32

The challenge of operating in a low-interest environment

The continuation of very low interest rates creates several challenges. One is that customers with fixed-income investments have low returns relative to those typical of a higher-interest environment. We proactively talk to these customers to ensure they understand why their returns are low and advise them on options based on their risk profile and short- and long-term needs.

As a publicly traded company we compete for shareholders who provide the capital we need to invest for long-term future growth. We have to demonstrate that an investment in our bank will offer a competitive return. In a low-interest-rate environment, where the difference between lending and savings makes this challenging, we have to find new sources of growth.

At TD, we have diversified our income sources by acquiring new businesses. For example, in 2012 we entered into an agreement to become the exclusive issuer of Target-branded Visa and private-label credit cards to Target’s U.S. customers.

Periodically we review our pricing to ensure it is competitive and reflects the value of the features and benefits we offer. Price increases are never welcomed by customers of any business, including banking. Our goal is to fairly balance what our customers want and what is right for our business. Sometimes that involves making tough choices. No decision with a potential negative effect on customers is ever undertaken lightly – we always conduct a thorough and thoughtful review to evaluate the impacts and reduce them where possible. When our pricing goes up, we make a point of explaining to our customers how they can reduce or even avoid the fees they pay. For chequing accounts this can include managing the number of monthly transactions and maintaining a recommended account balance, as well as subscribing to electronic statements. We also always remind customers that we’re available to talk to them if they think there may be a better account that suits their needs.

Responsible sales and marketing

Our reputation and relationships with customers depend on helping to ensure that what we sell, how we sell and how we advise customers are transparent and right for them and offer value. By doing what’s right for our customers, we also help limit the bank’s financial risk.

In countries where we operate, TD meets or exceeds the laws and regulations requiring us to disclose basic information about the financial products and services we offer.

+ More on product design and responsible sales + Codes of Conduct and Public Commitments » 2012 Performance

Serving diverse needs

We ensure that sponsorships, marketing communications and advertising in Canada and the U.S. reflect our diverse customer base. And we offer multi- language information materials and services in branches and on the phone. A new service piloted in retail branches in Canada in 2012 provides free interpreting assistance in almost 200 languages to non-English-speaking customers. Branch customers point to their country of origin and preferred language on a Language Identification Card. A customer representative then connects the customer to an interpreter. A three-way conversation helps ensure full understanding of the customer’s transaction needs and any advice offered.

Be Customer-Focused

TD 2012 Corporate Responsibility Report