FUNDING


The Bank has access to a variety of unsecured and secured funding sources. The Bank’s funding activities are conducted in accordance with the liquidity management policy that requires, among other things, assets be funded to the appropriate term. The Bank’s primary approach to managing funding activities is to maximize the use of deposits raised through personal and commercial banking channels. The following table illustrates the Bank’s large base of personal and commercial, wealth, and TD Ameritrade sweep deposits (collectively, “P&C deposits”) that make up over 73% of the Bank’s total funding excluding securitization.


T ABLE 61


SUMMARY OF DEPOSIT FUNDING (millions of Canadian dollars)


P&C deposits – Canadian Retail P&C deposits – U.S. Retail Other deposits


Total As at


October 31 October 31 2016


2015


$ 324,606 $ 293,309 318,503 284,655 795


1,627 $ 643,904 $ 579,591


The Bank actively maintains various external wholesale term (greater than 1 year) funding programs to provide access to diversified funding sources, including asset securitization, covered bonds, and unsecured wholesale debt. The Bank’s wholesale funding is diversified by geography, by currency, and by funding types. The Bank also utilizes certificates of deposit and commercial paper as short term (1 year and less) funding.


The following table summarizes the Bank’s term funding programs by geography, with the related program size. The Bank also maintains Evergreen Credit Card Trust to issue notes securitized by credit card receivables.


Canada Capital Securities Program ($10 billion)


Senior Medium Term Linked Notes Program ($2 billion)


United States


U.S. SEC (F-3) Registered Linked Senior Debt, Capital Securities and Linked Notes Program (US$40 billion)


Europe/Australia


United Kingdom Listing Authority (UKLA) Registered Legislative Covered Bond Program ($40 billion)


UKLA Registered European Medium Term Note Program (US$20 billion)


Australian Debt Issuance Program (A$5 billion)


TD regularly evaluates opportunities to diversify its funding into new markets and to new investors in order to manage funding risk and cost. The following table presents a breakdown of the Bank’s term debt by currency and funding type. Term funding for the year ended October 31, 2016, was $112.4 billion (October 31, 2015 – $102.2 billion).


T ABLE 62 LONG-TERM FUNDING As at


October 31 October 31 2016


2015


Long-term funding by currency Canadian dollar


U.S. dollar Euro


British pound Other


Total


Long-term funding by type Senior unsecured medium term notes


Covered bonds


Mortgage securitization1 Term asset backed securities


Total


40% 41 13 3 3


100%


53% 26 16 5


100% 1 Mortgage securitization excludes the residential mortgage trading business.


41% 43 10 4 2


100%


51% 23 22 4


100%


The Bank maintains depositor concentration limits in respect of short-term wholesale deposits so that it is not overly-dependent on large wholesale depositors for funding. The Bank also limits the amount of short-term wholesale funding that can mature within a given time period to mitigate exposures to refinancing risk during a stress event.


TD BANK GROUP ANNUAL REPORT 2016 MANAGEMENT’S DISCUSSION AND ANALYSIS


97


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