TD Bank 2009 Annual Report Download - page 37

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TD BANK FINANCIAL GROUP ANNUAL REPORT 2009 MANAGEMENT’S DISCUSSION AND ANALYSIS 33
Insurance
•TD General Insurance is the leader in the direct personal automobile
and home insurance industry in Canada.
•TD Life and Health provides simple life, critical illness, and accident
insurance in Canada with three million customers covered.
•
TD Insurance full-service broker is the 9th largest bank owned insur-
ance broker in the U.S.
BUSINESS OUTLOOK AND FOCUS FOR 2010
Although revenue is vulnerable to economic and market condi-
tions, and a competitive pricing environment, the outlook for
revenue growth is expected to be moderate and comparable to
last year. While volume growth is expected to be lower than
last year across most products, margins on average are expected
to be relatively stable and revenue is expected to continue to
benefit from the increased leadership position in branch hours
and continued investment in our network. PCL is expected to
increase into 2010, reflective of continued challenging conditions
in the Canadian economy. Non-interest expenses are anticipated
to be higher relative to last year due to higher employee
compensation and benefit costs and investment in strategic
initiatives to support future growth. Our key priorities for 2010
are 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 consistently deliver top-tier earnings
performance.
•Establish our TD Insurance brand and build infrastructure for
future growth.
KEY PRODUCT GROUPS
Personal Banking
•
Personal Deposits – Increased equity market volatility, economic
uncertainty, and the Bank’s market leadership position has led to
record volume growth in chequing, savings, and term deposits.
Despite an increasingly competitive personal deposit landscape, the
Bank maintained its leadership in market share.
•Consumer Lending – Personal loan and credit card balances grew
compared with 2008, resulting from continued credit card account
growth, particularly in rewards-based products, combined with
higher auto lending volumes.
•Real Estate Secured Lending – Lending activities increased in 2009
reflecting improved Canadian housing market conditions, buoyed
by low mortgage rates and improvement in consumer confidence.
Customer retention remained strong.
Business Banking
•Commercial Banking – Continued investment in branches and
customer-facing resources resulted in volume growth across all
products, particularly deposits, which saw double digit growth.
While credit losses were up over 2008, this was largely due to
economic conditions.
•Small Business Banking – The customer base continued to grow in
2009 despite the economic environment, and year-over-year deposit
volumes exceeded expectations. Strategic focus continued on the
addition of small business advisors in retail branches.
•Merchant Services Banking – Merchant services offers point-of-sale
settlement solutions for debit and credit card transactions, support-
ing over 100,000 business locations across Canada. Client volumes
and revenues continued to increase in 2009 supported by industry
leading product and service capabilities including acquiring a
MasterCard Acquiring License and offering full support for new
debit and contactless payment offerings.
(millions of Canadian dollars, except as noted) 2009 2008 2007
Net interest income1$ 6,348 $ 5,790 $ 5,401
Non-interest income 3,101 3,036 2,848
Provision for credit losses11,155 766 608
Non-interest expenses 4,725 4,522 4,256
Income before provision for income taxes 3,569 3,538 3,385
Provision for income taxes 1,097 1,114 1,132
Net income – reported $ 2,472 $ 2,424 $ 2,253
Selected volumes and ratios
Average loans and acceptances (billions of Canadian dollars) $ 168 $ 156 $ 133
Average deposits (billions of Canadian dollars) 174 152 141
Return on invested capital 28.1% 29.3% 27.1%
Efficiency ratio 50.0 51.2 51.6
Margin on average earning assets12.90 2.95 3.05
CANADIAN PERSONAL AND COMMERCIAL BANKING
TABLE 14
1Including securitized assets.