Group President and CEO’s Message

In 2023, TD demonstrated the benefits of its diversified business model. Our ability to adapt and execute with speed and purpose allowed the Bank to drive progress and deliver for our stakeholders.

We grew our customer base and invested in new capabilities to make us even stronger and more competitive. We introduced leading customer-facing applications and enhanced execution excellence with new technology and agile work models. We remained focused on those we serve, extended our lead as Canada’s largest digital bank, and surpassed 10 million customers at TD Bank, America’s Most Convenient Bank. We also closed a strategic transaction and welcomed 1,700 TD Cowen colleagues to TD Securities. Across the Bank, our businesses are well-positioned to continue to serve our nearly 28 million customers and clients by delivering ease, value, and trusted advice.

Amid an increasingly challenging environment, the Bank reported fiscal 2023 earnings of $10.8 billion ($15.1 billion on an adjusted basis). While this was down 38 per cent compared to 2022 (two per cent on an adjusted basis) reflecting the decline in macroeconomic conditions and further credit normalization, our capital position remained strong. We ended the year with a Common Equity Tier 1 Ratio of 14.4 per cent, well above regulatory requirements.

Our performance and financial strength enabled TD to return value directly to shareholders. We paid a higher dividend in 2023 and initiated the repurchase of up to 90 million common shares, after completing our previously announced repurchase of 30 million shares. Our confidence in the earnings power of our franchise enabled us to declare a dividend increase of six per cent effective in the first quarter of fiscal 2024.

It would be an understatement to call 2023 a period of change. We saw inflation climb, and central banks rapidly raise interest rates in response. Households and businesses faced new challenges. Economies, though somewhat resilient, began to slow. Technology, including generative AI, disrupted at scale. Industries continued to transform to meet new demands and needs. We continued to adapt to help our customers navigate these fundamental changes to the environment.

At TD, we believe that banking serves a higher purpose. In times of significant change, our customers and clients turn to us to help them navigate complexity and achieve their financial goals. We take this responsibility seriously and work hard to earn the trust of those we serve every day. We are engines of economic progress, providing liquidity and credit to foster growth. We invest in communities, support those impacted by economic uncertainty, and help advance a more sustainable and inclusive future.

The Canadian Personal Bank remains Canada’s leading banking franchise, and in 2023 we sharpened our focus to drive growth in key areas critical to future success. Our New-to-Canada program enabled thousands to establish themselves in a new country with access to tailored products and services. Our credit card portfolio delivered industry-leading offers to meet customers’ unique needs, backed by relationships with top brands, including Aeroplan, Uber, Amazon, and Starbucks. In Real Estate Secured Lending, we grew share in a challenging market by offering proactive advice.

The Canadian Business Bank combined increased industry specialization with a focus on customer experience to drive growth. Leveraging the reach and scale of Canada’s leading branch network, we deployed business bankers across the country and doubled the number of Senior Private Bankers co-located in our Commercial Banking centres, advancing our One TD strategies. We added sector specialists, created a technology venture team, expanded our support for women entrepreneurs, and launched the Black Entrepreneur Credit Access Program. We supported small business clients in advance of the upcoming Canada Emergency Business Account (CEBA) repayment deadline and drove record originations at TD Auto Finance.

In Wealth Management and Insurance, we widened our leadership position and continued to disrupt the market. We remain Canada’s largest institutional asset manager and operate the country’s top-ranked digital brokerage platform. We launched TD Active Trader to offer our customers increased speed and flexibility. TD Insurance, Canada’s number-one direct insurer, continued to reshape the market with innovative digital capabilities and offers, such as small business insurance. TD Insurance colleagues provided advice and assistance to communities devastated by wildfires and flooding.

With our growing competitive differentiation and deepening customer connections, TD emerged as Canada’s most valuable brand in 2023.

In the United States, TD Bank, America’s Most Convenient Bank, continues to deliver on the promise of its human-centric brand. When the banking crisis hit the U.S. market in the spring, we offered our customers stability and assurance. We continue to be well-positioned across our Maine-to-Florida footprint, investing in new products and services to meet the needs of customers across one of the biggest banking markets in the world. For the seventh consecutive year, we ranked number one in Small Business Administration (SBA) lending in our footprint – and number two in SBA loans nationally. Notwithstanding the progress we have made in our U.S. business, it was disappointing that some shortcomings in our anti-money laundering control environment were identified during the year, which we are working hard to address, and I am confident that in time we will.

As announced earlier in the year, given the uncertainty of the approval timeline, we mutually agreed with First Horizon to terminate the previously announced transaction. Although this was a difficult decision – and one not taken lightly – it was the right one for the Bank under the circumstances.

In Wholesale, TD Securities continues to advance our long-term growth strategy to build a fully integrated North American dealer with global reach. We significantly expanded the scope of our services and capabilities and are winning new mandates and new clients. With the addition of TD Cowen, we have added deep talent and complementary capabilities that will deliver greater value for clients and accelerate our growth strategy.

In 2023, we continued to invest in our colleagues to attract, retain and develop the best talent for today and tomorrow. TD’s culture, backed by Shared Commitments that unify the efforts of our diverse workforce offers a significant advantage as we build, serve, and focus on the future. TD was recognized as a Best Workplace in both Canada and the United States by Great Place to Work. The Bank was also named a Top Company for Diversity by DiversityInc., Best Place to Work for Disability Inclusion, and one of Forbes’ America’s Best Employers for Diversity.

The Bank’s sustainability priorities are embedded in our business strategy. We bring significant expertise, resources, and financing to clients as they transition to meet heightened market expectations and seize the opportunities of a low carbon economy. Through products, services, and trusted advice, we are helping businesses contribute to a more sustainable future.

We also advanced our own efforts. This year, we launched a new Sustainable and Decarbonization Finance Target to support customers, clients, and the communities we serve by mobilizing $500 billion by 2030 through financial activities and the Bank’s own investments. In recognition of our leadership, we were proud to be listed on the Dow Jones Sustainability Index for the ninth consecutive year – the only North American-based bank included on this year’s World Index.

Through the TD Ready Commitment, we are supporting the future prosperity of the communities in which we live and work, as we invest in programs that create opportunities for people to thrive in a changing world. We are making progress toward our $1 billion 2030 target, with $157 million contributed this year alone in support of community, non-profit, and other organizations.

The Bank enters 2024 from a position of strength, with proven resiliency, a powerful brand and a strong capital position.

A dynamic economic and operating environment will continue to shift in the year ahead. While an economic downturn has not yet materialized, inflation, rising rates and affordability challenges are already having an impact. TD is well-positioned to pivot, adapt, and deliver as circumstances change.

Our businesses are strong, and our customer relationships continue to grow and deepen. We attract and retain the best talent in the industry. Our disciplined financial management will allow us to enhance our performance and serve the evolving needs of our customers and clients. In addition, we will continue to invest in our risk and control environment and strengthen our capabilities, commensurate with a bank of our size and risk profile.

I want to thank our more than 95,000 TD bankers around the world for their commitment and dedication, our customers and clients for their trust, and our shareholders for their continued support as we build the Better Bank.