TD Bank 2014 Annual Report Download - page 96

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS94
The Bank continues to explore all opportunities to access lower-cost
funding on a sustainable basis. The following table represents the
various sources of funding obtained as at October 31, 2014 and
October 31, 2013.
(millions of Canadian dollars) As at
October 31 October 31
2014 2013
Less than 1 to 3 3 to 6 6 months Over 1 to Over
1 month months months to 1 year 2 years 2 years Total Total
Deposits from Banks1 $ 6,578 $ 3,126 $ 738 $ 29 $ 3 $ 17 $ 10,491 $ 11,025
Bearer Deposit Note 143 563 2 8 – – 716 2,627
Certificates of Deposit 12,191 16,412 13,157 27,501 120 – 69,381 56,139
Commercial Paper 4,153 2,695 564 732 – – 8,144 8,192
Asset Backed Commercial Paper2 1,075 1,510 504 10 – – 3,099 4,081
Covered Bonds – – – 2,253 3,398 10,860 16,511 10,442
Mortgage Securitization 19 679 2,864 1,590 7,657 23,349 36,158 47,552
Senior Unsecured Medium Term Notes 228 276 446 7,220 14,165 18,933 41,268 23,290
Subordinated Notes and Debentures3 – – – – – 7,785 7,785 7,982
Term Asset Backed Securities – – – – – 1,953 1,953 1,662
Other4 2,339 1,172 78 131 – – 3,720 6,989
Total $ 26,726 $ 26,433 $ 18,353 $ 39,474 $ 25,343 $ 62,897 $ 199,226 $ 179,981
Of which:
Secured $ 1,094 $ 2,189 $ 3,368 $ 3,853 $ 11,055 $ 36,162 $ 57,721 $ 63,737
Unsecured 25,632 24,244 14,985 35,621 14,288 26,735 141,505 116,244
Total $ 26,726 $ 26,433 $ 18,353 $ 39,474 $ 25,343 $ 62,897 $ 199,226 $ 179,981
WHOLESALE FUNDING
TABLE 66
1 Includes fixed-term deposits with banks.
2 Represents asset-backed commercial paper (ABCP) issued by consolidated
Bank-owned structured entities.
3 Subordinated notes and debentures are not considered wholesale funding
as they may be raised primarily for capital management purposes.
4 Includes fixed-term deposits from non-bank institutions.
Refer to Note 29 of the Consolidated Financial Statements “Pledged
Assets and Collateral” discussion for details on financial assets
accepted as collateral that the Bank is permitted to sell or repledge
in the absence of default.
FUNDING
The Bank has access to a variety of short-term and long-term unse-
cured and secured funding sources, including securitization channels
that it uses to meet funding requirements. The Bank’s funding
activities are conducted in accordance with the GLAP Policy that
requires, among other things, assets be funded to the appropriate
term or stressed trading market depth.
The Bank’s primary approach to managing funding activities is to
maximize the use of deposits raised through personal and commercial
banking channels. The following table illustrates the Bank’s large base
of personal and commercial, domestic wealth, and TD Ameritrade
sweep deposits (collectively P&C deposits) that make up over 70% of
total funding excluding securitization. The amount of stable long-term
funding provided by demand or non-specific maturity P&C deposits is
determined based on demonstrated balance permanence under the
“Severe Combined Stress” scenario.
(billions of Canadian dollars) 2014 2013
P&C deposits – Canadian Retail $ 273.2 $ 260.5
P&C deposits – U.S. Retail 227.1 200.0
Other deposits 1.1 2.0
Total $ 501.4 $ 462.5
The Bank maintains an active external funding program to provide
access to diversified funding sources, including asset securitization,
covered bonds, and unsecured wholesale debt. The Bank’s wholesale
funding is diversified geographically, by currency, and by distribution
network. The Bank maintains depositor concentration limits against
short-term wholesale deposits so that it does not depend on one or
small groups of depositors for funding. The Bank further limits short-
term wholesale funding that can mature in a given time period in an
effort to mitigate exposures to refinancing risk during a stress event.
SUMMARY OF DEPOSIT FUNDING
TABLE 65