TD Bank 2014 Annual Report Download - page 31

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS 29
KEY PRODUCT GROUPS
Personal Banking
• Personal Deposits – offers a full suite of chequing and savings
products to retail clients across Canada. In 2014, personal deposit
volume growth was solid, and TD maintained its market share
position by focusing on acquiring and retaining core customer
accounts. Market share in term deposits declined as the business
reduced originations from higher cost, non-proprietary channels,
and fulfilled customer needs with other investment products. The
business was able to largely offset the impact of the lower interest
rate environment through volume growth.
• Consumer Lending – offers a diverse range of financing products to
suit the needs of retail clients across Canada. In 2014, TD continued
to grow in lending volumes but at a slower pace than in recent
years and maintained its leadership position in market share for
real estate secured lending products, with a focus on increasing
customer retention rates and good risk management.
• Credit Cards and Merchant Services – offers a range of credit card
products including co-branded and affinity credit card programs.
In 2014, through its focus on the Aeroplan program, MBNA integra-
tion and continued expansion, the business achieved good volume
growth and maintained the number one position in credit card
market share.
• Auto Finance – offers automotive and recreational vehicle financing
through an extensive network of dealers across Canada. In 2014,
TD delivered good portfolio growth in a highly competitive market
by producing financial solutions for automotive and recreational
product dealerships, developing flexible vehicle financing options,
and continuing its focus on service.
Business Banking
• Commercial Banking – serves the needs of Canadian businesses
across a wide range of industries. In 2014, the business continued
to invest in customer-facing resources in strategic markets to drive
strong volume growth and market share gains.
• Small Business Banking – offers a wide range of financial products
and services to small businesses across Canada. In 2014, the busi-
ness continued to make investments in both deposit and credit
infrastructure to improve speed to market and customer experience.
Wealth
• Direct Investing – offers a comprehensive product and service offer-
ing to self-directed retail investors. TD maintained its leadership
position in assets under administration and trade volume in 2014.
In Europe, TD Direct Investing provides a broad range of products
available for trading and investing, including trading in U.K. and
international equities, with direct access to 17 markets.
• Advice-based business – offers financial planning, full service
brokerage, and private client services, across different portfolio
sizes and levels of product complexity, to help clients protect,
grow and transition their wealth. The advice-based wealth business
is integrated with the Canadian personal and commercial banking
businesses. In 2014, it generated good asset growth driven by new
assets and market appreciation.
• Asset Management – TD Asset Management (TDAM) is a leading
investment manager with deep retail and institutional capabilities.
TD Mutual Funds is a leading mutual fund business, providing
a broadly diversified range of mutual funds and professionally
managed portfolios. TDAM’s institutional investment business
has a leading market share in Canada and includes clients of some
of the largest pension funds, endowments, and corporations
in Canada. All asset management units work in close partnership
with other TD businesses, including the advice-based wealth
business and retail banking, to align products and services to
ensure a legendary client experience. 2014 was a record year
for assets under management and long-term fund sales.
Insurance
• Property and Casualty – TD is the largest direct distribution
insurer and the second largest personal insurer in Canada.
It is also the national leader in the affinity market offering home
and auto insurance to members of affinity groups such as profes-
sional associations, universities and employer groups, and other
customers, through direct channels. The business was able to
continue its strong premium growth while facing a challenging
winter weather season in 2014.
• Life and Health – offers credit protection and travel insurance
products mostly distributed through TD Canada Trust branches.
Other simple life and health insurance products, and credit card
balance protection are distributed through direct channels.
BUSINESS OUTLOOK AND FOCUS FOR 2015
The primary focus for 2015 will be to continue to deliver
legendary customer service and convenience across all channels.
Our commitment to continually invest in our businesses posi-
tions us well for future growth. We expect earnings growth to
moderate in 2015 due to a more challenging operating environ-
ment. We expect the personal loan growth rate to be in line
with current year levels. Business lending is forecasted to
remain strong as we maintain our focus on winning market
share. Wealth asset acquisition is expected to be strong;
however, benefits from market appreciation next year are
subject to capital markets performance. The outlook for insur-
ance is for good core premium growth; however claims will
depend on the frequency and severity of weather-related
events. Credit loss rates should remain relatively stable;
however, low personal bankruptcy trends will likely continue
to normalize. Over the next year we expect continued pressure
on margins due to the impact of the sustained low interest rate
environment, and competitive pricing in the market. We will
maintain our focus on productivity initiatives.
Our key priorities for 2015 are as follows:
• Provide a legendary customer experience across all
distribution channels.
• Focus on organic growth opportunities across our businesses.
• Deliver integrated service and advice in local markets, across
businesses, and channels.
• Invest in and grow our key businesses, and focus on emerging
payment and loyalty innovations.
• Accelerate our growth in the Wealth Advice channels and
introduce new client solutions in the Direct Investing business.
• Review and enhance insurance products to ensure that they
are competitive, provide the protection our clients need, and
are easy to understand.
• Keep our focus on productivity to enhance the customer
experience, employee satisfaction, and shareholder value.