BUSINESS HIGHLIGHTS • Record reported earnings of $5,988 million. • Continued to focus on customer service and convenience by optimizing our branch network, and investing in our digital channel experience, including mobile and online banking.
• Recognized as an industry leader in customer service excellence with distinctions that included the following: – Retained the #1 spot in “Customer Service Excellence”2,3 among the Big 5 Canadian Banks for the twelfth consecutive year according to Ipsos, a global market research firm; – Won the “Online Banking Excellence”2,4
award among the
Big 5 Canadian Banks for the twelfth consecutive year according to Ipsos; and
– Won the “Mobile Banking Excellence”2,5 award among the
Big 5 Canadian Banks for the fourth consecutive year according to Ipsos.
• Ranked first in Canadian mobile banking with the highest number of mobile unique visitors according to Comscore6
.
• Continued to generate strong volume growth across key businesses: – Record total originations in real estate secured lending; – Personal Banking recorded strong chequing and savings deposit volume growth of 9.5%;
– Business Banking generated strong loan volume growth of 10.5%;
– TD Auto Finance Canada had record originations in Canada; – TD Asset Management (TDAM), the manager of TD Mutual Funds, accumulated record assets under management; and
– TD Wealth Private Investment Advice had record net asset acquisition and record assets under administration.
• TD Insurance remained the largest direct distribution insurer7 and leader in the affinity market7
in Canada. • TD has maintained strong Canadian market share8 in
key products: – #1 in personal deposit and credit card market share; – #2 in real estate secured lending and personal loan market share;
– #2 in Business Banking deposit and loan market share; and – #1 in Direct Investing by asset, trades, and revenue market share.
CHALLENGES IN 2016 • Continued low interest rate environment contributed to lower margins.
• Fierce competition for new and existing customers from the major Canadian banks and non-bank competitors.
• Challenging credit conditions, including increased credit losses primarily in oil-impacted regions.
INDUSTRY PROFILE
The personal and business banking environment in Canada is very competitive among the major banks as well as some strong regional players and non-bank competitors. The intense competition makes it difficult to achieve market share gains and distinctive competitive advantage over the long term. Continued success depends upon delivering outstanding customer service and convenience, maintaining disciplined risk management practices, and prudent expense management. Business growth in the fiercely competitive wealth management industry depends on the ability to differentiate on client experience by providing the right products, services, tools and solutions to serve our clients’ needs. Insurance operates in both the Canadian property and casualty insurance, and the life and health insurance industries. The property and casualty insurance industry in Canada is a fragmented and competitive market, consisting of both personal and commercial lines writers, whereas the life and health insurance industry is made up of several larger competitors.
OVERALL BUSINESS STRATEGY
The strategy for Canadian Retail is to: • Consistently deliver legendary customer experiences and provide trusted advice to help our customers achieve their goals and aspirations.
• Be recognized as an extraordinary place to work by embracing diversity and inclusion and helping all our colleagues achieve their full potential.
• Deliver organic growth by deepening relationships and focusing on underrepresented products and markets.
• Innovate with purpose for our customers and colleagues, simplifying to make it easier to get things done.
• Execute with speed and impact, taking only those risks we can understand and manage.
• Improve the well-being of our communities.
2
Ipsos 2016 Best Banking Awards are based on full year Customer Service Index (CSI) survey results. Sample size for the total 2016 CSI program year ended with the August 2016 survey wave was 47,305 completed surveys yielding 67,678 financial institution ratings nationally. Leadership is defined as either a statistically significant lead over the other Big 5 Canadian Banks (at a 95% confidence interval) or a statistically equal tie with one or more of the Big 5 Canadian Banks.
3 4 5
TD Canada Trust achieved leadership in banking excellence in the following channels in the 2016 Ipsos Best Banking Awards: Automated Teller Machine, Online and Mobile.
TD Canada Trust won the Online Banking Excellence award among the Big 5 Canadian Banks in the proprietary Ipsos 2006-2016 Best Banking StudiesSM
TD Canada Trust won the Mobile Banking Excellence award among the Big 5 Canadian Banks in the proprietary Ipsos 2013-2016 Best Banking StudiesSM The award was introduced in 2013.
. .
28 TD BANK GROUP ANNUAL REPORT 2016 MANAGEMENT’S DISCUSSION AND ANALYSIS
6
Comscore reporting as of August 30, 2016. TD had the highest number of mobile unique visitors accessing financial services over the past 3 months, over the full year-to-date, and over the third quarter of 2016.
7
Based on Gross Written Premiums for Property and Casualty business. Ranks based on data available from OSFI, Insurers, Insurance Bureau of Canada and Provincial Regulators, as at December 31, 2015.
8
Market share ranking is based on most current data available from OSFI for Personal Deposits and Loans as at August 2016, public financial disclosures for average credit card balances as at June 2016, from the Canadian Bankers Association for Real Estate Secured Lending as at June 2016 and Business Deposits and Loans as at March 2016, and from Investor Economics for Direct Investing asset, trades and revenue metrics as at June 2016.
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