TD Bank 2010 Annual Report Download - page 6

4TD BANK GROUP ANNUAL REPORT 2010 GROUP PRESIDENT AND CEO’S MESSAGE
Group President and CEO’s Message
It was another great year for TD. As economic headwinds lingered, we delivered $5.2 billion in adjusted
profit, and our retail operations posted a record $4.8 billion in adjusted earnings. We continued to grow
our presence. In Canada, this meant continued leadership in customer service, additional banking hours and
the opening of 21 new branches. In the U.S., we added about 240 stores through the acquisition of
The South Financial Group, Inc. and the operations of three Florida banks purchased from the U.S. Federal
Deposit Insurance Corporation.
A STORY OF GROWTH
There’s no question that 2010 was a year of significant growth for TD.
While the economy is still recovering, our outstanding retail banking
businesses continued to deliver strong results, and our Wholesale
business earned above its target rate of return. This year, TD’s earnings
per share returned to a level roughly in line with 2007, which is a
remarkable achievement given the continuing challenges in the economy
and the fact that our share count is significantly higher than it was
three years ago. In short, we’re very proud of our performance.
Our Canadian Personal and Commercial Banking operations continue
to be our engine of growth, thanks to strength in the Canadian
housing market, strong volume growth in personal and business
deposits and market share gains in business banking. The operating
environment also improved for TD Insurance, positioning it well for
the future.
TD Bank, America’s Most Convenient Bank, continued to grow
organically and also completed a number of acquisitions to further
build out our Maine-to-Florida footprint and continued to perform well
despite the weak economy and an uncertain regulatory environment.
Performance in our Wealth Management business continued to
strengthen throughout the year, marking seven consecutive quarters
of improved profit. We continued to be competitive in attracting new
assets, and TD Investment Management was recognized by Benefits
Canada as the fastest-growing pension money manager for 2010 in
the greater than $10 billion assets category.
Meanwhile, our Wholesale business normalized as we had expected
and continued to deliver strong results in the face of challenging
market conditions. TD Securities also grew its fixed-income, currency
and commodities businesses and continued to build out its investment
banking capabilities.
SIGNIFICANT MILESTONES
A few things really stood out for me. First, TD Canada Trust continued
to set the high-watermark for providing legendary service and
unparalleled convenience to customers, winning the J.D. Power and
Associates award for the fifth year in a row and the Synovate award
for the sixth straight year – an outstanding success.
We continued to put our commitment to our customers into action.
We recognize that not all customers operate on the same schedule.
To better meet their needs, TD Canada Trust announced seven-day
banking, which will let customers at 300 branches across Canada
do their banking on any day of the week. And this year, we also
celebrated our 150th anniversary of operating in Quebec – a terrific
milestone in an important market. We continued to support the
communities where our customers and employees live and work. This
is much more than simple cheque-cutting – we worked to increase the
impact of our donations by encouraging our customers and employees
to get involved and by working directly with community groups.
It was a great year for our U.S. franchise. First, we bought the
operations of three banks from the U.S. Federal Deposit Insurance
Corporation (FDIC). We were pleased to be involved in these transac-
tions, which not only helped grow our presence in the U.S. but also
allowed us to work with the FDIC in its mission to maintain stability
and public confidence in the U.S. financial system. These acquisitions
were an excellent opportunity for TD to expand in the deposit-rich
Florida market. We were then able to successfully complete the
acquisition of The South Financial Group, Inc. (TSFG), an experienced
commercial lender with a presence in Florida and North and South
Carolina. The TSFG transaction was an acquisition that carried accept-
able asset risk and allowed us to rapidly increase our scale in the
strategically important Florida market. We plan to convert it to the TD
brand in 2011. While we’re still in the early days for these additions,
we’re happy with what we’ve seen so far in terms of performance.
We also remained focused on a conservative approach to risk
management. We take only risks that we understand and can manage
within an acceptable level. That approach has been crucial to our ability
to navigate the financial crisis. It was also reflected in the acquisitions
we completed in 2010.
If you look at all of TD’s accomplishments throughout 2010, it’s
clear that we strengthened our position as a growth-oriented top
North American bank. Our success was recognized by Euromoney,
one of the world’s leading international business and investment
magazines, which named TD the Best Bank in North America for the
second year in a row.
A GROWTH-ORIENTED NORTH AMERICAN BANK
We’re very pleased with how our U.S. Personal and Commercial
Banking business is performing. Our focus has been on organic growth
complemented by strategic acquisitions, and we made progress on
both fronts. In 2010, TD Bank, America’s Most Convenient Bank, added
32 new stores, aside from the acquisitions we made. The year also
marked an important milestone for our U.S. business, as it delivered
the highest level of adjusted profit since TD entered that market.
On the regulatory front, we saw some clarity regarding the regulation
of overdraft fees, and we’re happy to see the U.S. banking system is
moving toward a more packaged approach, similar to Canada’s.
The economy and the U.S. regulatory environment remain uncertain,
but despite the current economic challenges, our commitment to the
U.S. is unwavering. We’ll continue to lend to customers, just as we
have throughout the recession. In fact, since the downturn started in
2007, we’ve grown our U.S. lending volume by 25 per cent. We also
remain very happy with our investment in TD Ameritrade. Our relation-
ship represents a strategic fit with our retail bank with mutually
attractive cross-selling opportunities that will play an important role
in the success of both companies.