TD Bank 2002 Annual Report Download - page 25

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HOW WE PERFORMED IN 2002
Other
TD Wealth Management
(millions of dollars) 2002 2001 2000
Net interest income (TEB) $ 435 $ 480 $ 604
Other income 1,777 1,834 2,379
Total revenue 2,212 2,314 2,983
Provision for credit losses –– 1
Non-interest expenses excluding non-cash goodwill/intangible amortization 1,961 2,031 2,167
Income before taxes 251 283 815
Provision for income taxes (TEB) 120 129 345
Non-controlling interest in net income of subsidiaries –636
Net income – cash basis $ 131 $ 148 $ 434
Selected volumes and ratios
Assets under management (billions of dollars) $ 112 $ 119 $ 112
Economic profit (loss) (114) (41) 271
Full-time equivalent staff at October 31 7,736 8,944 11,225
Return on economic capital – cash basis 22 % 18 % 56%
Efficiency ratio – cash basis 88.7 % 87.8 % 73.0%
The Other segment includes non-controlling interests in
subsidiaries, certain gains on dispositions of businesses,
real estate investments, the effect of securitizations, treasury
management, general provisions for credit losses, certain
taxable equivalent adjustments and corporate level tax
benefits, restructuring costs and residual unallocated revenues
and expenses.
During the year, the Other segment had an operating cash
basis net loss of $56 million. The most significant factors
contributing to this result were net losses of $49 million
related to transfer pricing differences, net treasury activities,
and net unallocated revenues, expenses and taxes. In
addition, the Other segment included the $34 million after-
tax charge for non-controlling interest in subsidiaries. The
above net losses were offset by net earnings of $27 million
from dispositions of businesses. Reported net loss for the
Other segment was $24 million for the year, and includes the
special gain of $32 million after-tax related to the sale of the
Bank’s mutual fund record keeping and custody business.
Other
(millions of dollars) 2002 2001 2000
Net interest income (TEB) $ (467) $ (681) $ (493)
Other income 243 324 288
Total revenue (224) (357) (205)
Provision for credit losses (70) (87) (63)
Non-interest expenses excluding non-cash goodwill/intangible amortization 60 59 7
Income (loss) before taxes (214) (329) (149)
Provision for (benefit of) income taxes (TEB) (192) (378) (171)
Non-controlling interest in net income of subsidiaries 34 43 41
Net income (loss) – operating cash basis $ (56) $ 6 $ (19)
Special increase in general provision, net of income taxes –(208) –
Gain on sale of mutual fund record keeping and custody business, net of income taxes 32 ––
Gains on sale of investment real estate, net of income taxes –275 –
Restructuring costs, net of income taxes –(138) (271)
Income tax expense from income tax rate changes –(75) –
Net loss – reported basis $ (24) $ (140) $ (290)
Management’s Discussion and Analysis of Operating Performance
$13 million to $238 million in 2002 compared with the
prior year and an efficiency ratio improvement of seven
percentage points compared with the prior year.
TD Waterhouse discount brokerage is a world leader in
self-directed investing, serving customers both directly and
through joint ventures in Canada, the United States, the
United Kingdom, Australia, India, Singapore, Hong Kong and
Luxembourg. As economic uncertainties dominated the
landscape during fiscal 2002, trading volumes and margin
loans were well below previous levels. These factors,
combined with narrowing spreads, resulted in a 6% or $104
million decrease in revenue in 2002 to $1,512 million.
Offsetting this decline was a continued focus on expense
management which resulted in total expenses of $1,445
million, a 4% or $63 million decline from prior year.
TD Waterhouse Financial Planning continues to aggressively
grow its front-line salesforce and invest in a comprehensive
technology platform. As a result of this investment, revenues
increased to $7 million and total operating expenses
increased $13 million or 68% during the year.