TD Bank 2007 Annual Report Download - page 22

TD BANK FINANCIAL GROUP ANNUAL REPORT 2007 Management’s Discussion and Analysis18
TABLE 5NET INTEREST INCOME ON AVERAGE EARNING BALANCES1
NET INTEREST INCOME
(millions of Canadian dollars)
05 06 07
05
06
07
$7,000
0
6,000
5,000
4,000
3,000
2,000
1,000
FINANCIAL RESULTS OVERVIEW
Revenue
AT A GLANCE OVERVIEW
• Total revenue increased by $1,089 million, or 8%, from
the prior year.
• Net interest income was up $553 million, or 9%, from
the prior year.
• Other income was up $536 million, or 8%, from the
prior year.
NET INTEREST INCOME
Net interest income was $6,924 million in 2007, an increase
of $553 million or 9%. Canadian Personal and Commercial
Banking net interest income increased by $522 million largely
on higher product volumes. U.S. Personal and Commercial
Banking net interest income increased largely due to the full
year impact of the Hudson and Interchange acquisitions. The
increase in Wholesale Banking net interest income was largely
due to higher trading-related net interest income. These
increases were partially offset by the loss of net interest income
related to the impact of the sale of TD Waterhouse U.S.A.
to Ameritrade.
Net Interest Margin
Net interest margin improved by 4 bps in 2007 to 2.06% from
2.02% in 2006. The increase was a result of a slight margin
improvement in the Canadian Personal and Commercial
Banking segment, higher net interest income in the Wholesale
Banking segment and the impact of the change in the Bank’s
overall product mix. These increases were partially offset by a
slight compression in margins in the U.S. Personal and
Commercial Banking segment.
(millions of Canadian dollars) 2007 2006 2005
Average
balance Interest
Average
rate
Average
balance Interest
Average
rate
Average
balance Interest
Average
rate
Earning assets
Deposits with banks $ 12,184 $ 357 2.93%$ 11,680 $ 302 2.59%$ 10,654 $ 415 3.90%
Securities
Trading 81,756 3,124 3.82 76,679 2,653 3.46 77,906 2,536 3.26
Non-trading 43,970 1,642 3.73 – – – – – –
Investment – – – 40,172 1,782 4.44 32,354 1,503 4.65
Total securities 125,726 4,766 3.79 116,851 4,435 3.80 110,260 4,039 3.66
Securities purchased under
reverse repurchase agreements 31,960 1,829 5.72 30,910 1,413 4.57 27,253 907 3.33
Loans
Mortgages 63,991 3,471 5.42 60,325 3,131 5.19 58,033 2,807 4.84
Consumer installment and
other personal 64,502 4,510 6.99 62,797 4,036 6.43 55,975 3,067 5.48
Credit card 5,467 731 13.37 3,830 509 13.29 2,690 323 12.01
Business and government 31,913 2,188 6.86 28,562 1,743 6.10 23,288 1,218 5.23
Total loans 165,873 10,900 6.57 155,514 9,419 6.06 139,986 7,415 5.30
Total earning assets $ 335,743 $ 17,852 5.32%$ 314,955 $ 15,569 4.94%$ 288,153 $ 12,776 4.43%
Interest-bearing liabilities
Deposits
Personal $ 144,364 $ 3,733 2.59%$ 132,135 $ 3,027 2.29%$ 122,032 $ 2,509 2.06%
Banks 19,954 814 4.08 15,874 661 4.16 14,683 462 3.15
Business and government 105,196 3,700 3.52 105,252 3,393 3.22 99,827 2,158 2.16
Total deposits 269,514 8,247 3.06 253,261 7,081 2.80 236,542 5,129 2.17
Subordinated notes and
debentures 9,061 484 5.34 6,956 388 5.58 5,626 328 5.83
Obligations related to securities
sold short and under
repurchase agreements 46,487 2,088 4.49 44,287 1,603 3.62 34,499 1,164 3.37
Preferred shares and
capital trust securities 1,797 109 6.07 1,790 126 7.04 2,215 147 6.64
Total interest-bearing
liabilities $ 326,859 $ 10,928 3.34%$ 306,294 $ 9,198 3.00%$ 278,882 $ 6,768 2.43%
Total net interest income on
average earnings assets $ 335,743 $ 6,924 2.06%$ 314,955 $ 6,371 2.02%$ 288,153 $ 6,008 2.09%
1 Net interest income includes dividends on securities.