The Toronto-Dominion Bank

Please stand by. Your meeting is about to begin. Good afternoon, ladies and gentlemen. Welcome to the TD Bank Group Q2 2020 Earnings Conference Call. I would like to turn the meeting over to Ms. Gillian Manning, Head of Investor Relations. Please go ahead, Ms. Manning.

Thank you, Operator. Good afternoon and welcome to TD Bank Group's second quarter 2020 investor presentation. We will begin today's presentation with remarks from Bharat Misrani, the bank's CEO. after which Riaz Ahmed, the bank's CFO, will present our second quarter operating results. Ajay Babawale, 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 Q2 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. The last few months have been an extraordinary time for all of us. On April 2nd, we conducted our first-ever virtual annual meeting. It's hard to believe that with June 1st just around the corner, The sweeping restrictions on economic and social activity implemented to contain the COVID-19 pandemic are still largely in place, though it is encouraging to see reopening measures beginning to take shape in some geographies. Before I turn to our Q2 results, I want to talk about how we are meeting the COVID-19 challenge at TD. The toll exacted by this crisis in lives lost and activity disrupted will reverberate for years to come. Economies around the world have been plunged into recession, and unemployment rates have risen to levels not seen in decades. But while the scale of this crisis still has the power to shock, the response it has elicited is inspiring. From dedicated frontline workers in so many different industries, including financial services, venturing out each day to keep critical services running. from businesses and nonprofits fighting to maintain their operations and support their staff, from central banks and regulators who launched new liquidity facilities to keep financial markets functioning and ease the supply of credit to the economy, and from governments who implemented bold measures and support to tie households and businesses through this unprecedented suspension of activity. We've been proud at TD to contribute to this collective effort, We've been working hard to support our people so they can keep themselves safe while looking after our customers. I want to thank them for their exceptional service. This includes the many colleagues who are keeping our branches, stores, and contact centers open and performing services vital to our customers and the bank's core operations. We've adjusted their work environments to help protect their well-being, changing schedules, reconfiguring floors and offices, and investing in protective equipment and enhanced cleaning. You've recognized the sacrifice they and their families have made with additional compensation and vacation days. We quickly enabled 60,000 of our colleagues to work from home, equipping them with the tools and technology to work productively while prioritizing security. And for all of our colleagues, we committed that there will be no job losses in 2020 as a result of COVID-19. We know this is a stressful time. This assurance is important for our colleagues as well as our customers who are depending on them for support and financial advice in these difficult times. At TD, our people are our greatest asset. Their hard work and dedication has enabled us to deliver swift and comprehensive assistance for our customers. Through our TD Health program in Canada, and our TD Cares program in the U.S., we've connected with thousands of customers and been there to serve them in their moment of greatest need. Across our Canadian and U.S. retail businesses, we've provided financial support to over 800,000 customers and accounts, deferring payments on approximately $62 billion in loan balances as of April 30th, extending other forms of relief, including premium reductions and deferrals to more than 125,000 TD insurance clients and facilitating the flow of billions of dollars in government funds to businesses through the programs like SEBA in Canada and the Paycheck Protection Program in the U.S. We are also helping the federal government deliver income support to Canadian households through the CERB program with 1.4 million direct deposits facilitated during the quarter. In our wholesale bank, We increased total growth lending exposures by $23 billion, providing our corporate, institutional, and government clients with critical funding and liquidity support during a period of severe market dislocation. NTD Asset Management is contributing to stabilizing capital markets, having been selected by the Bank of Canada to manage its commercial paper and corporate bond purchase programs. We have also taken decisive action to support our communities, As part of the TD Ready commitment, we've announced the TD Community Resilience Initiative, which is allocating $25 million to strengthen our communities and support organizations involved in the COVID-19 recovery effort. I'm very proud of the response we've mounted over the last few months. Our people have demonstrated their ability to adapt to new ways of working almost overnight, and we reshaped the bank's operations just as quickly. supported by the investments we've made to enhance our technology infrastructure and network capacity, build new lending platforms, and launch scalable end-to-end customer journeys. These investments in our infrastructure and capabilities enabled us to meet a surge in digital traffic of more than 25% across our banking and insurance businesses, manage record trading volumes in our direct investing business, and stay connected to customers across our footprint. From virtual trading desks to video communications to new online and mobile tools delivering payment relief and advice to our more than 14 million active digital customers, TD has remained strong, active, and fully operational from the first day of this crisis, and we are well positioned to continue supporting our customers and colleagues on the road to recovery. These purposeful investments have been made possible by the strength of our model. a diversified business mix backed by North American scale, underpinned by a strong risk culture. It has demonstrated its resilience over time and through a variety of challenging operating environments, and is proving its mettle again now. This quarter, we earned through tremendous headwinds. Earnings were $1.6 billion, and EPS was 85 cents. As we absorbed a substantial increase in provisions for performing loans, as well as margin pressure from the steep drop in interest rates. Our CET1 capital ratio was 11%, down 70 basis points from the prior quarter on higher RWA, reflecting both the deterioration in the economic environment and the balance sheet growth as we continue to support our clients. A tough quarter, no question, but one that demonstrates the resilience of our model and our strategy. Everything you know about PDE has been borne out by this crisis. We build long-term relationships with customers and stand by them in good times and bad. A risk appetite is our compass. We have the ability to execute with speed and purpose when the world shifts around us, and the earnings power and balance sheet strength to play our role in the recovery. That recovery will come, though it is not clear how long it will take. The revenue picture is likely to remain challenging. given the lower for longer interest rate environment. And provisions for credit losses may remain elevated if the downturn is more prolonged. But the hallmark of TD is our ability to adapt to any operating environment and seize the opportunities it presents. Today, we are firmly focused on the way forward, examining our workplaces and making plans to reopen locations with a focus on continuing to provide safe spaces for our customers and colleagues as we begin the hard work of rebuilding. Banking is a critical service, an engine of economic growth and a pillar of the financial system. For 165 years, TD has been privileged to play this role. Given the power of our model, the strength of our balance sheet, and our distinctive culture, I'm confident that we will emerge from this crisis stronger and better positioned to continue serving our customers, colleagues, and communities. I'll wrap up with two thoughts. First, I'm very proud of how we responded to this challenge as an industry. We are fierce competitors, but with a strong tradition of mutual respect for each other as well as our counterparts in government and the supervisory agencies. Drawing on our long experience and our collective expertise, We've been working to deliver the right outcomes for our customers and clients as well as the economy and society. I also want to thank our 90,000 people who have been bringing their best selves to work each day under very trying circumstances. You embody our purpose to enrich the lives of our customers, colleagues, and communities and give meaning to our vision to be the better bank. With that, I'll turn it over to Riaz.