Toronto-Dominion Bank T.TD

Alternate Symbol(s): TD | TDBCP | T.TD.PF.A | TDOPF | T.TD.PF.C | T.TD.PF.D | TDBKF | TDOMF | T.TD.PF.E | T.TD.PF.I | T.TD.PF.J

Financial Services

The Toronto-Dominion Bank (the Bank) operates as a bank in North America. The Bank's segments include Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking. Its Canadian Personal and Commercial Banking segment offers a full range of financial products and services to approximately 15 million customers in the Bank’s personal and commercial banking businesses in Canada. Its U.S. Retail segment offers a range of financial products and services under the brand TD Bank, America’s Most Convenient Bank. U.S. Retail Segment also TD Auto Finance U.S., TD Wealth (U.S.) business. Wholesale Banking segment operates under the brand name TD Securities, which offers a range of capital markets and corporate and investment banking services to corporate, government, and institutional clients. Its Wealth Management and Insurance segment provides wealth solutions and insurance protection to approximately six million customers in Canada.

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Toronto-Dominion Bank

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Post by retiredcfon Jun 09, 2023 8:33am

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Post# 35488125

TD on TD

Toronto Dominion Bank (The)

(TD-T, TD-N) C$78.97 | US$59.17

2023 Investor Day Event

TD held an investor day on Thursday covering Canadian Retail Banking. The backdrop for the investor day is a period of weak relative stock performance unrelated, we believe, to the bank's fundamental performance (leading PTPP growth), but rather related to uncertainty associated with TD's U.S. growth strategy. Regarding the U.S. business and discussions with regulators, management stated that they cannot share discussions with regulators. The bank stated that the issues do not relate to good-faith dealings with customers and that the bank continues to work with regulators to rectify the issues.

Impact: NEUTRAL

Our key takeaways from the day include:

TD added a medium-term ROE target (16%-plus); the first time TD has provided an ROE target. The CET1 target of 12% implies TD has $16bln in excess capital. The bank will reassess the opportunity to repurchase more stock once the 30mm share NCIB is completed later this summer. The bank did not rule out using the capital for acquisitions. We forecast a 2023 ROE of 14.6%, down from 15.9% in 2022. The decline reflects a higher tax rate, much higher preferred share dividends, and weaker CMRR and fee income, partially offset by higher NIM.
The bank remains very committed to branch distribution and shifting the focus of branches to sales from transactions. This involves adding materially to sales- oriented staff. TD continues to lead in both branch and digital customer traffic in Canada.
Core deposits provide lower-cost reliable funding. The shift from core to term is less significant for TD than its peers. Discussions with other banks point to a recent moderation of this shift. TD has increased its share of deposits in six of the last eight quarters. We look at deposit trends on an industry level in this report.
TD's RESL goal is to reach $500bln in volumes, up from $357bln currently, with growth, in part, coming from taking share from peers and focusing on higher- growth customer segments (e.g. new to Canada). We believe growth of this nature will require significant investments in distribution.