The Toronto-Dominion Bank

Good afternoon, ladies and gentlemen. Welcome to the TD Bank Group Q1 2021 Earnings Conference Call. I would now like to turn the meeting over to Ms. Julianne Manning. Please go ahead, Ms. Manning.

Thank you, operator. Good afternoon and welcome to TD Bank Group's first quarter 2021 investor presentation. We will begin today's presentation with remarks from Barat Nasrani, the bank's CEO, after which Riaz 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 2021 report to shareholders. With that, let me turn the presentation over to Barrett.

Thank you, Jillian, and thank you, everyone, for joining us today. It's been almost a year since the COVID-19 pandemic transformed our lives. As we continue to witness its uneven impacts on the world around us and our own results, I'm proud of how the bank has managed through this period and of the resilience and commitment shown by our 90,000 colleagues around the globe. TD started the year strong, as we continue to execute on our strategies in an uncertain environment. First quarter earnings were $3.4 billion, and EPS was $1.83, up 10% from a year ago. Provisions for credit losses declined significantly, reflecting an improving economic outlook, as well as the impact of ongoing fiscal and monetary support for the economy and the sizable addition to our allowance for credit losses last year. While spending and payment volumes in our banking businesses remained below pre-crisis levels, fee income pressures eased, and deposit growth remained strong. And our wealth, insurance, and wholesale businesses hit another banner quarter, reflecting continued high levels of customer engagement and market activity. These strong results further bolstered our balance sheet, with our CET1 ratio climbing 50 basis points to 13.6%, and our liquidity coverage ratio ending the quarter at 139%. Overall, a powerful testament to the strength of our diversified business model. At TD, we believe banking serves a higher purpose, and we continue to fulfill ours, enriching the lives of our customers, colleagues, and communities. From the depths of the crisis last spring to the recovery that is now emerging, we've empowered our people to execute with purpose and impact on behalf of our customers and clients. We have helped facilitate government programs that remain a lifeline for so many households and businesses, and we have provided ongoing support for our communities. We know the recovery is not yet on solid ground. COVID-19 and its new variants remain a reality. Many households are still struggling, and businesses, especially small businesses, will need additional support after these long months of disruptions. It is too early to predict when we will see a full recovery, but we are encouraged by the progress on vaccination globally. As it proceeds, accompanied by effective testing and improving treatments, the foundation for a sustained recovery will continue to take hold. We are seeing the evidence already in rising consumer and business confidence, increasing customer activity levels, and a steepening yield curve. While we expect that households will maintain their high level of savings in the near term, there is significant pent-up demand to spend after these long months of inactivity, as well as the capacity to do so. And we will be there to advance the recovery, supporting our customers in good times as we did last year in those most difficult circumstances. In the meantime, we remain vigilant. Across the bank, we are maintaining and enhancing measures to protect and serve our customers and colleagues, adding new digital and advice capabilities to deliver the financial services they need while supporting the recovery in all of our markets. We are also investing in a better future. We know that healthy economies require healthy communities and that an inclusive and sustainable recovery is the only path to long-term prosperity. That's why, last fall, we launched an ambitious climate action plan to support the global effort to achieve net zero emissions by 2050. We're also intensifying our focus on diversity, inclusion, and anti-racism, working to remove barriers and create opportunities for everyone to thrive, as well as continuing our internal conversations about what each of us can do, most recently through our Black History Month events and initiatives. And in every community across our footprint, We're investing in new programs, bringing our financial resources, talent, and know-how to help solve problems, and partnering with community organizations to build their resilience. This quarter, that included providing $10 million in grants to 15 organizations through the TD Ready Challenge to help them develop innovative solutions to address the inequities laid bare by the pandemic. And through the TD Ready commitment, We continue to make progress toward our target of $1 billion in giving by 2030. Collectively, we are putting the power of TD's proven business model in the service of a better future for everyone. We are also transforming the way we work today. COVID has led to accelerated change across our business and our footprint. Shifting customer demands, colleague aspirations, and economic realities are creating new challenges and opportunities, and we are meeting them head-on with new investments to improve the speed and agility of our operations, nurture and develop our talent, and grow our businesses. These forward-focused investments are already delivering concrete outcomes across the bank, strengthening our connections to customers and clients, and seeding the next phase of our growth. Let me share a few highlights from each of our businesses. A Canadian retail segment earned $2 billion this quarter. In the personal bank, the power of our omnichannel strategy was on full display as we generated very strong mortgage originations and checking account growth while maintaining our digital leadership. TD's banking app took top spot for customer experience, engagement, and adoption according to App Annie, Comscore, and Novanti's epiphany. respectively, and we made further enhancements this quarter, integrating AI into the app. In two recently launched use cases, eligible customers received personalized proactive advice based on their transaction patterns, including low balances and upcoming payments, providing further support for their financial well-being. Our business bank continues to be the number one CBA lender, with nearly $10 billion in loans funded as of January 31st. We also advanced our growth strategy this quarter, announcing an agreement to acquire Wells Fargo's Canadian Direct Equipment Finance Operations. The transaction, which we expect will close in the first half of calendar 2021, subject to regulatory approvals and closing conditions, will expand our mid-market presence in this key business line and add scale in new geographies. In our wealth business, we had another strong quarter for customer acquisition and generated a record $12 billion in retail net asset growth across the franchise. In TD Direct Investing, customers are responding to the enhancements we've made to our industry-leading web broker platform, including expanded educational resources to help them build their investing knowledge. Addressing the growing demand for sustainable investing, TD Asset Management also added three new ESG ETFs to its product lineup. And in our insurance business, a direct-to-consumer digital-first offering continues to drive strong customer acquisition and premium growth. A U.S. retail bank earned $615 million this quarter. Core consumer checking growth remained exceptionally strong, up more than 30% from a year ago, as customers continue to choose TD for their banking and savings needs. Reflecting our commitment to the small business recovery, we continue to facilitate access to the Triple P program, accepting over 25,000 applications, representing $2 billion in funding as round two of the program got underway. Delivering more of the bank to our 9 million-plus commercial and consumer customers is central to our continued success in the U.S. market. To that end, we merged our corporate and specialty banking teams with the commercial organization this quarter to strengthen our competitiveness in key industry verticals and drive further portfolio growth. Combining corporate and specialty banking's expertise in priority growth areas like asset-based lending, equipment finance, healthcare, and commercial real estate with a commercial bank's capabilities in middle market, community, and small business lending will help us scale our core businesses and build a commercial bank of the future. We were also proud to see TD Auto Finance in the U.S. receive the highest ranking in dealer satisfaction among national non-captive lenders with prime credit, according to the J.D. Power 2020 U.S. Dealer Financing Satisfaction Study. And we booked our first share of net income from Schwab this quarter. It contributed $161 million U.S. in earnings, bringing U.S. retail segment earnings to $776 million U.S., or $1 billion Canadian dollars. Our wholesale segment and another strong quarter, earning $437 million as the investments we've made to broaden and deepen our client base and product capabilities enabled us to do more business across our global platform. In our Canadian business, we were proud to be the lead left book runner on Air Canada's $912 million share offering. In the U.S., We advised NASDAQ on its $2.8 billion US dollar acquisition of Verifin. And from our new Dublin base, we acted as joint lead manager on the European Union's second shore issuance, a dual-trans five-year and 30-year transaction with total volume of 14 billion euros. It's the largest SSA transaction TD Securities has underwritten to date. and highlights our continued growth and success serving our European clients. Overall, I'm very pleased with our start to fiscal 2021. As I look ahead to the balance of the year, I'm encouraged by the gathering evidence of a recovery and our ability to make the most of it. My confidence is reinforced by the power of our model, the clarity of our purpose, and the strength of our people. I'll end by thanking them Our people are our greatest asset. Through a challenging year, they were there for each other and our customers, sustaining and strengthening our winning culture. Together, we've come a long way over the past year. And as 1TD, we are well positioned to meet every challenge and continue to build the better bank. With that, I'll turn things over to Riaz.