The Toronto-Dominion Bank

This conference has been recorded. Cette conférence est enregistrée. All participants, please stand by. Your meeting is ready to begin. Good afternoon, ladies and gentlemen. Welcome to the TD Bank Group Q2 2021 Earnings Conference Call. I would now like to turn the meeting over to Ms. Gillian Manning. Please go ahead, Ms. Manning.

Thank you, Operator. Good afternoon and welcome to TD Bank Group's second 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 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 to answer your questions today 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 are implied 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 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. Q2 was a strong quarter for TD as we continued to benefit from a recovering economy and rising consumer and business confidence. Earnings rose to $3.8 billion, and EPS to $2.04, more than twice last year's levels, as an improving outlook led us to release a portion of the performing allowances we built last year. Our wealth, insurance, and wholesale businesses hit another strong quarter as clients continue to bring us more of their business. And our personal and commercial banking businesses gained momentum as increased customer activity helped offset continued margin pressure from the low rate environment. Our CET1 ratio ended the quarter at 14.2%, reflecting these favorable trends. A year after the COVID-19 pandemic took hold in North America, it continues to have a significant impact on the economy and our financial results. Unprecedented fiscal and monetary support for households and businesses has led to a significant increase in cash balances, limiting borrowing needs, driving delinquency rates to historic lows, and keeping RWA growth muted. We have navigated this complex environment well, thanks to our diversified business model and the adaptability and resilience of our people. As I reflect on our performance over the last year, I'm most proud of them. Through this long period of upheaval, they have continued to deliver for our customers, communities, and each other and live our shared commitments. As we look around today, we know the battle against COVID is not over. The devastation we are witnessing in India and Brazil is heart-wrenching and will have far-reaching consequences on those regions. But in North America, we see encouraging signs that the recovery is on solid ground and gathering momentum. A rapid start to vaccinations in the U.S. has permitted an easing of restrictions across much of our footprint, and broadening vaccine availability in Canada should support similar trends here. TD will continue to play a key role in driving forward that recovery. As a purpose-driven organization, we know the bank thrives when our customers, colleagues, and communities thrive. Our recoveries must go hand in hand. That was a core message of our 2020 ESG and TCFD reports, which we released this quarter. I invite you to read them and learn more about what we are doing to build a more inclusive and sustainable future. That includes our approach to achieving the goals of our climate action plan as the first Canadian bank to set a net zero target by 2050. We are accelerating our efforts, have mobilized leaders and experts across the bank, and are working closely with clients in multiple sectors to support their transition plans and create positive change. We also discussed our progress on inclusion and diversity. Over the past year, we have seen what inequality looks like across our communities in stark terms, in the black, Asian, indigenous, and other communities. TD will never rest on our past success. We will work to increase our own representation and contribute to the fight against bias, discrimination, and racism. And because we know what gets measured gets done, our ESG report provides expanded and detailed reporting so all stakeholders can track our progress. As I wrote in my CEO message, TD will meet the biggest challenges of our generation with determination and purpose. We will continue to invest in what matters and leverage our resources and the talent of our 90,000 colleagues around the world to help build the better bank. That better bank is powered by our proven business model and sustained and strengthened by the investments we continue to make in our businesses and operations. In this year of accelerated digital take-up and changing customer needs, the capabilities and infrastructure we've put in place have enabled us to support a dramatic increase in adoption and engagement. We are winning with customers by delivering innovative solutions customized to their needs, this quarter crossing the 10 million mark for mobile users across our North American footprint. Our Canadian banking app, was honored by the Business Intelligence Group for AI-powered insights developed by Layer 6, our in-house AI team. In the U.S., we were recognized by Celent for our partnership on a virtual assistant that provided advice and support to customers digitally at the height of the lockdown. And we continue to maintain a strong base of innovation as the number one financial institution patent filer in Canada. These accomplishments have been matched by continued growth and strong customer acquisition in each of our businesses. Our Canadian retail segment earned $2.2 billion this quarter, reflecting lower PCL, lower insurance claims, and higher volumes and fee income. Activity accelerated in our banking businesses, with continued strength in mortgage volumes and a pickup in credit card spend. We also extended our lead in personal deposits and continued to lead in payments, ranking number one in Interact Flash and eTransfer. We delivered record wealth earnings on a strong trading volumes and net asset growth, and impressive insurance earnings, including substantial customer premium relief. We also achieved several milestones this quarter. In the business bank, TD Auto Finance ranked highest in dealer satisfaction among non-captive retail lenders by J.D. Power for the fourth year in a row, following TD Auto Finance U.S.' 's J.D. Power win last quarter. And just after quarter end, we closed the acquisition of Wells Fargo's Canadian direct equipment finance business. In our wealth business, we launched the TD Wealth Family Office, a multidisciplinary group that will leverage our one TD model to deliver bespoke advice and solutions for ultra-high net worth families and entrepreneurs. NTD Insurance continued to take market share, rising to the number three position for home and auto general insurance. A U.S. retail bank delivered $853 million U.S. in net income this quarter, with another strong sequential recovery in earnings, mainly on lower PCL. We recorded peer-leading consumer deposit volume growth as customers entrusted us with more of their savings. We saw a further increase in customer transaction activity with a return to near record levels of debit card spend and rising credit card transactions. We're also seeing good early take up of our new double up credit card, one of the best cash back offerings on the market. We continue to support small business customers with PPP financing, ranking in the top 10 nationally as we originated some 45,000 PPP loans in the second round of the program. and helped customers access over $1 billion in forgiveness under the program. Together with a $194 million contribution from our ownership stake in Schwab, U.S. retail segment earnings exceeded $1 billion. Our wholesale bank earned $383 million, a good result, with lower PCL helping offset a normalization in trading activity from last year's elevated levels. This quarter, we continue to build our U.S. franchise with the announcement of our agreement to acquire Headlands Tech Global Markets, expected to close in the second half of calendar 2021. The transaction will expand our capabilities in fixed income, electronic trading, and accelerate TD Security's innovation and technology strategy. We were also proud to act as joint lead for the International Finance Facility for Immunization Companies, 750 million US dollar five-year vaccine bonds, which will provide Gavi, the vaccine alliance, with immediately available funding to support routine immunization in lower-income countries, reaching nearly half the world's children. At the midpoint of fiscal 2021, TD Bank remains strong, and our business is well-positioned for the future. While the COVID-related impacts we saw last year, including margin pressure from low rates, high savings rates, delaying loan growth, and PCL, will continue to affect year-over-year comparisons, we will maintain our disciplined approach to investing for the long term. It served us well through the pandemic, and as the recovery progresses, it will support our continued readiness to meet changing needs, adapt to shifting dynamics, and build for growth. We are also supported by a very robust CET1 ratio, which affords us strategic flexibility to invest in our competitive position, to grow organically, to pursue acquisitions that add capabilities, and to build our franchise, to return capital to our shareholders when that becomes possible, or a combination of those things. As always, we will use our capital responsibly and be thoughtful about making the right investments for the long term. Our investments also support how we operate the bank. As we plan for a future when more of us can return to TD premises, we know that flexibility will remain critical and that our people need the capabilities and infrastructure to continue to serve customers. Backed by a clear strategy and strong balance sheet, we look ahead with confidence. Our bank has proven resilient. Our brand is among the strongest in the industry. and our unique and inclusive culture remains a distinct competitive advantage. Our people bring that culture to life, and I'll finish by thanking them for their continued hard work and dedication. With that, I'll turn it over to Riaz.