Colleen Johnston, Group Head Finance and Chief Financial Officer
TD wrapped up 2015 with another new record: $8.8 billion in adjusted total bank earnings, an 8% increase over last year, reflecting great contributions from all our businesses. These results were driven by good organic growth, strong credit quality, favourable currency translation and positive operating leverage.
In Canadian Retail, net income increased over last year primarily due to good loan, deposit volume and wealth asset growth, strong credit performance and higher insurance earnings. We were honoured that TD Canada Trust ranked “Highest in Customer Satisfaction Among the Big Five Retail Banks” for the 10th year in a row by J.D. Power. TD Canada Trust also retained the #1 spot in “Customer Service Excellence” among the Big Five Retail Banks for the 11th consecutive year according to Ipsos, a global market research firm.1
In U.S. Retail, net income increased year over year primarily due to strong organic loan and deposit growth, lower provision for credit losses, good expense management, and the impact of foreign currency translation. We also outperformed our peers in loan growth and household acquisition, and took market share. We continued to provide legendary customer service: we were named “Best Big Bank in America” by Money Magazine for the third year in a row.2
In Wholesale, our net income increased over last year primarily due to higher revenue. We were pleased with our robust performance in trading, corporate lending and debt underwriting both in Canada and the U.S.
This year we were pleased to acquire substantially all of Nordstrom Inc.'s U.S. Visa and private label consumer credit card portfolio. Additionally, the Bank and Nordstrom entered into a long-term agreement under which the Bank became the exclusive U.S. issuer of Nordstrom-branded Visa and private label consumer credit cards to Nordstrom customers. This agreement continues to build on the success of our growing North American credit card business.
This year we also took steps to streamline our processes, add capacity to invest for the future and moderate our rate of expense growth. As a result, the Bank recorded restructuring charges totaling $686 million ($471 million after tax) during fiscal 2015.
We are working hard to be the even Better Bank. In 2016, we expect the operating environment to remain challenging. While we expect to benefit from strong growth in loans, deposit and wealth assets, prudent expense management and a stronger U.S. dollar, low interest rates and normalizing credit losses will put pressure on earnings growth. However, we are confident that our diverse business mix and franchise model – centred around organic growth – will continue to drive positive results. We will continue to take market share and deliver legendary customer experiences.
Moving forward, we are focused on adapting and innovating. New technologies provide us with opportunities to extend our leadership position in service and convenience. We are investing in technology and tools that will allow our customers to engage across every channel – in our branches and stores, our call centres, our automated bank machines, and our phone, online and mobile platforms.
As I move to a new role at TD, it has been an honour and privilege to be CFO for the past 10 years. Thank you for your continued support and confidence.
Group Head Finance and Chief Financial Officer
1 TDCT received the highest numerical score among the big five retail banks in the proprietary J.D. Power 2006-2015 Canadian Retail Banking Customer Satisfaction StudiesSM. The 2015 study is based on more than 14,000 total responses and measures opinions of consumers with their primary banking institution. Proprietary study results are based on experiences and perceptions of consumers surveyed April-May 2015. Your experiences may vary. Visit www.jdpower.com. TDCT was rated number 1 among Canada’s five major banks for “Overall quality of customer service” by independent market research firm Ipsos (formerly Synovate) from 2005 to 2015. Ipsos 2015 Best Banking Awards are based on ongoing quarterly Customer Service Index (CSI) survey results. Sample size for the total 2015 CSI program year ended with the August 2015 survey wave was 45,391 completed surveys yielding 65,991 financial institution ratings nationally.
2 MONEY is a registered trademark of Time Inc. and is used under license. From MONEY® Magazine, November, 2015© 2015 Time Inc. MONEY and Time Inc. are not affiliated with and do not endorse products or services of TD Bank, N.A. or TD Bank Group.
3 Effective fiscal 2013, amounts are calculated in accordance with the Basel III regulatory framework, and are presented on the “all-in” methodology. Prior to fiscal 2013, amounts were calculated in accordance with the Basel II regulatory framework.