TD Bank 2012 Annual Report Download - page 9

TD BANK GROUP ANNUAL REPORT 2012 MANAGEMENT’S DISCUSSION AND ANALYSIS 7
This Management’s Discussion and Analysis (MD&A) is presented to enable readers to assess material
changes in the financial condition and operating results of TD Bank Group (TD or the Bank) for the year
ended October 31, 2012, compared with the corresponding period in the prior year. This MD&A should
be read in conjunction with our audited Consolidated Financial Statements and related Notes for the year
ended October 31, 2012. This MD&A is dated December 5, 2012. Unless otherwise indicated, all amounts
are expressed in Canadian dollars and have been primarily derived from the Bank’s annual Consolidated
Financial Statements prepared in accordance with International Financial Reporting Standards (IFRS).
Note that certain comparative amounts have been reclassified to conform to the presentation adopted
in the current year.
Management’s Discussion and Analysis
Additional information relating to the Bank, including the Bank’s Annual Information Form, is available on the Bank’s website at http://www.td.com, on SEDAR at
http://www.sedar.com, and on the U.S. Securities and Exchange Commission’s website at http://www.sec.gov (EDGAR filers section).
Caution Regarding Forward-Looking Statements
From time to time, the Bank makes written and/or oral forward-looking statements, including in this document, in other filings with Canadian regulators or the U.S.
Securities and Exchange Commission, and in other communications. In addition, representatives of the Bank may make forward-looking statements orally to analysts,
investors, the media and others. All such statements are made pursuant to the “safe harbour” provisions of, and are intended to be forward-looking statements under,
applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not
limited to, statements made in this document, the Bank’s 2012 MD&A under the headings “Economic Summary and Outlook” and, for each business segment,
“Business Outlook and Focus for 2013” and in other statements regarding the Bank’s objectives and priorities for 2013 and beyond and strategies to achieve them,
and the Bank’s anticipated financial performance. Forward-looking statements are typically identified by words such as “will”, “should”, “believe”, “expect”,
“anticipate”, “intend”, “estimate”, “plan”, “may”, and “could”.
By their very nature, these statements require the Bank to make assumptions and are subject to inherent risks and uncertainties, general and specific. Especially in
light of the uncertainty related to the financial, economic, political and regulatory environments, such risks and uncertainties – many of which are beyond the Bank’s
control and the effects of which can be difficult to predict – may cause actual results to differ materially from the expectations expressed in the forward-looking state ments.
Risk factors that could cause such differences include: credit, market (including equity, commodity, foreign exchange, and interest rate), liquidity, operational (including
technology), reputational, insurance, strategic, regulatory, legal, environmental, capital adequacy, and other risks, all of which are discussed in the 2012 MD&A.
Examples of such risk factors include the impact of recent U.S. legislative developments, as discussed under “Significant Events in 2012” in the “Financial Results
Overview” section of the 2012 MD&A; changes to and new interpretations of capital and liquidity guidelines and reporting instructions; increased funding costs for
credit due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank or its affiliates relating to the care
and control of information and disruptions in the Bank’s information technology, internet, network access or other voice or data communications systems or services;
and the overall difficult litigation environment, including in the United States. We caution that the preceding list is not exhaustive of all possible risk factors and other
factors could also adversely affect the Bank’s results. For more detailed information, please see the “Risk Factors and Management” section of the 2012 MD&A. All
such factors should be considered carefully, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements, when
making decisions with respect to the Bank and we caution readers not to place undue reliance on the Bank’s forward-looking statements.
Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2012 MD&A under the headings “Economic
Summary and Outlook” and, for each business segment, “Business Outlook and Focus for 2013”, as updated in subsequently filed quarterly Reports to Shareholders.
Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of
assisting the Bank’s shareholders and analysts in understanding the Bank’s financial position, objectives and priorities and anticipated financial performance as at and
for the periods ended on the dates presented, and may not be appropriate for other purposes. The Bank does not undertake to update any forward-looking statements,
whether written or oral, that may be made from time to time by or on its behalf, except as required under applicable securities legislation.
FINANCIAL RESULTS OVERVIEW
Net Income 12
Revenue 13
Expenses 17
Taxes 18
Quarterly Financial Information 19
BUSINESS SEGMENT ANALYSIS
Business Focus 21
Canadian Personal and Commercial Banking 24
Wealth and Insurance 27
U.S. Personal and Commercial Banking 30
Wholesale Banking 33
Corporate 36
2011 FINANCIAL RESULTS OVERVIEW
Selected Annual Information and Discussion relating to
2011 & 2010 Performance under Canadian GAAP 37
GROUP FINANCIAL CONDITION
Balance Sheet Review 40
Credit Portfolio Quality 41
Capital Position 54
Securitization and Off-Balance Sheet Arrangements 58
Related-Party Transactions 60
Financial Instruments 60
RISK FACTORS AND MANAGEMENT
Risk Factors that May Affect Future Results 61
Managing Risk 64
ACCOUNTING STANDARDS AND POLICIES
Critical Accounting Estimates 83
Future Changes in Accounting Policies 86
Controls and Procedures 86