TD Bank 2002 Annual Report Download - page 19

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HOW WE PERFORMED IN 2002
Commercial banking
•Provide lending, deposit, cash management and other
services for mid-market businesses.
•Highlights for 2002 include:
•successfully completed the first phase of the migration
of cash management services to the web.
•achieved strong growth in commercial deposits,
increasing average volume by $2.1 billion or 24%.
•realized a loan loss ratio of .19% well within
the target and improved the credit quality of the
loan portfolio.
•Average lending volume decreased by $1.2 billion or 8%
in 2002 as the economic environment discouraged our
customers’ capital expenditures.
•Focus for 2003 is to continue to emphasize deposit growth
and maintain a disciplined use of our capital.
Insurance
Offer a broad range of insurance products through the TD
Insurance and TD Meloche Monnex brands, including credit
protection coverage on TD Canada Trust lending products.
In 2002 total premiums collected surpassed the one
billion-dollar mark for the first time. Other key highlights and
outlook are as follows:
TD Life Group
•Grew revenue by 10% year-over-year.
•Significantly improved the creditor insurance sales
experience in the branches through a major systems
automation initiative that will lead to further growth
in 2003.
•Pursuing continued growth in critical illness insurance,
now providing protection to over 400,000 individuals,
giving us a leadership position in Canada.
TD Meloche Monnex
•Provides insurance services to almost 520,000 clients
and is the largest group insurer for home and auto in
Canada through affinity arrangements with professional
and university alumni organizations.
•Despite poor industry results at the bottom of the
traditional underwriting cycle, TD Meloche Monnex grew
premium volume by 28% and net revenue by 25% over
the prior year and achieved a direct expense ratio of
21%, which is well below industry average.
•Our objective is to achieve double-digit revenue growth
in 2003, building on 2002 sales growth, industry
pricing increases and a continued emphasis on service
and quality products.
TD Insurance
•Cater to TD customers, members of employer groups
and a broader clientele under the banner of TD
Insurance through a direct marketing approach,
including e-commerce, direct mail and telephone.
•Developed a successful web-based application, which
is now responsible for 25% of new auto and home
insurance sales and 35% of new individual life
insurance sales.
•Targeting continued strong growth in the employer
market and direct marketing sales, particularly
e-commerce driven.
TD Canada Trust
(millions of dollars) 2002 2001 2000
Net interest income (TEB) $ 4,058 $ 3,951 $ 3,265
Other income 1,710 1,688 1,438
Total revenue 5,768 5,639 4,703
Provision for credit losses 505 380 332
Non-interest expenses excluding non-cash goodwill/intangible amortization 3,501 3,467 2,944
Income before taxes 1,762 1,792 1,427
Provision for income taxes (TEB) 648 702 602
Net income – cash basis $ 1,114 $ 1,090 $ 825
Selected volumes and ratios
Average loans and customers' liability under acceptances (billions of dollars) $99 $91 $81
Average deposits (billions of dollars) 103 97 86
Economic profit 450 369 213
Full-time equivalent staff at October 31 28,452 30,538 27,902
Return on economic capital – cash basis127% 29% 24%
Efficiency ratio –cash basis158.9% 59.6% 60.9%
1Excludes Canada Trust acquisition funding costs.
Management’s Discussion and Analysis of Operating Performance