Bank net
income – adjusted1
|
|
803
|
|
|
752
|
|
|
940
|
|
|
1,555
|
|
|
1,950
|
|
Share of net income
from investment in Schwab3,4
|
|
136
|
|
|
144
|
|
|
185
|
|
|
280
|
|
|
407
|
|
Net income –
reported
|
$
|
433
|
|
$
|
670
|
|
$
|
1,040
|
|
$
|
1,103
|
|
$
|
2,213
|
|
Net income –
adjusted1
|
|
939
|
|
|
896
|
|
|
1,125
|
|
|
1,835
|
|
|
2,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common equity
– reported5
|
|
5.4
|
%
|
|
8.5
|
%
|
|
14.1
|
%
|
|
6.9
|
%
|
|
14.8
|
%
|
Return on common equity
– adjusted1,5
|
|
11.7
|
|
|
11.3
|
|
|
15.3
|
|
|
11.5
|
|
|
15.8
|
|
Net interest
margin1,6
|
|
2.99
|
|
|
3.03
|
|
|
3.25
|
|
|
3.01
|
|
|
3.27
|
|
Efficiency ratio –
reported
|
|
75.2
|
|
|
68.8
|
|
|
56.8
|
|
|
71.9
|
|
|
55.7
|
|
Efficiency ratio –
adjusted1
|
|
54.5
|
|
|
57.2
|
|
|
52.5
|
|
|
55.8
|
|
|
52.2
|
|
Assets under
administration (billions of U.S. dollars)7
|
$
|
40
|
|
$
|
40
|
|
$
|
39
|
|
$
|
40
|
|
$
|
39
|
|
Assets under management
(billions of U.S. dollars)7,8
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
Number of U.S. retail
stores
|
|
1,167
|
|
|
1,176
|
|
|
1,164
|
|
|
1,167
|
|
|
1,164
|
|
Average number of
full-time equivalent staff
|
|
27,957
|
|
|
27,985
|
|
|
28,401
|
|
|
27,971
|
|
|
27,987
|
|
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 – Q2 2023: $154 million or
US$113 million ($116 million or US$85 million after-tax), Q1 2023:
$106 million or US$78 million ($80 million or US$59 million
after-tax);
|
|
ii.
|
FDIC special assessment
– Q2 2024: $103 million or US$75 million ($77 million or US$56
million after-tax), Q1 2024: $411 million or US$300 million
($310 million or US$226 million after-tax);
and
|
|
iii.
|
Provision for
investigations related to the Bank's AML program – Q2 2024: $615
million or US$450 million (before and 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 second 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
second 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 – Q2 2024 vs. Q2 2023
U.S. Retail reported net income for the quarter was $580 million (US$433
million), a decrease of $826
million (US$607 million), or
59% (58% in U.S. dollars), compared with the second quarter last
year. On an adjusted basis, net income for the quarter was
$1,272 million (US$939 million), a decrease of $250 million (US$186 million), or 16% (17%
in U.S. dollars). The reported and adjusted annualized ROE for the
quarter were 5.4% and 11.7%, respectively, compared with 14.1% and
15.3%, respectively, in the second 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 $183 million (US$136
million), a decrease of $67
million (US$49 million), or
27% (26% in U.S. dollars).
U.S. Retail Bank reported net income was
$397 million (US$297 million), a decrease of $759 million (US$558
million), or 66% (65% in U.S. dollars), compared with the
second quarter last year, primarily reflecting higher non-interest
expenses, higher PCL, and lower net interest income. U.S. Retail
Bank adjusted net income was $1,089
million (US$803 million), a
decrease of $183 million (US$137
million), or 14% (15% in U.S. dollars), compared with the
second quarter last year, reflecting higher PCL and lower net
interest income.
Revenue for the quarter was US$2,540 million, a decrease of US$88 million, or 3%, compared with the second
quarter last year. Net interest income of US$2,094 million, decreased US$147 million, or 7%, driven by lower deposit
margins and volumes, partially offset by higher loan volumes. Net
interest margin of 2.99%, 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$59 million, or 15%,
compared with the second quarter last year, primarily reflecting
fee income growth from increased customer activity and losses from
the disposition of certain investments in the prior year.
Average loan volumes increased US$13 billion, or 7%, compared with the second
quarter last year. Personal loans increased 10%, reflecting strong
mortgage and auto originations and lower prepayments in the higher
rate environment. Business loans increased 5%, reflecting good
originations from new customer growth and slower payment rates.
Average deposit volumes decreased US$21
billion, or 6%, reflecting an 18% decrease in sweep
deposits, a 2% decrease in business deposits, partially offset by a
1% increase in personal deposit volumes. Excluding sweep deposits,
average deposits decreased 1%.
Assets under administration (AUA) were
US$40 billion as at April 30, 2024, an increase of US$1 billion, or 3%, compared with the second
quarter last year, reflecting net asset growth. Assets under
Management (AUM) were US$7 billion as
at April 30, 2024, flat compared with
the second quarter last year.
PCL for the quarter was US$280 million, an increase of US$140 million compared with the second quarter
last year. PCL – impaired was US$229
million, an increase of US$92
million, or 67%, reflecting credit migration in the consumer
and commercial lending portfolios. PCL – performing was
US$51 million, an increase of
US$48 million. The performing
provisions this quarter reflect credit conditions and volume
growth, and are largely recorded in the auto and commercial lending
portfolios. 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 0.60%, an increase of 27 bps,
compared with the second quarter last year.
Reported non-interest expenses for the
quarter were US$1,909 million, an
increase of US$416 million, or 28%,
compared with the second quarter last year, reflecting the impact
of the provision for investigations related to the Bank's AML
program, and FDIC special assessment, partially offset by
acquisition and integration-related charges for the terminated
First Horizon transaction in the second quarter last year. On an
adjusted basis, non-interest expenses were relatively flat,
reflecting higher employee-related expenses, partially offset by
productivity initiatives.
The reported and adjusted efficiency ratios
for the quarter were 75.2% and 54.5%, respectively, compared with
56.8% and 52.5%, respectively, in the second quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
U.S. Retail reported net income of $580
million (US$433 million), a
decrease of $327 million
(US$237 million), or 36% (35% in U.S.
dollars), compared with the prior quarter. On an adjusted basis,
net income for the quarter was $1,272
million (US$939 million), an
increase of $55 million (US$43 million), or 5% (5% in U.S. dollars).
The reported and adjusted annualized ROE for the quarter were 5.4%
and 11.7%, respectively, compared with 8.5% and 11.3%,
respectively, in the prior quarter.
The contribution from Schwab of $183 million (US$136
million) decreased $11 million
(US$8 million), or 6% (6% in U.S.
dollars).
U.S. Retail Bank reported net income was
$397 million (US$297 million), a decrease of $316 million (US$229
million), or 44% (44% in U.S. dollars), compared with the
prior quarter, primarily reflecting higher non-interest expenses
and lower net interest income. U.S. Retail Bank adjusted net income
was $1,089 million (US$803 million), an increase of $66 million (US$51
million), or 6% (7% in U.S. dollars), primarily reflecting
lower non-interest expenses, partially offset by lower net interest
income.
Revenue for the quarter was US$2,540 million, a decrease of US$47 million, or 2%, compared with the prior
quarter. Net interest income of US$2,094 million decreased US$47 million, or 2%, primarily reflecting the
effect of fewer days in the quarter, and lower deposit margins and
volumes. Net interest margin of 2.99% decreased 4 bps
quarter–over–quarter due to balance sheet mix and higher funding
costs. Non-interest income of US$446 million was flat compared
to the prior quarter.
Average loan volumes increased US$2 billion, or 1%, compared with the prior
quarter. Personal loans were relatively flat. 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
2% decrease in business deposits, partially offset by a 2% increase
in personal deposit volume.
AUA were US$40
billion as at April 30, 2024,
flat compared with the prior quarter. AUM were US$7 billion, flat compared with the prior
quarter.
PCL for the quarter was US$280 million, a decrease of US$5 million compared with the prior quarter. PCL
– impaired was US$229 million, a
decrease of US$50 million, or 18%, reflecting lower provisions
in the commercial lending portfolios, and seasonal trends in credit
card and auto portfolios. PCL – performing was US$51 million, an increase of US$45 million. The performing provisions this
quarter reflect credit conditions and volume growth, and are
largely recorded in the auto and commercial lending portfolios.
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 0.60%, a decrease of 1 basis point, compared with the
prior quarter.
Reported non-interest expenses for the
quarter were US$1,909 million, an
increase of US$130 million, or 7%,
compared to the prior quarter, primarily reflecting the impact of
the provision for investigations related to the Bank's AML
program and additional FDIC special assessment, partially
offset by the initial FDIC special assessment in the prior quarter,
and lower operating expenses. On an adjusted basis, non-interest
expenses decreased US$95 million, or
6%, due to seasonality of expenses and the impact of productivity
initiatives.
The reported and adjusted efficiency ratios
for the quarter were 75.2% and 54.5%, respectively, compared with
68.8% and 57.2%, respectively, in the prior quarter.
Year-to-date comparison – Q2 2024 vs. Q2 2023
U.S. Retail reported net income for the six months ended
April 30, 2024, was $1,487 million (US$1,103
million), a decrease of $1,503
million (US$1,110 million), or
50% (50% in U.S. dollars), compared with the same period last year.
On an adjusted basis, net income for the period was $2,489 million (US$1,835
million), a decrease of $697
million (US$522 million), or
22% (22% in U.S. dollars). The reported and adjusted annualized ROE
for the period were 6.9% and 11.5%, respectively, compared with
14.8% and 15.8%, respectively, in the same period last year.
The contribution from Schwab of $377 million (US$280
million), decreased $174
million (US$127 million), or
32% (31% in U.S. dollars).
U.S. Retail Bank reported net income for the
period was $1,110 million
(US$823 million), a decrease of
$1,329 million (US$983 million), or 54% (54% in U.S. dollars),
compared with the same period last year, reflecting higher
non-interest expenses, higher PCL, and lower net interest income.
U.S. Retail Bank adjusted net income was $2,112 million (US$1,555 million), a decrease of $523 million (US$395
million), or 20% (20% in U.S. dollars), primarily reflecting
higher PCL, higher non-interest expenses, and lower net interest
income.
Revenue for the period was US$5,127 million, a decrease of US$264 million, or 5%, compared with the same
period last year. Net interest income of US$4,235 million decreased US$354 million, or 8%, primarily reflecting lower
deposit margins and volumes, partially offset by higher loan
volumes. Net interest margin of 3.01%, decreased 26 bps, due
to lower deposit margins reflecting higher deposit costs and lower
margins on loans. Non-interest income of US$892 million
increased US$90 million, or 11%,
primarily reflecting fee income growth from increased customer
activity and higher valuation on certain investments in the prior
year.
Average loan volumes increased US$15 billion, or 8%, compared with the same
period last year. Personal loans increased 10%, reflecting good
originations and slower payment rates across portfolios. Business
loans increased 6%, reflecting good originations from new customer
growth, and slower payment rates. Average deposit volumes decreased
US$27 billion, or 8%, reflecting a 20% decrease in sweep
deposits and a 3% decrease in business deposits. Personal deposit
volumes were flat. Excluding sweep deposits, average deposits
decreased 1%.
PCL was US$565
million, an increase of US$276
million compared with the same period last year. PCL –
impaired was US$508 million, an
increase of US$213 million, or 72%, reflecting credit
migration in the consumer and commercial lending portfolios. PCL –
performing was a build of US$57
million, compared with a recovery of US$6 million in the prior year. The current year
performing provisions largely reflect current conditions, including
credit migration, and volume growth. 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 0.60%, an increase of
27 bps, compared with the same period last year.
Reported non-interest expenses for the
period were US$3,688 million, an
increase of US$683 million, or 23%,
compared with the same period last year, reflecting the impact of
the provision for investigations related to the Bank's AML program,
FDIC special assessment, and higher operating expenses, partially
offset by acquisition and integration-related charges for the
terminated First Horizon transaction in the same period last
year. On an adjusted basis, non-interest expenses increased
US$49 million, or 2%, reflecting
higher employee-related expenses.
The reported and adjusted efficiency ratios
for the quarter were 71.9% and 55.8%, respectively, compared with
55.7% and 52.2%, respectively, for the same period last year.
TABLE 9: WEALTH
MANAGEMENT AND INSURANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
|
|
|
For the three months
ended
|
|
For the six months
ended
|
|
|
|
April
30
|
|
January 31
|
|
April 30
|
|
April
30
|
|
April 30
|
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net interest
income
|
$
|
304
|
|
$
|
285
|
|
$
|
258
|
|
$
|
589
|
|
$
|
541
|
|
Non-interest
income1
|
|
2,810
|
|
|
2,850
|
|
|
2,543
|
|
|
5,660
|
|
|
5,175
|
|
Total
revenue
|
|
3,114
|
|
|
3,135
|
|
|
2,801
|
|
|
6,249
|
|
|
5,716
|
|
Provision for (recovery
of) credit losses – impaired
|
|
–
|
|
|
–
|
|
|
1
|
|
|
–
|
|
|
1
|
|
Provision for (recovery
of) credit losses – performing
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
|
–
|
|
Total provision for
(recovery of) credit losses
|
|
–
|
|
|
–
|
|
|
1
|
|
|
–
|
|
|
1
|
|
Insurance service
expenses1
|
|
1,248
|
|
|
1,366
|
|
|
1,118
|
|
|
2,614
|
|
|
2,282
|
|
Non-interest
expenses1
|
|
1,027
|
|
|
1,047
|
|
|
963
|
|
|
2,074
|
|
|
1,972
|
|
Provision for (recovery
of) income taxes
|
|
218
|
|
|
167
|
|
|
195
|
|
|
385
|
|
|
383
|
|
Net
income
|
$
|
621
|
|
$
|
555
|
|
$
|
524
|
|
$
|
1,176
|
|
$
|
1,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common
equity1,2
|
|
40.8
|
%
|
|
37.5
|
%
|
|
38.0
|
%
|
|
39.2
|
%
|
|
38.6
|
%
|
Efficiency
ratio1
|
|
33.0
|
|
|
33.4
|
|
|
34.4
|
|
|
33.2
|
|
|
34.5
|
|
Efficiency ratio, net
of ISE1,3
|
|
55.0
|
|
|
59.2
|
|
|
57.2
|
|
|
57.1
|
|
|
57.4
|
|
Assets under
administration (billions of Canadian
dollars)4
|
$
|
596
|
|
$
|
576
|
|
$
|
549
|
|
$
|
596
|
|
$
|
549
|
|
Assets under management
(billions of Canadian dollars)
|
|
489
|
|
|
479
|
|
|
460
|
|
|
489
|
|
|
460
|
|
Average number of
full-time equivalent staff
|
|
15,163
|
|
|
15,386
|
|
|
16,454
|
|
|
15,276
|
|
|
16,426
|
|
1
|
For the three and six
months ended April 30, 2023, certain amounts have been restated for
the adoption of IFRS 17. Refer to Note 2 of the Bank's second
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 – Q2 2024: $1,866
million, Q1 2024: $1,769 million, Q2 2023: $1,683
million, 2024 YTD: $3,635 million, 2023 YTD: $3,434 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 and the Glossary in the Bank's second 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 – Q2 2024 vs. Q2 2023
Wealth Management and Insurance net income for the quarter was
$621 million, an increase of
$97 million, or 19%, compared with the second quarter last
year, reflecting higher revenue, partially offset by higher
insurance service expenses and non-interest expenses. The
annualized ROE for the quarter was 40.8%, compared with 38.0% in
the second quarter last year.
Revenue for the quarter was $3,114 million, an increase of $313 million,
or 11%, compared with the second quarter last year. Non-interest
income was $2,810 million, an
increase of $267 million, or 10%, reflecting higher insurance
premiums, fee-based revenue commensurate with market growth and
transaction revenue. Net interest income was $304 million, an
increase of $46 million, or 18%, compared with the second
quarter last year, reflecting higher deposit margins.
AUA were $596
billion as at April 30, 2024,
an increase of $47 billion, or 9%,
compared with the second quarter last year, reflecting market
appreciation and net asset growth. AUM were $489 billion as at April
30, 2024, an increase of $29
billion, or 6%, compared with the second quarter last year,
primarily reflecting market appreciation.
Insurance service expenses for the quarter
were $1,248 million, an increase of
$130 million, or 12%, compared with
the second quarter last year, reflecting business growth, increased
claims severity and less favourable prior years' claims
development.
Non-interest expenses for the quarter were
$1,027 million, an increase of
$64 million, or 7%, compared with the
second quarter last year, reflecting higher variable compensation
commensurate with higher revenues, and technology costs.
The efficiency ratio for the quarter was
33.0%, compared with 34.4% in the second quarter last year. The
efficiency ratio, net of ISE for the quarter was 55.0%, compared
with 57.2% in the second quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
Wealth Management and Insurance net income for the quarter was
$621 million, an increase of
$66 million, or 12%, compared with
the prior quarter, primarily reflecting higher earnings in the
wealth management business. The annualized ROE for the quarter was
40.8%, compared with 37.5% in the prior quarter.
Revenue decreased $21
million, or 1%, compared with the prior quarter.
Non-interest income decreased $40 million, or 1%, reflecting
lower revenue in the insurance business, partially offset by higher
fee-based and transaction revenue in the wealth management
business. Net interest income increased $19 million, or 7%,
reflecting higher deposit margins.
AUA increased $20
billion, or 3%, compared with the prior quarter, reflecting
market appreciation and net asset growth. AUM increased
$10 billion, or 2%, compared with
prior quarter, primarily reflecting market appreciation.
Insurance service expenses for the quarter
decreased $118 million, or 9%,
compared with the prior quarter, reflecting seasonally lower claims
and more favourable prior years' claims development.
Non-interest expenses decreased $20 million, or 2%, compared with the prior
quarter, reflecting lower employee-related expenses.
The efficiency ratio for the quarter was
33.0%, compared with 33.4% in the prior quarter. The efficiency
ratio, net of ISE for the quarter was 55.0%, compared with 59.2% in
the prior quarter.
Year-to-date comparison – Q2 2024 vs. Q2 2023
Wealth Management and Insurance net income for the six months ended
April 30, 2024, was $1,176 million, an increase of $98 million, or 9%, compared with the same period
last year, reflecting higher revenues, partially offset by higher
insurance service expenses and non-interest expenses. The
annualized ROE for the period was 39.2%, compared with 38.6%, in
the same period last year.
Revenue for the period was $6,249 million, an increase of $533 million, or 9%, compared with same period
last year. Non-interest income increased $485 million, or 9%,
reflecting higher insurance premiums, and fee-based revenue
commensurate with market growth. Net interest income increased
$48 million, or 9%, reflecting higher investment income in the
insurance business, and higher deposit margins, partially offset by
lower deposit volumes in the wealth management business.
Insurance service expenses were $2,614 million, an increase of $332 million, or 15%, compared with the same
period last year, reflecting business growth, increased claims
severity and less favourable prior years' claims
development.
Non-interest expenses were $2,074 million, an increase of $102 million, or 5%, compared with the same
period last year, reflecting higher variable compensation
commensurate with higher revenues, and technology costs.
The efficiency ratio for the period was
33.2%, compared with 34.5% for the same period last year. The
efficiency ratio, net of ISE for the period was 57.1%, compared
with 57.4% in the same period last year.
TABLE 10: WHOLESALE
BANKING1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
For the six months
ended
|
|
|
|
April
30
|
|
January 31
|
|
April 30
|
|
April
30
|
|
April 30
|
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net interest income
(TEB)
|
$
|
189
|
|
$
|
198
|
|
$
|
498
|
|
$
|
387
|
|
$
|
1,023
|
|
Non-interest
income
|
|
1,751
|
|
|
1,582
|
|
|
919
|
|
|
3,333
|
|
|
1,739
|
|
Total
revenue
|
|
1,940
|
|
|
1,780
|
|
|
1,417
|
|
|
3,720
|
|
|
2,762
|
|
Provision for (recovery
of) credit losses – impaired
|
|
(1)
|
|
|
5
|
|
|
5
|
|
|
4
|
|
|
6
|
|
Provision for (recovery
of) credit losses – performing
|
|
56
|
|
|
5
|
|
|
7
|
|
|
61
|
|
|
38
|
|
Total provision for
(recovery of) credit losses
|
|
55
|
|
|
10
|
|
|
12
|
|
|
65
|
|
|
44
|
|
Non-interest expenses –
reported
|
|
1,430
|
|
|
1,500
|
|
|
1,189
|
|
|
2,930
|
|
|
2,072
|
|
Non-interest expenses –
adjusted2,3
|
|
1,328
|
|
|
1,383
|
|
|
1,116
|
|
|
2,711
|
|
|
1,978
|
|
Provision for (recovery
of) income taxes (TEB) – reported
|
|
94
|
|
|
65
|
|
|
66
|
|
|
159
|
|
|
165
|
|
Provision for (recovery
of) income taxes (TEB) – adjusted2
|
|
116
|
|
|
89
|
|
|
76
|
|
|
205
|
|
|
180
|
|
Net income –
reported
|
$
|
361
|
|
$
|
205
|
|
$
|
150
|
|
$
|
566
|
|
$
|
481
|
|
Net income –
adjusted2
|
|
441
|
|
|
298
|
|
|
213
|
|
|
739
|
|
|
560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading-related revenue
(TEB)4
|
$
|
693
|
|
$
|
730
|
|
$
|
482
|
|
$
|
1,423
|
|
$
|
1,144
|
|
Average gross lending
portfolio (billions of Canadian dollars)5
|
|
96.3
|
|
|
96.2
|
|
|
95.2
|
|
|
96.3
|
|
|
96.1
|
|
Return on common equity
– reported6
|
|
9.2
|
%
|
|
5.3
|
%
|
|
4.5
|
%
|
|
7.3
|
%
|
|
7.0
|
%
|
Return on common equity
– adjusted2,6
|
|
11.3
|
|
|
7.6
|
|
|
6.4
|
|
|
9.5
|
|
|
8.2
|
|
Efficiency ratio –
reported
|
|
73.7
|
|
|
84.3
|
|
|
83.9
|
|
|
78.8
|
|
|
75.0
|
|
Efficiency ratio –
adjusted2
|
|
68.5
|
|
|
77.7
|
|
|
78.8
|
|
|
72.9
|
|
|
71.6
|
|
Average number of
full-time equivalent staff
|
|
7,077
|
|
|
7,100
|
|
|
6,510
|
|
|
7,089
|
|
|
5,937
|
|
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 – Q2 2024: $102 million ($80
million after-tax), Q1 2024: $117 million ($93 million
after-tax), Q2 2023: $73 million ($63 million after-tax), Q1 2023:
$21 million ($16 million after-tax).
|
4
|
Includes net interest
income (loss) TEB of ($118) million (Q1 2024: $(54) million, Q2
2023: $285 million, Q1 2023: $261 million), and trading income
(loss) of $811 million (Q1 2024: $784 million, Q2 2023: $197
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 and the Glossary in the
Bank's second quarter 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 – Q2 2024 vs. Q2 2023
Wholesale Banking reported net income for the quarter was
$361 million, an increase of
$211 million, compared with the
second quarter last year, primarily reflecting higher revenues,
partially offset by higher non-interest expenses. On an adjusted
basis, net income was $441 million,
an increase of $228 million.
Revenue for the quarter, including TD Cowen,
was $1,940 million, an increase of
$523 million, or 37%, compared with
the second quarter last year. Higher revenue primarily reflects
higher trading-related revenue, underwriting fees, and lending
revenue.
PCL for the quarter was $55 million, an increase of $43 million compared with the second quarter last
year. PCL – impaired was a recovery of $1
million. PCL – performing was $56
million, an increase of $49
million compared to the prior year, reflecting a higher
build in the current quarter largely related to credit migration
across various industries.
Reported non-interest expenses for the
quarter, including TD Cowen, were $1,430
million, an increase of $241
million, or 20%, compared with the second quarter last year,
primarily reflecting higher variable compensation commensurate with
higher revenues, TD Cowen and the associated acquisition and
integration-related costs. On an adjusted basis, non-interest
expenses were $1,328 million, an
increase of $212 million, or 19%.
Quarterly comparison – Q2 2024 vs. Q1 2024
Wholesale Banking reported net income for the quarter was
$361 million, an increase of
$156 million, or 76%, compared with
the prior quarter, primarily reflecting higher revenues, and lower
non-interest expenses, partially offset by higher PCL. On an
adjusted basis, net income was $441
million, an increase of $143
million, or 48%.
Revenue for the quarter increased
$160 million, or 9%, compared with
the prior quarter. Higher revenue primarily reflects higher
underwriting and advisory fees, and the net change in fair value of
loan underwriting commitments.
PCL for the quarter was $55 million, an increase of $45 million compared with the prior quarter. PCL
– impaired was a recovery of $1
million. PCL – performing was $56
million, an increase of $51
million compared to the prior quarter, reflecting a higher
build in the current quarter largely related to credit migration
across various industries.
Reported non-interest expenses for the
quarter decreased $70 million, or 5%,
compared with the prior quarter, primarily reflecting a provision
of $102 million taken in connection
with the U.S. record keeping matter recorded in the prior period,
partially offset by higher variable compensation commensurate with
higher revenues. On an adjusted basis, non-interest expenses
decreased $55 million or 4%.
Year-to-date comparison – Q2 2024 vs. Q2 2023
Wholesale Banking reported net income for the six months ended
April 30, 2024 was $566 million, an increase of $85 million, or 18%, compared with the same
period last year, reflecting higher revenues, partially offset by
higher non-interest expenses. On an adjusted basis, net income was
$739 million, an increase of
$179 million, or 32%.
Revenue, including TD Cowen, was
$3,720 million, an increase of
$958 million, or 35%, compared with
the same period last year. Higher revenue primarily reflects higher
trading-related revenue, underwriting fees, lending revenue largely
from syndicated and leveraged finance, and equity commissions.
PCL was $65
million, an increase of $21
million compared with the same period last year. PCL –
impaired was $4 million. PCL –
performing was $61 million, an
increase of $23 million compared to
the prior year. The current year performing provisions largely
reflect credit migration across various industries.
Reported non-interest expenses were
$2,930 million, an increase of
$858 million, or 41%, compared with
the same period last year, reflecting TD Cowen and the associated
acquisition and integration-related costs, higher variable
compensation commensurate with higher revenues, as well as a
provision taken in connection with the U.S. record keeping matter.
On an adjusted basis, non-interest expenses were $2,711 million, an increase of $733 million or 37%.
(millions of Canadian
dollars)
|
For the three months
ended
|
|
For the six months
ended
|
|
|
April
30
|
January 31
|
April 30
|
April
30
|
April 30
|
|
|
2024
|
2024
|
2023
|
2024
|
2023
|
Net income (loss) –
reported
|
$
|
(737)
|
$
|
(628)
|
$
|
(399)
|
$
|
(1,365)
|
$
|
(3,016)
|
Adjustments for
items of note
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles
|
|
72
|
|
94
|
|
79
|
|
166
|
|
133
|
Acquisition and
integration charges related to the Schwab transaction
|
|
21
|
|
32
|
|
30
|
|
53
|
|
64
|
Share of restructuring
and other charges from investment in Schwab
|
|
–
|
|
49
|
|
–
|
|
49
|
|
–
|
Restructuring
charges
|
|
165
|
|
291
|
|
–
|
|
456
|
|
–
|
Impact from the
terminated FHN acquisition-related capital hedging
strategy
|
|
64
|
|
57
|
|
134
|
|
121
|
|
1,010
|
Civil matter
provision/Litigation settlement
|
|
274
|
|
–
|
|
39
|
|
274
|
|
1,642
|
Less: impact of
income taxes
|
|
|
|
|
|
|
|
|
|
|
CRD and federal tax
rate increase for fiscal 2022
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(585)
|
Other items of
note
|
|
143
|
|
113
|
|
60
|
|
256
|
|
735
|
Net income (loss) –
adjusted1
|
$
|
(284)
|
$
|
(218)
|
$
|
(177)
|
$
|
(502)
|
$
|
(317)
|
|
|
|
|
|
|
|
|
|
|
|
|
Decomposition of
items included in net income (loss) – adjusted
|
|
|
|
|
|
|
|
|
|
|
Net corporate
expenses2
|
$
|
(411)
|
$
|
(254)
|
$
|
(191)
|
$
|
(665)
|
$
|
(382)
|
Other
|
|
127
|
|
36
|
|
14
|
|
163
|
|
65
|
Net income (loss) –
adjusted1
|
$
|
(284)
|
$
|
(218)
|
$
|
(177)
|
$
|
(502)
|
$
|
(317)
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
volumes
|
|
|
|
|
|
|
|
|
|
|
Average number of
full-time equivalent staff
|
|
23,270
|
|
23,437
|
|
22,656
|
|
23,354
|
|
22,244
|
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 second
quarter of 2023 MD&A, which is incorporated by
reference.
|
Quarterly comparison – Q2 2024 vs. Q2 2023
Corporate segment's reported net loss for the quarter was
$737 million, compared with a
reported net loss of $399 million in
the second quarter last year. The higher net loss primarily
reflects the impacts of a civil matter provision, higher risk and
control expenses and restructuring charges, partially offset by
higher revenue from treasury and balance sheet activities in the
current quarter. Net corporate expenses increased $220 million
compared to the prior year, primarily reflecting investments in our
risk and control infrastructure. The adjusted net loss for the
quarter was $284 million, compared
with an adjusted net loss of $177
million in the second quarter last year.
Quarterly comparison – Q2 2024 vs. Q1 2024
Corporate segment's reported net loss for the quarter was
$737 million, compared with a
reported net loss of $628 million in
the prior quarter. The higher net loss reflects higher risk and
control expenses and the impact of a civil matter provision,
partially offset by lower restructuring charges and higher revenue
from treasury and balance sheet management activities. Net
corporate expenses increased $157
million compared to the prior quarter, primarily reflecting
investments in our risk and control infrastructure. The adjusted
net loss for the quarter was $284
million, compared with an adjusted net loss of
$218 million in the prior quarter.
Year-to-date comparison – Q2 2024 vs. Q2 2023
Corporate segment's reported net loss for the six months ended
April 30, 2024 was $1,365 million, compared with a reported net loss
of $3,016 million in the same period
last year. The lower net loss primarily reflects the prior period
impacts of the Stanford litigation
settlement, the terminated FHN acquisition-related capital hedging
strategy and 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 and risk and control
expenses in the current period. The adjusted net loss for the
six months ended April 30, 2024 was
$502 million, compared with an adjusted net loss of
$317 million in the same period last
year.
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:
TSX Trust
Company
301-100 Adelaide Street
West
Toronto, ON M5H
4H1
1-800-387-0825 (Canada
and U.S. only)
or
416-682-3860
Facsimile:
1-888-249-6189
shareholderinquiries@tmx.com or www.tsxtrust.com
|
Hold your TD shares
through the
Direct Registration
System
in the United
States
|
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
and quarterly reports
|
Co-Transfer Agent and
Registrar:
Computershare Trust
Company, N.A.
P.O. Box
43006
Providence, RI
02940-3006
or
Computershare Trust
Company, N.A.
150 Royall
Street
Canton, MA
02021
1-866-233-4836
TDD for hearing
impaired: 1-800-231-5469
Shareholders outside of
U.S.: 201-680-6578
TDD shareholders
outside of U.S.: 201-680-6610
Email inquiries:
web.queries@computershare.com
For electronic access to your account visit:
www.computershare.com/investor
|
Beneficially own TD
shares that are held in the
name of an intermediary, such as a bank, a trust
company, a securities broker or other nominee
|
Your TD shares,
including questions regarding the
dividend reinvestment plan and mailings of
shareholder materials
|
Your
intermediary
|
For all other shareholder inquiries, please contact TD Shareholder
Relations at 416-944-6367 or 1-866-756-8936 or email
tdshinfo@td.com. Please note that by leaving us an e-mail or
voicemail message, you are providing your consent for us to forward
your inquiry to the appropriate party for response.
Access to Quarterly Results Materials
Interested investors, the media and others may view the second
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 May
23, 2024. The call will be audio webcast live through TD's
website at 8:00 a.m. ET. The call will feature
presentations by TD executives on the Bank's financial results for
second 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 May 23, 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 May 23, 2024, until
11:59 p.m. ET on June 7, 2024, by calling 905-694-9451 or
1-800-408-3053 (toll free). The passcode is 7300743#.
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 $1.97 trillion in
assets on April 30, 2024. The
Toronto-Dominion Bank trades under the symbol "TD" on the
Toronto and New York Stock
Exchanges.
SOURCE TD Bank Group