TD Bank 2003 Annual Report Download - page 8

TD BANK FINANCIAL GROUP ANNUAL REPORT 2003 • To Our Shareholders6
President and CEO’s Message W. Edmund Clark • President and Chief Executive Officer
2003 marked an important transformation
for the Bank.
On the heels of a difficult year in 2002, our senior manage-
ment team and employees managed to reposition the Bank to
deliver more stable and sustainable earnings. I was confident
that we had the strategies and expertise to deliver on these
objectives but was pleasantly surprised at the accelerated rate
of our progress.
This year’s solid performance is attributable to the underly-
ing strength of our core businesses and the ability of our
employees. It demonstrates that we are successfully delivering
sustainable earnings and regaining market confidence.
Our entire management team is united in pursuit of building
long term shareholder value through growth in each of our
three businesses. We remain focused on deriving more of our
earnings from our retail businesses and are on track to reach
our goal of 80% of total earnings from retail with the balance
coming from a disciplined approach to our wholesale business.
Personal and Commercial Banking
The solid performance of Personal and Commercial Banking
was central to TD Bank Financial Group’s overall success this
year. TD Canada Trust demonstrated promising volume and
earnings growth in 2003, despite increased pressure on
margins. This translated into year-over-year profit growth of
14.6 percent.
Revenue grew across several key product groups including
real estate secured lending, Visa, small business banking and
insurance. Customer satisfaction also improved over the year
as the Customer Satisfaction Index reached a record high at
year-end.
Our focus going forward is to restructure our expense
base through continued process improvements with the goal
of permanently lowering our cost base so that we enhance
the customer experience and meet profit targets despite
declining margins.
We are pleased with the acquisition of 57 Laurentian Bank
branches in Ontario and Western Canada and firmly believe
that our integration experience will allow us to seamlessly
welcome our newest employees and customers to TD Canada
Trust. We look forward to delivering to these customers
the comfortable banking experience that is the hallmark of
our brand.
Looking forward, we see potential for continued steady
earnings growth in Personal and Commercial Banking,
despite the highly competitive environment.
Wealth Management
Wealth Management did very well in 2003 both in North
America and internationally as we successfully positioned
our operations to benefit from strengthening markets. Our
hard work and investments in the North American discount
brokerage business were rewarded this year as we realized
our objective of reducing the breakeven point per trade. As
market activity returned this year, we were able to translate
this volume growth into significant revenue growth. This
improvement was particularly notable in the United States.
We expect the earnings volatility to persist in this business
in the short-term but we remain comfortable in this environ-
ment because it is transparent to the marketplace and is
tied to what we view as a core high growth, high multiple
business. The TD Waterhouse brand remains a significant
asset throughout North America and we plan to build on
this strength in 2004.
In Canada, TD Waterhouse’s Financial Planning and
Investment Advice businesses continue to grow in line with
expectations. We are encouraged by referral growth and still
see opportunity to offer financial advice, products and services
to TD Canada Trust’s strong base of 10 million customers.
We significantly restructured TD Waterhouse International
and met our objective of reaching breakeven internationally
by fiscal 2004. Our focus on TD Waterhouse outside of North
America is now dedicated to the United Kingdom where
we have a strong franchise and the infrastructure to grow
the business profitably.