The Toronto-Dominion Bank

Good afternoon, everyone. Welcome to the TD Bank Group Q3 2023 earnings conference call. I would now like to turn the meeting over to Ms. Brooke Hales. Please go ahead, Ms. Hales.

Thank you, Operator. Good afternoon and welcome to TD Bank Group's third quarter 2023 investor presentation. Many of us are joining today's meeting from lands across North America. North America is known as Turtle Island by many Indigenous communities. I am currently situated in Toronto. As such, I would like to begin today's meeting by acknowledging that I am on the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee, and the Wendat peoples, and is now home to many diverse nations, Métis, and Inuit peoples. We also acknowledge that Toronto is covered by Treaty 13, signed with the Mississaugas of the Credit, and the Williams Treaty, signed with multiple Mississaugas and Chippewa bands. We will begin today's presentation with remarks from Barrett Mizrani, the bank's CEO, after which Kelvin Tran, the bank's CFO, will present our third quarter operating results. Ajay Bambwali, 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 Michael Rhodes, Group Head, Canadian Personal Banking, Barbara Hooper, Group Head, Canadian Business Banking, Raymond Chun, Group Head, Wealth Management and Insurance, Leo Salam, President and CEO, TD Bank, America's Most Convenient Bank, and Riaz Ahmed, 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, such as 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 use of non-GAAP and other financial measures, the bank's reported results, and factors and assumptions related to forward-looking information are all available in our Q3 2023 report to shareholders. With that, let me turn the presentation over to Barrett.

Thank you, Brooke, and thank you everyone for joining us today. Before I begin, our thoughts are with the communities and colleagues impacted by the devastating wildfires in British Columbia and the Northwest Territories. TD is supporting relief efforts, and we are ready to assist those in need. I would also like to add my thanks to the emergency responders and the many volunteers supporting those who are impacted. Moving to our results, Q3 was a good quarter for TD. Earnings were $3.7 billion, and EPS was $1.99. Revenue grew 12% year-over-year, primarily driven by margin expansion in our retail businesses. PCLs were higher, reflecting credit normalization and expenses increase driven by the inclusion of TD Cowan, investments in colleagues and business growth, and the impact of foreign exchange. PTPP was up 7% year-over-year as TD's diversified business model continues to deliver. The bank's CET1 ratio was 15.2%, reflecting organic capital generation and the impact of over 14 million common shares bought back during the quarter. Subject to market conditions, we expect to complete our previously announced 30 million common share buyback by early September. And today, we announced our intention to repurchase up to an additional 19 million common shares for cancellation subject to regulatory approvals over the next year. The bank continues to invest to build new capabilities for our customers and shape the future of banking. TD was recently named the best consumer digital bank in Canada and recognized for the best transformation and innovation in North America by Global Finances. Let me now turn to each of our businesses and review some highlights from Q3. In our Canadian personal and commercial banking segment, earnings were $1.7 billion, with revenue growth of 7%, PTPP growth of 9%, and significant positive operating leverage. The personal bank had strong everyday banking acquisition, with new accounts up 26% year over year, driven by a record quarter for New to Canada accounts. To continue to support growth in the New to Canada segment, TD offers ATMs in a market-leading seven languages and enables customers to select their preferred language when booking appointments online. In core deposits, the bank maintained industry-leading market share of almost 26%. In credit cards, we saw record spend with an all-time high in active accounts, and we delivered strong growth in new accounts, up 35% year-over-year, driven by our diverse product lineup, key strategic partnerships, and distinct loyalty offerings. This quarter, the Toronto Blue Jays unveiled a new patch on their iconic jersey featuring the TD Shield. This milestone reflects the strong relationship between TD and the Blue Jays and further enhances the TD brand. In the coming months, we will build on this relationship by offering exclusive benefits to TD cardholders to enhance the in-game experience. Moving to real estate secured lending, TD continued to execute against the strategies outlined at our recent Investor Day, taking share in a slower growth market and expanding our portfolio by over 4% year-over-year. And this quarter, TD was recognized by J.D. Power as highest in customer satisfaction for its Canadian mobile banking app, earning top marks for speed and content. We are using data and AI-driven insights to better know our customers and enhance their experience. The business bank grew loans by 9% year-over-year and continues to accelerate growth by expanding specialization in key segments. In particular, we are adding to our team and capabilities in the technology and innovation sector. In the months ahead, we will continue to build out our venture strategy, augmenting the great progress already made by our existing team and enabling us to further meet the unique needs of technology entrepreneurs. Turning to the U.S., a U.S. retail bank delivered PTPP, of $1.2 billion, up 9% year-over-year, and earnings of $890 million, down 3% year-over-year, reflecting higher PCLs driven by credit normalization. Net credit margin was 3% this quarter, while NIM expanded 38 basis points year-over-year. It declined 25 basis points quarter-over-quarter, reflecting... Higher deposit costs and deposit migration to higher yielding and term products is seen across the industry and some timing effects given TD's robust margin expansion earlier in the cycle. With the contribution from our investment in Schwab of $142 million, segment earnings were $1 billion. We saw strong loan growth again this quarter with personal loans and business loans up 11% and 9% respectively year-over-year. STD added customers and took share despite a challenging operating environment. In commercial banking, we added leadership talent and continued to have strong momentum with the middle market and specialty lending sectors up 20% and 19% year-over-year respectively. TD Auto Finance continued to innovate, offering real-time payments and expanded financing programs to dealer clients nationwide. We are proud that, for the fourth year in a row, the business received the highest ranking in the J.D. Power U.S. Dealer Finance Satisfaction Study. We had strong customer acquisition in our U.S. bank card business, with new accounts up 29% year-over-year, as TD leveraged a product suite that is resonating with customers to deepen relationships. Deposits remained resilient in a difficult environment, with spot balances up approximately 1% quarter over quarter. Earlier this month, TD Bank, America's most convenient bank, announced a community reinvestment agreement developed in coordination with New Jersey Citizen Action and the Housing and Community Development Network of New Jersey. TD has committed to invest more than $2 billion over three years in affordable mortgage, community development, small business lending, and affordable consumer products and services across New Jersey, particularly in underserved communities. The U.S. Retail Bank now serves over 10 million customers, including those being served by three new stores in low- and moderate-income areas in Charlotte, North Carolina, and Tampa, Florida, reflective of TD's commitment to reinvesting in communities. Turning to wealth management and insurance, we earned $504 million this quarter, with results impacted by severe weather-related events. Revenue was up 1% year-over-year, as strong insurance premium growth and the benefit of higher interest rates helped offset the impact of trading normalizations. TD Asset Management widened its lead as the number one institutional asset manager in Canada and leveraged its broad product suite to grow ETF market share, gaining momentum in a newer segment for the bank. The bank also gained market share and advice with our TD financial planning business growing fastest among the big five banks over the past six months. Our one TD approach and accelerated distribution expansion enabled this strong growth with wealth planners embedded in the bank's branches across Canada. In TD Direct Investing, the bank maintained its number one position across key performance categories, including total accounts, revenue, trades, and AUA, and saw record growth in share of gross new accounts as we move towards our target of adding over 300,000 new clients in the medium term as described at our recent investor day. Finally, As a result of recent and continuing severe weather-related events, I would like to thank all our insurance colleagues for their tremendous efforts, including advice and support provided through the TD Insurance Mobile Response Unit across affected communities. In wholesale banking, net income was $377 million, driven by record revenue of $1.6 billion, which includes our first full quarter of TD Cowan. We saw strong trading revenues and good underwriting and advisory activity. We are excited about our progress deepening the integration of TD Securities and TD Cowen, enhancing our ability to serve existing clients and win new clients together. Reflecting our leadership in the healthcare sector and strength in equity capital markets execution, this quarter TD Cowen acted as joint book runner on accelerants $621 million initial public offering, the largest biotech IPO in calendar 2023 to date. In this quarter, our U.S. debt capital markets business nearly doubled, both in terms of number of book runner rolls and volume underwritten compared to the same quarter last year. These strong results reflect TD's investment in client relationships as part of our U.S. dollar strategy. As we enter the final quarter of the year, we continue to navigate a complex and dynamic environment and deliver for all of our stakeholders. Last month, TD was proud to be recognized by the Euromoney Awards of Excellence 2023 as North America's best bank for corporate responsibility. The bank received this award based on its demonstrated commitment to an inclusive and sustainable future. As I've shared in the past, Inclusion is embedded in TD's culture. TD Bank, America's most convenient bank, was recently awarded the top score of 100 in the 2023 Disability Equality Index, a national workplace disability inclusion assessment tool for the ninth consecutive year. And the bank was again recognized as a certified great place to work in both Canada and the U.S. As ever, TD remains committed to strengthening the communities in which we operate. Recently, together with FOIA Canada, a not-for-profit led by Indigenous peoples, the bank announced the first cohort of recipients of the TD Scholarship for Indigenous Peoples, which provides financial support to Indigenous students for post-secondary education. Every day, Our TD bankers live our purpose to enrich the lives of our customers, communities, and colleagues. I will close by thanking each of them for their efforts. I'm confident that together we will deliver a strong finish to the year. With that, I'll turn things over to Kelvin.