TD Bank 2014 Annual Report Download - page 29

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS 27
BUSINESS HIGHLIGHTS
• Achieved record adjusted earnings of $5,490 million,
and a record adjusted efficiency ratio of 42.2%.
• Recognized as an industry leader in customer service
excellence with distinctions that included the following:
– Ranked “Highest in Customer Satisfaction Among the
Big Five Retail Banks”2 for the ninth consecutive year by
J.D. Power, a global marketing information services firm.
The 2014 Canadian Retail Banking Customer Satisfaction
Study included responses from over 17,000 customers who
use a primary financial institution for personal banking.
– TD Canada Trust retained the #1 spot in “Customer Service
Excellence” among the five major Canadian banks for the
tenth consecutive year according to global market research
firm Ipsos.
– TD Canada Trust was recognized as the “Highest in
Customer Satisfaction with Small Business Banking”3
by J.D. Power in the 2014 Canadian Small Business Banking
Customer Satisfaction Study.
• Continued to focus on customer service and convenience by
optimizing our branch network, and investing in our digital
channel experience, including mobile and online banking.
• Recorded strong chequing and savings deposit volume
growth due to a focus on acquiring and retaining core
customer accounts.
• TD Auto Finance Canada originated a record $8 billion of auto
loans in Canada in fiscal 2014.
• Business banking continued to generate strong loan volume
growth of 12%.
• The Canadian Cards business successfully assumed mass
marketing rights to the prestigious Aeroplan program
in Canada and completed the acquisition of approximately
50% of the existing Aeroplan credit card portfolio from CIBC.
• TD Asset Management, the manager of TD Mutual Funds,
had record long-term fund sales and record assets under
management.
• TD has maintained its strong market share4 in key products:
– TD is #1 in Canadian credit card market share.
– Retained the #1 position in personal deposit market share
and the #2 position in personal loan market share.
– Business banking held the #2 positions in deposit and loan
market share.
– The Direct Investing business maintained a market leading
position in both share of assets and trades.
– TD has the most online banking and mobile customers.
CHALLENGES IN 2014
• Sustained low interest rate environment contributed
to further deposit margin compression.
• Fierce competition for new and existing customers from the
major Canadian banks and non-bank competitors.
• Challenging retail lending environment due to slow economic
growth and elevated consumer debt levels.
• The property and casualty insurance results were impacted
by severe winter conditions.
INDUSTRY PROFILE
The personal and business banking environment in Canada is very
competitive among the major banks as well as some strong regional
players and non-bank competitors. The strong competition makes it
difficult to sustain market share gains and distinctive competitive
advantage over the long term. Continued success depends upon deliv-
ering outstanding customer service and convenience, disciplined risk
management practices, and investment in customer products and
services. Business growth in the fiercely competitive wealth manage-
ment industry lies in the ability to differentiate on client experience by
providing the right products, services, tools, and solutions to serve our
clients’ needs. Insurance operates in both the Canadian property and
casualty insurance, and the life and health insurance industries. The
property and casualty industry in Canada is a fragmented and competi-
tive market, consisting of both personal and commercial lines writers,
whereas the life and health insurance industry is made up of several
larger competitors.
OVERALL BUSINESS STRATEGY
The strategy for Canadian Retail is to:
• Consistently deliver a legendary customer experience
in everything we do.
• Be recognized as an extraordinary place to work.
• Make the customer and employee experience simple, fast,
and easy in order to drive efficiency.
• Strengthen our local market presence in our communities.
• Invest in the future to deliver top tier earnings performance
consistently.
2 TD Canada Trust received the highest numerical score among the big five retail
banks in the proprietary J.D. Power 2006-2014 Canadian Retail Banking Customer
Satisfaction Studies.
SM 2014 study based on 17,183 total responses and measures
opinions of consumers with their primary banking institution. Proprietary study
results are based on experiences and perceptions of consumers surveyed May-June
2014. Your experiences may vary. Visit jdpower.com
3 TD Canada Trust received the highest numerical score in the proprietary J.D. Power
2014 Canadian Small Business Banking Satisfaction Study.
SM Study based on
1,348 total responses, measuring 5 financial institutions and measures opinions
of small business customers. Proprietary study results are based on experiences and
perceptions of customers surveyed in May-June 2014. Your experiences may vary.
Visit jdpower.com
4 Market share ranking is based on most current data available from Canadian
Bankers Association for Business Deposits and Loans as at June 2014, from public
financial disclosures for average credit card balances as at July 2014, from OSFI
for Personal Deposits and Loans as at August 2014, from comScore for number
of online banking and mobile customers as at September 2014, and from Investor
Economics for assets and trades metrics as at September 2014.