The Toronto-Dominion Bank

Good afternoon, ladies and gentlemen. Welcome to the Q1 2020 Earnings Conference Call. I would now like to turn the meeting over to Ms. Jillian Manning. Please go ahead, Ms. Manning.

Thank you, Operator. Good afternoon and welcome to TD Bank Group's first quarter 2020 investor presentation. We will begin today's presentation with remarks from Barrett Masrani, the bank's CEO, after which Riyaz Ahmed, the bank's CFO, will present our first quarter operating results. Ajay Bambawale, Chief Risk Officer, will then offer comments on credit quality, after which we will invite questions from pre-qualified analysts and investors on the phone. Also present today to answer your questions are Terry Currie, Group Head, Canadian Personal Banking, Greg Bracca, President and CEO, TD Bank, America's Most Convenient Bank, and Bob Dorrance, Group Head, Wholesale Banking. Please turn to slide two. At this time, I would like to caution our listeners that this presentation contains forward-looking statements. that there are risks that actual results could differ materially from what is discussed, and that certain material factors or assumptions were applied in making these forward-looking statements. Any forward-looking statements contained in this presentation represent the views of management 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. Forward-looking statements may not be appropriate for other purposes. I would also like to remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results to assess each of its businesses and to measure overall bank performance. The bank believes that adjusted results provide readers with a better understanding of how management views the bank's performance. Barrett will be referring to adjusted results in his remarks. Additional information on items of note, the bank's reported results, and factors and assumptions related to forward-looking information are all available in our Q1 2020 report to shareholders. With that, let me turn the presentation over to Barrett.

Thank you, Jillian, and thank you, everyone, for joining us today. Q1 was a solid quarter for TD. Earnings rose 4% to $3.1 billion, and EPS was up 6% to $1.66. Revenue increased 6% on strong volume growth and record wholesale revenue as the investments we've been making in our people and capabilities enable us to continue acquiring more customers and doing more business with them. We maintained a strong capital position, with our CET1 ratio ending the quarter at 11.7%, including the impact from IFR at 16 and the repurchase of over 4 million common shares. We also declared a 5-cent dividend increase today, bringing our dividend per share to 79 cents for the quarter, up 7% from a year ago, for a five-year compound annual growth rate of 9%. I'm pleased with our performance this quarter, which saw us earn through some significant headwinds. Let me highlight a few accomplishments that speak to the power of our strategy and our success in executing on it. In December, TD Bank, America's most convenient bank, ranked number one in the J.D. Power 2019 U.S. National Banking Satisfaction Study. This is our first-ever national trophy in the first year that we were eligible for the survey. The win is all the more meaningful given the peer group, which includes some of the nation's largest and most storied banks, many of which operate coast-to-coast. We followed a disciplined strategy since entering the U.S. markets. keeping our customers at the center of everything we do. I couldn't be more proud of our team. It's their relentless focus on providing legendary, unexpectedly human experiences that has earned us this milestone recognition. In this survey, TD ranked best among national banks for both store experience and online satisfaction. That's what our omni-channel strategy is all about. At TD, We are delivering for our customers in branches and stores, as well as online and mobile. Customers love our design-centered digital tools and the personalization, convenience, and security they offer. In Canada, our banking app consistently ranks number one for adoption, engagement, and customer satisfaction. And in the U.S., our app is ranked in the top ten. We are the largest digital bank in Canada. and our active mobile user base is up 12% from a year ago across our North American footprint to 5.4 million users in Canada and 3.4 million users in the U.S. Our omni-channel strategy is about giving customers the advice they need to feel more confident about their financial future. That's the promise behind the TD Shield, and it's a message that is being heard loud and clear. This quarter... TD was named number one brand in Canada and the 13th most valuable banking brand globally, according to Brand Finance. Our brand promise is a commitment we take seriously in each of our businesses. I'll turn to them now. Canadian retail delivered earnings of $1.8 billion this quarter. We saw strong volume growth, offset by continued normalization of credit provisions and as well as higher expense growth as we continue to invest in our business, including adding nearly 1,500 advisors and customer-facing colleagues across our businesses. By the second half of the year, we expect the rate of expense growth to moderate, given that the dollar level of expenses has now stabilized. We continue to make significant progress winning more customers, helping them get to yes faster, and making it more personal. through our focus on end-to-end journeys and omni-channel platforms. In personal and commercial banking, a future-ready branch transformation strategy is equipping our frontline teams with the resources and training to support more advice conversations. And tools like Easy Apply, Homeowners Journey, and TD Clary are enabling customers to engage with us in their channel of choice. We're seeing benefits in robust loan and deposit growth, including record resale originations in this quarter. We also continue to extend our leadership in the card space. Building on the successful realignment of our consumer card lineup over the last two years, we refresh our suite of business cards this quarter with features that provide customers with greater flexibility, like more affordable interest rate options and ways to accelerate accumulation of reward points. We're also gearing up for the rollout of our TD Aeroplane cards when Air Canada unveiled its new loyalty program. We look forward to sharing more with you soon. Our wealth business recorded 7% earnings growth and 40% retail net asset growth as customers entrusted us with more of their business. For the second year in a row, TD Direct Investing won top spot among Canadian banks in the Globe and Mail's annual ranking of online brokers, with TD WebBroker recognized for tools that help people understand how their portfolios are performing and how well they're doing relative to their financial goals. And on the heels of last quarter's multiple wins at the Lippert Awards, TD Asset Management won eight awards in multiple asset classes at the FundData FundGrade A-plus Awards, demonstrating TD Asset Management's commitment to delivering exceptional long-term investment solutions In our insurance business, the investments we've made in our claims platform are paying off in top-line revenue growth and stronger share of voice, with gross written premiums up 15% and TD Insurance having the strongest brand power in Canada, as determined by Millward Brown's latest Brand Dynamics Survey. Turning to the U.S., Our U.S. retail bank generated earnings of $717 million this quarter, up 2% from a year ago. Its strong volume growth was offset by margin compression as we absorbed last year's three Fed rate cuts. With the contributions from TD Ameritrade down as expected following the elimination of trading commissions, segment earnings declined 7% to $869 million U.S. dollars. While U.S. retail bank earnings growth was more subdued this quarter, we continue to add new households and grow core accounts. We are driving volume growth through our store network as well as online and digitally. The digital mortgage offering we launched last fall is seeing increased take-up, and we've added a digital home equity functionality accessible in desktop and mobile formats. Overall, across our North American retail businesses, the investments we are making to enhance our capabilities improve our productivity, and transform the bank for the digital age are delivering tangible benefits for our customers today while positioning us to serve them better in the future. Our wholesale banking segment had a strong quarter with $281 million in earnings. Revenue was $1 billion on higher trading-related revenue and underwriting fees. as we continue to grow and up-tier banking and corporate lending relationships and take share in related product areas, reflecting investments in our U.S. dollar strategy. Our global markets business performs very well with broad-based strength across products and geographies. In the SSA space, a core area of strength for TD Securities, we led the debut sterling benchmark bond issue for the World Bank's International Development Association, ARP. We also made further progress diversifying our U.S. dollar investment grade DCM business with several new corporate origination mandates this quarter, serving as book runner on Duke Energy Florida's $700 million U.S. dollar 10-year green bond and Deutsche Telekom's $1.25 billion U.S. dollar 30-year benchmark transactions. Our corporate and investment banking business had a solid quarter with several key wins. Our flagship Canadian franchise was the sole advisor to Dream Global REIT on their $6.2 billion Canadian dollar acquisition by Blackstone, signifying the trust we've earned with key clients in the industry. We acted as co-leader and joint book runner on logistics, $300 million dollar four-year revolving credit facility, enhancing our competitive position in the Montreal market. And we strengthened our North American real estate investment banking franchise with the addition of a team from Kimberlite Group, a strategic real estate advisory and private capital raising firm based in New York, elevating the advisory capabilities we can offer our North American real estate client base across TD Securities and U.S. retail banks. We are off to a good start in fiscal 2020. As we said on our Q4 call, we expect full-year EPS growth to be moderate again this year. But the path there may be bumpy on a year-over-year basis given our 2019 quarterly EPS profile. And as we continue to absorb last fall's Fed rate cuts and the higher level of expenses in our retail segments in the first half of this year, While macroeconomic conditions continue to fluctuate and emerging risks like the coronavirus are creating uncertainty and market volatility, we will remain focused on our strategy, harnessing the strength of our diversified model to grow our business and fulfill our purpose of enriching the lives of our customers, colleagues, and communities. We've had many opportunities to do that over the last quarter. In December, we announced the 10 grant winners of the TD Ready Challenge. They received $1 million each for their work advancing medical innovations across North America and mitigating geographic, financial, and other barriers to health care. And we just wrapped up our 10th annual TD Black History Month series. This year, we sponsored nearly 100 events celebrating music, arts, and culture across Canada and the U.S., providing a platform for leaders and artists to share their personal perspectives on the ongoing effort to build more inclusive communities. The diversity we celebrate in the communities around us is a reflection of who we are at TD. We were honored this quarter to be recognized for our unique and inclusive employee culture on several fronts. As one of Canada's top employers for young people by Mediacorp, one of Forbes' best employers for diversity in the U.S., and a member of the Bloomberg Gender Equality Index for a fourth consecutive year. Our people are our greatest asset and the best ambassadors of the TD brand. I would like to thank all of them for their passion and dedication to make TD the better bank every day. With that, I'll turn things over to Riaz.