NORMAL COURSE ISSUER BID
On December 9, 2015, the Bank announced that the Toronto Stock Exchange and OSFI approved the Bank’s normal course issuer bid (NCIB) to repurchase for cancellation up to 9.5 million of the Bank’s common shares. During the year ended October 31, 2016, the Bank completed its share repurchase under the NCIB and repurchased 9.5 million common shares at an average price of $51.23 per share for a total amount of $487 million.
DIVIDEND REINVESTMENT PLAN
The Bank offers a dividend reinvestment plan for its common shareholders. Participation in the plan is optional and under the terms of the plan, cash dividends on common shares are used to purchase additional common shares. At the option of the Bank, the common shares may be issued from the Bank’s treasury at an average market price based on the last five trading days before the date of the dividend payment, with a discount of between 0% to 5% at the Bank’s discretion, or from the open market at market price. During the year, 6.0 million common shares at a discount of 0% were issued from the Bank’s treasury (2015 – 6.7 million common shares at a discount of 0%) under the dividend reinvestment plan.
DIVIDEND RESTRICTIONS The Bank is prohibited by the Bank Act from declaring dividends on its preferred or common shares if there are reasonable grounds for believing that the Bank is, or the payment would cause the Bank to be, in contravention of the capital adequacy and liquidity regulations of the Bank Act or directions of OSFI. The Bank does not anticipate that this condition will restrict it from paying dividends in the normal course of business.
The Bank is also restricted from paying dividends in the event that either Trust III or Trust IV fails to pay semi-annual distributions or interest in full to holders of their respective trust securities, TD CaTS III and TD CaTS IV Notes. In addition, the ability to pay dividends on common shares without the approval of the holders of the outstanding preferred shares is restricted unless all dividends on the preferred shares have been declared and paid or set apart for payment.
NOTE 22 TRADING-RELATED INCOME
Trading assets and liabilities, including trading derivatives, certain securities and loans held within a trading portfolio that are designated at fair value through profit or loss, trading loans and trading deposits, are measured at fair value, with gains and losses recognized on the Consolidated Statement of Income.
Trading-related income comprises Net interest income, Trading income (losses), and income from financial instruments designated at fair value through profit or loss that are managed within a trading portfolio, all recorded on the Consolidated Statement of Income. Net interest income arises from interest and dividends related to trading assets and liabilities, and is reported net of interest expense and income
Trading-Related Income (millions of Canadian dollars)
2016
Net interest income (loss) Trading income (loss)
Financial instruments designated at fair value through profit or loss1 Total
By product Interest rate and credit portfolios Foreign exchange portfolios Equity and other portfolios
Financial instruments designated at fair value through profit or loss1 Total
1
Excludes amounts related to securities designated at fair value through profit or loss that are not managed within a trading portfolio, but which have been combined with derivatives to form economic hedging relationships.
$ 934 395 6
1,335
742 622
(35) 6
$ 1,335
associated with funding these assets and liabilities in the following table. Trading income (loss) includes realized and unrealized gains and losses on trading assets and liabilities. Realized and unrealized gains and losses on financial instruments designated at fair value through profit or loss are included in Non-interest income on the Consolidated Statement of Income.
Trading-related income excludes underwriting fees and commissions on securities transactions, which are shown separately on the Consolidated Statement of Income.
Trading-related income by product line depicts trading income for each major trading category.
For the years ended October 31 2015
2014
$ 1,380 (223) (5)
1,152
636 467 54
(5) $ 1,152
$ 1,337 (349) (9)
979
601 385 2
(9) $ 979
Currently, these limitations do not restrict the payment of dividends on common shares or preferred shares.
NON-CONTROLLING INTERESTS IN SUBSIDIARIES The following are included in non-controlling interests in subsidiaries of the Bank.
(millions of Canadian dollars) REIT preferred stock, Series A
TD Capital Trust III Securities – Series 20081 Total
$ 661 989
$ 1,650 1 Refer to Note 20 for a description of the TD Capital Trust III securities.
REIT Preferred Stock, Fixed-to-Floating Rate Exchangeable Non-Cumulative Perpetual Preferred Stock, Series A
A real estate investment trust, Northgroup Preferred Capital Corporation (Northgroup REIT), a subsidiary of TD Bank, N.A., issued 500,000 shares of Fixed-to-Floating Rate Exchangeable Non-Cumulative Perpetual Preferred Stock, Series A (Series A shares). Each Series A share is entitled to semi-annual non-cumulative cash dividends, if declared, at a per annum rate of 6.378% until October 17, 2017, and at a per annum rate of three-month LIBOR plus 1.1725% payable quarterly thereafter. The Series A shares are redeemable by Northgroup REIT, subject to regulatory consent, at a price of US$1,000 plus a make-whole amount at any time after October 15, 2012, and prior to October 15, 2017, and at a price of US$1,000 per Series A share on October 15, 2017, and every five years thereafter. Each Series A share may be automatically exchanged, without the consent of the holders, into a newly issued share of preferred stock of TD Bank, N.A. on the occurrence of certain events.
As at
October 31 October 31 2016
2015
$ 646 964
$ 1,610
TD BANK GROUP ANNUAL REPORT 2016 FINANCIAL RESULTS 175
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