TD Bank 2010 Annual Report Download - page 26

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TD BANK GROUP ANNUAL REPORT 2010 MANAGEMENT’S DISCUSSION AND ANALYSIS24
(millions of Canadian dollars, except as noted) 2010 2009 2008
Net interest income $ 7,134 $ 6,348 $ 5,790
Non-interest income 3,237 3,101 3,036
Total revenue 10,371 9,449 8,826
Provision for credit losses 1,046 1,155 766
Non-interest expenses 4,934 4,725 4,522
Net income – reported $ 3,095 $ 2,472 $ 2,424
Selected volumes and ratios
Return on invested capital 33.4% 28.1% 29.3%
Margin on average earning assets (including securitized assets) 2.92 2.90 2.95
Efficiency ratio 47.6 50.0 51.2
Number of Canadian retail branches 1,127 1,116 1,098
Average number of full-time equivalent staff 34,108 32,725 32,167
CANADIAN PERSONAL AND COMMERCIAL BANKING
TABLE 14
BUSINESS HIGHLIGHTS
• Posted record earnings of $3,095 million, up 25% from last
year and achieved record revenue and efficiency.
• Achieved revenue growth of 10% on broad-based volume
growth and higher fee revenue.
• Ongoing investment in customer-facing areas with the objec-
tive of further improving customer service. Extended market
leadership position for the number of average branch hours
by exceeding peer average by 54% and continuing to lead the
industry in new branch openings with 166 opened since 2005,
including 21 new branches in 2010.
• Announced introduction of seven-day banking – more than
300 branches in 90 communities across Canada will serve
customers on Sundays.
• Achieved largest market share gains of five major Canadian
banks for business banking credit, year over year and for the
cumulative three year period.
• Achieved external recognition as an industry leader in
customer service excellence with distinctions that included
the following:
–
Rated #1 for “Customer Service Excellence” among Canada’s
five major banks by an independent market research firm
Synovate for the sixth year in a row. The Synovate Best
Banking Awards for 2010 were based on survey responses
from 39,000 banking customers for the year ended August
2010,
regionally and demographically representative of
the entire Canadian population. Known as the Customer
Service Index, the survey has been in existence since 1987.
– Ranked highest in overall customer satisfaction among the
five major Canadian banks for the fifth consecutive year
by J.D. Power and Associates. 2010 results represented
responses from 14,583 Canadian retail banking customers,
fielded in March and June 2010 by J.D. Power and Asso-
ciates, a global marketing information services firm.
TD Canada Trust set the highest benchmark scores across
six major drivers of customer satisfaction: account activities,
account information, product offerings, facility, fees, and
problem resolution.
• TD Insurance gross originated premiums grew 11%, retaining
the #1 direct writer position and increasing overall market
share in Canada.
CHALLENGES IN 2010
• Continued low interest rate environment impacted margins
on prime-based products.
• Heightened competition from the major Canadian banks
and other competitors in residential secured lending and
term deposits.
• Significant claims cost escalation continued in Ontario
accident benefits.
INDUSTRY PROFILE
The personal and business banking environment in Canada is very
competitive among the major banks with some strong regional players.
The competition makes it difficult to sustain market share gains and
distinctive competitive advantages over the long term. Customers
expect more convenient and cost effective banking solutions. Continued
success depends upon outstanding customer service and convenience,
disciplined risk management practices, and expense management. The
Canadian property and casualty insurance industry features a relatively
large number of participants each with limited market share. The life
and health insurance industry in Canada and the reinsurance market
internationally are more consolidated featuring a few large players.
OVERALL BUSINESS STRATEGY
The strategy for Canadian Personal and Commercial Banking is
as follows:
• Integrate the elements of the comfortable customer experience
into everything we do.
• Be recognized as an extraordinary place to work.
• Use our strengths to build out under-represented businesses.
• Simplify activities to be an efficient revenue growth engine.
• Invest in the future to deliver top tier earnings performance
consistently.