This quarterly Earnings
News Release should be read in conjunction with the Bank's
unaudited second quarter 2022 Report to Shareholders for the three
months ended April 30, 2022, 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 25, 2022. Unless otherwise indicated, all amounts are
expressed in Canadian dollars, and have been primarily derived from
the Bank's Annual or Interim Consolidated Financial Statements
prepared in accordance with IFRS. Certain comparative amounts have
been revised to conform to the presentation adopted in the current
period. Additional information relating to the Bank is available on
the Bank's website at http://www.td.com, as well as on SEDAR at
http://www.sedar.com and on the U.S. Securities and Exchange
Commission's (SEC) website at http://www.sec.gov (EDGAR filers
section).
Reported results
conform to generally accepted accounting principles (GAAP), in
accordance with IFRS. Adjusted results are non-GAAP financial
measures. For additional information about the Bank's use of
non-GAAP financial measures, refer to "Non-GAAP and Other Financial
Measures" in the "How We Performed" section of this
document.
|
SECOND QUARTER FINANCIAL HIGHLIGHTS, compared with the second
quarter last year:
- Reported diluted earnings per share were $2.07, compared with $1.99.
- Adjusted diluted earnings per share were $2.02, compared with $2.04.
- Reported net income was $3,811
million, compared with $3,695
million.
- Adjusted net income was $3,714
million, compared with $3,775
million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended
April 30, 2022, compared with the
corresponding period last year:
- Reported diluted earnings per share were $4.09, compared with $3.76.
- Adjusted diluted earnings per share were $4.09, compared with $3.86.
- Reported net income was $7,544
million, compared with $6,972
million.
- Adjusted net income was $7,547
million, compared with $7,155
million.
SECOND QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The
second quarter reported earnings figures included the following
items of note:
- Amortization of acquired intangibles of $60 million ($54
million after-tax or 3 cents
per share), compared with $69 million
($62 million after-tax or
3 cents per share) in the
second quarter last year.
- Acquisition and integration charges related to the Schwab
transaction of $20 million
($18 million after-tax or
1 cent per share), compared with
$19 million ($18 million after-tax or 1
cent per share) in the second quarter last year.
- Litigation settlement recovery of $224 million ($169
million after-tax or 9 cents
per share).
TORONTO, May 26, 2022
/CNW/ - TD Bank Group ("TD" or the "Bank") today announced its
financial results for the second quarter ended April 30, 2022. Reported earnings were
$3.8 billion, up 3% compared with the
second quarter last year, and adjusted earnings were $3.7 billion, down 2%.
"TD's second quarter performance reflects the strength of our
diversified business model and customer-centric approach," said
Bharat Masrani, Group President and CEO, TD Bank Group. "We have
delivered strong revenue growth across our businesses and we enter
the second half of the year well-positioned to support households
and businesses as they navigate an evolving economic environment.
TD will continue to invest in our people, technology, and
innovation to exceed our customers' rapidly changing expectations
and help shape the future of banking."
Canadian Retail saw strong revenue growth supported by
continued volume momentum
Canadian Retail net income was
$2,236 million, an increase of 2%
compared with the second quarter last year. The increase in
earnings reflects strong revenue, partially offset by higher
non-interest expenses, insurance claims, and provisions for credit
losses (PCL). Revenue increased 9%, reflecting continued growth in
volume as well as strong other income. Expenses increased 9%,
reflecting investments to support business growth, including
technology enhancements, higher employee-related expenses, and
variable compensation. PCL of $60
million reflects a lower recovery in performing PCL compared
to the prior year, partially offset by lower impaired PCL.
Momentum continued this quarter with Canadian Retail delivering
record revenue in the Personal and Commercial Bank supported by
increased customer activity and strong growth in commercial
lending. TD Insurance achieved strong earnings this quarter and
continued to grow market share in property and casualty insurance.
In Wealth, net asset growth partially offset trading volume
normalization to deliver solid revenue for the business. This
quarter, TD enhanced its credit cards rewards offering, launching
My TD Rewards, a loyalty and rewards hub available through EasyWeb
and the TD Mobile App. My TD Rewards offers customers a convenient
way to access and redeem rewards and loyalty benefits through
collaborations with leading global brands such as Amazon, Expedia
and recently announced Starbucks Canada. Strengthening its position
in online and mobile platforms, TD received the Celent 2022 Model
Bank Award for Customer Engagement and was also recognized by the
Business Intelligence Group for innovation in artificial
intelligence, both for the second consecutive year.
The U.S. Retail Bank delivered solid loan and deposit
volumes, driven by increased customer activity
U.S. Retail
net income for the quarter was $1,367
million (US$1,079 million), an
increase of 4% (3% in U.S. dollars) compared with the second
quarter last year. Reported net income included an insurance
recovery related to litigation of $224
million (US$177 million) or
$169 million (US$133 million) after-tax. On an adjusted basis,
net income for the quarter was $1,198
million (US$946 million), a
decrease of 9% (10% in U.S. dollars). The Bank's investment in The
Charles Schwab Corporation (Schwab) contributed $224 million (US$177
million) in earnings, a decrease of 9% (9% 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 $1,143
million (US$902 million), an
increase of 7% (6% in U.S. dollars) from the second quarter last
year, primarily reflecting higher revenue, including the insurance
recovery related to litigation, partially offset by higher PCL,
reflecting a lower recovery in performing PCL. On an adjusted
basis, net income was $974 million
(US$769 million), a decrease of 9%
(10% in U.S. dollars), driven primarily by a lower recovery in
performing PCL, lower income from the Paycheck Protection Program
(PPP), higher employee-related expenses and business investments,
partially offset by higher deposit volume and margin, and increased
earnings on the investment portfolio and customer activity.
U.S. Retail continued to sustain business momentum in the second
quarter, with improved commercial loan originations in the middle
market and specialty lending businesses that allowed the Bank to
deliver 0.4% loan growth over the prior quarter despite the
significant wind-down in PPP volumes, as compared to a 4.2%
decrease in average loan volumes over the same quarter last year.
In addition, the U.S. Retail Bank sustained consumer loan growth in
mortgages, auto and credit cards, and delivered strong retail
deposit volume increases. The U.S. Retail Bank continued to deliver
new capabilities, introducing real-time payments for the dealer
network through TD Auto Finance, a first for an indirect auto
lender. TD Bank, America's Most Convenient Bank®
(TD AMCB), was recognized by Forbes as a Best Employer for
Diversity 2022 for the fourth consecutive year, the highest ranked
bank, and ninth among 500 corporations. TD AMCB was also a
top-ranked bank on DiversityInc's top 50 Companies for Diversity
for 2022.
Solid Wholesale Banking performance in Q2
Wholesale
Banking reported net income of $359
million this quarter, a decrease of 6% compared to the
second quarter last year, reflecting higher non-interest expenses
and a lower PCL recovery, partially offset by higher revenues.
The Wholesale Bank continued to demonstrate its leadership
position in Environmental, Social, and Governance (ESG) and deepen
client relationships. This quarter, TD Securities was named
Environmental Finance's 'Lead Manager of the Year' for
Supranational, Sub-sovereign and Agency Green Bonds, and was
recognized in several categories of the 2022 Energy Risk Commodity
Rankings, including #1 in Base Metals and #2 in Precious Metals. TD
Securities delivered on notable mandates, including acting as sole
active bookrunner on Dream Residential REIT's US$125 million initial public offering, the first
IPO in Canada for the 2022
calendar year.
Capital
TD's Common Equity Tier 1 Capital ratio was
14.7%1.
Conclusion
"As we continue to emerge from the COVID-19
pandemic we face new economic uncertainties and growing
geopolitical tensions. TD has proven its ability to adapt to
changing circumstances and deliver performance and progress," added
Masrani. "Our colleagues around the world are working together to
serve customers, contribute to communities, and build a more
sustainable and inclusive future. I thank them for their tremendous
efforts and dedication."
The foregoing contains forward-looking statements. Please refer
to the "Caution Regarding Forward-Looking Statements".
Caution Regarding Forward-Looking
Statements
From time to time, the Bank (as defined in
this document) makes written and/or oral forward-looking
statements, including in this document, in other filings with
Canadian regulators or the United
States (U.S.) Securities and Exchange Commission (SEC), and
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 ("2021 MD&A") in the
Bank's 2021 Annual Report under the headings "Economic Summary and
Outlook" and "The Bank's Response to COVID-19", under the headings
"Key Priorities for 2022" and "Operating Environment and Outlook"
for the Canadian Retail, U.S. Retail, and Wholesale Banking
segments, and under the heading "Focus for 2022" for the Corporate
segment, and in other statements regarding the Bank's objectives
and priorities for 2022 and beyond and strategies to achieve them,
the regulatory environment in which the Bank operates, the Bank's
anticipated financial performance, and the potential economic,
financial and other impacts of the Coronavirus Disease 2019
(COVID-19). Forward-looking statements are typically identified by
words such as "will", "would", "should", "believe", "expect",
"anticipate", "intend", "estimate", "plan", "goal", "target",
"may", and "could".
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 the economic,
financial, and other impacts of pandemics, including the COVID-19
pandemic; general business and economic conditions in the regions
in which the Bank operates; geopolitical risk; the ability of the
Bank to execute on long-term strategies and shorter-term key
strategic priorities, including the successful completion of
acquisitions and dispositions, business retention plans, and
strategic plans; technology and cyber security risk (including
cyber-attacks or data security breaches) on the Bank's information
technology, internet, network access or other voice or data
communications systems or services; model risk; fraud activity; 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-party service providers; the impact of new and changes to, or
application of, current laws and regulations, including without
limitation tax laws, capital guidelines and liquidity regulatory
guidance and the bank recapitalization "bail-in" regime; regulatory
oversight and compliance risk; increased competition from
incumbents and new entrants (including Fintechs and big technology
competitors); shifts in consumer attitudes and disruptive
technology; 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
currency and interest rates (including the possibility of negative
interest rates); 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; existing and potential international debt crises;
environmental and social risk (including climate change); 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 2021 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 "Pending Acquisition" or "Significant
and Subsequent Events and Pending Acquisitions" 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 2021
MD&A under the headings "Economic Summary and Outlook" and "The
Bank's Response to COVID-19", under the headings "Key Priorities
for 2022" and "Operating Environment and Outlook" for the Canadian
Retail, U.S. Retail, and Wholesale Banking segments, and under
the heading "Focus for 2022" 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 securities legislation.
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.
______________________________________________
|
1 This
measure has been included in this document in accordance with
OSFI's Capital Adequacy Requirements guideline
|
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
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Results of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue –
reported
|
$
|
11,263
|
|
$
|
11,281
|
|
$
|
10,228
|
|
$
|
22,544
|
|
$
|
21,040
|
|
Total revenue –
adjusted1
|
|
11,039
|
|
|
11,281
|
|
|
10,228
|
|
|
22,320
|
|
|
21,040
|
|
Provision for (recovery
of) credit losses
|
|
27
|
|
|
72
|
|
|
(377)
|
|
|
99
|
|
|
(64)
|
|
Insurance claims and
related expenses
|
|
592
|
|
|
756
|
|
|
441
|
|
|
1,348
|
|
|
1,221
|
|
Non-interest expenses –
reported
|
|
6,033
|
|
|
5,967
|
|
|
5,729
|
|
|
12,000
|
|
|
11,513
|
|
Non-interest expenses –
adjusted1
|
|
5,999
|
|
|
5,897
|
|
|
5,691
|
|
|
11,896
|
|
|
11,435
|
|
Net income –
reported
|
|
3,811
|
|
|
3,733
|
|
|
3,695
|
|
|
7,544
|
|
|
6,972
|
|
Net income –
adjusted1
|
|
3,714
|
|
|
3,833
|
|
|
3,775
|
|
|
7,547
|
|
|
7,155
|
|
Financial
position (billions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans net of
allowance for loan losses
|
$
|
765.0
|
|
$
|
743.6
|
|
$
|
708.4
|
|
$
|
765.0
|
|
$
|
708.4
|
|
Total assets
|
|
1,825.3
|
|
|
1,778.6
|
|
|
1,669.1
|
|
|
1,825.3
|
|
|
1,669.1
|
|
Total
deposits
|
|
1,183.7
|
|
|
1,159.5
|
|
|
1,118.5
|
|
|
1,183.7
|
|
|
1,118.5
|
|
Total equity
|
|
99.4
|
|
|
102.0
|
|
|
94.5
|
|
|
99.4
|
|
|
94.5
|
|
Total risk-weighted
assets2
|
|
489.0
|
|
|
470.9
|
|
|
455.0
|
|
|
489.0
|
|
|
455.0
|
|
Financial
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common equity
(ROE) – reported3
|
|
16.4
|
%
|
|
15.3
|
%
|
|
16.7
|
%
|
|
15.8
|
%
|
|
15.5
|
%
|
Return on common equity
– adjusted1
|
|
15.9
|
|
|
15.7
|
|
|
17.1
|
|
|
15.8
|
|
|
15.9
|
|
Return on tangible
common equity (ROTCE)1
|
|
22.1
|
|
|
20.6
|
|
|
23.0
|
|
|
21.4
|
|
|
21.5
|
|
Return on tangible
common equity – adjusted1
|
|
21.2
|
|
|
20.8
|
|
|
23.1
|
|
|
21.1
|
|
|
21.6
|
|
Efficiency ratio –
reported3
|
|
53.6
|
|
|
52.9
|
|
|
56.0
|
|
|
53.2
|
|
|
54.7
|
|
Efficiency ratio –
adjusted1,3
|
|
54.3
|
|
|
52.3
|
|
|
55.6
|
|
|
53.3
|
|
|
54.4
|
|
Provision for (recovery
of) credit losses as a % of net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average loans and acceptances
|
|
0.01
|
|
|
0.04
|
|
|
(0.21)
|
|
|
0.03
|
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share
information – reported (Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.08
|
|
$
|
2.03
|
|
$
|
2.00
|
|
$
|
4.10
|
|
$
|
3.77
|
|
Diluted
|
|
2.07
|
|
|
2.02
|
|
|
1.99
|
|
|
4.09
|
|
|
3.76
|
|
Dividends per
share
|
|
0.89
|
|
|
0.89
|
|
|
0.79
|
|
|
1.78
|
|
|
1.58
|
|
Book value per
share3
|
|
51.49
|
|
|
53.00
|
|
|
49.25
|
|
|
51.49
|
|
|
49.25
|
|
Closing share
price4
|
|
92.79
|
|
|
101.81
|
|
|
84.50
|
|
|
92.79
|
|
|
84.50
|
|
Shares outstanding
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average basic
|
|
1,804.7
|
|
|
1,820.5
|
|
|
1,817.4
|
|
|
1,812.8
|
|
|
1,815.7
|
|
Average diluted
|
|
1,808.3
|
|
|
1,824.1
|
|
|
1,819.9
|
|
|
1,816.5
|
|
|
1,817.8
|
|
End of period
|
|
1,803.9
|
|
|
1,816.5
|
|
|
1,818.7
|
|
|
1,803.9
|
|
|
1,818.7
|
|
Market capitalization
(billions of Canadian dollars)
|
$
|
167.4
|
|
$
|
184.9
|
|
$
|
153.7
|
|
$
|
167.4
|
|
$
|
153.7
|
|
Dividend
yield3
|
|
3.6
|
%
|
|
3.7
|
%
|
|
3.9
|
%
|
|
3.6
|
%
|
|
4.2
|
%
|
Dividend payout
ratio3
|
|
42.8
|
|
|
44.0
|
|
|
39.5
|
|
|
43.8
|
|
|
41.9
|
|
Price-earnings
ratio3
|
|
11.5
|
|
|
12.8
|
|
|
10.9
|
|
|
11.5
|
|
|
10.9
|
|
Total shareholder
return (1 year)3
|
|
13.9
|
|
|
45.8
|
|
|
52.1
|
|
|
13.9
|
|
|
52.1
|
|
Common share
information – adjusted (Canadian
dollars)1,3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.02
|
|
$
|
2.08
|
|
$
|
2.04
|
|
$
|
4.10
|
|
$
|
3.87
|
|
Diluted
|
|
2.02
|
|
|
2.08
|
|
|
2.04
|
|
|
4.09
|
|
|
3.86
|
|
Dividend payout
ratio
|
|
43.9
|
%
|
|
42.8
|
%
|
|
38.7
|
%
|
|
43.4
|
%
|
|
40.8
|
%
|
Price-earnings
ratio
|
|
11.4
|
|
|
12.5
|
|
|
12.6
|
|
|
11.4
|
|
|
12.6
|
|
Capital
ratios2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
Capital ratio
|
|
14.7
|
%
|
|
15.2
|
%
|
|
14.2
|
%
|
|
14.7
|
%
|
|
14.2
|
%
|
Tier 1 Capital
ratio
|
|
15.9
|
|
|
16.3
|
|
|
15.4
|
|
|
15.9
|
|
|
15.4
|
|
Total Capital
ratio
|
|
18.5
|
|
|
19.0
|
|
|
18.0
|
|
|
18.5
|
|
|
18.0
|
|
Leverage
ratio
|
|
4.3
|
|
|
4.4
|
|
|
4.6
|
|
|
4.3
|
|
|
4.6
|
|
TLAC ratio
|
|
30.4
|
|
|
28.6
|
|
|
25.1
|
|
|
30.4
|
|
|
25.1
|
|
TLAC Leverage
ratio
|
|
8.1
|
|
|
7.6
|
|
|
7.6
|
|
|
8.1
|
|
|
7.6
|
|
1 The
Toronto-Dominion Bank ("TD" or the "Bank") prepares its unaudited
Interim Consolidated Financial Statements in accordance with IFRS,
the current GAAP, and refers to results prepared in accordance with
IFRS as the "reported" results. The Bank also utilizes non-GAAP
financial measures such as "adjusted" results and non-GAAP ratios
to assess each of its businesses and to measure overall Bank
performance. To arrive at adjusted results, the Bank adjusts
reported results for "items of note". Refer to the "How We
Performed" section of this document for further explanation, a list
of the items of note, and a reconciliation of adjusted to reported
results. Non-GAAP financial measures and ratios used in this
document are not defined terms under IFRS and, therefore, may not
be comparable to similar terms used by other issuers.
|
2
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 (CAR), Leverage
Requirements, and Total Loss Absorbing Capacity (TLAC) guidelines.
Refer to the "Capital Position" section in the second quarter of
2022 MD&A for further details.
|
3 For
additional information about this metric, refer to the Glossary in
the second quarter of 2022 MD&A, which is incorporated by
reference.
|
4
Toronto Stock Exchange (TSX) closing market price.
|
PENDING ACQUISITION
Acquisition of First Horizon Corporation
On February 28, 2022, the Bank and
First Horizon Corporation ("First Horizon") announced a definitive
agreement for the Bank to acquire First Horizon in an all-cash
transaction valued at US$13.4
billion, or US$25.00 for each
common share of First Horizon. In connection with this transaction,
the Bank has invested US$494 million
in non-voting First Horizon preferred stock (convertible in certain
circumstances into up to 4.9% of First Horizon's common stock). The
transaction is expected to close in the first quarter of fiscal
2023, and is subject to customary closing conditions, including
approvals from First Horizon's shareholders and U.S. and Canadian
regulatory authorities. The results of the acquired business
will be consolidated by the Bank from the closing date and reported
in the
U.S. Retail segment.
If the transaction does not close prior to November 27, 2022, First Horizon shareholders
will receive, at closing, an additional US$0.65 per share on an annualized basis for the
period from November 27, 2022 through
the day immediately prior to the closing. Either party will
have the right to terminate the agreement if the transaction has
not closed by February 27, 2023 (the
"outside date"), subject to the right of either party (under
certain conditions) to extend the outside date to May 27, 2023.
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
reported results for "items of note". 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, 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
On October 6, 2020, the Bank
acquired an approximately 13.5% stake in Schwab following the
completion of Schwab's acquisition of TD Ameritrade ("Schwab
transaction"). For further details, refer to Note 7 of the second
quarter of 2022 Interim Consolidated Financial Statements. The Bank
accounts for its investment in Schwab using the equity method and
reports its after-tax share of Schwab's earnings with a one-month
lag. 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 and the acquisition and integration charges related to
the Schwab transaction.
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
|
|
|
|
|
2022
|
2022
|
2021
|
|
2022
|
2021
|
|
|
Net interest
income
|
$
|
6,377
|
$
|
6,302
|
$
|
5,835
|
|
$
|
12,679
|
$
|
11,865
|
|
|
Non-interest
income
|
|
4,886
|
|
4,979
|
|
4,393
|
|
|
9,865
|
|
9,175
|
|
|
Total
revenue
|
|
11,263
|
|
11,281
|
|
10,228
|
|
|
22,544
|
|
21,040
|
|
|
Provision for (recovery
of) credit losses
|
|
27
|
|
72
|
|
(377)
|
|
|
99
|
|
(64)
|
|
|
Insurance claims and
related expenses
|
|
592
|
|
756
|
|
441
|
|
|
1,348
|
|
1,221
|
|
|
Non-interest
expenses
|
|
6,033
|
|
5,967
|
|
5,729
|
|
|
12,000
|
|
11,513
|
|
|
Income before income
taxes and share of net income from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab
|
|
4,611
|
|
4,486
|
|
4,435
|
|
|
9,097
|
|
8,370
|
|
|
Provision for (recovery
of) income taxes
|
|
1,002
|
|
984
|
|
962
|
|
|
1,986
|
|
1,789
|
|
|
Share of net income
from investment in Schwab
|
|
202
|
|
231
|
|
222
|
|
|
433
|
|
391
|
|
|
Net income –
reported
|
|
3,811
|
|
3,733
|
|
3,695
|
|
|
7,544
|
|
6,972
|
|
|
Preferred dividends and
distributions on other equity instruments
|
|
66
|
|
43
|
|
65
|
|
|
109
|
|
130
|
|
|
Net income available
to common shareholders
|
$
|
3,745
|
$
|
3,690
|
$
|
3,630
|
|
$
|
7,435
|
$
|
6,842
|
|
|
The following table provides a reconciliation between the Bank's
adjusted and reported results.
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
|
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
|
Operating results –
adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
6,377
|
$
|
6,302
|
$
|
5,835
|
$
|
12,679
|
$
|
11,865
|
|
Non-interest
income1
|
|
4,662
|
|
4,979
|
|
4,393
|
|
9,641
|
|
9,175
|
|
Total
revenue
|
|
11,039
|
|
11,281
|
|
10,228
|
|
22,320
|
|
21,040
|
|
Provision for (recovery
of) credit losses
|
|
27
|
|
72
|
|
(377)
|
|
99
|
|
(64)
|
|
Insurance claims and
related expenses
|
|
592
|
|
756
|
|
441
|
|
1,348
|
|
1,221
|
|
Non-interest
expenses2
|
|
5,999
|
|
5,897
|
|
5,691
|
|
11,896
|
|
11,435
|
|
Income before income
taxes and share of net income
|
|
|
|
|
|
|
|
|
|
|
|
|
from investment in
Schwab
|
|
4,421
|
|
4,556
|
|
4,473
|
|
8,977
|
|
8,448
|
|
Provision for (recovery
of) income taxes
|
|
955
|
|
1,001
|
|
970
|
|
1,956
|
|
1,806
|
|
Share of net income
from investment in Schwab3
|
|
248
|
|
278
|
|
272
|
|
526
|
|
513
|
|
Net income –
adjusted
|
|
3,714
|
|
3,833
|
|
3,775
|
|
7,547
|
|
7,155
|
|
Preferred dividends and
distributions on other equity instruments
|
|
66
|
|
43
|
|
65
|
|
109
|
|
130
|
|
Net income available
to common shareholders – adjusted
|
|
3,648
|
|
3,790
|
|
3,710
|
|
7,438
|
|
7,025
|
|
Pre-tax adjustments
for items of note
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles4
|
|
(60)
|
|
(67)
|
|
(69)
|
|
(127)
|
|
(143)
|
|
Acquisition and
integration charges related to the Schwab
transaction5
|
|
(20)
|
|
(50)
|
|
(19)
|
|
(70)
|
|
(57)
|
|
Litigation settlement
recovery1
|
|
224
|
|
–
|
|
–
|
|
224
|
|
–
|
|
Less: Impact of
income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles
|
|
(6)
|
|
(8)
|
|
(7)
|
|
(14)
|
|
(16)
|
|
Acquisition and
integration charges related to the Schwab
transaction5
|
|
(2)
|
|
(9)
|
|
(1)
|
|
(11)
|
|
(1)
|
|
Litigation settlement
recovery
|
|
55
|
|
–
|
|
–
|
|
55
|
|
–
|
|
Total adjustments
for items of note
|
|
97
|
|
(100)
|
|
(80)
|
|
(3)
|
|
(183)
|
|
Net income available
to common shareholders – reported
|
$
|
3,745
|
$
|
3,690
|
$
|
3,630
|
$
|
7,435
|
$
|
6,842
|
|
1.
|
Adjusted non-interest
income excludes the following item of note:
|
|
i.
|
The Bank reached a
settlement in TD Bank, N.A. v. Lloyd's Underwriter et al.,
in Canada, pursuant to which the Bank recovered losses resulting
from the previous resolution by the Bank of multiple proceedings in
the U.S. related to an alleged Ponzi scheme, perpetrated by, among
others, Scott Rothstein – Q2 2022: $224 million. The amount is
reported in the U.S. Retail segment.
|
|
|
|
2.
|
Adjusted non-interest
expenses exclude the following items of note related to the Bank's
own asset acquisitions and business combinations reported in the
Corporate segment:
|
|
i.
|
Amortization of
acquired intangibles – Q2 2022: $26 million, Q1 2022: $33 million,
Q2 2021: $35 million, Q1 2021: $39 million.
|
|
ii.
|
The Bank's own
integration and acquisition costs related to the Schwab transaction
– Q2 2022: $8 million, Q1 2022: $37 million, Q2 2021:
$3 million, Q1 2021: $1 million.
|
|
|
|
3.
|
Adjusted share of net
income from investment in Schwab excludes the following items of
note on an after-tax basis. The earnings impact of both items is
reported in the Corporate segment:
|
|
i.
|
Amortization of
Schwab-related acquired intangibles – Q2 2022: $34 million; Q1
2022: $34 million, Q2 2021: $34 million; Q1 2021: $35 million;
and
|
|
ii.
|
The Bank's share of
acquisition and integration charges associated with Schwab's
acquisition of TD Ameritrade – Q2 2022: $12 million, Q1 2022: $13
million, Q2 2021: $16 million, Q1 2021: $37
million.
|
|
|
|
4
|
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 2 and 3 for
amounts.
|
|
|
|
5
|
Acquisition and
integration charges related to the Schwab transaction include the
Bank's own integration and acquisition costs, as well as the Bank's
share of acquisition and integration charges associated with
Schwab's acquisition of TD Ameritrade on an after-tax basis, both
reported in the Corporate segment. Refer to footnotes 2 and 3 for
amounts.
|
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
|
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
|
Basic earnings per
share – reported
|
$
|
2.08
|
$
|
2.03
|
$
|
2.00
|
$
|
4.10
|
$
|
3.77
|
|
Adjustments for items
of note
|
|
(0.05)
|
|
0.05
|
|
0.04
|
|
–
|
|
0.10
|
|
Basic earnings per
share – adjusted
|
$
|
2.02
|
$
|
2.08
|
$
|
2.04
|
$
|
4.10
|
$
|
3.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share – reported
|
$
|
2.07
|
$
|
2.02
|
$
|
1.99
|
$
|
4.09
|
$
|
3.76
|
|
Adjustments for items
of note
|
|
(0.05)
|
|
0.05
|
|
0.04
|
|
–
|
|
0.10
|
|
Diluted earnings per
share – adjusted
|
$
|
2.02
|
$
|
2.08
|
$
|
2.04
|
$
|
4.09
|
$
|
3.86
|
|
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.
|
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 increased to 10.5% Common Equity Tier 1
(CET1) Capital in the first quarter of 2022, compared with 9% in
fiscal 2021.
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
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Average common
equity
|
$
|
93,922
|
|
$
|
95,829
|
|
$
|
89,069
|
|
$
|
94,674
|
|
$
|
89,049
|
|
Net income available
to common shareholders – reported
|
|
3,745
|
|
|
3,690
|
|
|
3,630
|
|
|
7,435
|
|
|
6,842
|
|
Items of note, net of
income taxes
|
|
(97)
|
|
|
100
|
|
|
80
|
|
|
3
|
|
|
183
|
|
Net income available
to common shareholders – adjusted
|
$
|
3,648
|
|
$
|
3,790
|
|
$
|
3,710
|
|
$
|
7,438
|
|
$
|
7,025
|
|
Return on common
equity – reported
|
|
16.4
|
%
|
|
15.3
|
%
|
|
16.7
|
%
|
|
15.8
|
%
|
|
15.5
|
%
|
Return on common
equity – adjusted
|
|
15.9
|
|
|
15.7
|
|
|
17.1
|
|
|
15.8
|
|
|
15.9
|
|
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
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Average common
equity
|
$
|
93,922
|
|
$
|
95,829
|
|
$
|
89,069
|
|
$
|
94,674
|
|
$
|
89,049
|
|
Average
goodwill
|
|
16,577
|
|
|
16,519
|
|
|
16,320
|
|
|
16,539
|
|
|
16,530
|
|
Average imputed
goodwill and intangibles on investments in Schwab
|
|
6,577
|
|
|
6,585
|
|
|
6,670
|
|
|
6,577
|
|
|
6,786
|
|
Average other acquired
intangibles1
|
|
498
|
|
|
526
|
|
|
366
|
|
|
512
|
|
|
387
|
|
Average related
deferred tax liabilities
|
|
(171)
|
|
|
(172)
|
|
|
(167)
|
|
|
(172)
|
|
|
(170)
|
|
Average tangible
common equity
|
|
70,441
|
|
|
72,371
|
|
|
65,880
|
|
|
71,218
|
|
|
65,516
|
|
Net income available
to common shareholders – reported
|
|
3,745
|
|
|
3,690
|
|
|
3,630
|
|
|
7,435
|
|
|
6,842
|
|
Amortization of
acquired intangibles, net of income taxes
|
|
54
|
|
|
59
|
|
|
62
|
|
|
113
|
|
|
127
|
|
Net income available
to common shareholders adjusted for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization of
acquired intangibles, net of income taxes
|
|
3,799
|
|
|
3,749
|
|
|
3,692
|
|
|
7,548
|
|
|
6,969
|
|
Other items of note,
net of income taxes
|
|
(151)
|
|
|
41
|
|
|
18
|
|
|
(110)
|
|
|
56
|
|
Net income available
to common shareholders – adjusted
|
$
|
3,648
|
|
$
|
3,790
|
|
$
|
3,710
|
|
$
|
7,438
|
|
$
|
7,025
|
|
Return on tangible
common equity
|
|
22.1
|
%
|
|
20.6
|
%
|
|
23.0
|
%
|
|
21.4
|
%
|
|
21.5
|
%
|
Return on tangible
common equity – adjusted
|
|
21.2
|
|
|
20.8
|
|
|
23.1
|
|
|
21.1
|
|
|
21.6
|
|
1
Excludes intangibles relating to software and asset servicing
rights.
|
HOW OUR BUSINESSES PERFORMED
For management reporting purposes, the Bank reports its results
under three key business segments: Canadian Retail, which includes
the results of the personal and commercial banking, wealth, and
insurance businesses; U.S. Retail, which includes the results of
the personal and business banking operations, wealth management
services, and the Bank's investment in Schwab; 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 2021 MD&A, and Note 29 of the Bank's Consolidated
Financial Statements for the year ended October 31, 2021.
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 before-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's
results are reversed in the Corporate segment. The TEB adjustment
for the quarter was $34 million, compared with
$38 million in the prior quarter and $37 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 and the acquisition and integration charges related to
the Schwab transaction are recorded in the Corporate segment.
TABLE 7: CANADIAN
RETAIL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net interest
income
|
$
|
3,148
|
|
$
|
3,085
|
|
$
|
2,873
|
|
$
|
6,233
|
|
$
|
5,851
|
|
Non-interest
income
|
|
3,475
|
|
|
3,633
|
|
|
3,189
|
|
|
7,108
|
|
|
6,556
|
|
Total
revenue
|
|
6,623
|
|
|
6,718
|
|
|
6,062
|
|
|
13,341
|
|
|
12,407
|
|
Provision for (recovery
of) credit losses – impaired
|
|
163
|
|
|
150
|
|
|
191
|
|
|
313
|
|
|
358
|
|
Provision for (recovery
of) credit losses – performing
|
|
(103)
|
|
|
(117)
|
|
|
(228)
|
|
|
(220)
|
|
|
(253)
|
|
Total provision for
(recovery of) credit losses
|
|
60
|
|
|
33
|
|
|
(37)
|
|
|
93
|
|
|
105
|
|
Insurance claims and
related expenses
|
|
592
|
|
|
756
|
|
|
441
|
|
|
1,348
|
|
|
1,221
|
|
Non-interest
expenses
|
|
2,932
|
|
|
2,869
|
|
|
2,689
|
|
|
5,801
|
|
|
5,343
|
|
Provision for (recovery
of) income taxes
|
|
803
|
|
|
806
|
|
|
787
|
|
|
1,609
|
|
|
1,519
|
|
Net
income
|
$
|
2,236
|
|
$
|
2,254
|
|
$
|
2,182
|
|
$
|
4,490
|
|
$
|
4,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common
equity1
|
|
44.6
|
%
|
|
44.8
|
%
|
|
51.3
|
%
|
|
44.7
|
%
|
|
48.6
|
%
|
Net interest margin
(including on securitized assets)2
|
|
2.62
|
|
|
2.53
|
|
|
2.61
|
|
|
2.58
|
|
|
2.63
|
|
Efficiency
ratio
|
|
44.3
|
|
|
42.7
|
|
|
44.4
|
|
|
43.5
|
|
|
43.1
|
|
Assets under
administration (billions of Canadian
dollars)3
|
$
|
537
|
|
$
|
557
|
|
$
|
514
|
|
$
|
537
|
|
$
|
514
|
|
Assets under management
(billions of Canadian dollars)3
|
|
411
|
|
|
429
|
|
|
397
|
|
|
411
|
|
|
397
|
|
Number of Canadian
retail branches
|
|
1,060
|
|
|
1,062
|
|
|
1,085
|
|
|
1,060
|
|
|
1,085
|
|
Average number of
full-time equivalent staff
|
|
43,707
|
|
|
42,952
|
|
|
41,064
|
|
|
43,323
|
|
|
40,886
|
|
1
Capital allocated to the business segment was increased to 10.5%
CET1 Capital effective the first quarter of fiscal 2022 compared
with 9% 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 second quarter of 2022 MD&A, which is incorporated by
reference, for additional information about these
metrics.
|
3 For
additional information about this metric, refer to the Glossary in
the second quarter of 2022 MD&A, which is incorporated by
reference.
|
Quarterly comparison – Q2 2022 vs. Q2 2021
Canadian Retail net income for the quarter was $2,236 million, an increase of $54 million,
or 2%, compared with the second quarter last year, reflecting
higher revenue, partially offset by higher non-interest expenses,
insurance claims, and PCL. The annualized ROE for the quarter was
44.6%, compared with 51.3% in the second quarter last year.
Canadian Retail revenue is derived from the personal and
business banking, wealth, and insurance businesses. Revenue for the
quarter was $6,623 million, an
increase of $561 million, or 9%, compared with the second
quarter last year.
Net interest income was $3,148 million, an increase of
$275 million, or 10%, compared with the second quarter last
year, primarily reflecting volume growth. Average loan volumes
increased $43 billion, or 9%, reflecting 8% growth in personal
loans and 16% growth in business loans. Average deposit volumes
increased $37 billion, or 8%, reflecting 7% growth in personal
deposits, 10% growth in business deposits, and 10% growth in wealth
deposits. Net interest margin was 2.62%, an increase of 1 basis
point, as higher margin on deposits reflecting the rising interest
rate environment, was partially offset by lower margin on
loans.
Non-interest income was $3,475 million, an increase of
$286 million, or 9%, reflecting prior year premium rebates for
customers in the insurance business, and higher fee-based revenue
in the banking and wealth businesses, partially offset by lower
transaction revenue in the wealth business, and a decrease in the
fair value of investments supporting claims liabilities which
resulted in a similar decrease in insurance claims.
Assets under administration (AUA) were $537 billion as at April
30, 2022, an increase of $23
billion, or 4%, and assets under management (AUM) were
$411 billion as at April 30,
2022, an increase of $14
billion, or 4%, compared with the second quarter last year,
both reflecting net asset growth.
PCL was $60 million, higher by
$97 million compared with the second
quarter last year. PCL – impaired for the quarter was $163 million, a decrease of $28 million, or
15%, largely related to improved credit conditions. PCL –
performing was a recovery of $103
million, compared with a recovery of $228 million in the prior year. The performing
release this quarter reflects improved credit conditions, partially
offset by elevated economic uncertainty. Total PCL as an annualized
percentage of credit volume was 0.05%, an increase of 8 bps
compared with the second quarter last year.
Insurance claims and related expenses for the quarter were
$592 million, an increase of
$151 million, or 34%, compared with
the second quarter last year reflecting higher current year claims,
partially offset by the favourable impact of a higher discount rate
which resulted in a similar decrease in fair value of investments
supporting claims liabilities reported in non-interest income.
Non-interest expenses for the quarter were $2,932 million, an increase of $243 million, or 9%, compared with the second
quarter last year, reflecting higher spend supporting business
growth, including technology and marketing costs, higher
employee-related expenses and variable compensation.
The efficiency ratio for the quarter was 44.3%, compared with
44.4% in the second quarter last year.
Quarterly comparison – Q2 2022 vs. Q1 2022
Canadian Retail net income for the quarter was $2,236 million, a decrease of $18 million, or 1%, compared with the prior
quarter, reflecting lower revenue and higher non-interest expenses
and PCL, partially offset by lower insurance claims. The
annualized ROE for the quarter was 44.6%, compared with 44.8%, in
the prior quarter.
Revenue decreased $95 million, or 1%, compared with the
prior quarter. Net interest income increased $63 million, or 2%, reflecting higher
margins and volume growth, partially offset by the effect of fewer
days in the second quarter. Average loan volumes increased
$9 billion, or 2%, reflecting 1%
growth in personal loans and 4% growth in business loans.
Average deposit volumes increased $6 billion, or 1%,
reflecting 2% growth in personal deposits and a 5% increase in
wealth deposits. Net interest margin was 2.62%, an increase of 9
bps, primarily due to higher margin on deposits, reflecting the
rising interest rate environment.
Non-interest income decreased $158 million, or 4%,
reflecting a decrease in the fair value of investments supporting
claims liabilities which resulted in a similar decrease in
insurance claims, and lower fee-based revenue in the banking and
wealth businesses.
AUA decreased $20 billion, or 4%,
and AUM decreased $18 billion, or 4%,
compared with the prior quarter, both reflecting market
depreciation, partially offset by net asset growth.
PCL was $60 million, an increase
of $27 million, compared with the
prior quarter. PCL – impaired increased $13 million. PCL –
performing was a recovery of $103
million compared with a recovery of $117 million in the prior quarter. The performing
release this quarter reflects improved credit conditions, partially
offset by elevated economic uncertainty. Total PCL as an annualized
percentage of credit volume was 0.05%, an increase of 2 bps.
Insurance claims and related expenses for the quarter decreased
$164 million, or 22%, compared with
the prior quarter, reflecting the favourable impact of a higher
discount rate which resulted in a similar decrease in fair value of
investments supporting claims liabilities reported in non-interest
income, more favourable prior years' claims development, and lower
current year claims.
Non-interest expenses increased $63
million, or 2%, compared with the prior quarter reflecting
higher technology and marketing costs.
The efficiency ratio was 44.3%, compared with 42.7%, in the
prior quarter.
Year-to-date comparison – Q2 2022 vs. Q2 2021
Canadian Retail net income for the six months ended April 30, 2022, was $4,490
million, an increase of $271
million, or 6%, compared with same period last year. The
increase in earnings reflects higher revenue, partially offset by
higher non-interest expenses and insurance claims. The annualized
ROE for the period was 44.7%, compared with 48.6%, in the same
period last year.
Revenue for the period was $13,341
million, an increase of $934
million, or 8%, compared with same period last year. Net
interest income increased $382 million, or 7%, reflecting
volume growth, partially offset by lower margins. Average loan
volumes increased $42 billion, or 9%, reflecting 8%
growth in personal loans and 15% growth in business loans. Average
deposit volumes increased $38
billion, or 9%, reflecting 7% growth in personal
deposits, 11% growth in business deposits, and 9% growth in wealth
deposits. Net interest margin was 2.58%, a decrease of 5 bps,
primarily reflecting lower margin on loans and lower mortgage
prepayment revenue, partially offset by higher margin on deposits,
reflecting the rising interest rate environment.
Non-interest income increased $552
million, or 8%, reflecting higher fee-based revenue in the
banking and wealth business, prior year insurance premium rebates
for customers and higher insurance volumes, partially offset by
lower transaction revenue in the wealth business, and a decrease in
the fair value of investments supporting claims liabilities which
resulted in a similar decrease in insurance claims.
PCL was $93 million, a decrease of
$12 million, compared with the same
period last year. PCL – impaired was $313
million, a decrease of $45
million, or 13%, largely related to improved credit
conditions. PCL – performing was a recovery of $220 million, compared with a recovery of
$253 million in the same period last
year. The current year performing release reflects improved credit
conditions including a more favourable outlook, partially
offset by elevated uncertainty. Total PCL as an annualized
percentage of credit volume was 0.04%, a decrease of 1 basis
point.
Insurance claims and related expenses were $1,348 million, an increase of $127 million, or 10%, compared with the same
period last year, reflecting higher current year claims and more
severe weather-related events, partially offset by the favourable
impact of a higher discount rate which resulted in a similar
decrease in fair value of investments supporting claims liabilities
reported in non-interest income.
Non-interest expenses were $5,801
million, an increase of $458
million, or 9%, compared with the same period last year,
reflecting higher spend supporting business growth, including
technology and marketing costs, higher employee-related expenses
and variable compensation.
The efficiency ratio for the period was 43.5%, compared with
43.1%, for the same period last year.
TABLE 8: U.S.
RETAIL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
2022
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
Net interest
income
|
$
|
2,079
|
|
$
|
2,115
|
|
$
|
1,950
|
|
$
|
4,194
|
|
$
|
3,981
|
|
Non-interest income –
reported
|
|
864
|
|
|
671
|
|
|
663
|
|
|
1,535
|
|
|
1,316
|
|
Non-interest income –
adjusted1
|
|
640
|
|
|
671
|
|
|
663
|
|
|
1,311
|
|
|
1,316
|
|
Total revenue –
reported
|
|
2,943
|
|
|
2,786
|
|
|
2,613
|
|
|
5,729
|
|
|
5,297
|
|
Total revenue –
adjusted1
|
|
2,719
|
|
|
2,786
|
|
|
2,613
|
|
|
5,505
|
|
|
5,297
|
|
Provision for (recovery
of) credit losses – impaired
|
|
96
|
|
|
125
|
|
|
117
|
|
|
221
|
|
|
307
|
|
Provision for (recovery
of) credit losses – performing
|
|
(114)
|
|
|
(104)
|
|
|
(330)
|
|
|
(218)
|
|
|
(385)
|
|
Total provision for
(recovery of) credit losses
|
|
(18)
|
|
|
21
|
|
|
(213)
|
|
|
3
|
|
|
(78)
|
|
Non-interest
expenses
|
|
1,632
|
|
|
1,597
|
|
|
1,594
|
|
|
3,229
|
|
|
3,282
|
|
Provision for (recovery
of) income taxes – reported
|
|
186
|
|
|
148
|
|
|
162
|
|
|
334
|
|
|
232
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
131
|
|
|
148
|
|
|
162
|
|
|
279
|
|
|
232
|
|
U.S. Retail Bank net
income – reported
|
|
1,143
|
|
|
1,020
|
|
|
1,070
|
|
|
2,163
|
|
|
1,861
|
|
U.S. Retail Bank net
income – adjusted1
|
|
974
|
|
|
1,020
|
|
|
1,070
|
|
|
1,994
|
|
|
1,861
|
|
Share of net income
from investment in Schwab2,3
|
|
224
|
|
|
252
|
|
|
246
|
|
|
476
|
|
|
455
|
|
Net income –
reported
|
$
|
1,367
|
|
$
|
1,272
|
|
$
|
1,316
|
|
$
|
2,639
|
|
$
|
2,316
|
|
Net income –
adjusted1
|
|
1,198
|
|
|
1,272
|
|
|
1,316
|
|
|
2,470
|
|
|
2,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
1,641
|
|
$
|
1,671
|
|
$
|
1,548
|
|
$
|
3,312
|
|
$
|
3,127
|
|
Non-interest income –
reported
|
|
682
|
|
|
530
|
|
|
528
|
|
|
1,212
|
|
|
1,035
|
|
Non-interest income –
adjusted1
|
|
505
|
|
|
530
|
|
|
528
|
|
|
1,035
|
|
|
1,035
|
|
Total revenue –
reported
|
|
2,323
|
|
|
2,201
|
|
|
2,076
|
|
|
4,524
|
|
|
4,162
|
|
Total revenue –
adjusted1
|
|
2,146
|
|
|
2,201
|
|
|
2,076
|
|
|
4,347
|
|
|
4,162
|
|
Provision for (recovery
of) credit losses – impaired
|
|
75
|
|
|
99
|
|
|
91
|
|
|
174
|
|
|
238
|
|
Provision for (recovery
of) credit losses – performing
|
|
(90)
|
|
|
(82)
|
|
|
(264)
|
|
|
(172)
|
|
|
(308)
|
|
Total provision for
(recovery of) credit losses
|
|
(15)
|
|
|
17
|
|
|
(173)
|
|
|
2
|
|
|
(70)
|
|
Non-interest
expenses
|
|
1,289
|
|
|
1,261
|
|
|
1,267
|
|
|
2,550
|
|
|
2,580
|
|
Provision for (recovery
of) income taxes – reported
|
|
147
|
|
|
117
|
|
|
129
|
|
|
264
|
|
|
184
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
103
|
|
|
117
|
|
|
129
|
|
|
220
|
|
|
184
|
|
U.S. Retail Bank net
income – reported
|
|
902
|
|
|
806
|
|
|
853
|
|
|
1,708
|
|
|
1,468
|
|
U.S. Retail Bank net
income – adjusted1
|
|
769
|
|
|
806
|
|
|
853
|
|
|
1,575
|
|
|
1,468
|
|
Share of net income
from investment in Schwab2,3
|
|
177
|
|
|
200
|
|
|
194
|
|
|
377
|
|
|
355
|
|
Net income –
reported
|
$
|
1,079
|
|
$
|
1,006
|
|
$
|
1,047
|
|
$
|
2,085
|
|
$
|
1,823
|
|
Net income –
adjusted1
|
|
946
|
|
|
1,006
|
|
|
1,047
|
|
|
1,952
|
|
|
1,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common equity
– reported4
|
|
14.2
|
%
|
|
12.6
|
%
|
|
13.9
|
%
|
|
13.4
|
%
|
|
11.8
|
%
|
Return on common equity
– adjusted1
|
|
12.5
|
|
|
12.6
|
|
|
13.9
|
|
|
12.6
|
|
|
11.8
|
|
Net interest
margin1,5
|
|
2.21
|
|
|
2.21
|
|
|
2.15
|
|
|
2.21
|
|
|
2.20
|
|
Efficiency ratio –
reported
|
|
55.5
|
|
|
57.3
|
|
|
61.0
|
|
|
56.4
|
|
|
62.0
|
|
Efficiency ratio –
adjusted1
|
|
60.1
|
|
|
57.3
|
|
|
61.0
|
|
|
58.7
|
|
|
62.0
|
|
Assets under
administration (billions of U.S. dollars)
|
$
|
32
|
|
$
|
32
|
|
$
|
27
|
|
$
|
32
|
|
$
|
27
|
|
Assets under management
(billions of U.S. dollars)
|
|
37
|
|
|
40
|
|
|
44
|
|
|
37
|
|
|
44
|
|
Number of U.S. retail
stores
|
|
1,156
|
|
|
1,152
|
|
|
1,141
|
|
|
1,156
|
|
|
1,141
|
|
Average number of
full-time equivalent staff
|
|
25,366
|
|
|
24,922
|
|
|
25,892
|
|
|
25,141
|
|
|
26,116
|
|
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 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 2022 Interim
Consolidated Financial Statements for further details.
|
3 The
after-tax amounts for amortization of acquired intangibles and the
Bank's share of acquisition and integration charges associated with
Schwab's acquisition are recorded in the Corporate
segment.
|
4
Capital allocated to the business segment was increased to 10.5%
CET1 Capital effective the first quarter of fiscal 2022 compared
with 9% in the prior year.
|
5 Net
interest margin is calculated by dividing U.S. Retail segment's net
interest income by average interest-earning assets excluding the
impact related to sweep deposits arrangements and the impact of
intercompany deposits and cash collateral, which management
believes better reflects segment performance. In addition, the
value of tax-exempt interest income is adjusted to its equivalent
before-tax value. Net interest income and average interest-earning
assets used in the calculation are non-GAAP financial
measures.
|
Quarterly comparison – Q2 2022 vs. Q2 2021
U.S. Retail reported net income for the quarter was $1,367 million (US$1,079
million), an increase of $51
million (US$32 million), or 4%
(3% in U.S. dollars) compared with the second quarter last year. On
an adjusted basis, net income for the quarter was $1,198 million (US$946
million), a decrease of $118
million (US$101 million), or
9% (10% in U.S. dollars). The reported and adjusted annualized ROE
for the quarter was 14.2% and 12.5%, respectively, compared with
13.9% 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 U.S. Retail Bank and the Bank's
investment in Schwab was $1,143
million (US$902 million) and
$224 million (US$177 million), respectively. On an adjusted
basis for the quarter, the U.S. Retail Bank's contributed net
income was $974 million (US$769 million).
The contribution from Schwab of US$177
million decreased US$17
million, or 9%, primarily reflecting lower trading
revenue.
U.S. Retail Bank reported net income was US$902 million, an increase of US$49 million, or 6%, primarily reflecting higher
revenue, partially offset by a lower recovery of PCL. U.S. Retail
Bank adjusted net income was US$769
million, a decrease of US$84
million, or 10%, primarily reflecting a lower recovery of
PCL, partially offset by higher revenue.
U.S. Retail Bank revenue is derived from the personal and
business banking and wealth management businesses. Reported revenue
for the quarter was US$2,323 million,
an increase of US$247 million, or
12%, compared with the second quarter last year. On an adjusted
basis, revenue increased US$70
million, or 3%. Net interest income of US$1,641 million, increased US$93 million, or 6%, largely driven by the
benefit of higher personal and business deposit volumes and margins
combined with increased earnings on the investment portfolio,
partially offset by lower income from PPP loan forgiveness, and
lower sweep deposit balances. Net interest margin of 2.21%,
increased 6 bps, as higher margin on deposits reflecting the rising
interest rate environment and increased earnings on the investment
portfolio was partially offset by negative balance sheet mix and
lower income from PPP loan forgiveness. Reported non-interest
income of US$682 million increased
US$154 million, or 29%, compared with
the second quarter last year, primarily reflecting an insurance
recovery related to litigation and fee income growth from increased
customer activity, partially offset by lower gains on the sale of
mortgage loans. On an adjusted basis, non-interest income decreased
US$23 million, or 4%, as lower gains
on the sale of mortgage loans were partially offset by fee income
growth from increased customer activity.
Average loan volumes decreased US$7
billion, or 4%, compared with the second quarter last year.
Personal loans increased 4%, primarily reflecting higher
residential mortgage and auto originations since the second quarter
last year, and higher credit card volumes, partially offset by a
decline in home equity. Business loans decreased 11%, or 3%
excluding PPP loans, primarily due to continued paydowns of
commercial loans, partially offset by growth in originations and
higher commercial line utilization. Average deposit volumes
increased US$12 billion, or 3%,
reflecting a 12% increase in personal deposits and a 7% increase in
business deposits, partially offset by a 7% decrease in sweep
deposits.
AUA were US$32 billion as at
April 30, 2022, an increase of
US$5 billion, or 19%, compared with
the second quarter last year, reflecting net asset growth. AUM were
US$37 billion as at April 30, 2022, a decrease of US$7 billion, or 16%, compared with the second
quarter last year, reflecting net asset outflows and market
depreciation.
PCL for the quarter was a recovery of US$15 million, compared with a recovery of
US$173 million in the second quarter
last year. PCL – impaired was US$75 million, a decrease of
US$16 million, or 18%, largely
related to improved credit conditions. PCL – performing was a
recovery of US$90 million, compared
with a recovery of US$264 million in
the prior year. The performing release this quarter reflects
improved credit conditions, partially offset by elevated economic
uncertainty. 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 -0.04%, higher by 37 bps, compared with the
second quarter last year.
Non-interest expenses for the quarter were US$1,289 million, an increase of US$22 million, or 2%, compared with the second
quarter last year, primarily reflecting higher employee-related
expenses and investments in the business, partially offset by prior
year store optimization costs of US$49
million, lower COVID-19 expenses and productivity savings in
the current year.
The reported and adjusted efficiency ratios for the quarter were
55.5% and 60.1%, respectively, compared with 61.0%, in the second
quarter last year.
Quarterly comparison – Q2 2022 vs. Q1 2022
U.S. Retail reported net income of $1,367
million (US$1,079 million)
increased $95 million (US$73 million), or 7% (7% in U.S. dollars). On an
adjusted basis, net income for the quarter was $1,198 million (US$946
million), a decrease of $74
million (US$60 million), or 6%
(6% in U.S. dollars). The reported and adjusted annualized ROE for
the quarter was 14.2% and 12.5%, respectively, compared with 12.6%
in the prior quarter.
The contribution from Schwab of US$177
million decreased US$23
million, or 12%, primarily reflecting lower trading revenue,
lower asset management fees and higher operating expenses.
U.S. Retail Bank reported net income was US$902 million, an increase of US$96 million, or 12%, compared with the prior
quarter, primarily reflecting higher revenue and lower PCL. U.S.
Retail Bank adjusted net income was US$769
million, a decrease of US$37
million, or 5%, primarily reflecting lower revenue, and
higher expenses, partially offset by lower PCL.
Reported revenue for the quarter increased US$122 million, or 6%, compared with the prior
quarter. Adjusted revenue for the quarter decreased US$55 million, or 2%. Net interest income of
US$1,641 million decreased
US$30 million, or 2%, primarily
reflecting lower income from PPP loan forgiveness, the effect of
fewer days in the second quarter, and higher prepayment income in
the prior quarter, partially offset by higher deposit margins due
to rising interest rates. Net interest margin of 2.21% was flat
quarter over quarter, as higher margin on deposits reflecting the
rising interest rate environment was offset by lower PPP loan
forgiveness, lower margin on loans and higher prepayment income in
the prior quarter. Reported non-interest income increased
US$152 million, or 29%, primarily
reflecting an insurance recovery related to litigation, partially
offset by lower fee income from overdraft fee policy changes and
lower gains on the sale of mortgage loans. Adjusted non-interest
income of US$505 million decreased
US$25 million, or 5%, primarily
reflecting lower fee income from overdraft policy changes and lower
gains on the sale of mortgage loans.
Average loan volumes increased US$1
billion compared with the prior quarter. Personal loans
increased 1%, primarily reflecting growth in residential mortgage
and auto loans. Business loans were flat, or were up 1% excluding
PPP loans, primarily reflecting continued growth in originations
and higher commercial line utilization. Average deposit volumes
increased US$1 billion compared with
the prior quarter reflecting a 4% increase in personal deposits,
largely offset by a 2% decrease in business deposits, and a 1%
decrease in sweep deposits.
AUA were US$32 billion as at
April 30, 2022, flat compared with
the prior quarter. AUM were US$37
billion as at April 30, 2022,
a decrease of US$3 billion, or 8%,
reflecting market depreciation and net asset outflows.
PCL was lower by US$32 million
compared with the prior quarter. PCL – impaired decreased
US$24 million, or 24%, largely in the
auto portfolio. PCL – performing was a recovery of US$90 million, compared with a recovery of
US$82 million in the prior quarter.
The performing release this quarter reflects improved credit
conditions, partially offset by elevated economic uncertainty. The
current quarter release was largely reflected in the Commercial
portfolio. 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 -0.04%, lower by 8 bps from prior quarter.
Non-interest expenses for the quarter were US$1,289 million, an increase of US$28 million, or 2%, primarily reflecting higher
investments in the business and higher employee-related
expenses.
The reported and adjusted efficiency ratios for the quarter were
55.5% and 60.1%, respectively, compared with 57.3% in the prior
quarter.
Year-to-date comparison – Q2 2022 vs. Q2 2021
U.S. Retail reported net income for the six months ended
April 30, 2022, was $2,639 million (US$2,085
million), an increase of $323
million (US$262 million), or 14% (14% in U.S. dollars),
compared with the same period last year. On an adjusted basis, net
income for the period was $2,470 million (US$1,952 million), an increase of $154 million (US$129
million), or 7% (7% in U.S. dollars). The reported and
adjusted annualized ROE for the period was 13.4% and 12.6%,
respectively, compared with 11.8% in the same period last year.
Reported net income from the U.S. Retail Bank and the Bank's
investment in Schwab was $2,163
million (US$1,708 million) and
$476 million (US$377 million),
respectively. On an adjusted basis for the period, the U.S. Retail
Bank's contributed net income was $1,994
million (US$1,575
million).
The contribution from Schwab was US$377
million, an increase of US$22
million, or 6%, primarily reflecting higher net interest
revenue.
U.S. Retail Bank reported net income for the period was
US$1,708 million, an increase of
US$240 million, or 16%, compared with
the same period last year, reflecting higher revenue, partially
offset by higher PCL. U.S. Retail Bank adjusted net income was
US$1,575 million, an increase of
US$107 million, or 7%.
Reported revenue for the period was US$4,524 million, an increase of US$362 million, or 9%, compared with same period
last year. On an adjusted basis, revenue increased US$185 million, or 4%. Net interest income
increased US$185 million, or 6%,
largely driven by the benefit of higher business and personal
deposit volumes and margins combined with increased earnings on the
investment portfolio, partially offset by lower income from PPP
loan forgiveness and decreased sweep deposit balances. Net interest
margin was 2.21%, an increase of 1 basis point, as higher margin on
deposits reflecting the rising interest rate environment was
largely offset by negative balance sheet mix and the impact of
lower income from PPP loan forgiveness. Reported non-interest
income increased US$177 million, or 17%, primarily reflecting
an insurance recovery related to litigation and fee income growth
from increased customer activity, partially offset by lower gains
on the sale of mortgage loans. On an adjusted basis, non-interest
income was flat, as fee income growth was offset by lower gains on
the sale of mortgage loans.
Average loan volumes decreased US$9
billion, or 5%, compared with the same period last year.
Personal loans increased 2%, driven by residential mortgage, auto,
and credit cards, partially offset by home equity. Business loans
decreased 11%, or up 4% excluding PPP loans, primarily reflecting
continued paydowns of commercial loans, partially offset by growth
in originations and higher commercial line utilization. Average
deposit volumes increased US$16 billion, or 4%, reflecting a
13% increase in personal deposits and a 9% increase in business
deposits, partially offset by a 6% decrease in sweep deposits.
PCL was US$2 million compared with
a recovery of US$70 million in the
same period last year. PCL – impaired was US$174 million, a decrease of US$64 million, or 27%, largely related to
improved credit conditions. PCL – performing was a recovery of
US$172 million, compared with a
recovery of US$308 million in the
prior year. The current year performing release reflects improved
credit conditions including a more favourable outlook, partially
offset by elevated uncertainty. 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 zero percent, higher by
11 bps.
Non-interest expenses for the period were US$2,550 million, a decrease of US$30 million, or 1%, compared with the same
period last year, reflecting US$125
million in prior year store optimization costs, productivity
savings in the current year, and lower COVID-19 related expenses,
partially offset by higher employee-related expenses and
investments in the business.
The reported and adjusted efficiency ratios for the quarter were
56.4% and 58.7%, respectively, compared with 62.0%, for the same
period last year.
TABLE 9: WHOLESALE
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
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Net interest income
(TEB)
|
$
|
759
|
|
$
|
709
|
|
$
|
648
|
|
$
|
1,468
|
|
$
|
1,309
|
|
Non-interest
income
|
|
491
|
|
|
637
|
|
|
509
|
|
|
1,128
|
|
|
1,158
|
|
Total
revenue
|
|
1,250
|
|
|
1,346
|
|
|
1,157
|
|
|
2,596
|
|
|
2,467
|
|
Provision for (recovery
of) credit losses – impaired
|
|
(1)
|
|
|
(4)
|
|
|
12
|
|
|
(5)
|
|
|
22
|
|
Provision for (recovery
of) credit losses – performing
|
|
(8)
|
|
|
(1)
|
|
|
(75)
|
|
|
(9)
|
|
|
(65)
|
|
Total provision for
(recovery of) credit losses
|
|
(9)
|
|
|
(5)
|
|
|
(63)
|
|
|
(14)
|
|
|
(43)
|
|
Non-interest
expenses
|
|
776
|
|
|
764
|
|
|
705
|
|
|
1,540
|
|
|
1,416
|
|
Provision for (recovery
of) income taxes (TEB)
|
|
124
|
|
|
153
|
|
|
132
|
|
|
277
|
|
|
274
|
|
Net
income
|
$
|
359
|
|
$
|
434
|
|
$
|
383
|
|
$
|
793
|
|
$
|
820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading-related revenue
(TEB)1
|
$
|
680
|
|
$
|
726
|
|
$
|
558
|
|
$
|
1,406
|
|
$
|
1,302
|
|
Average gross lending
portfolio (billions of Canadian dollars)2
|
|
63.7
|
|
|
59.2
|
|
|
60.3
|
|
|
61.4
|
|
|
59.5
|
|
Return on common
equity3
|
|
13.1
|
%
|
|
16.2
|
%
|
|
20.0
|
%
|
|
14.6
|
%
|
|
20.7
|
%
|
Efficiency
ratio
|
|
62.1
|
|
|
56.8
|
|
|
60.9
|
|
|
59.3
|
|
|
57.4
|
|
Average number of
full-time equivalent staff
|
|
4,950
|
|
|
4,932
|
|
|
4,757
|
|
|
4,941
|
|
|
4,717
|
|
1
Includes net interest income TEB of $581 million (January 2022 –
$525 million, April 2021 – $508 million, January 2021 – $504
million), and trading income (loss) of $99 million
(January 2022 – $201 million, April 2021 – $50 million,
January 2021 – $240 million). Trading-related revenue (TEB) is a
non-GAAP financial measure. Refer to "Non-GAAP and Other Financial
Measures" in the "How We Performed" section of this document and
the Glossary in the second quarter of 2022 MD&A, which is
incorporated by reference, for additional information about this
metric.
|
2
Includes gross loans and bankers' acceptances relating to Wholesale
Banking, excluding letters of credit, cash collateral, credit
default swaps, and allowance for credit losses.
|
3
Capital allocated to the business segment was increased to 10.5%
CET1 Capital effective the first quarter of fiscal 2022 compared
with 9% in the prior year.
|
Quarterly comparison – Q2 2022 vs. Q2 2021
Wholesale Banking net income for the quarter was $359 million, a decrease of $24 million, or 6%, compared with the second
quarter last year, reflecting higher non-interest expenses and a
lower PCL recovery, partially offset by higher revenues.
Wholesale Banking revenue is derived primarily from capital
markets and corporate and investment banking services provided to
corporate, government, and institutional clients. Wholesale Banking
generates revenue from corporate lending, advisory, underwriting,
sales, trading and research, client securitization, trade finance,
cash management, prime services, and trade execution services.
Revenue for the quarter was $1,250
million, an increase of $93
million, or 8%, compared with the second quarter last year,
primarily reflecting higher trading-related revenue, partially
offset by lower underwriting fees.
PCL for the quarter was a recovery of $9
million, compared with a recovery of $63 million in the second quarter last year. PCL
– impaired was a recovery of $1 million. PCL – performing was
a recovery of $8 million, compared
with a recovery of $75 million in the
prior year.
Non-interest expenses were $776
million, an increase of $71
million, or 10%, compared with the second quarter last year,
primarily reflecting the continued investments in Wholesale
Banking's U.S. dollar strategy, including the hiring of banking,
sales and trading, and technology professionals, and the
acquisition of TD Securities Automated Trading (previously
Headlands Tech Global Markets, LLC).
Quarterly comparison – Q2 2022 vs. Q1 2022
Wholesale Banking net income for the quarter was $359 million, a decrease of $75 million, or 17%, compared with the prior
quarter, reflecting lower revenue and higher non-interest
expenses.
Revenue for the quarter decreased $96
million, or 7%, primarily reflecting lower trading-related
revenue, loan fees and underwriting fees.
PCL for the quarter was a recovery of $9
million, compared with a recovery of $5 million in the prior quarter. PCL – impaired
was a recovery of $1 million. PCL –
performing was a recovery of $8
million.
Non-interest expenses for the quarter increased $12 million, or 2%, primarily reflecting volume
related and other fees, partially offset by lower variable
compensation.
Year-to-date comparison – Q2 2022 vs. Q2 2021
Wholesale Banking net income for the six months ended
April 30, 2022 was $793 million, a decrease of $27 million, or 3%, compared with the same period
last year, reflecting higher non-interest expenses and a lower PCL
recovery, partially offset by higher revenues.
Revenue was $2,596 million, an
increase of $129 million, or 5%,
compared with the same period last year, reflecting higher
trading-related revenue, prime services revenue, and transaction
banking revenue, partially offset by lower underwriting fees.
PCL was a recovery of $14 million,
compared with a recovery of $43
million in the same period last year. PCL – impaired was a
recovery of $5 million, lower by
$27 million. PCL – performing was a
recovery of $9 million, compared with
a recovery of $65 million in the same
period last year.
Non-interest expenses were $1,540
million, an increase of $124
million, or 9%, compared with the same period last year,
primarily reflecting the continued investments in Wholesale
Banking's U.S. dollar strategy, including the hiring of banking,
sales and trading, and technology professionals, and the
acquisition of TD Securities Automated Trading.
TABLE 10:
CORPORATE
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
For the six months
ended
|
|
|
April
30
|
January 31
|
April 30
|
April
30
|
April 30
|
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
Net income (loss) –
reported
|
$
|
(151)
|
$
|
(227)
|
$
|
(186)
|
$
|
(378)
|
$
|
(383)
|
Adjustments for
items of note
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles before income taxes
|
|
60
|
|
67
|
|
69
|
|
127
|
|
143
|
Acquisition and
integration charges related to the Schwab transaction
|
|
20
|
|
50
|
|
19
|
|
70
|
|
57
|
Less: impact of income
taxes
|
|
8
|
|
17
|
|
8
|
|
25
|
|
17
|
Net income (loss) –
adjusted1
|
$
|
(79)
|
$
|
(127)
|
$
|
(106)
|
$
|
(206)
|
$
|
(200)
|
|
|
|
|
|
|
|
|
|
|
|
|
Decomposition of
items included in net income (loss) – adjusted
|
|
|
|
|
|
|
|
|
|
|
Net corporate
expenses2
|
$
|
(161)
|
$
|
(168)
|
$
|
(186)
|
$
|
(329)
|
$
|
(368)
|
Other
|
|
82
|
|
41
|
|
80
|
|
123
|
|
168
|
Net income (loss) –
adjusted1
|
$
|
(79)
|
$
|
(127)
|
$
|
(106)
|
$
|
(206)
|
$
|
(200)
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
volumes
|
|
|
|
|
|
|
|
|
|
|
Average number of
full-time equivalent staff
|
|
19,180
|
|
18,017
|
|
17,736
|
|
18,588
|
|
17,728
|
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 2022 MD&A, which is incorporated by
reference.
|
Quarterly comparison – Q2 2022 vs. Q2 2021
Corporate segment's reported net loss for the quarter was
$151 million, compared with a
reported net loss of $186 million in
the second quarter last year. The year-over-year decrease reflects
lower net corporate expenses and lower amortization of intangibles.
Net corporate expenses decreased $25
million compared to the same quarter last year. The adjusted
net loss for the quarter was $79
million, compared with an adjusted net loss of $106 million in the second quarter last year.
Quarterly comparison – Q2 2022 vs. Q1 2022
Corporate segment's reported net loss for the quarter was
$151 million, compared with a
reported net loss of $227 million in
the prior quarter. The quarter-over-quarter decrease reflects a
higher contribution from other items, lower acquisition and
integration charges related to the Schwab transaction, and lower
net corporate expenses. The increase in other items primarily
reflects higher revenue from treasury and balance sheet management
activities this quarter. Net corporate expenses decreased
$7 million compared to the prior
quarter. The adjusted net loss for the quarter was $79 million, compared with an adjusted net loss
of $127 million in the prior
quarter.
Year-to-date comparison – Q2 2022 vs. Q2 2021
Corporate segment's reported net loss for the six months ended
April 30, 2022 was $378 million, compared with a reported net loss
of $383 million in the same period
last year. The $5 million decrease
primarily reflects lower net corporate expenses and lower
amortization of intangibles, partially offset by a lower
contribution of other items and higher acquisition and integration
charges related to the Schwab transaction. Other items decreased
$45 million, largely reflecting lower
revenue from treasury and balance sheet management activities. Net
corporate expenses decreased $39
million compared to the same period last year. Adjusted net
loss for the six months ended April 30,
2022 was $206 million,
compared with an adjusted net loss of $200
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
P.O. Box 700, Station
B
Montréal, Québec H3B
3K3
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
505000
Louisville, KY 40233,
or
Computershare Trust
Company, N.A.
462 South 4th Street,
Suite 1600
Louisville, KY
40202
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 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.
Normal Course Issuer Bid
On January 7, 2022, the Bank
announced that the Toronto Stock Exchange (TSX) and OSFI had
approved the Bank's Normal Course Issuer Bid (NCIB) to repurchase
for cancellation up to 50 million of the Bank's common shares.
Pursuant to the Notice of Intention filed with the TSX, the NCIB
ends on January 10, 2023, such earlier date as the Bank
may determine, or such earlier date as the Bank may complete its
purchases. A copy of the Notice may be obtained without charge by
contacting TD Shareholder Relations by phone at 416-944-6367 or
1-866-756-8936 or by e-mail at tdshinfo@td.com.
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 on Thursday, May 26, 2022. The call will be audio
webcast live through TD's website at 1:30 p.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 26, 2022 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 26, 2022, until
11:59 p.m. ET on June 10, 2022 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 fifth
largest bank in North America by
assets and serves more than 26 million customers in three key
businesses operating in a number of locations in financial centres
around the globe: Canadian Retail, including TD Canada Trust, TD
Auto Finance Canada, TD Wealth (Canada), TD Direct Investing, and TD
Insurance; 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; and
Wholesale Banking, including TD Securities. TD also ranks among the
world's leading online financial services firms, with more than 15
million active online and mobile customers. TD had CDN$1.8 trillion in assets on April 30, 2022. The Toronto-Dominion Bank trades
under the symbol "TD" on the Toronto and New York Stock Exchanges.
SOURCE TD Bank Group