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CEO's message


TD continued to grow, sharpen its competitive edge, and extend its leadership position in 2013.

Once again, our retail-focused business model delivered strong performances despite continued challenges in our operating environment. Our adjusted earnings of over $7.1 billion reflected record results in several businesses – accounting for 85 per cent of our total earnings – which helped offset other areas impacted by market volatility and extreme weather. We provided excellent value to our shareholders with two dividend increases in 2013, representing an increase of 12% in dividends paid since last year. The market rewarded our performance, as TD’s stock price closed the year at an all-time high. In December 2013 we announced a stock dividend, which has the same effect as a two-for-one split of our common shares. TD’s share price has increased 170% since the last stock split in 1999.

The better bank in 2013 and beyond

TD’s diverse mix of revenue streams enabled us to weather a bumpy operating environment this year, and our business model enabled us to continue to invest for the future. Investments in the mobile and online space are now helping TD define what it means to be The Better Bank in the digital age. And we continue to stand out in the industry as the best in customer service, with a number of impressive recognitions on both sides of the border.

We had bumps of our own in 2013: in the immediate aftermath of the Alberta floods, as well as with our auto insurance business in Ontario. As always, the key is in the recovery. Have we learned from these experiences? Can we get better at what we do, and how we do it? In all instances, we can – and we will.

In 2013 we validated the competitive advantages we derive with our better business model:

Build our franchise around our customers’ wants and needs, deliver better experiences, and make banking convenient.

Stay true to the great traditions of banking, creating real value in the real economy.

Embrace values that foster a unique, inclusive performance culture that attracts the best, and makes our people their best.

Compete by managing risks better. And keep reinvesting in our businesses, with a primary focus on organic growth.

How our businesses performed

Our Canadian retail bank delivered record adjusted earnings of $3.8 billion for the year. We solidified our leadership position in credit cards following this year’s announcement that TD will be the primary issuer of Aeroplan Visa credit cards in 2014. TD Canada Trust earned its eighth consecutive J.D. Power Award in customer satisfaction.

Our U.S. retail bank set a target of $1.6 billion in earnings by 2013. We delivered, and did so in a period of tough operating conditions for banks. Much of our success stems from a better organic business model, which has seen, for instance, TD become the fifth-largest bank in New York City. J.D. Power also recognized our leadership in retail banking customer satisfaction in Florida, and small business banking customer satisfaction in the Northeast.

Our Wealth business, including TD Ameritrade, delivered record earnings of $937 million. We completed the acquisition of Epoch Holding Corporation, a successful asset management firm based in New York. This strengthened our U.S. business, and expanded our offering for our institutional and retail clients in Canada. For the fifth consecutive year, TD Ameritrade grew its net new client assets at a double-digit rate, faster than any of its publicly-traded peers.

Our Insurance business had a challenging year, delivering earnings of $216 million. We faced charges resulting from a combination of severe weather-related impacts and increased general insurance claims. However the fundamentals of the business are strong, and we continue to see Insurance as a key part of our strategy.

Our Wholesale business contributed $648 million this year, a weaker result than last year due to lower security gains, continued economic instability, which impacted corporate and investor activities. We remain confident in following a strategy based on adding value for our clients, integrated with TD’s brand and values, and growing aggressively within our risk appetite.

Looking forward

As you know, this is my last letter to shareholders. I want to thank you for your continued confidence, and thank TD’s Board of Directors for their generous support. But mostly I want to thank our employees who have shown the world what it means to be TD.

All transitions involve change, and change is necessary. Great transitions involve change with continuity of the things that matter, and I am confident we will see a continuity of what makes TD great. My successor, Bharat Masrani, has been my business partner almost since the day I arrived at TD. Both Bharat and I know that without our great leaders and fabulous team we would not have built The Better Bank.

We are extremely excited about our journey ahead.

Ed Clark

Group President and Chief Executive Officer