TD Bank 2010 Annual Report Download - page 18

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TD BANK GROUP ANNUAL REPORT 2010 MANAGEMENT’S DISCUSSION AND ANALYSIS16
(millions of Canadian dollars, except as noted) 2010 vs. 2009
2010 2009 2008 % change
Salaries and employee benefits
Salaries $ 3,747 $ 3,671 $ 3,089 2.1
Incentive compensation 1,337 1,342 1,235 (0.4)
Pension and other employee benefits 876 826 660 6.1
Total salaries and employee benefits 5,960 5,839 4,984 2.1
Occupancy
Rent 577 559 463 3.2
Depreciation 335 323 225 3.7
Property tax 49 50 33 (2.0)
Other 275 281 214 (2.1)
Total occupancy 1,236 1,213 935 1.9
Equipment
Rent 209 285 216 (26.7)
Depreciation 266 277 213 (4.0)
Other 405 335 254 20.9
Total equipment 880 897 683 (1.9)
Amortization of other intangible assets 592 653 577 (9.3)
Restructuring costs 17 36 48 (52.8)
Marketing and business development 595 566 491 5.1
Brokerage-related fees 297 274 252 8.4
Professional and advisory services 804 740 569 8.6
Communications 251 239 210 5.0
Other expenses
Capital and business taxes 213 274 234 (22.3)
Postage 166 156 138 6.4
Travel and relocation 134 138 106 (2.9)
Other 1,018 1,186 275 (14.2)
Total other expenses 1,531 1,754 753 (12.7)
Total expenses $ 12,163 $ 12,211 $ 9,502 (0.4)
Efficiency ratio – reported 62.2% 68.4% 64.8% (620)
bps
Efficiency ratio – adjusted 58.6 59.2 64.6 (60)
NON-INTEREST EXPENSES AND EFFICIENCY RATIO
TABLE 9
U.S. Personal and Commercial Banking non-interest expenses
increased due to investments in new stores and infrastructure,
partially offset
by the translation effect of a stronger Canadian dollar.
EFFICIENCY RATIO
The efficiency ratio measures operating efficiency and is calculated
by taking the non-interest expenses as a percentage of total revenue.
A lower ratio indicates a more efficient business operation.
The Bank’s reported and adjusted efficiency ratio improved from last
year, primarily due to improved efficiency in Canadian Personal and
Commercial Banking and Global Wealth Management.
FINANCIAL RESULTS OVERVIEW
Expenses
AT A GLANCE OVERVIEW
•
Reported non-interest expenses were $12,163 million,
a decrease of $48 million, compared with last year.
• Adjusted non-interest expenses were $11,464 million,
an increase of $448 million, or 4%, compared with last year.
•
Reported efficiency ratio improved to 62.2% compared
with 68.4% last year.
•
Adjusted efficiency ratio improved to 58.6% compared with
59.2% last year.
NON-INTEREST EXPENSES
Reported non-interest expenses for the year were $12,163 million,
compared with $12,211 million last year, a decrease of $48 million
compared with last year. Adjusted non-interest expenses were
$11,464 million, an increase of $448 million, or 4% compared with
last year. The increase in adjusted non-interest expenses was due to
increases in the Canadian Personal and Commercial Banking, Wealth
Management, and U.S. Personal and Commercial Banking segments.
Canadian Personal and Commercial Banking non-interest expenses
increased largely due to higher employee compensation, project-related
costs, non-credit losses, and the investment in new branches, partially
offset by lower litigation costs and capital taxes. Wealth Management
non-interest expenses increased due to higher variable compensation
and trailer fees, the inclusion of U.K. acquisitions, and continued
investment in growing the sales force in advice-based businesses.
NON-INTEREST EXPENSES
(millions of Canadian dollars)
08 09 10
10,000
12,000
$14,000
8,000
6,000
4,000
2,000
0
EFFICIENCY RATIO
(percent)
08 09 10
80%
60
40
20
0