TD Bank 2002 Annual Report Download - page 18

Download and view the complete annual report

Please find page 18 of the 2002 TD Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 95

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95

16
HOW WE PERFORMED IN 2002
Financial results of key product segments within
TD Canada Trust
Real estate secured lending
•Offers mortgages and home equity secured lines of credit
through branches and other sales channels.
•Highlights for 2002 include:
•growing average volumes by $4.3 billion or 5%.
•introducing over 40 process improvements designed
to enhance the customer’s mortgage purchase and
renewal experience.
•launching the new Great Rate Mortgage – a less than
prime variable rate mortgage with lock-in capability at
guaranteed favourable rates.
•2002 proved to be a buoyant year for real estate in both
home purchase and refinance activity.
•Process challenges earlier in the year stemming from
integration activities and a highly competitive mortgage
market contributed to a market share decline of
approximately one percentage point despite a 40%
increase in mortgage origination volume.
•Market share stabilized towards the end of the year as
customers responded to our service improvements.
•Looking forward, the industry will continue to be extremely
competitive due to the historical low interest rates, the
growing influence of mortgage brokers and the emergence
of non-traditional mortgage providers.
•Objectives for 2003 are to maintain market share and
grow volume and revenue by continuing to improve the
mortgage process and introducing new products designed
to enhance our customer’s comfortable real estate
financing experience.
Personal deposits
•Offers a complete range of Canadian and U.S. dollar
chequing, savings and term investment vehicles designed
to promote primary banking relationships.
•During 2002, the industry experienced strong growth in
non-term deposits as customers opted for guaranteed
returns and liquidity against a backdrop of declining equity
markets and an uncertain economic environment.
•We maintained the number one position in personal
deposit market share as our overall share improved on
growth in average non-term volumes of 24% (primarily
savings) partly offset by a decline in average term volumes
of 6%.
•We do not expect the strong non-term deposit volume
growth to repeat in 2003, however we do expect a
turnaround in term deposit volumes as customers switch
back to term products as interest rates increase from
historic lows.
Consumer lending
•Offers Lines of Credit, Loans, Overdraft Protection products
and a wide selection of Visa credit cards including Classic,
Premium and Rewards cards such as the GM Visa card
and the TD Gold Travel Visa card.
•Revenue growth in 2002 came from credit cards while
revenues and volumes from other products were flat.
•Provision for credit losses increased during the year due to
seasoning of our unsecured lending portfolio following two
years of strong growth, as well as operational and
collection issues following the merger (which were
successfully resolved by the end of the second quarter).
•Strengthening and deepening relationships with existing
customers, pricing for risk and striving to grow low risk
business to generate shareholder value will be the key
initiatives in 2003.
Small business banking and merchant services
•Provide lending, deposit, and electronic banking services
for small businesses as well as credit/debit card point of
sale services.
•As our small business market share is below our share for
personal banking products, this is a business that we have
targeted for higher growth.
•In 2002, market share grew with average lending and
deposit volumes increasing by 8% and 17% respectively
on improved customer satisfaction scores.
•We will continue to build on this momentum in 2003 and
have set a double-digit revenue growth target for the year.
1Other revenue includes internal commissions on sales of mutual funds
and other TD Wealth Management products, fees for foreign exchange,
safety deposit box rentals and other branch services. The funding costs
for the Canada Trust acquisition is also included in Other. Revenues in
2001 also include certain revenues that are of a non-recurring nature.
Revenues
(millions of dollars) 2002 2001 Growth
Real estate secured lending $ 745 $ 697 7%
Personal deposits 1,941 1,940 –
Small business banking 667 641 4
Commercial banking 617 627 (2)
Consumer lending 1,107 1,027 8
Insurance 411 352 17
Other1280 355 (21)
Total $ 5,768 $ 5,639 2%
Management’s Discussion and Analysis of Operating Performance