This quarterly earnings
news release should be read in conjunction with the Bank's
unaudited fourth quarter 2022 consolidated financial results for
the year ended October 31, 2022, included in this Earnings News
Release and the audited 2022 Consolidated Financial Statements,
prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB), which is available on TD's website
at http://www.td.com/investor/. This analysis is dated November 30, 2022. Unless
otherwise indicated, all amounts are expressed in Canadian dollars,
and have been primarily derived from the Bank's Annual or Interim
Consolidated Financial Statements prepared in accordance with IFRS.
Certain comparative amounts have been revised to conform to the
presentation adopted in the current period. Additional information
including the 2022 MD&A relating to the Bank is available on
the Bank's website at
http://www.td.com, as well
as on SEDAR at http://www.sedar.com
and on the U.S. Securities and Exchange
Commission's (SEC) website at
http://www.sec.gov (EDGAR
filers section).
Reported results conform to generally accepted accounting
principles (GAAP), in accordance with IFRS. Adjusted results are
non-GAAP financial measures. For additional information about the
Bank's use of non-GAAP financial measures, refer to "Non-GAAP and
Other Financial Measures" in the "How We Performed" section of this
document.
|
|
FOURTH QUARTER FINANCIAL HIGHLIGHTS, compared with the fourth
quarter last year:
- Reported diluted earnings per share were $3.62 compared with $2.04.
- Adjusted diluted earnings per share were $2.18, compared with $2.09.
- Reported net income was $6,671
million, compared with $3,781
million.
- Adjusted net income was $4,065
million, compared with $3,866
million.
FULL YEAR FINANCIAL HIGHLIGHTS, compared with last
year:
- Reported diluted earnings per share were $9.47, compared with $7.72.
- Adjusted diluted earnings per share were $8.36, compared with $7.91.
- Reported net income was $17,429
million, compared with $14,298
million.
- Adjusted net income was $15,425
million, compared with $14,649
million.
FOURTH QUARTER ADJUSTMENTS (ITEMS OF NOTE)
The fourth quarter reported earnings figures included the
following items of note:
- Amortization of intangibles of $57
million ($51 million after-tax
or 3 cents per share), compared with
$74 million ($65 million after-tax or 4
cents per share) in the fourth quarter last year.
- Acquisition and integration charges related to the Schwab
transaction of $18 million
($16 million after-tax or
1 cent per share), compared
with $22 million ($20 million after-tax or 1
cent per share) in the fourth quarter last year.
- Acquisition and integration-related charges for pending
acquisitions of $85 million
($65 million after-tax or
3 cents per share).
- Mitigation of interest rate volatility to closing capital on
First Horizon acquisition, net gain of $2,319 million ($1,741
million after-tax or 96 cents
per share).
- Gain on sale of Schwab shares of $997
million ($997 million
after-tax or 55 cents per
share).
TORONTO, Dec. 1, 2022
/CNW/ - TD Bank Group ("TD" or the "Bank") today announced its
financial results for the fourth quarter ended October 31, 2022. Reported earnings were
$6.7 billion, up 76% compared with
the fourth quarter last year, and adjusted earnings were
$4.1 billion, up 5%.
"I'm extremely pleased with our earnings performance this
quarter, which capped off a strong year demonstrating the benefit
of our diversified business model and prudent risk and financial
management," said Bharat Masrani, President and CEO, TD Bank Group.
"The strength and resilience of our franchise enabled the Bank to
invest in our business and deliver for our shareholders."
Canadian Personal and Commercial Banking delivered a strong
quarter with record earnings from continued growth momentum
Canadian Personal and Commercial Banking finished the year in a
position of strength with net income of $1,694 million, an increase of 11% compared with
the fourth quarter last year reflecting higher margins and strong
volume growth. Revenue growth of 16% resulted in a fourth
consecutive quarter of record revenue.
The strong momentum in Canadian Personal and Commercial Banking
was supported by continued strength in customer acquisition and
higher customer activity. The Personal Bank launched a banking
package specifically created for International Students – a first
among Canadian peers – contributing to record New to Canada growth. TD Canada Trust was ranked
"Highest in Customer Satisfaction in Small Business
Banking1" by J.D. Power, reflecting the
trusted relationships built with our customers.
______________________________
|
1 TD Canada
Trust received the highest score in the J.D. Power 2022 Canada
Small Business Banking Satisfaction Study of customers'
satisfaction with their primary business bank. Visit
jdpower.com/awards for more details.
|
The U.S. Retail Bank delivered strong results supported by
broad-based growth in its businesses
U.S. Retail reported net income for the quarter was $1,539 million (US$1,163
million), an increase of 12% (7% in U.S. dollars) compared
with the fourth quarter last year. On an adjusted basis, net income
for the quarter was $1,590 million
(US$1,200 million), an increase of
16% (10% in U.S. dollars). Reported net income included acquisition
and integration-related charges for the First Horizon acquisition
of $67 million (US$50 million) or $51
million (US$37 million)
after-tax. The Bank's investment in The Charles Schwab Corporation
(Schwab) contributed $310 million
(US$237 million) in earnings, an
increase of 26% (22% in U.S. dollars) compared with the fourth
quarter last year.
The U.S. Retail Bank, which excludes the Bank's investment in
Schwab, reported net income of $1,229
million (US$926 million), an
increase of 9% (3% in U.S. dollars) from the fourth quarter
last year. On an adjusted basis, net income was a record
$1,280 million (US$963 million).
The U.S. Retail Bank was pleased to announce extended
partnership agreements with Nordstrom through 2026 and Target
Corporation through 2030. In addition, the Bank continued to
modernize its distribution network with enhanced capabilities in
sales and advice, including converting select retail stores to
wealth advice centres, while expanding its presence in North Carolina and South Florida, including plans to open 15 new
stores in Charlotte by 2025.
TD Bank, America's Most Convenient Bank® (TD AMCB),
ranked No. 1 in its footprint by total number of approved U.S.
Small Business Administration (SBA) loan units for the sixth
consecutive year and ranked #2 National SBA Lender in 2022.
Wealth Management and Insurance delivered solid performance
in the fourth quarter amid challenging market conditions
Wealth Management and Insurance net income was $516 million, a decrease of 15% compared with the
fourth quarter last year. Insurance claims and related expenses
rose 11%, reflecting increased driving activity and more severe
weather-related events. This quarter's results highlighted the
benefits of the segment's diversified business model as higher net
interest income and insurance revenue largely offset the impact of
market volatility and trading normalization.
Wealth Management and Insurance continued to deliver high
quality advice and innovative financial products to help customers
navigate the challenging economic environment. Wealth Management
expanded its advisor base to better service mass affluent and high
net worth client segments. TD Asset Management launched new
investment solutions, including a carbon credit ETF and a
multi-asset solution with exposure to alternative investments to
enhance diversification for retail and institutional clients. TD
Insurance continued its digital transformation, with over 20% of
new sales this quarter completed digitally.
Solid Wholesale Banking performance reflects strength of
diversified business model
Wholesale Banking reported net income for the quarter was
$261 million, a decrease of 38%,
compared with the fourth quarter last year. On an adjusted basis,
net income was $275 million, a
decrease of 35%. Revenue was up 1%, as a challenging underwriting
environment was offset by higher deposit, lending, and
trading-related revenues, reflecting the strength of Wholesale
Banking's diversified business model.
This quarter, TD Securities launched a Carbon Advisory business
within the ESG Solutions group, bolstering the team's capabilities
to support clients' transitions to a low-carbon economy. As part of
this effort, TD Securities announced a $10
million investment into the Boreal Wildlands Carbon Project
– the largest single private conservation project ever undertaken
in Canada – further demonstrating
the Bank's commitment to supporting the growth and development of
the voluntary carbon markets.
Capital
TD's Common Equity Tier 1 Capital ratio was 16.2%.
Conclusion
For the year ahead, there are both tailwinds (including the
interest rate environment and the anticipated closing of the
announced acquisitions) and headwinds (including geopolitical
tensions, the complex operating environment, and the potential for
an economic slowdown). On balance, unless macroeconomic conditions
were to shift dramatically, TD expects to meet or exceed its
medium-term adjusted EPS growth target range of 7-10% in fiscal
2023.
"We enter 2023 from a position of strength, with growing
businesses and a powerful purpose-driven brand. While there will be
macroeconomic and geopolitical challenges in the year ahead, the
progress we made in 2022 gives me great confidence in our future
success," added Masrani.
"I would like to thank our colleagues around the world for
living the TD brand and for their unwavering commitment to
enriching the lives of our customers and our communities,"
concluded Masrani.
The foregoing contains forward-looking statements. Please
refer to the "Caution Regarding Forward-Looking
Statements".
Caution Regarding
Forward-Looking Statements
From time to time, the Bank (as defined in this
document) makes written and/or oral forward-looking statements,
including in this document, in other filings with Canadian
regulators or the United States (U.S.) Securities and Exchange
Commission (SEC), and in other communications. In addition,
representatives of the Bank may make forward-looking statements
orally to analysts, investors, the media and others. All such
statements are made pursuant to the "safe harbour" provisions of,
and are intended to be forward-looking statements under, applicable
Canadian and U.S. securities legislation, including the U.S.
Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to,
statements made in this document, the Management's Discussion and
Analysis ("2022 MD&A") in the Bank's 2022 Annual Report under
the heading "Economic Summary and Outlook", under the headings "Key
Priorities for 2023" and "Operating Environment and Outlook" for
the Canadian Personal and Commercial Banking, U.S. Retail, Wealth
Management and Insurance, and Wholesale Banking segments, and under
the heading "2022 Accomplishments and Focus for 2023" for the
Corporate segment, and in other statements regarding the Bank's
objectives and priorities for 2023 and beyond and strategies to
achieve them, the regulatory environment in which the Bank
operates, and the Bank's anticipated financial performance.
Forward-looking statements are typically identified by words such
as "will", "would", "should", "believe", "expect", "anticipate",
"intend", "estimate", "plan", "goal", "target", "may", and
"could".
By their very nature, these forward-looking statements require the
Bank to make assumptions and are subject to inherent risks and
uncertainties, general and specific. Especially in light of the
uncertainty related to the physical, financial, economic,
political, and regulatory environments, such risks and
uncertainties – many of which are beyond the Bank's control and the
effects of which can be difficult to predict – may cause actual
results to differ materially from the expectations expressed in the
forward-looking statements. Risk factors that could cause,
individually or in the aggregate, such differences include:
strategic, credit, market (including equity, commodity, foreign
exchange, interest rate, and credit spreads), operational
(including technology, cyber security, and infrastructure), model,
insurance, liquidity, capital adequacy, legal, regulatory
compliance and conduct, reputational, environmental and social, and
other risks. Examples of such risk factors include general business
and economic conditions in the regions in which the Bank operates;
geopolitical risk; inflation, rising rates and recession; the
economic, financial, and other impacts of pandemics, including the
COVID-19 pandemic; the ability of the Bank to execute on long-term
strategies and shorter-term key strategic priorities, including the
successful completion of acquisitions and dispositions, business
retention plans, and strategic plans; technology and cyber security
risk (including cyber-attacks, data security breaches or technology
failures) on the Bank's information technology, internet, network
access or other voice or data communications systems or services;
model risk; fraud activity; the failure of third parties to comply
with their obligations to the Bank or its affiliates, including
relating to the care and control of information, and other risks
arising from the Bank's use of third-party service providers; the
impact of new and changes to, or application of, current laws and
regulations, including without limitation tax laws, capital
guidelines and liquidity regulatory guidance; regulatory oversight
and compliance risk; increased competition from incumbents and new
entrants (including Fintechs and big technology competitors);
shifts in consumer attitudes and disruptive technology; exposure
related to significant litigation and regulatory matters; ability
of the Bank to attract, develop, and retain key talent; changes to
the Bank's credit ratings; changes in foreign exchange rates,
interest rates, credit spreads and equity prices; increased funding
costs and market volatility due to market illiquidity and
competition for funding; Interbank Offered Rate (IBOR) transition
risk; critical accounting estimates and changes to accounting
standards, policies, and methods used by the Bank; existing and
potential international debt crises; environmental and social risk
(including climate change); and the occurrence of natural and
unnatural catastrophic events and claims resulting from such
events. The Bank cautions that the preceding list is not exhaustive
of all possible risk factors and other factors could also adversely
affect the Bank's results. For more detailed information, please
refer to the "Risk Factors and Management" section of the 2022
MD&A, as may be updated in subsequently filed quarterly reports
to shareholders and news releases (as applicable) related to any
events or transactions discussed under the heading "Significant
Acquisitions" or "Significant Events and Pending Acquisitions" in
the relevant MD&A, which applicable releases may be found on
www.td.com. All such factors, as well as other uncertainties and
potential events, and the inherent uncertainty of forward-looking
statements, should be considered carefully when making decisions
with respect to the Bank. The Bank cautions readers not to place
undue reliance on the Bank's forward-looking statements.
Material economic assumptions underlying the forward-looking
statements contained in this document are set out in the 2022
MD&A under the heading "Economic Summary and Outlook", under
the headings "Key Priorities for 2023" and "Operating Environment
and Outlook" for the Canadian Personal and Commercial Banking, U.S.
Retail, Wealth Management and Insurance, and Wholesale Banking
segments, and under the heading "2022 Accomplishments and Focus for
2023" for the Corporate segment, each as may be updated in
subsequently filed quarterly reports to shareholders.
Any forward-looking statements contained in this document represent
the views of management only as of the date hereof 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 as at and for
the periods ended on the dates presented, and may not be
appropriate for other purposes. The Bank does not undertake to
update any forward-looking statements, whether written or oral,
that may be made from time to time by or on its behalf, except as
required under applicable securities legislation.
|
This document was reviewed by the Bank's Audit Committee and
was approved by the Bank's Board of Directors, on the Audit
Committee's recommendation, prior to its release.
TABLE 1: FINANCIAL
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
As at or for the
three months ended
|
|
As at or for the
twelve months ended
|
|
|
|
|
31-Oct
|
|
|
31-Jul
|
|
|
31-Oct
|
|
|
31-Oct
|
|
|
31-Oct
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Results of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue –
reported
|
$
|
15,563
|
|
$
|
10,925
|
|
$
|
10,941
|
|
$
|
49,032
|
|
$
|
42,693
|
|
Total revenue –
adjusted1
|
|
12,247
|
|
|
11,603
|
|
|
10,941
|
|
|
46,170
|
|
|
42,693
|
|
Provision for (recovery
of) credit losses
|
|
617
|
|
|
351
|
|
|
-123
|
|
|
1,067
|
|
|
-224
|
|
Insurance claims and
related expenses
|
|
723
|
|
|
829
|
|
|
650
|
|
|
2,900
|
|
|
2,707
|
|
Non-interest expenses –
reported
|
|
6,545
|
|
|
6,096
|
|
|
5,947
|
|
|
24,641
|
|
|
23,076
|
|
Non-interest expenses –
adjusted1
|
|
6,430
|
|
|
6,033
|
|
|
5,898
|
|
|
24,359
|
|
|
22,909
|
|
Net income –
reported
|
|
6,671
|
|
|
3,214
|
|
|
3,781
|
|
|
17,429
|
|
|
14,298
|
|
Net income –
adjusted1
|
|
4,065
|
|
|
3,813
|
|
|
3,866
|
|
|
15,425
|
|
|
14,649
|
|
Financial positions
(billions of Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans net of
allowance for loan losses
|
$
|
831
|
|
$
|
790.8
|
|
$
|
722.6
|
|
$
|
831
|
|
$
|
722.6
|
|
Total assets
|
|
1,917.50
|
|
|
1,840.80
|
|
|
1,728.70
|
|
|
1,917.50
|
|
|
1,728.70
|
|
Total
deposits
|
|
1,230.00
|
|
|
1,201.70
|
|
|
1,125.10
|
|
|
1,230.00
|
|
|
1,125.10
|
|
Total equity
|
|
111.4
|
|
|
102.6
|
|
|
99.8
|
|
|
111.4
|
|
|
99.8
|
|
Total risk-weighted
assets2
|
|
517
|
|
|
495.7
|
|
|
460.3
|
|
|
517
|
|
|
460.3
|
|
Financial
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common equity
(ROE) – reported3
|
26.5
|
%
|
|
13.5
|
%
|
|
15.7
|
%
|
|
18
|
%
|
|
15.5
|
%
|
Return on common equity
– adjusted1
|
16
|
|
|
16.1
|
|
|
16.1
|
|
|
15.9
|
|
|
15.9
|
|
Return on tangible
common equity (ROTCE)1
|
35.4
|
|
|
18.4
|
|
|
21.3
|
|
|
24.3
|
|
|
21.2
|
|
Return on tangible
common equity – adjusted1
|
21.2
|
|
|
21.6
|
|
|
21.4
|
|
|
21.2
|
|
|
21.4
|
|
Efficiency ratio –
reported3
|
|
42.1
|
|
|
55.8
|
|
|
54.4
|
|
|
50.3
|
|
|
54.1
|
|
Efficiency ratio –
adjusted1,3
|
|
52.5
|
|
|
52
|
|
|
53.9
|
|
|
52.8
|
|
|
53.7
|
|
Provision for (recovery
of) credit losses as a % of net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average loans and
acceptances
|
0.29
|
|
|
0.17
|
|
|
-0.07
|
|
|
0.14
|
|
|
-0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share
information – reported (Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
3.62
|
|
$
|
1.76
|
|
$
|
2.04
|
|
$
|
9.48
|
|
$
|
7.73
|
|
|
Diluted
|
|
3.62
|
|
|
1.75
|
|
|
2.04
|
|
|
9.47
|
|
|
7.72
|
|
Dividends per
share
|
|
0.89
|
|
|
0.89
|
|
|
0.79
|
|
|
3.56
|
|
|
3.16
|
|
Book value per
share3
|
|
55
|
|
|
52.54
|
|
|
51.66
|
|
|
55
|
|
|
51.66
|
|
Closing share
price4
|
|
87.19
|
|
|
83.18
|
|
|
89.84
|
|
|
87.19
|
|
|
89.84
|
|
Shares outstanding
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
basic
|
1,812.10
|
|
|
1,804.50
|
|
|
1,820.50
|
|
|
1,810.50
|
|
|
1,817.70
|
|
|
Average
diluted
|
1,814.40
|
|
|
1,807.10
|
|
|
1,823.20
|
|
|
1,813.60
|
|
|
1,820.20
|
|
|
End of
period
|
|
1,820.70
|
|
|
1,813.10
|
|
|
1,822.00
|
|
|
1,820.70
|
|
|
1,822.00
|
|
Market capitalization
(billions of Canadian dollars)
|
$
|
158.7
|
|
$
|
150.8
|
|
$
|
163.7
|
|
$
|
158.7
|
|
$
|
163.7
|
|
Dividend
yield3
|
|
4.2
|
%
|
|
4
|
%
|
|
3.7
|
%
|
|
3.8
|
%
|
|
3.9
|
%
|
Dividend payout
ratio3
|
|
24.6
|
|
|
50.6
|
|
|
38.7
|
|
|
37.5
|
|
|
40.9
|
|
Price-earnings
ratio3
|
|
9.2
|
|
|
10.6
|
|
|
11.6
|
|
|
9.2
|
|
|
11.6
|
|
Total shareholder
return (1 year)3
|
|
0.9
|
|
|
4.2
|
|
|
58.9
|
|
|
0.9
|
|
|
58.9
|
|
Common share
information – adjusted (Canadian
dollars)1,3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share
earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.18
|
|
$
|
2.09
|
|
$
|
2.09
|
|
$
|
8.38
|
|
$
|
7.92
|
|
|
Diluted
|
|
2.18
|
|
|
2.09
|
|
|
2.09
|
|
|
8.36
|
|
|
7.91
|
|
Dividend payout
ratio
|
|
40.8
|
%
|
|
42.5
|
%
|
|
37.8
|
%
|
|
42.5
|
%
|
|
39.9
|
%
|
Price-earnings
ratio
|
|
10.4
|
|
|
10
|
|
|
11.3
|
|
|
10.4
|
|
|
11.3
|
|
Capital
Ratios2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1
Capital ratio
|
16.2
|
%
|
|
14.9
|
%
|
|
15.2
|
%
|
|
16.2
|
%
|
|
15.2
|
%
|
Tier 1 Capital
ratio
|
|
18.3
|
|
|
16.3
|
|
|
16.5
|
|
|
18.3
|
|
|
16.5
|
|
Total Capital
ratio
|
|
20.7
|
|
|
18.8
|
|
|
19.1
|
|
|
20.7
|
|
|
19.1
|
|
Leverage
ratio
|
|
4.9
|
|
|
4.3
|
|
|
4.8
|
|
|
4.9
|
|
|
4.8
|
|
Total Loss Absorbing
Capacity (TLAC) ratio
|
35.2
|
|
|
32
|
|
|
28.3
|
|
|
35.2
|
|
|
28.3
|
|
TLAC Leverage
ratio
|
|
9.4
|
|
|
8.5
|
|
|
8.2
|
|
|
9.4
|
|
|
8.2
|
|
1
|
The Toronto-Dominion
Bank ("TD" or the "Bank") prepares its Consolidated Financial
Statements in accordance with IFRS, the current Generally Accepted
Accounting Principles (GAAP),
and refers to results prepared in accordance with IFRS as the
"reported" results. The Bank also utilizes non-GAAP financial
measures such as "adjusted" results and non-GAAP ratios to
assess each of its businesses and to measure overall Bank
performance. To arrive at adjusted results, the Bank adjusts
reported results for "items of note". Refer to the "How We
Performed" section of this document for further explanation, a list
of the items of note, and a reconciliation of adjusted to reported
results. Non-GAAP financial measures and ratios used
in this document are not defined terms under IFRS and, therefore,
may not be comparable to similar terms used by other
issuers.
|
2
|
These measures have
been included in this document in accordance with the Office of the
Superintendent of Financial Institutions Canada's Capital Adequacy
Requirements, Leverage
Requirements, and TLAC guidelines. Refer to the "Capital Position"
section in the 2022 MD&A for further details.
|
3
|
For additional
information about this metric, refer to the Glossary in the 2022
MD&A, which is incorporated by reference.
|
4
|
Toronto Stock Exchange
(TSX) closing market price.
|
SIGNIFICANT EVENTS AND PENDING ACQUISITIONS
Acquisition of Cowen Inc.
On August 2, 2022, the Bank and
Cowen Inc. ("Cowen") announced a definitive agreement for TD to
acquire Cowen in an all-cash transaction valued at US$1.3 billion, or US$39.00 for each share of Cowen common stock.
The Bank is currently planning to close the transaction in the
first calendar quarter of 2023, subject to customary closing
conditions, including approvals from certain U.S., Canadian, and
foreign regulatory authorities. Regulatory approvals are not within
the Bank's control. The results of the acquired business will be
consolidated by the Bank from the closing date and reported in the
Wholesale Banking segment. Based on the estimated financial
performance and balance sheets of the Bank and Cowen, including
transaction-related impacts, the Bank expects that its Common
Equity Tier 1 (CET1) Capital ratio will be comfortably above 11%
upon the closing of the Cowen acquisition, pro forma for the
closing of the Bank's acquisition of First Horizon Corporation
("First Horizon").
Sale of Schwab Common Shares
On August 1, 2022, in order to
provide the capital required for the acquisition of Cowen, the Bank
sold 28.4 million non-voting common shares of The Charles Schwab
Corporation ("Schwab") at a price of US$66.53 per share for proceeds of $2.5 billion (US$1.9
billion). Approximately 15 million shares were sold to
Schwab pursuant to a repurchase agreement at a price equal to the
price obtained in the sale of 13.4 million shares sold to a broker
dealer pursuant to Rule 144 of the Securities Act of 1933.
All shares sold automatically converted into shares of Schwab
voting common stock and the shares acquired by Schwab are no longer
outstanding. The sales reduced the Bank's ownership interest in
Schwab from approximately 13.4% to 12.0%. The Bank recognized
$997 million as other income (net of
$368 million loss from accumulated
other comprehensive income (AOCI) reclassified to earnings), in the
fourth quarter of fiscal 2022.
Acquisition of First Horizon Corporation
On February 28, 2022, the Bank and
First Horizon announced a definitive agreement for the Bank to
acquire First Horizon in an all-cash transaction valued at
US$13.4 billion, or US$25.00 for each common share of First Horizon.
In connection with this transaction, the Bank has invested
US$494 million in non-voting First
Horizon preferred stock (convertible in certain circumstances into
up to 4.9% of First Horizon's common stock). The Bank is currently
planning to close the transaction in the first half of fiscal 2023,
subject to customary closing conditions, including approvals from
U.S. and Canadian regulatory authorities. Regulatory approvals are
not within the Bank's control. The results of the acquired business
will be consolidated by the Bank from the closing date and reported
in the U.S. Retail segment.
First Horizon shareholders will receive, at closing, an
additional US$0.65 per share on an
annualized basis for the period from November 27, 2022 through the day immediately
prior to the closing. Either party will have the right to terminate
the agreement if the transaction has not closed by February 27, 2023 (the "outside date"), subject
to the right of either party (under certain conditions) to extend
the outside date to May 27, 2023.
During the year, the Bank implemented a strategy to mitigate
interest rate volatility to capital on closing of the
acquisition.
The fair value of First Horizon's fixed rate financial assets
and liabilities and certain intangible assets are sensitive to
interest rate changes. The fair value of net assets will determine
the amount of goodwill to be recognized on closing of the
acquisition. Increases in goodwill and intangibles will negatively
impact capital ratios because they are deducted from capital under
OSFI Basel III rules. In order to mitigate this volatility to
closing capital, the Bank de-designated certain interest rate swaps
hedging fixed income investments in fair value hedge accounting
relationships.
After the de-designation, mark-to-market gains (losses) on these
swaps are recognized in earnings, without any corresponding offset
from the previously hedged investments. Such gains (losses) will
mitigate the capital impact from changes in the amount of goodwill
recognized on closing of the acquisition. The de-designation also
triggered the amortization of the investments' basis adjustment to
net interest income over the remaining expected life of the
investments.
For the year ended October 31,
2022, the Bank reported $1,487
million in non-interest income related to the mark-to-market
on the swaps, and $154 million in net
interest income related to the basis adjustment amortization. In
addition, for the year ended October 31,
2022, the Bank reported $121
million in non-interest income related to the net interest
earned on the swaps since the de-designation of the hedge
accounting relationships.
HOW WE PERFORMED
Economic Summary and Outlook
The outlook for the global economy for the next two years was
downgraded relative to the prior quarter. In Europe, an energy crisis continues to impact
household finances and weigh on industrial output. China is reckoning with the fallout of its
real estate slowdown and strict COVID-19 controls. In North America, COVID-19 is causing fewer
supply chain disruptions, but the legacy of high domestic inflation
and tight labour markets has led to central banks raising policy
rates at the fastest pace in roughly four decades. This has
significantly weakened the economic growth prospects over the next
twelve to twenty-four months.
The U.S. economy expanded by 2.6% annualized in the third
calendar quarter of 2022, after having contracted in the first half
of the year. However, this was largely due to a surge in exports
relative to imports. In contrast, domestic demand grew by a soft
0.5%. Consumer spending growth decelerated to 1.4% relative to the
prior calendar quarter of 2.0%, as inflation continued to weigh on
the purchasing power of households, which are also normalizing
spending away from goods after a surge during the pandemic. The
ongoing downturn in housing also weighed on the economy in the
third calendar quarter, subtracting 1.4 percentage points from
growth.
As the lagged effect of interest rate increases is expected to
continue to feed through the economy in 2023, it should lead to
some cooling in the job market, where the unemployment rate was
3.7% in October, near a cyclical low. Consumer Price Index (CPI)
inflation has shown modest signs of cooling, but at 7.7%
year-over-year in October, it is still close to 40-year highs.
Slower global growth and a high U.S. dollar are expected to help
goods inflation ease, while services inflation is likely to prove
more persistent.
The Federal Reserve continued its aggressive pace of rate
increases, with a fourth 75 basis points (bps) hike in early
November. TD Economics expects further interest rate hikes will
take the Federal Funds rate to a range of 4.50-5.00% in calendar
2023. This historically large increase in interest rates raises the
risk that the economy will slow more quickly and trigger an
outright recession. Financial markets have reflected this risk with
the yield curve inverting.
The Canadian economy has begun to slow after growing at a
very healthy pace in the first half of the year. The interest-rate
sensitive housing market was the first area of the economy to
respond to the Bank of Canada's
rapid increase in the policy rate. As of October, home sales were
down 40% from the peak in February of this year. Housing demand is
expected to cool further as higher interest rates continue to weigh
on affordability. Canadian inflation has begun to decelerate but
remained high at 6.9% year-over-year in October. The labour market
has also remained quite strong through October, although TD
Economics expects job market conditions to ease in the coming
quarters, in line with weaker demand in the broader economy.
The Bank of Canada raised
its overnight interest rate by 50 bps in October, to 3.75%.TD
Economics expects further increases in the overnight rate to a
range of 4.25-4.50% in calendar 2023. With interest rates expected
to increase to a lesser degree in Canada than in the
United States, the Canadian dollar may reach a low of 70
U.S. cents in the first half of calendar 2023.
HOW THE BANK REPORTS
The Bank prepares its Consolidated Financial Statements in
accordance with IFRS, the current GAAP, and refers to results
prepared in accordance with IFRS as "reported" results.
Non-GAAP and Other Financial Measures
In addition to reported results, the Bank also presents certain
financial measures, including non-GAAP financial measures that are
historical, non-GAAP ratios, supplementary financial measures and
capital management measures, to assess its results. Non-GAAP
financial measures, such as "adjusted" results, are utilized to
assess the Bank's businesses and to measure the Bank's overall
performance. To arrive at adjusted results, the Bank adjusts for
"items of note", from reported results. Items of note are items
which management does not believe are indicative of underlying
business performance and are disclosed in Table 3. Non-GAAP ratios
include a non-GAAP financial measure as one or more of its
components. Examples of non-GAAP ratios include adjusted basic and
diluted earnings per share (EPS), adjusted dividend payout ratio,
adjusted efficiency ratio, and adjusted effective income tax rate.
The Bank believes that non-GAAP financial measures and non-GAAP
ratios provide the reader with a better understanding of how
management views the Bank's performance. Non-GAAP financial
measures and non-GAAP ratios used in this document are not defined
terms under IFRS and, therefore, may not be comparable to similar
terms used by other issuers. Supplementary financial measures
depict the Bank's financial performance and position, and capital
management measures depict the Bank's capital position, and both
are explained in this document where they first appear.
U.S. Strategic Cards
The Bank's U.S. strategic cards portfolio is comprised of
agreements with certain U.S. retailers pursuant to which TD is the
U.S. issuer of private label and co-branded consumer credit cards
to their U.S. customers. Under the terms of the individual
agreements, the Bank and the retailers share in the profits
generated by the relevant portfolios after credit losses. Under
IFRS, TD is required to present the gross amount of revenue and
provisions for credit losses (PCL) related to these portfolios in
the Bank's Consolidated Statement of Income. At the segment level,
the retailer program partners' share of revenues and credit losses
is presented in the Corporate segment, with an offsetting amount
(representing the partners' net share) recorded in Non-interest
expenses, resulting in no impact to Corporate's reported Net income
(loss). The Net income (loss) included in the U.S. Retail segment
includes only the portion of revenue and credit losses attributable
to TD under the agreements.
Investment in The Charles Schwab Corporation
On October 6, 2020, the Bank
acquired an approximately 13.5% stake in Schwab following the
completion of Schwab's acquisition of TD Ameritrade Holding
Corporation ("TD Ameritrade") of which the Bank was a major
shareholder (the "Schwab transaction"). On August 1, 2022, the Bank sold 28.4 million
non-voting common shares of Schwab, which reduced the Bank's
ownership interest in Schwab to approximately 12.0%. For further
details, refer to Note 12 of the 2022 Consolidated Financial
Statements. The Bank's share of Schwab's earnings is reported with
a one-month lag, and the Bank started recording its share of
Schwab's earnings on this basis in the first quarter of fiscal
2021. The U.S. Retail segment reflects the Bank's share of net
income from its investment in Schwab. The Corporate segment net
income (loss) includes amounts for amortization of acquired
intangibles and the acquisition and integration charges related to
the Schwab transaction.
On November 25, 2019, the Bank and
Schwab entered into an insured deposit account agreement (the
"Schwab IDA Agreement"), which became effective upon closing of the
Schwab transaction and has an initial expiration date of
July 1, 2031. Refer to the "Related
Party Transactions" section in the 2022 MD&A for further
details.
The following table provides the operating results on a reported
basis for the Bank.
TABLE 2: OPERATING
RESULTS – Reported
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
|
October
31
|
July 31
|
October 31
|
October
31
|
October 31
|
|
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
|
Net interest
income
|
$
|
7,630
|
$
|
7,044
|
$
|
6,262
|
$
|
27,353
|
$
|
24,131
|
|
Non-interest
income
|
|
7,933
|
|
3,881
|
|
4,679
|
|
21,679
|
|
18,562
|
|
Total
revenue
|
|
15,563
|
|
10,925
|
|
10,941
|
|
49,032
|
|
42,693
|
|
Provision for (recovery
of) credit losses
|
|
617
|
|
351
|
|
(123)
|
|
1,067
|
|
(224)
|
|
Insurance claims and
related expenses
|
|
723
|
|
829
|
|
650
|
|
2,900
|
|
2,707
|
|
Non-interest
expenses
|
|
6,545
|
|
6,096
|
|
5,947
|
|
24,641
|
|
23,076
|
|
Income before income
taxes and share of net income from
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab
|
|
7,678
|
|
3,649
|
|
4,467
|
|
20,424
|
|
17,134
|
|
Provision for (recovery
of) income taxes
|
|
1,297
|
|
703
|
|
910
|
|
3,986
|
|
3,621
|
|
Share of net income
from investment in Schwab
|
|
290
|
|
268
|
|
224
|
|
991
|
|
785
|
|
Net income –
reported
|
|
6,671
|
|
3,214
|
|
3,781
|
|
17,429
|
|
14,298
|
|
Preferred dividends and
distributions on other equity instruments
|
|
107
|
|
43
|
|
63
|
|
259
|
|
249
|
|
Net income available
to common shareholders
|
$
|
6,564
|
$
|
3,171
|
$
|
3,718
|
$
|
17,170
|
$
|
14,049
|
|
The following table provides a reconciliation between the Bank's
adjusted and reported results.
TABLE 3: NON-GAAP
FINANCIAL MEASURES – Reconciliation of Adjusted to Reported Net
Income1
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
|
October
31
|
July 31
|
October 31
|
October
31
|
October 31
|
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
|
Operating results –
adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income6
|
$
|
7,627
|
$
|
7,001
|
$
|
6,262
|
$
|
27,307
|
$
|
24,131
|
|
Non-interest
income1,6
|
|
4,620
|
|
4,602
|
|
4,679
|
|
18,863
|
|
18,562
|
|
Total
revenue
|
|
12,247
|
|
11,603
|
|
10,941
|
|
46,170
|
|
42,693
|
|
Provision for (recovery
of) credit losses
|
|
617
|
|
351
|
|
(123)
|
|
1,067
|
|
(224)
|
|
Insurance claims and
related expenses
|
|
723
|
|
829
|
|
650
|
|
2,900
|
|
2,707
|
|
Non-interest
expenses2
|
|
6,430
|
|
6,033
|
|
5,898
|
|
24,359
|
|
22,909
|
|
Income before income
taxes and share of net income from
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab
|
|
4,477
|
|
4,390
|
|
4,516
|
|
17,844
|
|
17,301
|
|
Provision for income
taxes
|
|
747
|
|
892
|
|
921
|
|
3,595
|
|
3,658
|
|
Share of net income
from investment in Schwab3
|
|
335
|
|
315
|
|
271
|
|
1,176
|
|
1,006
|
|
Net income –
adjusted
|
|
4,065
|
|
3,813
|
|
3,866
|
|
15,425
|
|
14,649
|
|
Preferred dividends and
distributions on other equity instruments
|
|
107
|
|
43
|
|
63
|
|
259
|
|
249
|
|
Net income available
to common shareholders – adjusted
|
|
3,958
|
|
3,770
|
|
3,803
|
|
15,166
|
|
14,400
|
|
Pre-tax adjustments
for items of note
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles4
|
|
(57)
|
|
(58)
|
|
(74)
|
|
(242)
|
|
(285)
|
|
Acquisition and
integration charges related to the Schwab
transaction5
|
|
(18)
|
|
(23)
|
|
(22)
|
|
(111)
|
|
(103)
|
|
Acquisition and
integration-related charges for pending
acquisitions2
|
|
(85)
|
|
(29)
|
|
–
|
|
(114)
|
|
–
|
|
Mitigation of interest
rate volatility to closing capital on First Horizon
acquisition6
|
|
2,319
|
|
(678)
|
|
–
|
|
1,641
|
|
–
|
|
Gain on sale of Schwab
shares1
|
|
997
|
|
–
|
|
–
|
|
997
|
|
–
|
|
Litigation settlement
recovery1
|
|
–
|
|
–
|
|
–
|
|
224
|
|
–
|
|
Less: Impact of
income taxes
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles
|
|
(6)
|
|
(6)
|
|
(9)
|
|
(26)
|
|
(32)
|
|
Acquisition and
integration charges related to the Schwab transaction
|
|
(2)
|
|
(3)
|
|
(2)
|
|
(16)
|
|
(5)
|
|
Acquisition and
integration-related charges for pending
acquisitions5
|
|
(20)
|
|
(7)
|
|
–
|
|
(27)
|
|
–
|
|
Mitigation of interest
rate volatility to closing capital on First Horizon
acquisition
|
|
578
|
|
(173)
|
|
–
|
|
405
|
|
–
|
|
Gain on sale of Schwab
shares
|
|
–
|
|
–
|
|
–
|
|
–
|
|
–
|
|
Litigation settlement
recovery
|
|
–
|
|
–
|
|
–
|
|
55
|
|
–
|
|
Total adjustments
for items of note
|
|
2,606
|
|
(599)
|
|
(85)
|
|
2,004
|
|
(351)
|
|
Net income available
to common shareholders – reported
|
$
|
6,564
|
$
|
3,171
|
$
|
3,718
|
$
|
17,170
|
$
|
14,049
|
|
1
|
Adjusted non-interest
income excludes the following item of note:
|
|
|
i.
|
The Bank reached a
settlement in TD Bank, N.A. v. Lloyd's Underwriter et al.,
in Canada, pursuant to which the Bank recovered losses resulting
from the previous resolution by the
Bank of multiple proceedings in the U.S. related to an alleged
Ponzi scheme, perpetrated by, among others, Scott Rothstein – Q2
2022: $224 million. This amount is reported in the
U.S. Retail segment; and
|
|
|
ii.
|
The Bank sold 28.4
million non-voting common shares of Schwab and recognized a gain on
the sale – Q4 2022: $997 million. This amount is reported in the
Corporate segment.
|
|
|
|
|
2
|
Adjusted non-interest
expenses exclude the following items of note related to the Bank's
asset acquisitions and business combinations:
|
|
|
i.
|
Amortization of
acquired intangibles – Q4 2022: $24 million, Q3 2022: $23 million,
2022: $106 million, Q4 2021: $40 million, 2021: $148 million. These
charges are reported in the
Corporate segment;
|
|
|
ii.
|
The Bank's own
integration and acquisition costs related to the Schwab transaction
– Q4 2022: $6 million, Q3 2022: $11 million, 2022: $62 million, Q4
2021: $9 million, 2021:
$19 million. These costs are reported in the Corporate
segment; and
|
|
|
iii.
|
Acquisition and
integration-related charges for pending acquisitions – Q4 2022: $85
million, Q3 2022: $29 million, 2022: $114 million. These charges
are primarily related to
professional services and other incremental operating expenses for
various acquisitions, and are reported in the U.S. Retail and
Wholesale Banking segments.
|
|
|
|
|
3
|
Adjusted share of net
income from investment in Schwab excludes the following items of
note on an after-tax basis. The earnings impact of both items is
reported in the Corporate segment:
|
|
|
i.
|
Amortization of
Schwab-related acquired intangibles – Q4 2022: $33 million, Q3
2022: $35 million, 2022: $136 million, Q4 2021: $34 million, 2021:
$137 million; and
|
|
|
ii.
|
The Bank's share of
acquisition and integration charges associated with Schwab's
acquisition of TD Ameritrade – Q4 2022: $12 million, Q3 2022: $12
million, 2022: $49 million,
Q4 2021: $13 million, 2021: $84 million.
|
|
|
|
|
4
|
Amortization of
acquired intangibles relates to intangibles acquired as a result of
asset acquisitions and business combinations, including the
after-tax amounts for amortization of acquired
intangibles relating to the Share of net income from investment in
Schwab, reported in the Corporate segment. Refer to footnotes 2 and
3 for amounts.
|
|
|
5
|
Acquisition and
integration charges related to the Schwab transaction include the
Bank's own integration and acquisition costs, as well as the Bank's
share of acquisition and integration charges
associated with Schwab's acquisition of TD Ameritrade on an
after-tax basis, both reported in the Corporate segment. Refer to
footnotes 2 and 3 for amounts.
|
|
|
6
|
Mitigation of interest
rate volatility to closing capital on First Horizon acquisition
includes the following components, reported in the Corporate
segment: i) mark-to-market gains (losses)
on interest rate swaps recorded in non-interest income –
Q4 2022: $2,208 million, Q3 2022: $(721) million, ii)
basis adjustment amortization related to de-designated fair value
hedge
accounting relationships, recorded in net interest income –
Q4 2022: $111 million, Q3 2022: $43 million, and iii) interest
income (expense) recognized on the interest rate swaps,
reclassified from non-interest income to net interest income with
no impact to total adjusted net income – Q4 2022: $108 million.
Refer to the "Significant Events and Pending Acquisitions"
section for further details.
|
TABLE 4:
RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER
SHARE1
|
|
(Canadian
dollars)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
October
31
|
July 31
|
October 31
|
October
31
|
October 31
|
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
|
Basic earnings per
share – reported
|
$
|
3.62
|
$
|
1.76
|
$
|
2.04
|
$
|
9.48
|
$
|
7.73
|
|
Adjustments for items
of note
|
|
(1.44)
|
|
0.33
|
|
0.05
|
|
(1.11)
|
|
0.19
|
|
Basic earnings per
share – adjusted
|
$
|
2.18
|
$
|
2.09
|
$
|
2.09
|
$
|
8.38
|
$
|
7.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share – reported
|
$
|
3.62
|
$
|
1.75
|
$
|
2.04
|
$
|
9.47
|
$
|
7.72
|
|
Adjustments for items
of note
|
|
(1.44)
|
|
0.33
|
|
0.05
|
|
(1.10)
|
|
0.19
|
|
Diluted earnings per
share – adjusted
|
$
|
2.18
|
$
|
2.09
|
$
|
2.09
|
$
|
8.36
|
$
|
7.91
|
|
1
|
EPS is computed by
dividing net income available to common shareholders by the
weighted-average number of shares outstanding during the period.
Numbers may not add due to rounding.
|
TABLE 5: NON-GAAP
FINANCIAL MEASURES – Reconciliation of Reported to Adjusted
Provision for Income Taxes
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
For the twelve
months ended
|
|
|
|
October
31
|
|
July 31
|
|
October 31
|
|
October
31
|
|
October 31
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Provision for income
taxes – reported
|
$
|
1,297
|
|
$
|
703
|
|
$
|
910
|
|
$
|
3,986
|
|
$
|
3,621
|
|
Total adjustments
for items of note
|
|
(550)
|
|
|
189
|
|
|
11
|
|
|
(391)
|
|
|
37
|
|
Provision for income
taxes – adjusted
|
$
|
747
|
|
$
|
892
|
|
$
|
921
|
|
$
|
3,595
|
|
$
|
3,658
|
|
Effective income tax
rate – reported
|
|
16.9
|
%
|
|
19.3
|
%
|
|
20.4
|
%
|
|
19.5
|
%
|
|
21.1
|
%
|
Effective income tax
rate – adjusted1
|
|
16.7
|
|
|
20.3
|
|
|
20.4
|
|
|
20.1
|
|
|
21.1
|
|
1
|
For additional
information about this metric, refer to the Glossary in the 2022
MD&A.
|
RETURN ON COMMON EQUITY
The consolidated Bank ROE is calculated as reported net income
available to common shareholders as a percentage of average common
equity. The consolidated Bank adjusted ROE is calculated as
adjusted net income available to common shareholders as a
percentage of average common equity. Adjusted ROE is a non-GAAP
ratio, and can be utilized in assessing the Bank's use of
equity.
ROE for the business segments is calculated as the segment net
income attributable to common shareholders as a percentage of
average allocated capital. The Bank's methodology for allocating
capital to its business segments is largely aligned with the common
equity capital requirements under Basel III. Capital allocated to
the business segments increased to 10.5% CET1 Capital effective the
first quarter of 2022 compared with 9% in fiscal 2021.
TABLE 6: RETURN ON
COMMON EQUITY
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
|
For the three months
ended
|
|
For the twelve
months ended
|
|
|
|
October
31
|
|
July 31
|
|
October 31
|
|
October
31
|
|
October 31
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Average common
equity
|
$
|
98,199
|
|
$
|
92,963
|
|
$
|
93,936
|
|
$
|
95,326
|
|
$
|
90,677
|
|
Net income available
to common shareholders – reported
|
|
6,564
|
|
|
3,171
|
|
|
3,718
|
|
|
17,170
|
|
|
14,049
|
|
Items of note, net of
income taxes
|
|
(2,606)
|
|
|
599
|
|
|
85
|
|
|
(2,004)
|
|
|
351
|
|
Net income available
to common shareholders – adjusted
|
$
|
3,958
|
|
$
|
3,770
|
|
$
|
3,803
|
|
$
|
15,166
|
|
$
|
14,400
|
|
Return on common
equity – reported
|
|
26.5
|
%
|
|
13.5
|
%
|
|
15.7
|
%
|
|
18.0
|
%
|
|
15.5
|
%
|
Return on common
equity – adjusted
|
|
16.0
|
|
|
16.1
|
|
|
16.1
|
|
|
15.9
|
|
|
15.9
|
|
RETURN ON TANGIBLE COMMON EQUITY
Tangible common equity (TCE) is calculated as common
shareholders' equity less goodwill, imputed goodwill and
intangibles on the investments in Schwab and other acquired
intangible assets, net of related deferred tax liabilities. ROTCE
is calculated as reported net income available to common
shareholders after adjusting for the after-tax amortization of
acquired intangibles, which are treated as an item of note, as a
percentage of average TCE. Adjusted ROTCE is calculated using
reported net income available to common shareholders, adjusted for
all items of note, as a percentage of average TCE. TCE, ROTCE, and
adjusted ROTCE can be utilized in assessing the Bank's use of
equity. TCE is a non-GAAP financial measure, and ROTCE and adjusted
ROTCE are non-GAAP ratios.
TABLE 7: RETURN ON
TANGIBLE COMMON EQUITY
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
For the twelve
months ended
|
|
|
|
October
31
|
|
July 31
|
|
October 31
|
|
October
31
|
|
October 31
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Average common
equity
|
$
|
98,199
|
|
$
|
92,963
|
|
$
|
93,936
|
|
$
|
95,326
|
|
$
|
90,677
|
|
Average
goodwill
|
|
17,334
|
|
|
16,704
|
|
|
16,408
|
|
|
16,803
|
|
|
16,404
|
|
Average imputed
goodwill and intangibles on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investments in
Schwab
|
|
6,374
|
|
|
6,600
|
|
|
6,570
|
|
|
6,515
|
|
|
6,667
|
|
Average other acquired
intangibles1
|
|
463
|
|
|
476
|
|
|
565
|
|
|
492
|
|
|
439
|
|
Average related
deferred tax liabilities
|
|
(172)
|
|
|
(172)
|
|
|
(173)
|
|
|
(172)
|
|
|
(171)
|
|
Average tangible
common equity
|
|
74,200
|
|
|
69,355
|
|
|
70,566
|
|
|
71,688
|
|
|
67,338
|
|
Net income available to
common shareholders – reported
|
|
6,564
|
|
|
3,171
|
|
|
3,718
|
|
|
17,170
|
|
|
14,049
|
|
Amortization of
acquired intangibles, net of income taxes
|
|
51
|
|
|
52
|
|
|
65
|
|
|
216
|
|
|
253
|
|
Net income available
to common shareholders adjusted for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization of
acquired intangibles, net of income taxes
|
|
6,615
|
|
|
3,223
|
|
|
3,783
|
|
|
17,386
|
|
|
14,302
|
|
Other items of note,
net of income taxes
|
|
(2,657)
|
|
|
547
|
|
|
20
|
|
|
(2,220)
|
|
|
98
|
|
Net income available
to common shareholders – adjusted
|
$
|
3,958
|
|
$
|
3,770
|
|
$
|
3,803
|
|
$
|
15,166
|
|
$
|
14,400
|
|
Return on tangible
common equity
|
|
35.4
|
%
|
|
18.4
|
%
|
|
21.3
|
%
|
|
24.3
|
%
|
|
21.2
|
%
|
Return on tangible
common equity – adjusted
|
|
21.2
|
|
|
21.6
|
|
|
21.4
|
|
|
21.2
|
|
|
21.4
|
|
1
|
Excludes intangibles
relating to software and asset servicing rights.
|
Impact of Foreign Exchange Rate on U.S. Retail Segment
Translated Earnings
The following table reflects the estimated impact of foreign
currency translation on key U.S. Retail segment income statement
items. The impact is calculated as the difference in translated
earnings using the average US to Canadian dollars exchange rates in
the periods noted.
TABLE 8: IMPACT OF
FOREIGN EXCHANGE RATE ON U.S. RETAIL SEGMENT TRANSLATED
EARNINGS
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
|
October 31, 2022
vs.
|
October 31, 2022
vs.
|
|
|
|
October 31,
2021
|
October 31,
2021
|
|
|
|
Increase
(Decrease)
|
Increase
(Decrease)
|
|
U.S. Retail
Bank
|
|
|
|
|
|
|
|
|
Total revenue –
reported
|
|
|
$
|
201
|
|
$
|
312
|
|
Total revenue –
adjusted1
|
|
|
|
201
|
|
|
311
|
|
Non-interest expenses –
reported
|
|
|
|
110
|
|
|
171
|
|
Non-interest expenses –
adjusted1
|
|
|
|
106
|
|
|
166
|
|
Net income – reported,
after-tax
|
|
|
|
69
|
|
|
111
|
|
Net income – adjusted,
after-tax1
|
|
|
|
72
|
|
|
114
|
|
Share of net income
from investment in Schwab2
|
|
|
|
11
|
|
|
15
|
|
U.S. Retail segment
net income – reported, after-tax
|
|
|
|
80
|
|
|
126
|
|
U.S. Retail segment
net income – adjusted, after-tax1
|
|
|
|
83
|
|
|
129
|
|
Earnings per share
(Canadian dollars)
|
|
|
|
|
|
|
|
|
Basic –
reported
|
|
|
$
|
0.04
|
|
$
|
0.07
|
|
Basic –
adjusted1
|
|
|
|
0.05
|
|
|
0.07
|
|
Diluted –
reported
|
|
|
|
0.04
|
|
|
0.07
|
|
Diluted –
adjusted1
|
|
|
|
0.05
|
|
|
0.07
|
|
1
|
For additional
information about the Bank's use of non-GAAP financial measures,
refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document.
|
2
|
Share of net income
from investment in Schwab and the foreign exchange impact are
reported with a one-month lag.
|
|
|
|
|
Average foreign
exchange rate (equivalent of CAD $1.00)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
|
October
31
|
October 31
|
October
31
|
October 31
|
|
|
|
2022
|
2021
|
2022
|
2021
|
|
U.S. dollar
|
0.751
|
0.796
|
0.777
|
0.795
|
|
|
|
|
|
|
|
HOW OUR BUSINESSES PERFORMED
For management reporting purposes, commencing the fourth quarter
of 2022, the Bank's operations and activities are organized around
the following four key business segments: Canadian Personal and
Commercial Banking, U.S. Retail, Wealth Management and Insurance,
and Wholesale Banking. The Bank's other activities are grouped into
the Corporate segment. The comparative period information has been
adjusted to reflect the new segment alignment.
Results of each business segment reflect revenue, expenses,
assets, and liabilities generated by the businesses in that
segment. Where applicable, the Bank measures and evaluates the
performance of each segment based on adjusted results and ROE, and
for those segments the Bank indicates that the measure is adjusted.
For further details, refer to Note 29 of the
Bank's Consolidated Financial Statements for the year ended
October 31, 2022.
PCL related to performing (Stage 1 and Stage 2) and impaired
(Stage 3) financial assets, loan commitments, and financial
guarantees is recorded within the respective segment.
Net interest income within Wholesale Banking is calculated on a
taxable equivalent basis (TEB), which means that the value of
non-taxable or tax-exempt income, including dividends, is adjusted
to its equivalent before-tax value. Using TEB allows the Bank to
measure income from all securities and loans consistently and makes
for a more meaningful comparison of net interest income with
similar institutions. The TEB increase to net interest income and
provision for income taxes reflected in Wholesale Banking results
is reversed in the Corporate segment. The TEB adjustment for the
quarter was $36 million, compared
with $36 million in the fourth
quarter last year, and $41 million in
the prior quarter.
Share of net income from investment in Schwab is reported in the
U.S. Retail segment. Amounts for amortization of acquired
intangibles and the acquisition and integration charges related to
the Schwab transaction are recorded in the Corporate segment.
TABLE 9: CANADIAN
PERSONAL AND COMMERCIAL BANKING
|
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
|
October
31
|
|
July
31
|
|
October
31
|
|
|
2022
|
|
2022
|
|
2021
|
|
Net interest
income
|
$
|
3,388
|
|
$
|
3,199
|
|
$
|
2,863
|
|
Non-interest
income
|
|
1,066
|
|
|
1,061
|
|
|
991
|
|
Total
revenue
|
|
4,454
|
|
|
4,260
|
|
|
3,854
|
|
Provision for (recovery
of) credit losses – impaired
|
|
184
|
|
|
142
|
|
|
140
|
|
Provision for (recovery
of) credit losses – performing
|
|
45
|
|
|
28
|
|
|
(87)
|
|
Total provision for
(recovery of) credit losses
|
|
229
|
|
|
170
|
|
|
53
|
|
Non-interest
expenses
|
|
1,921
|
|
|
1,807
|
|
|
1,720
|
|
Provision for (recovery
of) income taxes
|
|
610
|
|
|
605
|
|
|
552
|
|
Net
income
|
$
|
1,694
|
|
$
|
1,678
|
|
$
|
1,529
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Return on common
equity1
|
|
41.9
|
%
|
|
42.3
|
%
|
|
46.4
|
%
|
Net interest margin
(including on securitized assets)2
|
|
2.70
|
|
|
2.59
|
|
|
2.48
|
|
Efficiency
ratio
|
|
43.1
|
|
|
42.4
|
|
|
44.6
|
|
Number of Canadian
Retail branches at period end
|
|
1,060
|
|
|
1,060
|
|
|
1,061
|
|
Average number of
full-time equivalent staff
|
|
28,936
|
|
|
28,944
|
|
|
27,693
|
|
1
|
Capital allocated to
the business segment was increased to 10.5% CET1 Capital effective
the first quarter of fiscal 2022 compared with 9% in the prior
year.
|
2
|
Net interest margin is
calculated by dividing net interest income by average
interest-earning assets. Average interest-earning assets used in
the calculation of net interest margin
is a non‑GAAP financial measure. Refer to "Non-GAAP and Other
Financial Measures" in the "How We Performed" section of this
document and the Glossary in the 2022 MD&A,
for additional information about these metrics.
|
Quarterly comparison – Q4 2022 vs. Q4 2021
Canadian Personal and Commercial Banking net income for the
quarter was $1,694 million, an
increase of $165 million, or 11%, compared with the fourth
quarter last year, reflecting higher revenue, partially offset by
higher non-interest expenses and PCL. The annualized ROE for
the quarter was 41.9%, compared with 46.4%, in the fourth quarter
last year.
Revenue for the quarter was $4,454 million, an increase of $600 million, or 16%, compared with the fourth
quarter last year.
Net interest income was $3,388
million, an increase of $525
million, or 18%, reflecting higher margins and volume
growth. Average loan volumes increased $44 billion, or 9%, reflecting 8% growth in
personal loans and 15% growth in business loans. Average deposit
volumes increased $18 billion, or 4%,
reflecting 8% growth in personal deposits and 2% decrease in
business deposits. Net interest margin was 2.70%, an increase of 22
bps, primarily due to higher margins on deposits reflecting rising
interest rates, partially offset by lower margin on loans, and
changes in balance sheet mix.
Non-interest income was $1,066
million, an increase of $75
million, or 8%, reflecting increased client activity,
including credit card-related and foreign exchange revenue.
PCL was $229 million, an increase
of $176 million compared with the
fourth quarter last year. PCL – impaired for the quarter was
$184 million, an increase of
$44 million, or 31%, reflecting some
normalization of credit performance. PCL – performing was
$45 million, compared with a recovery
of $87 million in the prior year. The
performing build this quarter reflects some normalization of credit
performance, deterioration in the economic outlook, and volume
growth. Total PCL as an annualized percentage of credit volume
was 0.17%, an increase of 13 bps compared with the fourth quarter
last year.
Non-interest expenses for the quarter were $1,921 million, an increase of $201 million,
or 12%, compared with the fourth quarter last year, primarily
reflecting higher spend supporting business growth, including
technology and employee-related expenses.
The efficiency ratio for the quarter was 43.1%, compared with
44.6% in the fourth quarter last year.
Quarterly comparison – Q4 2022 vs. Q3 2022
Canadian Personal and Commercial Banking net income for the
quarter was $1,694 million, an
increase of $16 million, or 1%, compared with the prior
quarter, reflecting revenue growth, partially offset by higher
non-interest expenses and PCL. The annualized ROE for the
quarter was 41.9%, compared with 42.3% in the prior quarter.
Revenue increased $194 million, or
5%, compared with the prior quarter. Net interest income increased
$189 million, or 6%, reflecting
higher margins and volume growth. Average loan volumes increased
$9 billion, or 2%, reflecting 2%
growth in personal loans and 3% growth in business loans. Average
deposit volumes were relatively flat compared with the prior
quarter, reflecting 2% growth in personal deposits and 2% decrease
in business deposits. Net interest margin was 2.70%, an increase of
11 bps, due to higher margins on deposits reflecting rising
interest rates, partially offset by lower margin on
loans.
Non-interest income was relatively flat compared with the prior
quarter.
PCL increased by $59 million
compared with the prior quarter. PCL – impaired increased by
$42 million, or 30%, reflecting some
normalization of credit performance. PCL – performing was
$45 million, an increase of
$17 million. The performing build
this quarter reflects some normalization of credit performance,
deterioration in the economic outlook, and volume growth. Total PCL
as an annualized percentage of credit volume was 0.17%, an increase
of 4 bps.
Non-interest expenses increased $114
million, or 6%, compared with the prior quarter, primarily
reflecting higher spend supporting business growth, including
employee-related expenses, technology, and marketing costs.
The efficiency ratio for the quarter was 43.1%, compared with
42.4% in the prior quarter.
TABLE 10: U.S.
RETAIL
|
|
|
|
|
|
|
|
|
|
(millions of dollars,
except as noted)
|
For the three months
ended
|
|
|
|
October
31
|
|
July 31
|
|
October 31
|
|
Canadian
Dollars
|
|
2022
|
|
|
2022
|
|
|
2021
|
|
Net interest
income
|
$
|
2,957
|
|
$
|
2,453
|
|
$
|
2,103
|
|
Non-interest
income
|
|
638
|
|
|
648
|
|
|
677
|
|
Total
revenue
|
|
3,595
|
|
|
3,101
|
|
|
2,780
|
|
Provision for (recovery
of) credit losses – impaired
|
|
166
|
|
|
135
|
|
|
68
|
|
Provision for (recovery
of) credit losses – performing
|
|
59
|
|
|
(28)
|
|
|
(144)
|
|
Total provision for
(recovery of) credit losses
|
|
225
|
|
|
107
|
|
|
(76)
|
|
Non-interest expenses –
reported
|
|
1,976
|
|
|
1,715
|
|
|
1,617
|
|
Non-interest expenses –
adjusted1,2
|
|
1,909
|
|
|
1,686
|
|
|
1,617
|
|
Provision for (recovery
of) income taxes – reported
|
|
165
|
|
|
126
|
|
|
111
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
181
|
|
|
133
|
|
|
111
|
|
U.S. Retail Bank net
income – reported
|
|
1,229
|
|
|
1,153
|
|
|
1,128
|
|
U.S. Retail Bank net
income – adjusted1
|
|
1,280
|
|
|
1,175
|
|
|
1,128
|
|
Share of net income
from investment in Schwab3,4
|
|
310
|
|
|
289
|
|
|
246
|
|
Net income –
reported
|
$
|
1,539
|
|
$
|
1,442
|
|
$
|
1,374
|
|
Net income –
adjusted1
|
|
1,590
|
|
|
1,464
|
|
|
1,374
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Dollars
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
|
2,220
|
|
$
|
1,905
|
|
$
|
1,673
|
|
Non-interest
income
|
|
479
|
|
|
504
|
|
|
539
|
|
Total
revenue
|
|
2,699
|
|
|
2,409
|
|
|
2,212
|
|
Provision for (recovery
of) credit losses – impaired
|
|
125
|
|
|
105
|
|
|
53
|
|
Provision for (recovery
of) credit losses – performing
|
|
44
|
|
|
(22)
|
|
|
(115)
|
|
Total provision for
(recovery of) credit losses
|
|
169
|
|
|
83
|
|
|
(62)
|
|
Non-interest expenses –
reported
|
|
1,482
|
|
|
1,332
|
|
|
1,288
|
|
Non-interest expenses –
adjusted1,2
|
|
1,432
|
|
|
1,310
|
|
|
1,288
|
|
Provision for (recovery
of) income taxes – reported
|
|
122
|
|
|
98
|
|
|
89
|
|
Provision for (recovery
of) income taxes – adjusted1
|
|
135
|
|
|
103
|
|
|
89
|
|
U.S. Retail Bank net
income – reported
|
|
926
|
|
|
896
|
|
|
897
|
|
U.S. Retail Bank net
income – adjusted1
|
|
963
|
|
|
913
|
|
|
897
|
|
Share of net income
from investment in Schwab3,4
|
|
237
|
|
|
226
|
|
|
195
|
|
Net income –
reported
|
$
|
1,163
|
|
$
|
1,122
|
|
$
|
1,092
|
|
Net income –
adjusted1
|
|
1,200
|
|
|
1,139
|
|
|
1,092
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Return on common equity
– reported5
|
|
15.4
|
%
|
|
14.8
|
%
|
|
14.5
|
%
|
Return on common equity
– adjusted1,5
|
|
15.8
|
|
|
15.0
|
|
|
14.5
|
|
Net interest
margin1,6
|
|
3.13
|
|
|
2.62
|
|
|
2.21
|
|
Efficiency ratio –
reported
|
|
54.9
|
|
|
55.3
|
|
|
58.2
|
|
Efficiency ratio –
adjusted1
|
|
53.1
|
|
|
54.4
|
|
|
58.2
|
|
Assets under
administration (billions of U.S. dollars)7
|
$
|
34
|
|
$
|
32
|
|
$
|
30
|
|
Assets under management
(billions of U.S. dollars)7
|
|
33
|
|
|
36
|
|
|
41
|
|
Number of U.S. retail
stores
|
|
1,160
|
|
|
1,158
|
|
|
1,148
|
|
Average number of
full-time equivalent staff
|
|
26,710
|
|
|
25,968
|
|
|
24,771
|
|
1
|
For additional
information about the Bank's use of non-GAAP financial measures,
refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this
document.
|
2
|
Adjusted non-interest
expenses exclude the acquisition and integration-related charges
for the First Horizon acquisition – Q4 2022: $67 million or US$50
million ($51 million or
US$37 million after-tax), Q3 2022: $29 million or US$22
million ($22 million or US$17 million after-tax)
|
3
|
The Bank's share of
Schwab's earnings is reported with a one-month lag. Refer to Note
12 of the 2022 Consolidated Financial Statements for further
details.
|
4
|
The after-tax amounts
for amortization of acquired intangibles and the Bank's share of
acquisition and integration charges associated with Schwab's
acquisition of TD Ameritrade
are recorded in the Corporate segment.
|
5
|
Capital allocated to
the business segment was increased to 10.5% CET1 Capital effective
in the first quarter of the fiscal 2022 compared with 9% in the
prior year.
|
6
|
Net interest margin is
calculated by dividing U.S. Retail segment's net interest income by
average interest-earning assets excluding the impact related to
sweep deposits
arrangements and the impact of intercompany deposits and cash
collateral, which management believes better reflects segment
performance. In addition, the value of tax-exempt
interest income is adjusted to its equivalent before-tax
value. Net interest income and average interest-earning assets
used in the calculation are non-GAAP financial measures.
|
7
|
For additional
information about this metric, refer to the Glossary in the 2022
MD&A.
|
Quarterly comparison – Q4 2022 vs. Q4 2021
U.S. Retail reported net income for the quarter was $1,539 million (US$1,163
million), an increase of $165
million (US$71 million), or
12% (7% in U.S. dollars) compared with the fourth quarter last
year. On an adjusted basis, net income for the quarter was
$1,590 million (US$1,200 million), an increase of $216 million (US$108
million), or 16% (10% in U.S. dollars). The reported and
adjusted annualized ROE for the quarter were 15.4% and 15.8%,
respectively, compared with 14.5% in the fourth quarter last
year.
U.S. Retail net income includes contributions from the U.S.
Retail Bank and the Bank's investment in Schwab. Reported net
income for the quarter from the Bank's investment in Schwab was
$310 million (US$237 million), an increase of $64 million (US$42
million), or 26% (22% in U.S. dollars), reflecting higher
net interest income, partially offset by higher expenses, lower
asset management fees and lower trading revenue.
U.S. Retail Bank reported net income was $1,229 million (US$926
million), an increase of $101
million (US$29 million), or 9%
(3% in U.S. dollars), compared with the fourth quarter last year,
primarily reflecting higher revenue, partially offset by higher PCL
and non-interest expenses including acquisition and
integration-related charges for the First Horizon acquisition.
U.S. Retail Bank adjusted net income was $1,280 million (US$963
million), an increase of $152
million (US$66 million), or 13% (7% in U.S. dollars),
compared with the fourth quarter last year, reflecting higher
revenue, partially offset by higher PCL and non-interest
expenses.
U.S. Retail Bank revenue is derived from the personal and
business banking and wealth management businesses. Revenue for the
quarter was US$2,699 million, an
increase of US$487 million, or 22%,
compared with the fourth quarter last year. Net interest income of
US$2,220 million, increased
US$547 million, or 33%, driven by the benefit of higher
deposit margins from the rising rate environment, higher business
and personal deposits and higher loan volumes along with higher
earnings on investments, partially offset by lower income from PPP
loan forgiveness and lower margin on loans. Net interest margin of
3.13%, increased 92 bps, as higher margin on deposits reflecting
the rising interest rate environment and positive balance sheet mix
was partially offset by lower income from PPP loan forgiveness and
lower margin on loans. Non-interest income of US$479 million decreased US$60 million, or 11%, compared with the fourth
quarter last year, reflecting lower overdraft fees and higher
valuation of certain investments in the prior year.
Average loan volumes increased US$7
billion, or 4%, compared with the fourth quarter last year.
Personal loans increased 10%, reflecting higher residential
mortgage and auto originations coupled with lower prepayments, and
higher credit card volumes. Business loans were flat, reflecting
strong originations, new customer growth, higher commercial line
utilization and increased customer activity, offset by PPP loan
forgiveness. Excluding PPP loans, business loans increased 5%.
Average deposit volumes were flat, reflecting a 5% increase in
personal deposits, flat business deposit volumes, and a 5% decrease
in sweep deposits.
Assets under administration (AUA) were US$34 billion as at October 31, 2022, an increase of US$4 billion, or 13%, compared with the fourth
quarter last year, reflecting net asset growth. Assets under
Management (AUM) were US$33 billion
as at October 31, 2022, a decrease of
US$8 billion, or 20%, compared with
the fourth quarter last year, reflecting market depreciation and
net asset outflows.
PCL for the quarter was US$169
million, compared with a recovery of US$62 million in the fourth quarter last year.
PCL – impaired was US$125 million, an
increase of US$72 million, or 136%,
reflecting some normalization of credit performance. PCL –
performing was US$44 million,
compared with a recovery of US$115
million in the prior year. The performing build this quarter
reflects some normalization of credit performance, deterioration in
the economic outlook, and volume growth. U.S. Retail PCL including
only the Bank's share of PCL in the U.S. strategic cards portfolio,
as an annualized percentage of credit volume was 0.40%, an increase
of 55 bps, compared with the fourth quarter last year.
Reported non-interest expenses for the quarter were US$1,482 million, an increase of US$194 million, or 15%, compared with the fourth
quarter last year, reflecting higher employee-related expenses,
acquisition and integration-related charges for the First Horizon
acquisition and higher investments in the business. On an adjusted
basis, excluding acquisition and integration-related charges for
the First Horizon acquisition, non-interest expenses increased
US$144 million, or 11%.
The reported and adjusted efficiency ratios for the quarter were
54.9% and 53.1%, respectively, compared with 58.2%, in the fourth
quarter last year.
Quarterly comparison – Q4 2022 vs. Q3 2022
U.S. Retail reported net income of $1,539
million (US$1,163 million)
increased $97 million (US$41 million), or 7% (4% in U.S. dollars),
compared with the prior quarter. On an adjusted basis, net income
for the quarter was $1,590 million
(US$1,200 million), an increase of
$126 million (US$61 million), or 9% (5% in U.S. dollars).
The reported and adjusted annualized ROE for the quarter were 15.4%
and 15.8%, respectively, compared with 14.8% and 15.0%,
respectively, in the prior quarter.
The contribution from Schwab of $310
million (US$237 million),
increased $21 million (US$11 million), or 7% (5% in U.S. dollars),
reflecting higher net interest income.
U.S. Retail Bank reported net income was $1,229 million (US$926
million), an increase of $76
million (US$30 million), or 7%
(3% in U.S. dollars), compared with the prior quarter, reflecting
higher revenue, partially offset by higher PCL and non-interest
expenses including acquisition and integration-related charges for
the First Horizon acquisition. U.S. Retail Bank adjusted net income
was $1,280 million (US$963 million), an increase of $105 million (US$50
million), or 9% (5% in U.S. dollars), reflecting higher
revenue, partially offset by higher PCL and non-interest
expenses.
Revenue increased US$290 million,
or 12%, compared with the prior quarter. Net interest income of
US$2,220 million increased
US$315 million, or 17%, reflecting
the benefit of higher deposit margins due to the rising interest
rate environment, partially offset by lower margin on loans. Net
interest margin of 3.13% increased 51 bps quarter over quarter, as
higher margin on deposits reflecting the rising interest rate
environment and positive balance sheet mix was partially offset by
lower margin on loans. Non-interest income of US$479 million decreased US$25 million, or 5%, reflecting lower overdraft
fees.
Average loan volumes increased US$4
billion, or 2%, compared with the prior quarter. Personal
loans increased 4%, reflecting higher originations in residential
mortgage, auto, and home equity coupled with lower prepayments, and
higher credit card volumes. Business loans increased 1%, or 2%
excluding PPP loans, reflecting strong originations, new customer
growth, and increased customer activity. Average deposit volumes
decreased US$10 billion, or 3%,
compared with the prior quarter reflecting a 1% decrease in
personal deposits and a 7% decline in sweep deposits, partially
offset by a 1% increase in business deposits.
AUA were US$34 billion as at
October 31, 2022, an increase of
US$2 billion, or 6%, compared with
the prior quarter, reflecting net asset growth. AUM were
US$33 billion as at October 31, 2022, a decrease of
US$3 billion, or 8%, reflecting market depreciation and net
asset outflows.
PCL increased by US$86 million
compared with the prior quarter. PCL – impaired increased
US$20 million, or 19%, reflecting
some further normalization of credit performance. PCL – performing
was US$44 million, compared with a
recovery of US$22 million in the
prior quarter. The performing build this quarter reflects some
normalization of credit performance, deterioration in the economic
outlook and volume growth. U.S. Retail PCL including only the
Bank's share of PCL in the U.S. strategic cards portfolio, as an
annualized percentage of credit volume was 0.40%, higher by 20
bps.
Reported non-interest expenses for the quarter were US$1,482 million, an increase of US$150 million, or 11%, reflecting higher
employee-related expenses, higher investments in the business, and
acquisition and integration-related charges for the First Horizon
acquisition. On an adjusted basis, excluding acquisition and
integration-related charges for the First Horizon acquisition,
non-interest expenses increased US$122
million, or 9%.
The reported and adjusted efficiency ratios for the quarter were
54.9% and 53.1%, respectively, compared with 55.3% and 54.4%,
respectively, in the prior quarter.
TABLE 11: WEALTH
MANAGEMENT AND INSURANCE
|
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
|
October
31
|
|
July 31
|
|
October
31
|
|
|
2022
|
|
2022
|
|
2021
|
|
Net interest
income
|
$
|
272
|
|
$
|
249
|
|
$
|
199
|
|
Non-interest
income
|
|
2,359
|
|
|
2,511
|
|
|
2,467
|
|
Total
revenue
|
|
2,631
|
|
|
2,760
|
|
|
2,666
|
|
Provision for (recovery
of) credit losses – impaired
|
|
–
|
|
|
–
|
|
|
–
|
|
Provision for (recovery
of) credit losses – performing
|
|
–
|
|
|
–
|
|
|
–
|
|
Total provision for
(recovery of) credit losses
|
|
–
|
|
|
–
|
|
|
–
|
|
Insurance claims and
related expenses
|
|
723
|
|
|
829
|
|
|
650
|
|
Non-interest
expenses
|
|
1,208
|
|
|
1,150
|
|
|
1,192
|
|
Provision for (recovery
of) income taxes
|
|
184
|
|
|
206
|
|
|
216
|
|
Net
income
|
$
|
516
|
|
$
|
575
|
|
$
|
608
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Return on common
equity1
|
|
39.5
|
%
|
|
44.6
|
%
|
|
51.4
|
%
|
Efficiency
ratio
|
|
45.9
|
|
|
41.7
|
|
|
44.7
|
|
Assets under
administration (billions of Canadian
dollars)2
|
$
|
517
|
|
$
|
526
|
|
$
|
557
|
|
Assets under management
(billions of Canadian dollars)
|
|
397
|
|
|
408
|
|
|
427
|
|
Average number of
full-time equivalent staff
|
|
15,952
|
|
|
16,092
|
|
|
14,512
|
|
1
|
Capital allocated to
the business segment was increased to 10.5% CET1 Capital effective
the first quarter of 2022 compared with 9% in the prior
year.
|
2
|
Includes AUA
administered by TD Investor Services, which is part of the Canadian
Personal and Commercial Banking segment.
|
Quarterly comparison – Q4 2022 vs. Q4 2021
Wealth Management and Insurance net income for the quarter was
$516 million, a decrease of $92 million, or 15%, compared
with the fourth quarter last year, reflecting lower non-interest
income in the wealth management business and higher claims in the
insurance business, partially offset by higher net interest
income. The annualized ROE for the quarter was 39.5%, compared
with 51.4%, in the fourth quarter last year.
Revenue for the quarter was $2,631 million, a decrease of $35 million, or 1%, compared with the fourth
quarter last year. Non-interest income was $2,359 million, a decrease of $108 million, or 4%, reflecting lower transaction
and fee-based revenue in the wealth management business and a
decrease in the fair value of investments supporting claims
liabilities which resulted in a similar decrease in insurance
claims, partially offset by higher insurance premiums. Net interest
income was $272 million, an increase
of $73 million, or 37%, reflecting
volume growth and higher margins.
AUA were $517 billion as at
October 31, 2022, a decrease of
$40 billion, or 7%, and AUM were
$397 billion as at October 31, 2022, a decrease of $30 billion,
or 7%, compared with the fourth quarter last year, both reflecting
market depreciation, partially offset by net asset growth.
Insurance claims and related expenses were $723 million, an increase of $73 million, or 11%, compared with the fourth
quarter last year, reflecting increased driving activity,
inflationary costs and more severe weather-related events,
partially offset by favourable prior years' claims development and
the impact of a higher discount rate which resulted in a similar
decrease in the fair value of investments supporting claims
liabilities reported in non-interest income.
Non-interest expenses for the quarter were $1,208 million, an increase of $16 million,
or 1%, compared with the fourth quarter last year, reflecting
higher spend supporting business growth, including higher
employee-related expenses and technology costs, largely offset by
the impact of lower legal provisions and variable compensation.
The efficiency ratio for the quarter was 45.9%, compared with
44.7% in the fourth quarter last year.
Quarterly comparison – Q4 2022 vs. Q3 2022
Wealth Management and Insurance net income for the quarter was
$516 million, a decrease of $59 million, or 10%, compared
with the prior quarter, reflecting lower revenue and higher
non-interest expenses, partially offset by lower insurance claims
and related expenses. The annualized ROE for the quarter was
39.5%, compared with 44.6%, in the prior quarter.
Revenue decreased $129 million, or
5%, compared with the prior quarter. Non-interest income decreased
$152 million, or 6%, reflecting lower
transaction and fee-based revenue in the wealth management
business, lower insurance premiums and a decrease in the fair value
of investments supporting claims liabilities which resulted in a
similar decrease in insurance claims. Net interest income increased
$23 million, or 9%, reflecting higher
margins.
AUA decreased $9 billion, or
2% compared with the prior quarter, reflecting market depreciation,
partially offset by net asset growth. AUM decreased $11 billion, or 3%, compared with the prior
quarter, primarily reflecting market depreciation.
Insurance claims and related expenses decreased $106 million, or 13%, compared with the prior
quarter, reflecting the impact of a higher discount rate which
resulted in a similar decrease in the fair value of investments
supporting claims liabilities reported in non-interest income,
favourable prior years' claims development and current year claims
experience.
Non-interest expenses for the quarter increased
$58 million, or 5%, compared with the prior quarter,
reflecting higher spend supporting business growth, including
marketing and technology costs and higher employee-related
expenses.
The efficiency ratio for the quarter was 45.9%, compared with
41.7% in the prior quarter.
TABLE 12: WHOLESALE
BANKING
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
|
|
|
October
31
|
|
July 31
|
|
October 31
|
|
|
|
2022
|
|
2022
|
|
2021
|
|
Net interest income
(TEB)
|
$
|
683
|
|
$
|
786
|
|
$
|
689
|
|
Non-interest
income
|
|
476
|
|
|
290
|
|
|
461
|
|
Total
revenue
|
|
1,159
|
|
|
1,076
|
|
|
1,150
|
|
Provision for (recovery
of) credit losses – impaired
|
|
24
|
|
|
–
|
|
|
(14)
|
|
Provision for (recovery
of) credit losses – performing
|
|
2
|
|
|
25
|
|
|
(63)
|
|
Total provision for
(recovery of) credit losses
|
|
26
|
|
|
25
|
|
|
(77)
|
|
Non-interest expenses –
reported
|
|
802
|
|
|
691
|
|
|
658
|
|
Non-interest expenses –
adjusted1,2
|
|
784
|
|
|
691
|
|
|
658
|
|
Provision for (recovery
of) income taxes (TEB) – reported
|
|
70
|
|
|
89
|
|
|
149
|
|
Provision for (recovery
of) income taxes (TEB) – adjusted1
|
|
74
|
|
|
89
|
|
|
149
|
|
Net income –
reported
|
|
261
|
|
|
271
|
|
|
420
|
|
Net income –
adjusted1
|
$
|
275
|
|
$
|
271
|
|
$
|
420
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected volumes and
ratios
|
|
|
|
|
|
|
|
|
|
Trading-related revenue
(TEB)3
|
$
|
560
|
|
$
|
547
|
|
$
|
510
|
|
Average gross lending
portfolio (billions of Canadian dollars)4
|
|
85.0
|
|
|
72.2
|
|
|
58.1
|
|
Return on common equity
– reported5
|
|
8.2
|
%
|
|
8.9
|
%
|
|
18.6
|
%
|
Return on common equity
– adjusted1,5
|
|
8.6
|
|
|
8.9
|
|
|
18.6
|
|
Efficiency ratio –
reported
|
|
69.2
|
|
|
64.2
|
|
|
57.2
|
|
Efficiency ratio –
adjusted1
|
|
67.6
|
|
|
64.2
|
|
|
57.2
|
|
Average number of
full-time equivalent staff
|
|
5,301
|
|
|
5,163
|
|
|
4,910
|
|
1
|
For additional
information about the Bank's use of non-GAAP financial measures,
refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document.
|
2
|
Adjusted non-interest
expenses exclude the acquisition and integration-related charges
primarily for the Cowen acquisition – Q4 2022: $18 million ($14
million after-tax).
|
3
|
Includes net interest
income TEB of $407 million (July 2022 – $567 million, October 2021
– $514 million), and trading income (loss) of $153 million (July
2022 – ($20) million,
October 2021 – ($4) million). Trading-related revenue
(TEB) is a non-GAAP financial measure. Refer to "Non-GAAP and Other
Financial Measures" in the "How We Performed" section
and the Glossary in the 2022 MD&A, for additional information
about this metric.
|
4
|
Includes gross loans
and bankers' acceptances relating to Wholesale Banking, excluding
letters of credit, cash collateral, credit default swaps, and
allowance for credit losses.
|
5
|
Capital allocated to
the business segment was increased to 10.5% CET1 Capital effective
in the first quarter of the fiscal 2022 compared with 9% in the
prior year.
|
Quarterly comparison – Q4 2022 vs. Q4 2021
Wholesale Banking reported net income for the quarter was
$261 million, a decrease of
$159 million, or 38%, compared with
the fourth quarter last year, reflecting higher non-interest
expenses and PCL. On an adjusted basis, net income was $275 million, a decrease of $145 million, or 35%.
Revenue for the quarter was $1,159
million, an increase of $9
million, or 1%, compared with the fourth quarter last year,
reflecting higher global transaction banking, trading-related, and
lending revenue, partially offset by lower underwriting revenue and
markdowns in certain loan underwriting commitments.
PCL for the quarter was $26
million, compared with a recovery of $77 million in the fourth quarter last year. PCL
– impaired was $24 million primarily
reflecting credit migration. PCL – performing was $2 million.
Reported non-interest expenses were $802
million, an increase of $144
million, or 22%, compared with the fourth quarter last year,
reflecting the continued investments in Wholesale Banking's U.S.
dollar strategy, including the hiring of banking, sales and
trading, and technology professionals, timing of employee-related
costs, acquisition and integration-related charges primarily for
the Cowen acquisition, and the impact of foreign exchange
translation. On an adjusted basis, non-interest expenses were
$784 million, an increase of
$126 million or 19%.
Quarterly comparison – Q4 2022 vs. Q3 2022
Wholesale Banking reported net income for the quarter was
$261 million, a decrease of
$10 million, or 4%, compared with the
prior quarter, reflecting higher non-interest expenses, partially
offset by higher revenue. On an adjusted basis, net income was
$275 million, an increase of
$4 million, or 1%.
Revenue for the quarter increased $83
million, or 8%, reflecting higher global transaction banking
revenue, loan fees, and lending revenue, partially offset by lower
advisory revenue and markdowns in certain loan underwriting
commitments.
PCL increased by $1 million
compared with the prior quarter. PCL – impaired was $24 million primarily reflecting credit
migration. PCL – performing was $2 million.
Reported non-interest expenses for the quarter increased
$111 million, or 16%, reflecting the
timing of employee-related costs, continued investments in
technology, acquisition and integration-related charges primarily
for the Cowen acquisition, and the impact of foreign exchange
translation. On an adjusted basis, non-interest expenses increased
$93 million or 13%.
TABLE 13:
CORPORATE
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
|
|
|
October
31
|
July 31
|
October 31
|
|
|
|
2022
|
2022
|
2021
|
|
Net income (loss) –
reported
|
$
|
2,661
|
$
|
(752)
|
$
|
(150)
|
|
Adjustments for
items of note
|
|
|
|
|
|
|
|
Amortization of
acquired intangibles before income taxes
|
|
57
|
|
58
|
|
74
|
|
Acquisition and
integration charges related to the Schwab transaction
|
|
18
|
|
23
|
|
22
|
|
Mitigation of interest
rate volatility to closing capital on First Horizon
acquisition
|
|
(2,319)
|
|
678
|
|
–
|
|
Gain on sale of Schwab
shares
|
|
(997)
|
|
–
|
|
–
|
|
Less: impact of income
taxes
|
|
(570)
|
|
182
|
|
11
|
|
Net income (loss) –
adjusted1
|
$
|
(10)
|
$
|
(175)
|
$
|
(65)
|
|
|
|
|
|
|
|
|
|
|
Decomposition of
items included in net income (loss) – adjusted
|
|
|
|
|
|
|
|
Net corporate
expenses2
|
$
|
(187)
|
$
|
(196)
|
$
|
(202)
|
|
Other
|
|
177
|
|
21
|
|
137
|
|
Net income (loss) –
adjusted1
|
$
|
(10)
|
$
|
(175)
|
$
|
(65)
|
|
|
|
|
|
|
|
|
|
|
Selected
volumes
|
|
|
|
|
|
|
|
Average number of
full-time equivalent staff
|
|
21,373
|
|
20,950
|
|
17,772
|
|
1
|
For additional
information about the Bank's use of non-GAAP financial measures,
refer to "Non-GAAP and Other Financial Measures" in the "How We
Performed" section of this document.
|
2
|
For additional
information about this metric, refer to the Glossary in the 2022
MD&A.
|
Quarterly comparison – Q4 2022 vs. Q4 2021
Corporate segment's reported net income for the quarter was
$2,661 million, compared with
reported net loss of $150 million in
the fourth quarter last year. The year-over-year increase primarily
reflects gains from mitigation of interest rate volatility to
closing capital on First Horizon acquisition and from the sale of
Schwab shares, lower net corporate expenses, and a higher
contribution from other items. The decrease in net corporate
expenses largely reflects corporate real estate optimization costs
in the prior year. The increase in other items primarily reflects
the favourable tax impact of earnings mix and the recognition of
unused tax losses, partially offset by lower revenue from treasury
and balance sheet management activities this quarter. The adjusted
net loss for the quarter was $10
million, compared with an adjusted net loss of
$65 million in the fourth quarter last year.
Quarterly comparison – Q4 2022 vs. Q3 2022
Corporate segment's reported net income for the quarter was
$2,661 million, compared with
reported net loss of $752 million in
the prior quarter. The quarter-over-quarter increase primarily
reflects gains from mitigation of interest rate volatility to
closing capital on First Horizon acquisition and from the sale of
Schwab shares, lower net corporate expenses, and a higher
contribution from other items. The increase in other items
primarily reflects the favourable tax impact of earnings mix
and the recognition of unused tax losses, partially offset by lower
revenue from treasury and balance sheet management activities this
quarter. The adjusted net loss for the quarter was $10 million, compared with an adjusted net loss
of $175 million in the prior
quarter.
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE
SHEET1
|
|
|
|
|
|
(millions of Canadian
dollars)
|
|
|
|
As at
|
|
|
|
October
31
|
October 31
|
|
|
|
|
2022
|
|
2021
|
|
ASSETS
|
|
|
|
Cash and due from
banks
|
$
|
8,556
|
$
|
5,931
|
|
Interest-bearing
deposits with banks
|
|
137,294
|
|
159,962
|
|
|
|
|
145,850
|
|
165,893
|
|
Trading loans,
securities, and other
|
|
143,726
|
|
147,590
|
|
Non-trading financial
assets at fair value through profit or loss
|
|
10,946
|
|
9,390
|
|
Derivatives
|
|
103,873
|
|
54,427
|
|
Financial assets
designated at fair value through profit or loss
|
|
5,039
|
|
4,564
|
|
Financial assets at
fair value through other comprehensive income
|
|
69,675
|
|
79,066
|
|
|
|
|
333,259
|
|
295,037
|
|
Debt securities at
amortized cost, net of allowance for credit losses
|
|
342,774
|
|
268,939
|
|
Securities purchased
under reverse repurchase agreements
|
|
160,167
|
|
167,284
|
|
Loans
|
|
|
|
|
|
Residential
mortgages
|
|
293,924
|
|
268,340
|
|
Consumer instalment and
other personal
|
|
206,152
|
|
189,864
|
|
Credit card
|
|
36,010
|
|
30,738
|
|
Business and
government
|
|
301,389
|
|
240,070
|
|
|
|
|
837,475
|
|
729,012
|
|
Allowance for loan
losses
|
|
(6,432)
|
|
(6,390)
|
|
Loans, net of allowance
for loan losses
|
|
831,043
|
|
722,622
|
|
Other
|
|
|
|
|
|
Customers' liability
under acceptances
|
|
19,733
|
|
18,448
|
|
Investment in
Schwab
|
|
8,088
|
|
11,112
|
|
Goodwill
|
|
17,656
|
|
16,232
|
|
Other
intangibles
|
|
2,303
|
|
2,123
|
|
Land, buildings,
equipment, and other depreciable assets
|
|
9,400
|
|
9,181
|
|
Deferred tax
assets
|
|
2,193
|
|
2,265
|
|
Amounts receivable from
brokers, dealers, and clients
|
|
19,760
|
|
32,357
|
|
Other assets
|
|
25,302
|
|
17,179
|
|
|
|
|
104,435
|
|
108,897
|
|
Total
assets
|
$
|
1,917,528
|
$
|
1,728,672
|
|
LIABILITIES
|
|
|
|
|
|
Trading
deposits
|
$
|
23,805
|
$
|
22,891
|
|
Derivatives
|
|
91,133
|
|
57,122
|
|
Securitization
liabilities at fair value
|
|
12,612
|
|
13,505
|
|
Financial liabilities
designated at fair value through profit or loss
|
|
162,786
|
|
113,988
|
|
|
|
|
290,336
|
|
207,506
|
|
Deposits
|
|
|
|
|
|
Personal
|
|
660,838
|
|
633,498
|
|
Banks
|
|
38,263
|
|
20,917
|
|
Business and
government
|
|
530,869
|
|
470,710
|
|
|
|
|
1,229,970
|
|
1,125,125
|
|
Other
|
|
|
|
|
|
Acceptances
|
|
19,733
|
|
18,448
|
|
Obligations related to
securities sold short
|
|
45,505
|
|
42,384
|
|
Obligations related to
securities sold under repurchase agreements
|
|
128,024
|
|
144,097
|
|
Securitization
liabilities at amortized cost
|
|
15,072
|
|
15,262
|
|
Amounts payable to
brokers, dealers, and clients
|
|
25,195
|
|
28,993
|
|
Insurance-related
liabilities
|
|
7,468
|
|
7,676
|
|
Other
liabilities
|
|
33,552
|
|
28,133
|
|
|
|
|
274,549
|
|
284,993
|
|
Subordinated notes
and debentures
|
|
11,290
|
|
11,230
|
|
Total
liabilities
|
|
1,806,145
|
|
1,628,854
|
|
EQUITY
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
Common
shares
|
|
24,363
|
|
23,066
|
|
Preferred shares and
other equity instruments
|
|
11,253
|
|
5,700
|
|
Treasury – common
shares
|
|
(91)
|
|
(152)
|
|
Treasury – preferred
shares and other equity instruments
|
|
(7)
|
|
(10)
|
|
Contributed
surplus
|
|
179
|
|
173
|
|
Retained
earnings
|
|
73,698
|
|
63,944
|
|
Accumulated other
comprehensive income (loss)
|
|
1,988
|
|
7,097
|
|
Total
equity
|
|
111,383
|
|
99,818
|
|
Total liabilities
and equity
|
$
|
1,917,528
|
$
|
1,728,672
|
|
1
|
The amounts as at
October 31, 2022 and October 31, 2021, have been derived
from the audited financial statements.
|
CONSOLIDATED
STATEMENT OF INCOME1
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars, except as noted)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
|
October
31
|
October 31
|
October
31
|
October 31
|
|
|
2022
|
2021
|
2022
|
2021
|
|
Interest
income2
|
|
|
|
|
|
|
|
|
|
Loans
|
$
|
9,793
|
$
|
6,009
|
$
|
29,666
|
$
|
23,959
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
3,419
|
|
960
|
|
7,928
|
|
3,721
|
|
|
Dividends
|
|
500
|
|
394
|
|
1,822
|
|
1,594
|
|
Deposits with
banks
|
|
987
|
|
76
|
|
1,616
|
|
307
|
|
|
|
14,699
|
|
7,439
|
|
41,032
|
|
29,581
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
5,255
|
|
776
|
|
9,748
|
|
3,742
|
|
Securitization
liabilities
|
|
185
|
|
88
|
|
573
|
|
343
|
|
Subordinated notes and
debentures
|
|
105
|
|
93
|
|
397
|
|
374
|
|
Other
|
|
1,524
|
|
220
|
|
2,961
|
|
991
|
|
|
|
7,069
|
|
1,177
|
|
13,679
|
|
5,450
|
|
Net interest
income
|
|
7,630
|
|
6,262
|
|
27,353
|
|
24,131
|
|
Non-interest
income
|
|
|
|
|
|
|
|
|
|
Investment and
securities services
|
|
1,381
|
|
1,565
|
|
5,869
|
|
6,179
|
|
Credit fees
|
|
438
|
|
374
|
|
1,615
|
|
1,453
|
|
Trading income
(loss)
|
|
(219)
|
|
(12)
|
|
(257)
|
|
313
|
|
Service
charges
|
|
719
|
|
711
|
|
2,871
|
|
2,655
|
|
Card
services
|
|
750
|
|
651
|
|
2,890
|
|
2,435
|
|
Insurance
revenue
|
|
1,310
|
|
1,248
|
|
5,380
|
|
4,877
|
|
Other income
(loss)
|
|
3,554
|
|
142
|
|
3,311
|
|
650
|
|
|
|
7,933
|
|
4,679
|
|
21,679
|
|
18,562
|
|
Total
revenue
|
|
15,563
|
|
10,941
|
|
49,032
|
|
42,693
|
|
Provision for
(recovery of) credit losses
|
|
617
|
|
(123)
|
|
1,067
|
|
(224)
|
|
Insurance claims and
related expenses
|
|
723
|
|
650
|
|
2,900
|
|
2,707
|
|
Non-interest
expenses
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
3,507
|
|
3,051
|
|
13,394
|
|
12,378
|
|
Occupancy, including
depreciation
|
|
433
|
|
440
|
|
1,660
|
|
1,882
|
|
Technology and
equipment, including depreciation
|
|
521
|
|
449
|
|
1,902
|
|
1,694
|
|
Amortization of other
intangibles
|
|
147
|
|
179
|
|
599
|
|
706
|
|
Communication and
marketing
|
|
403
|
|
378
|
|
1,355
|
|
1,203
|
|
Brokerage-related and
sub-advisory fees
|
|
97
|
|
112
|
|
408
|
|
427
|
|
Professional, advisory
and outside services
|
|
692
|
|
568
|
|
2,190
|
|
1,620
|
|
Other
|
|
745
|
|
770
|
|
3,133
|
|
3,166
|
|
|
|
6,545
|
|
5,947
|
|
24,641
|
|
23,076
|
|
Income before income
taxes and share of net income from investment
|
|
|
|
|
|
|
|
|
|
|
in
Schwab
|
|
7,678
|
|
4,467
|
|
20,424
|
|
17,134
|
|
Provision for
(recovery of) income taxes
|
|
1,297
|
|
910
|
|
3,986
|
|
3,621
|
|
Share of net income
from investment in Schwab
|
|
290
|
|
224
|
|
991
|
|
785
|
|
Net
income
|
|
6,671
|
|
3,781
|
|
17,429
|
|
14,298
|
|
Preferred dividends
and distributions on other equity instruments
|
|
107
|
|
63
|
|
259
|
|
249
|
|
Net income available
to common shareholders
|
$
|
6,564
|
$
|
3,718
|
$
|
17,170
|
$
|
14,049
|
|
Earnings per
share (Canadian dollars)
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
3.62
|
$
|
2.04
|
$
|
9.48
|
$
|
7.73
|
|
Diluted
|
|
3.62
|
|
2.04
|
|
9.47
|
|
7.72
|
|
Dividends per common
share (Canadian dollars)
|
|
0.89
|
|
0.79
|
|
3.56
|
|
3.16
|
|
1
|
The amounts for the
three months ended October 31, 2022, and October 31,
2021, have been derived from unaudited financial statements. The
amounts for the twelve months ended
October 31, 2022 and October 31, 2021, have been derived
from the audited financial statements.
|
2
|
Includes $12,315
million and $35,277 million, for the three and twelve months ended
October 31, 2022, respectively (three and twelve months ended
October 31, 2021 – $6,646 million
and $26,706 million, respectively) which have been calculated
based on the effective interest rate method.
|
CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME1
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
|
|
October
31
|
October 31
|
October
31
|
October 31
|
|
|
|
|
2022
|
2021
|
2022
|
2021
|
|
Net
income
|
$
|
6,671
|
$
|
3,781
|
$
|
17,429
|
$
|
14,298
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
Items that will
be subsequently reclassified to net income
|
|
|
|
|
|
|
|
|
|
|
Net change in
unrealized gain/(loss) on financial assets at fair value
through
|
|
|
|
|
|
|
|
|
|
|
|
other comprehensive
income
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized
gain/ (loss)
|
|
(269)
|
|
(124)
|
|
(1,343)
|
|
27
|
|
|
Reclassification to
earnings of net loss /(gain)
|
|
7
|
|
(11)
|
|
2
|
|
(75)
|
|
|
Changes in allowance
for credit losses recognized in earnings
|
|
(2)
|
|
3
|
|
(5)
|
|
1
|
|
|
Income taxes relating
to:
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized
gain/(loss)
|
|
63
|
|
30
|
|
360
|
|
(2)
|
|
|
|
Reclassification to
earnings of net loss/(gain)
|
|
–
|
|
2
|
|
–
|
|
16
|
|
|
|
|
|
(201)
|
|
(100)
|
|
(986)
|
|
(33)
|
|
|
Net change in
unrealized foreign currency translation gain/(loss)
on
|
|
|
|
|
|
|
|
|
|
|
|
investments in
foreign operations, net of hedging activities
|
|
|
|
|
|
|
|
|
|
|
Unrealized
gain/(loss)
|
|
5,871
|
|
(699)
|
|
9,230
|
|
(6,082)
|
|
|
Reclassification to
earnings of net loss /(gain)
|
|
50
|
|
–
|
|
50
|
|
–
|
|
|
Net gain/(loss) on
hedges
|
|
(2,084)
|
|
312
|
|
(3,271)
|
|
2,649
|
|
|
Reclassification to
earnings of net loss /(gain) on hedges
|
|
(68)
|
|
–
|
|
(68)
|
|
–
|
|
|
Income taxes relating
to:
|
|
|
|
|
|
|
|
|
|
|
|
Net gain/(loss) on
hedges
|
|
548
|
|
(82)
|
|
859
|
|
(694)
|
|
|
|
Reclassification to
earnings of net loss /(gain) on hedges
|
|
18
|
|
–
|
|
18
|
|
–
|
|
|
|
|
|
4,335
|
|
(469)
|
|
6,818
|
|
(4,127)
|
|
|
Net change in
gain/(loss) on derivatives designated as cash flow
hedges
|
|
|
|
|
|
|
|
|
|
|
Change in
gain/(loss)
|
|
(1,485)
|
|
(2,016)
|
|
(6,179)
|
|
(3,172)
|
|
|
Reclassification to
earnings of loss/(gain)
|
|
(3,600)
|
|
185
|
|
(4,100)
|
|
607
|
|
|
Income taxes relating
to:
|
|
|
|
|
|
|
|
|
|
|
|
Change in
gain/(loss)
|
|
419
|
|
518
|
|
1,660
|
|
761
|
|
|
|
Reclassification to
earnings of loss/(gain)
|
|
890
|
|
(41)
|
|
972
|
|
(92)
|
|
|
|
|
|
(3,776)
|
|
(1,354)
|
|
(7,647)
|
|
(1,896)
|
|
|
Share of other
comprehensive income (loss) from investment in
Schwab
|
|
(721)
|
|
(198)
|
|
(3,200)
|
|
(768)
|
|
Items that will
not be subsequently reclassified to net income
|
|
|
|
|
|
|
|
|
|
|
Remeasurement
gain/(loss) on employee benefit plans
|
|
|
|
|
|
|
|
|
|
|
Gain/(loss)
|
|
(399)
|
|
659
|
|
1,105
|
|
2,422
|
|
|
Income taxes
|
|
105
|
|
(172)
|
|
(290)
|
|
(635)
|
|
|
|
|
|
(294)
|
|
487
|
|
815
|
|
1,787
|
|
|
Change in net
unrealized gain/(loss) on equity securities designated
at
|
|
|
|
|
|
|
|
|
|
|
|
fair value through
other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
Change in net
unrealized gain/(loss)
|
|
(62)
|
|
55
|
|
(214)
|
|
587
|
|
|
Income taxes
|
|
16
|
|
(15)
|
|
56
|
|
(154)
|
|
|
|
|
|
(46)
|
|
40
|
|
(158)
|
|
433
|
|
|
Gain/(loss) from
changes in fair value due to own credit risk on
|
|
|
|
|
|
|
|
|
|
|
|
financial
liabilities designated at fair value through profit or
loss
|
|
|
|
|
|
|
|
|
|
|
Gain/(loss)
|
|
52
|
|
19
|
|
87
|
|
69
|
|
|
Income taxes
|
|
(14)
|
|
(5)
|
|
(23)
|
|
(18)
|
|
|
|
|
|
38
|
|
14
|
|
64
|
|
51
|
|
Total other
comprehensive income (loss)
|
|
(665)
|
|
(1,580)
|
|
(4,294)
|
|
(4,553)
|
|
Total comprehensive
income (loss)
|
$
|
6,006
|
$
|
2,201
|
$
|
13,135
|
$
|
9,745
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
Common
shareholders
|
$
|
5,899
|
$
|
2,138
|
$
|
12,876
|
$
|
9,496
|
|
|
Preferred shareholders
and other equity instrument holders
|
|
107
|
|
63
|
|
259
|
|
249
|
|
1
|
The amounts for the
three months ended October 31, 2022, and October 31,
2021, have been derived from unaudited financial statements. The
amounts for the twelve months ended
October 31, 2022 and October 31, 2021, have been derived
from the audited financial statements.
|
CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY1
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
October
31
|
October 31
|
October
31
|
October 31
|
|
|
2022
|
2021
|
2022
|
2021
|
|
Common
shares
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
$
|
23,744
|
$
|
22,945
|
$
|
23,066
|
$
|
22,487
|
|
Proceeds from shares
issued on exercise of stock options
|
|
23
|
|
19
|
|
120
|
|
165
|
|
Shares issued as a
result of dividend reinvestment plan
|
|
596
|
|
102
|
|
1,442
|
|
414
|
|
Purchase of shares for
cancellation and other
|
|
–
|
|
–
|
|
(265)
|
|
–
|
|
Balance at end of
period
|
|
24,363
|
|
23,066
|
|
24,363
|
|
23,066
|
|
Preferred shares and
other equity instruments
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
7,350
|
|
6,700
|
|
5,700
|
|
5,650
|
|
Issue of shares and
other equity instruments
|
|
3,903
|
|
–
|
|
5,553
|
|
1,750
|
|
Redemption of shares
and other equity instruments
|
|
–
|
|
(1,000)
|
|
–
|
|
(1,700)
|
|
Balance at end of
period
|
|
11,253
|
|
5,700
|
|
11,253
|
|
5,700
|
|
Treasury – common
shares
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
(104)
|
|
(189)
|
|
(152)
|
|
(37)
|
|
Purchase of
shares
|
|
(2,721)
|
|
(2,461)
|
|
(10,852)
|
|
(10,859)
|
|
Sale of
shares
|
|
2,734
|
|
2,498
|
|
10,913
|
|
10,744
|
|
Balance at end of
period
|
|
(91)
|
|
(152)
|
|
(91)
|
|
(152)
|
|
Treasury – preferred
shares and other equity instruments
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
(16)
|
|
(5)
|
|
(10)
|
|
(4)
|
|
Purchase of shares and
other equity instruments
|
|
(113)
|
|
(98)
|
|
(255)
|
|
(205)
|
|
Sale of shares and
other equity instruments
|
|
122
|
|
93
|
|
258
|
|
199
|
|
Balance at end of
period
|
|
(7)
|
|
(10)
|
|
(7)
|
|
(10)
|
|
Contributed
surplus
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
169
|
|
125
|
|
173
|
|
121
|
|
Net premium (discount)
on sale of treasury instruments
|
|
(19)
|
|
5
|
|
(3)
|
|
–
|
|
Issuance of stock
options, net of options exercised
|
|
2
|
|
3
|
|
18
|
|
6
|
|
Other
|
|
27
|
|
40
|
|
(9)
|
|
46
|
|
Balance at end of
period
|
|
179
|
|
173
|
|
179
|
|
173
|
|
Retained
earnings
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
69,090
|
|
61,167
|
|
63,944
|
|
53,845
|
|
Net income attributable
to equity instrument holders
|
|
6,671
|
|
3,781
|
|
17,429
|
|
14,298
|
|
Common
dividends
|
|
(1,613)
|
|
(1,437)
|
|
(6,442)
|
|
(5,741)
|
|
Preferred dividends and
distributions on other equity instruments
|
|
(107)
|
|
(63)
|
|
(259)
|
|
(249)
|
|
Share and other equity
instrument issue expenses
|
|
(19)
|
|
–
|
|
(24)
|
|
(5)
|
|
Net premium on
repurchase of common shares and redemption of preferred shares and
other equity instruments
|
|
–
|
|
–
|
|
(1,930)
|
|
(1)
|
|
Remeasurement
gain/(loss) on employee benefit plans
|
|
(294)
|
|
487
|
|
815
|
|
1,787
|
|
Realized gain/(loss) on
equity securities designated at fair value through other
comprehensive income
|
|
(30)
|
|
9
|
|
165
|
|
10
|
|
Balance at end of
period
|
|
73,698
|
|
63,944
|
|
73,698
|
|
63,944
|
|
Accumulated other
comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
Net unrealized
gain/(loss) on financial assets at fair value through other
comprehensive income:
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
(275)
|
|
610
|
|
510
|
|
543
|
|
Other comprehensive
income (loss)
|
|
(199)
|
|
(103)
|
|
(981)
|
|
(34)
|
|
Allowance for credit
losses
|
|
(2)
|
|
3
|
|
(5)
|
|
1
|
|
Balance at end of
period
|
|
(476)
|
|
510
|
|
(476)
|
|
510
|
|
Net unrealized
gain/(loss) on equity securities designated at fair value through
other comprehensive income:
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
69
|
|
141
|
|
181
|
|
(252)
|
|
Other comprehensive
income (loss)
|
|
(76)
|
|
49
|
|
7
|
|
443
|
|
Reclassification of
loss/(gain) to retained earnings
|
|
30
|
|
(9)
|
|
(165)
|
|
(10)
|
|
Balance at end of
period
|
|
23
|
|
181
|
|
23
|
|
181
|
|
Gain/(loss) from
changes in fair value due to own credit risk on financial
liabilities designated at fair value through
|
|
|
|
|
|
|
|
|
|
|
profit or
loss:
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
40
|
|
–
|
|
14
|
|
(37)
|
|
Other comprehensive
income (loss)
|
|
38
|
|
14
|
|
64
|
|
51
|
|
Balance at end of
period
|
|
78
|
|
14
|
|
78
|
|
14
|
|
Net unrealized
foreign currency translation gain/(loss) on investments in foreign
operations, net of hedging activities:
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
7,713
|
|
5,699
|
|
5,230
|
|
9,357
|
|
Other comprehensive
income (loss)
|
|
4,335
|
|
(469)
|
|
6,818
|
|
(4,127)
|
|
Balance at end of
period
|
|
12,048
|
|
5,230
|
|
12,048
|
|
5,230
|
|
Net gain/(loss) on
derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
Balance at beginning of
period
|
|
(1,941)
|
|
3,284
|
|
1,930
|
|
3,826
|
|
Other comprehensive
income (loss)
|
|
(3,776)
|
|
(1,354)
|
|
(7,647)
|
|
(1,896)
|
|
Balance at end of
period
|
|
(5,717)
|
|
1,930
|
|
(5,717)
|
|
1,930
|
|
Share of accumulated
other comprehensive income (loss) from Investment in
Schwab
|
|
(3,968)
|
|
(768)
|
|
(3,968)
|
|
(768)
|
|
Total accumulated
other comprehensive income
|
|
1,988
|
|
7,097
|
|
1,988
|
|
7,097
|
|
Total
equity
|
$
|
111,383
|
$
|
99,818
|
$
|
111,383
|
$
|
99,818
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The amounts for the
three months ended October 31, 2022, and October 31, 2021, have
been derived from unaudited financial statements. The amounts for
the twelve months ended
October 31, 2022 and October 31, 2021, have been derived from the
audited financial statements.
|
CONSOLIDATED
STATEMENT OF CASH FLOWS1
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
For the three months
ended
|
For the twelve
months ended
|
|
|
|
October
31
|
October 31
|
October
31
|
October 31
|
|
|
|
2022
|
2021
|
2022
|
2021
|
|
Cash flows from
(used in) operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
6,671
|
$
|
3,781
|
$
|
17,429
|
$
|
14,298
|
|
Adjustments to
determine net cash flows from (used in) operating
activities
|
|
|
|
|
|
|
|
|
|
|
Provision for (recovery
of) credit losses
|
|
617
|
|
(123)
|
|
1,067
|
|
(224)
|
|
|
Depreciation
|
|
316
|
|
296
|
|
1,167
|
|
1,360
|
|
|
Amortization of other
intangibles
|
|
147
|
|
179
|
|
599
|
|
706
|
|
|
Net securities
loss/(gain)
|
|
(8)
|
|
(11)
|
|
(60)
|
|
(14)
|
|
|
Share of net income
from investment in Schwab
|
|
(290)
|
|
(224)
|
|
(991)
|
|
(785)
|
|
|
Gain on sale of Schwab
shares
|
|
(997)
|
|
–
|
|
(997)
|
|
–
|
|
|
Deferred
taxes
|
|
469
|
|
99
|
|
502
|
|
258
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
Interest receivable and
payable
|
|
(150)
|
|
(30)
|
|
(412)
|
|
(288)
|
|
|
Securities sold under
repurchase agreements
|
|
1,078
|
|
(11,766)
|
|
(16,073)
|
|
(44,779)
|
|
|
Securities purchased
under reverse repurchase agreements
|
|
1,108
|
|
(5,130)
|
|
7,117
|
|
1,878
|
|
|
Securities sold
short
|
|
(4,563)
|
|
5,661
|
|
3,121
|
|
7,030
|
|
|
Trading loans,
securities, and other
|
|
4,407
|
|
(152)
|
|
3,864
|
|
1,177
|
|
|
Loans net of
securitization and sales
|
|
(40,791)
|
|
(3,314)
|
|
(109,463)
|
|
(3,660)
|
|
|
Deposits
|
|
33,435
|
|
(110)
|
|
105,759
|
|
(6,494)
|
|
|
Derivatives
|
|
(9,817)
|
|
1,722
|
|
(15,435)
|
|
3,734
|
|
|
Non-trading financial
assets at fair value through profit or loss
|
|
480
|
|
(138)
|
|
(1,556)
|
|
(842)
|
|
|
Financial assets and
liabilities designated at fair value through profit or
loss
|
|
22,697
|
|
21,701
|
|
48,323
|
|
54,498
|
|
|
Securitization
liabilities
|
|
(215)
|
|
(138)
|
|
(1,083)
|
|
(719)
|
|
|
Current
taxes
|
|
(1,121)
|
|
(682)
|
|
(4,100)
|
|
239
|
|
|
Brokers, dealers and
clients amounts receivable and payable
|
|
2,165
|
|
(3,968)
|
|
8,799
|
|
(4,592)
|
|
|
Other, including
unrealized foreign currency translation loss/(gain)
|
|
(13,047)
|
|
6,472
|
|
(8,628)
|
|
27,348
|
|
Net cash from (used in)
operating activities
|
|
2,591
|
|
14,125
|
|
38,949
|
|
50,129
|
|
Cash flows from
(used in) financing activities
|
|
|
|
|
|
|
|
|
|
Redemption or
repurchase of subordinated notes and debentures
|
|
(42)
|
|
(11)
|
|
6
|
|
(7)
|
|
Common shares issued,
net
|
|
21
|
|
17
|
|
108
|
|
145
|
|
Repurchase of common
shares
|
|
–
|
|
–
|
|
(2,195)
|
|
–
|
|
Preferred shares and
other equity instruments issued
|
|
3,884
|
|
–
|
|
5,529
|
|
1,745
|
|
Redemption of preferred
shares and other equity instruments
|
|
–
|
|
–
|
|
(1,000)
|
|
(700)
|
|
Sale of treasury shares
and other equity instruments
|
|
2,837
|
|
2,596
|
|
11,168
|
|
10,943
|
|
Purchase of treasury
shares and other equity instruments
|
|
(2,834)
|
|
(2,559)
|
|
(11,107)
|
|
(11,064)
|
|
Dividends paid on
shares and distributions paid on other equity
instruments
|
|
(2,156)
|
|
(1,387)
|
|
(6,665)
|
|
(5,555)
|
|
Repayment of lease
liabilities
|
|
(185)
|
|
(102)
|
|
(663)
|
|
(543)
|
|
Net cash from (used in)
financing activities
|
|
1,525
|
|
(1,446)
|
|
(4,819)
|
|
(5,036)
|
|
Cash flows from
(used in) investing activities
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits with banks
|
|
(532)
|
|
6,967
|
|
30,455
|
|
(729)
|
|
Activities in financial
assets at fair value through other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
(7,079)
|
|
(5,526)
|
|
(31,135)
|
|
(21,056)
|
|
|
Proceeds from
maturities
|
|
8,002
|
|
6,631
|
|
33,158
|
|
33,541
|
|
|
Proceeds from
sales
|
|
1,540
|
|
2,594
|
|
6,723
|
|
5,363
|
|
Activities in debt
securities at amortized cost
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
(30,848)
|
|
(36,360)
|
|
(149,560)
|
|
(153,896)
|
|
|
Proceeds from
maturities
|
|
20,250
|
|
12,888
|
|
68,719
|
|
92,131
|
|
|
Proceeds from
sales
|
|
5,160
|
|
652
|
|
8,720
|
|
2,365
|
|
Net purchases of land,
buildings, equipment, other depreciable assets, and other
intangibles
|
|
(461)
|
|
(358)
|
|
(1,454)
|
|
(1,129)
|
|
Net cash acquired from
(paid for) divestitures and acquisitions
|
|
2,479
|
|
–
|
|
2,479
|
|
(1,858)
|
|
Net cash from (used in)
investing activities
|
|
(1,489)
|
|
(12,512)
|
|
(31,895)
|
|
(45,268)
|
|
Effect of exchange rate
changes on cash and due from banks
|
|
255
|
|
(53)
|
|
390
|
|
(339)
|
|
Net increase
(decrease) in cash and due from banks
|
|
2,882
|
|
114
|
|
2,625
|
|
(514)
|
|
Cash and due from banks
at beginning of period
|
|
5,674
|
|
5,817
|
|
5,931
|
|
6,445
|
|
Cash and due from
banks at end of period
|
$
|
8,556
|
$
|
5,931
|
$
|
8,556
|
$
|
5,931
|
|
Supplementary
disclosure of cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Amount of income taxes
paid (refunded) during the period
|
$
|
301
|
$
|
1,590
|
$
|
4,404
|
$
|
4,071
|
|
Amount of interest paid
during the period
|
|
6,428
|
|
1,136
|
|
12,523
|
|
5,878
|
|
Amount of interest
received during the period
|
|
13,408
|
|
6,974
|
|
37,642
|
|
28,127
|
|
Amount of dividends
received during the period
|
|
281
|
|
443
|
|
1,792
|
|
1,844
|
|
1
|
The amounts for the
three months ended October 31, 2022, and October 31, 2021, have
been derived from unaudited financial statements. The amounts for
the twelve months ended
October 31, 2022 and October 31, 2021, have been derived from the
audited financial statements.
|
Appendix A – Segmented Information
For management reporting purposes, commencing the fourth quarter
of 2022, the Bank reports its results under four key business
segments: Canadian Personal and Commercial Banking, which includes
the results of the Canadian personal and commercial banking
businesses, and TD Auto Finance Canada; U.S. Retail, which includes
the results of the U.S. personal and commercial banking businesses,
U.S. credit cards, TD Auto Finance U.S., U.S. wealth business, and
the Bank's investment in Schwab; Wealth Management and Insurance;
and Wholesale Banking. The Bank's other activities are grouped into
the Corporate segment.
Results for these segments for the years ended October 31,
2022 and October 31, 2021 are
presented in the following tables.
Results by Business
Segment1,2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian
|
|
|
|
|
Wealth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal
and
|
|
|
|
|
Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Banking
|
U.S.
Retail
|
and
Insurance
|
Wholesale
Banking3
|
Corporate3
|
Total
|
|
|
|
|
|
|
|
|
For the three months
ended October 31
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net interest income
(loss)
|
$
|
3,388
|
$
|
2,863
|
$
|
2,957
|
$
|
2,103
|
$
|
272
|
$
|
199
|
$
|
683
|
$
|
689
|
$
|
330
|
$
|
408
|
$
|
7,630
|
$
|
6,262
|
Non-interest income
(loss)
|
|
1,066
|
|
991
|
|
638
|
|
677
|
|
2,359
|
|
2,467
|
|
476
|
|
461
|
|
3,394
|
|
83
|
|
7,933
|
|
4,679
|
Total
revenue
|
|
4,454
|
|
3,854
|
|
3,595
|
|
2,780
|
|
2,631
|
|
2,666
|
|
1,159
|
|
1,150
|
|
3,724
|
|
491
|
|
15,563
|
|
10,941
|
Provision for (recovery
of)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
credit
losses
|
|
229
|
|
53
|
|
225
|
|
(76)
|
|
–
|
|
–
|
|
26
|
|
(77)
|
|
137
|
|
(23)
|
|
617
|
|
(123)
|
Insurance claims
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related
expenses
|
|
–
|
|
–
|
|
–
|
|
–
|
|
723
|
|
650
|
|
–
|
|
–
|
|
–
|
|
–
|
|
723
|
|
650
|
Non-interest
expenses
|
|
1,921
|
|
1,720
|
|
1,976
|
|
1,617
|
|
1,208
|
|
1,192
|
|
802
|
|
658
|
|
638
|
|
760
|
|
6,545
|
|
5,947
|
Income (loss) before
income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and share of net income
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab
|
|
2,304
|
|
2,081
|
|
1,394
|
|
1,239
|
|
700
|
|
824
|
|
331
|
|
569
|
|
2,949
|
|
(246)
|
|
7,678
|
|
4,467
|
Provision for (recovery
of)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income taxes
|
|
610
|
|
552
|
|
165
|
|
111
|
|
184
|
|
216
|
|
70
|
|
149
|
|
268
|
|
(118)
|
|
1,297
|
|
910
|
Share of net income
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab4,5
|
|
–
|
|
–
|
|
310
|
|
246
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(20)
|
|
(22)
|
|
290
|
|
224
|
Net income
(loss)
|
$
|
1,694
|
$
|
1,529
|
$
|
1,539
|
$
|
1,374
|
$
|
516
|
$
|
608
|
$
|
261
|
$
|
420
|
$
|
2,661
|
$
|
(150)
|
$
|
6,671
|
$
|
3,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the twelve
months ended October 31
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net interest income
(loss)
|
$
|
12,396
|
$
|
11,195
|
$
|
9,604
|
$
|
8,074
|
$
|
945
|
$
|
762
|
$
|
2,937
|
$
|
2,630
|
$
|
1,471
|
$
|
1,470
|
$
|
27,353
|
$
|
24,131
|
Non-interest income
(loss)
|
|
4,190
|
|
3,722
|
|
2,821
|
|
2,684
|
|
9,915
|
|
9,827
|
|
1,894
|
|
2,070
|
|
2,859
|
|
259
|
|
21,679
|
|
18,562
|
Total
revenue
|
|
16,586
|
|
14,917
|
|
12,425
|
|
10,758
|
|
10,860
|
|
10,589
|
|
4,831
|
|
4,700
|
|
4,330
|
|
1,729
|
|
49,032
|
|
42,693
|
Provision for (recovery
of)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
credit
losses
|
|
491
|
|
256
|
|
335
|
|
(250)
|
|
1
|
|
2
|
|
37
|
|
(118)
|
|
203
|
|
(114)
|
|
1,067
|
|
(224)
|
Insurance claims
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
related
expenses
|
|
–
|
|
–
|
|
–
|
|
–
|
|
2,900
|
|
2,707
|
|
–
|
|
–
|
|
–
|
|
–
|
|
2,900
|
|
2,707
|
Non-interest
expenses
|
|
7,176
|
|
6,648
|
|
6,920
|
|
6,417
|
|
4,711
|
|
4,355
|
|
3,033
|
|
2,709
|
|
2,801
|
|
2,947
|
|
24,641
|
|
23,076
|
Income (loss) before
income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and share of net income
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab
|
|
8,919
|
|
8,013
|
|
5,170
|
|
4,591
|
|
3,248
|
|
3,525
|
|
1,761
|
|
2,109
|
|
1,326
|
|
(1,104)
|
|
20,424
|
|
17,134
|
Provision for (recovery
of)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income taxes
|
|
2,361
|
|
2,128
|
|
625
|
|
504
|
|
853
|
|
929
|
|
436
|
|
539
|
|
(289)
|
|
(479)
|
|
3,986
|
|
3,621
|
Share of net income
from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment in
Schwab4,5
|
|
–
|
|
–
|
|
1,075
|
|
898
|
|
–
|
|
–
|
|
–
|
|
–
|
|
(84)
|
|
(113)
|
|
991
|
|
785
|
Net income
(loss)
|
$
|
6,558
|
$
|
5,885
|
$
|
5,620
|
$
|
4,985
|
$
|
2,395
|
$
|
2,596
|
$
|
1,325
|
$
|
1,570
|
$
|
1,531
|
$
|
(738)
|
$
|
17,429
|
$
|
14,298
|
Total Assets by
Business Segment6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Canadian
|
|
|
|
Wealth
|
|
|
|
|
|
|
|
|
|
|
Personal
and
|
|
|
|
Management
|
|
Wholesale
|
|
|
|
|
|
|
|
Commercial
Baking
|
U.S.
Retail
|
and
Insurance
|
Banking
|
Corporate
|
Total
|
|
|
|
As at October 31,
2022
|
|
Total
assets
|
$
|
526,374
|
$
|
585,297
|
$
|
23,721
|
$
|
635,094
|
$
|
147,042
|
$
|
1,917,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at October 31,
2021
|
|
Total
assets
|
$
|
484,857
|
$
|
559,503
|
$
|
24,579
|
$
|
514,681
|
$
|
145,052
|
$
|
1,728,672
|
|
1
|
The amounts for the
three months ended October 31, 2022 and October 31, 2021
have been derived from the unaudited financial statements. The
amounts for the twelve months
ended October 31, 2022 and October 31, 2021 have
been derived from the audited financial statements.
|
2
|
The retailer program
partners' share of revenues and credit losses is presented in the
Corporate segment, with an offsetting amount (representing the
partners' net share) recorded in
Non-interest expenses, resulting in no impact to Corporate reported
Net income (loss). The Net income (loss) included in the U.S.
Retail segment includes only the portion of revenue
and credit losses attributable to the Bank under the
agreements.
|
3
|
Net interest income
within Wholesale Banking is calculated on a TEB. The TEB adjustment
reflected in Wholesale Banking is reversed in the Corporate
segment.
|
4
|
The after-tax amounts
for amortization of acquired intangibles and the Bank's share of
acquisition and integration charges associated with Schwab's
acquisition of TD Ameritrade are
recorded in the Corporate segment.
|
5
|
The Bank's share of
Schwab's earnings is reported with a one-month lag. Refer to Note
12 for further details.
|
6
|
Total assets as at
October 31, 2022 and October 31, 2021 have been derived from the
audited financial statements.
|
SHAREHOLDER AND INVESTOR
INFORMATION
Shareholder Services
If
you:
|
And your inquiry
relates to:
|
Please
contact:
|
Are a
registered shareholder (your
name
appears on your TD share certificate)
|
Missing dividends, lost
share certificates, estate
questions, address changes to the share register,
dividend bank account changes, the dividend
reinvestment plan, eliminating duplicate mailings of
shareholder materials, or stopping (or resuming)
receiving annual and quarterly reports
|
Transfer
Agent:
TSX Trust Company
P.O. Box 700, Station B
Montréal, Québec
H3B 3K3
1-800-387-0825 (Canada
and U.S. only)
or
416-682-3860
Facsimile:
1-888-249-6189
shareholderinquiries@tmx.com or
http://www.tsxtrust.com
|
Hold your TD shares
through the
Direct Registration
System
in the United
States
|
Missing dividends, lost
share certificates, estate
questions, address changes to the share register,
eliminating duplicate mailings of shareholder materials
or stopping (or resuming) receiving annual and quarterly
reports
|
Co-Transfer Agent
and Registrar:
Computershare
P.O. Box 43006
Providence, RI
02940-3006
or
Computershare
150 Royall
Street
Canton, MA
02021
1-866-233-4836
TDD for hearing
impaired: 1-800-231-5469
Shareholders outside of
U.S.: 201-680-6578
TDD shareholders
outside of U.S.: 201-680-6610
www.computershare.com/investor
|
Beneficially own
TD shares that are held in
the name of an intermediary, such as a bank,
a trust company, a securities broker, or other
nominee
|
Your TD shares,
including questions regarding the
dividend reinvestment plan and mailings of shareholder
materials
|
Your
intermediary
|
For all other shareholder inquiries, please contact TD
Shareholder Relations at 416-944-6367 or 1-866-756-8936 or email
tdshinfo@td.com.
Please note that by leaving us an e-mail or voicemail message, you
are providing your consent for us to forward your inquiry to the
appropriate party for response.
Annual Report on Form 40-F (U.S.)
A copy of the Bank's Annual Report on Form 40-F for fiscal 2022
will be filed with the Securities and Exchange Commission later
today and will be available at http://www.td.com. You may obtain a
printed copy of the Bank's Annual Report on Form 40-F for fiscal
2022 free of charge upon request to TD Shareholder Relations
at 416-944-6367 or 1-866-756-8936 or e-mail tdshinfo@td.com.
Access to Quarterly Results Materials
Interested investors, the media, and others may view this fourth
quarter earnings news release, results slides, supplementary
financial information, supplemental regulatory disclosure, and the
2022 Consolidated Financial Statements and MD&A documents on
the TD website at www.td.com/investor/.
General Information
Products and services: Contact TD Canada Trust, 24 hours a day,
seven days a week: 1-866-567-8888 French: 1-866-233-2323
Cantonese/Mandarin: 1-800-328-3698
Telephone device for the hearing impaired (TTY): 1-800-361-1180
Website: www.td.com
Email: customer.service@td.com
Media contacts: https://stories.td.com/media-contacts
Quarterly Earnings Conference Call
TD Bank Group will host an earnings conference call in
Toronto, Ontario on
December 1, 2022. The call will be available live via TD's
website at 1:30 p.m. ET. The call and audio webcast will
feature presentations by TD executives on the Bank's financial
results for the fourth quarter, followed by a question-and-answer
period with analysts. The presentation material referenced during
the call will be available on the TD website at
www.td.com/investor on December 1, 2022 before
1:30 p.m. ET. A listen-only telephone
line is available at 416-641-6150 or 1-866-696-5894 (toll free) and
the passcode is 2727354#.
The audio webcast and presentations will be archived
at www.td.com/investor. Replay of the teleconference will be
available from 5:00 p.m. ET on
December 1, 2022, until 11:59 p.m.
ET on December 16, 2022 by
calling 905-694-9451 or 1-800-408-3053 (toll free). The passcode is
7300743#.
Annual Meeting
Thursday, April 20, 2023
Toronto, Ontario
Record Date for Notice and Voting:
February 21, 2023
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively
known as TD Bank Group ("TD" or the "Bank"). TD is the sixth
largest bank in North America by
assets and serves over 27 million customers in four key businesses
operating in a number of locations in financial centres around the
globe: Canadian Personal and Commercial Banking, including TD
Canada Trust and TD Auto Finance Canada; U.S. Retail, including TD
Bank, America's Most Convenient Bank®, TD Auto Finance
U.S., TD Wealth (U.S.), and an investment in The Charles Schwab
Corporation; Wealth Management and Insurance, including TD Wealth
(Canada), TD Direct
Investing, and TD Insurance; and Wholesale Banking, including
TD Securities. TD also ranks among the world's leading online
financial services firms, with more than 15 million active online
and mobile customers. TD had $1.9
trillion in assets on October 31,
2022. The Toronto-Dominion Bank trades under the symbol "TD"
on the Toronto and New York Stock
Exchanges.
SOURCE TD Bank Group