6-K
TORONTO DOMINION BANK (TD)
FORM
6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________________________
______________________________
REPORT OF FOREIGN PRIVATE
ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May,
2025
Commission File Number:
001-14446
______________________________
The Toronto-Dominion Bank
(Translation of registrant's name into English)
______________________________
c/o General Counsel’s Office
P.O. Box 1
,
Toronto Dominion Centre
,
Toronto
,
Ontario
,
M5K 1A2
(Address of principal executive offices)
Indicate by check mark whether the registrant
files or will file annual reports under cover
of Form 20-F or Form 40-F:
Form 20-F
☐
Form 40-F
☑
This Form 6-K, excluding Exhibit 99.4, Exhibit
99.5 and Exhibit 99.6 hereto, is incorporated by
reference into all outstanding Registration Statements
of The Toronto-
Dominion Bank filed with the U.S. Securities
and Exchange Commission.
EXHIBIT INDEX
Exhibit
Description
99.1
Quarter 2025 Report to Shareholders
99.2
99.3
Return on Assets, Dividend Payouts, and Equity to Assets Ratios
99.4
99.5
99.6
101
Interactive Data File (formatted as Inline
XBRL)
104
Cover Page Interactive Data File (formatted
as Inline XBRL and contained in Exhibit
101)
FORM 6-K
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant
has duly caused this report to be signed on
its behalf by the undersigned, thereunto
duly
authorized.
THE TORONTO-DOMINION BANK
DATE:
May 22, 2025
By:
/s/ Sue-Anne Fox
Name:
Sue-Anne Fox
Title:
Associate Vice President, Legal,
Treasury and
Corporate Securities
ex991
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 1
TD Bank Group Reports Second Quarter 2025 Results
Report to Shareholders
•
Three and six months ended April 30,
2025
The financial information in this document is reported
in Canadian dollars and is based on
the Bank’s unaudited Interim Consolidated
Financial Statements
prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB), unless
otherwise noted. Certain comparative amounts
have been revised to conform with the presentation
adopted in the current period.
Reported results conform with generally accepted
accounting principles (GAAP), in accordance
with IFRS. Adjusted measures are non-GAAP
financial
measures. For additional information about
the Bank’s use of non-GAAP financial measures,
refer to “Significant Events”,
“Non-GAAP and Other Financial
Measures” in the “How We Performed”,
or “How Our Businesses Performed” sections
of this document.
SECOND QUARTER FINANCIAL HIGHLIGHTS,
compared with the second quarter last
year:
●
Reported diluted earnings per share were
$6.27, compared with $1.35.
●
Adjusted diluted earnings per share were
$1.97, compared with $2.04.
●
Reported net income was $11,129 million, compared with
$2,564 million.
●
Adjusted net income was $3,626 million,
compared with $3,789 million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended April
30, 2025, compared with the corresponding
period last year:
●
Reported diluted earnings per share were
$7.81, compared with $2.89.
●
Adjusted diluted earnings per share were
$3.99, compared with $4.04.
●
Reported net income was $13,922 million,
compared with $5,388 million.
●
Adjusted net income was $7,249 million,
compared with $7,426 million.
SECOND QUARTER ADJUSTMENTS (ITEMS
OF NOTE)
The second quarter reported earnings figures
included the following items of note:
●
Amortization of acquired intangibles
of $43 million ($35 million after tax or 2
cents per share), compared with $72 million
($62 million after tax or
4 cents per share) in the second quarter
last year.
●
Acquisition and integration charges related
to the Cowen acquisition of $34 million
($26 million after tax or 2 cents
per share), compared with
$102 million ($80 million after tax or 4 cents
per share) in the second quarter last year.
●
Impact from the terminated First Horizon
Corporation (FHN) acquisition-related
capital hedging strategy of $47 million ($35
million after tax or
2 cents per share), compared with $64 million
($48 million after tax or 3 cents per
share) in the second quarter last year.
●
U.S. balance sheet restructuring of $1,129
million ($847 million after tax or 49 cents
per share).
●
Restructuring charges of $163 million
($122 million after tax or 7 cents per share),
compared with $165 million ($122 million
after tax or 7 cents per
share) under a previous program in the
second quarter last year.
●
Gain on sale of Schwab shares of $8,975
million ($8,568 million after tax or $4.92
per share).
TORONTO
, May 22, 2025 – TD Bank Group (“TD” or the “Bank”)
today announced its financial results for the second quarter
ended April 30, 2025. Reported earnings were
$11.1 billion, up 334% compared
with the second quarter last year,
reflecting the Bank's sale of its remaining equity investment
in The Charles Schwab Corporation
(“Schwab”), and adjusted earnings were $3.6 billion, down
4%.
“TD delivered strong results this quarter,
with robust trading and fee income in our markets-driven
businesses as well as deposit and loan growth in Canadian
Personal and
Commercial Banking,”
said Raymond Chun, Group President and CEO, TD
Bank Group. “Our U.S. balance sheet restructuring is
on track, and we are making consistent
progress on AML remediation. We are well positioned
as we enter the second half of the year,
and we continue to strengthen our Bank by investing
in the client experience,
enhancing our digital capabilities, and simplifying how we
operate to achieve greater speed and execution excellence.
”
Canadian Personal and Commercial Banking results
driven by continued volume growth in loans and
deposits
Canadian Personal and Commercial Banking net income was
$1,668 million, a decrease of 4% compared with
the second quarter last year,
reflecting higher provisions for
credit losses (PCL) and non-interest expenses, partially offset
by higher revenue. Revenue increased 3%, primarily
reflecting loan and deposit growth.
The Canadian Personal Bank reported another quarter
of solid acquisition growth, including a record in digital
day-to-day sales. The Canadian Personal Bank
also delivered a
strong quarter of credit card growth and referral volumes
to Wealth and Business Banking. This quarter,
Business Banking reported strong commercial loan
growth, record
second-quarter retail originations in TD Auto Finance (TDAF),
and robust customer acquisition in Small Business Banking.
In addition, TDAF scored highest in two segments
of the J.D. Power 2025 Canada Dealer Financing Satisfaction
Study, ranking #1 for
Dealer Satisfaction among Non-Prime and Prime Credit Non
-Captive Automotive
Financing Lenders
1
.
The U.S. Retail Bank delivered continued momentum
and progress on balance sheet restructuring
U.S. Retail reported net income for the quarter was $120
million (US$89 million), down 76% (77% in U.S. dollars),
compared with the second quarter last year.
On an adjusted
basis, net income was $967 million (US$680 million),
down 19% (23% in U.S. dollars). Reported net income
for the quarter from the Bank’s prior investment
in Schwab was
$78 million (US$54 million), a decrease of 57% (60% in
U.S. dollars), compared with the second quarter last year
reflecting the Bank’s sale of its remaining
equity investment
in Schwab this quarter.
The U.S. Retail Bank, which excludes the Bank’s
prior investment in Schwab, reported net income was $42
million (US$35 million), down 87% (86% in U.S.
dollars),
compared with the second quarter last year,
primarily reflecting the impact of balance sheet restructuring
activities, higher governance and control investments,
including costs
for U.S. BSA/AML remediation, and higher PCL, partially
offset by the impact of charges for the global
resolution of the investigations into the Bank’s
U.S. BSA/AML program
and FDIC special assessment charge in the second
quarter last year. On an adjusted
basis, net income was $889 million (US$626 million),
down 13% (16% in U.S. dollars)
1
TD Auto Finance received the highest score in the retail non-captive non-prime segment and the retail non-captive prime segment in the J.D. Power 2024-2025 Canada Dealer Financing Satisfaction
Studies, which measure Canadian auto dealers’ satisfaction with their auto finance providers. Visit jdpower.com/awards for more details.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 2
compared with the second quarter last year,
reflecting higher governance and control investments,
including costs for U.S. BSA/AML remediation, and
higher PCL, partially
offset by higher revenue.
This quarter, the U.S. Retail Bank
demonstrated
resilience and delivered continued momentum, with its
sixth quarter of consumer deposit growth and double
-digit growth in
U.S. Wealth assets year over year.
This quarter, TD Bank, America
’s Most Convenient Bank
®
, ranked #1 in Florida for retail banking customer satisfaction
in the J.D. Power
2025 U.S. Retail Banking Satisfaction Study
2
.
Wealth Management and Insurance delivered strong
results across diversified businesses
Wealth Management and Insurance net income
was $707 million, an increase of 14% compared with
the second quarter last year, with
strong revenue growth in both
businesses. This quarter’s revenue growth of 12% reflected higher
insurance premiums, higher fee-based revenue, and transaction
revenue.
This quarter, Wealth Management
and Insurance continued to invest in client-centric innovation
and deliver growth. TD Asset Management
(TDAM) launched the TD
Greystone Infrastructure iCapital Canada Access Fund, expanding
access to direct private infrastructure to retail investors.
TDAM also added more than $5 billion in net
institutional assets, demonstrating its strength as the #1 institutional
asset manager in Canada among the Big 5 banks.
The TD Private Wealth Management and TD
Financial
Planning businesses delivered strong net asset growth this
quarter. Additionally,
TD Insurance continued to deliver double-digit premium
growth and further increased its
market share
3
.
Wholesale Banking delivered record revenue including
fees earned from TD’s sale of its remaining
equity investment in Schwab
Wholesale Banking reported net income for the quarter was
$419 million, an increase of 16% compared with the second
quarter last year, primarily reflecting
higher revenue,
partially offset by higher PCL and non-interest expenses.
On an adjusted basis, net income was $445 million,
an increase of 1% compared with the second
quarter last year.
Revenue for the quarter was a record $2,129 million, an
increase of 10% compared with the second quarter
last year, primarily reflecting higher
trading-related revenue, and
underwriting fees, including those associated with the Bank’s
sale of its remaining equity investment in Schwab.
This quarter, Wholesale Banking executed
the largest sole-managed convertible offering in
the U.S. since 2020, demonstrating the strength
of its capabilities and market
influence. Wholesale Banking was voted Overall Commodities
Dealer in the Energy Risk Commodity Rankings
2025, run by Risk.net, reflecting its global leadership,
reliability,
and client trust.
Capital
TD’s Common Equity Tier 1 Capital
ratio was 14.9%.
Conclusion
“We are operating in a fluid macroeconomic environment.
As we navigate this period of uncertainty,
TD is very well-capitalized, prepared for a broad range
of economic
scenarios, and remains focused on the needs and goals of
our clients,” added Chun. “I want to thank our colleagues
for their continued efforts as we further
strengthen our
Bank and build for the future.”
The foregoing contains forward-looking statements. Please refer to the “Caution Regarding Forward-Looking Statements”
on page 4.
2
TD Bank received the highest score in a tie in Florida in the J.D. Power 2025 U.S. Retail Banking Satisfaction Study, which measures customers’ satisfaction with their primary bank. Visit
jdpower.com/awards for more details.
3
Rankings based on data provided by OSFI, Insurers and the Insurance Bureau of Canada for the year ended December 31, 2024. Excludes public insurance regimes (ICBC, MPI and SAF).
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 3
ENHANCED DISCLOSURE TASK FORCE
The Enhanced Disclosure Task Force (EDTF) was established by the Financial
Stability Board in 2012 to identify fundamental
disclosure principles,
recommendations and leading practices to enhance
risk disclosures of banks. The index
below includes the recommendations (as
published by the EDTF) and
lists the location of the related EDTF disclosures
presented in the second quarter 2025
Report to Shareholders (RTS), Supplemental
Financial Information (SFI),
or Supplemental Regulatory Disclosures (SRD).
Information on TD’s website, SFI, and SRD is
not and should not be considered incorporated
herein by reference
into the second quarter 2025 RTS, Management’s
Discussion and Analysis, or the Interim Consolidated
Financial Statements. Certain disclosure references
have
been made to the Bank’s 2024
Annual Report.
Type of
Risk
Topic
EDTF Disclosure
Page
RTS
Second
Quarter
2025
SFI
Second
Quarter
2025
SRD
Second
Quarter
2025
Annual Report
2024
General
1
Present all related risk information together in any particular report.
Refer to below for location of disclosures
2
The bank’s risk terminology and risk measures and present key parameter
values used.
94-101, 105,
110, 112-114,
125-127
3
Describe and discuss top and emerging risks.
84-93
4
Outline plans to meet each new key regulatory ratio once applicable rules
are finalized.
33, 46
80, 122
Risk
Governance
and Risk
Management
and
Business
Model
5
Summarize the bank’s risk management organization, processes, and key
functions.
95-99
6
Description of the bank’s risk culture and procedures applied to support the
culture.
94-95
7
Description of key risks that arise from the bank’s business models and
activities.
79, 94, 100-128
8
Description of stress testing within the bank’s risk governance and capital
frameworks.
78, 99-100, 108,
125
Capital
Adequacy
and Risk
Weighted
Assets
9
Pillar 1 capital requirements and the impact for global systemically important
banks.
31-32, 83
1-3, 6
75-77, 80-81,
235
10
Composition of capital and reconciliation of accounting balance sheet to the
regulatory balance sheet.
1-3, 5
75
11
Flow statement of the movements in regulatory capital.
4
12
Discussion of capital planning within a more general discussion of
management’s strategic planning.
76-78, 125
13
Analysis of how risk-weighted asset (RWA) relate to business activities
and
related risks.
9-13
78-79
14
Analysis of capital requirements for each method used for calculating RWA.
13
101-103, 105,
107-108
15
Tabulate credit risk in the banking book
for Basel asset classes and major
portfolios.
36-53, 59-65
16
Flow statement reconciling the movements of RWA by risk type.
18-19
17
Discussion of Basel III back-testing requirements.
80
104, 108,
112-113
Liquidity
18
The bank’s management of liquidity needs and liquidity reserves.
39-43
114-116,
118-119
Funding
19
Encumbered and unencumbered assets in a table by balance sheet
category.
41
117, 229
20
Tabulate consolidated total assets, liabilities
and off-balance sheet
commitments by remaining contractual maturity at the balance sheet date.
46-48
122-124
21
Discussion of the bank’s funding sources and the bank’s funding strategy.
42-46
119-122
Market Risk
22
Linkage of market risk measures for trading and non-trading portfolio and
balance sheet.
36
106
23
Breakdown of significant trading and non-trading market risk factors.
36, 38
106, 109-110
24
Significant market risk measurement model limitations and validation
procedures.
37
107-110,
112-113
25
Primary risk management techniques beyond reported risk measures and
parameters.
37
107-110
Credit Risk
26
Provide information that facilitates users’ understanding of the bank’s credit
risk profile, including any significant credit risk concentrations.
28-31, 65-74
21-36
1-5, 13, 18,
20-70, 72-80
62-74, 101-105,
185-192, 201,
203-204,
233-234
27
Description of the bank’s policies for identifying impaired loans.
73
71, 162-163,
169-170, 191
28
Reconciliation of the opening and closing balances of impaired loans in the
period and the allowance for loan losses.
29, 68-72
25, 29
69, 188-190
29
Analysis of the bank’s counterparty credit risks that arise from derivative
transactions.
54-55, 66-70
103, 173-174,
195-197, 201,
203-204
30
Discussion of credit risk mitigation, including collateral held for all sources of
credit risk.
104, 166,
173-174
Other Risks
31
Description of ‘other risk’ types based on management’s classifications and
discuss how each one is identified, governed, measured, and managed.
110-113,
125-128
32
Discuss publicly known risk events related to other risks.
81
91-93, 227-228
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 4
TABLE OF CONTENTS
MANAGEMENT’S DISCUSSION AND ANALYSIS
4
Caution Regarding Forward-Looking Statements
49
Securitization and Off-Balance Sheet Arrangements
5
Financial Highlights
49
Accounting Policies and Estimates
6
Significant Events
49
Changes in Internal Control over Financial
Reporting
6
Update on U.S. BSA/AML Program Remediation
and
50
Glossary
Enterprise AML Program Improvement Activities
9
How We Performed
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
13
Financial Results Overview
53
Interim Consolidated Balance Sheet
17
How Our Businesses Performed
54
Interim Consolidated Statement of Income
26
Quarterly Results
55
Interim Consolidated Statement of Comprehensive
Income
27
Balance Sheet Review
56
Interim Consolidated Statement of Changes
in Equity
28
Credit Portfolio Quality
57
Interim Consolidated Statement of Cash
Flows
31
Capital Position
58
Notes to Interim Consolidated Financial Statements
34
Risk Factors and Management
34
Managing Risk
84
SHAREHOLDER AND INVESTOR INFORMATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATING
PERFORMANCE
This Management’s Discussion and Analysis (MD&A)
is presented to enable readers
to assess material changes in the financial
condition and operating results of
TD Bank Group (“TD” or the “Bank”) for the
three and six months ended April 30, 2025,
compared with the corresponding periods
shown. This MD&A should be
read in conjunction with the Bank’s unaudited Interim
Consolidated Financial Statements included
in this Report to Shareholders and with
the 2024 Annual
Consolidated Financial Statements and 2024
MD&A. This MD&A is dated May 21,
- Unless otherwise indicated,
all amounts are expressed in Canadian
dollars and have been primarily derived
from the Bank’s 2024 Annual Consolidated Financial
Statements or Interim Consolidated
Financial Statements, prepared
in accordance with IFRS as issued by the
IASB. Note that certain comparative amounts
have been revised to conform with the presentation
adopted in the current
period. Additional information relating
to the Bank, including the Bank’s 2024 Annual
Information Form, is available on the
Bank’s website at http://www.td.com as
well as on SEDAR+
at http://www.sedarplus.ca and on the SEC’s website at http://www.sec.gov (EDGAR
filers section).
Caution Regarding Forward-Looking Statements
From time to time, the Bank (as defined in this document) makes written and/or oral forward-looking statements, including
in this document, in other filings with Canadian regulators or the United States (U.S.) Securities
and
Exchange Commission (SEC), and in other communications. In addition, representatives of the
Bank may make forward-looking statements orally to analysts, investors, the media, and others. All such
statements are made
pursuant to the “safe harbour” provisions of, and are intended to be forward-looking statements
under, applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to, statements made in this document,
the Management’s Discussion and Analysis (“2024 MD&A”) in the Bank’s 2024 Annual Report under the heading
“Economic
Summary and Outlook”, under the headings “Key Priorities for 2025” and “Operating Environment and
Outlook” for the Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance,
and
Wholesale Banking segments, and under the heading “2024 Accomplishments and Focus for
2025” for the Corporate segment, and in other statements regarding the Bank’s objectives and priorities for
2025 and beyond
and strategies to achieve them, the regulatory environment in which the Bank operates, and the Bank’s anticipated
financial performance.
Forward-looking statements are typically identified by words such as “will”, “would”, “should”, “believe”,
“expect”, “anticipate”, “intend”, “estimate”, “forecast”, “outlook”, “plan”, “goal”, “target”, “possible”,
“potential”,
“predict”, “project”, “may”, and “could” and similar expressions or variations thereof, or the negative thereof,
but these terms are not the exclusive means of identifying such statements. By their very
nature, these forward-
looking statements require the Bank to make assumptions and are subject to inherent risks and
uncertainties, general and specific. Especially in light of the uncertainty related to the physical, financial,
economic, political,
and regulatory environments, such risks and uncertainties – many of which are beyond the Bank’s control
and the effects of which can be difficult to predict – may cause actual results to differ materially from the
expectations expressed in the forward-looking statements.
Risk factors that could cause, individually or in the aggregate, such differences include: strategic, credit,
market (including equity, commodity, foreign exchange, interest rate, and credit spreads), operational (including
technology, cyber security, process, systems, data, third-party, fraud, infrastructure, insider and conduct), model, insurance, liquidity, capital adequacy, compliance and legal, financial crime, reputational, environmental and
social, and other risks. Examples of such risk factors include general business and economic conditions
in the regions in which the Bank operates; geopolitical risk (including policy, trade and tax-related risks and the
potential impact of any new or elevated tariffs or any retaliatory tariffs); inflation, interest rates and recession uncertainty; regulatory
oversight and compliance risk; risks associated with the Bank’s ability to satisfy the terms
of the global resolution of the investigations into the Bank’s U.S.
Bank Secrecy Act
(BSA)/anti-money laundering (AML) program; the impact of the global resolution of the investigations
into the Bank’s U.S. BSA/AML
program on the Bank’s businesses, operations, financial condition, and reputation; the ability of the Bank to execute
on long-term strategies, shorter-term key strategic priorities, including the successful completion of
acquisitions and dispositions and integration of acquisitions, the ability of the Bank to achieve its financial
or strategic objectives with respect to its investments, business retention plans, and other strategic
plans; technology
and cyber security risk (including cyber-attacks, data security breaches or technology failures) on the
Bank’s technologies, systems and networks, those of the Bank’s customers (including their own devices), and third
parties providing services to the Bank; data risk; model risk; fraud activity; insider risk; conduct
risk; the failure of third parties to comply with their obligations to the Bank or its affiliates, including
relating to the care and
control of information, and other risks arising from the Bank’s use of third-parties; the impact of new and changes
to, or application of, current laws, rules and regulations, including without limitation consumer
protection laws
and regulations, tax laws, capital guidelines and liquidity regulatory guidance; increased competition
from incumbents and new entrants (including Fintechs and big technology competitors); shifts in consumer
attitudes and
disruptive technology; environmental and social risk (including climate-related risk); exposure related to
litigation and regulatory matters; ability of the Bank to attract, develop, and retain key talent;
changes in foreign
exchange rates, interest rates, credit spreads and equity prices; downgrade, suspension or withdrawal
of ratings assigned by any rating agency, the value and market price of the Bank’s common shares and other securities
may be impacted by market conditions and other factors; the interconnectivity of financial institutions
including existing and potential international debt crises; increased funding costs and market volatility due to
market
illiquidity and competition for funding; critical accounting estimates and changes to accounting standards,
policies, and methods used by the Bank; and the occurrence of natural and unnatural catastrophic
events and
claims resulting from such events.
The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other
factors could also adversely affect the Bank’s results. For more detailed information, please refer to the “Risk
Factors and
Management” section of the 2024 MD&A, as may be updated in subsequently filed quarterly reports to shareholders
and news releases (as applicable) related to any events or transactions discussed under the headings
“Significant Events”, “Significant and Subsequent Events” or “Update on U.S. Bank Secrecy
Act (BSA)/Anti-Money Laundering (AML) Program Remediation and Enterprise AML Program Improvement
Activities“ in the
relevant MD&A, which applicable releases may be found on www.td.com. All such factors, as well as other
uncertainties and potential events, and the inherent uncertainty of forward-looking statements, should be
considered carefully when making decisions with respect to the Bank. The Bank cautions readers
not to place undue reliance on the Bank’s forward-looking statements.
Material economic assumptions underlying the forward-looking statements contained in this document are set
out in the 2024 MD&A under the headings “Economic Summary and Outlook” and “Significant Events”,
under
the headings “Key Priorities for 2025” and “Operating Environment and Outlook” for the Canadian
Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking segments,
and under the heading “2024 Accomplishments and Focus for 2025” for the Corporate segment,
each as may be updated in subsequently filed quarterly reports to shareholders and news releases (as
applicable).
Any forward-looking statements contained in this document represent the views of management only as
of the date hereof and are presented for the purpose of assisting the Bank’s shareholders and analysts in
understanding the Bank’s financial position, objectives and priorities and anticipated financial performance as at and
for the periods ended on the dates presented, and may not be appropriate for other
purposes. The Bank
does not undertake to update any forward-looking statements, whether written or oral, that may be
made from time to time by or on its behalf, except as required under applicable securities legislation.
This document was reviewed by the Bank’s Audit Committee and was approved by the Bank’s Board of Directors,
on the Audit Committee’s recommendation, prior to its release.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 5
TABLE 1: FINANCIAL HIGHLIGHTS
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Results of operations
Total revenue – reported
$
22,937
$
14,049
$
13,819
$
36,986
$
27,533
Total revenue – adjusted
1
15,138
15,030
13,883
30,168
27,654
Provision for (recovery of) credit losses
1,341
1,212
1,071
2,553
2,072
Insurance service expenses (ISE)
1,417
1,507
1,248
2,924
2,614
Non-interest expenses – reported
8,139
8,070
8,401
16,209
16,431
Non-interest expenses – adjusted
1
7,908
7,983
7,084
15,891
14,209
Net income – reported
11,129
2,793
2,564
13,922
5,388
Net income – adjusted
1
3,626
3,623
3,789
7,249
7,426
Financial position
(billions of Canadian dollars)
Total loans net of allowance for loan losses
$
936.4
$
965.3
$
928.1
$
936.4
$
928.1
Total assets
2,064.3
2,093.6
1,966.7
2,064.3
1,966.7
Total deposits
1,267.7
1,290.5
1,203.8
1,267.7
1,203.8
Total equity
126.1
119.0
112.0
126.1
112.0
Total risk-weighted assets
2
624.6
649.0
602.8
624.6
602.8
Financial ratios
Return on common equity (ROE) – reported
3
39.1
%
10.1
%
9.5
%
24.8
%
10.2
%
Return on common equity – adjusted
1
12.3
13.2
14.5
12.7
14.3
Return on tangible common equity (ROTCE)
1,3
48.0
13.4
13.0
31.3
13.9
Return on tangible common equity – adjusted
1
15.0
17.2
19.2
15.9
18.9
Efficiency ratio – reported
3
35.5
57.4
60.8
43.8
59.7
Efficiency ratio – adjusted, net of ISE
1,3,4
57.6
59.0
56.1
58.3
56.7
Provision for (recovery of) credit losses
as a % of net
average loans and acceptances
0.58
0.50
0.47
0.54
0.45
Common share information – reported
(Canadian dollars)
Per share earnings
Basic
$
6.28
$
1.55
$
1.35
$
7.81
$
2.90
Diluted
6.27
1.55
1.35
7.81
2.89
Dividends per share
1.05
1.05
1.02
2.10
2.04
Book value per share
3
66.75
61.61
57.69
66.75
57.69
Closing share price (TSX)
5
88.09
82.91
81.67
88.09
81.67
Shares outstanding (millions)
Average basic
1,740.5
1,749.9
1,762.8
1,745.3
1,769.8
Average diluted
1,741.7
1,750.7
1,764.1
1,746.3
1,771.2
End of period
1,722.5
1,751.7
1,759.3
1,722.5
1,759.3
Market capitalization (billions of Canadian dollars)
$
151.7
$
145.2
$
143.7
$
151.7
$
143.7
Dividend yield
3
5.0
%
5.4
%
5.1
%
5.2
%
5.0
%
Dividend payout ratio
3
16.6
67.8
75.6
26.8
70.3
Price-earnings ratio
3
9.1
17.5
13.8
9.1
13.8
Total shareholder return (1 year)
3
13.6
6.9
4.5
13.6
4.5
Common share information – adjusted
(Canadian dollars)
Per share earnings
Basic
$
1.97
$
2.02
$
2.04
$
3.99
$
4.05
Diluted
1.97
2.02
2.04
3.99
4.04
Dividend payout ratio
53.0
%
51.9
%
49.9
%
52.4
%
50.3
%
Price-earnings ratio
11.4
10.6
10.5
11.4
10.5
Capital ratios
3
Common Equity Tier 1 Capital ratio
14.9
%
13.1
%
13.4
%
14.9
%
13.4
%
Tier 1 Capital ratio
16.6
14.7
15.1
16.6
15.1
Total Capital ratio
18.5
17.0
17.1
18.5
17.1
Leverage ratio
4.7
4.2
4.3
4.7
4.3
TLAC ratio
31.0
29.5
30.6
31.0
30.6
TLAC Leverage ratio
8.7
8.5
8.7
8.7
8.7
1
The Toronto-Dominion Bank (“TD” or the
“Bank”) prepares its Interim Consolidated Financial Statements in accordance with IFRS,
the current GAAP, and refers
to results prepared in
accordance with IFRS as the “reported” results. The Bank also utilizes non-GAAP financial measures
such as “adjusted” results and non-GAAP ratios to assess each of its businesses
and to measure overall Bank performance. To
arrive at adjusted results, the Bank adjusts reported results for “items of note”. Refer to “Significant
Events”, “How We Performed” or “How
Our Businesses Performed” sections
of this document for further explanation, a list of the items of note, and a reconciliation of
adjusted to reported results. Non-GAAP financial measures
and ratios used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar
terms used by other issuers.
2
These measures have been included in this document in accordance with the Office of the Superintendent
of Financial Institutions Canada’s (OSFI’s) Capital Adequacy
Requirements
(CAR), Leverage Requirements (LR), and Total
Loss Absorbing Capacity (TLAC) guidelines.
Refer to the “Capital Position” section of this document for further details.
3
For additional information about these metrics, refer to the Glossary of this document.
4
Efficiency ratio – adjusted, net of ISE is calculated by dividing adjusted non-interest expenses by adjusted
total revenue, net of ISE. Adjusted total revenue, net of ISE –
Q2 2025: $13,721 million, Q1 2025: $13,523 million, Q2 2024: $12,635 million, 2025 YTD: $27,244 million, 2024
YTD: $25,040 million.
5
Toronto Stock Exchange closing market
price.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 6
SIGNIFICANT EVENTS
a)
Sale of Schwab Shares
On February 12, 2025, the Bank sold its entire
remaining equity investment in the Charles
Schwab Corporation (“Schwab”) through a
registered offering and share
repurchase by Schwab. Immediately prior
to the sale, TD held 184.7 million shares of
Schwab’s common stock, representing 10.1%
economic ownership. The sale
of the shares resulted in proceeds of approximately
$21.0 billion (US$14.6 billion) and
the Bank recognized
a net gain on sale of approximately $8.6 billion
(US$5.8 billion). This gain is net of the release
of related cumulative foreign currency
translation from AOCI, the release of AOCI on
designated net investment
hedging items, direct transaction costs,
and taxes. The Bank also recognized
$184 million of underwriting fees in its
Wholesale segment as a result of TD
Securities acting as a lead bookrunner on
the transaction.
The transaction increased
Common Equity Tier 1 (CET1) capital by approximately
238 basis points (bps). The Bank discontinued
recording its share of
earnings available to common shareholders
from its investment in Schwab following
the sale. The Bank continues to have a
business relationship with Schwab
through the IDA Agreement.
b) Restructuring Charges
The Bank initiated a new restructuring program
in the second quarter of 2025 to reduce its
cost base and achieve greater efficiency. In connection with this
program, the Bank incurred $163 million
pre-tax of restructuring charges in
the second quarter of 2025 which primarily
relate to real estate optimization, employee
severance and other personnel-related
costs, and asset impairment and other rationalization,
including certain business wind-downs.
The Bank expects to incur
total restructuring charges of $600 million
to $700 million pre-tax over the next several
quarters, to generate savings of approximately
$100 million pre-tax in fiscal
2025 and fully realized annual savings of $550
million to $650 million pre-tax, including savings
from an approximate 2% workforce
reduction
4
.
UPDATE ON U.S. BANK
SECRECY ACT (BSA)/ANTI-MONEY LAUNDERING (AML
)
PROGRAM REMEDIATION
AND
ENTERPRISE AML PROGRAM IMPROVEMENT ACTIVITIES
As previously disclosed in the Bank’s 2024
MD&A, on October 10, 2024, the Bank announced
that, following active cooperation and engagement
with authorities
and regulators, it reached a resolution of previously
disclosed investigations related to its
U.S. BSA/AML compliance programs (the “Global
Resolution”). The Bank
and certain of its U.S. subsidiaries consented
to orders with the Office of the Comptroller
of the Currency (OCC), the Federal Reserve
Board, and the Financial
Crimes Enforcement Network (FinCEN) and
entered into plea agreements with the
Department of Justice (DOJ), Criminal
Division, Money Laundering and Asset
Recovery Section and the United States
Attorney’s Office for the District of New Jersey. The Bank is focused
on meeting the terms of the consent orders and
plea
agreements, including meeting its requirements
to remediate the Bank’s U.S. BSA/AML programs.
In addition, the Bank is also undertaking several
improvements
to the Bank’s enterprise-wide AML/Anti-Terrorist Financing and Sanctions Programs
(“Enterprise AML Program”).
For additional information on the Global
Resolution, the Bank’s U.S. BSA/AML program
remediation activities, the Bank’s Enterprise
AML Program improvement
activities, and the risks associated with the
foregoing, see the “Significant Events – Global
Resolution of the Investigations into the Bankְ’s U.S. BSA/AML
Program”
and “Risk Factors That May Affect Future Results
– Global Resolution of the Investigations into
the Bank’s U.S. BSA/AML Program” sections of
the Bank’s
2024 MD&A.
Remediation of the U.S. BSA/AML Program
The Bank remains focused on remediating
its U.S. BSA/AML program to meet the requirements
of the Global Resolution. As noted in the
Bank’s first quarter 2025
MD&A, the Bank continues to expect to have
the majority of its management remediation
actions implemented in calendar 2025
with remaining management
implementations planned for calendar 2026
and into calendar 2027. Sustainability
and testing activities are planned for calendar
2026 and calendar 2027 following
management implementations, and the Bank
is targeting to have the Suspicious Activity
Report lookback completed in calendar 2027
per the OCC consent order.
For fiscal 2025, the Bank continues to expect
U.S. BSA/AML remediation and related
governance and control investments of
approximately US$500 million pre-tax
and expects similar investments in fiscal
2026
5
. As noted in the Bank’s 2024 MD&A, all
management remediation actions will be
subject to validation by the Bank’s
internal audit function, followed by the review
and acceptance by the appointed monitor, demonstrated
sustainability, and, ultimately, the review and approval of
the Bank’s U.S. banking regulators and the DOJ.
Following such independent reviews, testing,
and validation, there could be additional remediation
related
implementations required from the Bank
that would take place after calendar 2027.
In addition, as the Bank undertakes the lookback
reviews, the Bank may be
required to further expand the scope of the review, either in
terms of the subjects being addressed and/or
the time period reviewed. The following
graph illustrates
the Bank’s expected remediation plan and progress
on a calendar year basis, based on its
work to date:
As noted in the Bank’s 2024 MD&A including in the
“Risk Factors That May Affect Future Results
– Global Resolution of the Investigations
into the Bank’s U.S.
BSA/AML Program” section thereof, the Bank’s
remediation timeline is based on the Bank’s
current plans, as well as assumptions related
to the duration of
4
The Bank's expectations regarding the restructuring program are subject to inherent uncertainties and are based on the Bank's assumptions regarding certain factors, including rate of natural attrition,
talent re-deployment opportunities, years-of-service, execution timing of actions, decisions to expand on or reduce the restructuring actions (e.g., scope of real estate optimization, additional
rationalizations), and foreign exchange translation impacts. Refer to the “Risk Factors That May Affect Future Results” section of this document for additional information about risks and uncertainties
that may impact the Bank’s estimates.
5
The total amount expected to be spent on remediation and governance and control investments is subject to inherent uncertainties and may vary based on the scope of work in the U.S. BSA/AML
remediation plan which could change as a result of additional findings that are identified as work progresses as well as the Bank’s ability to successfully execute against the U.S. BSA/AML remediation
program in accordance with the U.S. Retail segment’s fiscal 2025 and medium term plan.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 7
planning activities, including the completion
of external benchmarking and lookback
reviews. The Bank’s ability to meet its planned
remediation milestones
assumes that the Bank will be able to
successfully execute against its U.S. BSA/AML
remediation program plan, which
is subject to inherent risks and
uncertainties including the Bank’s ability to attract
and retain key employees, the ability
of third parties to deliver on their contractual
obligations, and the successful
development and implementation of required
technology solutions. Furthermore, the execution
of the U.S. BSA/AML remediation plan, including
these planned
milestones, will not be entirely within the
Bank’s control because of various factors such
as (i) the requirement to obtain regulatory
approval or non-objection before
proceeding with various steps, and (ii) the requirement
for the various deliverables to be acceptable
to the regulators and/or the monitor. As of the date hereof,
the
Bank believes that it and its applicable
U.S. subsidiaries have taken such actions as
are required of them to date under the terms
of the consent orders and plea
agreements and is not aware of them being in
breach of the same.
While substantial work remains, in addition
to the work that has been completed and
previously outlined in the Bank’s 2024 MD&A and
first quarter 2025 MD&A,
the Bank continued to make progress on
remediating and strengthening its U.S. BSA/AML
program during the second fiscal quarter
of 2025, including:
1)
incremental improvements to transaction
monitoring capabilities with the implementation
of the final round of planned scenarios into
the Bank’s U.S.
transaction monitoring system as set out in
our U.S. BSA/AML program remediation plan;
2)
the continued implementation of enhanced,
streamlined investigation practices including
the introduction of updated procedures
for analyzing
customer activity;
3)
progress with data staging in relation to lookback
reviews;
4)
the implementation of further enhancements
to cash deposit requirements at store locations;
5)
updated policies, including those with respect
to Know Your Customer activities, and revised escalation standards
across all of U.S. Financial Crime
Risk Management; and
6)
further hiring of U.S. investigative analysts,
as planned, to help manage higher case
volumes resulting from the additional
monitoring capabilities that
have been implemented.
For the remainder of fiscal 2025, the
Bank’s focus will be on implementing incremental
enhancements to its transaction monitoring
and reporting controls,
including:
1)
continued improvements to transaction
monitoring standards, procedures and
training;
2)
the implementation of additional reporting
and controls for cash management activities;
3)
further progress with data staging and analysis
in relation to lookback reviews; and
4)
the deployment of machine learning analysis
capabilities beginning in the third fiscal quarter
of 2025.
As noted in the Bank’s 2024 MD&A, to help ensure
that the Bank can continue to support its
customers’ financial needs in the U.S.
while not exceeding the
limitation on the combined total assets of
the U.S. Bank, the Bank is focused on executing
multiple U.S. balance sheet restructuring actions
in fiscal 2025. Refer to
the “Update on U.S. Balance Sheet Restructuring”
section of the U.S. Retail segment section
for additional information on these actions.
For additional information
about expenses associated with the Bank’s U.S. BSA/AML
program remediation activities, refer
to the U.S. Retail segment section.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 8
Assessment and Strengthening of the
Bank’s Enterprise AML Program
The Bank is continuing to implement improvements
to the Enterprise AML Program and
continues to target implementation of
the majority of its Enterprise AML
Program remediation and enhancement actions
by the end of calendar 2025. As noted in
the Bank’s first quarter 2025 MD&A, once implemented,
those
remediation and enhancement actions will
then be subject to internal review, challenge and validation
of the activities. Following the end of the
first fiscal quarter,
the Financial Transactions and Reports Analysis Centre
of Canada (“FINTRAC”) commenced a
review of certain remediation steps that
the Bank has taken to date
to address the FINTRAC violations. This review
is ongoing,
and subject to the outcome, may result
in additional regulatory actions.
As noted in the “Risk Factors That May
Affect Future Results – Global Resolution of
the Investigations into the Bank’s U.S. BSA/AML
Program” section of the
Bank’s 2024 MD&A, the remediation and enhancement
of the Enterprise AML program is exposed
to similar risks as noted in respect
of the remediation of the
Bank’s U.S. BSA/AML program. In particular,
as the Bank continues its remediation and
improvement activities of the Enterprise
AML Program, it expects an
increase in identification of reportable transactions
and/or events, which will add to the operational
backlog in the Bank’s Financial Crime
Risk Management
(FCRM)
investigations processing that the Bank
currently faces, but is working towards
remediating, across the enterprise. In addition,
it continues to assess (i)
whether issues that have been, and continue
to be, identified in the U.S. BSA/AML program
exist in the Enterprise AML Program in Canada,
Europe or Asia, and
(ii) the impact of such issues. The results of
these assessments may also broaden
the scope of the remediation and improvements
required for the Enterprise AML
Program. Furthermore, the Bank’s regulators
or law enforcement agencies may identify
other issues with the Bank’s Enterprise AML
Program, which may result in
additional regulatory actions.
While substantial work remains, the
Bank has made progress on the improvements
to the Enterprise AML Program over the
second fiscal quarter of 2025,
including:
1) new reporting on workloads, which has
improved our ability to forecast resource
needs and expanded our FCRM program
reporting to the Bank’s
Boards and senior management;
2) launching technology initiatives to consolidate
electronic document and data availability, to improve quality and
timeliness of monitoring and oversight
of escalated AML issues;
3) continued improvements in the Bank’s process
and procedural guidance, reinforced
with targeted training across FCRM and
individual business
lines; and
4) hiring of additional investigative analysts,
to help improve management of
case volumes, with further expansion planned over
the rest of the fiscal
year.
For the remainder of fiscal 2025, the
Bank’s focus will be on the following improvements
to the Enterprise AML Program:
1) the Enterprise-wide adoption of a new
centralized case management tool that is already
in production in the U.S., with the goal of
strengthening
oversight and investigations of identified
FCRM risks; and
2) the ongoing rollout of an enhanced risk
assessment methodology and tools to
strengthen identification and measurement
of FCRM risks across
clients, products, and transactions, supported
by improved data capabilities.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 9
HOW WE PERFORMED
CORPORATE OVERVIEW
The Toronto-Dominion Bank and its subsidiaries are collectively known as
TD Bank Group (“TD” or the “Bank”). TD is
the sixth largest bank in North America by
assets and serves more than 27.9 million
customers in four key businesses operating
in a number of locations in financial centres
around the globe: Canadian
Personal and Commercial Banking, including
TD Canada Trust and TD Auto Finance Canada; U.S.
Retail, including TD Bank, America’s Most Convenient
Bank
®
,
TD Auto Finance U.S., and TD Wealth (U.S.);
Wealth Management and Insurance, including TD Wealth
(Canada), TD Direct Investing, and TD Insurance;
and
Wholesale Banking, including TD Securities
and TD Cowen. TD also ranks among
the world’s leading online financial services firms,
with more than 18 million
active online and mobile customers. TD had
$2.1
trillion in assets on April 30, 2025. The
Toronto-Dominion Bank trades under the symbol “TD” on the Toronto
Stock Exchange and New York Stock Exchange.
HOW THE BANK REPORTS
The Bank prepares its Interim Consolidated
Financial Statements in accordance
with IFRS, the current GAAP, and refers to results prepared in accordance with
IFRS as “reported”
results.
Non-GAAP and Other Financial Measures
In addition to reported results, the Bank also
presents certain financial measures, including
non-GAAP financial measures that are historical,
non-GAAP ratios,
supplementary financial measures and capital
management measures, to assess its results.
Non-GAAP financial measures, such as “adjusted”
results, are utilized
to assess the Bank’s businesses and to measure
the Bank’s overall performance.
To
arrive at adjusted results, the Bank adjusts
for “items of note” from reported
results. Items of note are items which management
does not believe are indicative of underlying
business performance and are disclosed
in Table 3. Non-GAAP
ratios include a non-GAAP financial measure
as one or more of its components. Examples
of non-GAAP ratios include adjusted net
interest margin, adjusted basic
and diluted earnings per share (EPS), adjusted
dividend payout ratio, adjusted efficiency ratio,
net of ISE, and adjusted effective income tax rate.
The Bank
believes that non-GAAP financial measures and
non-GAAP ratios provide the reader with
a better understanding of how management
views the Bank’s
performance. Non-GAAP financial measures
and non-GAAP ratios used in this document
are not defined terms under IFRS and,
therefore, may not be
comparable to similar terms used by other issuers.
Supplementary financial measures depict
the Bank’s financial performance and position, and
capital
management measures depict the Bank’s capital
position, and both are explained in this document
where they first appear.
U.S. Strategic Cards
The Bank’s U.S. strategic cards portfolio is comprised
of agreements with certain U.S. retailers
pursuant to which TD is the U.S. issuer
of private label and co-
branded consumer credit cards to their U.S.
customers. Under the terms of the individual
agreements, the Bank and the retailers
share in the profits generated by
the relevant portfolios after credit losses.
Under IFRS, TD is required to present the gross
amount of revenue and PCL related to these
portfolios in the Bank’s
Interim Consolidated Statement of Income.
At the segment level, the retailer program
partners’ share of revenues and credit
losses is presented in the Corporate
segment, with an offsetting amount (representing
the partners’ net share) recorded in Non-interest
expenses, resulting in no impact to Corporate’s
reported net
income (loss). The net income included in
the U.S. Retail segment includes only the
portion of revenue and credit losses attributable
to TD under the agreements.
Investment in The Charles Schwab Corporation
and IDA Agreement
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab
through a registered offering and share repurchase
by Schwab. For further
details, refer to the “Significant Events”
section of this document. The Bank
discontinued recording its share of earnings
available to common shareholders from its
investment in Schwab following the sale.
Prior to the sale, the Bank accounted
for its investment in Schwab using the equity
method. The U.S. Retail segment reflected
the Bank’s share of net income
from its investment in Schwab. The Corporate
segment net income (loss) included
amounts for amortization of acquired intangibles,
the acquisition and integration
charges related to the Schwab transaction,
and the Bank’s share of restructuring and other
charges incurred by Schwab. The Bank’s share of
Schwab’s earnings
available to common shareholders was reported
with a one-month lag. For further details,
refer to Note 12 of the Bank’s 2024 Annual
Consolidated Financial
Statements.
On November 25, 2019, the Bank and Schwab
signed an insured deposit account agreement
(the “2019 Schwab IDA Agreement”), with
an initial expiration
date of July 1, 2031. Under the 2019 Schwab
IDA Agreement, starting July 1, 2021, Schwab
had the option to reduce the deposits by up
to US$10 billion per year
(subject to certain limitations and adjustments),
with a floor of US$50 billion. In addition, Schwab
requested some further operational flexibility
to allow for the
sweep deposit balances to fluctuate over
time, under certain conditions and subject to
certain limitations.
On May 4, 2023, the Bank and Schwab entered
into an amended insured deposit account
agreement (the “2023 Schwab IDA Agreement”
or the “Schwab IDA
Agreement”), which replaced the 2019 Schwab
IDA Agreement. Pursuant to the 2023 Schwab
IDA Agreement, the Bank continues to make
sweep deposit
accounts available to clients of Schwab. Schwab
designates a portion of the deposits
with the Bank as fixed-rate obligation amounts
(FROA). Remaining deposits
are designated as floating-rate obligations.
In comparison to the 2019 Schwab IDA Agreement,
the 2023 Schwab IDA Agreement extends
the initial expiration date
by three years to July 1, 2034 and provides
for lower deposit balances in its first
six years, followed by higher balances in
the later years. Specifically, until
September 2025, the aggregate FROA
will serve as the floor. Thereafter, the floor will be set at US$60 billion.
In addition, Schwab had the option to buy
down up
to $6.8 billion (US$5 billion) of FROA by paying
the Bank certain fees in accordance with
the 2023 Schwab IDA Agreement, subject
to certain limits.
During the first quarter of fiscal 2024, Schwab
exercised its option to buy down the remaining
$0.7 billion (US$0.5 billion) of the US$5 billion
FROA buydown
allowance and paid $32 million (US$23
million) in termination fees to the Bank in accordance
with the 2023 Schwab IDA Agreement. By the
end of the first quarter
of fiscal 2024, Schwab had completed its buydown
of the full US$5 billion FROA buydown allowance
and had paid a total of $337 million (US$250
million) in
termination fees to the Bank. The fees were
intended to compensate the Bank for losses
incurred from discontinuing certain hedging
relationships and for lost
revenues. The net impact was recorded in
net interest income.
Subsequent to the sale of the Bank’s entire remaining
equity investment in Schwab, the Bank
continues to have a business relationship
with Schwab through
the IDA Agreement.
Refer to Note 27 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details
on the Schwab IDA Agreement.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 10
Strategic Review Update
The Bank is conducting a strategic review. The strategic review
is organized across four pillars:
1)
Adjust business mix and capital allocation –
re-allocate capital and disproportionately
invest in targeted segments;
2)
Simplify the portfolio and drive ROE
focus – simplify, optimize, and reposition portfolios to drive returns;
3)
Evolve the Bank and accelerate capabilities
– simplify operating model and strengthen
capabilities to deliver exceptional client experiences;
and
4)
Innovate to drive efficiency and operational excellence
– redesign operations and processes.
The Bank will provide an update on its strategic
review, and on the Bank’s medium-term financial targets, in
the second half of 2025. For additional information
on
current initiatives that are part of the
strategic review, refer to “Significant Events – Sale of Schwab
Shares”, “How Our Businesses Performed
– U.S. Retail –
Update on U.S. Balance Sheet Restructuring
Activities”, and “Significant Events –
Restructuring Charges”
in this document.
The following table provides the operating results
on a reported basis for the Bank.
TABLE 2: OPERATING RESULTS – Reported
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income
$
8,125
$
7,866
$
7,465
$
15,991
$
14,953
Non-interest income
14,812
6,183
6,354
20,995
12,580
Total revenue
22,937
14,049
13,819
36,986
27,533
Provision for (recovery of) credit losses
1,341
1,212
1,071
2,553
2,072
Insurance service expenses
1,417
1,507
1,248
2,924
2,614
Non-interest expenses
8,139
8,070
8,401
16,209
16,431
Income before income taxes and share
of net income from
investment in Schwab
12,040
3,260
3,099
15,300
6,416
Provision for (recovery of) income taxes
985
698
729
1,683
1,363
Share of net income from investment in
Schwab
74
231
194
305
335
Net income – reported
11,129
2,793
2,564
13,922
5,388
Preferred dividends and distributions on other
equity instruments
200
86
190
286
264
Net income attributable to common shareholders
$
10,929
$
2,707
$
2,374
$
13,636
$
5,124
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 11
The following table provides a reconciliation between
the Bank’s adjusted and reported results.
For further details refer to the “Significant
Events”, “How We
Performed”, or “How Our Businesses Performed”
sections.
TABLE 3: NON-GAAP FINANCIAL MEASURES – Reconciliation
of Adjusted to Reported Net Income
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Operating results – adjusted
Net interest income
1,2
$
8,208
$
7,920
$
7,529
$
16,128
$
15,074
Non-interest income
3
6,930
7,110
6,354
14,040
12,580
Total revenue
15,138
15,030
13,883
30,168
27,654
Provision for (recovery of) credit losses
1,341
1,212
1,071
2,553
2,072
Insurance service expenses
1,417
1,507
1,248
2,924
2,614
Non-interest expenses
4
7,908
7,983
7,084
15,891
14,209
Income before income taxes and share of net income from
investment in Schwab
4,472
4,328
4,480
8,800
8,759
Provision for (recovery of) income taxes
929
962
920
1,891
1,792
Share of net income from investment in Schwab
5
83
257
229
340
459
Net income – adjusted
3,626
3,623
3,789
7,249
7,426
Preferred dividends and distributions on other equity instruments
200
86
190
286
264
Net income available to common shareholders –
adjusted
3,426
3,537
3,599
6,963
7,162
Pre-tax adjustments for items of note
Amortization of acquired intangibles
6
(43)
(61)
(72)
(104)
(166)
Acquisition and integration charges related to the Schwab
transaction
4,5
–
–
(21)
–
(53)
Share of restructuring and other charges from investment
in Schwab
5
–
–
–
–
(49)
Restructuring charges
4
(163)
–
(165)
(163)
(456)
Acquisition and integration-related charges
4
(34)
(52)
(102)
(86)
(219)
Impact from the terminated FHN acquisition-related capital
hedging strategy
1
(47)
(54)
(64)
(101)
(121)
Gain on sale of Schwab shares
3
8,975
–
–
8,975
–
U.S. balance sheet restructuring
2,3
(1,129)
(927)
–
(2,056)
–
Civil matter provision
4
–
–
(274)
–
(274)
FDIC special assessment
4
–
–
(103)
–
(514)
Global resolution of the investigations into the Bank’s
U.S. BSA/AML program
4
–
–
(615)
–
(615)
Less: Impact of income taxes
Amortization of acquired intangibles
(8)
(9)
(10)
(17)
(25)
Acquisition and integration charges related to the Schwab
transaction
–
–
(5)
–
(11)
Restructuring charges
(41)
–
(43)
(41)
(121)
Acquisition and integration-related charges
(8)
(11)
(22)
(19)
(46)
Impact from the terminated FHN acquisition-related capital
hedging strategy
(12)
(13)
(16)
(25)
(30)
Gain on sale of Schwab shares
407
–
–
407
–
U.S. balance sheet restructuring
(282)
(231)
–
(513)
–
Civil matter provision
–
–
(69)
–
(69)
FDIC special assessment
–
–
(26)
–
(127)
Total adjustments for items
of note
7,503
(830)
(1,225)
6,673
(2,038)
Net income available to common shareholders – reported
$
10,929
$
2,707
$
2,374
$
13,636
$
5,124
1
After the termination of the merger agreement between the Bank and FHN on May 4, 2023, the residual
impact of the strategy is reversed through net interest income – Q2 2025: ($47) million,
Q1 2025: ($54) million,
2025 YTD: ($101) million, Q2 2024: ($64) million, 2024 YTD: ($121) million, reported in the Corporate segment.
2
Adjusted net interest income excludes the following item of note:
i.
U.S. balance sheet restructuring – Q2 2025: $36 million, 2025 YTD: $36 million, reported in the U.S.
Retail segment.
3
Adjusted non-interest income excludes the following items of note:
i.
The Bank sold common shares of Schwab and recognized a gain on the sale – Q2 2025: $8,975
million, 2025 YTD: $8,975 million, reported in the Corporate segment; and
ii.
U.S. balance sheet restructuring – Q2 2025: $1,093 million, Q1 2025: $927 million, 2025 YTD: $2,020 million, reported in
the U.S. Retail segment.
4
Adjusted non-interest expenses exclude the following items of note:
i.
Amortization of acquired intangibles – Q2 2025: $34 million, Q1 2025: $35 million, 2025 YTD: $69 million,
Q2 2024: $42 million, 2024 YTD: $105 million, reported in the Corporate segment;
ii.
The Bank’s own acquisition and integration charges related to the Schwab transaction – Q2 2024: $16
million, 2024 YTD: $39 million, reported in the Corporate segment;
iii.
Restructuring charges – Q2 2025: $163 million, 2025 YTD: $163 million, compared with Q2 2024: $165 million, 2024
YTD: $456 million under a previous program, reported in the Corporate segment;
iv.
Acquisition and integration-related charges – Q2 2025: $34 million, Q1 2025: $52 million, 2025 YTD:
$86 million, Q2 2024: $102 million, 2024 YTD: $219 million, reported in the Wholesale Banking segment;
v.
Civil matter provision – Q2 2024: $274 million, 2024 YTD: $274 million, reported in the Corporate segment;
vi.
FDIC special assessment – Q2 2024: $103 million, 2024 YTD: $514 million, reported in the U.S. Retail
segment; and
vii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program – Q2 2024:
$615 million, 2024 YTD: $615 million, reported in the U.S. Retail segment.
5
Adjusted share of net income from investment in Schwab excludes the following items of note on
an after-tax basis. The earnings impact of these items is reported in the Corporate segment:
i.
Amortization of Schwab-related acquired intangibles – Q2 2025: $9 million, Q1 2025: $26 million, 2025 YTD:
$35 million, Q2 2024: $30 million, 2024 YTD: $61 million;
ii.
The Bank’s share of acquisition and integration charges associated with Schwab’s acquisition of TD Ameritrade – Q2 2024: $5
million, 2024 YTD: $14 million;
iii.
The Bank’s share of restructuring charges incurred by Schwab – 2024 YTD: $27 million; and
iv.
The Bank’s share of the FDIC special assessment charge incurred by Schwab – 2024 YTD: $22 million.
6
Amortization of acquired intangibles relates to intangibles acquired as a result of asset acquisitions and
business combinations, including the after-tax amounts for amortization of acquired intangibles relating
to the share
of net income from investment in Schwab, reported in the Corporate segment. Refer to footnotes 4 and
5 for amounts.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 12
TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE
1
(Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Basic earnings (loss) per share – reported
$
6.28
$
1.55
$
1.35
$
7.81
$
2.90
Adjustments for items of note
(4.31)
0.47
0.69
(3.82)
1.15
Basic earnings per share – adjusted
$
1.97
$
2.02
$
2.04
$
3.99
$
4.05
Diluted earnings (loss) per share – reported
$
6.27
$
1.55
$
1.35
$
7.81
$
2.89
Adjustments for items of note
(4.30)
0.47
0.69
(3.82)
1.15
Diluted earnings per share – adjusted
$
1.97
$
2.02
$
2.04
$
3.99
$
4.04
1
EPS is computed by dividing net income available to common shareholders by the weighted-average number of
shares outstanding during the period. Numbers may not add due to
rounding.
TABLE 5: AMORTIZATION OF INTANGIBLES, NET OF INCOME TAXES
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Schwab
1
$
9
$
26
$
30
$
35
$
61
Wholesale Banking related intangibles
20
21
27
41
69
Other
6
5
5
11
11
Included as items of note
35
52
62
87
141
Software and asset servicing rights
124
119
104
243
200
Amortization of intangibles, net of income
taxes
$
159
$
171
$
166
$
330
$
341
1
Included in Share of net income from investment in Schwab.
Return on Common Equity
The consolidated Bank ROE is calculated
as reported net income available to common
shareholders as a percentage of average
common equity. The
consolidated Bank adjusted ROE is calculated
as adjusted net income available to
common shareholders as a percentage of average
common equity. Adjusted
ROE is a non-GAAP financial ratio and
can be utilized in assessing the Bank’s use of equity.
ROE for the business segments is calculated
as the segment net income attributable
to common shareholders as a percentage of average
allocated capital. The
Bank’s methodology for allocating capital to its
business segments is largely aligned
with the common equity capital requirements
under Basel III. Capital allocated
to the business segments was 11.5% CET1 Capital effective fiscal 2024.
TABLE 6: RETURN ON COMMON EQUITY
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Average common equity
$
114,585
$
106,133
$
101,137
$
110,708
$
100,573
Net income (loss) attributable to common
shareholders – reported
10,929
2,707
2,374
13,636
5,124
Items of note, net of income taxes
(7,503)
830
1,225
(6,673)
2,038
Net income available to common shareholders
– adjusted
$
3,426
$
3,537
$
3,599
$
6,963
$
7,162
Return on common equity – reported
39.1
%
10.1
%
9.5
%
24.8
%
10.2
%
Return on common equity – adjusted
12.3
13.2
14.5
12.7
14.3
Return on Tangible Common Equity
Tangible common equity (TCE) is calculated as common shareholders’ equity
less goodwill, imputed goodwill and intangibles
on the investments in Schwab and
other acquired intangible assets, net of related
deferred tax liabilities. ROTCE is calculated
as reported net income available to common
shareholders after
adjusting for the after-tax amortization of
acquired intangibles, which are treated as an
item of note, as a percentage of average
TCE. Adjusted ROTCE is
calculated using reported net income available
to common shareholders, adjusted for all
items of note, as a percentage of average
TCE. TCE, ROTCE, and
adjusted ROTCE can be utilized in assessing
the Bank’s use of equity. TCE is a non-GAAP financial measure,
and ROTCE and adjusted ROTCE are
non-GAAP
ratios.
TABLE 7: RETURN ON TANGIBLE COMMON EQUITY
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Average common equity
$
114,585
$
106,133
$
101,137
$
110,708
$
100,573
Average goodwill
19,302
19,205
18,380
19,207
18,322
Average imputed goodwill and intangibles on
investments in Schwab
1,304
5,116
6,051
2,924
6,062
Average other acquired intangibles
1
450
482
574
456
595
Average related deferred tax liabilities
(236)
(237)
(228)
(236)
(230)
Average tangible common equity
93,765
81,567
76,360
88,357
75,824
Net income attributable to common
shareholders – reported
10,929
2,707
2,374
13,636
5,124
Amortization of acquired intangibles, net of income
taxes
35
52
62
87
141
Net income attributable to common shareholders
adjusted for amortization of acquired intangibles,
net of income taxes
10,964
2,759
2,436
13,723
5,265
Other items of note, net of income taxes
(7,538)
778
1,163
(6,760)
1,897
Net income available to common shareholders
– adjusted
$
3,426
$
3,537
$
3,599
$
6,963
$
7,162
Return on tangible common equity
48.0
%
13.4
%
13.0
%
31.3
%
13.9
%
Return on tangible common equity – adjusted
15.0
17.2
19.2
15.9
18.9
1
Excludes intangibles relating to software and asset servicing rights.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 13
IMPACT OF FOREIGN EXCHANGE RATE ON U.S. RETAIL SEGMENT TRANSLATED EARNINGS
The following table reflects the estimated impact
of foreign currency translation on key
U.S. Retail segment income statement items.
The impact is calculated as
the difference in translated earnings using the average
U.S. to Canadian dollars exchange rates in the
periods noted.
TABLE 8: IMPACT OF FOREIGN EXCHANGE RATE ON U.S. RETAIL SEGMENT
TRANSLATED EARNINGS
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30, 2025 vs.
April 30, 2025 vs.
April 30, 2024
April 30, 2024
Increase (Decrease)
Increase (Decrease)
U.S. Retail Bank
Total revenue – reported
$
118
$
251
Total revenue – adjusted
1
169
347
Non-interest expenses – reported
106
220
Non-interest expenses – adjusted
1
106
220
Net income – reported, after tax
2
9
Net income – adjusted, after tax
1
40
81
Share of net income from investment in
Schwab
2
5
11
U.S. Retail segment net income – reported,
after tax
7
20
U.S. Retail segment net income – adjusted,
after tax
1
45
92
Earnings (loss) per share
(Canadian dollars)
Basic – reported
$
–
$
0.01
Basic – adjusted
1
0.03
0.05
Diluted – reported
–
0.01
Diluted – adjusted
1
0.03
0.05
Average foreign exchange rate (equivalent of CAD $1.00)
For the three months ended
For the six months ended
April 30
April 30
April 30
April 30
2025
2024
2025
2024
U.S. dollar
$
0.703
$
0.737
$
0.704
$
0.738
FINANCIAL RESULTS
OVERVIEW
Performance Summary
Outlined below is an overview of the Bank’s performance
for the second quarter of 2025. Shareholder
performance indicators help guide and
benchmark the
Bank’s accomplishments. For the purposes of
this analysis, the Bank utilizes adjusted earnings,
which excludes items of note from the reported
results that are
prepared in accordance with IFRS. Reported
and adjusted results and items of note are
explained in “Non-GAAP and Other Financial
Measures” in the “How We
Performed” section of this document.
●
Adjusted diluted EPS for the six months ended
April 30, 2025, decreased 1% from
the same period last year.
●
Adjusted ROTCE for the six months
ended April 30, 2025, was 15.9%.
●
For the twelve months ended April 30, 2025,
the total shareholder return was 13.6%
compared to the Canadian peer
6
average of 24.8%.
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Share of net income from investment in Schwab and the foreign exchange impact are reported with a one-month
lag.
Net Income
Quarterly comparison – Q2 2025 vs. Q2 2024
Reported net income for the quarter was $11,129 million, an increase
of $8,565 million compared with the second
quarter last year, primarily reflecting the net gain
from sale of Schwab shares in the Corporate
segment, higher revenues, and the impact of
the charges for the global resolution of the investigations
into the Bank’s
U.S. BSA/AML program in the prior year in
U.S. Retail, partially offset by the impact of balance
sheet restructuring activities in U.S. Retail,
higher non-interest
expenses, including higher governance and
control investments,
and higher PCL. On an adjusted basis,
net income for the quarter was $3,626
million, a decrease
of $163 million, or 4%, compared with
the second quarter last year.
By segment, the increase in reported net income
reflects increases in the Corporate segment
of $8,879 million, in Wealth Management and
Insurance of
$86 million, and in Wholesale Banking of $58
million, partially offset by decreases in U.S. Retail
of $387 million, and in Canadian Personal
and Commercial
Banking of $71 million.
Quarterly comparison – Q2 2025 vs. Q1 2025
Reported net income for the quarter increased
$8,336 million compared with the prior quarter, primarily reflecting
the net gain from sale of Schwab shares in
the
Corporate segment, partially offset by the higher impact
of balance sheet restructuring activities in
U.S. Retail, and restructuring charges. Adjusted
net income for
the quarter was relatively flat compared
with the prior quarter.
By segment, the increase in reported net income
reflects increases in the Corporate segment
of $8,574 million, in Wholesale Banking of
$120 million, and in
Wealth Management and Insurance of $27 million, partially
offset by decreases in U.S. Retail of $222
million, and in Canadian Personal and
Commercial Banking
of $163 million.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Reported net income of $13,922 million, increased
$8,534 million compared with the same period
last year. The increase reflects the net gain from sale
of Schwab
shares in the Corporate segment, higher revenues,
and the impact of the charges for the
global resolution of the investigations into
the Bank’s U.S. BSA/AML
program and FDIC special assessment charge
in the same period last year in U.S.
Retail, partially offset by the impact of balance
sheet restructuring activities in
U.S. Retail, higher non-interest expenses, including
higher governance and control investments,
and higher PCL. Adjusted net income
was $7,249 million, a
decrease of $177 million, or 2%.
By segment, the increase in reported net income
reflects increases in the Corporate segment
of $9,111 million, in Wealth Management and Insurance of
$211 million, and in Wholesale Banking of $152 million, partially offset by
decreases in U.S. Retail of $915 million, and
in Canadian Personal and Commercial
Banking of $25 million.
6
Canadian peers include Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and
The Bank of Nova Scotia.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 14
Net Interest Income
Quarterly comparison – Q2 2025 vs. Q2 2024
Reported net interest income for the quarter
was $8,125 million, an increase of $660
million, or 9%, compared with the second
quarter last year, primarily reflecting
higher revenue from treasury and balance
sheet activities, volume growth in Canadian
Personal and Commercial Banking, and the impact
of U.S. balance sheet
restructuring activities and higher deposit
margins in U.S. Retail. On an adjusted basis,
net interest income was $8,208 million, an
increase of $679 million, or 9%.
By segment, the increase in reported net interest
income reflects increases in the Corporate
segment of $338 million, in Canadian Personal
and Commercial
Banking of $211 million, in U.S. Retail of
$197 million, and in Wealth Management
and Insurance of $58 million, partially offset
by a decrease in Wholesale
Banking of $144 million.
Quarterly comparison – Q2 2025 vs. Q1 2025
Reported net interest income for the quarter
increased $259 million, or 3%, compared with
the prior quarter, primarily reflecting higher
revenue from treasury and
balance sheet activities, and the impact of balance
sheet restructuring activities in the current
quarter in U.S. Retail, partially offset by the impact
of fewer days in
the quarter. On an adjusted basis, net interest income increased
$288 million, or 4%.
By segment, the increase in reported net interest
income reflects increases in the Corporate
segment of $252 million, in Wholesale Banking
of $152 million,
partially offset by decreases in Canadian
Personal and Commercial Banking of $112
million, in U.S. Retail of $26 million, and
in Wealth Management and
Insurance of $7 million.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Reported net interest income was $15,991 million,
an increase of $1,038 million, or 7%,
compared with the same period last year, primarily
reflecting volume
growth in Canadian Personal and Commercial
Banking, higher revenue from treasury
and balance sheet activities, and the impact
of U.S. balance sheet
restructuring activities and higher deposit
margins in U.S. Retail. On an adjusted basis,
net interest income was $16,128 million,
an increase of $1,054 million, or
7%.
By segment, the increase in reported net interest
income reflects increases in Canadian
Personal and Commercial Banking of $513
million, in the Corporate
segment of $470 million, in U.S. Retail of
$362 million, and in Wealth Management
and Insurance of $142 million, partially offset
by a decrease in Wholesale
Banking of $449 million.
Non-Interest Income
Quarterly comparison – Q2 2025 vs. Q2 2024
Reported non-interest income for the quarter
was $14,812 million, an increase of $8,458
million compared with the second quarter last
year, primarily reflecting the
net gain from sale of Schwab shares in the
Corporate segment, higher trading-related
revenue, and underwriting fees, including
those associated with the sale of
Schwab shares in Wholesale Banking, and higher
insurance premiums, fee-based revenue,
and transaction revenue in Wealth Management
and Insurance,
partially offset by the impact of balance sheet restructuring
activities in U.S. Retail.
On an adjusted basis, non-interest income
was $6,930 million, an increase of
$576 million, or 9%.
By segment, the increase in reported non-interest
income reflects increases in the Corporate
segment of $8,904 million, increases in
Wholesale Banking of
$333 million, and in Wealth Management and
Insurance of $331 million, partially offset by decreases
in U.S. Retail of $1,051 million, in Canadian
Personal and
Commercial Banking of $59 million.
Quarterly comparison – Q2 2025 vs. Q1 2025
Non-interest income for the quarter increased
$8,629 million compared with the prior quarter,
primarily reflecting the net gain from sale
of Schwab shares in the
Corporate segment, partially offset by the impact
of balance sheet restructuring activities
in U.S. Retail, and lower trading-related
revenue in Wholesale Banking.
On an adjusted basis, non-interest income
decreased $180 million, or 3%.
By segment, the increase in non-interest income
reflects an increase in the Corporate segment
of $8,949 million, partially offset by decreases
in U.S. Retail of
$163 million, in Wealth Management and
Insurance of $88 million, in Canadian Personal
and Commercial Banking of $46 million, and
in Wholesale Banking of
$23 million.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Reported non-interest income was $20,995
million, an increase of $8,415 million, or 67%,
compared with the same period last year, primarily reflecting
the net gain
from sale of Schwab shares in the Corporate
segment, higher insurance premiums, fee-based
revenue commensurate with market growth,
and transaction
revenue in Wealth Management and Insurance, and
higher trading-related revenue, and underwriting
fees, including those associated with the
sale of Schwab
shares in Wholesale Banking, partially offset by
the impact of balance sheet restructuring activities
in U.S. Retail. Adjusted non-interest income
was
$14,040 million, an increase of $1,460 million, or
12%.
By segment, the increase in reported non-interest
income reflects increases in the Corporate
segment of $8,880 million, in Wholesale Banking
of $858 million, in
Wealth Management and Insurance of $710 million, partially
offset by decreases in U.S. Retail of $1,937
million, and in Canadian Personal and Commercial
Banking of $96 million.
Provision for Credit Losses
Quarterly comparison – Q2 2025 vs. Q2 2024
PCL for the quarter was $1,341 million, an increase
of $270 million compared with the
second quarter last year. PCL – impaired was $946 million,
an increase of
$76 million, or 9%, largely reflecting credit
migration in the Wholesale and Canadian
consumer lending portfolios.
PCL – performing was $395 million,
an increase
of $194 million compared to the second quarter
last year. The performing provisions this quarter largely
reflect credit impacts from policy and
trade uncertainty,
including overlays and an update to the
macroeconomic forecasts, partially offset by lower
volume in the U.S. consumer lending portfolio.
Total PCL for the quarter
as an annualized percentage of credit volume
was 0.58%.
By segment, PCL was higher by $155
million in Canadian Personal and Commercial
Banking, by $68 million in Wholesale Banking,
by $62 million in
U.S. Retail, and lower by $15 million in
the Corporate segment.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 15
Quarterly comparison – Q2 2025 vs. Q1 2025
PCL for the quarter was $1,341 million, an increase
of $129 million compared with the prior
quarter. PCL – impaired was $946 million, a decrease of
$270 million,
or 22%, recorded across the Canadian and
U.S. consumer and commercial lending portfolios,
including seasonal trends in the U.S.
credit card and auto portfolios,
and a prior quarter adoption impact of a
model update in the U.S. credit card portfolio.
PCL – performing was a build of $395
million, compared with a recovery of
$4 million in the prior quarter.
The performing provisions this quarter largely
reflect credit impacts from policy and
trade uncertainty, including overlays and an
update to the macroeconomic forecasts, partially
offset by lower volume in the U.S. consumer
lending portfolio.
Total PCL for the quarter as an annualized
percentage of credit volume was 0.58%.
By segment, PCL was higher by $101
million in Canadian Personal and Commercial
Banking, by $51 million in Wholesale Banking,
and lower by $14 million in
the Corporate segment and $9 million in
U.S. Retail.
While results may vary by quarter, there are
many potential scenarios that may impact
the economic trajectory and credit performance,
some of which could
drive PCL results beyond the Bank’s
previously disclosed estimated PCL
range of 45 to 55 bps for fiscal 2025
7
.
Year-to-date comparison – Q2 2025 vs. Q2 2024
PCL was $2,553 million, an increase
of $481 million compared with the same period
last year. PCL – impaired was
$2,162 million, an increase of $358 million,
largely reflecting credit migration across the
lending portfolios and the adoption impact
of a model update in the U.S. credit
card portfolio.
PCL – performing was
$391 million, an increase of $123 million compared
with the same period last year.
The current year performing provisions largely
reflect credit impacts from policy
and trade uncertainty, including overlays and
an update to the macroeconomic forecasts,
partially offset by lower volume in the U.S.
consumer portfolio, and the
adoption impact of a model update in
the U.S. credit card portfolio.
Total PCL as an annualized
percentage of credit volume was 0.54%.
By segment, PCL was higher in Canadian
Personal and Commercial Banking by $253
million, in Wholesale Banking by $130
million, in U.S. Retail by
$128 million, and lower in the Corporate segment
by $30 million.
TABLE 9: PROVISION FOR CREDIT LOSSES
1
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Provision for (recovery of) credit losses
– Stage 3 (impaired)
Canadian Personal and Commercial
Banking
$
428
$
459
$
397
$
887
$
761
U.S. Retail
309
529
311
838
688
Wealth Management and Insurance
–
–
–
–
–
Wholesale Banking
61
33
(1)
94
4
Corporate
2
148
195
163
343
351
Total provision for (recovery of) credit losses – Stage 3
946
1,216
870
2,162
1,804
Provision for (recovery of) credit losses
– Stage 1
and Stage 2 (performing)
Canadian Personal and Commercial
Banking
194
62
70
256
129
U.S. Retail
133
(78)
69
55
77
Wealth Management and Insurance
–
–
–
–
–
Wholesale Banking
62
39
56
101
61
Corporate
2
6
(27)
6
(21)
1
Total provision for (recovery of) credit losses – Stage 1
and Stage 2
395
(4)
201
391
268
Total provision for (recovery of) credit losses
$
1,341
$
1,212
$
1,071
$
2,553
$
2,072
1
Includes PCL for off-balance sheet instruments.
2
Includes PCL on the retailer program partners’ share of the U.S. strategic cards portfolio.
Insurance Service Expenses
Quarterly comparison – Q2 2025 vs. Q2 2024
Insurance service expenses for the quarter
were $1,417 million, an increase of $169
million, or 14%, compared with the second quarter
last year, primarily
reflecting increased claims severity.
Quarterly comparison – Q2 2025 vs. Q1 2025
Insurance service expenses for the quarter
decreased $90 million, or 6%, compared
with the prior quarter, primarily driven by favourable claims experience
related
to seasonality.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Insurance service expenses were $2,924 million,
an increase of $310 million, or 12%,
compared with the same period last year, reflecting business
growth,
increased claims severity and higher occurrences
of catastrophe claims.
Non-Interest Expenses and Efficiency
Ratio
Quarterly comparison – Q2 2025 vs. Q2 2024
Reported non-interest expenses were $8,139
million, decreased $262 million, or 3%,
compared with the second quarter last
year, primarily reflecting the prior year
impact of the charges for the global resolution
of the investigations into the Bank’s U.S. BSA/AML
program in U.S. Retail, and the prior
year impact of a civil matter
provision in Corporate, partially offset by higher
governance and control investments, including
costs for U.S. BSA/AML remediation, higher
spend supporting
business growth initiatives from technology
costs and employee-related expenses, and the
impact of foreign exchange translation.
On an adjusted basis, non-
interest expenses were $7,908 million, an
increase of $824 million, or 12%. The Bank
expects fiscal 2025 adjusted expense growth,
assuming fiscal 2024 levels of
variable compensation, foreign exchange translation,
and U.S. strategic cards portfolio impact,
to be at the upper end of the previously communicated
5% to 7%
range, reflecting investments in governance
and control and investments supporting business
growth, net of expected productivity and
restructuring savings
8
.
7
The Bank’s estimated PCL range is based on forward-looking assumptions that have inherent risks and
uncertainties. Results may vary depending on actual economic or credit conditions
and performance, such as the level of unemployment, interest rates, economic growth or contraction, and borrower
or industry specific credit factors and conditions, inclusive of policy
and trade uncertainty.
The Bank’s PCL estimate is subject to risks and uncertainties including those set out in the
“Risk Factors and Management” section of this document.
8
The Bank’s expectations regarding expense growth are based on the Bank’s assumptions
regarding certain factors, including risk
and control investments, employee-related expenses,
foreign exchange impact, gross-up of the retailer program partners’ share of PCL for the Bank’s U.S. strategic
card portfolio (“SCP Impact”), and productivity and restructuring savings. In
particular in estimating its expense growth expectations, the Bank has assumed that the following three factors on
the Bank’s fiscal 2025 adjusted expenses will be the same as the
Bank’s fiscal 2024 adjusted expenses: (i) variable compensation commensurate with higher revenue,
(ii) foreign exchange translation, and (iii) SCP Impact. For reference, in the second
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 16
By segment, the decrease in reported non-interest
expenses reflect decreases in U.S. Retail
of $356 million, and in the Corporate
segment of $136 million,
partially offset by increases in Wealth Management
and Insurance of $104 million, in Canadian
Personal and Commercial Banking of
$95 million, and in Wholesale
Banking of $31 million.
The Bank’s reported efficiency ratio was 35.5%, compared
to 60.8% in the second quarter last year. The Bank’s adjusted
efficiency ratio, net of ISE was 57.6%,
compared with 56.1%
in the second quarter last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Reported non-interest expenses increased
$69 million, or 1%, compared with the prior
quarter, primarily reflecting restructuring charges, and higher
governance
and control investments, including costs
for U.S. BSA/AML remediation, partially offset by
lower employee-related expenses including
variable compensation.
Adjusted non-interest expenses decreased
$75 million, or 1%.
By segment, the increase in reported non-interest
expenses reflect an increase in the
Corporate segment of $261 million, partially offset
by decreases in
Wholesale Banking of $74 million, in
Wealth Management and Insurance of $42 million,
in U.S. Retail of $42 million, and in Canadian
Personal and Commercial
Banking of $34 million.
The Bank’s reported efficiency ratio was 35.5%, compared
with 57.4% in the prior quarter. The Bank’s adjusted efficiency ratio, net
of ISE was 57.6%,
compared with 59.0% in the prior quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Reported non-interest expenses of $16,209
million decreased $222 million, or 1%, compared
with the same period last year, primarily reflecting the impact
of the
charges for the global resolution of the investigations
into the Bank’s U.S. BSA/AML program and
FDIC special assessment charge in the
same period last year in
U.S. Retail, and higher restructuring charges
in the same period last year in Corporate,
partially offset by higher governance and control
investments, including
costs for U.S. BSA/AML remediation, the impact
of foreign exchange translation, and higher
spend supporting business growth initiatives
from technology costs
and employee-related expenses. On an adjusted basis,
non-interest expenses were $15,891 million,
an increase of $1,682 million, or 12%.
By segment, the decrease in reported non-interest
expenses reflects decreases in U.S. Retail
of $435 million and in the Corporate
segment of $280 million,
partially offset by increases in Wealth Management and
Insurance of $230 million, in Canadian Personal
and Commercial Banking of $197 million,
and in
Wholesale Banking of $66 million.
The Bank’s reported efficiency ratio was 43.8%, compared
with 59.7% in the same period last year. The Bank’s adjusted efficiency
ratio, net of ISE was 58.3%,
compared with 56.7% in the same period last
year.
Income Taxes
The Bank’s effective income tax rate on a reported
basis was 8.2% for the current quarter, compared with 23.5%
in the second quarter last year and 21.4%
in the
prior quarter. The year-over-year decrease primarily reflects
the tax impact of the sale of Schwab
shares and the non-deductible provision for
the Bank’s AML
program in the prior year. The quarter-over-quarter decrease
primarily reflects the tax impact of
the sale of Schwab shares.
To allow for an after-tax calculation of adjusted income, the adjusted provision
for income taxes is calculated by adjusting
the taxes for each item of note using
the statutory income tax rate of the applicable
legal entity. The adjusted effective income tax rate is calculated
as the adjusted provision for income taxes as
a
percentage of adjusted net income before
taxes. The Bank’s adjusted effective income tax rate
was 20.8% for the current quarter, compared with 20.5% in
the
second quarter last year and 22.2% in
the prior quarter. The year-over-year increase primarily reflects
taxes associated with Pillar Two legislation and the impact
of changes in earnings mix, partially offset by
a tax related adjustment in the current quarter. The quarter-over-quarter
decrease primarily reflects the impact
of
changes in earnings mix and a tax related adjustment
in the current quarter.
TABLE 10: INCOME TAXES – Reconciliation of Reported to Adjusted Provision for
Income Taxes
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Income taxes at Canadian statutory income
tax rate
$
3,347
27.8
%
$
906
27.8
%
$
861
27.8
%
$
4,253
27.8
%
$
1,780
27.8
%
Increase (decrease) resulting from:
Dividends received
(4)
–
(3)
(0.1)
(3)
(0.1)
(7)
–
(11)
(0.2)
Rate differentials on international operations
1
(2,303)
(19.1)
(199)
(6.1)
(124)
(4.0)
(2,502)
(16.4)
(395)
(6.2)
Other
(55)
(0.5)
(6)
(0.2)
(5)
(0.2)
(61)
(0.4)
(11)
(0.2)
Provision for income taxes and effective
income tax rate – reported
$
985
8.2
%
$
698
21.4
%
$
729
23.5
%
$
1,683
11.0
%
$
1,363
21.2
%
Total adjustments for items of note
(56)
264
191
208
429
Provision for income taxes and effective
income tax rate – adjusted
$
929
20.8
%
$
962
22.2
%
$
920
20.5
%
$
1,891
21.5
%
$
1,792
20.5
%
1
These amounts reflect tax credits as well as international earnings mix.
International Tax Reform – Pillar Two Global Minimum Tax
On December 20, 2021, the Organisation
for Economic Co-operation and Development
(OECD) published Pillar Two model rules as part of its
efforts toward
international tax reform. The Pillar Two model rules provide
for the implementation of a 15% global
minimum tax for large multinational enterprises,
which is to be
applied on a jurisdiction-by-jurisdiction
basis. Pillar Two legislation was enacted in Canada on
June 20, 2024 under Bill C-69, which includes
the
Global Minimum
Tax Act
addressing the Pillar Two model rules. Similar legislation
has passed in other jurisdictions in
which the Bank operates and will result in additional
taxes
being paid in these countries. The rules
were effective and implemented by the Bank on
November 1, 2024. The IASB previously issued
amendments to IAS 12
Income Taxes
for a temporary mandatory exception from
the recognition and disclosure of deferred
taxes related to the implementation of Pillar
Two model rules,
which the Bank has applied. For the three and
six months ended April 30, 2025, the Bank’s effective
tax rate increased by approximately 0.2%
and 0.3%,
respectively, due to Pillar Two taxes (for the three months ended January 31,
2025 – 0.5%).
quarter of 2025, variable compensation, foreign exchange translation, and the SCP impact, in the aggregate, accounted for
approximately one-fourth of the year-over-year 12% increase
in adjusted non-interest expenses. The Bank’s assumptions are subject to inherent uncertainties and
may vary based on factors both within and outside the Bank’s control, including the
accuracy of the Bank’s employee compensation and benefit expense forecasts, impact of business
performance on variable compensation, inflation, the pace of productivity initiatives
across the organization, and unexpected expenses such as legal matters. Refer to the “Risk Factors That May Affect
Future Results” section of this document for additional information
about risks and uncertainties that may impact the Bank’s estimates.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 17
ECONOMIC SUMMARY AND OUTLOOK
The global economic outlook has weakened
in the wake of the historically elevated import
tariffs levied by the United States on its trading partners
around the
world. The future path of tariff policy is highly uncertain
and financial market volatility has risen.
At the same time, inflation expectations have
increased as the U.S.
tariffs – and retaliatory measures – are expected
to raise prices and complicate global
supply chains. This puts global central banks
in the challenging position of
gauging whether any resulting inflationary
pressures are one-time or prove persistent.
TD Economics still expects future interest
rate reductions, but uncertainty on
the outlook has increased.
After growing at a healthy 2.8% annualized
pace in calendar 2024, the U.S. economy recorded
a small contraction in the first quarter of
calendar 2025.
Economic growth was held back by a surge in
goods imports, as businesses rushed
to stockpile ahead of tariffs. American households and
businesses rushed to
buy big-ticket items such as cars and equipment
before tariffs either lead to increased prices
or made certain goods more difficult to obtain.
This boosted growth in
the domestic economy to a 3% annualized
pace in the first quarter of calendar 2025.
These trends are likely to reverse in the second
calendar quarter, putting the
U.S. economy on track to record a modest
improvement in economic growth even
as momentum in the domestic economy
slows. TD Economics expects that U.S.
tariffs will be partially rolled back over the second
half of 2025 as trade deals are reached
between the U.S. and many other countries.
As a result of heightened
uncertainty and tariffs, TD Economics has
substantially downgraded its forecast for
U.S. economic growth in calendar 2025,
followed by only a modest recovery
next calendar year.
Based on April 2025 data, the U.S. job market
has remained resilient so far this
year. The unemployment rate has held largely steady at around
4.2%. The U.S.
economy had been on track for a “soft landing”
only a few months ago, where inflation
pressures were expected to gradually
drift lower. The rise in tariffs has
raised uncertainty on whether a soft landing
is still likely, and the Federal Reserve has kept interest rates
unchanged as it assesses the impact of the
tariffs on the
economy.
TD Economics expects that by July 2025,
the U.S. central bank will have sufficient clarity around
the economic outlook to resume monetary
easing, with the
federal funds rate expected to be lowered
to 3.50-3.75% by the end of calendar 2025
– a level still on the restrictive side.
Canada’s economic outlook for 2025 has softened
due to the impact of U.S. tariffs. Canada’s economy had
expanded at a solid pace in calendar
2024, boosted
by strong population gains and lower interest
rates. U.S tariffs on Canada have not been
as severe as initially threatened, however, the effect of elevated
uncertainty about tariff policy has resulted in a deterioration
in business confidence about the future,
which is expected to dampen business investment
and weigh
on Canada’s economy for some time. TD Economics
expects Canada’s economy to slip into a
shallow recession beginning in the second
quarter of calendar 2025,
before likely gaining some modest traction by
year end. This soft backdrop is expected
to lift the unemployment rate from 6.9% in
April to 7.2% by (calendar) year
end. TD Economics also expects population
growth to slow sharply over the next
few years as immigration policy changes
restrict inflows.
The Canadian central bank lowered its overnight
rate further to 2.75% in March 2025, before
pausing to assess the impact of U.S. tariffs on
the economic
outlook. TD Economics expects the Bank of
Canada to continue trimming interest rates, reaching
2.25% by the third quarter of calendar 2025.
Concerns about the
U.S. economic outlook and larger U.S. government
deficits have weakened the U.S. dollar, lifting the
Canadian dollar. TD Economics expects the Canadian dollar
will trade in the 72 to 73 U.S. cent range over
the next few quarters, although that is likely
to be influenced by the path of U.S. trade policy.
HOW OUR BUSINESSES PERFORMED
For management reporting purposes, the Bank’s business
operations and activities are organized around
the following four key business segments:
Canadian
Personal and Commercial Banking, U.S.
Retail, Wealth Management and Insurance, and
Wholesale Banking. The Bank’s other activities
are grouped into the
Corporate segment.
Results of each business segment reflect revenue,
expenses, assets, and liabilities generated
by the businesses in that segment. Where
applicable,
the Bank
measures and evaluates the performance of
each segment based on adjusted results
and ROE, and for those segments,
the Bank indicates that the measure is
adjusted. For further details, refer to the “How
We Performed”
section of this document, the “Business
Focus”
section in the Bank’s 2024 MD&A, and Note
28 of
the Bank’s Annual Consolidated Financial
Statements for the year ended October 31,
2024.
Effective the first quarter of 2025, certain
U.S. governance and control
investments, including costs for U.S. BSA/AML
remediation, previously reported
in the Corporate segment are now reported
in the U.S. Retail segment.
Comparative amounts have been reclassified
to conform with the presentation adopted
in the current period.
PCL related to performing (Stage 1 and Stage
2) and impaired (Stage 3) financial assets, loan
commitments, and financial guarantees is recorded
within the
respective segment.
Net interest income within Wholesale Banking
is calculated on a taxable equivalent basis
(TEB), which means that the value of non-taxable
or tax-exempt
income, including certain dividends, is adjusted
to its equivalent pre-tax value. Using
TEB allows the Bank to measure income from
all securities and loans
consistently and makes for a more meaningful
comparison of net interest income with similar
institutions. The TEB increase to net interest income
and provision for
income taxes reflected in Wholesale Banking
results is reversed in the Corporate segment.
The TEB adjustment for the quarter was $13
million, compared with
$15 million in the prior quarter and $4 million in
the second quarter last year.
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab.
Prior to the sale, the Bank accounted
for its investment in Schwab using
the equity method and the share of net income
from investment in Schwab was reported in
the U.S. Retail segment. Amounts for amortization
of acquired
intangibles,
the acquisition and integration charges related
to the Schwab transaction, and the Bank’s share
of restructuring and other charges incurred
by Schwab
are recorded in the Corporate segment.
Refer to “Significant Events”
for further details.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 18
TABLE 11: CANADIAN PERSONAL AND COMMERCIAL BANKING
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income
$
4,023
$
4,135
$
3,812
$
8,158
$
7,645
Non-interest income
968
1,014
1,027
1,982
2,078
Total revenue
4,991
5,149
4,839
10,140
9,723
Provision for (recovery of) credit losses –
impaired
428
459
397
887
761
Provision for (recovery of) credit losses –
performing
194
62
70
256
129
Total provision for (recovery of) credit losses
622
521
467
1,143
890
Non-interest expenses
2,052
2,086
1,957
4,138
3,941
Provision for (recovery of) income taxes
649
711
676
1,360
1,368
Net income
$
1,668
$
1,831
$
1,739
$
3,499
$
3,524
Selected volumes and ratios
Return on common equity
1
28.9
%
31.4
%
32.9
%
30.2
%
33.8
%
Net interest margin (including on securitized
assets)
2
2.82
2.81
2.84
2.82
2.84
Efficiency ratio
41.1
40.5
40.4
40.8
40.5
Number of Canadian retail branches
1,059
1,063
1,062
1,059
1,062
Average number of full-time equivalent staff
27,371
27,422
29,053
27,397
29,163
1
Capital allocated to the business segment was 11.5% CET1 Capital.
2
Net interest margin is calculated by dividing net interest income by average interest-earning assets. Average
interest-earning assets used in the calculation of net interest margin is a non-
GAAP financial measure. Refer to “Non-GAAP and Other Financial Measures” in the “How We Performed”
section and the Glossary of this document for additional information about
these metrics.
Quarterly comparison – Q2 2025 vs. Q2 2024
Canadian Personal and Commercial
Banking net income for the quarter was
$1,668 million, a decrease of $71 million, or
4%, compared with the second quarter
last year, primarily reflecting higher PCL and non-interest expenses,
partially offset by higher revenue. The annualized
ROE for the quarter was 28.9%, compared
with 32.9%, in the second quarter last year.
Revenue for the quarter was $4,991
million, an increase of $152
million, or 3%, compared with the second quarter
last year. Net interest income was
$4,023 million, an increase of $211 million, or 6%, primarily reflecting
volume growth. Average loan volumes increased
$21 billion, or 4%, reflecting 3% growth in
personal loans and 6% growth in business
loans. Average deposit volumes increased $25
billion, or 5%, reflecting 4% growth in personal
deposits and 8% growth
in business deposits. Net interest margin
was 2.82%, a decrease of 2 bps, primarily
due to changes to balance sheet mix reflecting
the transition of Bankers’
Acceptances (BAs) to Canadian Overnight
Repo Rate Average (CORRA)-based loans. Non-interest
income was $968 million, a decrease
of $59 million, or 6%,
compared with the second quarter last
year, primarily reflecting lower fees due to the transition of
BAs to CORRA-based loans in the prior
year, the impact of
which is offset in net interest income.
PCL for the quarter was $622 million, an increase
of $155 million compared with the second
quarter last year. PCL – impaired was $428
million, an increase of
$31 million, or 8%, largely reflecting credit
migration in the consumer lending portfolios.
PCL – performing was $194 million, an increase
of $124
million compared
to the prior year. The performing provisions this quarter largely
reflect credit impacts from policy and
trade uncertainty, including overlays and an update to our
macroeconomic forecasts. Total PCL as an annualized percentage of credit
volume was 0.44%, an increase of 10 bps
compared with the second quarter last year.
Non-interest expenses for the quarter were $2,052
million, an increase of $95 million, or
5%, compared with the second quarter
last year, primarily reflecting
higher technology spend and other operating
expenses.
The efficiency ratio for the quarter was 41.1%,
compared with 40.4% in the second quarter
last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Canadian Personal and Commercial
Banking net income for the quarter was
$1,668 million, a decrease of $163
million, or 9%, compared with the prior quarter,
primarily reflecting lower revenue and higher
PCL, partially offset by lower non-interest
expenses. The annualized ROE for the quarter
was 28.9%, compared with
31.4% in the prior quarter.
Revenue decreased $158
million, or 3%, compared with the prior quarter. Net interest
income decreased $112 million, or 3%, reflecting fewer days
in the
second quarter, partially offset by volume growth. Average loan volumes
increased $2 billion,
relatively flat compared with the prior
quarter. Average deposit
volumes increased $1 billion, relatively
flat compared with the prior quarter.
Net interest margin was 2.82%, an increase
of 1 basis point, primarily due to higher
margins on loans. As we look forward to the
third quarter,
while many factors can impact margins,
we again expect net interest margin to be relatively
stable
9
. Non-
interest income decreased $46 million,
or 5% compared with the prior quarter, reflecting lower
fee revenue.
PCL for the quarter was $622 million, an increase
of $101 million compared with the prior
quarter. PCL – impaired was $428
million, a decrease of $31 million,
or 7%, recorded across the consumer and
commercial lending portfolios. PCL – performing
was $194 million, an increase of $132
million. The performing
provisions this quarter largely reflect credit
impacts from policy and trade uncertainty, including overlays
and an update to our macroeconomic forecasts.
Total PCL
as an annualized percentage of credit volume
was 0.44%, an increase of 9 bps compared
with the prior quarter.
Non-interest expenses decreased $34 million,
or 2% compared with the prior quarter, primarily reflecting
fewer days in the second quarter, the impact of TD
Share Compensation Initiative from the prior
quarter,
and lower other operating expenses.
The efficiency ratio was 41.1%, compared with 40.5%
in the prior quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Canadian Personal and Commercial
Banking net income for the six months ended
April 30, 2025, was $3,499 million, a decrease
of $25 million, or 1%, compared
with the same period last year, reflecting higher PCL and non-interest
expenses, partially offset by higher revenue.
The annualized ROE for the period was 30.2%,
compared with 33.8%, in the same period
last year.
Revenue for the period was $10,140 million,
an increase of $417 million, or 4%, compared
with the same period last year. Net interest income was
$8,158 million, an increase of $513 million, or
7%, compared with the same period last
year, primarily reflecting volume growth. Average loan volumes increased
$23 billion, or 4%, reflecting 4% growth in
personal loans and 6% growth in business
loans. Average deposit volumes increased $25 billion,
or 5%, reflecting 4%
growth in personal deposits and 8% growth in
business deposits. Net interest margin
was 2.82%, a decrease of 2 bps, primarily due
to changes to balance sheet
mix reflecting the transition of BAs to CORRA-based
loans. Non-interest income was $1,982
million, a decrease of $96
million, or 5%, reflecting lower fees due
to
the transition of BAs to CORRA-based loans in
the prior year, the impact of which is offset in net interest income,
partially offset by higher fee revenue.
9
The Bank’s Q3 2025 net interest margin expectations for the segment are based on the Bank’s assumptions regarding factors such as Bank of Canada rate actions, competitive market dynamics, and
deposit reinvestment rates and maturity profiles, and are subject to inherent risks and uncertainties, including those set out in the “Risk Factors That May Affect Future Results” section of the Bank’s
2024 MD&A and the second quarter 2025 MD&A.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 19
PCL was $1,143 million, an increase of $253
million compared with the same period last
year. PCL – impaired was $887 million, an increase of $126
million, or
17%, largely reflecting credit migration in
the consumer lending portfolios. PCL – performing
was $256 million, an increase of $127 million
compared with the same
period last year. The current year performing provisions largely
reflect credit impacts from policy and
trade uncertainty, including overlays and an update to our
macroeconomic forecasts, and volume growth.
Total PCL as an annualized percentage of credit volume was 0.39%, an
increase of 7 bps compared with the same
period last year.
Non-interest expenses were $4,138 million,
an increase of $197
million, or 5%, compared with the same period
last year, reflecting higher technology spend
and other operating expenses.
The efficiency ratio was 40.8%, compared with 40.5%,
for the same period last year.
U.S. Retail
Update on U.S. Balance Sheet Restructuring
Activities
The Bank continued to focus on executing
the balance sheet restructuring activities
disclosed in the 2024 MD&A to help ensure
the Bank can continue to support
customers’ financial needs in the U.S. while
not exceeding the limitation on the
combined total assets of TD Bank, N.A. and
TD Bank USA, N.A. (the “U.S. Bank”).
As previously disclosed, the Bank expects
to reposition its U.S. investment portfolio by
selling up to US$50 billion of lower yielding investment
securities and
reinvesting the proceeds into a similar composition
of assets but yielding higher rates.
During the second quarter of fiscal 2025, the
Bank sold approximately
US$3.1 billion of bonds which resulted in a
loss of US$199 million pre-tax. In the
aggregate, since the announcement of
the U.S. balance sheet restructuring
activities on October 10, 2024, through April
30, 2025, the Bank sold approximately
US$19 billion of bonds from its U.S. investment
portfolio for an aggregate loss
of US$1.1 billion pre-tax. Between May
1, 2025, through May 21, 2025, the Bank
sold an additional US$4.3 billion of bonds,
resulting in a loss of US$178 million
pre-tax. The Bank expects to complete its
investment portfolio repositioning no later
than the first half of calendar 2025 and expects
the net interest income benefit
from these sales to be at the upper end of
the previously disclosed range of US$300
million to US$500 million pre-tax in fiscal
2025
10
.
In addition, the Bank continues to target reducing
the U.S. Bank’s assets by approximately 10%
from the asset level as of September 30, 2024,
largely by selling
or winding down certain non-scalable or non-core
U.S. loan portfolios that do not align
with the U.S. Retail segment’s focused strategy
or have lower returns on
investment such as the correspondent lending,
residential jumbo mortgage, export
and import lending, and commercial
auto dealer portfolios. This reduction in
assets combined with natural balance sheet
run-off, is expected to be largely complete by
the end of fiscal 2025 and reduce net interest
income in the U.S. Retail
segment by approximately US$200 million
to US$225 million pre-tax in fiscal 2025
11
.
This quarter, the Bank completed the sale of US$8.6 billion
of certain U.S. residential mortgage loans (the
“correspondent loans”), which resulted
in the recognition
of a pre-tax loss including transaction
costs of US$564 million; net interest income
was US$25 million lower as a result of the related
hedge rebalance before
close. In addition to the correspondent loan
sale, loans were further reduced by US$2
billion, reflecting run-off and sales in the
non-core U.S. loan portfolios. The
Bank used proceeds from the sale of the loans,
investment maturities, and cash on hand,
to pay down US$4 billion of short-term
borrowings. Accordingly, as of
April 30, 2025, the combined total assets of the
U.S. Bank were US$399 billion. Between
May 1, 2025, through May 21, 2025, the Bank
paid down an additional
US$7 billion of bank borrowings from loan
sales, investment maturities and normalized
cash levels.
As of March 31, 2025, the combined total assets
of the U.S. Bank, as measured in accordance
with the OCC Consent Order which utilizes
the average of spot
balances of December 31, 2024, and
March 31, 2025, was US$405 billion.
In the aggregate, total losses associated
with the Bank’s U.S. balance sheet restructuring
activities from October 10, 2024,
through April 30, 2025, are
US$1,666 million pre-tax and US$1,250
million after-tax. In total, the Bank’s collective
balance sheet restructuring actions are
expected to result in a loss up to
US$1.5 billion after-tax, and impact capital
as executed
10
,11
.
In addition to the asset reductions identified on
October 10, 2024, the Bank made the strategic
decision to gradually wind-down the approximately
US$3 billion
point of sale financing business which
services third-party retailers, as part of
the Bank’s efforts to reduce non-scalable and niche portfolios
that do not fit the
Bank’s focused strategy.
10
The amount of bonds that the Bank sells and the timing of such sales, are subject to market conditions and other
factors. Accordingly, the expected loss incurred as well as the expected
amount of net interest income benefit, are subject to risk and uncertainties and are based on assumptions regarding
the timing of when such bonds are sold, the interest rates at the time
of sale as well as other market factors and conditions which are not entirely within the Bank’s control.
11
The Bank’s estimates regarding net interest income impacts are based on assumptions regarding the timing of
when such assets are sold or wound down. The Bank’s ability to
successfully dispose of the assets is subject to inherent risks and uncertainty and there is no guarantee that the
Bank will be able to sell the assets in the timeline outlined or achieve the
purchase price which it currently expects. The ability to sell the assets will depend on market factors and conditions and any
sale will likely be subject to customary closing terms and
conditions which could involve regulatory approvals which are not entirely within the Bank’s control.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 20
TABLE 12: U.S. RETAIL
(millions of dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
Canadian Dollars
2025
2025
2024
2025
2024
Net interest income – reported
$
3,038
$
3,064
$
2,841
$
6,102
$
5,740
Net interest income – adjusted
1,2
3,074
3,064
2,841
6,138
5,740
Non-interest income (loss) – reported
(445)
(282)
606
(727)
1,210
Non-interest income – adjusted
1,3
648
645
606
1,293
1,210
Total revenue – reported
2,593
2,782
3,447
5,375
6,950
Total revenue – adjusted
1,2,3
3,722
3,709
3,447
7,431
6,950
Provision for (recovery of) credit losses –
impaired
309
529
311
838
688
Provision for (recovery of) credit losses –
performing
133
(78)
69
55
77
Total provision for (recovery of) credit losses
442
451
380
893
765
Non-interest expenses – reported
2,338
2,380
2,694
4,718
5,153
Non-interest expenses – adjusted
1,4
2,338
2,380
1,976
4,718
4,024
Provision for (recovery of) income taxes – reported
(229)
(192)
49
(421)
32
Provision for (recovery of) income taxes – adjusted
1
53
39
75
92
159
U.S. Retail Bank net income – reported
42
143
324
185
1,000
U.S. Retail Bank net income – adjusted
1
889
839
1,016
1,728
2,002
Share of net income from investment in
Schwab
5,6
78
199
183
277
377
Net income – reported
$
120
$
342
$
507
$
462
$
1,377
Net income – adjusted
1
967
1,038
1,199
2,005
2,379
U.S. Dollars
Net interest income – reported
$
2,136
$
2,160
$
2,094
$
4,296
$
4,235
Net interest income – adjusted
1,2
2,161
2,160
2,094
4,321
4,235
Non-interest income (loss) – reported
(306)
(198)
446
(504)
892
Non-interest income – adjusted
1,3
457
454
446
911
892
Total revenue – reported
1,830
1,962
2,540
3,792
5,127
Total revenue – adjusted
1,2,3
2,618
2,614
2,540
5,232
5,127
Provision for (recovery of) credit losses –
impaired
216
371
229
587
508
Provision for (recovery of) credit losses –
performing
95
(53)
51
42
57
Total provision for (recovery of) credit losses
311
318
280
629
565
Non-interest expenses – reported
1,644
1,675
1,980
3,319
3,795
Non-interest expenses – adjusted
1,4
1,644
1,675
1,455
3,319
2,970
Provision for (recovery of) income taxes – reported
(160)
(136)
37
(296)
25
Provision for (recovery of) income taxes – adjusted
1
37
27
56
64
118
U.S. Retail Bank net income – reported
35
105
243
140
742
U.S. Retail Bank net income – adjusted
1
626
594
749
1,220
1,474
Share of net income from investment in
Schwab
5,6
54
142
136
196
280
Net income – reported
$
89
$
247
$
379
$
336
$
1,022
Net income – adjusted
1
680
736
885
1,416
1,754
Selected volumes and ratios
Return on common equity – reported
7
1.1
%
2.9
%
4.7
%
2.1
%
6.4
%
Return on common equity – adjusted
1,7
8.8
8.6
11.0
8.7
11.0
Net interest margin – reported
1,8
3.00
2.86
2.99
2.93
3.01
Net interest margin – adjusted
1,8
3.04
2.86
2.99
2.95
3.01
Efficiency ratio – reported
89.8
85.4
78.0
87.5
74.0
Efficiency ratio – adjusted
1
62.8
64.1
57.3
63.4
57.9
Assets under administration (billions of U.S.
dollars)
9
$
45
$
43
$
40
$
45
$
40
Assets under management (billions of U.S.
dollars)
9
9
9
7
9
7
Number of U.S. retail stores
1,137
1,134
1,167
1,137
1,167
Average number of full-time equivalent staff
28,604
28,276
27,957
28,437
27,971
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted net interest income excludes the following item of note:
i.
U.S. balance sheet restructuring (impact of loan hedge rebalancing before the close of the correspondent loan
sale) – Q2 2025: $36 million or US$25 million ($26 million or
US$19 million after-tax), 2025 YTD: $36 million or US$25 million ($26 million or US$19 million after-tax).
3
Adjusted non-interest income excludes the following item of note:
i.
U.S. balance sheet restructuring – Q2 2025: $1,093 million or US$763 million ($821 million or US$572 million after
-tax), Q1 2025:
$927 million or US$652 million ($696 million or
US$489 million after-tax), 2025 YTD: $2,020
million or US$1,415 million ($1,517 million or US$1,061 million after-tax).
4
Adjusted non-interest expenses exclude the following items of note:
i.
FDIC special assessment – Q2 2024: $103 million or US$75 million ($77 million or US$56 million after
-tax), 2024 YTD: $514 million or US$375 million ($387 million or
US$282 million after-tax); and
ii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program –
Q2 2024: $615 million or US$450 million (before and after-tax),
2024 YTD:
$615 million or US$450 million (before and after-tax).
5
The Bank’s share of Schwab’s earnings is reported with a one-month lag. Refer to
Note 7 of the Bank’s second quarter 2025
Interim Consolidated Financial Statements for further details.
6
The after-tax amounts for amortization of acquired intangibles, the Bank’s share of acquisition and integration
charges associated with Schwab’s acquisition of TD Ameritrade, the Bank’s
share of Schwab’s restructuring charges,
and the Bank’s share of Schwab’s FDIC special assessment charge are recorded
in the Corporate segment.
7
Capital allocated to the business segment was 11.5% CET1
Capital.
8
Net interest margin is calculated by dividing U.S. Retail segment’s net interest income
by average interest-earning assets excluding the impact related to sweep deposits arrangements
and the impact of intercompany deposits and cash collateral, which management believes better reflects segment
performance.
In addition, the value of tax-exempt interest income is
adjusted to its equivalent before-tax value. For investment securities, the adjustment to fair value is included in the
calculation of average interest-earning assets. Net interest income and
average interest-earning assets used in the calculation are non-GAAP financial measures.
Management believes this calculation better reflects segment performance.
9
For additional information about this metric, refer to the Glossary of this document.
Quarterly comparison – Q2 2025 vs. Q2 2024
U.S. Retail reported net income for the quarter
was $120 million (US$89 million), a decrease
of $387 million (US$290 million), or 76%
(77% in U.S. dollars),
compared with the second quarter last
year. On an adjusted basis, net income for the quarter
was $967 million (US$680 million), a decrease
of $232
million
(US$205 million), or 19% (23%
in U.S. dollars). The reported and adjusted
annualized ROE for the quarter were 1.1%
and 8.8%, respectively, compared with 4.7%
and 11.0%, respectively, in the second quarter last year.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 21
U.S. Retail net income includes contributions
from the U.S. Retail Bank and the Bank’s investment
in Schwab. Reported net income for the
quarter from the
Bank’s investment in Schwab was $78 million (US$54
million), a decrease of $105 million (US$82
million), or 57% (60% in U.S. dollars),
compared with the second
quarter last year.
U.S. Retail Bank reported net income
was $42 million (US$35 million), a decrease
of $282
million (US$208 million), or 87% (86% in
U.S. dollars), compared
with the second quarter last year, primarily reflecting the impact
of U.S. balance sheet restructuring
activities, higher governance and control investments,
including
costs for U.S. BSA/AML remediation,
and higher PCL, partially offset by the impact of
the charges for the global resolution of the investigations
into the Bank’s
U.S. BSA/AML program, and FDIC special
assessment charge, in the second quarter
last year. U.S. Retail Bank adjusted net income was $889
million
(US$626 million), a decrease of $127
million (US$123 million), or 13% (16% in
U.S. dollars), compared with the second quarter
last year, reflecting higher
governance and control investments, including
costs for U.S. BSA/AML remediation, and
higher PCL, partially offset by higher revenue.
Reported revenue for the quarter was US$1,830
million, a decrease of US$710 million, or 28%,
compared with the second quarter last
year. On an adjusted
basis, revenue for the quarter was US$2,618
million, an increase of US$78 million, or 3%.
Reported net interest income of US$2,136
million, increased
US$42 million, or 2%, and adjusted net interest
income of US$2,161 million, increased US$67
million, or 3%, driven by the impact of U.S. balance
sheet
restructuring activities and higher deposit
margins, partially offset by the adjustment related
to certain deferred product acquisition
costs (the “deferred cost
adjustment”). Reported net interest
margin of 3.00% increased 1 basis point,
and adjusted net interest margin of 3.04%
increased 5 bps, due to the impact of U.S.
balance sheet restructuring activities and higher
deposit margins, partially offset by maintaining
elevated liquidity levels (which negatively impacted
net interest
margin by 8 bps) and the deferred cost adjustment.
Reported non-interest loss was US$306
million, a decrease of US$752 million,
compared with the second
quarter last year, reflecting the impact of U.S. balance sheet
restructuring activities, partially offset by higher
fee income. On an adjusted basis, non-interest
income of US$457 million increased US$11 million, or 2%, compared
with the second quarter last year, reflecting higher fee income.
Average loan volumes decreased US$6 billion,
or 3%, compared with the second quarter
last year. Personal loans decreased 2% and business
loans
decreased 4%, reflecting U.S. balance sheet
restructuring activities. Excluding the impact
of the loan portfolios identified for sale
or run-off under our U.S. balance
sheet restructuring program, average loan
volumes increased US$3 billion, or 2%
12,13
. Average deposit volumes decreased US$7 billion, or
2%, reflecting a 7%
decrease in sweep deposits and a 4% decrease
in business deposits, partially offset by a 3% increase
in personal deposits.
Assets under administration (AUA) were
US$45 billion as of April 30, 2025, an increase
of US$5 billion, or 13%, compared
with the second quarter last year,
reflecting net asset growth. Assets under
management (AUM) were US$9 billion as
of April 30, 2025, an increase of US$2 billion,
or 29%, compared with the
second quarter last year.
PCL for the quarter was US$311 million, an increase of US$31
million compared with the second quarter
last year. PCL – impaired was US$216 million, a
decrease of US$13 million, or 6%, largely recorded
in the consumer lending portfolios. PCL
– performing was US$95 million, an increase
of US$44 million
compared to the prior year. The performing provisions this quarter
largely reflect credit impacts from policy
and trade uncertainty, including overlays and an update
to our macroeconomic forecasts, partially
offset by lower volume. U.S. Retail PCL including
only the Bank’s share of PCL in the U.S. strategic
cards portfolio, as an
annualized percentage of credit volume
was 0.70%, an increase of 10 bps compared
with the second quarter last year.
Effective the first quarter of 2025, U.S. Retail segment
non-interest expenses include certain U.S.
governance and control investments, including
costs for U.S.
BSA/AML remediation which were previously
reported in the Corporate segment.
Comparative amounts have been reclassified
to conform with the presentation
adopted in the current period.
Reported non-interest expenses for the quarter
were US$1,644 million, a decrease of US$336
million, or 17%, compared to the
second quarter last year, reflecting the impact of charges for
the global resolution of the investigations
into the Bank’s U.S. BSA/AML program, and
the FDIC
special assessment charge, in the second
quarter last year, partially offset by higher governance and control
investments including costs of US$110 million for
U.S. BSA/AML remediation,
and higher employee-related expenses, in
the current quarter. Our governance and control investments
in this quarter were higher
compared to the second quarter last year as
remediation efforts progressed over this period.
On an adjusted basis, non-interest expenses
increased US$189
million, or 13%, reflecting higher governance
and control investments, including
costs for U.S. BSA/AML remediation, and
higher employee-related expenses.
The reported and adjusted efficiency ratios for
the quarter were 89.8% and 62.8%, respectively, compared with 78.0%
and 57.3%, respectively, in the second
quarter last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
U.S. Retail reported net income was $120
million (US$89 million), a decrease of $222
million (US$158 million), or 65% (64% in
U.S. dollars), compared with the
prior quarter. On an adjusted basis, net income for the
quarter was $967 million (US$680 million),
a decrease of $71 million (US$56 million),
or 7% (8% in U.S.
dollars). The reported and adjusted annualized
ROE for the quarter were 1.1% and 8.8%,
respectively, compared with 2.9% and 8.6%, respectively, in the prior
quarter.
The contribution from Schwab of $78
million (US$54 million) decreased $121 million
(US$88 million), or 61% (62% in U.S.
dollars), compared with the prior
quarter.
U.S. Retail Bank reported net income
was $42 million (US$35 million), a decrease
of $101
million (US$70 million), or 71% (67% in U.S.
dollars) compared with
the prior quarter, primarily reflecting the impact of U.S. balance
sheet restructuring activities and higher PCL,
partially offset by the impact of fewer days in
the
current quarter. U.S. Retail Bank adjusted net income was $889
million (US$626 million), an increase of $50
million (US$32 million), or 6% (5% in U.S.
dollars),
compared to the prior quarter, primarily reflecting lower expenses,
lower PCL, and higher non-interest income.
Reported revenue was US$1,830 million,
a decrease of US$132
million, or 7%, compared with the prior quarter. On an adjusted
basis, revenue was
US$2,618 million, an increase of US$4
million, relatively flat, compared with the
prior quarter. Reported net interest income of US$2,136
million decreased
US$24 million, or 1%, driven by the deferred
cost adjustment,
and fewer days in the quarter, partially offset by the impact of
U.S. balance sheet restructuring
activities. On an adjusted basis, net interest
income was US$2,161 million, relatively flat
compared with the prior quarter, as the impact of U.S. balance
sheet
restructuring activities was offset by the deferred
cost adjustment,
and fewer days in the quarter.
Reported net interest margin of 3.00% increased
14 bps, and
adjusted net interest margin of 3.04% increased
18 bps, compared with the prior quarter, due to impact of
U.S. balance sheet restructuring activities,
normalization
of elevated liquidity levels (which positively impacted
net interest margin by 11 bps), and higher deposit margins, partially
offset by the deferred cost adjustment.
Net interest margin in the third quarter is expected
to deliver substantial expansion, reflecting
the benefits from ongoing U.S. balance
sheet restructuring activities
and further normalization of elevated liquidity
levels
14
. Reported non-interest loss was US$306
million, compared with reported non-interest
loss of US$198 million
12
Loan portfolios identified for sale or run-off include the point of sale finance business which services third
party retailers,
correspondent lending, residential jumbo mortgage, export and
import lending, commercial auto dealer portfolio, and other non-core portfolios. Q2 2025 average loan volumes:
US$187 billion (Q1 2025: US$193
billion; 2025 YTD: US$190 billion;
Q2 2024: US$193
billion; 2024 YTD: US$192 billion). Q2 2025 average loan volumes of loan portfolios identified for sale or
run-off: US$31 billion (Q1 2025: US$37 billion; 2025 YTD:
US$34 billion; Q2 2024: US$40 billion; 2024 YTD: US$40 billion). Q2 2025 average loan volumes excluding loan
portfolios identified for sale or run-off: US$156 billion (Q1 2025:
US$156 billion; 2025 YTD: US$156 billion; Q2 2024: US$153
billion; 2024 YTD: US$152
billion).
13
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP and Other Financial Measures”
in the “How We Performed” section of this
document.
14
The Bank’s Q3 2025 net interest margin expectations for the segment are based on the Bank’s assumptions regarding
interest rates, deposit reinvestment rates, average asset levels,
execution of planned restructuring opportunities, and other variables, and are subject to inherent risks and uncertainties,
including those set out in the “Risk Factors That May Affect
Future Results” section of this document.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 22
in the prior quarter, reflecting the impact of U.S. balance
sheet restructuring activities, partially offset by
higher fee revenue. On an adjusted basis,
non-interest
income of US$457 million increased US$3
million, or 1%, compared with the prior
quarter, reflecting higher fee revenue.
Average loan volumes decreased US$6 billion,
or 3%, compared with the prior quarter, reflecting a 5% decrease
in personal loans and a 2% decrease in
business loans. Excluding the impact of the
loan portfolios identified for sale or run-off under
our U.S. balance sheet restructuring program,
average loan volumes
were flat
12
,13
. Average deposit volumes were relatively flat
compared with the prior quarter, reflecting a 2% decrease
in business deposits and a 1% decrease
in
sweep deposits,
partially offset by a 1% increase in personal
deposits.
AUA were US$45 billion as of April 30,
2025, an increase of US$2 billion, or 5%,
compared with the prior quarter. AUM were US$9 billion, flat
compared with
the prior quarter.
PCL for the quarter was US$311 million, a decrease of US$7
million compared with the prior quarter. PCL – impaired was
US$216 million, a decrease of
US$155 million, or 42%, recorded across
the consumer and commercial lending portfolios,
including seasonal trends in the credit card and
auto portfolios, and a
prior quarter adoption impact of a model
update in the credit card portfolio. PCL –
performing was a build of US$95
million, compared with a recovery of
US$53 million in the prior quarter. The performing provisions
this quarter largely reflect credit impacts
from policy and trade uncertainty, including overlays and an
update to our macroeconomic forecasts,
partially offset by lower volume. U.S. Retail PCL
including only the Bank’s share of PCL in
the U.S. strategic cards
portfolio, as an annualized percentage of
credit volume was 0.70%, an increase
of 3 bps compared with the prior quarter.
Non-interest expenses for the quarter were
US$1,644 million, a decrease of US$31 million,
or 2%, compared with the prior quarter, reflecting fewer days
in the
quarter and lower operating expenses, partially
offset by higher governance and control investments,
including costs for U.S. BSA/AML remediation.
The reported and adjusted efficiency ratios for
the quarter were 89.8% and 62.8%, respectively, compared with 85.4%
and 64.1%, respectively, in the prior
quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
U.S. Retail reported net income for the
six months ended April 30, 2025, was $462
million (US$336 million), a decrease of $915
million (US$686 million), or 66%
(67% in U.S. dollars), compared with the
same period last year. On an adjusted basis, net income
for the period was $2,005 million (US$1,416
million), a decrease
of $374 million (US$338 million), or 16%
(19% in U.S. dollars). The reported and
adjusted annualized ROE for the period
were 2.1% and 8.7%, respectively,
compared with 6.4% and 11.0%, respectively, in the same period last year.
The contribution from Schwab of $277
million (US$196 million), decreased $100 million
(US$84 million), or 27%
(30%
in U.S. dollars).
U.S. Retail Bank reported net income
for the period was $185 million (US$140
million), a decrease of $815 million (US$602
million), or 82% (81% in U.S.
dollars), compared with the same period
last year, reflecting the impact of U.S. balance sheet restructuring
activities, higher PCL, and higher non-interest
expenses, partially offset by the impact of the charges
for the global resolution of the investigations
into the Bank’s U.S. BSA/AML program, and
FDIC special
assessment charge, in the same period last
year, and higher revenue. U.S. Retail Bank adjusted net
income was $1,728 million (US$1,220 million),
a decrease of
$274 million (US$254 million), or 14% (17%
in U.S. dollars), primarily reflecting higher
non-interest expenses and higher PCL, partially
offset by higher revenue.
Reported revenue for the period was US$3,792
million, a decrease of US$1,335 million, or
26%, compared with the same period last
year. On an adjusted basis,
revenue for the period was US$5,232 million,
an increase of US$105 million, or 2%,
compared with the same period last year. Reported net interest
income of
US$4,296 million increased US$61 million, or
1%, and adjusted net interest income
of US$4,321 million increased US$86
million, or 2%, reflecting the impact of
U.S. balance sheet restructuring activities and
higher deposit margins, partially offset by
the deferred cost adjustment.
Reported net interest margin of 2.93%,
decreased 8 bps, and adjusted net interest
margin of 2.95% decreased 6 bps, due to
maintaining elevated liquidity levels (which
negatively impacted net interest
margin by 13 bps) and the deferred cost adjustment,
partially offset by the impact of U.S. balance
sheet restructuring activities, and higher deposit
margins.
Reported non-interest loss of US$504
million decreased US$1,396 million, primarily reflecting
the impact of U.S. balance sheet restructuring
activities, partially
offset by higher fee revenue. On an adjusted
basis, non-interest income of US$911 million increased US$19
million, or 2%, primarily reflecting higher
fee income.
Average loan volumes for the period decreased $2
billion, or 1%, compared with the same
period last year, reflecting a 3% decrease in business loans,
partially
offset by a 1% increase in personal loans. Excluding
the impact of the loan portfolios identified
for sale or run-off under our U.S. balance
sheet restructuring
program, average loan volumes for the period
increased US$4 billion, or 3%, compared
with the same period last year
12
,13
. Average deposit volumes decreased
US$8 billion, or 3%, reflecting a 9% decrease
in sweep deposits and a 4% decrease in
business deposits,
partially offset by a 3% increase in personal deposits
compared with the same period last year.
PCL was US$629 million, an increase of
US$64 million compared with the same period
last year. PCL – impaired was US$587 million, an increase of
US$79 million, or 16%, largely reflecting
credit migration in the commercial lending portfolio
and the adoption impact of a model update in
the credit card portfolio.
PCL – performing was US$42 million,
a decrease of US$15 million compared
with the same period last year. The current year performing provisions
largely reflect
credit impacts from policy and trade uncertainty, including overlays
and an update to our macroeconomic forecasts,
partially offset by lower volume and the
adoption impact of a model update in
the credit card portfolio.
U.S. Retail PCL including only the Bank’s
share of PCL in the U.S. strategic cards portfolio,
as an
annualized percentage of credit volume
was 0.68%, an increase of 8 bps, compared
with the same period last year.
Reported non-interest expenses for the period
were US$3,319 million, a decrease of
US$476 million, or 13%, compared with the
same period last year,
reflecting the impact of the charges for the global
resolution of the investigations into the Bank’s
U.S. BSA/AML program, and FDIC special
assessment charge, in
the same period last year, partially offset by higher governance
and control investments,
including costs for U.S. BSA/AML remediation,
and higher employee-
related expenses. On an adjusted basis, non-interest
expenses increased US$349 million, or 12%,
reflecting costs related to the Bank’s governance
and control
investments,
including costs for U.S. BSA/AML remediation,
and higher employee-related expenses.
The reported and adjusted efficiency ratios for
the period were 87.5% and 63.4%, respectively, compared
with 74.0% and 57.9%, respectively, for the same
period last year.
THE CHARLES SCHWAB CORPORATION
Refer to Note 7, Investment in Associates
and Joint Ventures of the Bank’s second quarter 2025
Interim Consolidated Financial Statements
for further information
on Schwab.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 23
TABLE 13: WEALTH MANAGEMENT AND INSURANCE
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income
$
362
$
369
$
304
$
731
$
589
Non-interest income
3,141
3,229
2,810
6,370
5,660
Total revenue
3,503
3,598
3,114
7,101
6,249
Insurance service expenses
1
1,417
1,507
1,248
2,924
2,614
Non-interest expenses
1,131
1,173
1,027
2,304
2,074
Provision for (recovery of) income taxes
248
238
218
486
385
Net income
$
707
$
680
$
621
$
1,387
$
1,176
Selected volumes and ratios
Return on common equity
46.8
%
42.7
%
40.8
%
44.7
%
39.2
%
Return on common equity – Wealth Management
2
57.8
61.9
54.4
59.9
49.4
Return on common equity – Insurance
33.5
21.9
26.9
27.3
28.0
Efficiency ratio
32.3
32.6
33.0
32.4
33.2
Efficiency ratio, net of ISE
3
54.2
56.1
55.0
55.2
57.1
Assets under administration (billions of Canadian
dollars)
4
$
654
$
687
$
596
$
654
$
596
Assets under management (billions of Canadian
dollars)
542
556
489
542
489
Average number of full-time equivalent staff
15,077
15,059
15,163
15,068
15,276
1
Includes estimated losses related to catastrophe claims – Q2 2025: $50 million, Q1 2025: nil, Q2 2024: $7 million
,
YTD 2025: $50 million, YTD 2024: $17 million.
2
Capital allocated to the business was 11.5% CET1 Capital.
3
Efficiency ratio, net of ISE is calculated by dividing non-interest expenses by total revenue, net of ISE.
Total revenue, net of ISE
– Q2 2025: $2,086
million, Q1 2025: $2,091 million,
Q2 2024: $1,866 million, YTD 2025: $4,177 million, YTD 2024: $3,635 million. Total
revenue, net of ISE is a non-GAAP financial measure. Refer to “Non-GAAP and Other Financial
Measures” in the “How We Performed” section and the Glossary of this document for additional information about
this metric.
4
Includes
AUA administered by TD Investment Services Inc. which is part of the Canadian Personal and Commercial
Banking segment.
Quarterly comparison – Q2 2025 vs. Q2 2024
Wealth Management and Insurance net income
for the quarter was $707 million, an increase
of $86 million, or 14%, compared with the second
quarter last year,
reflecting Wealth Management net income of
$480 million, an increase of $62 million,
or 15%, compared with the second quarter
last year, and Insurance net
income of $227 million, an increase of $24
million, or 12%, compared with the second
quarter last year. The annualized ROE for the quarter was 46.8%,
compared
with 40.8% in the second quarter last year. Wealth Management
annualized ROE for the quarter was 57.8%,
compared with 54.4% in the second quarter last
year,
and Insurance annualized ROE for the quarter
was 33.5% compared with 26.9% in the
second quarter last year.
Revenue for the quarter was $3,503 million, an
increase of $389 million, or 12%,
compared with the second quarter last year. Non-interest income
was
$3,141 million, an increase of $331 million, or
12%, reflecting higher insurance
premiums, fee-based revenue, and transaction
revenue. Net interest income was
$362 million, an increase of $58 million, or 19%,
compared with the second quarter last
year, reflecting higher deposit volumes and margins.
AUA were $654 billion as at April 30, 2025, an
increase of $58 billion, or 10%, and
AUM were $542 billion as at April 30, 2025, an
increase of $53 billion, or 11%,
compared with the second quarter last
year, both reflecting market appreciation and net asset growth.
Insurance service expenses for the quarter
were $1,417 million, an increase of $169
million, or 14%, compared with the second quarter
last year, primarily
reflecting increased claims severity.
Non-interest expenses for the quarter were $1,131
million, an increase of $104 million, or
10%, compared with the second quarter last
year, reflecting higher
variable compensation, higher spend supporting
business growth initiatives from technology
spend and employee-related expenses.
The efficiency ratio for the quarter was 32.3%,
compared with 33.0% in the second quarter
last year. The efficiency ratio, net of ISE for the quarter was 54.2%,
compared with 55.0% in the second quarter
last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Wealth Management and Insurance net income
for the quarter was $707 million, an increase
of $27 million, or 4%, compared with the prior
quarter, reflecting
Wealth Management net income of $480 million,
a decrease of $32 million, or 6%, compared
with the prior quarter, and Insurance net income of $227
million, an
increase of $59 million, or 35%, compared
with the prior quarter. The annualized ROE for the quarter
was 46.8%, compared with 42.7% in the prior quarter. Wealth
Management annualized ROE for the quarter
was 57.8%, compared with 61.9% in
the prior quarter, and Insurance annualized ROE for the quarter
was 33.5%
compared with 21.9% in the prior quarter.
Revenue decreased $95 million, or 3%, compared
with the prior quarter. Non-interest income decreased $88
million, or 3%, reflecting lower fee-based revenue
and transaction revenue. Net interest income
decreased $7 million, or 2%, reflecting
the effect of fewer days in the second quarter.
AUA decreased $33 billion, or 5%, and AUM
decreased $14 billion, or 3%, compared
with the prior quarter, both reflecting market depreciation and lower
net asset
growth.
Insurance service expenses for the quarter
decreased $90 million, or 6%, compared
with the prior quarter, primarily driven by seasonally lower claims.
Non-interest expenses decreased $42 million,
or 4%, compared with the prior quarter, primarily reflecting
lower employee-related expenses
and lower variable
compensation.
The efficiency ratio for the quarter was 32.3%,
compared with 32.6% in the prior quarter. The efficiency ratio,
net of ISE for the quarter was 54.2%, compared
with 56.1% in the prior quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Wealth Management and Insurance net income
for the six months ended April 30, 2025, was
$1,387 million, an increase of $211 million, or 18%, compared with
the same period last year, reflecting Wealth Management net income
of $992 million, an increase of $219
million, or 28%, compared with the same period
last
year, and Insurance net income of $395 million, a decrease
of $8 million, or 2%, compared with the
same period last year. The annualized ROE for the period was
44.7%, compared with 39.2%, in the same
period last year. Wealth Management annualized ROE for the period
was 59.9%, compared with 49.4% in the same
period last year, and Insurance annualized ROE for the period
was 27.3% compared with 28.0% in the
same period last year.
Revenue for the period was $7,101 million,
an increase of $852 million, or 14%,
compared with same period last year. Non-interest income increased
$710 million, or 13%, reflecting higher insurance
premiums, fee-based revenue commensurate
with market growth, and transaction revenue.
Net interest income
increased $142 million, or 24%, reflecting
higher deposit volumes and margins.
Insurance service expenses were $2,924
million, an increase of $310 million, or 12%,
compared with the same period last year, reflecting business
growth,
increased claims severity and higher occurrences
of catastrophe claims.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 24
Non-interest expenses were $2,304 million,
an increase of $230 million, or 11%, compared with the
same period last year, reflecting higher variable
compensation commensurate with higher
revenues, and increased technology
spend to support strategic initiatives.
The efficiency ratio for the period was 32.4%, compared
with 33.2% for the same period last
year. The efficiency ratio, net of ISE for the period was 55.2%,
compared with 57.1% in the same period last
year.
TABLE 14: WHOLESALE BANKING
1
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income (loss) (TEB)
$
45
$
(107)
$
189
$
(62)
$
387
Non-interest income
2,084
2,107
1,751
4,191
3,333
Total revenue
2,129
2,000
1,940
4,129
3,720
Provision for (recovery of) credit losses –
impaired
61
33
(1)
94
4
Provision for (recovery of) credit losses –
performing
62
39
56
101
61
Total provision for (recovery of) credit losses
123
72
55
195
65
Non-interest expenses – reported
1,461
1,535
1,430
2,996
2,930
Non-interest expenses – adjusted
1,2
1,427
1,483
1,328
2,910
2,711
Provision for (recovery of) income taxes
(TEB) – reported
126
94
94
220
159
Provision for (recovery of) income taxes
(TEB) – adjusted
1
134
105
116
239
205
Net income – reported
$
419
$
299
$
361
$
718
$
566
Net income – adjusted
1
445
340
441
785
739
Selected volumes and ratios
Trading-related revenue (TEB)
3
$
856
$
904
$
693
$
1,760
$
1,423
Average gross lending portfolio (billions of Canadian
dollars)
4
103.1
100.9
96.3
102.0
96.3
Return on common equity – reported
5
10.2
%
7.3
%
9.2
%
8.8
%
7.3
%
Return on common equity – adjusted
1,5
10.9
8.3
11.3
9.6
9.5
Efficiency ratio – reported
68.6
76.8
73.7
72.6
78.8
Efficiency ratio – adjusted
1
67.0
74.2
68.5
70.5
72.9
Average number of full-time equivalent staff
6,970
6,919
7,077
6,944
7,089
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted non-interest expenses exclude the acquisition and integration-related charges for the Cowen acquisition
– Q2 2025: $34 million ($26 million after tax), Q1 2025: $52 million
($41 million after tax), 2025 YTD: $86 million ($67 million after tax), Q2 2024: $102 million ($80 million
after tax), 2024 YTD: $219 million ($173 million after tax).
3
Includes net interest income (loss) TEB of ($272) million, (Q1 2025: ($404) million, 2025 YTD: ($676)
million, Q2 2024: ($118) million, 2024 YTD:
($172) million), and trading income (loss)
of $1,128 million (Q1 2025: $1,308 million, 2025 YTD: $2,436 million, Q2 2024: $811
million, 2024 YTD: $1,595 million). Trading-related revenue (TEB) is a non-GAAP
financial measure.
Refer to “Non-GAAP and Other Financial Measures” in the “How We Performed” section and the Glossary
of this document for additional information about this metric.
4
Includes gross loans and bankers’ acceptances relating to Wholesale Banking, excluding letters of credit, cash
collateral, credit default swaps, and allowance for credit losses.
5
Capital allocated to the business segment was 11.5% CET1 Capital.
Quarterly comparison – Q2 2025 vs. Q2 2024
Wholesale Banking reported net income for
the quarter was $419 million, an increase
of $58 million, or 16%, compared with the
second quarter last year, primarily
reflecting higher revenues, partially offset by higher
PCL, income taxes and non-interest
expenses. On an adjusted basis, net income
was $445 million, an
increase of $4 million, or 1%, compared
with the second quarter last year.
Revenue for the quarter was $2,129 million, an
increase of $189 million, or 10%,
compared with the second quarter last year. Higher revenue
primarily reflects
higher trading-related revenue, and underwriting
fees, including those associated with the
sale of Schwab shares, partially offset by the net
change in fair value of
loan underwriting commitments and the equity
investment portfolio,
and lower advisory fees.
PCL for the quarter was $123 million, an increase
of $68 million compared with the second
quarter last year. PCL – impaired was $61 million, an
increase of
$62 million compared with the prior year, primarily reflecting
a small number of impairments across
various industries. PCL – performing was
$62 million, an
increase of $6 million compared with the prior
year. The performing build this quarter reflects credit impacts
from policy and trade uncertainty, including overlays
and an update to our macroeconomic forecasts.
Reported non-interest expenses for the quarter
were $1,461 million, an increase of $31
million, or 2%, compared with the second
quarter last year, primarily
reflecting higher technology and front office costs,
and the impact of foreign exchange translation,
partially offset by lower acquisition and integration-related
costs
and variable compensation. On an adjusted
basis, non-interest expenses were $1,427
million, an increase of $99 million, or 7%.
Quarterly comparison – Q2 2025 vs. Q1 2025
Wholesale Banking reported net income for
the quarter was $419 million, an increase
of $120 million, or 40%, compared
with the prior quarter, primarily reflecting
higher revenues and lower non-interest expenses,
partially offset by higher PCL. On an adjusted
basis, net income was $445 million, an increase
of $105 million,
or 31%.
Revenue for the quarter increased $129 million,
or 6%, compared with the prior quarter. Higher revenue
primarily reflects higher underwriting fees, including
those associated with the sale of Schwab
shares, partially offset by lower trading-related
revenue.
PCL for the quarter was $123 million, an increase
of $51 million compared with the prior
quarter. PCL – impaired was $61 million, an increase
of $28
million,
primarily reflecting a small number of impairments
across various industries. PCL – performing
was $62 million, an increase of $23 million.
The performing build
this quarter reflects credit impacts from policy
and trade uncertainty, including overlays and an update to our
macroeconomic forecasts.
Reported non-interest expenses for the quarter
decreased $74 million, or 5%, compared
with the prior quarter, primarily reflecting lower variable
compensation
and acquisition and integration-related
costs. On an adjusted basis, non-interest expenses
decreased $56 million, or 4%.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Wholesale Banking reported net income for
the six months ended April 30, 2025
was $718 million, an increase of $152
million, or 27%, compared with the same
period last year, reflecting higher revenues, partially offset by higher
PCL, non-interest expenses and income
taxes. On an adjusted basis, net income
was
$785 million, an increase of $46 million, or 6%.
Revenue was $4,129 million, an increase of
$409 million, or 11%, compared with the same period last year. Higher revenue
primarily reflects higher trading-
related revenue, and underwriting fees, including
those associated with the sale of Schwab
shares, partially offset by the net change in fair
value of loan
underwriting commitments and the equity
investment portfolio,
and lower advisory fees.
PCL was $195 million, an increase of $130
million compared with the same period last
year. PCL – impaired was $94 million, an increase of $90
million,
primarily reflecting a small number of impairments
across various industries. PCL – performing
was $101 million, an increase of $40 million.
The current year
performing provisions reflect credit impacts
from policy and trade uncertainty, including overlays and an update
to our macroeconomic forecasts.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 25
Reported non-interest expenses were $2,996
million, an increase of $66 million, or 2%,
compared with the same period last year, reflecting higher technology
and front office costs, and the impact of
foreign exchange translation, partially offset by lower
acquisition and integration-related costs, and
the impact of a
provision related to the U.S. record keeping
and trading regulatory matters recorded in
the same period last year. On an adjusted basis, non-interest
expenses
were $2,910
million, an increase of $199 million, or 7%.
TABLE 15: CORPORATE
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net income (loss) – reported
$
8,215
$
(359)
$
(664)
$
7,856
$
(1,255)
Adjustments for items of note
Amortization of acquired intangibles
43
61
72
104
166
Acquisition and integration charges related
to the Schwab transaction
–
–
21
–
53
Share of restructuring and other charges
from investment in Schwab
–
–
–
–
49
Restructuring charges
163
–
165
163
456
Impact from the terminated FHN acquisition-related
capital hedging strategy
47
54
64
101
121
Gain on sale of Schwab shares
(8,975)
–
–
(8,975)
–
Civil matter provision
–
–
274
–
274
Less: impact of income taxes
(346)
22
143
(324)
256
Net income (loss) – adjusted
1
$
(161)
$
(266)
$
(211)
$
(427)
$
(392)
Decomposition of items included in net
income (loss) – adjusted
Net corporate expenses
2
$
(431)
$
(370)
$
(338)
$
(801)
$
(555)
Other
270
104
127
374
163
Net income (loss) – adjusted
1
$
(161)
$
(266)
$
(211)
$
(427)
$
(392)
Selected volumes
Average number of full-time equivalent staff
23,250
22,748
23,270
22,995
23,354
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
For additional information about this metric, refer to the Glossary of this document.
Quarterly comparison – Q2 2025 vs. Q2 2024
Corporate segment’s reported net income for the quarter
was $8,215 million, compared with a reported
net loss of $664 million in the second quarter
last year. The
higher net income primarily reflects the gain
on the Schwab sale transaction,
the prior year impact of a civil matter
provision
and higher revenue from treasury and
balance sheet activities in the current quarter. Net corporate
expenses increased $93 million compared
to the second quarter last year, primarily reflecting higher
governance and control costs. The adjusted
net loss for the quarter was $161
million, compared with an adjusted net loss
of $211 million in the second quarter last
year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Corporate segment’s reported net income for the quarter
was $8,215 million, compared with a reported
net loss of $359 million in the prior quarter. The higher net
income primarily reflects the gain on the Schwab
sale transaction and higher revenue from
treasury and balance sheet activities, partially
offset by restructuring
charges. Net corporate expenses increased
$61 million compared to the prior quarter. The adjusted net
loss for the quarter was $161 million, compared
with an
adjusted net loss of $266 million in the prior
quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Corporate segment’s reported net income for the
six months ended April 30, 2025 was $7,856
million, compared with a reported net loss
of $1,255 million in the
same period last year. The higher net income primarily reflects
the gain on the Schwab sale transaction,
higher revenue from treasury and balance sheet
activities
and lower restructuring charges compared
to the previous program in the same period
last year.
Net corporate expenses increased $246
million compared to the
same period last year, primarily reflecting higher governance
and control costs. The adjusted net loss
for the six months ended April 30, 2025
was $427 million,
compared with an adjusted net loss of $392
million in the same period last year.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 26
QUARTERLY
RESULTS
The following table provides summary information
related to the Bank’s eight most recently
completed quarters.
TABLE 16: QUARTERLY RESULTS
(millions of Canadian dollars, except as noted)
For the three months ended
2025
2024
2023
Apr. 30
Jan. 31
Oct. 31
Jul. 31
Apr. 30
Jan. 31
Oct. 31
Jul. 31
Net interest income
$
8,125
$
7,866
$
7,940
$
7,579
$
7,465
$
7,488
$
7,494
$
7,289
Non-interest income
14,812
6,183
7,574
6,597
6,354
6,226
5,684
5,625
Total revenue
22,937
14,049
15,514
14,176
13,819
13,714
13,178
12,914
Provision for (recovery of) credit losses
1,341
1,212
1,109
1,072
1,071
1,001
878
766
Insurance service expenses
1,417
1,507
2,364
1,669
1,248
1,366
1,346
1,386
Non-interest expenses
8,139
8,070
8,050
11,012
8,401
8,030
7,628
7,359
Provision for (recovery of) income taxes
985
698
534
794
729
634
616
704
Share of net income from investment in Schwab
74
231
178
190
194
141
156
182
Net income (loss) – reported
11,129
2,793
3,635
(181)
2,564
2,824
2,866
2,881
Pre-tax adjustments for items of note
1
Amortization of acquired intangibles
43
61
60
64
72
94
92
88
Acquisition and integration charges related to the
Schwab transaction
–
–
35
21
21
32
31
54
Share of restructuring and other charges from
investment in Schwab
–
–
–
–
–
49
35
–
Restructuring charges
163
–
–
110
165
291
363
–
Acquisition and integration-related charges
34
52
82
78
102
117
197
143
Charges related to the terminated FHN acquisition
2
–
–
–
–
–
–
–
84
Payment related to the termination of the
FHN transaction
2
–
–
–
–
–
–
–
306
Impact from the terminated FHN acquisition-related
capital hedging strategy
47
54
59
62
64
57
64
177
Impact of retroactive tax legislation on payment card
clearing services
3
–
–
–
–
–
–
–
57
Gain on sale of Schwab shares
(8,975)
–
(1,022)
–
–
–
–
–
U.S. balance sheet restructuring
1,129
927
311
–
–
–
–
–
Indirect tax matters
2,4
–
–
226
–
–
–
–
–
Civil matter provision
–
–
–
–
274
–
–
–
FDIC special assessment
–
–
(72)
–
103
411
–
–
Global resolution of the investigations into the
Bank’s U.S. BSA/AML program
–
–
52
3,566
615
–
–
–
Total pre-tax adjustments
for items of note
1
(7,559)
1,094
(269)
3,901
1,416
1,051
782
909
Less: Impact of income taxes
(56)
264
161
74
191
238
163
141
Net income – adjusted
1
3,626
3,623
3,205
3,646
3,789
3,637
3,485
3,649
Preferred dividends and distributions on other
equity instruments
200
86
193
69
190
74
196
74
Net income available to common
shareholders – adjusted
1
$
3,426
$
3,537
$
3,012
$
3,577
$
3,599
$
3,563
$
3,289
$
3,575
(Canadian dollars, except as noted)
Basic earnings (loss) per share
Reported
$
6.28
$
1.55
$
1.97
$
(0.14)
$
1.35
$
1.55
$
1.48
$
1.53
Adjusted
1
1.97
2.02
1.72
2.05
2.04
2.01
1.82
1.95
Diluted earnings (loss) per share
Reported
6.27
1.55
1.97
(0.14)
1.35
1.55
1.48
1.53
Adjusted
1
1.97
2.02
1.72
2.05
2.04
2.00
1.82
1.95
Return on common equity – reported
39.1
%
10.1
%
13.4
%
(1.0)
%
9.5
%
10.9
%
10.5
%
10.8
%
Return on common equity – adjusted
1
12.3
13.2
11.7
14.1
14.5
14.1
12.9
13.8
(billions of Canadian dollars, except as noted)
Average total assets
$
2,156
$
2,063
$
2,035
$
1,968
$
1,938
$
1,934
$
1,910
$
1,898
Average interest-earning assets
5
1,894
1,883
1,835
1,778
1,754
1,729
1,715
1,716
Net interest margin – reported
1.76
%
1.66
%
1.72
%
1.70
%
1.73
%
1.72
%
1.73
%
1.69
%
Net interest margin – adjusted
1
1.78
1.67
1.74
1.71
1.75
1.74
1.75
1.70
1
For explanations of items of note, refer to the “Significant Events”
and “Non-GAAP Financial Measures – Reconciliation of Adjusted to Reported Net Income” table in the
“How We
Performed” section of this document.
2
Adjusted non-interest expenses exclude the following items of note:
i.
Charges related to the terminated FHN acquisition, reported in the U.S. Retail segment;
ii.
Payment related to the termination of the FHN transaction, reported in the Corporate segment; and
iii.
Indirect tax matters,
reported in the Corporate segment.
3
Adjusted non-interest income excludes the impact of retroactive tax legislation on payment card clearing services,
reported in the Corporate segment.
4
Adjusted net interest income excludes indirect tax matters, reported in the Corporate segment.
5
Average interest-earning assets used in the calculation of net interest margin is a non-GAAP financial
measure. Refer to “Non-GAAP and Other Financial Measures” in the “How We
Performed” section and the Glossary of this document for additional information about these metrics.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 27
BALANCE SHEET REVIEW
TABLE 17: SELECTED INTERIM CONSOLIDATED BALANCE SHEET ITEMS
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Assets
Cash and Interest-bearing deposits
with banks
$
145,245
$
176,367
Trading loans, securities, and other
195,002
175,770
Non-trading financial assets at fair value through
profit or loss
7,528
5,869
Derivatives
89,210
78,061
Financial assets designated at fair value through
profit or loss
6,508
6,417
Financial assets at fair value through other
comprehensive income
116,902
93,897
Debt securities at amortized cost, net of allowance
for credit losses
254,417
271,615
Securities purchased under reverse repurchase
agreements
216,476
208,217
Loans, net of allowance for loan losses
936,378
949,549
Investment in Schwab
–
9,024
Other
96,608
86,965
Total assets
$
2,064,274
$
2,061,751
Liabilities
Trading deposits
$
28,761
$
30,412
Derivatives
83,485
68,368
Financial liabilities designated at fair value
through profit or loss
193,925
207,914
Deposits
1,267,748
1,268,680
Obligations related to securities sold
under repurchase agreements
187,402
201,900
Subordinated notes and debentures
10,714
11,473
Other
166,148
157,844
Total liabilities
1,938,183
1,946,591
Total equity
126,091
115,160
Total liabilities and equity
$
2,064,274
$
2,061,751
Total assets
were $2,064 billion as at April 30, 2025, an increase
of $3 billion from October 31, 2024. The impact
of foreign exchange translation from the
appreciation in the Canadian dollar decreased
total assets by $9 billion.
The increase in total assets reflects an increase
in financial assets at fair value through other
comprehensive income of $23 billion, trading
loans, securities, and
other of $19 billion, derivative assets of $11 billion, other assets of
$10 billion, securities purchased under reverse
repurchase agreements of $8 billion, and non-
trading financial assets at fair value through
profit or loss of $2 billion. The increase
was partially offset by a decrease in cash and interest-bearing
deposits with
banks of $31 billion, debt securities at amortized
cost of $17 billion, loans, net of allowances
for loan losses of $13 billion, and Investment
in Schwab of $9 billion.
Cash and interest-bearing deposits with
banks
decreased $31 billion primarily reflecting
cash management activities,
including higher payments on obligations
related to securities sold under repurchase agreements
and advances to Federal Home Loan Bank
(FHLB), and the impact of foreign exchange
translation,
partially offset by proceeds from the sale of Schwab.
Trading loans, securities, and other
increased $19 billion primarily in commodities
held for trading, equity securities, government
securities held for trading, and
securitized mortgages.
Non-trading financial assets at fair
value through profit or loss
increased $2 billion reflecting new investments.
Derivative
assets
increased $11 billion primarily reflecting changes in mark-to-market
values of foreign exchange and equity contracts,
partially offset by a
decrease in interest rate contracts.
Financial assets at fair value through other
comprehensive income
increased $23 billion reflecting new investments
primarily in government securities,
partially offset by maturities and sales.
Debt securities at amortized cost, net
of allowance for credit losses
decreased $17 billion primarily reflecting
maturities and sales as a result of the U.S.
balance sheet restructuring activities, and
the impact of the foreign exchange translation,
partially offset by new investments.
Securities purchased under reverse repurchase
agreements
increased $8 billion
primarily
reflecting an increase in volume, partially offset
by the impact of
foreign exchange translation.
Loans, net of allowance for loan losses
decreased $13 billion primarily reflecting the
sale of U.S. residential mortgage loans (correspondent
lending loans) in
relation to the U.S. balance sheet restructuring
activities, and the impact of foreign exchange
translation.
Investment in Schwab
decreased by $9 billion,
which reflects the sale of the Bank’s entire remaining
equity investment in Schwab.
Other
assets increased $10 billion primarily reflecting
increase in amounts receivable from brokers,
dealers and clients due to higher volumes of
pending trades,
and accounts receivable and other.
Total liabilities
were $1,938 billion as at April 30, 2025,
a decrease of $8 billion from October
31, 2024. The impact of foreign exchange
translation from the
appreciation in the Canadian dollar decreased
total liabilities by $9 billion.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 28
The decrease in total liabilities reflects a decrease
in obligations related to securities sold under
repurchase agreements of $14 billion,
financial liabilities
designated at fair value through profit or loss
of $14 billion, trading deposits of $2 billion, deposits
of $1 billion, and subordinated notes
and debentures of
$1 billion. The decrease was partially offset by an increase
in derivative liabilities of $15 billion
and other liabilities of $9 billion.
Trading deposits
decreased $2 billion primarily reflecting
maturities.
Derivative
liabilities
increased $15 billion primarily reflecting
changes in mark-to-market values of foreign
exchange and equity contracts, partially
offset by a
decrease in interest rate contracts.
Financial liabilities designated at fair value
through profit or loss
decreased $14 billion reflecting maturities
and the impact of foreign exchange
translation,
partially offset by new issuances.
Deposits
decreased $1 billion primarily reflecting lower
volume in bank deposits and the impact of
foreign exchange translation, partially offset by
volume increase
in personal and business and government deposits.
Obligations related to securities sold
under repurchase agreements
decreased $14 billion primarily reflecting
a decrease in volume and the impact of
foreign
exchange translation.
Subordinated notes and debentures
decreased $1 billion primarily reflecting redemptions,
partially offset by new issuances.
Other
liabilities increased $9 billion primarily
reflecting volume increase in amounts payable
to brokers, dealers, and clients due to higher
volume of pending
trades, and obligations related to securities
sold short, partially offset by a decrease in provision
for investigations related to the Bank’s U.S. BSA/AML
program
due to payments.
Equity
was $126 billion as at April 30, 2025, and increase
of $11 billion from October 31, 2024. The increase primarily
reflects an increase in retained earnings
and gains in accumulated other comprehensive
income. The retained earnings increased
as a result of higher income generated
from the sale of investment in
Schwab. The increase in accumulated other
comprehensive income is primarily driven
by gains on cash flow hedges and the
Bank’s share of the other
comprehensive income from investment in Schwab.
CREDIT PORTFOLIO QUALITY
Quarterly comparison – Q2 2025 vs. Q2 2024
Gross impaired loans were $4,866 million
as at April 30, 2025, an increase of $971
million, or 25%, compared with the second
quarter last year. Canadian
Personal and Commercial Banking gross
impaired loans increased $135 million, or
8%, compared with the second quarter
last year, reflecting formations
outpacing resolutions in the consumer lending
portfolios. U.S. Retail gross impaired loans
increased $536 million, or 25%, compared
with the second quarter last
year, reflecting formations outpacing resolutions in the commercial
and consumer lending portfolios, and
the impact of foreign exchange. Wholesale gross
impaired loans increased $300 million, compared
with the second quarter last year, reflecting credit migration.
Net impaired loans were $3,238 million as
at
April 30, 2025, an increase of $494 million, or
18%, compared with the second quarter
last year.
The allowance for credit losses of $9,589
million as at April 30, 2025 was comprised
of Stage 3 allowance for impaired loans of
$1,632 million, Stage 2
allowance of $4,892 million and Stage 1 allowance
of $3,060 million, and the allowance for debt
securities of $5 million. The Stage 1 and 2 allowances
are for
performing loans and off-balance sheet instruments.
The Stage 3 allowance for loan losses increased
$470 million, or 40%, reflecting credit
migration in the business and government and
consumer lending
portfolios, and the impact of foreign exchange.
The Stage 1 and Stage 2 allowance for loan
losses increased $567 million, or 8%, reflecting
reserve build related to
elevated uncertainty associated with policy and
trade, credit migration, and the impact of foreign
exchange, partially offset by the prior quarter adoption
impact of a
model update in the U.S. Cards portfolios.
The allowance change included a decrease of
$2 million attributable to the retailer program
partners’ share of the U.S.
strategic cards portfolio.
Forward-looking information, including
macroeconomic variables deemed to be
predictive of expected credit losses (ECLs)
based on the Bank’s experience, is
used to determine ECL scenarios and associated
probability weights to determine the probability-weighted
ECLs. Each quarter, all base forecast macroeconomic
variables are refreshed, resulting in new upside
and downside macroeconomic scenarios.
The probability weightings assigned
to each ECL scenario are also
reviewed each quarter and updated as required,
as part of the Bank’s ECL governance process.
As a result of periodic reviews and quarterly updates,
the
allowance for credit losses may be revised
to reflect updates in loss estimates based on
the Bank’s recent loss experience and its forward-looking
views. The Bank
periodically reviews the methodology and
has performed certain additional quantitative
and qualitative portfolio and loan level
assessments of significant increase
in credit risk. Refer to Note 3 of the Bank’s second
quarter 2025 Interim Consolidated
Financial Statements for further details on
forward-looking information.
The probability-weighted allowance for
credit losses reflects the Bank’s forward-looking
views.
To
the extent that certain anticipated effects cannot
be fully
incorporated into quantitative models, management
continues to exercise expert credit judgment
in determining the amount of ECLs, including
for risks related to
elevated uncertainty associated with policy and
trade, and such adjustments will be updated
as appropriate in future quarters as additional
information becomes
available. Refer to Note 4 of the Bank’s second quarter
2025 Interim Consolidated Financial Statements
for additional details.
The Bank calculates allowances for ECLs
on debt securities measured at amortized
cost and fair value through other comprehensive
income (FVOCI). The Bank
has $367 billion in such debt securities,
all of which are performing (Stage 1 and
2) and none are impaired (Stage 3).
The allowance for credit losses was
$3 million for debt securities at amortized
cost (DSAC) and $2 million for debt securities
at FVOCI, for a total of $5 million, an increase
of $2 million, compared with
the second quarter last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Gross impaired loans decreased $587
million, or 11%, compared with the prior quarter, largely related to resolutions
outpacing new formations across the
business and government and consumer lending
portfolios, and the impact of foreign exchange.
Impaired loans net of allowance decreased
$397 million, or 11%,
compared with the prior quarter.
The allowance for credit losses of $9,589
million as at April 30, 2025 was comprised
of Stage 3 allowance for impaired loans of
$1,632 million, Stage 2
allowance of $4,892 million and Stage 1 allowance
of $3,060 million, and the allowance for debt
securities of $5 million. The Stage 1 and 2 allowances
are for
performing loans and off-balance sheet instruments.
The Stage 3 allowance for loan losses decreased
$192 million, or 11%, compared with the prior quarter,
reflecting a lower pace of impaired provisions
relative to resolutions in the business
and government lending portfolios, and
the impact of foreign exchange. The
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 29
Stage 1 and Stage 2 allowance for loan losses
increased $182 million, or 2%, compared
with the prior quarter, reflective of elevated uncertainty associated
with
policy and trade, partially offset by the impact of
foreign exchange.
The allowance for debt securities increased
by $1 million, compared to the prior quarter.
For further details on loans, impaired loans,
allowance for credit losses,
and on the Bank’s use of forward-looking information
and macroeconomic variables in
determining its allowance for credit losses,
refer to Note 6 of the Bank’s second quarter 2025
Interim Consolidated Financial Statements.
TABLE 18: CHANGES IN GROSS IMPAIRED LOANS AND ACCEPTANCES
1,2
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Personal, Business, and Government
Loans
Impaired loans as at beginning of period
$
5,453
$
4,949
$
3,709
$
4,949
$
3,299
Classified as impaired during the period
2,031
2,432
1,937
4,463
3,942
Transferred to performing during the period
(451)
(327)
(261)
(778)
(576)
Net repayments
(688)
(532)
(465)
(1,220)
(773)
Disposals of loans
–
(47)
–
(47)
(10)
Amounts written off
(1,315)
(1,144)
(1,080)
(2,459)
(1,997)
Exchange and other movements
(164)
122
55
(42)
10
Impaired loans as at end of period
$
4,866
$
5,453
$
3,895
$
4,866
$
3,895
1
Includes customers’ liability under acceptances.
2
Includes loans that are measured at FVOCI.
TABLE 19: ALLOWANCE FOR CREDIT LOSSES
(millions of Canadian dollars, except
as noted)
As at
April 30
January 31
April 30
2025
2025
2024
Allowance for loan losses for on-balance
sheet loans
Stage 1 allowance for loan losses
$
2,645
$
2,598
$
2,479
Stage 2 allowance for loan losses
4,340
4,239
3,915
Stage 3 allowance for loan losses
1,628
1,818
1,151
Total allowance for loan losses for on-balance sheet loans
1
8,613
8,655
7,545
Allowance for off-balance sheet instruments
Stage 1 allowance for loan losses
415
398
423
Stage 2 allowance for loan losses
552
535
568
Stage 3 allowance for loan losses
4
6
11
Total allowance for off-balance sheet instruments
971
939
1,002
Allowance for loan losses
9,584
9,594
8,547
Allowance for debt securities
5
4
3
Allowance for credit losses
$
9,589
$
9,598
$
8,550
Impaired loans, net of allowance
2
$
3,238
$
3,635
$
2,744
Net impaired loans as a percentage of net loans
2
0.35
%
0.38
%
0.29
%
Total allowance for credit losses as a percentage of gross loans and acceptances
1.01
0.99
0.91
Provision for (recovery of) credit losses
as a percentage of net average loans and acceptances
0.58
0.50
0.47
1
Includes allowance for loan losses related to loans that are measured at FVOCI of nil as at April 30, 2025
(January 31, 2025 – $1 million, April 30,
2024 – nil).
2
Credit cards are considered impaired when they are 90 days past due and written off at 180 days past
due.
Real Estate Secured Lending
Retail real estate secured lending includes
mortgages and lines of credit to North American
consumers to satisfy financing needs including
home purchases and
refinancing. While the Bank retains first lien
on the majority of properties held as security, there is a small
portion of loans with second liens, but
most of these are
behind a TD mortgage that is in first
position. In Canada, credit policies are designed
so that the combined exposure of all uninsured
facilities on one property does
not exceed 80% of the collateral value at origination.
Lending at a higher loan-to-value ratio
is permitted by legislation but requires
default insurance. This
insurance is contractual coverage for the life
of eligible facilities and protects the
Bank’s real estate secured lending portfolio against
potential losses caused by
borrowers’ default. The Bank may also purchase
default insurance on lower loan-to-value
ratio loans. The insurance is provided
by either government-backed
entities or approved private mortgage insurers.
In the U.S., for residential mortgage originations,
mortgage insurance is usually obtained from either
government-
backed entities or approved private mortgage
insurers when the loan-to-value exceeds
80% of the collateral value at origination.
The Bank regularly performs stress tests
on its real estate lending portfolio as part
of its overall stress testing program. This is
done with a view to determine the
extent to which the portfolio would be vulnerable
to a severe downturn in economic conditions.
The effect of severe changes in house prices,
interest rates, and
unemployment levels are among the factors
considered when assessing the impact
on credit losses and the Bank’s overall profitability. A variety of portfolio
segments, including dwelling type and geographical
regions, are examined during the exercise
to determine whether specific vulnerabilities exist.
TABLE 20: CANADIAN REAL ESTATE SECURED LENDING
1,2
(millions of Canadian dollars)
As at
Amortizing
Non-amortizing
Total
Residential
Home equity
Total amortizing real
Home equity
mortgages
lines of credit
estate secured lending
lines of credit
April 30, 2025
Total
$
270,041
$
93,279
$
363,320
$
35,272
$
398,592
October 31, 2024
Total
$
273,069
$
89,369
$
362,438
$
33,667
$
396,105
1
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at fair value through profit or loss (FVTPL)
for which no
allowance is recorded.
2
Amortizing includes loans where the fixed contractual payments are no longer sufficient to cover the interest
based on the rates in effect at April 30, 2025 and October 31, 2024.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 30
TABLE 21: REAL ESTATE
SECURED LENDING
1,2
(millions of Canadian dollars, except as noted)
As at
Residential mortgages
Home equity lines of credit
Total
Insured
3
Uninsured
Insured
3
Uninsured
Insured
3
Uninsured
April 30, 2025
Canada
Atlantic provinces
$
2,381
0.9
%
$
4,820
1.8
%
$
149
0.1
%
$
2,388
1.9
%
$
2,530
0.6
%
$
7,208
1.8
%
British Columbia
4
8,039
3.0
47,680
17.7
757
0.6
24,196
18.8
8,796
2.2
71,876
18.0
Ontario
4
21,526
8.0
125,697
46.4
2,556
2.0
70,701
54.9
24,082
6.1
196,398
49.3
Prairies
4
17,108
6.3
22,287
8.3
1,403
1.1
13,120
10.2
18,511
4.6
35,407
8.9
Québec
6,272
2.3
14,231
5.3
470
0.4
12,811
10.0
6,742
1.7
27,042
6.8
Total Canada
55,326
20.5
%
214,715
79.5
%
5,335
4.2
%
123,216
95.8
%
60,661
15.2
%
337,931
84.8
%
United States
1,507
44,750
–
11,808
1,507
56,558
Total
$
56,833
$
259,465
$
5,335
$
135,024
$
62,168
$
394,489
October 31, 2024
Canada
Atlantic provinces
$
2,445
0.9
%
$
4,753
1.7
%
$
158
0.1
%
$
2,207
1.8
%
$
2,603
0.7
%
$
6,960
1.8
%
British Columbia
4
8,311
3.0
48,362
17.7
804
0.7
22,840
18.6
9,115
2.3
71,202
18.0
Ontario
4
21,943
8.1
126,294
46.3
2,734
2.2
67,567
54.9
24,677
6.2
193,861
48.9
Prairies
4
17,685
6.5
22,120
8.1
1,499
1.2
12,459
10.1
19,184
4.8
34,579
8.7
Québec
6,616
2.4
14,540
5.3
509
0.4
12,259
10.0
7,125
1.8
26,799
6.8
Total Canada
57,000
20.9
%
216,069
79.1
%
5,704
4.6
%
117,332
95.4
%
62,704
15.8
%
333,401
84.2
%
United States
1,517
57,063
–
11,525
1,517
68,588
Total
$
58,517
$
273,132
$
5,704
$
128,857
$
64,221
$
401,989
1
Geographic location is based on the address of the property mortgaged.
2
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at FVTPL for which no allowance is recorded.
3
Default insurance is contractual coverage for the life of eligible facilities whereby the Bank’s exposure
to real estate secured lending, all or in part, is protected against potential losses
caused by borrower default. It is provided by either government-backed entities or other approved private mortgage
insurers.
4
The territories are included as follows: Yukon is included in British Columbia; Nunavut
is included in Ontario; and the Northwest Territories
is included in the Prairies region.
The following table provides a summary
of the period over which the Bank’s residential
mortgages would be fully repaid based on
the amount of the most recent
payment received. All figures are calculated
based on current customer payment amounts,
including voluntary payments larger than
the original contractual
amounts and/or other voluntary prepayments.
The most recent customer payment amount
may exceed the original contractual amount
due.
Balances with a remaining amortization longer
than 30 years primarily reflect Canadian
variable rate mortgages where prior interest
rate increases relative to
current customer payment levels have resulted
in a longer current amortization period.
At renewal, the amortization period for
Canadian mortgages reverts to the
remaining contractual amortization, which
may require increased payments.
TABLE 22: RESIDENTIAL MORTGAGES BY REMAINING
AMORTIZATION
1,2,3
As at
<=5
>5 – 10
>10 – 15
>15 – 20
>20 – 25
>25 – 30
>30 – 35
>35
years
years
years
years
years
years
years
years
Total
April 30, 2025
Canada
0.8
%
2.9
%
7.5
%
19.3
%
32.6
%
29.3
%
1.3
%
6.3
%
100.0
%
United States
2.6
1.5
3.5
8.8
18.9
63.4
0.7
0.6
100.0
Total
1.1
%
2.7
%
6.9
%
17.7
%
30.6
%
34.4
%
1.2
%
5.4
%
100.0
%
October 31, 2024
Canada
0.8
%
2.7
%
6.4
%
16.8
%
33.3
%
28.9
%
2.4
%
8.7
%
100.0
%
United States
2.3
1.3
3.4
7.6
14.2
70.2
0.5
0.5
100.0
Total
1.0
%
2.5
%
5.9
%
15.1
%
29.9
%
36.2
%
2.1
%
7.3
%
100.0
%
1
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at FVTPL for which no allowance is recorded.
2
Percentage based on outstanding balance.
3
$1.9 billion or 1% of the mortgage portfolio in Canada (October 31, 2024: $15.6 billion or 6%) relates to mortgages
in which the fixed contractual payments are no longer sufficient to
cover the interest based on the rates in effect at April 30, 2025
and October 31, 2024, respectively.
TABLE 23: UNINSURED AVERAGE LOAN-TO-VALUE – Newly Originated and Newly Acquired
1,2,3
For the three months ended
Residential
Home equity
Residential
Home equity
mortgages
lines of credit
4,5
Total
mortgages
lines of credit
4,5
Total
April 30, 2025
October 31, 2024
Canada
Atlantic provinces
69
%
69
%
69
%
69
%
67
%
68
%
British Columbia
6
67
65
66
66
62
65
Ontario
6
68
65
66
67
63
65
Prairies
6
73
71
72
73
69
71
Québec
69
70
70
69
69
69
Total Canada
68
67
67
68
64
66
United States
71
59
65
73
61
68
Total
69
%
66
%
67
%
69
%
64
%
66
%
1
Geographic location is based on the address of the property mortgaged.
2
Excludes loans classified as trading as the Bank intends to sell the loans immediately or in the near term, and loans
designated at FVTPL for which no allowance is recorded.
3
Based on house price at origination.
4
Home equity lines of credit (HELOCs) loan-to-value includes first position collateral mortgage if applicable.
5
HELOC fixed rate advantage option is included in loan-to-value calculation.
6
The territories are included as follows: Yukon is included in British Columbia; Nunavut
is included in Ontario; and the Northwest Territories
is included in the Prairies region.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 31
Sovereign Risk
The table below provides a summary of
the Bank’s direct credit exposures
outside of Canada and the U.S. (Europe excludes
United Kingdom).
TABLE 24: Total Net Exposure by Region and Counterparty
(millions of Canadian dollars)
As at
Loans and commitments
1
Derivatives, repos, and securities lending
2
Trading and investment portfolio
3
Total
Corporate
Sovereign
Financial
Total
Corporate
Sovereign
Financial
Total
Corporate
Sovereign
Financial
Total
Exposure
4
April 30, 2025
Region
Europe
$
8,449
$
8
$
4,985
$
13,442
$
4,564
$
1,983
$
9,864
$
16,411
$
874
$
25,582
$
2,025
$
28,481
$
58,334
United Kingdom
7,584
3,857
2,662
14,103
3,265
1,399
12,988
17,652
549
869
546
1,964
33,719
Asia
195
20
2,342
2,557
393
992
3,558
4,943
305
8,764
1,549
10,618
18,118
Other
5
223
–
679
902
448
540
2,010
2,998
211
1,169
2,288
3,668
7,568
Total
$
16,451
$
3,885
$
10,668
$
31,004
$
8,670
$
4,914
$
28,420
$
42,004
$
1,939
$
36,384
$
6,408
$
44,731
$
117,739
October 31, 2024
Region
Europe
$
8,490
$
8
$
5,050
$
13,548
$
4,847
$
2,117
$
8,145
$
15,109
$
1,157
$
24,124
$
2,660
$
27,941
$
56,598
United Kingdom
8,462
3,124
2,661
14,247
3,490
1,172
13,536
18,198
866
1,691
1,104
3,661
36,106
Asia
241
30
2,412
2,683
519
533
2,739
3,791
290
10,486
893
11,669
18,143
Other
5
209
–
598
807
370
416
2,481
3,267
218
1,012
3,187
4,417
8,491
Total
$
17,402
$
3,162
$
10,721
$
31,285
$
9,226
$
4,238
$
26,901
$
40,365
$
2,531
$
37,313
$
7,844
$
47,688
$
119,338
1
Exposures, including interest-bearing deposits with banks, are presented net of impairment charges where applicable.
2
Exposures are calculated on a fair value basis and presented net of collateral. Derivatives are presented as net
exposures where there is an International Swaps and Derivatives
Association master netting agreement.
3
Trading exposures are net of eligible short positions.
4
In addition to the exposures identified above, the Bank also has $33.6 billion (October 31, 2024 – $35.5 billion)
of exposure to supranational entities.
5
Other regional exposure largely attributable to Australia.
CAPITAL POSITION
REGULATORY CAPITAL
Capital requirements established by the Basel
Committee on Banking Supervision (BCBS)
are commonly referred to as Basel
III. Under Basel III,
Total Capital consists of three components, namely CET1, Additional Tier 1, and Tier 2 Capital.
Risk sensitive regulatory capital ratios are
calculated by dividing
CET1, Tier 1, and Total Capital by risk-weighted assets (RWA), inclusive of any minimum requirements
outlined under the regulatory floor. Basel III also
introduced a non-risk sensitive leverage
ratio to act as a supplementary measure
to the risk-sensitive capital requirements.
The leverage ratio is calculated by
dividing Tier 1 Capital by leverage exposure which is
primarily comprised of on-balance sheet
assets with adjustments made to derivative
and securities financing
transaction exposures, and credit equivalent amounts
of off-balance sheet exposures. TD manages its
regulatory capital in accordance with
OSFI’s
implementation of the Basel III Capital
Framework.
OSFI’s Capital Requirements under Basel III
OSFI’s CAR and LR guidelines detail how
the Basel III capital rules apply to Canadian
banks.
The Domestic Stability Buffer (DSB) level increased
from 3% to 3.5% as of November 1,
2023, and has remained stable since. Currently, the DSB can range
from
0 to 4%, with the effective level adjusted by OSFI
in response to developments in Canada’s
financial system and the broader economy.
OSFI has implemented the Basel III reforms
with adjustments to make them suitable
for domestic implementation. The Basel III reforms
impact the calculation of
credit risk, market risk and operational risk
for Canadian banks, as well as amend
the LR Guideline to include a requirement for
domestic systemically important
banks (D-SIBs) to hold a leverage ratio
buffer of 0.50% in addition to the regulatory minimum
requirement of 3.0%. The LR buffer requirement
also applies to the
TLAC leverage ratio.
On November 1, 2023, the standardized
capital floor transitioned to 67.5% of RWA from the previous 65%
of RWA. OSFI has stated that the floor will remain at
67.5% until further notice.
The Bank has implemented OSFI’s Parental Stand-Alone
(Solo) Total Loss Absorbing Capacity (TLAC) Framework for D-SIBs, which
establishes a risk-based
measure intended to ensure that a non-viable
D-SIB has sufficient loss absorbing capacity on a
stand-alone, legal entity basis to support its
resolution. The Bank is
compliant with the requirements set out in this
framework.
The table below summarizes OSFI’s published regulatory
minimum capital targets as at April 30, 2025.
REGULATORY
CAPITAL AND TLAC
TARGET RATIOS
Capital
Pillar 1
Pillar 1 & 2
Conservation
D-SIB / G-SIB
Regulatory
Regulatory
Minimum
Buffer
Surcharge
1
Target
2
DSB
Target
CET1
4.5
%
2.5
%
1.0
%
8.0
%
3.5
%
11.5
%
Tier 1
6.0
2.5
1.0
9.5
3.5
13.0
Total Capital
8.0
2.5
1.0
11.5
3.5
15.0
Leverage
3.0
n/a
3
0.5
3.5
n/a
3.5
TLAC
18.0
2.5
1.0
21.5
3.5
25.0
TLAC Leverage
6.75
n/a
0.50
7.25
n/a
7.25
1
The higher of the D-SIB and Global Systemically Important Bank (G-SIB) surcharge applies to risk weighted
capital. The D-SIB surcharge is currently equivalent to the Bank’s 1% G-SIB
additional common equity requirement for risk weighted capital. The G-SIB surcharge may increase above
1% if the Bank’s G-SIB score increases above certain thresholds to a maximum
of 4.5%. OSFI’s Leverage Requirements Guideline includes a requirement for D-SIBs to hold a leverage
ratio buffer set at 50% of a D-SIB’s higher loss absorbency risk
-weighted
requirements, effectively 0.50%. This buffer also applies to the TLAC Leverage ratio.
2
The Bank’s countercyclical buffer requirement is 0% as of April 30, 2025.
3
Not applicable.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 32
The following table provides details of the
Bank’s regulatory capital position.
TABLE 25: CAPITAL STRUCTURE AND RATIOS – Basel III
(millions of Canadian dollars, except
as noted)
As at
April 30
October 31
April 30
2025
2024
2024
Common Equity Tier 1 Capital
Common shares plus related contributed
surplus
$
25,308
$
25,543
$
25,410
Retained earnings
78,640
70,826
71,904
Accumulated other comprehensive income
11,032
7,904
4,166
Common Equity Tier 1 Capital before regulatory
adjustments
114,980
104,273
101,480
Common Equity Tier 1 Capital regulatory adjustments
Prudential valuation adjustments
(164)
–
–
Goodwill (net of related tax liability)
(18,491)
(18,645)
(18,470)
Intangibles (net of related tax liability)
(3,058)
(2,921)
(2,759)
Deferred tax assets excluding those arising
from temporary differences
(327)
(212)
(180)
Cash flow hedge reserve
1,174
3,015
4,878
Shortfall of provisions to expected losses
–
–
–
Gains and losses due to changes in own
credit risk on fair valued liabilities
(317)
(193)
(181)
Defined benefit pension fund net assets (net
of related tax liability)
(736)
(731)
(676)
Investment in own shares
(5)
(21)
(8)
Non-significant investments in the capital of
banking, financial, and insurance entities,
net of eligible
short positions (amount above 10% threshold)
–
(1,835)
(3,202)
Significant investments in the common
stock of banking, financial, and insurance
entities
that are outside the scope of regulatory
consolidation, net of eligible short positions
(amount above 10% threshold)
–
–
–
Equity investments in funds subject to
the fall-back approach
(28)
(32)
(51)
Other deductions or regulatory adjustments
to CET1 as determined by OSFI
20
16
10
Total regulatory adjustments to Common Equity Tier 1 Capital
(21,932)
(21,559)
(20,639)
Common Equity Tier 1 Capital
93,048
82,714
80,841
Additional Tier 1 Capital instruments
Directly issued qualifying Additional Tier 1 instruments
plus stock surplus
11,111
10,887
10,502
Additional Tier 1 Capital instruments before
regulatory adjustments
11,111
10,887
10,502
Additional Tier 1 Capital instruments regulatory
adjustments
Non-significant investments in the capital of
banking, financial, and insurance entities,
net of eligible
short positions (amount above 10% threshold)
–
(3)
(5)
Significant investments in the capital of banking,
financial, and insurance entities that are
outside
the scope of regulatory consolidation, net of
eligible short positions
(700)
(350)
(350)
Total regulatory adjustments to Additional Tier 1 Capital
(700)
(353)
(355)
Additional Tier 1 Capital
10,411
10,534
10,147
Tier 1 Capital
103,459
93,248
90,988
Tier 2 Capital instruments and provisions
Directly issued qualifying Tier 2 instruments plus related
stock surplus
10,514
11,273
11,120
Collective allowances
1,553
1,512
1,485
Tier 2 Capital before regulatory adjustments
12,067
12,785
12,605
Tier 2 regulatory adjustments
Investments in own Tier 2 instruments
–
–
–
Non-significant investments in the capital of
banking, financial, and insurance entities,
net of eligible
short positions (amount above 10% threshold)
1
–
(224)
(316)
Non-significant investments in the other
TLAC-eligible instruments issued by
G-SIBs and Canadian
D-SIBs, where the institution does not own
more than 10% of the issued common
share capital
of the entity: amount previously designated
for the 5% threshold but that no longer
meets the
conditions
–
(64)
(144)
Significant investments in the capital of banking,
financial, and insurance entities that are
outside
the scope of regulatory consolidation, net of
eligible short positions
–
–
(160)
Total regulatory adjustments to Tier 2 Capital
–
(288)
(620)
Tier 2 Capital
12,067
12,497
11,985
Total Capital
$
115,526
$
105,745
$
102,973
Risk-weighted assets
$
624,636
$
630,900
$
602,825
Capital Ratios and Multiples
Common Equity Tier 1 Capital (as percentage of risk-weighted
assets)
14.9
%
13.1
%
13.4
%
Tier 1 Capital (as percentage of risk-weighted assets)
16.6
14.8
15.1
Total Capital (as percentage of risk-weighted assets)
18.5
16.8
17.1
Leverage ratio
2
4.7
4.2
4.3
1
Includes other TLAC-eligible instruments issued by G-SIBs and Canadian D-SIBs that are outside the scope of
regulatory consolidation, where the institution does not own more than
10% of the issued common share capital of the entity.
2
The Leverage ratio is calculated as Tier 1 Capital divided by leverage exposure,
as defined in the “Regulatory Capital” section of this document.
As at April 30, 2025, the Bank’s CET1, Tier 1, and Total Capital ratios were 14.9%, 16.6%,
and 18.5%, respectively. The Bank’s CET1 Capital ratio increased
from
13.1% as at October 31, 2024, primarily attributable
to the sale of Schwab shares, and internal
capital generation, offset by common shares repurchased
for
cancellation, RWA growth across various segments and
the impact of U.S. balance sheet restructuring.
As at April 30, 2025, the Bank’s leverage ratio
was 4.7%. The Bank’s leverage ratio increased
from 4.2% as at October 31, 2024, primarily
attributable to the sale
of Schwab shares, and internal capital generation,
offset by common shares repurchased for cancellation,
exposure increases across various
segments and the
impact of U.S. balance sheet restructuring.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 33
Future Regulatory Capital Developments
Future regulatory capital developments, in
addition to those described in the “Future
Regulatory Capital Developments” section
of the Bank’s 2024
MD&A, are
noted below.
On February 12, 2025, OSFI deferred increases
to the Basel III standardized capital floor level
until further notice. The capital floor subjects
banks using internal
model-based approaches to a floor, where the floor is calculated
as a percentage of RWA under the standardized approach.
OSFI will notify the Bank at least two
years prior to resuming an increase in
the capital floor level.
TABLE 26: EQUITY AND OTHER SECURITIES
1
(thousands of shares/units and millions of
Canadian dollars, except as noted)
As at
April 30, 2025
October 31, 2024
Number of
Number of
shares/units
Amount
shares/units
Amount
Common shares
Common shares outstanding
1,722,791
$
25,136
1,750,272
$
25,373
Treasury – common shares
(313)
(26)
(213)
(17)
Total common shares
1,722,478
$
25,110
1,750,059
$
25,356
Stock options
Vested
6,474
5,400
Non-vested
9,120
9,312
Preferred shares – Class A
Series 1
20,000
$
500
20,000
$
500
Series 5
2
–
–
20,000
500
Series 7
14,000
350
14,000
350
Series 9
8,000
200
8,000
200
Series 16
14,000
350
14,000
350
Series 18
14,000
350
14,000
350
Series 27
850
850
850
850
Series 28
800
800
800
800
71,650
$
3,400
91,650
$
3,900
Other equity instruments
3,4
Limited Recourse Capital Notes – Series 1
1,750
$
1,750
1,750
$
1,750
Limited Recourse Capital Notes – Series 2
1,500
1,500
1,500
1,500
Limited Recourse Capital Notes – Series 3
5
1,750
2,403
1,750
2,403
Limited Recourse Capital Notes – Series 4
5
750
1,023
750
1,023
Limited Recourse Capital Notes – Series 5
6
750
750
–
–
Perpetual Subordinated Capital Notes –
Series 2023-9
7
1
312
1
312
78,151
$
11,138
97,401
$
10,888
Treasury – preferred shares and other equity instruments
(141)
(28)
(162)
(18)
Total preferred shares and other equity instruments
78,010
$
11,110
97,239
$
10,870
1
For further details, including the conversion and exchange features, and distributions, refer to Note 20 of the Bank’s
2024 Consolidated Financial Statements.
2
On January 31, 2025, the Bank redeemed all of its 20 million outstanding Non-Cumulative 5-Year
Rate Reset Class A First Preferred Shares Non-Viability Contingent Capital
(NVCC),
Series 5 (“Series 5 Preferred Shares”), at a redemption price of $25.00 per Series 5 Preferred Share, for a total redemption
cost of approximately $500 million.
3
For other equity instruments, the number of shares/units represents the number of notes issued.
4
Refer to the “Preferred Shares and Other Equity Instruments – Significant Terms
and Conditions” table in Note 20 of the Bank’s 2024 Consolidated Financial Statements
for further
details.
5
For LRCNs – Series 3 and Series 4, the amount represents the Canadian dollar equivalent of the U.S. dollar notional
amount.
6
On December 18, 2024, the Bank issued $750 million 5.909% Fixed Rate Reset Limited Recourse Capital Notes,
Series 5 NVCC (the “LRCNs”). The LRCNs will bear interest at a rate of
5.909 per cent annually, payable quarterly,
for the initial period ending on, but excluding, January 1, 2030. Thereafter, the interest
rate on the LRCNs will reset every five years at a rate
equal to the prevailing Government of Canada Yield plus 3.10 per cent. The LRCNs
will mature on January 1, 2085. Concurrently with the issuance of the LRCNs, the Bank issued
750,000 Non-Cumulative 5.909% Fixed Rate Reset Preferred Shares, Series 32 NVCC (“Preferred Shares Series
32”). The Preferred Shares Series 32 are eliminated on the Bank’s
Consolidated Financial Statements.
7
For Perpetual Subordinated Capital Notes (AT1), the amount
represents the Canadian dollar equivalent of the Singapore dollar notional amount.
DIVIDENDS
On May 21, 2025, the Board approved a dividend
in an amount of one dollar and five cents
($1.05) per fully paid common share in the
capital stock of the Bank for
the quarter ending July 31, 2025, payable on
and after July 31, 2025, to shareholders
of record at the close of business on July 10,
2025.
DIVIDEND REINVESTMENT PLAN
The Bank offers a Dividend Reinvestment Plan
(DRIP) 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 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
purchased from the open market at market
prices.
During the three months ended April 30, 2025,
the Bank satisfied the DRIP requirements through
open market common share purchases.
During the six months
ended April 30, 2025, the Bank satisfied the
DRIP requirements through common shares
issued from treasury with no discount
for the first three months and open
market common share purchases in the last
three months. During the three and six
months ended April 30, 2024, the Bank
satisfied the DRIP requirements
through common shares issued from treasury
with no discount.
NORMAL COURSE ISSUER BID
On August 28, 2023,
the Bank announced that the Toronto Stock Exchange and OSFI approved
a normal course issuer bid (2023 NCIB) to
repurchase for
cancellation up to 90 million of its common
shares. The 2023 NCIB commenced on August
31, 2023 and continued until August 31, 2024.
From the
commencement of the 2023 NCIB to August
31, 2024, the Bank repurchased 71.4
million shares under the program. The 2023 NCIB
terminated on August 31,
2024 and therefore, there was no repurchase
of common shares by the Bank under the 2023
NCIB during the six months ended April 30,
- During the six
months ended April 30, 2024,
the Bank repurchased 36.1 million common
shares, at an average price of $81.43 per
share for a total amount of $2.9 billion.
On February 24, 2025, the Bank announced
that the Toronto Stock Exchange and OSFI had approved the Bank’s previously
announced
normal course issuer bid
(2025 NCIB) to purchase for cancellation up
to 100 million of its common shares.
The 2025 NCIB commenced on March 3, 2025
and will end on February 28,
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 34
2026, or such earlier date as the Bank
may determine. From the commencement of
the 2025 NCIB to April 30, 2025, the Bank repurchased
30.0 million shares
under the program, at an average price of $84.18
per share for a total amount of $2.5 billion.
NON-VIABILITY CONTINGENT CAPITAL PROVISION
If an NVCC trigger event were to occur, for all series of Class
A First Preferred Shares excluding the preferred
shares issued with respect to LRCNs,
the maximum
number of common shares that could be issued,
assuming there are no declared and unpaid
dividends on the respective series of preferred
shares at the time of
conversion, would be 0.7 billion in aggregate.
The LRCNs, by virtue of the recourse to the
preferred shares held in the Limited Recourse
Trust, include NVCC provisions. For LRCNs, if an NVCC
trigger were
to occur, the maximum number of common shares that could
be issued, assuming there are no declared
and unpaid dividends on the preferred
shares series
issued in connection with such LRCNs,
would be 1.5 billion in aggregate.
For all other NVCC subordinated notes and
debentures including Additional Tier 1 Perpetual
Notes, if an NVCC trigger event were to occur, the maximum
number of common shares that could be issued,
assuming there is no accrued and unpaid
interest on the respective subordinated notes
and debentures, would be
3.2 billion in aggregate.
RISK FACTORS AND
MANAGEMENT
Risk Factors That May Affect Future Results
In addition to the risks described in the “Managing
Risk” section of the Bank’s 2024 MD&A
and this Report, there are numerous other
risk factors, many of which
are beyond the Bank’s control and the effects of
which can be difficult to predict, that could
cause the Bank’s results to differ significantly from the
Bank’s plans,
objectives, and estimates or could impact
the Bank’s reputation or the sustainability of its
business model. All forward-looking statements,
including those in this
MD&A, are, by their very nature, subject
to inherent risks and uncertainties, general
and specific, which may cause the Bank’s actual
results to differ materially
from the plan, objectives, estimates or expectations
expressed in the forward-looking statements.
Some of these factors are discussed
in the “Risk Factors and
Management” section of the 2024 MD&A and
in the “Managing Risk” section of this
document, and others are noted in the “Caution
Regarding Forward-Looking
Statements” section of this document.
The Bank has supplemented the following Risk
Factors
to reflect developments in the external environment.
Geopolitical Risk
Further to the geopolitical risks outlined in
the Bank’s 2024 MD&A, the evolution of geopolitical,
policy,
trade and tax-related risks, including the application
or
threat of any new or elevated tariffs to goods imported
into the U.S. and any retaliatory tariffs as well as
the enactment of recently proposed tax
legislation in the
U.S., have the potential to increase economic
uncertainty,
market volatility, disrupt global supply chains and trade flows, deteriorate
business confidence and other
adverse impacts. For example, tariffs can threaten
to raise prices and reduce demand for
imported goods weighing on activity in both
importing and exporting
countries;
if set at very high rates, tariffs may halt the
flow of trade altogether and lead to shortages
throughout the supply chain. While the nature
and extent of the
risks may vary, they have the potential to disrupt economic growth,
create volatility in financial markets that
may affect the Bank’s financial condition, trading and
non-trading activities, impact market liquidity
and funding costs, put pressure on credit
performance, and directly and indirectly
influence general business and
economic conditions, and certain industries
in ways that may have an adverse impact
on the Bank and its customers. For more information
on the economic
outlook refer to the “Economic Summary and
Outlook”
section of this document.
Regulatory Oversight and Compliance
Risk
Further to the Regulatory Oversight and
Compliance risk outlined in the Bank’s 2024
MD&A, regulators have indicated the potential
for escalating consequences
for banks that do not timely resolve open issues
or have repeat issues. Furthermore,
delays in satisfying one regulatory requirement
could affect the Bank’s
progress on others. Failure to satisfy regulatory
requirements, including requirements for
maintaining and executing a compliance
management program in
alignment with regulatory standards,
on a timely basis could result in additional
fines, penalties, business restrictions, limitations
on subsidiary capital distributions,
increased capital or liquidity requirements, enforcement
actions, increased regulatory oversight,
and other adverse consequences, which
could be significant.
The current U.S. regulatory environment
is evolving. Changes in the U.S. executive
administration including executive orders
and changes to mandates,
leadership and priorities of supervisory agencies,
are leading to uncertainty,
which could have varying effects on the Bank and its
subsidiaries and businesses.
Various supervisory agencies are shifting their supervisory and enforcement
priorities. These priorities include reducing
the size of government and reassessing
prior rules and guidance.
This may result in adverse effects which could
include incurring additional costs and
devoting additional resources to address
initial and
ongoing compliance, and increasing risks associated
with potential non-compliance. This could also
have an adverse impact on the Bank’s financial
condition,
results of operations and reputation.
MANAGING RISK
EXECUTIVE SUMMARY
Growing profitability in financial results based
on balanced revenue, expense and capital
growth services involves selectively
taking and managing risks within the
Bank’s risk appetite. The Bank’s goal is to earn
a stable and sustainable rate of return for
every dollar of risk it takes, while putting
significant emphasis on
investing in its businesses to meet its future
strategic objectives.
The Bank’s businesses and operations are exposed
to a broad number of risks that have been
identified and defined in the Enterprise
Risk Framework. The
Bank’s tolerance to those risks is defined
in the Enterprise Risk Appetite which has
been developed within a comprehensive
framework that takes into
consideration current conditions in which
the Bank operates and the impact that emerging
risks will have on TD’s strategy and risk profile. The
Bank’s risk appetite
states that it takes risks required to build its
business, but only if those risks: (1)
fit the business strategy and can be understood
and managed; (2) do not expose
the enterprise to any significant single loss
events; TD does not ‘bet the bank’
on any single acquisition, business, product
or decision; and (3) do not risk harming
the TD brand. Each business is responsible
for setting and aligning its individual risk
appetites with that of the enterprise
based on a thorough examination of
the
specific risks to which it is exposed.
The Bank considers it critical to regularly
assess its operating environment
and highlight top and emerging risks. These
are risks with a potential to have a
material effect on the Bank and where the attention
of senior leaders is focused due to the potential
magnitude or immediacy of their impact.
Risks are identified, discussed, and actioned
by senior leaders and reported quarterly to the
Risk Committee. Specific plans to mitigate
top and emerging risks
are prepared, monitored, and adjusted as required.
The Bank’s risk governance structure and risk
management approach have not substantially
changed from that described in the Bank’s 2024
MD&A.
In the
second quarter of 2025, the Bank updated its
Enterprise Risk Framework and made
the following changes to better reflect the Bank’s
priorities and structure:
●
Financial Crime Risk
was elevated to a stand-alone Major
Risk Category (previously part of Legal and
Regulatory Compliance Risk)
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 35
●
Operational Risk
was divided into two Major Risk Categories, 1)
Operational Risk – Data, Technology and Cybersecurity
and 2)
Operational
Risk excluding Data, Technology and Cybersecurity
●
The Bank also convened a new Executive
Committee, the Remediation Subcommittee
of the Enterprise Risk Management
Committee,
dedicated to
overseeing the Bank’s enforcement commitments
and progress on required remediations.
These changes resulted in two new Major
Risk Categories and updates to the definitions
as noted below:
Financial Crime Risk:
The risk associated with the Bank failing to
sufficiently identify and manage risks
associated with money laundering, terrorist
financing,
bribery/corruption activities and economic
sanctions, or otherwise comply with
associated legal and regulatory requirements
for financial crime.
Operational Risk excluding Data, Technology and Cybersecurity
:
The risk of loss resulting from inadequate
or failed internal processes, people or external
events and also includes losses related
to legal risk events and regulatory fines.
Operational Risk – Data, Technology and Cybersecurity
:
The potential for loss resulting from inadequate
or ineffectual data, technology or cybersecurity
controls originating from internal or external
events.
Compliance and Legal Risk
:
The risk associated with the Bank’s failure
to comply (with letter or intent) with key
federal and provincial/state banking,
securities, trust and insurance laws,
regulations, regulatory guidelines, voluntary
codes and public commitments (regulatory
requirements), legal obligations,
the
TD Code of Conduct and Ethics, and other
TD policies related to TD’s activities and practices
with respect to business conduct and market
conduct as well as
regulatory requirements applicable across
the Bank, which can lead to fines, sanctions,
liabilities, or reputational harm that could
be material to the Bank.
Additional information on risk factors can
be found in this document and the 2024
MD&A under the heading “Risk Factors and
Management”. For a complete
discussion of the risk governance structure
and the risk management approach, refer
to the “Managing Risk” section in the Bank’s 2024
MD&A.
The shaded sections of this MD&A represent
a discussion relating to market and liquidity
risks and form an integral part of the Interim
Consolidated Financial
Statements for the period ended April 30, 2025.
CREDIT RISK
Gross credit risk exposure, also referred
to as exposure at default (EAD), is the
total amount the Bank is exposed to at the time
of default of a loan and is
measured before counterparty-specific
provisions or write-offs. Gross credit risk exposure
does not reflect the effects of credit risk
mitigation (CRM) and includes
both on-balance sheet and off-balance sheet exposures.
On-balance sheet exposures consist primarily
of outstanding loans, non-trading securities,
derivatives,
and certain other repo-style transactions.
Off-balance sheet exposures consist primarily
of undrawn commitments, guarantees,
and certain other repo-style
transactions.
Gross credit risk exposures for the two approaches
the Bank uses to measure credit risk
are included in the following table.
TABLE 27: GROSS CREDIT RISK EXPOSURE – Standardized
and Internal Ratings-Based (IRB) Approaches
1
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Standardized
IRB
Total
Standardized
IRB
Total
Retail
Residential secured
$
4,619
$
530,259
$
534,878
$
4,163
$
537,075
$
541,238
Qualifying revolving retail
880
174,400
175,280
866
172,203
173,069
Other retail
3,348
104,382
107,730
3,391
104,253
107,644
Total retail
8,847
809,041
817,888
8,420
813,531
821,951
Non-retail
Corporate
2,537
725,852
728,389
2,346
721,156
723,502
Sovereign
126
563,925
564,051
205
588,498
588,703
Bank
3,898
167,726
171,624
4,541
171,250
175,791
Total non-retail
6,561
1,457,503
1,464,064
7,092
1,480,904
1,487,996
Gross credit risk exposures
$
15,408
$
2,266,544
$
2,281,952
$
15,512
$
2,294,435
$
2,309,947
1
Gross credit risk exposures represent EAD and are before the effects of CRM. This table excludes securitization,
equity, and certain other credit RWA.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 36
MARKET RISK
Market risk capital is calculated using the Standardized
Approach under Basel III. The Bank
continues to use Value-at-Risk (VaR) as an internal management
metric to monitor and control market risk.
Market Risk Linkage to the Balance Sheet
The following table provides a breakdown of
the Bank’s balance sheet assets and liabilities
exposed to trading and non-trading market
risks. Market risk of assets
and liabilities included in the calculation of VaR and metrics used
for regulatory market risk capital purposes
is classified as trading market risk.
TABLE 28: MARKET RISK LINKAGE TO THE BALANCE SHEET
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Non-trading market
Balance
Trading
Non-trading
Balance
Trading
Non-trading
risk – primary risk
sheet
market risk
market risk
Other
sheet
market risk
market risk
Other
sensitivity
Assets subject to market risk
Interest-bearing deposits with banks
$
139,744
$
688
$
139,056
$
–
$
169,930
$
1,601
$
168,329
$
–
Interest rate
Trading loans, securities, and other
195,002
192,751
2,251
–
175,770
174,232
1,538
–
Interest rate
Non-trading financial assets at
fair value through profit or loss
7,528
–
7,528
–
5,869
–
5,869
–
Equity,
foreign exchange,
interest rate
Derivatives
89,210
82,895
6,315
–
78,061
70,636
7,425
–
Equity,
foreign exchange,
interest rate
Financial assets designated at
fair value through profit or loss
6,508
–
6,508
–
6,417
–
6,417
–
Interest rate
Financial assets at fair value through
other comprehensive income
116,902
–
116,902
–
93,897
–
93,897
–
Equity,
foreign exchange,
interest rate
Debt securities at amortized cost,
net of allowance for credit losses
254,417
–
254,417
–
271,615
–
271,615
–
Foreign exchange,
interest rate
Securities purchased under
reverse repurchase agreements
216,476
6,950
209,526
–
208,217
10,488
197,729
–
Interest rate
Loans, net of allowance for
loan losses
936,378
–
936,378
–
949,549
–
949,549
–
Interest rate
Investment in Schwab
–
–
–
–
9,024
–
9,024
–
Equity
Other assets
1
2,087
–
2,087
–
2,230
–
2,230
–
Interest rate
Assets not exposed to
market risk
100,022
–
–
100,022
91,172
–
–
91,172
Total Assets
$
2,064,274
$
283,284
$
1,680,968
$
100,022
$
2,061,751
$
256,957
$
1,713,622
$
91,172
Liabilities subject to market risk
Trading deposits
$
28,761
$
24,534
$
4,227
$
–
$
30,412
$
26,827
$
3,585
$
–
Equity, interest rate
Derivatives
83,485
80,479
3,006
–
68,368
66,976
1,392
–
Equity,
foreign exchange,
interest rate
Securitization liabilities at fair value
22,396
22,396
–
–
20,319
20,319
–
–
Interest rate
Financial liabilities designated at
fair value through profit or loss
193,925
5
193,920
–
207,914
2
207,912
–
Interest rate
Deposits
1,267,748
–
1,267,748
–
1,268,680
–
1,268,680
–
Interest rate,
foreign exchange
Obligations related to securities
sold short
43,553
42,433
1,120
–
39,515
37,812
1,703
–
Interest rate
Obligations related to securities sold
under repurchase agreements
187,402
10,346
177,056
–
201,900
13,540
188,360
–
Interest rate
Securitization liabilities at amortized
cost
13,158
–
13,158
–
12,365
–
12,365
–
Interest rate
Subordinated notes and debentures
10,714
–
10,714
–
11,473
–
11,473
–
Interest rate
Other liabilities
1
33,356
–
33,356
–
34,066
–
34,066
–
Equity, interest rate
Liabilities and Equity not
exposed to market risk
179,776
–
–
179,776
166,739
–
–
166,739
Total Liabilities and Equity
$
2,064,274
$
180,193
$
1,704,305
$
179,776
$
2,061,751
$
165,476
$
1,729,536
$
166,739
1
Relates to retirement benefits, insurance, and structured entity liabilities.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 37
-60
-50
-40
-30
-20
-10
0
10
20
30
40
50
60
70
2/3/2025
2/10/2025
2/17/2025
2/24/2025
3/3/2025
3/10/2025
3/17/2025
3/24/2025
3/31/2025
4/7/2025
4/14/2025
4/21/2025
4/28/2025
TOTAL VALUE-AT-RISK
AND TRADING NET REVENUE
(millions of Canadian dollars)
Trading net revenue
Value-at-Risk
Calculating VaR
The Bank computes total VaR on a daily basis by combining the General
Market Risk (GMR) and Idiosyncratic Debt
Specific Risk (IDSR) associated with the
Bank’s trading positions.
GMR is determined by creating a distribution
of potential changes in the market value of
the current portfolio using historical simulation.
The Bank values the
current portfolio using the market price and rate
changes of the most recent
259
trading days for equity, interest rate, foreign exchange, credit, and
commodity
products. GMR is computed as the threshold
level that portfolio losses are not expected
to exceed more than
one
out of every
100
trading days. A
one-day
holding
period is used for GMR calculation.
IDSR measures idiosyncratic (single-name) credit
spread risk for credit exposures in the trading
portfolio using Monte Carlo simulation.
The IDSR model is
based on the historical behaviour of five-year idiosyncratic
credit spreads. Similar to GMR, IDSR is
computed as the threshold level that portfolio
losses are not
expected to exceed more than
one
out of every
100
trading days. IDSR is measured for a
ten-day
holding period.
The following graph discloses daily one-day
VaR usage and trading net revenue, reported on a TEB,
within Wholesale Banking. Trading net revenue includes
trading income and net interest income related
to positions within the Bank’s market risk capital
trading books. For the second quarter ending
April 30, 2025,
there were
7 days
of trading losses and trading net revenue
was positive for
89
% of the trading days, reflecting normal
trading activity. Losses in the quarter did
not exceed VaR on any trading day.
VaR is a valuable risk measure but it should be used in the
context of its limitations, for example:
●
VaR uses historical data to estimate future events, which limits
its forecasting abilities;
●
it does not provide information on losses beyond
the selected confidence level; and
●
it assumes that all positions can be liquidated
during the holding period used for VaR calculation.
The Bank continuously improves its VaR methodologies and incorporates
new risk measures in line with market
conventions, industry best practices, and
regulatory requirements.
To mitigate some of the shortcomings of VaR, the Bank uses additional metrics designed for risk
management purposes.
This includes Stress Testing as well
as sensitivities to various market risk factors.
The following table presents the end of quarter, average, high,
and low usage of TD’s VaR metric.
TABLE 29: PORTFOLIO MARKET RISK MEASURES
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January
31
April 30
April 30
April 30
2025
2025
2024
2025
2024
As at
Average
High
Low
Average
Average
Average
Average
Interest rate risk
$
7.9
$
12.8
$
21.1
$
7.0
$
12.4
$
20.8
$
12.6
$
19.3
Credit spread risk
20.8
20.1
23.5
16.5
19.8
26.5
19.9
27.9
Equity risk
11.9
9.6
20.8
6.8
8.3
7.5
8.9
7.3
Foreign exchange risk
3.7
3.8
6.1
2.4
4.1
3.1
3.9
2.7
Commodity risk
24.3
23.1
28.6
16.8
6.0
3.9
14.5
3.8
Idiosyncratic debt specific risk
21.5
23.4
28.0
20.1
19.6
18.9
21.5
19.9
Diversification effect
1
(51.1)
(56.9)
n/m
2
n/m
(41.8)
(52.8)
(49.2)
(51.9)
Total Value-at-Risk (one-day)
39.0
35.9
43.5
28.5
28.4
27.9
32.1
29.0
1
The aggregate VaR is less than the sum of the VaR
of the different risk types due to risk offsets resulting from portfolio diversification.
2
Not meaningful. It is not meaningful to compute a diversification effect because the high and low may
occur on different days for different risk types.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 38
Average VaR increased compared to the prior quarter due to the market
volatility observed across a number of risk
factors, particularly credit spreads and
commodities.
Validation of VaR Model
The Bank uses a back-testing process
to compare actual profits and losses to VaR to review their consistency
with the statistical results of the VaR model.
Structural (Non-Trading) Interest Rate
Risk
The Bank’s
structural interest rate risk arises from traditional
personal and commercial banking activity
and is generally the result of mismatches between
the
maturities and repricing dates of the Bank’s assets
and liabilities. The measurement of interest
rate risk in the banking book does not
include exposures from TD’s
Wholesale Banking or Insurance businesses.
The primary measures for managing and
controlling this risk are Economic Value of Shareholders’
Equity (EVE) Sensitivity and Net Interest
Income Sensitivity
(NIIS).
The EVE Sensitivity measures the change in
the net present value of the Bank’s banking
book assets, liabilities, and certain off-balance
sheet items given a
specific interest rate shock. It reflects a measurement
of the potential present value impact on
shareholders’ equity without an assumed
term profile for the
management of the Bank’s own equity and excludes
product margins.
The NIIS measures the net interest income (NII)
change over a twelve-month horizon for
a specified change in interest rates for banking
book assets, liabilities,
and certain off-balance sheet items assuming a
constant balance sheet over the period.
The Bank’s Market Risk policy sets overall limits
on the structural interest rate risk measures.
These limits are periodically reviewed and
approved by the Risk
Committee. In addition to the Board policy limits,
book-level risk limits are set for the
Bank’s management of non-trading interest rate
risk by Risk Management.
Exposures against these limits are routinely
monitored and reported, and breaches of the
Board limits, if any, are escalated to both the ALCO and the Risk
Committee.
The following table shows the potential before-tax
impact of an immediate and sustained
100 bps increase or decrease in interest rates
on the EVE and NIIS
measures.
TABLE 30: STRUCTURAL INTEREST RATE SENSITIVITY MEASURES
(millions of Canadian dollars)
As at
April 30, 2025
January 31, 2025
April 30, 2024
EVE
NII
EVE
NII
EVE
NII
Sensitivity
Sensitivity
1
Sensitivity
Sensitivity
1
Sensitivity
Sensitivity
1
Canada
U.S.
Total
Canada
U.S.
Total
Total
Total
Total
Total
Before-tax impact of
100 bps increase in rates
$
(775)
$
(1,837)
$
(2,612)
$
133
$
546
$
679
$
(2,573)
$
597
$
(2,312)
$
875
100 bps decrease in rates
596
1,520
2,116
(182)
(587)
(769)
2,056
(789)
1,861
(1,053)
1
Represents the twelve-month NII exposure to an immediate and sustained shock in rates, and may include adjustments
for non-recurring items.
As at April 30, 2025, an immediate and sustained
100 bps increase in interest rates
would have had a negative impact to the Bank’s EVE
of $
2,612
million, an
increase of $
39
million from last quarter, and a positive impact to the Bank’s
NII of $
679
million, an increase of $
82
million from last quarter. An immediate and
sustained 100 bps decrease in interest rates
would have had a positive impact to the Bank’s EVE
of $
2,116
million, an increase of $
60
million from last quarter,
and a negative impact to the Bank’s NII of $
769
million, a decrease of $
20
million from last quarter. The quarter over quarter increase in EVE
sensitivity is
attributed to marginally higher fixed rate assets
held, while NII sensitivity was maintained
relatively unchanged during the quarter.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 39
Liquidity Risk
The risk of having insufficient cash or collateral
to meet financial obligations and an inability
to, in a timely manner, raise funding or monetize assets at
a non-
distressed price. Financial obligations can arise
from deposit withdrawals, debt maturities,
commitments to provide credit or liquidity
support or the need to pledge
additional collateral.
TD’S LIQUIDITY RISK APPETITE
The Bank follows a disciplined liquidity management
program that is subject to risk governance
and oversight, and designed to maintain
sufficient liquidity to permit
the Bank to operate through a significant
liquidity event without relying on extraordinary
central bank assistance. The Bank seeks
to maintain a stable and
diversified funding profile that emphasizes
funding assets and contingencies to the appropriate
term.
The Bank manages liquidity risk using a
combination of quantitative and qualitative
measures with the objective of ensuring it has
sufficient liquidity to satisfy its
operational needs and client commitments
in both normal and stress conditions. The
Bank maintains buffers over regulatory minimums
prescribed by OSFI’s
Liquidity Adequacy Requirements (LAR) Guideline.
The Bank targets a 90-day survival horizon
under a combined bank-specific and
market-wide stress scenario,
and minimum surpluses over prescribed regulatory
requirements. The Bank’s funding program emphasizes
maximizing deposits as a core source
of funding and
having ready access to wholesale funding
markets across diversified terms, funding types,
and currencies. This approach helps lower
exposure to a sudden
contraction of wholesale funding capacity and
minimizes structural liquidity gaps. The Bank
also maintains a Contingency Funding
Plan (CFP) to enhance
preparedness for addressing potential liquidity
stress events. The Bank’s strategies, plans and
governance practices underpin an integrated
liquidity risk
management program that is designed to reduce
exposure to liquidity risk and maintain
compliance with regulatory requirements.
LIQUIDITY RISK MANAGEMENT RESPONSIBILITY
The Bank’s ALCO is responsible for establishing
effective management structures and practices
to ensure appropriate measurement,
management, and
governance of liquidity risk. The Global Liquidity
& Funding (GLF) Committee, a subcommittee
of the ALCO comprised of senior management
from Treasury,
Wholesale Banking and Risk Management,
identifies and monitors the Bank’s liquidity risks.
The management of liquidity risk is the responsibility
of the Senior
Executive Team member responsible for Treasury, while oversight and challenge are provided by the ALCO
and independently by Risk Management.
The Risk
Committee regularly reviews the Bank’s liquidity
position and approves the Bank’s Liquidity Risk
Management Framework biennially and the related
policies
annually.
The Bank’s liquidity risk appetite and liquidity risk
management approach have not substantially
changed from that described in the Bank’s 2024
MD&A. For a
complete discussion of liquidity risk,
refer to the “Liquidity Risk” section in the
Bank’s 2024 MD&A.
Liquid assets
The Bank’s unencumbered liquid assets may be used
to help address potential liquidity requirements
arising from stress events. Liquid asset
eligibility considers
estimated in-stress market values and trading
market depths, as well as operational, legal,
or other impediments to sale, rehypothecation
or pledging.
Assets held by the Bank to meet liquidity
requirements are summarized in the following
tables. The tables do not include assets held
within the Bank’s insurance
businesses as these are used to support insurance-specific
liabilities and capital requirements.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 40
TABLE 31: SUMMARY OF LIQUID ASSETS BY TYPE AND CURRENCY
(millions of Canadian dollars, except as noted)
As at
Securities
received as
collateral from
securities
financing and
Bank-owned
derivative
Total
Encumbered
Unencumbered
liquid assets
transactions
liquid assets
liquid assets
liquid assets
1
April 30, 2025
Cash and central bank reserves
$
21,197
$
–
$
21,197
$
1,143
$
20,054
Obligations of government, federal agencies, public sector
entities,
and multilateral development banks
2
114,129
99,988
214,117
88,361
125,756
Equities
14,618
5,302
19,920
16,926
2,994
Other debt securities
5,565
5,913
11,478
6,224
5,254
Other securities
–
–
–
–
–
Total Canadian dollar-denominated
155,509
111,203
266,712
112,654
154,058
Cash and central bank reserves
112,936
–
112,936
202
112,734
Obligations of government, federal agencies, public sector
entities,
and multilateral development banks
223,076
141,884
364,960
151,044
213,916
Equities
58,390
38,475
96,865
54,332
42,533
Other debt securities
70,534
16,999
87,533
26,348
61,185
Other securities
19,756
3,776
23,532
6,429
17,103
Total non-Canadian dollar-denominated
484,692
201,134
685,826
238,355
447,471
Total
$
640,201
$
312,337
$
952,538
$
351,009
$
601,529
October 31, 2024
Total Canadian dollar
-denominated
$
163,269
$
117,083
$
280,352
$
110,064
$
170,288
Total non-Canadian
dollar-denominated
482,052
179,665
661,717
247,478
414,239
Total
$
645,321
$
296,748
$
942,069
$
357,542
$
584,527
1
Unencumbered liquid assets include on-balance sheet assets, assets borrowed or purchased under resale agreements,
and other off-balance sheet collateral received less encumbered
liquid assets.
2
Includes National Housing Act Mortgage-Backed Securities (NHA MBS).
Total unencumbered liquid assets increased by $
17
billion since October 31, 2024 primarily
due to proceeds received from the sale of
the equity investment in
Schwab.
Unencumbered liquid assets held in The
Toronto-Dominion Bank and multiple domestic and foreign subsidiaries (excluding
insurance subsidiaries) and branches
are summarized in the following table.
TABLE 32: SUMMARY OF UNENCUMBERED LIQUID ASSETS BY
BANK, SUBSIDIARIES, AND BRANCHES
(millions of Canadian dollars)
As at
April 30
October 31
2025
2024
The Toronto-Dominion Bank (Parent)
$
251,901
$
237,005
Bank subsidiaries
321,612
314,306
Foreign branches
28,016
33,216
Total
$
601,529
$
584,527
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 41
The Bank’s
monthly average liquid assets (excluding those
held in insurance subsidiaries) for the quarters
ended April 30, 2025 and January 31,
2025, are
summarized in the following table.
TABLE 33: SUMMARY OF AVERAGE LIQUID ASSETS BY TYPE AND CURRENCY
(millions of Canadian dollars, except as noted)
Average for the three months ended
Securities
received as
collateral from
securities
financing and
Total
Bank-owned
derivative
liquid
Encumbered
Unencumbered
liquid assets
transactions
assets
liquid assets
liquid assets
1
April 30, 2025
Cash and central bank reserves
$
26,606
$
–
$
26,606
$
1,099
$
25,507
Obligations of government, federal agencies, public sector
entities, and multilateral development banks
2
113,469
109,547
223,016
90,579
132,437
Equities
16,170
5,475
21,645
17,458
4,187
Other debt securities
4,969
6,146
11,115
6,554
4,561
Other securities
–
–
–
–
–
Total Canadian dollar-denominated
161,214
121,168
282,382
115,690
166,692
Cash and central bank reserves
113,049
–
113,049
200
112,849
Obligations of government, federal agencies, public sector
entities, and multilateral development banks
226,020
143,736
369,756
154,793
214,963
Equities
57,592
41,137
98,729
58,568
40,161
Other debt securities
72,724
16,643
89,367
27,329
62,038
Other securities
20,753
3,912
24,665
6,823
17,842
Total non-Canadian dollar-denominated
490,138
205,428
695,566
247,713
447,853
Total
$
651,352
$
326,596
$
977,948
$
363,403
$
614,545
January 31, 2025
Total Canadian dollar-denominated
$
162,690
$
123,312
$
286,002
$
115,431
$
170,571
Total non-Canadian dollar-denominated
476,008
194,735
670,743
247,376
423,367
Total
$
638,698
$
318,047
$
956,745
$
362,807
$
593,938
1
Unencumbered liquid assets include on-balance sheet assets, assets borrowed or purchased under resale agreements,
and other off-balance sheet collateral received less encumbered
liquid assets.
2
Includes NHA MBS.
Average unencumbered liquid assets held in
The Toronto-Dominion Bank and multiple domestic and foreign subsidiaries (excluding
insurance subsidiaries) and
branches are summarized in the following
table.
TABLE 34: SUMMARY OF AVERAGE UNENCUMBERED LIQUID ASSETS BY BANK, SUBSIDIARIES,
AND BRANCHES
(millions of Canadian dollars)
Average for the three months ended
April 30
January 31
2025
2025
The Toronto-Dominion
Bank (Parent)
$
257,975
$
242,148
Bank subsidiaries
328,128
322,354
Foreign branches
28,442
29,436
Total
$
614,545
$
593,938
ASSET ENCUMBRANCE
In the course of the Bank’s daily operations, assets
are pledged to obtain funding, support
trading and brokerage businesses, and participate
in clearing and/or
settlement systems.
A summary of on-
and off-balance sheet encumbered and unencumbered
assets (excluding assets held in insurance
subsidiaries) is
presented as follows.
TABLE 35: ENCUMBERED AND UNENCUMBERED ASSETS
(millions of Canadian dollars)
As at
Total Assets
Encumbered
Unencumbered
Total
Pledged as
Available as
Assets
Collateral
1
Other
2
Collateral
3
Other
4
April 30, 2025
Cash and due from banks
$
5,501
$
–
$
–
$
–
$
5,501
Interest-bearing deposits with banks
139,744
7,622
–
127,903
4,219
Securities, trading loans, and other
961,985
413,019
22,826
504,739
21,401
Derivatives
89,210
–
–
–
89,210
Loans, net of allowance for loan losses
921,593
80,481
104,571
32,915
703,626
Other assets
5
96,608
223
–
–
96,385
Total assets
$
2,214,641
$
501,345
$
127,397
$
665,557
$
920,342
October 31, 2024
Total assets
$
2,202,763
$
509,319
$
113,528
$
635,491
$
944,425
1
Pledged collateral refers to the portion of assets that are pledged through encumbering activities, such as repurchase agreements, securities lending, derivative contracts, and requirements associated
with participation in clearing houses and payment systems.
2
Includes assets supporting TD’s long-term funding activities such as asset securitization and issuance of covered bonds.
3
Represents assets that are readily available for use as collateral to generate funding or support collateral requirements. This category includes unencumbered loans backed by real-estate that qualify as
eligible collateral at Federal Home Loan Bank (FHLB).
4
Other unencumbered assets are not subject to any restrictions on their use to secure funding or as collateral but would not be considered immediately available.
5
Other assets include goodwill, other intangibles, land, buildings, equipment, other depreciable assets and right-of-use assets, deferred tax assets, amounts receivable from brokers, dealers, and clients,
and other assets on the balance sheet not reported in the above categories.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 42
LIQUIDITY STRESS TESTING AND CONTINGENCY
FUNDING PLANS
In addition to the Bank’s internal liquidity stress
metric, the Bank performs liquidity
stress testing on multiple alternate scenarios.
These scenarios consist of a mix
of TD-specific and market-wide stress
events designed to evaluate the potential
impact of risk factors material to the
Bank’s risk profile. Liquidity assessments are
also part of the Bank’s Enterprise-Wide Stress
Testing program.
The Bank has designed CFPs for the enterprise
and material subsidiaries operating in foreign
jurisdictions. As they provide a playbook
for managing stressed
liquidity conditions, these plans are an integral
component of the Bank’s overall liquidity risk
management framework. The CFPs outline
different contingency
levels based on the severity and duration of
the liquidity situation and identify recovery
actions appropriate for each level. To support operational readiness, CFPs
provide key steps required to implement
each recovery action. Regional CFPs identify
recovery actions to address region-specific
stress events. The actions and
governance structure outlined in the Bank’s
CFP are aligned with the Bank’s Crisis Management
Recovery Plan.
CREDIT RATINGS
Credit ratings may impact the Bank’s access to,
and cost of, raising funding and its ability
to engage in certain business activities
on a cost-effective basis. Credit
ratings and outlooks provided by rating agencies
reflect their views and methodologies and
are subject to change based on a number
of factors including the
Bank’s financial strength, competitive position, and
liquidity, as well as factors not entirely within the Bank’s control, including
conditions affecting the overall
financial services industry.
TABLE 36: CREDIT RATINGS
1
As at
April 30, 2025
Moody’s
S&P
Fitch
DBRS
2
Deposits/Counterparty
3
Aa2
A+
AA
AA
Legacy Senior Debt
4
Aa3
A+
AA
AA
Senior Debt
5
A2
A-
AA-
AA (low)
Covered Bonds
Aaa
–
AAA
AAA
Legacy Subordinated Debt – non-NVCC
A3
A-
A
A (high)
Tier 2 Subordinated Debt – NVCC
A3 (hyb)
BBB+
A
A (low)
AT1 Perpetual Debt – NVCC
Baa2 (hyb)
BBB-
BBB+
–
Limited Recourse Capital Notes – NVCC
Baa2 (hyb)
BBB-
BBB+
BBB (high)
Preferred Shares – NVCC
Baa2 (hyb)
BBB-
BBB+
Pfd-2
Short-Term Debt (Deposits)
P-1
A-1
F1+
R-1 (high)
Outlook
Stable
Stable
Negative
Stable
1
The above ratings are for The Toronto-Dominion
Bank legal entity. Subsidiaries’ ratings are available
on the Bank’s website at http://www.td.com/investor/credit.jsp. Credit
ratings are not
recommendations to purchase, sell, or hold a financial obligation in as much as they do not comment on market
price or suitability for a particular investor. Ratings are subject
to revision
or withdrawal at any time by the rating organization.
2
Reflects ratings downgrade and outlook change made by DBRS subsequent to quarter end, on May 2, 2025.
3
Represents Moody’s Long-Term
Deposits Ratings and Counterparty Risk Rating, S&P’s Issuer Credit Rating, Fitch’s
Long-Term Deposits Rating and DBRS
’
Long-Term Issuer Rating.
4
Includes (a) Senior debt issued prior to September 23, 2018; and (b) Senior debt issued on or after September
23, 2018, which is excluded from the bank recapitalization “bail-in” regime.
5
Subject to conversion under the bank recapitalization “bail-in”
regime.
The Bank regularly reviews the level
of increased collateral its trading counterparties
would require in the event of a downgrade of
TD’s credit rating. The following
table presents the additional collateral that
could have been contractually required
to be posted to over-the-counter (OTC) derivative
counterparties as of the
reporting date in the event of one, two, and
three-notch downgrades of the Bank’s credit
ratings.
TABLE 37: ADDITIONAL COLLATERAL REQUIREMENTS FOR RATING DOWNGRADES
1
(millions of Canadian dollars)
Average for the three months ended
April 30
January 31
2025
2025
One-notch downgrade
$
531
$
83
Two-notch downgrade
1,086
772
Three-notch downgrade
2,207
3,028
1
These collateral requirements are based on each OTC trading counterparty’s Credit Support Annex
and the Bank’s credit rating across applicable rating agencies.
LIQUIDITY COVERAGE RATIO (LCR)
The LCR is a Basel III standard that aims to ensure
that an institution has an adequate stock
of unencumbered high-quality liquid assets
(HQLA), consisting of
cash or assets that could be converted into
cash to meet its liquidity needs for a 30-calendar
day liquidity stress scenario.
Other than during periods of financial stress,
the Bank must maintain the LCR above 100%
in accordance with the published OSFI
LAR requirement. The
Bank’s LCR is calculated according to the scenario
parameters in the LAR guideline, including
prescribed HQLA eligibility criteria and haircuts,
deposit run-off
rates, and other outflow and inflow rates.
HQLA held by the Bank that are eligible
for the LCR under the LAR are primarily
central bank reserves, sovereign-issued
or sovereign-guaranteed securities, and
high-quality securities issued by non-financial
entities.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 43
The following table summarizes the Bank’s average
daily LCR as of the relevant dates.
TABLE 38: AVERAGE LIQUIDITY COVERAGE RATIO
1
(millions of Canadian dollars, except
as noted)
Average for the three months ended
April 30, 2025
Total unweighted
Total weighted
value (average)
2
value (average)
3
High-quality liquid assets
Total high-quality liquid assets
$
n/a
4
$
382,814
Cash outflows
Retail deposits and deposits from small business
customers, of which:
$
512,080
$
33,030
Stable deposits
272,752
8,183
Less stable deposits
239,328
24,847
Unsecured wholesale funding, of which:
395,738
197,831
Operational deposits (all counterparties)
and deposits in networks of cooperative banks
141,371
33,464
Non-operational deposits (all counterparties)
228,778
138,778
Unsecured debt
25,589
25,589
Secured wholesale funding
n/a
47,068
Additional requirements, of which:
369,515
115,384
Outflows related to derivative exposures and
other collateral requirements
64,596
52,834
Outflows related to loss of funding on debt products
11,420
11,420
Credit and liquidity facilities
293,499
51,130
Other contractual funding obligations
16,504
9,608
Other contingent funding obligations
851,053
13,059
Total cash outflows
$
n/a
$
415,980
Cash inflows
Secured lending
$
269,537
$
45,280
Inflows from fully performing exposures
35,611
12,058
Other cash inflows
87,922
87,922
Total cash inflows
$
393,070
$
145,260
Average for the three months ended
April 30, 2025
January 31, 2025
Total adjusted
Total adjusted
value
value
Total high-quality liquid assets
$
382,814
$
381,731
Total net cash outflows
270,720
270,041
Liquidity coverage ratio
141
%
141
%
1
The LCR is calculated in accordance with OSFI’s LAR guideline, which is reflective of liquidity-related
requirements published by the BCBS. The LCR for the quarter ended April 30, 2025
is calculated as an average of the 61 daily data points in the quarter.
2
Unweighted inflow and outflow values are outstanding balances maturing or callable within 30 days.
3
Weighted values are calculated after the application of respective HQLA haircuts or inflow and outflow
rates, and caps as prescribed by the OSFI LAR guideline.
4
Not applicable as per the LCR common disclosure template.
The Bank’s average LCR was 141% for the
quarter ended April 30, 2025 and continues
to meet regulatory requirements.
The Bank holds a variety of liquid assets
commensurate with its liquidity needs.
Most of these liquid assets also qualify as
HQLA under the OSFI LAR guideline.
LCR is expected to normalize as the
Bank targets more typical LCR levels,
though will remain elevated in the near-term
reflecting proceeds received from sale of
the equity investment in Schwab
15
. The average HQLA of the Bank for the
quarter ended April 30, 2025 was $383 billion
(January 31, 2025
– $382 billion), with
Level 1 assets representing 86%
(January 31, 2025 – 86%). The Bank’s reported
HQLA excludes excess HQLA from U.S.
Retail operations, as required by the
OSFI LAR guideline, to reflect liquidity
transfer considerations between U.S. Retail
and its affiliates as a result of the U.S. Federal
Reserve Board’s regulations. By
excluding excess HQLA, the U.S. Retail
LCR is effectively capped at 100% prior to total
Bank consolidation.
As described in the “How TD Manages Liquidity
Risk” section of the Bank’s 2024 MD&A, the Bank
manages its HQLA and other liquidity buffers to
the higher of
TD’s internal 90-day surplus requirement and its
target buffers over regulatory requirements including
those for LCR, NSFR, and the Net Cumulative
Cash Flow
metrics.
NET STABLE
FUNDING RATIO (NSFR)
The NSFR is a Basel III metric calculated as
the ratio of total available stable funding
(ASF) over total required stable funding (RSF)
in accordance with OSFI’s
LAR guideline. The Bank must maintain an
NSFR equal to or above 100% as required by
LAR. The Bank’s ASF comprises the Bank’s liability
and capital
instruments (including deposits and wholesale
funding). The assets that require
stable funding are based on the Bank’s on and off-balance
sheet activities and a
function of their liquidity characteristics and
the requirements of OSFI’s LAR guideline.
15
The Bank’s expectations regarding liquidity levels are based on the Bank’s assumptions
regarding certain factors, including product growth, strategic plans, pace of share repurchases
under the Bank’s normal course issuer bid (which is subject to financial forecasts and capital requirements).
The Bank’s assumptions are subject to inherent uncertainties and may vary
based on factors both within and outside the Bank’s control, including general market conditions, economic
outlooks and geopolitical matters. Refer to the “Risk Factors That May Affect
Future Results” section of this document for additional information about risks and uncertainties that may impact
the Bank’s estimates.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 44
TABLE 39: NET STABLE FUNDING RATIO
1
(millions of Canadian dollars, except
as noted)
As at
April 30, 2025
Unweighted value by residual maturity
6 months to
No
Less than
less than
More than
Weighted
maturity
2
6 months
1 year
1 year
value
3
Available Stable Funding Item
Capital
$
122,551
$
n/a
$
n/a
$
10,389
$
132,939
Regulatory capital
122,551
n/a
n/a
10,389
132,939
Other capital instruments
n/a
n/a
n/a
–
–
Retail deposits and deposits from small business
customers:
459,830
72,185
38,790
30,515
558,601
Stable deposits
255,271
26,970
15,594
14,686
297,629
Less stable deposits
204,559
45,215
23,196
15,829
260,972
Wholesale funding:
260,044
413,059
79,733
234,773
448,421
Operational deposits
112,284
2,291
–
–
57,288
Other wholesale funding
147,760
410,768
79,733
234,773
391,133
Liabilities with matching interdependent assets
4
–
1,421
2,053
31,356
–
Other liabilities:
54,980
101,158
6,819
NSFR derivative liabilities
n/a
5,636
n/a
All other liabilities and equity not included
in the above categories
54,980
87,988
1,431
6,103
6,819
Total Available Stable Funding
$
1,146,780
Required Stable Funding Item
Total NSFR high-quality liquid assets
$
n/a
$
n/a
$
n/a
$
n/a
$
57,595
Deposits held at other financial institutions for
operational purposes
–
–
–
–
–
Performing loans and securities
118,231
255,628
118,885
659,819
768,381
Performing loans to financial institutions
secured by Level 1 HQLA
–
59,876
12,889
–
11,200
Performing loans to financial institutions
secured by non-Level 1
HQLA and unsecured performing loans to
financial institutions
–
73,881
6,336
10,176
21,393
Performing loans to non-financial corporate
clients, loans to retail
and small business customers, and loans
to sovereigns, central
banks and PSEs, of which:
40,113
64,508
43,726
293,647
341,817
With a risk weight of less than or equal
to 35% under the Basel II
standardized approach for credit risk
n/a
–
–
–
–
Performing residential mortgages, of which:
35,138
50,559
53,794
289,485
295,668
With a risk weight of less than or equal
to 35% under the Basel II
standardized approach for credit risk
35,138
50,559
53,794
289,485
295,668
Securities that are not in default and do not
qualify as HQLA,
including exchange-traded equities
42,980
6,804
2,140
66,511
98,303
Assets with matching interdependent liabilities
4
–
2,562
2,733
29,535
–
Other assets:
75,191
142,837
107,495
Physical traded commodities, including gold
18,064
n/a
n/a
n/a
15,616
Assets posted as initial margin for derivative
contracts and
contributions to default funds of CCPs
17,402
14,792
NSFR derivative assets
n/a
7,291
1,655
NSFR derivative liabilities before deduction
of variation margin
posted
n/a
21,484
1,074
All other assets not included in the above
categories
57,127
88,452
1,175
7,033
74,358
Off-balance sheet items
n/a
838,498
30,270
Total Required Stable Funding
$
963,741
Net Stable Funding Ratio
119
%
As at
October 31, 2024
Total Available Stable Funding
$
1,154,060
Total Required Stable Funding
994,567
Net Stable Funding Ratio
116
%
1
The NSFR is calculated in accordance with OSFI’s LAR guideline, which is reflective of liquidity-related
requirements published by the BCBS.
2
Items in the “no maturity” time bucket do not have a stated maturity. These
may include, but are not limited to, items such as capital with perpetual maturity,
non-maturity deposits, short
positions, open maturity positions, non-HQLA equities, and physical traded commodities.
3
Weighted values are calculated after the application of respective NSFR weights, as prescribed by the
OSFI LAR guideline.
4
Interdependent asset and liability items are deemed by OSFI to be interdependent and have RSF and ASF risk factors
adjusted to zero. Interdependent liabilities cannot fall due while the
asset is still on balance sheet, cannot be used to fund any other assets and principal payments from the asset cannot
be used for anything other than repaying the liability.
As such, the
only interdependent assets and liabilities that qualify for this treatment at the Bank are the liabilities arising from the
Canada Mortgage Bonds Program and their corresponding
encumbered assets.
The Bank’s NSFR for the quarter ended April 30,
2025 is 119%
(October 31, 2024 – 116%) representing a surplus of $183 billion
and adherence to regulatory
requirements. The NSFR’s increase is predominantly
attributable to sale proceeds received
from the equity investment in Schwab.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 45
FUNDING
The Bank has access to a variety of unsecured
and secured funding sources. The Bank’s
funding activities are conducted in accordance
with liquidity risk
management policies that require assets be
funded to the appropriate term and to a prudent
diversification profile.
The Bank’s primary approach to funding is
to maximize the use of deposits raised through
its personal,
wealth and business banking channels.
The deposits
raised from these sources were approximately
64
% (October 31, 2024 –
63
%) of the Bank’s total funding. Non-personal
deposit funding as reflected below does
not include the Bank’s Wholesale Banking deposits
(including Corporate & Investment Banking).
TABLE 40: SUMMARY OF DEPOSIT FUNDING
1
(millions of Canadian dollars)
As at
April 30
October 31
2025
2024
Personal
$
648,504
$
641,667
Non-personal
306,554
310,422
Total
$
955,058
$
952,089
1
The calculation methodology has been changed to reflect deposit funding from personal, wealth and business
banking channels.
WHOLESALE FUNDING
The Bank maintains various registered 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 raises
term funding through Senior Notes, NHA
MBS, notes backed by credit card
receivables (Evergreen Credit Card Trust) and home equity
lines of credit (Genesis Trust II). The Bank’s wholesale
funding is diversified by geography, currency,
and funding types. The Bank raises short-term
(1 year or less) funding using certificates
of deposit, commercial paper, and up until June 28, 2024,
bankers’
acceptances.
The following table summarizes the registered
term funding and capital programs by geography, with the related
program size as at April 30,
2025.
Canada
United States
Europe
Capital Securities Program ($20 billion)
Canadian Senior Medium-Term Linked Notes
Program ($5 billion)
HELOC ABS Program (Genesis Trust II) ($7
billion)
U.S. SEC (F-3) Registered Capital and
Debt
Program (US$75 billion)
U.K. Financial Conduct Authority (FCA) Registered
Legislative Covered Bond Program ($100 billion)
FCA Registered Global Medium-Term Note Program
(US$40 billion)
The following table presents a breakdown of
the Bank’s term debt by currency and funding
type. Term funding as at April 30, 2025, was $185.6
billion
(October 31, 2024 – $184.5 billion).
Note that Table 41: Long-Term Funding and Table
42: Wholesale Funding do not include
any funding accessed via repurchase transactions
or securities financing.
TABLE 41: LONG-TERM FUNDING
1
As at
April 30
October 31
Long-term funding by currency
2025
2024
Canadian dollar
24
%
25
%
U.S. dollar
34
31
Euro
32
33
British pound
4
5
Other
6
6
Total
100
%
100
%
Long-term funding by type
Senior unsecured medium-term notes
51
%
51
%
Covered bonds
40
40
Mortgage securitization
2
7
7
Term asset-backed securities
2
2
Total
100
%
100
%
1
The table includes funding issued to external investors
only.
2
Mortgage securitization excludes the residential
mortgage trading business.
The Bank maintains depositor concentration
limits in respect of short-term wholesale
deposits so that it is not overly reliant
on individual depositors for funding.
The Bank further limits short-term wholesale
funding maturity concentration in an effort to
mitigate refinancing risk during a stress event.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 46
The following table represents the remaining
maturity of various sources of funding outstanding
as at April 30,
2025 and October 31, 2024.
TABLE 42: WHOLESALE FUNDING
(millions of Canadian dollars)
As at
April 30
October 31
2025
2024
Less than
1 to 3
3 to 6
6 months
Up to 1
Over 1 to
Over
1 month
months
months
to 1 year
year
2 years
2 years
Total
Total
Deposits from banks
1
$
252
$
280
$
309
$
217
$
1,058
$
48
$
–
$
1,106
$
1,856
Bearer deposit notes
333
891
656
828
2,708
–
–
2,708
787
Certificates of deposit
11,007
20,228
32,262
30,754
94,251
174
–
94,425
101,168
Commercial paper
10,353
11,990
13,390
13,138
48,871
–
–
48,871
60,339
Covered bonds
–
10,349
–
9,767
20,116
22,529
31,614
74,259
75,399
Mortgage securitization
2
–
1,221
240
2,552
4,013
4,082
27,458
35,553
32,684
Legacy senior unsecured medium-term
notes
3
–
–
207
62
269
–
–
269
88
Senior unsecured medium-term notes
4
–
5,694
5,557
8,672
19,923
21,576
53,369
94,868
93,157
Subordinated notes and debentures
5
200
–
–
–
200
–
10,514
10,714
11,473
Term asset-backed
securitization
1,286
2,382
1,331
7,131
12,130
1,140
1,698
14,968
9,604
Other
6
37,892
7,756
7,961
780
54,389
1,031
3,245
58,665
70,951
Total
$
61,323
$
60,791
$
61,913
$
73,901
$
257,928
$
50,580
$
127,898
$
436,406
$
457,506
Of which:
Secured
$
10,591
$
20,845
$
8,464
$
19,451
$
59,351
$
27,751
$
60,773
$
147,875
$
153,855
Unsecured
50,732
39,946
53,449
54,450
198,577
22,829
67,125
288,531
303,651
Total
$
61,323
$
60,791
$
61,913
$
73,901
$
257,928
$
50,580
$
127,898
$
436,406
$
457,506
1
Only includes fixed-term commercial bank deposits.
2
Includes mortgage-backed securities (MBS) issued to external investors and Wholesale Banking residential mortgage
trading business.
3
Includes a) senior debt issued prior to September 23, 2018; and b) senior debt issued on or after September 23,
2018 which is excluded from the bank recapitalization “bail-in” regime,
including debt with an original term-to-maturity of less than 400 days.
4
Comprised of senior debt subject to conversion under the bank recapitalization “bail-in”
regime. Excludes $3.7 billion of structured notes subject to conversion under the “bail-in”
regime (October 31, 2024 – $4.4 billion).
5
Subordinated notes and debentures are not considered wholesale funding as they may be raised primarily for capital
management purposes.
6
Includes fixed-term deposits from non-bank institutions (unsecured) of $19.8 billion (October 31, 2024 – $17.3
billion) and the remaining are non-term deposits.
Excluding the Wholesale Banking residential
mortgage trading business, the Bank’s total
mortgage-backed securities issued to external
investors for the three and
six months ended April 30, 2025, was $1.3
billion and $2.3 billion, respectively (three
and six months ended April 30, 2024 – $0.7
billion and $0.8 billion,
respectively) and other asset-backed
securities issued for the three and six
months ended April 30, 2025, was nil and
$0.2 billion (three and six months ended
April 30, 2024 – nil). The Bank also issued
nil and $10.4
billion, respectively,
of unsecured medium-term notes for the three
and six months ended April 30, 2025
(three and six months ended April 30, 2024 –
$7.5 billion and $8.1 billion, respectively).
Covered bonds issued for the three and six
months ended April 30, 2025
was nil (three and six months ended April
30, 2024 – $10.2 billion and $14.7 billion,
respectively).
MATURITY ANALYSIS OF ASSETS, LIABILITIES, AND OFF-BALANCE SHEET COMMITMENTS
The following table summarizes on-balance
sheet and off-balance sheet categories by remaining
contractual maturity. Off-balance sheet commitments include
contractual obligations to make future payments
on certain lease-related commitments, certain
purchase obligations, and other liabilities.
The values of credit
instruments reported in the following
table represent the maximum amount of additional
credit that the Bank could be obligated to extend
should such instruments
be fully drawn or utilized. Since a significant
portion of guarantees and commitments
are expected to expire without being
drawn upon, the total of the contractual
amounts is not representative of expected future
liquidity requirements. These contractual
obligations have an impact on the Bank’s short-term
and long-term
liquidity and capital resource needs.
The maturity analysis presented does not depict
the degree of the Bank’s maturity transformation or
the Bank’s exposure to interest rate and liquidity risk.
The
Bank’s objective is to fund its assets appropriately
to protect against borrowing cost volatility
and potential reductions to funding market
availability. The Bank
utilizes stable non-maturity deposits (chequing
and savings accounts) and term deposits
as the primary source of long-term funding
for the Bank’s non-trading
assets including personal and business
term loans and the stable balance of revolving
lines of credit. Additionally, the Bank issues long-term funding in
respect of
such non-trading assets and raises short
term funding primarily to finance trading assets.
The liquidity of trading assets under stressed
market conditions is
considered when determining the appropriate
term of the funding.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 47
TABLE 43: REMAINING CONTRACTUAL MATURITY
(millions of Canadian dollars)
As at
April 30, 2025
No
Less than
1 to 3
3 to 6
6 to 9
9 months
Over 1 to
Over 2 to
Over
specific
1 month
months
months
months
to 1 year
2 years
5 years
5 years
maturity
Total
Assets
Cash and due from banks
$
5,501
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
5,501
Interest-bearing deposits with banks
137,234
266
179
–
–
–
–
–
2,065
139,744
Trading loans, securities, and other
1
3,703
4,631
4,810
4,133
4,282
16,411
27,981
31,113
97,938
195,002
Non-trading financial assets at fair
value through profit or loss
419
915
184
–
4
1,024
2,259
956
1,767
7,528
Derivatives
13,257
13,988
7,218
6,682
5,302
12,153
17,702
12,908
–
89,210
Financial assets designated at fair
value through profit or loss
377
461
340
209
330
1,420
1,837
1,534
–
6,508
Financial assets at fair value through
other comprehensive income
2,151
8,964
8,840
3,848
4,249
6,255
31,792
46,923
3,880
116,902
Debt securities at amortized cost,
net of allowances for credit losses
1,725
5,076
4,268
9,171
6,259
26,019
76,363
125,539
(3)
254,417
Securities purchased under
reverse repurchase agreements
2
135,050
34,602
26,874
7,746
9,348
527
63
–
2,266
216,476
Loans
Residential mortgages
1,498
7,644
14,934
14,054
17,954
88,138
120,399
51,677
–
316,298
Consumer instalment and other personal
1,637
3,621
5,445
4,903
7,494
31,156
82,065
35,419
62,263
234,003
Credit card
–
–
–
–
–
–
–
–
40,465
40,465
Business and government
56,288
19,021
18,152
15,713
14,658
46,369
95,650
59,170
29,204
354,225
Total loans
59,423
30,286
38,531
34,670
40,106
165,663
298,114
146,266
131,932
944,991
Allowance for loan losses
–
–
–
–
–
–
–
–
(8,613)
(8,613)
Loans, net of allowance for loan losses
59,423
30,286
38,531
34,670
40,106
165,663
298,114
146,266
123,319
936,378
Investment in Schwab
–
–
–
–
–
–
–
–
–
–
Goodwill
3
–
–
–
–
–
–
–
–
18,703
18,703
Other intangibles
3
–
–
–
–
–
–
–
–
3,167
3,167
Land, buildings, equipment, and other depreciable
assets, and right-of-use assets
3
–
1
1
12
8
80
661
3,014
5,934
9,711
Deferred tax assets
–
–
–
–
–
–
–
–
5,309
5,309
Amounts receivable from brokers, dealers, and clients
31,276
–
–
–
–
–
–
–
–
31,276
Other assets
6,056
2,594
827
742
2,754
241
304
260
14,664
28,442
Total assets
$
396,172
$
101,784
$
92,072
$
67,213
$
72,642
$
229,793
$
457,076
$
368,513
$
279,009
$
2,064,274
Liabilities
Trading deposits
$
2,708
$
2,360
$
3,469
$
2,785
$
2,789
$
4,901
$
7,330
$
2,419
$
–
$
28,761
Derivatives
14,941
12,611
6,177
6,213
5,836
9,483
15,411
12,813
–
83,485
Securitization liabilities at fair value
–
785
97
1,047
601
2,635
10,737
6,494
–
22,396
Financial liabilities designated at
fair value through profit or loss
51,291
39,269
50,315
28,192
24,464
174
4
–
216
193,925
Deposits
4,5
Personal
11,699
23,881
27,788
25,494
18,574
16,462
14,013
2
510,591
648,504
Banks
18,702
7,413
6,893
644
–
–
3
1
11,293
44,949
Business and government
22,984
29,497
12,957
11,122
15,613
45,649
64,750
23,628
348,095
574,295
Total deposits
53,385
60,791
47,638
37,260
34,187
62,111
78,766
23,631
869,979
1,267,748
Obligations related to securities sold short
1
1,419
5,117
1,076
583
2,066
7,278
13,851
10,534
1,629
43,553
Obligations related to securities sold under repurchase
agreements
2
167,674
13,944
1,722
619
1,455
164
26
–
1,798
187,402
Securitization liabilities at amortized cost
–
436
143
718
186
1,447
4,983
5,245
–
13,158
Amounts payable to brokers, dealers, and clients
31,584
–
–
–
–
–
–
–
523
32,107
Insurance contract liabilities
211
402
603
603
636
1,118
1,745
769
835
6,922
Other liabilities
11,657
9,744
6,288
2,778
1,455
1,881
1,875
5,482
6,852
48,012
Subordinated notes and debentures
200
–
–
–
–
–
–
10,514
–
10,714
Equity
–
–
–
–
–
–
–
–
126,091
126,091
Total liabilities and equity
$
335,070
$
145,459
$
117,528
$
80,798
$
73,675
$
91,192
$
134,728
$
77,901
$
1,007,923
$
2,064,274
Off-balance sheet commitments
Credit and liquidity commitments
6,7
$
23,761
$
31,442
$
31,959
$
23,186
$
20,492
$
53,728
$
173,913
$
4,563
$
1,958
$
365,002
Other commitments
8
178
118
233
322
286
931
1,593
408
43
4,112
Unconsolidated structured entity commitments
28
118
806
628
401
357
–
–
–
2,338
Total off-balance sheet commitments
$
23,967
$
31,678
$
32,998
$
24,136
$
21,179
$
55,016
$
175,506
$
4,971
$
2,001
$
371,452
1
Amount has been recorded according to the remaining contractual maturity of the underlying security.
2
Certain contracts considered short-term are presented in ‘less than 1 month’ category.
3
Certain non-financial assets have been recorded as having ‘no specific maturity’.
4
As the timing of demand deposits and notice deposits is non-specific and callable by the depositor,
obligations have been included as having ‘no specific maturity’.
5
Includes $
74
billion of covered bonds with remaining contractual maturities of $
10
billion in ‘over 1 to 3 months’, $
10
billion in ‘over 9 months to 1 year, $
22
billion in ‘over 1 to 2 years’,
$
26
billion in ‘over 2 to 5 years’, and $
6
billion in ‘over 5 years’.
6
Includes $
653
million in commitments to extend credit to private equity investments.
7
Commitments to extend credit exclude personal lines of credit and credit card lines, which are unconditionally cancellable
at the Bank’s discretion at any time.
8
Includes various purchase commitments as well as commitments for leases not yet commenced, and
lease-related payments
.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 48
TABLE 43: REMAINING CONTRACTUAL MATURITY
(continued)
(millions of Canadian dollars)
As at
October 31, 2024
No
Less than
1 to 3
3 to 6
6 to 9
9 months
Over 1 to
Over 2 to
Over
specific
1 month
months
months
months
to 1 year
2 years
5 years
5 years
maturity
Total
Assets
Cash and due from banks
$
6,437
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
–
$
6,437
Interest-bearing deposits with banks
165,665
23
–
–
–
–
–
–
4,242
169,930
Trading loans, securities, and other
1
3,773
4,852
6,777
4,852
4,729
11,756
28,458
27,484
83,089
175,770
Non-trading financial assets at fair value through
profit or loss
–
2
301
1,431
96
702
810
694
1,833
5,869
Derivatives
11,235
12,059
5,501
4,257
2,587
10,485
17,773
14,164
–
78,061
Financial assets designated at fair value through
profit or loss
367
251
486
613
292
1,144
1,865
1,399
–
6,417
Financial assets at fair value through other comprehensive
income
357
7,284
6,250
6,459
9,367
5,766
19,729
34,270
4,415
93,897
Debt securities at amortized cost, net of allowance
for credit losses
1,620
4,237
4,763
6,367
4,072
30,513
93,429
126,617
(3)
271,615
Securities purchased under reverse repurchase
agreements
2
134,310
35,360
19,897
10,119
5,299
1,722
482
–
1,028
208,217
Loans
Residential mortgages
7,502
11,817
13,066
16,074
4,353
86,112
132,381
60,344
–
331,649
Consumer instalment and other personal
974
1,758
2,509
4,077
6,137
28,498
88,052
35,096
61,281
228,382
Credit card
–
–
–
–
–
–
–
–
40,639
40,639
Business and government
55,591
15,405
10,866
19,340
18,982
47,488
98,362
61,904
29,035
356,973
Total loans
64,067
28,980
26,441
39,491
29,472
162,098
318,795
157,344
130,955
957,643
Allowance for loan losses
–
–
–
–
–
–
–
–
(8,094)
(8,094)
Loans, net of allowance for loan losses
64,067
28,980
26,441
39,491
29,472
162,098
318,795
157,344
122,861
949,549
Investment in Schwab
–
–
–
–
–
–
–
–
9,024
9,024
Goodwill
3
–
–
–
–
–
–
–
–
18,851
18,851
Other intangibles
3
–
–
–
–
–
–
–
–
3,044
3,044
Land, buildings, equipment, other depreciable
assets, and right-of-use assets
3
–
8
1
4
12
81
562
3,130
6,039
9,837
Deferred tax assets
–
–
–
–
–
–
–
–
4,937
4,937
Amounts receivable from brokers, dealers, and clients
22,115
–
–
–
–
–
–
–
–
22,115
Other assets
6,556
2,478
2,989
556
367
373
312
153
14,397
28,181
Total assets
$
416,502
$
95,534
$
73,406
$
74,149
$
56,293
$
224,640
$
482,215
$
365,255
$
273,757
$
2,061,751
Liabilities
Trading deposits
$
4,522
$
2,516
$
2,768
$
2,101
$
3,715
$
5,488
$
7,566
$
1,736
$
–
$
30,412
Derivatives
9,923
11,556
5,740
3,319
2,783
8,800
12,877
13,370
–
68,368
Securitization liabilities at fair value
–
1,004
328
644
97
3,313
9,443
5,490
–
20,319
Financial liabilities designated at
fair value through profit or loss
50,711
25,295
51,967
40,280
37,964
1,477
–
–
220
207,914
Deposits
4,5
Personal
14,229
31,997
30,780
16,971
19,064
15,120
15,590
7
497,909
641,667
Banks
14,714
4,287
2,434
16,343
6,954
–
3
–
12,963
57,698
Business and government
23,536
24,136
11,295
19,038
9,020
37,681
76,667
24,144
343,798
569,315
Total deposits
52,479
60,420
44,509
52,352
35,038
52,801
92,260
24,151
854,670
1,268,680
Obligations related to securities sold short
1
1,431
2,392
750
971
603
8,303
10,989
12,610
1,466
39,515
Obligations related to securities sold under repurchase
agreements
2
173,741
21,172
2,096
1,036
30
1,225
23
–
2,577
201,900
Securitization liabilities at amortized cost
119
589
819
438
144
1,843
4,823
3,590
–
12,365
Amounts payable to brokers, dealers, and clients
26,598
–
–
–
–
–
–
–
–
26,598
Insurance-related liabilities
224
448
671
671
705
1,184
1,656
727
883
7,169
Other liabilities
12,396
14,478
7,279
1,114
876
1,886
1,421
5,608
6,820
51,878
Subordinated notes and debentures
–
–
–
200
–
–
–
11,273
–
11,473
Equity
–
–
–
–
–
–
–
–
115,160
115,160
Total liabilities and equity
$
332,144
$
139,870
$
116,927
$
103,126
$
81,955
$
86,320
$
141,058
$
78,555
$
981,796
$
2,061,751
Off-balance sheet commitments
Credit and liquidity commitments
6,7
$
31,198
$
28,024
$
26,127
$
24,731
$
21,440
$
52,706
$
174,388
$
4,743
$
1,948
$
365,305
Other commitments
8
113
266
270
400
254
1,019
1,591
403
50
4,366
Unconsolidated structured entity commitments
–
–
–
125
766
490
19
–
–
1,400
Total off-balance sheet commitments
$
31,311
$
28,290
$
26,397
$
25,256
$
22,460
$
54,215
$
175,998
$
5,146
$
1,998
$
371,071
1
Amount has been recorded according to the remaining contractual maturity of the underlying security.
2
Certain contracts considered short-term are presented in ‘less than 1 month’ category.
3
Certain non-financial assets have been recorded as having ‘no specific maturity’.
4
As the timing of demand deposits and notice deposits is non-specific and callable by the depositor,
obligations have been included as having ‘no specific maturity’.
5
Includes $
75
billion of covered bonds with remaining contractual maturities of $
2
billion in ‘over 3 months to 6 months’, $
10
billion in ‘over 6 months to 9 months’, $
18
billion in ‘over 1 to
2 years’, $
37
billion in ‘over 2 to 5 years’, and $
8
billion in ‘over 5 years’.
6
Includes $
609
million in commitments to extend credit to private equity investments.
7
Commitments to extend credit exclude personal lines of credit and credit card lines, which are unconditionally cancellable
at the Bank’s discretion at any time.
8
Includes various purchase commitments as well as commitments for leases not yet commenced, and lease-related
payments.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 49
ISSB – IFRS S1 and IFRS S2
On April 23, 2025, Canadian Securities Administrators
(CSA) announced that it is pausing its
work on the development of a new mandatory
climate-related
disclosure rule that is based on the two standards
issued by the Canadian Sustainability
Standards Board (CSSB). The CSSB standards
are based on the
international sustainability standards issued
by the International Sustainability Standards
Board (ISSB). They set out the disclosure requirements
for financially
material information about sustainability and
climate-related risks and opportunities
to meet investor information needs.
For these standards to become mandatory
requirements in Canada, they would need
to be incorporated into a CSA rule. The Bank
continues to assess the impact of adopting these
standards and to monitor
developments from various standard setters
and regulators.
SECURITIZATION AND
OFF-BALANCE SHEET ARRANGEMENTS
The Bank enters into securitization and off-balance
sheet arrangements in the normal course of
operations. The Bank is involved with
structured entities (SEs) that
it sponsors, as well as entities sponsored
by third parties. Refer to “Securitization and
Off-Balance Sheet Arrangements”
section, Note 9: Transfers of Financial
Assets and Note 10: Structured Entities of
the Bank’s 2024 Annual Report for further details.
There have been no significant changes
to the Bank’s securitization
and off-balance sheet arrangements during the quarter
ended April 30, 2025.
Securitization of Third-Party Originated
Assets
Significant Unconsolidated Special Purpose
Entities
The Bank securitizes third-party originated
assets through Bank-sponsored SEs, including
its Canadian multi-seller conduits which are
not consolidated. These
Canadian multi-seller conduits securitize
Canadian originated third-party assets.
The Bank administers these multi-seller
conduits and provides liquidity facilities
as
well as securities distribution services; it
may also provide credit enhancements.
TD’s total potential exposure to loss through the
provision of liquidity facilities for
multi-seller conduits was $20.7 billion as
at April 30, 2025 (October 31, 2024
– $16.8 billion). As at April 30, 2025,
the Bank had funded exposure of $18.3 billion
under such liquidity facilities relating
to outstanding issuances of asset-backed
commercial paper (October 31, 2024 – $15.4
billion).
ACCOUNTING POLICIES AND ESTIMATES
The Bank’s
unaudited Interim Consolidated Financial
Statements have been prepared in accordance
with IFRS. For details of the Bank’s
accounting policies under
IFRS, refer to Note 2 of the Bank’s second
quarter 2025 Interim Consolidated Financial
Statements and 2024 Annual
Consolidated Financial Statements. For
details of the Bank’s significant accounting
judgments, estimates, and assumptions
under IFRS, refer to Note 3 of the Bank’s
second quarter 2025
Interim
Consolidated Financial Statements and the Bank’s
2024
Annual Consolidated Financial Statements.
CURRENT CHANGES IN ACCOUNTING
POLICIES
There were no new accounting policies adopted
by the Bank for the three and six months ended
April 30, 2025.
ACCOUNTING JUDGMENTS, ESTIMATES,
AND ASSUMPTIONS
The estimates used in the Bank’s accounting
policies are essential to understanding its
results of operations and financial condition.
Some of the Bank’s policies
require subjective, complex judgments and
estimates as they relate to matters
that are inherently uncertain. Changes in these judgments
or estimates and
changes to accounting standards and policies
could have a materially adverse impact
on the Bank’s Interim Consolidated Financial Statements.
The Bank has
established procedures to ensure that accounting
policies are applied consistently and that
the processes for changing methodologies,
determining estimates, and
adopting new accounting standards are well-controlled
and occur in an appropriate and systematic
manner.
Impairment – Expected Credit Loss Model
The ECL model requires the application of judgments,
estimates,
and assumptions in the assessment of the
current and forward-looking economic
environment.
There remains elevated economic uncertainty, and management
continues to exercise expert credit judgment
in assessing if an exposure has experienced
significant increase in credit risk since initial
recognition and in determining the amount
of ECLs at each reporting date. To the extent that certain effects are not
fully incorporated into the model calculations,
temporary quantitative and qualitative adjustments
have been applied,
including for risks related to elevated
uncertainty associated with policy and trade,
and such adjustments will be updated as appropriate
in future quarters.
FUTURE CHANGES IN ACCOUNTING
POLICIES
There were no new accounting standards
or amendments issued during the three and
six months ended April 30, 2025. Refer to
Note 4 of the Bank’s 2024 Annual
Consolidated Financial Statements for a description
of future changes in accounting policies.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL
REPORTING
During the most recent interim period, there have
been no changes in the Bank’s policies and
procedures and other processes that
comprise its internal control
over financial reporting, that have materially affected,
or are reasonably likely to materially
affect, the Bank’s internal control over financial
reporting. Refer to
Note 2 and Note 3 of the Bank’s second quarter 2025
Interim Consolidated Financial Statements
for further information regarding the Bank’s changes
to
accounting policies, procedures, and estimates.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 50
GLOSSARY
Financial and Banking Terms
Adjusted Results:
Non-GAAP financial measures
used to assess each of the
Bank’s businesses and to measure the Bank’s overall
performance. To arrive at
adjusted results, the Bank adjusts for “items
of note”, from reported results. The
items of note relate to items which management
does not believe are indicative
of underlying business performance.
Allowance for Credit Losses:
Represent expected credit losses (ECLs)
on
financial assets, including any off-balance sheet
exposures, at the balance
sheet date. Allowance for credit losses consists
of Stage 3 allowance for
impaired financial assets and Stage 2 and
Stage 1 allowance for performing
financial assets and off-balance sheet instruments.
The allowance is increased
by the provision for credit losses,
decreased by write-offs net of recoveries and
disposals,
and impacted by foreign exchange.
Amortized Cost:
The amount at which a financial asset or
financial liability is
measured at initial recognition minus principal
repayments, plus or minus the
cumulative amortization, using EIRM, of any
differences between the initial
amount and the maturity amount, and
minus any reduction for impairment.
Assets under Administration (AUA):
Assets that are beneficially owned by
customers where the Bank provides services
of an administrative nature, such
as the collection of investment income and
the placing of trades on behalf of the
clients (where the client has made his or
her own investment selection). The
majority of these assets are not reported on
the Bank’s Consolidated Balance
Sheet.
Assets under Management (AUM):
Assets that are beneficially owned by
customers, managed by the Bank, where
the Bank has discretion to make
investment selections on behalf of the
client (in accordance with an investment
policy). In addition to the TD family of mutual
funds, the Bank manages assets
on behalf of individuals, pension funds, corporations,
institutions, endowments
and foundations. These assets are not reported
on the Bank’s Consolidated
Balance Sheet. Some assets under management
that are also administered by
the Bank are included in assets under administration.
Asset-Backed Commercial Paper (ABCP):
A form of commercial paper that is
collateralized by other financial assets.
Institutional investors usually purchase
such instruments in order to diversify their assets
and generate short-term
gains.
Asset-Backed Securities (ABS):
A security whose value and income
payments are derived from and collateralized
(or “backed”) by a specified pool
of underlying assets.
Average Common Equity:
Average common equity for the business
segments
reflects the average allocated capital. The
Bank’s methodology for allocating
capital to its business segments is largely aligned
with the common equity
capital requirements under Basel III.
Average Interest-Earning Assets:
A non-GAAP financial measure that depicts
the Bank’s financial position, and is calculated
as the average carrying value of
deposits with banks, loans and securities based
on daily balances for the period
ending October 31 in each fiscal year.
Basic Earnings per Share (EPS)
: A performance measure calculated by
dividing net income attributable to common
shareholders by the weighted
average number of common shares outstanding
for the period. Adjusted basic
EPS is calculated in the same manner using
adjusted net income.
Basis Points
(bps):
A unit equal to 1/100 of 1%. Thus, a 1%
change is equal to
100 basis points.
Book Value per Share:
A measure calculated by dividing common
shareholders’
equity by number of common shares at the
end of the period.
Carrying Value:
The value at which an asset or liability
is carried at on the
Consolidated Balance Sheet.
Catastrophe Claims:
Insurance claims that relate to any single
event that
occurred in the period, for which the aggregate
insurance claims are equal to
or greater than an internal threshold of $5
million before reinsurance. The
Bank’s internal threshold may change from time
to time.
Collateralized Mortgage Obligation (CMO):
They are collateralized debt
obligations consisting of mortgage-backed
securities that are separated and
issued as different classes of mortgage pass-through
securities with different
terms, interest rates, and risks. CMOs by private
issuers are collectively
referred to as non-agency CMOs.
Common Equity Tier 1 (CET1) Capital:
This is a primary Basel III capital
measure comprised mainly of common equity, retained earnings and
qualifying
non-controlling interest in subsidiaries. Regulatory
deductions made to arrive
at the CET1 Capital include goodwill
and intangibles, unconsolidated
investments in banking, financial, and insurance
entities, deferred tax assets,
defined benefit pension fund assets, and
shortfalls in allowances.
Common Equity Tier 1 (CET1) Capital Ratio:
CET1 Capital ratio represents
the predominant measure of capital adequacy
under Basel III
and equals CET1 Capital divided by RWA.
Compound Annual Growth Rate (CAGR):
A measure of growth over multiple
time periods from the initial investment value
to the ending investment value
assuming that the investment has been compounding
over the time period.
Credit Valuation Adjustment (CVA):
CVA represents a capital charge that
measures credit risk due to default of derivative
counterparties. This charge
requires banks to capitalize for the potential
changes in counterparty credit
spread for the derivative portfolios.
Diluted EPS:
A performance measure calculated by dividing
net income
attributable to common shareholders by the
weighted average number of
common shares outstanding adjusting
for the effect of all potentially dilutive
common shares. Adjusted diluted EPS is
calculated in the same manner using
adjusted net income.
Dividend Payout Ratio:
A ratio represents the percentage of Bank’s earnings
being paid to common shareholders in
the form of dividends and is calculated
by dividing common dividends by net income
available to common
shareholders. Adjusted dividend payout ratio
is calculated in the same manner
using adjusted net income.
Dividend Yield:
A ratio calculated as the dividend per
common share for the
year divided by the daily average closing
stock price during the year.
Effective Income Tax Rate:
A rate and performance indicator calculated
by
dividing the provision for income taxes as a percentage
of net income before
taxes. Adjusted effective income tax rate is calculated
in the same manner
using adjusted results.
Effective Interest Rate (EIR):
The rate that discounts expected future cash
flows for the expected life of the financial instrument
to its carrying value. The
calculation takes into account the contractual
interest rate, along with any fees
or incremental costs that are directly
attributable to the instrument and all other
premiums or discounts.
Effective Interest Rate Method (EIRM):
A technique for calculating the actual
interest rate in a period based on the amount
of a financial instrument’s book
value at the beginning of the accounting period.
Under EIRM,
the effective
interest rate, which is a key component of
the calculation, discounts the
expected future cash inflows and outflows expected
over the life of a financial
instrument.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 51
Efficiency Ratio:
The efficiency ratio measures operating efficiency and
is
calculated by taking the non-interest expenses
as a percentage of total revenue.
A lower ratio indicates a more efficient business
operation. Adjusted efficiency
ratio is calculated in the same manner using
adjusted non-interest expenses
and total revenue.
Enhanced Disclosure Task Force (EDTF):
Established by the Financial
Stability Board in May 2012, comprised of
banks, analysts, investors, and
auditors, with the goal of enhancing the risk
disclosures of banks and other
financial institutions.
Expected Credit Losses (ECLs):
ECLs are the probability-weighted present
value of expected cash shortfalls over
the remaining expected life of the
financial instrument and considers reasonable
and supportable information
about past events, current conditions, and forecasts
of future events and
economic conditions that impact the Bank’s
credit risk assessment.
Fair Value:
The price that would be received to sell an
asset or paid to transfer
a liability in an orderly transaction between
market participants at the
measurement date, under current market
conditions.
Fair value through other comprehensive
income (FVOCI):
Under IFRS 9, if
the asset passes the contractual cash
flows test (named SPPI), the business
model assessment determines how the instrument
is classified. If the instrument
is being held to collect contractual cash flows,
that is, if it is not expected to be
sold, it is measured as amortized cost. If the
business model for the instrument
is to both collect contractual cash flows and
potentially sell the asset, it is
measured at FVOCI.
Fair value through profit or loss (FVTPL):
Under IFRS 9, the classification is
dependent on two tests, a contractual
cash flow test (named SPPI) and a
business model assessment. Unless the
asset meets the requirements of both
tests, it is measured at fair value with all
changes in fair value reported in profit
or loss.
Federal Deposit Insurance Corporation
(FDIC):
A U.S. government
corporation which provides deposit insurance
guaranteeing the safety of a
depositor’s accounts in member banks.
The FDIC also examines and
supervises certain financial institutions for
safety and soundness, performs
certain consumer-protection functions, and
manages banks in receiverships
(failed banks).
Forward Contracts:
Over-the-counter contracts between two parties
that oblige
one party to the contract to buy and the other
party to sell an asset for a fixed
price at a future date.
Futures:
Exchange-traded contracts to buy or
sell a security at a predetermined
price on a specified future date.
Hedging:
A risk management technique intended
to mitigate the Bank’s
exposure to fluctuations in interest rates,
foreign currency exchange rates, or
other market factors. The elimination or
reduction of such exposure is
accomplished by engaging in capital markets
activities to establish offsetting
positions.
Impaired Loans:
Loans where, in management’s opinion,
there has been a
deterioration of credit quality to the extent
that the Bank no longer has
reasonable assurance as to the timely collection
of the full amount of principal
and interest.
Loss Given Default (LGD):
It is the amount of the loss the Bank
would likely
incur when a borrower defaults on a loan,
which is expressed as a percentage
of exposure at default.
Mark-to-Market (MTM):
A valuation that reflects current market rates
as at the
balance sheet date for financial instruments
that are carried at fair value.
Master Netting Agreements:
Legal agreements between two parties
that have
multiple derivative contracts with each other
that provide for the net settlement
of all contracts through a single payment, in
a single currency, in the event of
default or termination of any one contract.
Net Corporate Expenses:
Non-interest expenses related to corporate
service
and control groups which are not allocated to a
business segment.
Net Interest Margin:
A non-GAAP ratio calculated as net interest
income as a
percentage of average interest-earning assets
to measure performance. This
metric is an indicator of the profitability of
the Bank’s earning assets less the
cost of funding. Adjusted net interest
margin is calculated in the same manner
using adjusted net interest income.
Non-Viability Contingent Capital (NVCC):
Instruments (preferred shares and
subordinated debt) that contain a feature or
a provision that allows the financial
institution to either permanently convert these
instruments into common shares
or fully write-down the instrument, in the event
that the institution is no longer
viable.
Notional:
A reference amount on which payments
for derivative financial
instruments are based.
Office of the Superintendent of Financial
Institutions Canada (OSFI):
The
regulator of Canadian federally chartered
financial institutions and federally
administered pension plans.
Options:
Contracts in which the writer of the option grants
the buyer the future
right, but not the obligation, to buy or to sell a
security, exchange rate, interest
rate, or other financial instrument or commodity
at a predetermined price at or
by a specified future date.
Price-Earnings Ratio:
A ratio calculated by dividing the closing
share price by
EPS based on a trailing four quarters to indicate
market performance.
Adjusted
price-earnings ratio is calculated in the
same manner using adjusted EPS.
Probability of Default (PD):
It is the likelihood that a borrower will not
be able
to meet its scheduled repayments.
Provision for Credit Losses (PCL):
Amount added to the allowance for credit
losses to bring it to a level that management
considers adequate to reflect
expected credit-related losses on its
portfolio.
Return on Common Equity (ROE):
The consolidated Bank ROE is calculated
as net income available to common shareholders
as a percentage of average
common shareholders’
equity,
utilized in assessing the Bank’s use of equity.
ROE for the business segments is calculated
as the segment net income
attributable to common shareholders as a percentage
of average allocated
capital. Adjusted ROE is calculated in
the same manner using adjusted net
income.
Return on Risk-weighted Assets:
Net income available to common
shareholders as a percentage of average risk-weighted
assets.
Return on Tangible Common Equity (ROTCE):
A non-GAAP financial
measure calculated as reported net income
available to common shareholders
after adjusting for the after-tax amortization
of acquired intangibles,
which are
treated as an item of note, as a percentage of average
Tangible common
equity. Adjusted ROTCE is calculated in the same manner using
adjusted net
income.
Both measures can be utilized in assessing
the Bank’s use of equity.
Risk-Weighted Assets (RWA):
Assets calculated by applying a regulatory
risk-weight factor to on and off-balance sheet
exposures. The risk-weight
factors are established by the OSFI to
convert on and off-balance sheet
exposures to a comparable risk level.
Securitization:
The process by which financial assets,
mainly loans, are
transferred to structures,
which normally issue a series of asset-backed
securities to investors to fund the purchase
of loans.
Solely Payments of Principal and Interest
(SPPI):
Contractual cash flows of
a financial asset that are consistent with a
basic lending arrangement.
Swaps:
Contracts that involve the exchange of fixed
and floating interest rate
payment obligations and currencies on a notional
principal for a specified
period of time.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 52
Tangible common equity (TCE):
A non-GAAP financial measure calculated
as
common shareholders’ equity less goodwill,
imputed goodwill, and intangibles
on an investment in Schwab and TD
Ameritrade and other acquired intangible
assets, net of related deferred tax liabilities.
It can be utilized in assessing the
Bank’s use of equity.
Taxable Equivalent Basis (TEB):
A calculation method (not defined in GAAP)
that increases revenues and the provision
for income taxes on certain tax-
exempt securities to an equivalent before-tax
basis to facilitate comparison of
net interest income from both taxable and
tax-exempt sources.
Tier 1 Capital Ratio:
Tier 1 Capital represents the more permanent
forms of
capital, consisting primarily of common
shareholders’
equity, retained earnings,
preferred shares and innovative instruments.
Tier 1 Capital ratio is calculated as
Tier 1 Capital divided by RWA.
Total Capital Ratio:
Total Capital is defined as the total of net Tier 1 and Tier 2
Capital. Total Capital ratio is calculated as Total Capital divided by RWA.
Total Shareholder Return (TSR):
The total return earned on an investment
in
TD’s common shares. The return measures the
change in shareholder value,
assuming dividends paid are reinvested in
additional shares.
Trading-Related Revenue:
A non-GAAP financial measure that is
the total of
trading income (loss), net interest income on
trading positions, and income from
financial instruments designated at FVTPL
that are managed within a trading
portfolio. Trading-related revenue (TEB) in the Wholesale
Banking segment is
also a non-GAAP financial measure and is
calculated in the same manner,
including TEB adjustments. Both are used
for measuring trading performance.
Value-at-Risk (VaR):
A metric used to monitor and control overall
risk levels
and to calculate the regulatory capital required
for market risk in trading
activities. VaR measures the adverse impact that potential changes
in market
rates and prices could have on the value
of a portfolio over a specified period of
time.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 53
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
INTERIM CONSOLIDATED BALANCE
SHEET
(unaudited)
(As at and in millions of Canadian dollars)
April 30, 2025
October 31, 2024
ASSETS
Cash and due from banks
$
5,501
$
6,437
Interest-bearing deposits with banks
139,744
169,930
145,245
176,367
Trading loans, securities, and other
(Note 4)
195,002
175,770
Non-trading financial assets at fair value through profit or
loss
(Note 4)
7,528
5,869
Derivatives
(Note 4)
89,210
78,061
Financial assets designated at fair value through profit or
loss
(Note 4)
6,508
6,417
Financial assets at fair value through other comprehensive income
(Note 4)
116,902
93,897
415,150
360,014
Debt securities at amortized cost, net of allowance for
credit losses (Notes 4, 5)
254,417
271,615
Securities purchased under reverse repurchase agreements
216,476
208,217
Loans (Notes 4, 6)
Residential mortgages
316,298
331,649
Consumer instalment and other personal
234,003
228,382
Credit card
40,465
40,639
Business and government
354,225
356,973
944,991
957,643
Allowance for loan losses
(Note 6)
(8,613)
(8,094)
Loans, net of allowance for loan losses
936,378
949,549
Other
Investment in Schwab
(Note 7)
–
9,024
Goodwill
18,703
18,851
Other intangibles
3,167
3,044
Land, buildings, equipment, other depreciable assets and
right-of-use assets
9,711
9,837
Deferred tax assets
5,309
4,937
Amounts receivable from brokers, dealers, and clients
31,276
22,115
Other assets
(Note 8)
28,442
28,181
96,608
95,989
Total assets
$
2,064,274
$
2,061,751
LIABILITIES
Trading deposits
(Notes 4, 9)
$
28,761
$
30,412
Derivatives
(Note 4)
83,485
68,368
Securitization liabilities at fair value
(Note 4)
22,396
20,319
Financial liabilities designated at fair value through
profit or loss
(Notes 4, 9)
193,925
207,914
328,567
327,013
Deposits (Notes 4, 9)
Personal
648,504
641,667
Banks
44,949
57,698
Business and government
574,295
569,315
1,267,748
1,268,680
Other
Obligations related to securities sold short
(Note 4)
43,553
39,515
Obligations related to securities sold under repurchase agreements
187,402
201,900
Securitization liabilities at amortized cost
(Note 4)
13,158
12,365
Amounts payable to brokers, dealers, and clients
32,107
26,598
Insurance contract liabilities
6,922
7,169
Other liabilities
(Note 10)
48,012
51,878
331,154
339,425
Subordinated notes and debentures (Notes 4, 11)
10,714
11,473
Total liabilities
1,938,183
1,946,591
EQUITY
Shareholders’ Equity
Common shares
(Note 12)
25,136
25,373
Preferred shares and other equity instruments
(Note 12)
11,138
10,888
Treasury – common shares
(Note 12)
(26)
(17)
Treasury – preferred shares and other
equity instruments
(Note 12)
(28)
(18)
Contributed surplus
199
204
Retained earnings
78,640
70,826
Accumulated other comprehensive income (loss)
11,032
7,904
Total equity
126,091
115,160
Total liabilities and equity
$
2,064,274
$
2,061,751
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 54
INTERIM CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
April 30
April 30
April 30
2025
2024
2025
2024
Interest income
1
(Note 19)
Loans
$
12,602
$
13,154
$
26,069
$
26,149
Reverse repurchase agreements
2,368
2,914
4,974
5,852
Securities
Interest
4,398
5,122
9,100
10,398
Dividends
848
680
1,371
1,228
Deposits with banks
1,366
1,126
2,940
2,182
21,582
22,996
44,454
45,809
Interest expense (Note 19)
Deposits
9,923
11,490
21,146
22,974
Securitization liabilities
205
259
433
516
Subordinated notes and debentures
145
99
280
193
Repurchase agreements and short sales
2,746
3,390
5,736
6,595
Other
438
293
868
578
13,457
15,531
28,463
30,856
Net interest income
8,125
7,465
15,991
14,953
Non-interest income
Investment and securities services
2,006
1,872
4,020
3,617
Credit fees
419
494
838
1,063
Trading income (loss)
992
744
2,297
1,669
Service charges
680
657
1,366
1,311
Card services
704
703
1,477
1,465
Insurance revenue
1,876
1,665
3,746
3,341
Other income (loss)
(Notes 5, 6, 7)
8,135
219
7,251
114
14,812
6,354
20,995
12,580
Total revenue
22,937
13,819
36,986
27,533
Provision for (recovery of) credit losses
(Note 6)
1,341
1,071
2,553
2,072
Insurance service expenses
1,417
1,248
2,924
2,614
Non-interest expenses
Salaries and employee benefits
4,485
4,250
9,135
8,564
Occupancy, including depreciation
499
474
1,011
942
Technology and equipment, including depreciation
699
616
1,388
1,254
Amortization of other intangibles
194
168
381
353
Communication and marketing
427
394
768
719
Restructuring charges
(Note 17)
163
165
163
456
Brokerage-related and sub-advisory fees
133
125
262
255
Professional, advisory and outside services
957
655
1,850
1,220
Other
582
1,554
1,251
2,668
8,139
8,401
16,209
16,431
Income before income taxes and share
of net income from investment
in Schwab
12,040
3,099
15,300
6,416
Provision for (recovery of) income taxes
985
729
1,683
1,363
Share of net income from investment
in Schwab (Note 7)
74
194
305
335
Net income
11,129
2,564
13,922
5,388
Preferred dividends and distributions
on other equity instruments
200
190
286
264
Net income attributable to common shareholders
$
10,929
$
2,374
$
13,636
$
5,124
Earnings per share
(Canadian dollars)
(Note 16)
Basic
$
6.28
$
1.35
$
7.81
$
2.90
Diluted
6.27
1.35
7.81
2.89
Dividends per common share
(Canadian dollars)
1.05
1.02
2.10
2.04
1
Includes $
19,285
million and $
40,031
million for the three and six months ended April 30, 2025, respectively (three and six months ended April
30, 2024 – $
20,659
million and
$
41,158
million, respectively), which have been calculated based on the effective interest rate method
(EIRM).
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 55
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(unaudited)
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
April 30
April 30
April 30
2025
2024
2025
2024
Net income
$
11,129
$
2,564
$
13,922
$
5,388
Other comprehensive income (loss)
Items that will be subsequently reclassified
to net income
Net change in unrealized gain/(loss) on
financial assets at fair value
through other comprehensive income
Change in unrealized gain/(loss)
(338)
(42)
(204)
297
Reclassification to earnings of net loss/(gain)
(3)
(3)
6
(9)
Changes in allowance for credit losses recognized
in earnings
2
–
1
(1)
Income taxes relating to:
Change in unrealized gain/(loss)
84
12
49
(73)
Reclassification to earnings of net loss/(gain)
2
2
4
5
(253)
(31)
(144)
219
Net change in unrealized foreign currency
translation gain/(loss) on
investments in foreign operations, net
of hedging activities
Unrealized gain/(loss)
(6,146)
3,058
(927)
(825)
Reclassification to earnings of net loss/(gain)
(533)
–
(533)
–
Net gain/(loss) on hedges
4,090
(1,966)
514
466
Reclassification to earnings of net loss/(gain)
on hedges
799
–
799
–
Income taxes relating to:
Net gain/(loss) on hedges
(1,138)
544
(145)
(132)
Reclassification to earnings of net loss/(gain)
on hedges
(220)
–
(220)
–
(3,148)
1,636
(512)
(491)
Net change in gain/(loss) on derivatives
designated as cash flow hedges
Change in gain/(loss)
2,464
(517)
3,953
(242)
Reclassification to earnings of loss/(gain)
(218)
(1,246)
(1,402)
1,194
Income taxes relating to:
Change in gain/(loss)
(714)
149
(1,095)
60
Reclassification to earnings of loss/(gain)
109
328
390
(330)
1,641
(1,286)
1,846
682
Share of other comprehensive income (loss)
from investment in Schwab
2,208
(56)
1,870
826
Items that will not be subsequently reclassified
to net income
Remeasurement gain/(loss) on employee
benefit plans
Gain/(loss)
(40)
(30)
(17)
(257)
Income taxes
11
8
6
71
(29)
(22)
(11)
(186)
Change in net unrealized gain/(loss)
on equity securities designated at
fair value through other comprehensive income
Change in net unrealized gain/(loss)
49
45
63
245
Income taxes
(13)
(11)
(16)
(65)
36
34
47
180
Gain/(loss) from changes in fair value due
to own credit risk on
financial liabilities designated at fair value
through profit or loss
Gain/(loss)
39
54
29
–
Income taxes
(11)
(15)
(8)
–
28
39
21
–
Total other comprehensive income (loss)
483
314
3,117
1,230
Total comprehensive income (loss)
$
11,612
$
2,878
$
17,039
$
6,618
Attributable to:
Common shareholders
$
11,412
$
2,688
$
16,753
$
6,354
Preferred shareholders and other equity instrument
holders
200
190
286
264
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 56
INTERIM CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
(unaudited)
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Common shares (Note 12)
Balance at beginning of period
$
25,528
$
25,318
$
25,373
$
25,434
Proceeds from shares issued on exercise of stock options
44
24
69
66
Shares issued as a result of dividend reinvestment plan
–
132
130
269
Purchase of shares for cancellation and other
(436)
(217)
(436)
(512)
Balance at end of period
25,136
25,257
25,136
25,257
Preferred shares and other equity instruments (Note 12)
Balance at beginning of period
11,138
10,853
10,888
10,853
Issuance of shares and other equity instruments
–
–
750
–
Redemption of shares and other equity instruments
–
(350)
(500)
(350)
Balance at end of period
11,138
10,503
11,138
10,503
Treasury – common shares (Note 12)
Balance at beginning of period
(38)
(58)
(17)
(64)
Purchase of shares
(2,880)
(2,154)
(6,384)
(5,250)
Sale of shares
2,892
2,188
6,375
5,290
Balance at end of period
(26)
(24)
(26)
(24)
Treasury – preferred shares and other equity instruments (Note 12)
Balance at beginning of period
(51)
(27)
(18)
(65)
Purchase of shares and other equity instruments
(267)
(153)
(1,387)
(251)
Sale of shares and other equity instruments
290
172
1,377
308
Balance at end of period
(28)
(8)
(28)
(8)
Contributed surplus
Balance at beginning of period
189
172
204
155
Net premium (discount) on sale of treasury instruments
1
5
(11)
18
Issuance of stock options, net of options exercised
3
8
3
13
Other
6
(1)
3
(2)
Balance at end of period
199
184
199
184
Retained earnings
Balance at beginning of period
71,718
72,347
70,826
73,008
Impact of reclassification of securities supporting insurance operations
related to the adoption of IFRS 17
1
–
–
–
(10)
Net income attributable to equity instrument holders
11,129
2,564
13,922
5,388
Common dividends
(1,815)
(1,795)
(3,651)
(3,602)
Preferred dividends and distributions on other equity instruments
(200)
(190)
(286)
(264)
Share and other equity instrument issue expenses
–
–
(2)
–
Net premium on repurchase of common shares and redemption of preferred shares and other
equity instruments
(Note 12)
(2,135)
(1,002)
(2,135)
(2,430)
Remeasurement gain/(loss) on employee benefit plans
(29)
(22)
(11)
(186)
Realized gain/(loss) on equity securities designated at fair value through
other comprehensive income
(28)
2
(23)
–
Balance at end of period
78,640
71,904
78,640
71,904
Accumulated other comprehensive income (loss)
Net unrealized gain/(loss) on financial assets at fair value through other comprehensive income:
Balance at beginning of period
(99)
(163)
(208)
(413)
Impact of reclassification of securities supporting insurance operations
related to the adoption of IFRS 17
1
–
–
–
10
Other comprehensive income (loss)
(255)
(31)
(145)
210
Allowance for credit losses
2
–
1
(1)
Balance at end of period
(352)
(194)
(352)
(194)
Net unrealized gain/(loss) on equity securities designated at fair value through
other comprehensive income:
Balance at beginning of period
46
19
35
(127)
Other comprehensive income (loss)
8
36
24
180
Reclassification of loss/(gain) to retained earnings
28
(2)
23
–
Balance at end of period
82
53
82
53
Gain/(loss) from changes in fair value due to own credit risk on financial liabilities
designated at fair value through profit or loss:
Balance at beginning of period
(29)
(77)
(22)
(38)
Other comprehensive income (loss)
28
39
21
–
Balance at end of period
(1)
(38)
(1)
(38)
Net unrealized foreign currency translation gain/(loss) on investments in foreign
operations, net of hedging activities:
Balance at beginning of period
15,529
10,550
12,893
12,677
Other comprehensive income (loss)
(3,148)
1,636
(512)
(491)
Balance at end of period
12,381
12,186
12,381
12,186
Net gain/(loss) on derivatives designated as cash flow hedges:
Balance at beginning of period
(2,719)
(3,504)
(2,924)
(5,472)
Other comprehensive income (loss)
1,641
(1,286)
1,846
682
Balance at end of period
(1,078)
(4,790)
(1,078)
(4,790)
Share of accumulated other comprehensive income (loss) from investment in Schwab
–
(3,051)
–
(3,051)
Total accumulated other comprehensive income
11,032
4,166
11,032
4,166
Total equity
$
126,091
$
111,982
$
126,091
$
111,982
1
Refer to Note 4 of the Bank’s 2024 Annual Consolidated Financial Statements for details on the adoption
of IFRS 17.
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 57
INTERIM CONSOLIDATED STATEMENT
OF CASH FLOWS
(unaudited)
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
April 30
April 30
April 30
2025
2024
2025
2024
Cash flows from (used in) operating activities
Net income
$
11,129
$
2,564
$
13,922
$
5,388
Adjustments to determine net cash flows from (used in) operating
activities
Gain on sale of Schwab shares
(Note 7)
(9,159)
–
(9,159)
–
Provision for (recovery of) credit losses
(Note 6)
1,341
1,071
2,553
2,072
Depreciation
340
324
685
638
Amortization of other intangibles
194
168
381
353
Net securities loss/(gain)
(Note 5)
282
66
1,202
60
Share of net income from investment in Schwab
(Note 7)
(74)
(194)
(305)
(335)
Deferred taxes
(457)
(730)
(527)
(797)
Changes in operating assets and liabilities
Interest receivable and payable
(Notes 8, 10)
(608)
206
(845)
370
Securities sold under repurchase agreements
(6,454)
18,110
(14,498)
25,385
Securities purchased under reverse repurchase agreements
5,643
(6,643)
(8,259)
(1,389)
Securities sold short
(2,533)
(4,730)
4,038
(6,516)
Trading loans, securities, and other
3,853
(4,826)
(19,232)
(14,256)
Loans net of securitization and sales
27,634
(24,876)
10,510
(34,289)
Deposits
(21,175)
23,104
(2,583)
5,822
Derivatives
3,143
(5,947)
3,968
3,294
Non-trading financial assets at fair value through profit or
loss
(718)
1,339
(1,659)
1,694
Financial assets and liabilities designated at fair value through
profit or loss
(16,984)
8,038
(14,080)
(4,132)
Securitization liabilities
1,721
1,333
2,870
3,102
Current taxes
1,822
(1,048)
241
520
Brokers, dealers, and clients amounts receivable and
payable
327
(1,053)
(3,652)
(2,267)
Other, including unrealized foreign currency
translation loss/(gain)
12,471
(995)
(4,112)
452
Net cash from (used in) operating activities
11,738
5,281
(38,541)
(14,831)
Cash flows from (used in) financing activities
Issuance of subordinated notes and debentures
(Note 11)
17
1,750
2,129
1,750
Redemption or repurchase of subordinated notes and
debentures
(Note 11)
(2,927)
(18)
(2,994)
(42)
Common shares issued, net of issuance costs
(Note 12)
40
22
62
59
Repurchase of common shares, including tax on net value
of share repurchases
(Note 12)
(2,571)
(1,219)
(2,571)
(2,942)
Preferred shares and other equity instruments issued,
net of issuance costs
(Note 12)
–
–
748
–
Redemption of preferred shares and other equity instruments
(Note 12)
–
(350)
(500)
(350)
Sale of treasury shares and other equity instruments
(Note 12)
3,183
2,365
7,741
5,616
Purchase of treasury shares and other equity instruments
(Note 12)
(3,147)
(2,307)
(7,771)
(5,501)
Dividends paid on shares and distributions paid on other equity
instruments
(2,015)
(1,853)
(3,807)
(3,597)
Repayment of lease liabilities
(340)
(158)
(509)
(325)
Net cash from (used in) financing activities
(7,760)
(1,768)
(7,472)
(5,332)
Cash flows from (used in) investing activities
Interest-bearing deposits with banks
(9,911)
(10,894)
29,129
10,242
Activities in financial assets at fair value through other comprehensive
income
Purchases
(21,836)
(6,325)
(42,813)
(13,626)
Proceeds from maturities
9,817
5,137
18,123
8,445
Proceeds from sales
1,530
377
2,370
1,115
Activities in debt securities at amortized cost
Purchases
(22,204)
(2,462)
(29,337)
(5,700)
Proceeds from maturities
13,422
8,825
26,012
17,532
Proceeds from sales
4,183
2,108
21,935
2,606
Net purchases of land, buildings, equipment, other depreciable
assets, and other intangibles
(436)
(425)
(933)
(896)
Net cash acquired from divestitures
(Note 7)
20,627
–
20,627
70
Net cash from (used in) investing activities
(4,808)
(3,659)
45,113
19,788
Effect of exchange rate changes on cash and
due from banks
(221)
121
(36)
(38)
Net increase (decrease) in cash and due from banks
(1,051)
(25)
(936)
(413)
Cash and due from banks at beginning of period
6,552
6,333
6,437
6,721
Cash and due from banks at end of period
$
5,501
$
6,308
$
5,501
$
6,308
Supplementary disclosure of cash flows from operating
activities
Amount of income taxes paid (refunded) during the period
$
1,466
$
1,590
$
2,787
$
2,172
Amount of interest paid during the period
13,978
15,232
29,456
30,410
Amount of interest received during the period
20,647
22,223
43,231
44,505
Amount of dividends received during the period
721
683
1,347
1,359
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 58
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1: NATURE OF OPERATIONS
CORPORATE INFORMATION
The Toronto-Dominion Bank is a bank chartered under the
Bank Act (Canada)
. The shareholders of a bank are not, as
shareholders, liable for any liability, act, or
default of the bank except as otherwise provided
under the
Bank Act (Canada)
. The Toronto-Dominion Bank and its subsidiaries are collectively known
as
TD Bank Group (“TD” or the “Bank”). The Bank
was formed through the amalgamation on
February 1, 1955,
of The Bank of Toronto (chartered in 1855) and The
Dominion Bank (chartered in 1869). The Bank
is incorporated and domiciled in Canada
with its registered and principal business
offices located at 66 Wellington
Street West, Toronto, Ontario. TD serves customers in four business segments
operating in a number of locations in key
financial centres around the globe:
Canadian Personal and Commercial
Banking, U.S. Retail, Wealth Management and
Insurance, and Wholesale Banking.
BASIS OF PREPARATION
The accompanying Interim Consolidated
Financial Statements have been prepared
on a condensed basis in accordance with
International Accounting Standards
34,
Interim Financial Reporting
(IAS 34), as issued by the International
Accounting Standards Board (IASB) and
with the accounting policies as described in
Note 2
of the Bank’s 2024 Annual Consolidated Financial
Statements, including the accounting requirements
of the Office of the Superintendent of Financial
Institutions
Canada (OSFI), which were consistently
applied to all periods presented, except
for any new accounting standards adopted
as described
below in Note 2. The
Interim Consolidated Financial Statements
are presented in Canadian dollars, unless
otherwise indicated.
Certain comparative amounts have been
revised to conform with the presentation adopted
in the current period.
The preparation of the Interim Consolidated
Financial Statements requires that management
make judgments, estimates, and assumptions
regarding the
reported amount of assets, liabilities, revenue
and expenses, and disclosure of contingent
assets and liabilities, as further described in
Note 3 of the Bank’s 2024
Annual Consolidated Financial Statements
and in Note 3 of this report. Accordingly, actual results may differ from estimated
amounts as future confirming events
occur.
The Bank’s Interim Consolidated Financial Statements
have been prepared using uniform accounting
policies for like transactions and events in
similar
circumstances. All intercompany transactions,
balances,
and unrealized gains and losses on
transactions are eliminated on consolidation.
The Interim Consolidated Financial Statements
for the three and six months ended April 30,
2025, were approved and authorized
for issue by the Bank’s Board
of Directors, in accordance with a recommendation
of the Audit Committee, on May 21, 2025.
As the Interim Consolidated Financial Statements
do not include all of the disclosures normally
provided in the Annual Consolidated Financial
Statements, they
should be read in conjunction with the Bank’s 2024
Annual Consolidated Financial Statements
and the accompanying Notes, and
the shaded sections of the 2024
Management’s Discussion and Analysis (MD&A).
The risk management policies and procedures
of the Bank are provided in the MD&A.
The shaded sections of
the “Managing Risk” section of the MD&A in
this report,
relating to market, liquidity, and insurance risks, are an integral
part of these Interim Consolidated Financial
Statements, as permitted by IFRS.
NOTE 2: CURRENT AND FUTURE
CHANGES IN ACCOUNTING POLICIES
CURRENT CHANGES IN ACCOUNTING
POLICIES
There were no new accounting policies adopted
by the Bank for the three and six months ended
April 30, 2025.
FUTURE CHANGES IN ACCOUNTING POLICIES
There were no new accounting standards
or amendments issued during the three and
six months ended April 30, 2025. Refer to
Note 4 of the Bank’s 2024 Annual
Consolidated Financial Statements for a description
of future changes in accounting policies.
NOTE 3: SIGNIFICANT ACCOUNTING
JUDGMENTS, ESTIMATES, AND ASSUMPTIONS
The estimates used in the Bank’s accounting policies
are essential to understanding its results
of operations and financial condition. Some
of the Bank’s policies
require subjective, complex judgments and
estimates as they relate to matters
that are inherently uncertain. Changes in these judgments
or estimates and
changes to accounting standards and policies
could have a materially adverse impact on
the Bank’s Interim Consolidated Financial
Statements. The Bank has
established procedures to ensure that accounting
policies are applied consistently and that the
processes for changing methodologies,
determining estimates, and
adopting new accounting standards are well-controlled
and occur in an appropriate and systematic
manner. Refer to Note 3 of the Bank’s 2024
Annual
Consolidated Financial Statements for a description
of significant accounting judgments, estimates,
and assumptions.
Impairment – Expected Credit Loss Model
The expected credit loss (ECL) model requires
the application of judgments, estimates,
and assumptions in the assessment of the
current and forward-looking
economic environment. There remains elevated
economic uncertainty, and management continues to exercise
expert credit judgment in assessing if an
exposure
has experienced significant increase in credit
risk since initial recognition and in determining
the amount of ECLs at each reporting date.
To the extent that certain
effects are not fully incorporated into the model
calculations, temporary quantitative and qualitative
adjustments have been applied,
including for risks related to
elevated uncertainty associated with policy and
trade, and such adjustments will be updated
as appropriate in future quarters.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 59
NOTE 4: FAIR VALUE MEASUREMENTS
There have been no significant changes to
the Bank’s approach and methodologies used
to determine fair value measurements for
the three and six months
ended April 30, 2025.
(a)
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE
The following table reflects the fair value
of the Bank’s financial assets and liabilities not
carried at fair value.
Financial Assets and Liabilities not carried
at Fair Value
1
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Carrying
Fair
Carrying
Fair
value
value
value
value
FINANCIAL ASSETS
Debt securities at amortized cost, net of allowance
for credit losses
Government and government-related
securities
$
199,347
$
196,246
$
206,815
$
202,667
Other debt securities
55,070
54,366
64,800
63,509
Total debt securities at amortized cost, net of allowance for credit losses
254,417
250,612
271,615
266,176
Total loans, net of allowance for loan losses
936,378
939,442
949,549
949,227
Total financial assets not carried at fair value
$
1,190,795
$
1,190,054
$
1,221,164
$
1,215,403
FINANCIAL LIABILITIES
Deposits
$
1,267,748
$
1,278,412
$
1,268,680
$
1,266,562
Securitization liabilities at amortized
cost
13,158
13,024
12,365
12,123
Subordinated notes and debentures
10,714
10,784
11,473
11,628
Total financial liabilities not carried at fair value
$
1,291,620
$
1,302,220
$
1,292,518
$
1,290,313
1
This table excludes financial assets and liabilities where the carrying value approximates their fair value.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 60
(b)
FAIR VALUE HIERARCHY
The following table presents the levels within
the fair value hierarchy for each of the assets
and liabilities measured at fair value on a
recurring basis as at
April 30, 2025 and October 31, 2024.
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
FINANCIAL ASSETS AND COMMODITIES
Trading loans, securities, and other
1
Government and government-related securities
Canadian government debt
Federal
$
5,823
$
6,263
$
–
$
12,086
$
691
$
9,551
$
–
$
10,242
Provinces
–
5,978
–
5,978
–
6,398
–
6,398
U.S. federal, state, municipal governments,
and agencies debt
3,023
19,432
–
22,455
–
18,861
–
18,861
Other OECD
2
government-guaranteed debt
583
8,369
–
8,952
–
9,722
–
9,722
Mortgage-backed securities
–
937
–
937
–
1,352
–
1,352
Other debt securities
Canadian issuers
–
6,260
4
6,264
–
6,611
12
6,623
Other issuers
–
14,808
2
14,810
–
15,845
14
15,859
Equity securities
75,466
91
28
75,585
68,682
34
12
68,728
Trading loans
–
25,664
–
25,664
–
23,518
–
23,518
Commodities
21,381
889
–
22,270
13,504
962
–
14,466
Retained interests
–
1
–
1
–
1
–
1
106,276
88,692
34
195,002
82,877
92,855
38
175,770
Non-trading financial assets at fair value
through profit or loss
Securities
388
2,684
1,253
4,325
391
1,188
1,233
2,812
Loans
–
3,203
–
3,203
–
3,057
–
3,057
388
5,887
1,253
7,528
391
4,245
1,233
5,869
Derivatives
Interest rate contracts
3
10,188
11
10,202
2
15,440
–
15,442
Foreign exchange contracts
1
65,191
–
65,192
47
51,001
13
51,061
Credit contracts
–
18
–
18
–
6
–
6
Equity contracts
155
7,830
–
7,985
64
6,167
–
6,231
Commodity contracts
798
4,994
21
5,813
548
4,756
17
5,321
957
88,221
32
89,210
661
77,370
30
78,061
Financial assets designated at
fair value through profit or loss
Securities
1
–
6,508
–
6,508
–
6,417
–
6,417
–
6,508
–
6,508
–
6,417
–
6,417
Financial assets at fair value through other
comprehensive income
Government and government-related securities
Canadian government debt
Federal
176
15,920
–
16,096
–
18,139
–
18,139
Provinces
–
22,529
–
22,529
–
21,270
–
21,270
U.S. federal, state, municipal governments,
and agencies debt
3,443
42,334
–
45,777
–
35,197
–
35,197
Other OECD government-guaranteed debt
–
7,050
–
7,050
–
1,679
–
1,679
Mortgage-backed securities
–
2,042
–
2,042
–
2,137
–
2,137
Other debt securities
Asset-backed securities
–
7,417
–
7,417
–
1,384
–
1,384
Corporate and other debt
–
11,972
–
11,972
–
9,439
7
9,446
Equity securities
1,067
3
2,808
3,878
1,058
2
3,355
4,415
Loans
–
141
–
141
–
230
–
230
4,686
109,408
2,808
116,902
1,058
89,477
3,362
93,897
Securities purchased under reverse
repurchase agreements
–
6,950
–
6,950
–
10,488
–
10,488
FINANCIAL LIABILITIES
Trading deposits
–
28,377
384
28,761
–
29,907
505
30,412
Derivatives
Interest rate contracts
3
7,933
92
8,028
3
13,283
158
13,444
Foreign exchange contracts
2
58,660
1
58,663
30
40,936
12
40,978
Credit contracts
–
1,517
–
1,517
–
403
–
403
Equity contracts
–
9,089
131
9,220
–
7,974
24
7,998
Commodity contracts
905
5,111
41
6,057
673
4,845
27
5,545
910
82,310
265
83,485
706
67,441
221
68,368
Securitization liabilities at fair value
–
22,396
–
22,396
–
20,319
–
20,319
Financial liabilities designated at fair value
through profit or loss
–
193,924
1
193,925
–
207,890
24
207,914
Obligations related to securities sold short
1
14,273
29,280
–
43,553
1,783
37,732
–
39,515
Obligations related to securities sold
under repurchase agreements
–
8,133
–
8,133
–
9,736
–
9,736
1
Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but
not yet purchased (short positions).
2
Organisation for Economic Co-operation and Development (OECD).
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 61
(c)
TRANSFERS BETWEEN FAIR VALUE HIERARCHY LEVELS FOR ASSETS
AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
The Bank’s policy is to record transfers of assets
and liabilities between the different levels of
the fair value hierarchy using the fair values
as at the end of each
reporting period. Assets and liabilities are
transferred between Level 1 and Level 2
depending on whether there is sufficient frequency
and volume in an active
market.
During the three months ended April 30, 2025,
the Bank transferred $
1,660
million of trading loans, securities, and
other, $
3,584
million of financial assets at fair
value through other comprehensive income
(FVOCI), and $
1,856
million of obligations related to securities
sold short from Level 2 to Level 1. During
the three
months ended April 30, 2025, there were no
significant transfers from Level 1 to Level
- There were no significant transfers between
Level 1 and Level 2 during
the three months ended April 30, 2024.
During the six months ended April 30, 2025,
the Bank transferred $
1,972
million of trading loans, securities, and other, $
3,586
million of financial assets at FVOCI,
and $
910
million of obligations related to securities
sold short from Level 2 to Level 1. During the
six months ended April 30, 2025, there were
no significant
transfers from Level 1 to Level 2. There were
no significant transfers between Level
1 and Level 2 during the six months ended
April 30, 2024.
There were no significant transfers between
Level 2 and Level 3 during the three and
six months ended April 30, 2025 and April 30,
2024.
There were no significant changes to the unobservable
inputs and sensitivities for assets and liabilities
classified as Level 3 during the three and
six months ended
April 30, 2025, and April 30, 2024.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 62
(d)
RECONCILIATION OF CHANGES IN FAIR VALUE FOR LEVEL 3 ASSETS AND LIABILITIES
The following tables set out changes in fair
value of all assets and liabilities measured
at fair value using significant Level 3 unobservable
inputs for the three and
six months ended April 30, 2025 and April 30,
2024.
Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities
(millions of Canadian dollars)
Change in
unrealized
Fair
Total realized and
Fair
gains
value as at
unrealized gains (losses)
Movements
1
Transfers
value as at
(losses) on
February 1
Included
Included
Purchases/
Sales/
Into
Out of
April 30
instruments
2025
in income
2
in OCI
3,4
Issuances
Settlements
Level 3
Level 3
2025
still held
5
FINANCIAL ASSETS
Trading loans, securities,
and other
Other debt securities
$
11
$
–
$
–
$
–
$
(7)
$
2
$
–
$
6
$
–
Equity securities
8
–
–
20
–
–
–
28
–
19
–
–
20
(7)
2
–
34
–
Non-trading financial
assets at fair value
through profit or loss
Securities
1,287
(40)
–
39
(20)
–
(13)
1,253
(43)
1,287
(40)
–
39
(20)
–
(13)
1,253
(43)
Financial assets at fair value
through other
comprehensive income
Other debt securities
3
–
–
–
(3)
–
–
–
(3)
Equity securities
3,174
–
3
1
(370)
–
–
2,808
(357)
$
3,177
$
–
$
3
$
1
$
(373)
$
–
$
–
$
2,808
$
(360)
FINANCIAL LIABILITIES
Trading deposits
6
$
(459)
$
24
$
–
$
(52)
$
103
$
–
$
–
$
(384)
$
27
Derivatives
7
Interest rate contracts
(155)
74
–
–
–
–
–
(81)
68
Foreign exchange contracts
21
(23)
–
–
(1)
2
–
(1)
(8)
Equity contracts
(29)
(98)
–
–
–
(4)
–
(131)
(95)
Commodity contracts
(4)
(16)
–
–
–
–
–
(20)
(12)
(167)
(63)
–
–
(1)
(2)
–
(233)
(47)
Financial liabilities designated
at fair value
through profit or loss
(1)
7
–
(7)
–
–
–
(1)
7
Change in
unrealized
Fair
Total realized and
Fair
gains
value as at
unrealized gains (losses)
Movements
1
Transfers
value as at
(losses) on
November 1
Included
Included
Purchases/
Sales/
Into
Out of
April 30
instruments
2024
in income
2
in OCI
4
Issuances
Settlements
Level 3
Level 3
2025
still held
5
FINANCIAL ASSETS
Trading loans, securities,
and other
Other debt securities
$
26
$
–
$
–
$
–
$
(22)
$
2
$
–
$
6
$
–
Equity securities
12
1
–
22
(7)
–
–
28
–
38
1
–
22
(29)
2
–
34
–
Non-trading financial
assets at fair value
through profit or loss
Securities
1,233
(14)
–
54
(37)
30
(13)
1,253
(30)
1,233
(14)
–
54
(37)
30
(13)
1,253
(30)
Financial assets at fair value
through other
comprehensive income
Other debt securities
7
–
–
–
(7)
–
–
–
–
Equity securities
3,355
–
3
3
(553)
–
–
2,808
–
$
3,362
$
–
$
3
$
3
$
(560)
$
–
$
–
$
2,808
$
–
FINANCIAL LIABILITIES
Trading deposits
6
$
(505)
$
28
$
–
$
(124)
$
217
$
–
$
–
$
(384)
$
34
Derivatives
7
Interest rate contracts
(158)
67
–
–
10
–
–
(81)
70
Foreign exchange contracts
1
(16)
–
–
3
9
2
(1)
(5)
Equity contracts
(24)
(103)
–
–
(2)
(2)
–
(131)
(102)
Commodity contracts
(10)
(10)
–
–
–
–
–
(20)
(9)
(191)
(62)
–
–
11
7
2
(233)
(46)
Financial liabilities designated
at fair value
through profit or loss
(24)
6
–
(14)
31
–
–
(1)
6
1
Includes foreign exchange.
2
Gains/losses on financial assets and liabilities are recognized within Non-interest Income on the Interim Consolidated
Statement of Income.
3
Other comprehensive income.
4
Includes realized gains/losses transferred to retained earnings on disposal of equities designated at FVOCI. Refer
to Note 5 for further details.
5
Changes in unrealized gains/losses on financial assets at FVOCI are recognized in accumulated other comprehensive
income (AOCI).
6
Issuances and repurchases of trading deposits are reported on a gross basis.
7
Consists of derivative assets of $
32
million (January 31, 2025/February 1, 2025 – $
38
million; October 31, 2024/November 1, 2024 – $
30
million) and derivative liabilities of $
265
million
(January 31, 2025/February 1, 2025 – $
205
million; October 31, 2024/November 1, 2024 – $
221
million) which have been netted in this table for presentation purposes only.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 63
Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities
(millions of Canadian dollars)
Change in
unrealized
Fair
Total realized and
Fair
gains
value as at
unrealized gains (losses)
Movements
1
Transfers
value as at
(losses) on
February 1
Included
Included
Purchases/
Sales/
Into
Out of
April 30
instruments
2024
in income
2
in OCI
3
Issuances
Settlements
Level 3
Level 3
2024
still held
4
FINANCIAL ASSETS
Trading loans, securities,
and other
Government and government-
related securities
$
34
$
–
$
–
$
–
$
(34)
$
–
$
–
$
–
$
–
Other debt securities
61
(2)
–
18
(4)
5
(49)
29
(1)
Equity securities
7
–
–
2
–
–
–
9
(1)
102
(2)
–
20
(38)
5
(49)
38
(2)
Non-trading financial
assets at fair value
through profit or loss
Securities
1,079
49
–
33
(10)
–
(1)
1,150
45
1,079
49
–
33
(10)
–
(1)
1,150
45
Financial assets at fair value
through other
comprehensive income
Other debt securities
26
–
(1)
–
(11)
–
–
14
3
Equity securities
2,142
–
(2)
122
45
–
–
2,307
(13)
$
2,168
$
–
$
(3)
$
122
$
34
$
–
$
–
$
2,321
$
(10)
FINANCIAL LIABILITIES
Trading deposits
5
$
(1,039)
$
34
$
–
$
(18)
$
97
$
–
$
16
$
(910)
$
44
Derivatives
6
Interest rate contracts
(137)
(18)
–
–
7
–
–
(148)
(10)
Foreign exchange contracts
(1)
(1)
–
–
1
(6)
–
(7)
(1)
Equity contracts
(28)
5
–
–
(1)
–
1
(23)
4
Commodity contracts
(10)
(14)
–
–
30
–
–
6
8
(176)
(28)
–
–
37
(6)
1
(172)
1
Financial liabilities designated
at fair value through profit
or loss
(24)
(37)
–
(79)
66
–
–
(74)
(37)
Change in
unrealized
Fair
Total realized and
Fair
gains
value as at
unrealized gains (losses)
Movements
1
Transfers
value as at
(losses) on
November 1
Included
Included
Purchases/
Sales/
Into
Out of
April 30
instruments
2023
in income
2
in OCI
3
Issuances
Settlements
Level 3
Level 3
2024
still held
4
FINANCIAL ASSETS
Trading loans, securities,
and other
Government and government-
related securities
$
67
$
–
$
–
$
–
$
(67)
$
–
$
–
$
–
$
–
Other debt securities
65
1
–
90
(85)
7
(49)
29
(2)
Equity securities
10
(1)
–
2
(2)
–
–
9
–
142
–
–
92
(154)
7
(49)
38
(2)
Non-trading financial
assets at fair value
through profit or loss
Securities
980
62
–
124
(15)
–
(1)
1,150
62
980
62
–
124
(15)
–
(1)
1,150
62
Financial assets at fair value
through other
comprehensive income
Other debt securities
27
–
(4)
3
(12)
–
–
14
–
Equity securities
2,377
–
(12)
128
(186)
–
–
2,307
(11)
$
2,404
$
–
$
(16)
$
131
$
(198)
$
–
$
–
$
2,321
$
(11)
FINANCIAL LIABILITIES
Trading deposits
5
$
(985)
$
10
$
–
$
(74)
$
118
$
–
$
21
$
(910)
$
2
Derivatives
6
Interest rate contracts
(126)
(41)
–
–
19
–
–
(148)
(23)
Foreign exchange contracts
(6)
1
–
–
1
(6)
3
(7)
(2)
Equity contracts
(21)
(1)
–
–
(1)
(1)
1
(23)
(1)
Commodity contracts
(1)
(4)
–
–
11
–
–
6
(5)
(154)
(45)
–
–
30
(7)
4
(172)
(31)
Financial liabilities designated
at fair value
through profit or loss
(22)
1
–
(133)
80
–
–
(74)
–
1
Includes foreign exchange.
2
Gains/losses on financial assets and liabilities are recognized within Non-interest Income on the Interim Consolidated
Statement of Income.
3
Includes realized gains/losses transferred to retained earnings on disposal of equities designated at FVOCI. Refer
to Note 5 for further details.
4
Changes in unrealized gains/losses on financial assets at FVOCI are recognized in AOCI.
5
Issuances and repurchases of trading deposits are reported on a gross basis.
6
Consists of derivative assets of $
20
million (January 31, 2024/February 1, 2024 – $
10
million; October 31, 2023/November 1, 2023 – $
22
million) and derivative liabilities of $
192
million
(January 31, 2024/February 1, 2024 – $
186
million; October 31, 2023/November 1, 2023 – $
176
million) which have been netted in this table for presentation purposes only.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 64
NOTE 5: SECURITIES
(a)
UNREALIZED SECURITIES GAINS (LOSSES)
The following table summarizes the unrealized
gains and losses as at April 30, 2025
and October 31, 2024.
Unrealized Gains (Losses) for Securities
at Fair Value Through Other Comprehensive Income
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Cost/
Gross
Gross
Cost/
Gross
Gross
amortized
unrealized
unrealized
Fair
amortized
unrealized
unrealized
Fair
cost
1
gains
(losses)
value
cost
1
gains
(losses)
value
Government and government-related
securities
Canadian government debt
Federal
$
16,286
$
11
$
(201)
$
16,096
$
18,281
$
17
$
(159)
$
18,139
Provinces
22,577
58
(106)
22,529
21,263
77
(70)
21,270
U.S. federal, state, municipal governments, and
agencies debt
45,991
23
(237)
45,777
35,371
22
(196)
35,197
Other OECD government-guaranteed debt
7,054
3
(7)
7,050
1,687
1
(9)
1,679
Mortgage-backed securities
2,018
27
(3)
2,042
2,125
17
(5)
2,137
93,926
122
(554)
93,494
78,727
134
(439)
78,422
Other debt securities
Asset-backed securities
7,477
1
(61)
7,417
1,397
1
(14)
1,384
Corporate and other debt
11,972
66
(66)
11,972
9,419
77
(50)
9,446
19,449
67
(127)
19,389
10,816
78
(64)
10,830
Total debt securities
113,375
189
(681)
112,883
89,543
212
(503)
89,252
Equity securities
Common shares
3,222
254
(81)
3,395
3,810
176
(72)
3,914
Preferred shares
551
103
(171)
483
632
29
(160)
501
3,773
357
(252)
3,878
4,442
205
(232)
4,415
Total securities at fair value through
other comprehensive income
$
117,148
$
546
$
(933)
$
116,761
$
93,985
$
417
$
(735)
$
93,667
1
Includes the foreign exchange translation of amortized cost balances at the period-end spot rate.
(b)
EQUITY SECURITIES DESIGNATED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
The Bank designated certain equity securities
at FVOCI.
The following table summarizes the fair
value of equity securities designated at
FVOCI as at
April 30, 2025 and October 31, 2024, and dividend
income recognized on these securities
for the three and six months ended April 30,
2025 and April 30, 2024.
Equity Securities Designated at Fair Value Through
Other Comprehensive Income
(millions of Canadian dollars)
As at
For the three months ended
For the six months ended
April 30, 2025
October 31, 2024
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Fair value
Dividend income recognized
Dividend income recognized
Common shares
$
3,395
$
3,914
$
88
$
48
$
115
$
65
Preferred shares
483
501
35
38
74
77
Total
$
3,878
$
4,415
$
123
$
86
$
189
$
142
The Bank disposed of certain equity securities
in line with the Bank’s investment strategy
and disposed of Federal Home Loan Bank (FHLB)
stock in accordance
with FHLB member stockholding requirements,
as follows:
Equity Securities Net Realized Gains
(Losses)
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Equity Securities
Fair value
$
62
$
73
$
126
$
115
Cumulative realized gain/(loss)
(26)
(1)
(20)
(1)
FHLB Stock
Fair value
219
4
537
163
Cumulative realized gain/(loss)
–
–
–
–
(c)
DEBT SECURITIES NET REALIZED GAINS
(LOSSES)
The Bank disposed of certain debt securities
measured at amortized cost and FVOCI
during the quarter.
The following table summarizes the net realized
gains
and losses on securities disposed of during
the three and six months ended April 30, 2025
and April 30, 2024, which are included in
Other income (loss) on the
Interim Consolidated Statement of Income.
Debt Securities Net Realized Gains (Losses)
1
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Debt securities at amortized cost
$
(285)
$
(69)
$
(1,196)
$
(69)
Debt securities at fair value through other
comprehensive income
3
3
(6)
9
Total
$
(282)
$
(66)
$
(1,202)
$
(60)
1
Includes $
284
million (US$
199
million) and $
1,207
million (US$
848
million), respectively, for the three and six months
ended April 30, 2025 (three and six months ended April 30, 2024 –
nil
) of pre-tax losses on debt securities related to the balance sheet restructuring initiative undertaken in the U.S.
Retail segment. Refer to Note 26 of the Bank’s 2024 Annual
Consolidated Financial Statements for additional information regarding the asset limitation on TD’s two
U.S. bank subsidiaries. As of May 21, 2025, the Bank has sold additional debt
securities during the third quarter of fiscal 2025, resulting in approximately $
247
million (US$
178
million) of additional pre-tax losses on debt securities.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 65
(d)
CREDIT QUALITY OF DEBT SECURITIES
The Bank evaluates non-retail credit risk
on an individual borrower basis, using both
a borrower risk rating (BRR) and facility
risk rating, as detailed in the shaded
area of the “Managing Risk” section of the 2024
MD&A. This system is used to assess all non-retail
exposures, including debt securities.
The following table provides the gross carrying
amounts of debt securities measured at amortized
cost and debt securities at FVOCI by internal
risk rating for credit
risk management purposes, presenting
separately those debt securities that are
subject to Stage 1, Stage 2, and Stage 3
allowances. Refer to the “Allowance
for
Credit Losses” table in Note 6 for details regarding
the allowance and provision for credit losses
on debt securities.
Debt Securities by Risk Rating
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Debt securities
1
Investment grade
$
366,430
$
–
$
n/a
2
$
366,430
$
360,272
$
–
$
n/a
$
360,272
Non-investment grade
704
112
n/a
816
439
91
n/a
530
Watch and classified
n/a
57
n/a
57
n/a
68
n/a
68
Default
n/a
n/a
–
–
n/a
n/a
–
–
Total debt securities
367,134
169
–
367,303
360,711
159
–
360,870
Allowance for credit losses on debt securities
at amortized cost
3
–
–
3
3
–
–
3
Total debt securities, net of
allowance
$
367,131
$
169
$
–
$
367,300
$
360,708
$
159
$
–
$
360,867
1
Includes debt securities backed by government-guaranteed loans of $
102
million (October 31, 2024 – $
113
million), which are reported in Non-investment grade or a lower risk rating
based on the issuer’s credit risk.
2
Not applicable.
As at April 30, 2025, total debt securities, net
of allowance,
in the table above, include debt securities
measured at amortized cost, net of allowance,
of
$
254,417
million (October 31, 2024 – $
271,615
million), and debt securities measured at
FVOCI of $
112,883
million (October 31, 2024 – $
89,252
million). The
difference between probability-weighted ECLs
and base ECLs on debt securities at
FVOCI and at amortized cost as at both
April 30, 2025 and October 31, 2024,
was insignificant.
NOTE 6: LOANS, IMPAIRED LOANS, AND ALLOWANCE FOR CREDIT LOSSES
(a)
LOANS
The following table provides details regarding
the Bank’s loans as at April 30, 2025 and October
31, 2024.
Loans
(millions of Canadian dollars)
As at
April 30, 2025
October 31,2024
Residential mortgages
$
316,298
$
331,649
Consumer instalment and other personal
234,003
228,382
Credit card
40,465
40,639
Business and government
354,225
356,973
944,991
957,643
Loans at FVOCI
(Note 4)
141
230
Total loans
945,132
957,873
Total allowance for loan losses
8,613
8,094
Total loans, net of allowance
$
936,519
$
949,779
Business and government loans and loans
at FVOCI are grouped together as reflected
below for presentation in the “Loans by
Risk Ratings” table.
Loans – Business and Government
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Loans at amortized cost
$
354,225
$
356,973
Loans at FVOCI
(Note 4)
141
230
Loans
354,366
357,203
Allowance for loan losses
3,903
3,583
Loans, net of allowance
$
350,463
$
353,620
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 66
(b)
CREDIT QUALITY OF LOANS
In the retail portfolio, including individuals and
small businesses, the Bank manages exposures
on a pooled basis, using predictive credit
scoring techniques. For
non-retail exposures, each borrower is assigned
a BRR that reflects the probability of default
(PD)
of the borrower using proprietary industry
and sector specific
risk models and expert judgment. Refer to
the shaded areas of the “Managing Risk”
section of the 2024 MD&A for further
details, including the mapping of PD
ranges to risk levels for retail exposures
as well as the Bank’s 21-point BRR scale
to risk levels and external ratings for non-retail
exposures.
The following table provides the gross carrying
amounts of loans and credit risk exposures
on loan commitments and financial guarantee
contracts by internal risk
ratings for credit risk management purposes,
presenting separately those that are
subject to Stage 1, Stage 2, and Stage 3
allowances.
Loans by Risk Ratings
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Residential mortgages
1,2,3
Low Risk
$
218,093
$
920
$
n/a
$
219,013
$
238,101
$
655
$
n/a
$
238,756
Normal Risk
72,782
9,420
n/a
82,202
65,318
13,620
n/a
78,938
Medium Risk
394
10,048
n/a
10,442
370
9,614
n/a
9,984
High Risk
8
3,799
348
4,155
5
3,201
347
3,553
Default
n/a
n/a
486
486
n/a
n/a
418
418
Total loans
291,277
24,187
834
316,298
303,794
27,090
765
331,649
Allowance for loan losses
106
174
68
348
116
189
60
365
Loans, net of allowance
291,171
24,013
766
315,950
303,678
26,901
705
331,284
Consumer instalment and other personal
4
Low Risk
100,688
2,611
n/a
103,299
101,171
2,624
n/a
103,795
Normal Risk
61,198
21,001
n/a
82,199
66,105
12,054
n/a
78,159
Medium Risk
27,578
6,834
n/a
34,412
27,188
6,352
n/a
33,540
High Risk
5,488
7,582
440
13,510
4,017
7,881
412
12,310
Default
n/a
n/a
583
583
n/a
n/a
578
578
Total loans
194,952
38,028
1,023
234,003
198,481
28,911
990
228,382
Allowance for loan losses
649
1,218
278
2,145
667
1,120
262
2,049
Loans, net of allowance
194,303
36,810
745
231,858
197,814
27,791
728
226,333
Credit card
Low Risk
8,288
15
n/a
8,303
6,902
16
n/a
6,918
Normal Risk
11,957
197
n/a
12,154
11,714
188
n/a
11,902
Medium Risk
11,938
1,080
n/a
13,018
12,908
1,122
n/a
14,030
High Risk
2,372
4,086
400
6,858
2,832
4,382
437
7,651
Default
n/a
n/a
132
132
n/a
n/a
138
138
Total loans
34,555
5,378
532
40,465
34,356
5,708
575
40,639
Allowance for loan losses
743
1,025
449
2,217
704
1,015
378
2,097
Loans, net of allowance
33,812
4,353
83
38,248
33,652
4,693
197
38,542
Business and government
1,2,3,5
Investment grade or Low/Normal Risk
152,746
156
n/a
152,902
158,425
102
n/a
158,527
Non-investment grade or Medium Risk
169,461
12,187
n/a
181,648
166,892
11,851
n/a
178,743
Watch and classified or High Risk
437
16,902
78
17,417
704
16,610
89
17,403
Default
n/a
n/a
2,399
2,399
n/a
n/a
2,530
2,530
Total loans
322,644
29,245
2,477
354,366
326,021
28,563
2,619
357,203
Allowance for loan losses
1,147
1,923
833
3,903
983
1,758
842
3,583
Loans, net of allowance
321,497
27,322
1,644
350,463
325,038
26,805
1,777
353,620
Total loans
843,428
96,838
4,866
945,132
862,652
90,272
4,949
957,873
Total allowance for loan losses
2,645
4,340
1,628
8,613
2,470
4,082
1,542
8,094
Total loans, net of allowance
$
840,783
$
92,498
$
3,238
$
936,519
$
860,182
$
86,190
$
3,407
$
949,779
1
Includes impaired loans with a balance of $
212
million (October 31, 2024 – $
259
million) which did not have a related allowance for loan losses as the realizable value of the collateral
exceeded the loan amount.
2
Excludes trading loans and non-trading loans at fair value through profit or loss (FVTPL) with a fair value of $
26
billion (October 31, 2024 – $
24
billion) and $
3
billion (October 31, 2024 –
$
3
billion), respectively.
3
Includes insured mortgages of $
70
billion (October 31, 2024 – $
71
billion).
4
Includes Canadian government-insured real estate personal loans of $
5
billion (October 31, 2024 – $
6
billion).
5
Includes loans guaranteed by government agencies of $
23
billion (October 31, 2024 – $
24
billion), which are primarily reported in Non-investment grade or a lower risk rating based on
the borrowers’ credit risk.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 67
Loans by Risk Ratings
(Continued)
– Off-Balance Sheet Credit Instruments
1
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Retail Exposures
2
Low Risk
$
316,318
$
1,546
$
n/a
$
317,864
$
268,234
$
1,365
$
n/a
$
269,599
Normal Risk
55,985
1,411
n/a
57,396
93,576
1,332
n/a
94,908
Medium Risk
14,508
1,214
n/a
15,722
18,562
1,247
n/a
19,809
High Risk
1,115
763
–
1,878
1,126
1,181
–
2,307
Default
n/a
n/a
–
–
n/a
n/a
–
–
Non-Retail Exposures
3
Investment grade
293,076
–
n/a
293,076
287,830
–
n/a
287,830
Non-investment grade
102,084
6,164
n/a
108,248
99,866
6,968
n/a
106,834
Watch and classified
369
5,662
–
6,031
328
5,418
–
5,746
Default
n/a
n/a
218
218
n/a
n/a
252
252
Total off-balance sheet credit
instruments
783,455
16,760
218
800,433
769,522
17,511
252
787,285
Allowance for off-balance sheet credit
instruments
415
552
4
971
439
593
11
1,043
Total off-balance sheet credit
instruments, net of allowance
$
783,040
$
16,208
$
214
$
799,462
$
769,083
$
16,918
$
241
$
786,242
1
Excludes mortgage commitments.
2
Includes $
390
billion (October 31, 2024 – $
384
billion) of personal lines of credit and credit card lines, which are unconditionally cancellable at the Bank’s
discretion at any time.
3
Includes $
68
billion (October 31, 2024 – $
66
billion) of the undrawn component of uncommitted credit and liquidity facilities.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 68
(c)
ALLOWANCE FOR CREDIT LOSSES
The following table provides details on
the Bank’s allowance for credit losses as at and
for the three and six months ended April 30,
2025
and April 30, 2024,
including allowance for off-balance sheet instruments
in the applicable categories.
Allowance for Credit Losses
(millions of Canadian dollars)
Foreign
Foreign
exchange,
exchange,
Balance at
Provision
Write-offs,
disposals,
Balance
Balance at
Provision
Write-offs,
disposals,
Balance
beginning
for credit
net of
and other
at end of
beginning
for credit
net of
and other
at end of
of period
losses
recoveries
adjustments
period
of period
losses
recoveries
adjustments
period
For the three months ended
April 30, 2025
April 30, 2024
Residential mortgages
$
368
$
(14)
$
–
$
(6)
$
348
$
410
$
(8)
$
(1)
$
2
$
403
Consumer instalment and other
personal
2,189
380
(307)
(41)
2,221
1,979
361
(288)
20
2,072
Credit card
2,797
451
(435)
(97)
2,716
2,577
423
(403)
47
2,644
Business and government
4,240
523
(360)
(104)
4,299
3,299
296
(207)
40
3,428
Total allowance for loan losses,
including off-balance sheet
instruments
9,594
1,340
(1,102)
(248)
9,584
8,265
1,072
(899)
109
8,547
Debt securities at amortized cost
3
–
–
–
3
2
–
–
–
2
Debt securities at FVOCI
1
1
–
–
2
1
(1)
–
1
1
Total allowance for credit
losses on debt securities
4
1
–
–
5
3
(1)
–
1
3
Total allowance for credit losses
$
9,598
$
1,341
$
(1,102)
$
(248)
$
9,589
$
8,268
$
1,071
$
(899)
$
110
$
8,550
Comprising:
Allowance for credit losses on
loans at amortized cost
$
8,654
$
8,613
$
7,265
$
7,545
Allowance for credit losses on
loans at FVOCI
1
–
–
–
Allowance for loan losses
8,655
8,613
7,265
7,545
Allowance for off-balance sheet
instruments
939
971
1,000
1,002
Allowance for credit losses on
debt securities
4
5
3
3
For the six months ended
April 30, 2025
April 30, 2024
Residential mortgages
$
365
$
(15)
$
(1)
$
(1)
$
348
$
403
$
–
$
(3)
$
3
$
403
Consumer instalment and other
personal
2,133
736
(641)
(7)
2,221
1,895
743
(563)
(3)
2,072
Credit card
2,699
901
(871)
(13)
2,716
2,577
853
(772)
(14)
2,644
Business and government
3,940
930
(546)
(25)
4,299
3,310
477
(320)
(39)
3,428
Total allowance for loan losses,
including off-balance sheet
instruments
9,137
2,552
(2,059)
(46)
9,584
8,185
2,073
(1,658)
(53)
8,547
Debt securities at amortized cost
3
–
–
–
3
2
–
–
–
2
Debt securities at FVOCI
1
1
–
–
2
2
(1)
–
–
1
Total allowance for credit
losses on debt securities
4
1
–
–
5
4
(1)
–
–
3
Total allowance for credit losses
$
9,141
$
2,553
$
(2,059)
$
(46)
$
9,589
$
8,189
$
2,072
$
(1,658)
$
(53)
$
8,550
Comprising:
Allowance for credit losses on
loans at amortized cost
$
8,094
$
8,613
$
7,136
$
7,545
Allowance for credit losses on
loans at FVOCI
–
–
–
–
Allowance for loan losses
8,094
8,613
7,136
7,545
Allowance for off-balance sheet
instruments
1,043
971
1,049
1,002
Allowance for credit losses on
debt securities
4
5
4
3
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 69
(d)
ALLOWANCE FOR LOAN LOSSES BY STAGE
The following table provides details on
the Bank’s allowance for loan losses by stage as
at and for the three months ended April 30,
2025 and April 30, 2024.
Allowance for Loan Losses by Stage
(millions of Canadian dollars)
For the three months ended
April 30, 2025
April 30, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Residential Mortgages
Balance at beginning of period
$
114
$
181
$
73
$
368
$
137
$
212
$
61
$
410
Provision for credit losses
Transfer to Stage 1
1
22
(20)
(2)
–
32
(32)
–
–
Transfer to Stage 2
(7)
17
(10)
–
(7)
13
(6)
–
Transfer to Stage 3
–
(8)
8
–
–
(8)
8
–
Net remeasurement due to transfers into stage
2
(5)
4
–
(1)
(8)
6
–
(2)
New originations or purchases
3
5
n/a
n/a
5
7
n/a
n/a
7
Net repayments
4
(1)
(1)
–
(2)
(1)
–
–
(1)
Derecognition of financial assets (excluding
disposals and write-offs)
5
(5)
(6)
(7)
(18)
(1)
(7)
(19)
(27)
Changes to risk, parameters, and models
6
(15)
8
9
2
(31)
29
17
15
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(1)
(1)
–
–
(2)
(2)
Recoveries
–
–
1
1
–
–
1
1
Foreign exchange and other adjustments
(2)
(1)
(3)
(6)
1
1
–
2
Balance at end of period
$
106
$
174
$
68
$
348
$
129
$
214
$
60
$
403
Consumer Instalment and Other Personal
Balance, including off-balance sheet instruments,
at beginning of period
$
683
$
1,224
$
282
$
2,189
$
664
$
1,090
$
225
$
1,979
Provision for credit losses
Transfer to Stage 1
1
139
(137)
(2)
–
142
(141)
(1)
–
Transfer to Stage 2
(60)
85
(25)
–
(58)
81
(23)
–
Transfer to Stage 3
(2)
(76)
78
–
(3)
(62)
65
–
Net remeasurement due to transfers into stage
2
(61)
72
2
13
(63)
71
2
10
New originations or purchases
3
76
n/a
n/a
76
87
n/a
n/a
87
Net repayments
4
(20)
(29)
(4)
(53)
(18)
(24)
(4)
(46)
Derecognition of financial assets (excluding
disposals and write-offs)
5
(21)
(27)
(10)
(58)
(16)
(26)
(16)
(58)
Changes to risk, parameters, and models
6
(46)
179
269
402
(55)
148
275
368
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(399)
(399)
–
–
(370)
(370)
Recoveries
–
–
92
92
–
–
82
82
Foreign exchange and other adjustments
(15)
(21)
(5)
(41)
8
9
3
20
Balance, including off-balance sheet instruments,
at end of period
673
1,270
278
2,221
688
1,146
238
2,072
Less: Allowance for off-balance sheet instruments
7
24
52
–
76
30
55
–
85
Balance at end of period
$
649
$
1,218
$
278
$
2,145
$
658
$
1,091
$
238
$
1,987
Credit Card
8
Balance, including off-balance sheet instruments,
at beginning of period
$
927
$
1,372
$
498
$
2,797
$
880
$
1,325
$
372
$
2,577
Provision for credit losses
Transfer to Stage 1
1
235
(224)
(11)
–
263
(255)
(8)
–
Transfer to Stage 2
(82)
105
(23)
–
(81)
101
(20)
–
Transfer to Stage 3
(6)
(286)
292
–
(5)
(239)
244
–
Net remeasurement due to transfers into stage
2
(78)
113
6
41
(118)
121
6
9
New originations or purchases
3
38
n/a
n/a
38
40
n/a
n/a
40
Net repayments
4
(12)
(1)
20
7
(8)
1
18
11
Derecognition of financial assets (excluding
disposals and write-offs)
5
(9)
(21)
(104)
(134)
(10)
(18)
(88)
(116)
Changes to risk, parameters, and models
6
(28)
302
225
499
(61)
286
254
479
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(532)
(532)
–
–
(486)
(486)
Recoveries
–
–
97
97
–
–
83
83
Foreign exchange and other adjustments
(32)
(46)
(19)
(97)
15
23
9
47
Balance, including off-balance sheet instruments,
at end of period
953
1,314
449
2,716
915
1,345
384
2,644
Less: Allowance for off-balance sheet instruments
7
210
289
–
499
248
366
–
614
Balance at end of period
$
743
$
1,025
$
449
$
2,217
$
667
$
979
$
384
$
2,030
1
Transfers represent stage transfer movements prior to ECL remeasurement.
2
Represents the mechanical remeasurement between twelve-month (i.e., Stage 1) and lifetime ECLs (i.e., Stage 2
or 3) due to stage transfers necessitated by credit risk migration, as
described in the “Significant Increase in Credit Risk” section of Note 2 and Note 3 of the Bank’s 2024
Annual Consolidated Financial Statements, holding all other factors impacting the
change in ECLs constant.
3
Represents the increase in the allowance resulting from loans that were newly originated, purchased, or renewed.
4
Represents the changes in the allowance related to cash flow changes associated with new draws or repayments
on loans outstanding.
5
Represents the decrease in the allowance resulting from loans that were fully repaid and excludes the decrease
associated with loans that were disposed or fully written off.
6
Represents the changes in the allowance related to current period changes in risk (e.g.,
PD) caused by changes to macroeconomic factors, level of risk, parameters,
and/or models,
subsequent to stage migration. Refer to the “Measurement of Expected Credit Losses”, “Forward-Looking Information
”
and “Expert Credit Judgment”
sections of Note 2 and Note 3 of the
Bank’s 2024 Annual Consolidated Financial Statements for further details.
7
The allowance for loan losses for off-balance sheet instruments is recorded in Other liabilities on the Interim
Consolidated Balance Sheet.
8
Credit cards are considered impaired and migrate to Stage 3 when they are 90 days past due and written off
at 180 days past due. Refer to Note 2 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 70
Allowance for Loan Losses by Stage
(Continued)
(millions of Canadian dollars)
For the three months ended
April 30, 2025
April 30, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Business and Government
1
Balance, including off-balance sheet instruments,
at beginning of period
$
1,272
$
1,997
$
971
$
4,240
$
1,139
$
1,631
$
529
$
3,299
Provision for credit losses
Transfer to Stage 1
2
66
(63)
(3)
–
52
(52)
–
–
Transfer to Stage 2
(161)
176
(15)
–
(166)
170
(4)
–
Transfer to Stage 3
(1)
(72)
73
–
(2)
(80)
82
–
Net remeasurement due to transfers into stage
2
(18)
45
–
27
(18)
51
1
34
New originations or purchases
2
314
n/a
n/a
314
297
n/a
n/a
297
Net repayments
2
(2)
(5)
(76)
(83)
9
(11)
(3)
(5)
Derecognition of financial assets (excluding
disposals and write-offs)
2
(160)
(199)
(46)
(405)
(161)
(155)
(100)
(416)
Changes to risk, parameters, and models
2
57
311
302
670
2
194
190
386
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(383)
(383)
–
–
(222)
(222)
Recoveries
–
–
23
23
–
–
15
15
Foreign exchange and other adjustments
(39)
(56)
(9)
(104)
18
30
(8)
40
Balance, including off-balance sheet instruments,
at end of period
1,328
2,134
837
4,299
1,170
1,778
480
3,428
Less: Allowance for off-balance sheet instruments
3
181
211
4
396
145
147
11
303
Balance at end of period
1,147
1,923
833
3,903
1,025
1,631
469
3,125
Total Allowance, including
off-balance sheet
instruments, at end of period
3,060
4,892
1,632
9,584
2,902
4,483
1,162
8,547
Less: Total Allowance for
off-balance sheet
instruments
3
415
552
4
971
423
568
11
1,002
Total Allowance for Loan Losses
at end of period
$
2,645
$
4,340
$
1,628
$
8,613
$
2,479
$
3,915
$
1,151
$
7,545
1
Includes allowance for loan losses related to customers’ liability under acceptances.
2
For explanations regarding this line item, refer to the “Allowance for Loan Losses by Stage” table on the previous
page in this Note.
3
The allowance for loan losses for off-balance sheet instruments is recorded in Other liabilities on the Interim
Consolidated Balance Sheet.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 71
The following table provides details on
the Bank’s allowance for loan losses by stage as
at and for the six months ended April 30, 2025
and April 30, 2024.
Allowance for Loan Losses by Stage
(millions of Canadian dollars)
For the six months ended
April 30, 2025
April 30, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Residential Mortgages
Balance at beginning of period
$
116
$
189
$
60
$
365
$
154
$
192
$
57
$
403
Provision for credit losses
Transfer to Stage 1
1
57
(54)
(3)
–
68
(65)
(3)
–
Transfer to Stage 2
(13)
28
(15)
–
(17)
28
(11)
–
Transfer to Stage 3
–
(19)
19
–
–
(17)
17
–
Net remeasurement due to transfers into stage
2
(12)
8
–
(4)
(14)
13
–
(1)
New originations or purchases
3
12
n/a
n/a
12
15
n/a
n/a
15
Net repayments
4
(2)
(2)
–
(4)
(2)
–
–
(2)
Derecognition of financial assets (excluding
disposals and write-offs)
5
(9)
(10)
(13)
(32)
(3)
(12)
(23)
(38)
Changes to risk, parameters, and models
6
(43)
34
22
13
(71)
74
23
26
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(2)
(2)
–
–
(4)
(4)
Recoveries
–
–
1
1
–
–
1
1
Foreign exchange and other adjustments
–
–
(1)
(1)
(1)
1
3
3
Balance at end of period
$
106
$
174
$
68
$
348
$
129
$
214
$
60
$
403
Consumer Instalment and Other Personal
Balance, including off-balance sheet instruments,
at beginning of period
$
696
$
1,175
$
262
$
2,133
$
688
$
1,010
$
197
$
1,895
Provision for credit losses
Transfer to Stage 1
1
324
(321)
(3)
–
273
(271)
(2)
–
Transfer to Stage 2
(124)
172
(48)
–
(130)
172
(42)
–
Transfer to Stage 3
(5)
(149)
154
–
(6)
(122)
128
–
Net remeasurement due to transfers into stage
2
(143)
148
4
9
(117)
157
4
44
New originations or purchases
3
160
n/a
n/a
160
176
n/a
n/a
176
Net repayments
4
(42)
(54)
(8)
(104)
(36)
(45)
(7)
(88)
Derecognition of financial assets (excluding
disposals and write-offs)
5
(42)
(57)
(20)
(119)
(33)
(46)
(26)
(105)
Changes to risk, parameters, and models
6
(148)
360
578
790
(126)
294
548
716
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(811)
(811)
–
–
(717)
(717)
Recoveries
–
–
170
170
–
–
154
154
Foreign exchange and other adjustments
(3)
(4)
–
(7)
(1)
(3)
1
(3)
Balance, including off-balance sheet instruments,
at end of period
673
1,270
278
2,221
688
1,146
238
2,072
Less: Allowance for off-balance sheet instruments
7
24
52
–
76
30
55
–
85
Balance at end of period
$
649
$
1,218
$
278
$
2,145
$
658
$
1,091
$
238
$
1,987
Credit Card
8
Balance, including off-balance sheet instruments,
at beginning of period
$
947
$
1,374
$
378
$
2,699
$
988
$
1,277
$
312
$
2,577
Provision for credit losses
Transfer to Stage 1
1
720
(698)
(22)
–
509
(494)
(15)
–
Transfer to Stage 2
(168)
212
(44)
–
(176)
212
(36)
–
Transfer to Stage 3
(11)
(528)
539
–
(11)
(462)
473
–
Net remeasurement due to transfers into stage
2
(300)
225
13
(62)
(226)
260
13
47
New originations or purchases
3
74
n/a
n/a
74
79
n/a
n/a
79
Net repayments
4
6
3
38
47
14
6
35
55
Derecognition of financial assets (excluding
disposals and write-offs)
5
(36)
(43)
(179)
(258)
(20)
(34)
(172)
(226)
Changes to risk, parameters, and models
6
(275)
775
600
1,100
(236)
586
548
898
Disposals
–
–
–
–
–
–
–
–
Write-offs
–
–
(1,061)
(1,061)
–
–
(930)
(930)
Recoveries
–
–
190
190
–
–
158
158
Foreign exchange and other adjustments
(4)
(6)
(3)
(13)
(6)
(6)
(2)
(14)
Balance, including off-balance sheet instruments,
at end of period
953
1,314
449
2,716
915
1,345
384
2,644
Less: Allowance for off-balance sheet instruments
7
210
289
–
499
248
366
–
614
Balance at end of period
$
743
$
1,025
$
449
$
2,217
$
667
$
979
$
384
$
2,030
1
Transfers represent stage transfer movements prior to ECL remeasurement.
2
Represents the mechanical remeasurement between twelve-month (i.e., Stage 1) and lifetime ECLs (i.e., Stage 2
or 3) due to stage transfers necessitated by credit risk migration, as
described in the “Significant Increase in Credit Risk” section of Note 2 and Note 3 of the Bank’s 2024
Annual Consolidated Financial Statements, holding all other factors impacting the
change in ECLs constant.
3
Represents the increase in the allowance resulting from loans that were newly originated, purchased, or renewed.
4
Represents the changes in the allowance related to cash flow changes associated with new draws or repayments
on loans outstanding.
5
Represents the decrease in the allowance resulting from loans that were fully repaid and excludes the decrease
associated with loans that were disposed or fully written off.
6
Represents the changes in the allowance related to current period changes in risk (e.g.,
PD) caused by changes to macroeconomic factors, level of risk, parameters,
and/or models,
subsequent to stage migration. Refer to the “Measurement of Expected Credit Losses”, “Forward-Looking Information
”
and “Expert Credit Judgment”
sections of Note 2 and Note 3 of the
Bank’s 2024 Annual Consolidated Financial Statements for further details.
7
The allowance for loan losses for off-balance sheet instruments is recorded in Other liabilities on the Interim
Consolidated Balance Sheet.
8
Credit cards are considered impaired and migrate to Stage 3 when they are 90 days past due and written off
at 180 days past due. Refer to Note 2 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 72
Allowance for Loan Losses by Stage
(Continued)
(millions of Canadian dollars)
For the six months ended
April 30, 2025
April 30, 2024
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Business and Government
1
Balance, including off-balance sheet instruments,
at beginning of period
$
1,150
$
1,937
$
853
$
3,940
$
1,319
$
1,521
$
470
$
3,310
Provision for credit losses
Transfer to Stage 1
2
154
(151)
(3)
–
114
(114)
–
–
Transfer to Stage 2
(314)
334
(20)
–
(283)
290
(7)
–
Transfer to Stage 3
(4)
(224)
228
–
(16)
(135)
151
–
Net remeasurement due to transfers into stage
2
(46)
103
1
58
(39)
93
5
59
New originations or purchases
2
614
n/a
n/a
614
568
n/a
n/a
568
Net repayments
2
15
(24)
(86)
(95)
17
(19)
(29)
(31)
Derecognition of financial assets (excluding
disposals and write-offs)
2
(329)
(395)
(122)
(846)
(333)
(254)
(145)
(732)
Changes to risk, parameters, and models
2
86
561
552
1,199
(160)
396
377
613
Disposals
–
–
(9)
(9)
–
–
–
–
Write-offs
–
–
(585)
(585)
–
–
(346)
(346)
Recoveries
–
–
39
39
–
–
26
26
Foreign exchange and other adjustments
2
(7)
(11)
(16)
(17)
–
(22)
(39)
Balance, including off-balance sheet instruments,
at end of period
1,328
2,134
837
4,299
1,170
1,778
480
3,428
Less: Allowance for off-balance sheet instruments
3
181
211
4
396
145
147
11
303
Balance at end of period
1,147
1,923
833
3,903
1,025
1,631
469
3,125
Total Allowance, including
off-balance sheet
instruments, at end of period
3,060
4,892
1,632
9,584
2,902
4,483
1,162
8,547
Less: Total Allowance for
off-balance sheet
instruments
3
415
552
4
971
423
568
11
1,002
Total Allowance for Loan Losses
at end of period
$
2,645
$
4,340
$
1,628
$
8,613
$
2,479
$
3,915
$
1,151
$
7,545
1
Includes allowance for loan losses related to customers’ liability under acceptances.
2
For explanations regarding this line item, refer to the “Allowance for Loan Losses by Stage” table on the previous
page in this Note.
3
The allowance for loan losses for off-balance sheet instruments is recorded in Other liabilities on the Interim
Consolidated Balance Sheet.
The allowance for credit losses on all remaining
financial assets is not significant.
(e)
FORWARD-LOOKING INFORMATION
Relevant macroeconomic factors are incorporated
in risk parameters as appropriate. Additional
risk factors that are industry or segment
specific are also
incorporated, where relevant. The key macroeconomic
variables used in determining ECLs include
regional unemployment rates for all retail exposures
and
regional housing price indices for residential
mortgages and home equity lines of credit.
For business and government loans,
the key macroeconomic variables
include gross domestic product (GDP), unemployment
rates, interest rates, and credit spreads.
Refer to Note 3 of the Bank’s 2024 Annual
Consolidated Financial
Statements for a discussion of how forward-looking
information is generated and considered
in determining whether there has been a
significant increase in credit
risk and in measuring ECLs.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 73
Macroeconomic Variables
Select macroeconomic variables are projected
over the forecast period.
The following table sets out average values
of the macroeconomic variables over
the four
calendar quarters starting with the current
quarter, and the remaining 4-year forecast period for the base
forecast and upside and downside scenarios
used in
determining the Bank’s ECLs as at April 30, 2025.
As the forecast period increases, information
about the future becomes less readily
available and projections
are anchored on assumptions around structural
relationships between economic parameters
that are inherently much less certain.
The baseline forecast reflects a
meaningful tempering in growth and higher
unemployment as a result of rising
trade tensions. Announced policies to date
have already led to a sharp deterioration
in consumer and business confidence,
heightened economic uncertainty, and a tightening in financial
conditions. A further escalation in the
trade conflict poses a
downside risk to the economic outlook.
Macroeconomic Variables
As at
April 30, 2025
Base Forecast
Upside Scenario
Downside Scenario
Average
Remaining
Average
Remaining
Average
Remaining
Q2 2025-
4-year
Q2 2025-
4-year
Q2 2025-
4-year
Q1 2026
1
period
1
Q1 2026
1
period
1
Q1 2026
1
period
1
Unemployment rate
Canada
6.9
%
6.0
%
6.3
%
5.7
%
7.6
%
7.2
%
United States
4.5
4.1
4.0
3.8
5.4
5.4
Real GDP
Canada
0.8
1.8
1.0
2.0
(0.5)
2.0
United States
1.1
2.1
1.2
2.2
(0.7)
2.3
Home prices
Canada (average existing price)
2
(2.5)
4.4
(2.1)
4.9
(8.5)
2.4
United States (CoreLogic HPI)
3
3.7
3.4
4.2
4.0
(5.8)
4.3
Central bank policy interest rate
Canada
2.25
2.25
2.50
2.50
1.13
1.42
United States
3.94
3.00
3.69
3.25
2.31
2.19
U.S. 10-year treasury yield
4.02
3.75
4.33
4.02
3.72
3.45
U.S. 10-year BBB spread (%-pts)
1.63
1.85
1.43
1.77
2.44
2.13
Exchange rate (U.S. dollar/Canadian dollar)
$
0.68
$
0.74
$
0.70
$
0.76
$
0.64
$
0.68
1
The numbers represent average values for the quoted periods, and average of year-on-year growth for real GDP and home prices.
2
The average home price is the average transacted sale price of homes sold via the Multiple Listing Service; data is collected by the Canadian Real Estate Association.
3
The CoreLogic home price index (HPI) is a repeat-sales index which tracks increases and decreases in the same home’s sales price over time.
(f)
SENSITIVITY OF ALLOWANCE FOR CREDIT LOSSES
ECLs are sensitive to the inputs used in internally
developed models, the macroeconomic
variables in the forward-looking forecasts and
respective probability
weightings in determining the probability-weighted
ECLs, and other factors considered when
applying expert credit judgment. Changes
in these inputs,
assumptions, models, and judgments would
affect the assessment of significant increase in
credit risk and the measurement of ECLs.
The following table presents the base ECL
scenario compared to the probability-weighted ECLs,
with the latter derived from three ECL
scenarios for performing
loans and off-balance sheet instruments. The difference
reflects the impact of deriving multiple
scenarios around the base ECLs and resultant
change in ECLs due
to non-linearity and sensitivity to using
macroeconomic forecasts.
Change from Base to Probability-Weighted
ECLs
(millions of Canadian dollars, except
as noted)
As at
April 30, 2025
October 31, 2024
Probability-weighted ECLs
$
7,952
$
7,584
Base ECLs
7,573
7,185
Difference – in amount
$
379
$
399
Difference – in percentage
5.0
%
5.6
%
ECLs for performing loans and off-balance sheet instruments
consist of an aggregate amount of Stage 1 and
Stage 2 probability-weighted ECLs
which are twelve-
month ECLs and lifetime ECLs, respectively. Transfers from Stage 1 to Stage
2 ECLs result from a significant increase
in credit risk since initial recognition
of the
loan.
The following table shows the estimated
impact of staging on ECLs by presenting all
performing loans and off-balance sheet instruments
calculated using
twelve-month ECLs compared to the current
aggregate probability-weighted ECLs, holding
all risk profiles constant.
Incremental Lifetime ECLs Impact
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
Probability-weighted ECLs
$
7,952
$
7,584
All performing loans and off-balance sheet instruments
using 12-month ECLs
6,067
5,631
Incremental lifetime ECLs impact
$
1,885
$
1,953
(g)
FORECLOSED ASSETS
Foreclosed assets are repossessed non-financial
assets where the Bank gains title, ownership,
or possession of individual properties,
such as real estate
properties, which are managed for sale in an
orderly manner with the proceeds used
to reduce or repay any outstanding debt.
The Bank does not generally occupy
foreclosed properties for its business use.
The Bank predominantly relies on third-party
appraisals to determine the carrying value of
foreclosed assets.
Foreclosed
assets held for sale were $
171
million as at April 30, 2025 (October 31, 2024
– $
126
million) and were recorded in Other assets
on the Interim Consolidated
Balance Sheet.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 74
(h)
LOANS PAST DUE BUT NOT IMPAIRED
A loan is classified as past due when a borrower
has failed to make a payment by the
contractual due date.
The following table summarizes loans that are
past
due but not impaired.
Loans less than 31 days contractually past
due are excluded as they do not generally
reflect a borrower’s ability to meet
their payment
obligations.
Loans Past Due but not Impaired
1
(millions of Canadian dollars)
As at
April 30, 2025
October 31, 2024
31-60
61-89
31-60
61-89
days
days
Total
days
days
Total
Residential mortgages
$
378
$
147
$
525
$
443
$
111
$
554
Consumer instalment and other personal
877
326
1,203
983
335
1,318
Credit card
361
245
606
375
269
644
Business and government
210
91
301
244
83
327
Total
$
1,826
$
809
$
2,635
$
2,045
$
798
$
2,843
1
Includes loans that are measured at FVOCI.
(i)
SALE OF U.S. RESIDENTIAL MORTGAGE
LOANS
On March 26, 2025, the Bank completed
the sale of US$
8.6
billion of certain U.S. residential mortgage
loans (correspondent loans) which resulted
in the
recognition of a pre-tax loss including
transaction costs of US$
564
million in Other income (loss) on the Interim
Consolidated Statement of Income. The sale
relates to the U.S. balance sheet restructuring
activities outlined in the fourth quarter
of fiscal 2024.
NOTE 7: INVESTMENT IN ASSOCIATES AND JOINT VENTURES
INVESTMENT IN THE CHARLES SCHWAB CORPORATION
On February 12, 2025, the Bank sold its entire
remaining equity investment in The
Charles Schwab Corporation (“Schwab”)
through a registered offering and
share repurchase by Schwab. Immediately prior
to the sale, TD held
184.7
million shares of Schwab’s common stock, representing
10.1
% economic ownership.
The sale of the shares resulted in proceeds
of approximately $
21.0
billion and the Bank recognized in Other income
(loss) a net gain on sale of approximately
$
9.2
billion. This gain is net of the release of
related cumulative foreign currency translation
from AOCI, the release of AOCI on designated
net investment hedging
items, and direct transaction costs. For segment
reporting, the Bank recognized an after-tax
gain of $
8.6
billion in its Corporate segment and $
184
million of
underwriting fees in its Wholesale segment
as a result of TD Securities acting as a lead
bookrunner on the transaction.
The transaction increased Common Equity
Tier 1 (CET1) capital by approximately
238
bps.
Prior to the sale, the Bank accounted
for its investment in Schwab using the equity
method. The Bank’s share of Schwab’s earnings available
to common
shareholders was reported with a one-month lag.
The Bank’s share of net income from its investment
in Schwab of $
74
million and $
305
million during the three
and six months ended April 30, 2025, respectively
(April 30, 2024 – $
194
million and $
335
million, respectively), reflects net income
after adjustments for
amortization of certain intangibles net of tax.
The Stockholder Agreement was terminated
by the Bank’s sale of its equity investment in Schwab
and the Bank discontinued
recording its share of earnings
available to common shareholders from its investment
in Schwab following the sale. The Bank
continues to have a business relationship
with Schwab through the
insured deposit account agreement (“IDA Agreement”).
Insured Deposit Account Agreement
On November 25, 2019, the Bank and Schwab
signed an insured deposit account agreement
(the “2019 Schwab IDA Agreement”), with an
initial expiration date of
July 1, 2031. Under the 2019 Schwab IDA
Agreement, starting July 1, 2021, Schwab
had the option to reduce the deposits by
up to US$
10
billion per year (subject
to certain limitations and adjustments),
with a floor of US$
50
billion. In addition, Schwab requested some
further operational flexibility to allow for the
sweep
deposit balances to fluctuate over time, under
certain conditions and subject to certain limitations.
On May 4, 2023, the Bank and Schwab entered
into an amended insured deposit account
agreement (the “2023 Schwab IDA Agreement”
or the “Schwab IDA
Agreement”), which replaced the 2019 Schwab
IDA Agreement. Pursuant to the 2023 Schwab
IDA Agreement, the Bank continues to make
sweep deposit
accounts available to clients of Schwab. Schwab
designates a portion of the deposits
with the Bank as fixed-rate obligation amounts
(FROA). Remaining deposits
are designated as floating-rate obligations.
In comparison to the 2019 Schwab IDA Agreement,
the 2023 Schwab IDA Agreement extends
the initial expiration date
by three years to July 1, 2034 and provides
for lower deposit balances in its first six
years, followed by higher balances in
the later years. Specifically, until
September 2025, the aggregate FROA
will serve as the floor. Thereafter, the floor will be set at US$
60
billion. In addition, Schwab had the option
to buy down up
to $
6.8
billion (US$
5
billion) of FROA by paying the Bank certain
fees in accordance with the 2023 Schwab
IDA Agreement, subject to certain limits.
During the first quarter of fiscal 2024, Schwab
exercised its option to buy down the remaining
$
0.7
billion (US$
0.5
billion) of the US$
5
billion FROA buydown
allowance and paid $
32
million (US$
23
million) in termination fees to the Bank in accordance
with the 2023 Schwab IDA Agreement. By
the end of the first quarter
of fiscal 2024, Schwab had completed its buydown
of the full US$
5
billion FROA buydown allowance and had
paid a total of $
337
million (US$
250
million) in
termination fees to the Bank. The fees were
intended to compensate the Bank for losses
incurred from discontinuing certain hedging
relationships and for lost
revenues. The net impact was recorded in
net interest income.
Refer to Note 27 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details
on the Schwab IDA Agreement.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 75
NOTE 8: OTHER ASSETS
Other Assets
(millions of Canadian dollars)
As at
April 30
October 31
2025
2024
Accounts receivable and other items
$
14,720
$
12,931
Accrued interest
5,361
5,509
Cheques and other items in transit
497
1,656
Current income tax receivable
4,101
4,061
Defined benefit asset
1,041
1,042
Prepaid expenses
1,676
1,794
Reinsurance contract assets
1,046
1,188
Total
$
28,442
$
28,181
NOTE 9: DEPOSITS
Demand deposits are those for which the Bank does not have the right to require notice prior to withdrawal, which
primarily include business and government
chequing accounts. Notice deposits are those for which the Bank can legally require notice prior to withdrawal,
which include both savings and chequing
accounts. Term
deposits are payable on a given date of maturity and are purchased by customers to earn interest over a fixed period, with terms ranging from
one day to ten years and generally include fixed term deposits, guaranteed investment certificates, senior debt, and similar
instruments. The aggregate amount
of term deposits in denominations of $100,000 or more as at April 30, 2025, was $
528
billion (October 31, 2024 – $
546
billion).
Deposits
(millions of Canadian dollars)
As at
April 30
October 31
By Type
By Country
2025
2024
Demand
Notice
Term
1
Canada
United States
International
Total
Total
Personal
$
22,014
$
488,577
$
137,913
$
347,019
$
301,485
$
–
$
648,504
$
641,667
Banks
10,763
530
33,656
19,093
23,295
2,561
44,949
57,698
Business and government
2
156,658
191,438
226,199
411,419
153,737
9,139
574,295
569,315
189,435
680,545
397,768
777,531
478,517
11,700
1,267,748
1,268,680
Trading
–
–
28,761
22,074
2,803
3,884
28,761
30,412
Designated at fair value through
profit or loss
3
–
–
193,702
50,140
78,012
65,550
193,702
207,668
Total
$
189,435
$
680,545
$
620,231
$
849,745
$
559,332
$
81,134
$
1,490,211
$
1,506,760
Non-interest-bearing deposits
included above
4
Canada
$
58,315
$
58,873
United States
72,325
73,509
International
–
–
Interest-bearing deposits
included above
4
Canada
791,430
781,526
United States
5
487,007
504,896
International
81,134
87,956
Total
2,6
$
1,490,211
$
1,506,760
1
Includes $
98.6
billion (October 31, 2024 – $
97.6
billion) of senior debt which is subject to the bank recapitalization “bail-in” regime. This regime provides certain
statutory powers to the
Canada Deposit Insurance Corporation, including the ability to convert specified eligible shares and liabilities into
common shares in the event that the Bank becomes non-viable.
2
Includes $
74.3
billion relating to covered bondholders (October 31, 2024 – $
75.4
billion).
3
Financial liabilities designated at FVTPL on the Consolidated Balance Sheet also includes $
222.8
million (October 31, 2024 – $
246.0
million) of loan commitments and financial
guarantees designated at FVTPL.
4
The geographical splits of the deposits are based on the point of origin of the deposits.
5
Includes $
9.8
billion (October 31, 2024 – $
13.1
billion) of U.S. federal funds deposited and $
23.1
billion (October 31, 2024 – $
36.2
billion) of deposits and advances with the FHLB.
6
Includes deposits of $
791.8
billion (October 31, 2024 – $
810.2
billion) denominated in U.S. dollars and $
134.0
billion (October 31, 2024 – $
140.7
billion) denominated in other foreign
currencies.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 76
NOTE 10: OTHER LIABILITIES
Other Liabilities
(millions of Canadian dollars)
As at
April 30
October 31
2025
2024
Accounts payable, accrued expenses, and
other items
$
8,372
$
7,706
Accrued interest
4,566
5,559
Accrued salaries and employee benefits
4,528
5,386
Current income tax payable
348
67
Deferred tax liabilities
303
300
Defined benefit liability
1,353
1,380
Lease liabilities
5,004
5,013
Liabilities related to structured entities
22,111
22,792
Provisions
(Note 17)
1,427
3,675
Total
$
48,012
$
51,878
NOTE 11: SUBORDINATED NOTES AND DEBENTURES
Issues
On January 23, 2025, the Bank issued EUR
750
million of Fixed Rate Reset Subordinated
Notes (Non-Viability Contingent Capital (NVCC))
constituting
subordinated indebtedness of the Bank (the
“Euro Notes”), maturing on January 23, 2036.
The Euro Notes will bear interest at a fixed rate
of
4.030
% per annum
(paid annually) until January 23, 2031, and at
the 5-year mid-swap rate plus
1.500
% thereafter (paid annually) until maturity on
January 23, 2036. With prior
approval of OSFI, the Bank may, at its option, redeem the Euro
Notes on January 23, 2031, in whole but not in
part, at par plus accrued and unpaid interest
by
giving not more than
60
nor less than
10
days’ notice to holders.
On January 31, 2025, the Bank issued $
1
billion of NVCC medium-term notes
constituting subordinated indebtedness of
the Bank (the “Notes”), maturing on
February 1, 2035. The Notes will bear interest
at a fixed rate of
4.231
% per annum (paid semi-annually) until
February 1, 2030, and at Daily Compounded
Canadian Overnight Repo Rate Average plus
1.54
% thereafter (paid quarterly) until maturity
on February 1, 2035. With prior approval
of OSFI, the Bank may, at its
option, redeem the Notes on or after February
1, 2030, in whole or in part, at par plus
accrued and unpaid interest by giving not
more than
60
nor less than
10
days’ notice to holders.
Redemptions
On April 22, 2025, the Bank redeemed all of
its outstanding $
3
billion
3.105
% NVCC medium-term notes due April
22, 2030 constituting subordinated
indebtedness of the Bank, at a redemption price
of
100
per cent of the principal amount, plus accrued
and unpaid interest up to, but excluding,
April 22, 2025.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 77
NOTE 12: EQUITY
The following table summarizes the changes
to the shares and other equity instruments
issued and outstanding,
and treasury instruments held as at and
for the
three and six months ended April 30, 2025 and
April 30, 2024.
Shares and Other Equity Instruments
Issued and Outstanding and Treasury Instruments
Held
(thousands of shares or other equity instruments
and millions of Canadian dollars)
For the three months ended
For the six months ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Number
Number
Number
Number
of shares
Amount
of shares
Amount
of shares
Amount
of shares
Amount
Common Shares
Balance as at beginning of period
1,752,200
$
25,528
1,772,819
$
25,318
1,750,272
$
25,373
1,791,422
$
25,434
Proceeds from shares issued on exercise
of stock options
592
44
351
24
945
69
988
66
Shares issued as a result of dividend
reinvestment plan
–
–
1,632
132
1,575
130
3,298
269
Purchase of shares for cancellation and other
(30,001)
(436)
(15,218)
(217)
(30,001)
(436)
(36,124)
(512)
Balance as at end of period – common shares
1,722,791
$
25,136
1,759,584
$
25,257
1,722,791
$
25,136
1,759,584
$
25,257
Preferred Shares and Other Equity Instruments
Preferred Shares – Class A
Balance as at beginning of period
71,650
$
3,400
143,650
$
5,200
91,650
$
3,900
143,650
$
5,200
Redemption of shares
1
–
–
(14,000)
(350)
(20,000)
(500)
(14,000)
(350)
Balance as at end of period
71,650
$
3,400
129,650
$
4,850
71,650
$
3,400
129,650
$
4,850
Other Equity Instruments
2
Balance as at beginning of period
6,501
$
7,738
5,000
$
5,653
5,751
$
6,988
5,000
$
5,653
Issue of limited recourse capital notes
3
–
–
–
–
750
750
–
–
Balance as at end of period
6,501
7,738
5,000
5,653
6,501
7,738
5,000
5,653
Balance as at end of period – preferred
shares
and other equity instruments
78,151
$
11,138
134,650
$
10,503
78,151
$
11,138
134,650
$
10,503
Treasury – common shares
4
Balance as at beginning of period
458
$
(38)
678
$
(58)
213
$
(17)
748
$
(64)
Purchase of shares
34,066
(2,880)
26,749
(2,154)
78,941
(6,384)
64,179
(5,250)
Sale of shares
(34,211)
2,892
(27,146)
2,188
(78,841)
6,375
(64,646)
5,290
Balance as at end of period – treasury
– common shares
313
$
(26)
281
$
(24)
313
$
(26)
281
$
(24)
Treasury – preferred shares and
other equity instruments
4
Balance as at beginning of period
549
$
(51)
160
$
(27)
163
$
(18)
142
$
(65)
Purchase of shares and other equity instruments
989
(267)
1,565
(153)
3,442
(1,387)
3,239
(251)
Sale of shares and other equity instruments
(1,397)
290
(1,587)
172
(3,464)
1,377
(3,243)
308
Balance as at end of period – treasury
– preferred shares and other equity
instruments
141
$
(28)
138
$
(8)
141
$
(28)
138
$
(8)
1
On January 31, 2025, the Bank redeemed all of its
20
million outstanding Non-Cumulative 5-Year
Rate Reset Class A First Preferred Shares NVCC, Series 5 (“Series 5 Preferred
Shares”), at a redemption price of $
25.00
per Series 5 Preferred Share, for a total redemption cost of approximately $
500
million.
2
For Other Equity Instruments, the number of shares represents the number of notes issued.
3
On December 18, 2024, the Bank issued $
750
million
5.909
% Fixed Rate Reset Limited Recourse Capital Notes, Series 5 NVCC (the “LRCNs”). The LRCNs
will bear interest at a rate of
5.909
per cent annually, payable quarterly,
for the initial period ending on, but excluding, January 1, 2030. Thereafter, the interest
rate on the LRCNs will reset every
five years
at a rate
equal to the prevailing Government of Canada Yield plus
3.10
per cent. The LRCNs will mature on January 1, 2085. Concurrently with the issuance of the LRCNs, the
Bank issued
750,000
Non-Cumulative
5.909
% Fixed Rate Reset Preferred Shares, Series 32 NVCC (“Preferred Shares Series 32”). The Preferred
Shares Series 32 are eliminated on the Bank’s
Consolidated Financial Statements.
4
When the Bank purchases its own equity instruments as part of its trading business, they are classified as treasury
instruments and the cost of these instruments is recorded as a
reduction in equity.
DIVIDENDS
On May 21, 2025, the Board approved a dividend
in an amount of one dollar and five cents
($
1.05
) per fully paid common share in the
capital stock of the Bank for
the quarter ending July 31, 2025, payable on
and after July 31, 2025, to shareholders
of record at the close of business on July 10,
2025.
DIVIDEND REINVESTMENT PLAN
The Bank offers a Dividend Reinvestment Plan
(DRIP) 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 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
purchased from the open market at market
prices.
During the three months ended April 30, 2025,
the Bank satisfied the DRIP requirements through
open market common share purchases.
During the six months
ended April 30, 2025, the Bank satisfied the
DRIP requirements through common shares
issued from treasury with
no
discount for the first three months and open
market common share purchases in the last
three months. During the three and six
months ended April 30, 2024, the Bank
satisfied the DRIP requirements
through common shares issued from treasury
with
no
discount.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 78
NORMAL COURSE ISSUER BID
On August 28, 2023,
the Bank announced that the Toronto Stock Exchange and OSFI approved
a normal course issuer bid (2023 NCIB) to
repurchase for
cancellation up to
90
million of its common shares. The 2023 NCIB
commenced on August 31, 2023 and continued
until August 31, 2024. From the
commencement of the 2023 NCIB to August
31, 2024, the Bank repurchased
71.4
million shares under the program. The 2023 NCIB
terminated on
August 31, 2024 and therefore, there was
no
repurchase of common shares by
the Bank under the 2023 NCIB during the
six months ended April 30, 2025. During
the six months ended April 30, 2024, the Bank
repurchased
36.1
million common shares, at an average price
of $
81.43
per share for a total amount of $
2.9
billion.
On February 24, 2025, the Bank announced
that the Toronto Stock Exchange and OSFI had approved the Bank’s previously
announced
normal course issuer bid
(2025 NCIB) to purchase for cancellation up
to
100
million of its common shares. The 2025
NCIB commenced on March 3, 2025 and will end
on
February 28, 2026, or such earlier date as
the Bank may determine. From the commencement
of the 2025 NCIB to April 30, 2025, the Bank
repurchased
30.0
million shares under the program, at an average
price of $
84.18
per share for a total amount of $
2.5
billion.
NOTE 13: SHARE-BASED COMPENSATION
For the three and six months ended April
30, 2025, the Bank recognized compensation
expense for stock option awards of $
7.0
million and $
10.1
million,
respectively (three and six months ended April
30, 2024 – $
10.4
million and $
20.5
million, respectively). During the three
months ended April 30, 2025 and
April 30, 2024,
nil
stock options were granted by the Bank.
During the six months ended April 30, 2025,
2.0
million (six months ended April 30, 2024 –
2.5
million)
stock options were granted by the Bank at
a weighted-average fair value of $
12.80
per option (April 30, 2024 – $
14.36
per option).
The following table summarizes the assumptions
used for estimating the fair value of options
for the six months ended April 30, 2025
and April 30, 2024.
Assumptions Used for Estimating the
Fair Value of Options
(in Canadian dollars, except as noted)
For the six months ended
April 30
April 30
2025
2024
Risk-free interest rate
3.08
%
3.41
%
Option contractual life
10 years
10 years
Expected volatility
19.47
%
18.92
%
Expected dividend yield
3.94
%
3.78
%
Exercise price/share price
$
75.76
$
81.78
The risk-free interest rate is based on Government
of Canada benchmark bond yields as
at the grant date. Expected volatility is
calculated based on the historical
average daily volatility and expected dividend
yield is based on dividend payouts in the last
fiscal year. These assumptions are measured over a period
corresponding to the option contractual life.
NOTE 14: EMPLOYEE BENEFITS
The following table summarizes expenses for
the Bank’s principal pension and non-pension post-retirement
defined benefit plans and the Bank’s other
material
defined benefit pension plans, for the
three and six months ended April 30,
2025 and April 30,
- Other employee defined benefit
plans operated by the Bank
and certain of its subsidiaries are not considered
material for disclosure purposes.
Defined Benefit Plan Expenses
(millions of Canadian dollars)
Principal post-retirement
Principal pension plans
benefit plan
Other pension plans
1
For the three months ended
April 30
April 30
April 30
April 30
April 30
April 30
2025
2024
2025
2024
2025
2024
Service cost – benefits earned
$
69
$
54
$
1
$
1
$
5
$
4
Net interest cost (income) on net defined
benefit liability (asset)
(13)
(21)
4
5
5
6
Interest cost on asset limitation and minimum
funding
requirement
–
3
–
–
–
1
Past service cost
2
–
35
–
–
–
–
Defined benefit administrative expenses
2
2
–
–
2
1
Total
$
58
$
73
$
5
$
6
$
12
$
12
For the six months ended
April 30
April 30
April 30
April 30
April 30
April 30
2025
2024
2025
2024
2025
2024
Service cost – benefits earned
$
138
$
108
$
3
$
2
$
10
$
8
Net interest cost (income) on net defined
benefit liability (asset)
(25)
(41)
8
10
11
12
Interest cost on asset limitation and minimum
funding
requirement
–
6
–
–
–
2
Past service cost
2
–
35
–
–
–
–
Defined benefit administrative expenses
5
4
–
–
3
2
Total
$
118
$
112
$
11
$
12
$
24
$
24
1
Includes Canada Trust defined benefit pension plan, TD Banknorth defined benefit pension
plan, TD Auto Finance defined benefit pension plan, TD Insurance defined benefit pension
plan, and supplemental executive defined benefit pension plans.
2
Relates to the Pension Fund Society that was modified in fiscal 2024.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 79
The following table summarizes expenses for
the Bank’s defined contribution plans for the three
and six months ended April 30, 2025 and
April 30, 2024.
Defined Contribution Plan Expenses
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
April 30
April 30
April 30
2025
2024
2025
2024
Defined contribution pension plans
1
$
85
$
73
$
191
$
158
Government pension plans
2
140
132
360
329
Total
$
225
$
205
$
551
$
487
1
Includes defined contribution portion of the TD Pension Plan (Canada) and TD Bank, N.A. defined contribution 401(k)
plan.
2
Includes Canada Pension Plan, Quebec Pension Plan, and Social Security under the U.S.
Federal Insurance Contributions Act
.
The following table summarizes the remeasurements
recognized in OCI for the Bank’s principal pension
and post-retirement defined benefit plans
and certain of
the Bank’s other material defined benefit pension
plans, for the three and six months ended
April 30, 2025 and April
30, 2024.
Amounts Recognized in Other Comprehensive
Income for Remeasurement of Defined
Benefit Plans
1,2,3
(millions of Canadian dollars)
Principal post-retirement
Principal pension plans
benefit plan
Other pension plans
For the three months ended
April 30
April 30
April 30
April 30
April 30
April 30
2025
2024
2025
2024
2025
2024
Remeasurement gain/(loss) – financial
$
297
$
439
$
12
$
13
$
14
$
18
Remeasurement gain/(loss) – return on plan
assets less
interest income
(366)
(524)
–
–
–
–
Change in asset limitation and minimum
funding requirement
3
24
–
–
–
–
Total
$
(66)
$
(61)
$
12
$
13
$
14
$
18
For the six months ended
April 30
April 30
April 30
April 30
April 30
April 30
2025
2024
2025
2024
2025
2024
Remeasurement gain/(loss) – financial
$
158
$
(685)
$
5
$
(23)
$
4
$
(25)
Remeasurement gain/(loss) – return on plan
assets less
interest income
(184)
276
–
–
–
–
Change in asset limitation and minimum
funding requirement
–
200
–
–
–
–
Total
$
(26)
$
(209)
$
5
$
(23)
$
4
$
(25)
1
Excludes the Canada Trust defined benefit pension plan, TD Banknorth defined benefit
pension plan, TD Auto Finance defined benefit pension plan, TD Insurance defined benefit pension
plan, and other employee defined benefit plans operated by the Bank and certain of its subsidiaries not considered material for
disclosure purposes as these plans are not remeasured on
a quarterly basis.
2
Changes in discount rates and return on plan assets are reviewed and updated on a quarterly basis. All other assumptions
are updated annually.
3
Amounts are presented on a pre-tax basis.
NOTE 15: INCOME TAXES
International Tax Reform – Pillar Two Global Minimum Tax
On December 20, 2021, the OECD published
Pillar Two model rules as part of its efforts toward international
tax reform. The Pillar Two model rules provide for the
implementation of a 15% global minimum
tax for large multinational enterprises,
which is to be applied on a jurisdiction-by-jurisdiction
basis. Pillar Two legislation
was enacted in Canada on June 20, 2024
under Bill C-69, which includes the
Global Minimum Tax Act
addressing the Pillar Two model rules. Similar legislation
has passed in other jurisdictions in which
the Bank operates and will result in additional
taxes being paid in these countries. The rules
were effective and
implemented by the Bank on November 1, 2024.
The IASB previously issued amendments
to IAS 12
Income Taxes
for a temporary mandatory exception
from the
recognition and disclosure of deferred
taxes related to the implementation of Pillar
Two model rules, which the Bank has applied. For the three
and six months
ended April 30, 2025, the Bank’s effective tax rate
increased by approximately
0.2
% and
0.3
%, respectively, due to Pillar Two taxes (for the three months ended
January 31, 2025 –
0.5
%).
Other Tax Matters
The Canada Revenue Agency (CRA), Revenu
Québec Agency (RQA) and Alberta
Tax and Revenue Administration (ATRA) are denying certain dividend and
interest deductions claimed by the Bank.
As at April 30, 2025, the CRA has reassessed
the Bank for $
1,668
million for the years 2011 to 2019, the RQA has
reassessed the Bank for $
52
million for the years 2011 to 2018, and the ATRA has reassessed the Bank for $
71
million for the years 2011 to 2018. In total, the
Bank has been reassessed for $
1,791
million of income tax and interest. The Bank
expects to continue to be reassessed for
open years. The Bank is of the view
that its tax filing positions were appropriate
and filed a Notice of Appeal with the
Tax Court of Canada on March 21, 2023.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 80
NOTE 16: EARNINGS PER SHARE
Basic earnings per share is calculated by
dividing net income attributable to common
shareholders by the weighted-average number
of common shares
outstanding for the period.
Diluted earnings per share is calculated using
the same method as basic earnings per
share except that certain adjustments are made
to net income
attributable to common shareholders and
the weighted-average number of shares outstanding
for the effects of all dilutive potential common
shares that are
assumed to be issued by the Bank.
The following table presents the Bank’s basic and
diluted earnings per share for the three and
six months ended April 30, 2025 and April
30, 2024.
Basic and Diluted Earnings Per Share
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
April 30
April 30
April 30
2025
2024
2025
2024
Basic earnings per share
Net income attributable to common shareholders
$
10,929
$
2,374
$
13,636
$
5,124
Weighted-average number of common shares outstanding
(millions)
1,740.5
1,762.8
1,745.3
1,769.8
Basic earnings per share
(Canadian dollars)
$
6.28
$
1.35
$
7.81
$
2.90
Diluted earnings per share
Net income attributable to common shareholders
$
10,929
$
2,374
$
13,636
$
5,124
Net income attributable to common shareholders
including impact of dilutive securities
10,929
2,374
13,636
5,124
Weighted-average number of common shares outstanding
(millions)
1,740.5
1,762.8
1,745.3
1,769.8
Effect of dilutive securities
Stock options potentially exercisable (millions)
1
1.2
1.3
1.0
1.4
Weighted-average number of common shares outstanding
– diluted (millions)
1,741.7
1,764.1
1,746.3
1,771.2
Diluted earnings per share
(Canadian dollars)
1
$
6.27
$
1.35
$
7.81
$
2.89
1
For the three and six months ended April 30, 2025, the computation of diluted earnings per share excluded average
options outstanding of $
4.7
million and $
7.2
million, respectively, with
a weighted-average exercise price of $
92.91
and $
89.12
, respectively, as the option price was greater
than the average market price of the Bank’s common shares. For the three and six
months ended April 30, 2024, the computation of diluted earnings per share excluded average options outstanding
of
7.3
million and
6.7
million, respectively, with a weighted-average
exercise price of $
89.14
and $
89.93
, respectively, as the option price was greater
than the average market price of the Bank’s common shares.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 81
NOTE 17: PROVISIONS AND CONTINGENT
LIABILITIES
Other than as described below, there have been no new significant
events or transactions except as previously
identified in Note 26 of the Bank’s 2024 Annual
Consolidated Financial Statements.
(a)
RESTRUCTURING CHARGES
The Bank initiated a new restructuring program
in the second quarter of 2025 to reduce its
cost base and achieve greater efficiency. In connection with this
program, the Bank incurred $
163
million pre-tax of restructuring charges in
the second quarter of 2025. The restructuring
charges primarily relate to: (i) real estate
optimization mainly recorded as a reduction
to buildings and land, (ii) employee severance
and other personnel-related costs recorded
as provisions and (iii) asset
impairment and other rationalization, including
certain business wind-downs.
(b)
LEGAL AND REGULATORY MATTERS
In the ordinary course of business, the Bank
and its subsidiaries are involved in various
legal and regulatory actions, including but
not limited to civil claims and
lawsuits, regulatory examinations, investigations,
audits, and requests for information by
governmental, regulatory and self-regulatory
agencies and law
enforcement authorities in various jurisdictions,
in respect of our businesses and compliance
programs. The Bank establishes provisions
when it becomes
probable that the Bank will incur a loss and
the amount can be reliably estimated.
The Bank also estimates the aggregate range
of reasonably possible losses
(RPL) in its legal and regulatory actions (that
is, those which are neither probable nor
remote), in excess of provisions. However, the Bank does
not disclose the
specific possible loss associated with each underlying
matter given the substantial uncertainty associated
with each possible loss as described below and
the
negative consequences to the Bank’s resolution
of the matters that comprise the
RPL should individual possible losses be disclosed.
As at April 30, 2025, the
Bank’s RPL is from
zero
to approximately $
419
million (October 31, 2024 – from
zero
to approximately $
625
million). The Bank’s provisions and RPL represent
the
Bank’s best estimates based upon currently available
information for actions for which estimates
can be made, but there are a number of factors
that could cause
the Bank’s actual losses to be significantly different
from its provisions or RPL. For example,
the Bank’s estimates involve significant judgment
due to the varying
stages of the proceedings, the existence of
multiple defendants in many proceedings
whose share of liability has yet to be determined,
the numerous yet-
unresolved issues in many of the proceedings,
some of which are beyond the Bank’s control and/or
involve novel legal theories and interpretations,
the attendant
uncertainty of the various potential outcomes
of such proceedings, and the fact that the underlying
matters will change from time to time. In addition,
some actions
seek very large or indeterminate damages.
Refer to Note 26 of the Bank’s 2024 Annual Consolidated
Financial Statements for details on the Bank’s significant
legal and regulatory matters. Based on
the Bank’s current knowledge, and subject to
the factors listed above as well as other uncertainties
inherent in litigation and
regulatory matters, other than as described
below: (i) there have been no notable developments
to the matters previously identified in Note 26
of the Bank’s 2024
Annual Consolidated Financial Statements; and
(ii) since October 31, 2024, no other legal
or regulatory matter has arisen or progressed
to the point that it would
reasonably be expected to result in a material
financial impact to the Bank.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, on October 10, 2024, the Bank
announced that, following
active cooperation and engagement with
authorities and regulators, it reached a resolution
of previously disclosed investigations related
to its U.S. BSA and AML
compliance programs (the “Global Resolution”).
The Bank and certain of its U.S. subsidiaries
consented to orders with the Office of the
Comptroller of the
Currency (OCC), the Federal Reserve Board,
and the Financial Crimes Enforcement
Network (FinCEN) and entered into plea agreements
with the Department of
Justice (DOJ), Criminal Division, Money Laundering
and Asset Recovery Section and the
United States Attorney’s Office for the District of New Jersey. The Bank
is focused on meeting the terms of the
consent orders and plea agreements, including
meeting its requirements to remediate the Bank’s
U.S. BSA/AML programs.
During the first fiscal quarter, the Bank fully paid the remainder
of the monetary penalty owed pursuant
to the consent orders and plea agreements
that were
entered into as part of the Global Resolution.
The payment was covered by provisions previously
taken by the Bank for this matter.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, the Bank and some former
and current directors, officers and
employees have been named as defendants
in proposed class action lawsuits in
the United States and Canada purporting
to be brought on behalf of TD
shareholders alleging, among other things, that
a decline in the price of TD’s shares was
the result of misleading disclosures
with respect to the Bank’s AML
program and/or the potential outcomes of
the government agencies’ or regulators’ investigations.
The two proposed class actions filed in the
United States have
been consolidated under the
caption Tiessen v. The Toronto-Dominion Bank, et al.,
in the United States District Court for
the Southern District of New York, and a
consolidated amended complaint has been
filed which additionally names TD Bank, N.A.,
TD Bank US Holding Company, and additional former and current
officers as defendants. Out of the three proposed
class actions in Ontario,
Parkin v. The Toronto-Dominion Bank, et al,
has been identified as the lead action
with
the other two Ontario actions being stayed.
There remains one further proposed class
action in Quebec. TD has been advised
that an Ontario resident intends to
seek leave to commence a derivative action
in Canada in the name of TD addressing
alleged breaches relating to its U.S. AML program.
A putative shareholder
derivative action, captioned
Rubin v. Masrani, et al.,
has also been filed purportedly on behalf of
TD in the United States in the Supreme
Court of the State of New
York, New York
County, against certain former and current TD directors,
officers and employees, and certain of TD’s U.S. affiliates and
subsidiaries. The complaint
asserts alleged breaches of duties and other
claims against the individual defendants in
connection with the Bank’s U.S. AML program. All
of the proceedings are
still in early stages and none of the proposed
class action lawsuits have been certified to proceed
as a class action. Losses or damages cannot
be estimated at
this time.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, the Bank has been named
as defendant in a purported class
action lawsuit in the United States purporting
to be brought on behalf of First Horizon shareholders
alleging that a decline in the price of First
Horizon shares was
the result of alleged misleading disclosures
TD made with respect to TD’s U.S. AML program
and its effect on the Bank’s contemplated merger
with First Horizon.
The lawsuit also names some of the
Bank’s former and current officers and a former employee
as defendants. These proceedings are still
in early stages and have
not been certified to proceed as a class
action. Losses or damages cannot be estimated
at this time.
As previously disclosed in Note 26 of the
Bank’s 2024 Annual Consolidated Financial
Statements, the Bank is a defendant in
Canada and/or the United States
in a number of matters brought by customers,
including class actions, alleging claims
in connection with various fees, practices
and credit decisions. The cases are
in various stages of maturity and include, among
others: a Quebec action against members
of the financial services industry (including
the Bank) regarding the
existence and amount of the insufficient or non-sufficient
funds fee (NSF fee), a Quebec action
against certain brokers (including TD Direct
Investing) regarding
disclosure of foreign conversion fees, and a
Quebec action against members of the automobile
insurance industry (including Primmum Insurance
Company)
regarding underwriting practices in Quebec.
Refer to Note 15 for disclosures related
to tax matters.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 82
NOTE 18: SEGMENTED INFORMATION
For management reporting purposes, the Bank
reports its results from business operations
and activities under four key business
segments:
Canadian Personal
and Commercial Banking, U.S. Retail, Wealth Management
and Insurance, and Wholesale Banking.
The Bank’s other activities are grouped into the
Corporate
segment.
Canadian Personal and Commercial
Banking provides financial products and services
to personal, small business and commercial
customers, and includes
TD Auto Finance Canada. U.S. Retail is comprised
of personal and business banking in
the U.S., TD Auto Finance U.S., the U.S. wealth
business,
as well as the
Bank’s equity investment in Schwab. On February
12, 2025, the Bank sold its entire remaining
equity investment in Schwab,
refer to Note 7 for further details.
Wealth Management and Insurance includes the
Canadian wealth business which provides investment
products and services to institutional and
retail investors,
and the insurance business which provides
property and casualty insurance, as
well as life and health insurance products
to customers across Canada. Wholesale
Banking provides a wide range of capital
markets, investment banking, and corporate
banking products and services,
including underwriting and distribution
of new
debt and equity issues, providing advice
on strategic acquisitions and divestitures, and
meeting the daily trading, funding, and investment
needs of the Bank’s
clients. The Corporate segment includes the
effects of certain asset securitization programs,
treasury management, elimination of taxable
equivalent adjustments
and other management reclassifications,
corporate level tax items, and residual unallocated
revenue and expenses. Effective the first quarter
of 2025, certain U.S.
governance and control investments, including
costs for U.S. BSA/AML remediation, previously
reported in the Corporate segment are now
reported in the U.S.
Retail segment. Comparative amounts have
been reclassified to conform with the presentation
adopted in the current period.
The following table summarizes the segment
results for the three and six months ended
April 30, 2025 and April 30, 2024.
Results by Business Segment
1
(millions of Canadian dollars)
Canadian
Wealth
Personal and
Management
Commercial Banking
U.S. Retail
and Insurance
Wholesale Banking
2
Corporate
2
Total
For the three months ended April 30
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
Net interest income (loss)
$
4,023
$
3,812
$
3,038
$
2,841
$
362
$
304
$
45
$
189
$
657
$
319
$
8,125
$
7,465
Non-interest income (loss)
968
1,027
(445)
606
3,141
2,810
2,084
1,751
9,064
160
14,812
6,354
Total revenue
4,991
4,839
2,593
3,447
3,503
3,114
2,129
1,940
9,721
479
22,937
13,819
Provision for (recovery of)
credit losses
622
467
442
380
–
–
123
55
154
169
1,341
1,071
Insurance service expenses
–
–
–
–
1,417
1,248
–
–
–
–
1,417
1,248
Non-interest expenses
2,052
1,957
2,338
2,694
1,131
1,027
1,461
1,430
1,157
1,293
8,139
8,401
Income (loss) before income taxes
and share of net income from
investment in Schwab
2,317
2,415
(187)
373
955
839
545
455
8,410
(983)
12,040
3,099
Provision for (recovery of)
income taxes
649
676
(229)
49
248
218
126
94
191
(308)
985
729
Share of net income from
investment in Schwab
3,4
–
–
78
183
–
–
–
–
(4)
11
74
194
Net income (loss)
$
1,668
$
1,739
$
120
$
507
$
707
$
621
$
419
$
361
$
8,215
$
(664)
$
11,129
$
2,564
For the six months ended April 30
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
Net interest income (loss)
$
8,158
$
7,645
$
6,102
$
5,740
$
731
$
589
$
(62)
$
387
$
1,062
$
592
$
15,991
$
14,953
Non-interest income (loss)
1,982
2,078
(727)
1,210
6,370
5,660
4,191
3,333
9,179
299
20,995
12,580
Total revenue
10,140
9,723
5,375
6,950
7,101
6,249
4,129
3,720
10,241
891
36,986
27,533
Provision for (recovery of)
credit losses
1,143
890
893
765
–
–
195
65
322
352
2,553
2,072
Insurance service expenses
–
–
–
–
2,924
2,614
–
–
–
–
2,924
2,614
Non-interest expenses
4,138
3,941
4,718
5,153
2,304
2,074
2,996
2,930
2,053
2,333
16,209
16,431
Income (loss) before income taxes
and share of net income from
investment in Schwab
4,859
4,892
(236)
1,032
1,873
1,561
938
725
7,866
(1,794)
15,300
6,416
Provision for (recovery of)
income taxes
1,360
1,368
(421)
32
486
385
220
159
38
(581)
1,683
1,363
Share of net income from
investment in Schwab
3,4
–
–
277
377
–
–
–
–
28
(42)
305
335
Net income (loss)
$
3,499
$
3,524
$
462
$
1,377
$
1,387
$
1,176
$
718
$
566
$
7,856
$
(1,255)
$
13,922
$
5,388
1
The retailer program partners’ share of revenues and credit losses is presented in the Corporate segment, with an
offsetting amount (representing the partners’ net share) recorded in
Non-interest expenses, resulting in no impact to Corporate reported Net income (loss). The Net income (loss) included
in the U.S. Retail segment includes only the portion of revenue and
credit losses attributable to the Bank under the agreements.
2
Net interest income within Wholesale Banking is calculated on a taxable equivalent basis (TEB). The TEB adjustment
reflected in Wholesale Banking is reversed in the Corporate
segment.
3
The after-tax amounts for amortization of acquired intangibles, the Bank’s share of acquisition and integration
charges associated with Schwab’s acquisition of TD Ameritrade, the Bank’s
share of Schwab’s restructuring charges, and the Bank’s share of Schwab’s Federal
Deposit Insurance Corporation special assessment charge are recorded in the Corporate segment.
4
The Bank’s share of Schwab’s earnings was reported with a one-month lag. Refer to
Note 7 for further details.
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 83
Total Assets by Business Segment
(millions of Canadian dollars)
Canadian
Wealth
Personal and
Management
Wholesale
Commercial Banking
U.S. Retail
and Insurance
Banking
Corporate
Total
As at April 30, 2025
Total assets
$
591,935
$
543,516
$
23,022
$
742,949
$
162,852
$
2,064,274
As at October 31, 2024
Total assets
$
584,468
$
606,572
$
23,217
$
686,795
$
160,699
$
2,061,751
NOTE 19: INTEREST INCOME AND EXPENSE
The following tables present interest income
and interest expense by basis of accounting
measurement.
Interest Income
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Measured at amortized cost
1
$
18,227
$
19,694
$
38,071
$
39,260
Measured at FVOCI – Debt instruments
1
1,058
965
1,960
1,898
19,285
20,659
40,031
41,158
Measured or designated at FVTPL
2,172
2,247
4,233
4,497
Measured at FVOCI – Equity instruments
125
90
190
154
Total
$
21,582
$
22,996
$
44,454
$
45,809
1
Interest income is calculated using EIRM.
Interest Expense
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30, 2025
April 30, 2024
April 30, 2025
April 30, 2024
Measured at amortized cost
1
$
10,622
$
12,504
$
22,442
$
24,696
Measured or designated at FVTPL
2,835
3,027
6,021
6,160
Total
$
13,457
$
15,531
$
28,463
$
30,856
1
Interest expense is calculated using EIRM.
NOTE 20: REGULATORY CAPITAL
The Bank manages its capital under guidelines
established by OSFI. The regulatory
capital guidelines measure capital in relation
to credit, market, and operational
risks. The Bank has various capital policies,
procedures, and controls which it utilizes
to achieve its goals and objectives. The
Bank is designated as a domestic
systemically important bank (D-SIB) and
a global systemically important bank (G-SIB).
Canadian banks designated as D-SIBs are required
to comply with OSFI’s minimum targets for risk-based
capital and leverage ratios. The minimum
targets
include a D-SIB surcharge and Domestic Stability
Buffer (DSB) for CET1, Tier 1, Total Capital and risk-based Total Loss Absorbing Capacity (TLAC) ratios. The
DSB level was increased to
3.5
% as of November 1, 2023, and as a
result the published regulatory minimum
targets are set at
11.5
%,
13.0
%,
15.0
% and
25.0
%,
respectively. The OSFI target includes the greater of the D-SIB or
G-SIB surcharge, both of which are
currently
1
% for the Bank. The OSFI target for leverage
requires D-SIBs to hold a leverage ratio buffer of
0.50
% in addition to the existing minimum
requirement. This sets the published regulatory
minimum targets for
leverage and TLAC leverage ratios at
3.5
% and
7.25
%, respectively.
The Bank complied with all minimum risk-based
capital and leverage ratio requirements
set by OSFI in the six months ended April 30,
2025.
The following table summarizes the Bank’s regulatory
capital positions as at April 30, 2025 and
October 31, 2024.
Regulatory Capital Position
(millions of Canadian dollars, except
as noted)
As at
April 30
October 31
2025
2024
Capital
Common Equity Tier 1 Capital
$
93,048
$
82,714
Tier 1 Capital
103,459
93,248
Total Capital
115,526
105,745
Risk-weighted assets used in the calculation
of capital ratios
624,636
630,900
Capital and leverage ratios
Common Equity Tier 1 Capital ratio
14.9
%
13.1
%
Tier 1 Capital ratio
16.6
14.8
Total Capital ratio
18.5
16.8
Leverage ratio
4.7
4.2
TLAC Ratio
31.0
28.7
TLAC Leverage Ratio
8.7
8.1
TD BANK GROUP • SECOND QUARTER 2025 • REPORT TO SHAREHOLDERS
Page 84
SHAREHOLDER AND INVESTOR INFORMATION
Shareholder Services
If you:
And your inquiry relates to:
Please contact:
Are a registered shareholder (your name appears
on your TD share certificate)
Missing dividends, lost share certificates, estate
questions, address changes to the share register,
dividend bank account changes, the dividend
reinvestment plan, eliminating duplicate mailings
of
shareholder materials or stopping (or resuming)
receiving annual and quarterly reports
Transfer Agent:
TSX Trust Company
301-100 Adelaide Street West
Toronto, ON M5H 4H1
1-800-387-0825 (Canada and U.S. only)
or 416-682-3860
Facsimile: 1-888-249-6189
shareholderinquiries@tmx.com or www.tsxtrust.com
Hold your TD shares through the
Direct Registration System
in the United States
Missing dividends, lost share certificates, estate
questions, address changes to the share register,
eliminating duplicate mailings of shareholder
materials or stopping (or resuming) receiving
annual
and quarterly reports
Co-Transfer Agent and Registrar:
Computershare Trust Company, N.A.
P.O. Box 43006
Providence, RI 02940-3006
or
Computershare Trust Company, N.A.
150 Royall Street
Suite 101
Canton, MA 02021
1-866-233-4836
TDD for hearing impaired: 1-800-231-5469
Shareholders outside of U.S.: 201-680-6578
TDD shareholders outside of U.S.: 201-680-6610
Email inquiries: web.queries@computershare.com
For electronic access to your account visit:
www.computershare.com/investor
Beneficially own TD shares that are
held in the
name of an intermediary, such as a bank,
a trust
company, a securities broker or other nominee
Your TD shares, including questions
regarding the
dividend reinvestment plan and mailings of
shareholder materials
Your intermediary
For all other shareholder inquiries, please
contact TD Shareholder Relations at
416-944-6367 or 1-866-756-8936 or email
tdshinfo@td.com. Please note that by
leaving us an e-mail or voicemail message,
you are providing your consent for us to
forward your inquiry to the appropriate party
for response.
General Information
Products and services: Contact TD
Canada Trust, 24 hours a day, seven
days a week: 1-866-567-8888
French: 1-866-233-2323
Cantonese/Mandarin: 1-800-328-3698
Telephone device for the hearing impaired
(TTY): 1-800-361-1180
Website:
www.td.com
Email:
customer.service@td.com
Quarterly Earnings Conference Call
TD Bank Group will host an earnings conference
call in Toronto, Ontario on May 22, 2025.
The call will be audio webcast live through
TD’s
website at 8:00 a.m. ET.
The call will feature presentations by
TD executives on the Bank’s financial results
for the second quarter and discussions
of related disclosures, followed by a
question-and-answer period with analysts.
The presentation material referenced
during the call will be available on the
TD website at
www.td.com/investor
on
May 22, 2025, in advance of the call.
A listen-only telephone line
is available at 416-340-2217 or 1-800-806-5484
(toll free) and the passcode is 2829533#.
The audio webcast and presentations will be
archived at
www.td.com/investor
. Replay of the teleconference will be available
from 5:00 p.m. ET on May 22, 2025,
until 11:59 p.m. ET on June 6, 2025,
by calling 905-694-9451 or 1-800-408-3053 (toll
free). The passcode is 8753393#.
ex992
THE TORONTO-DOMINION BANK
EARNINGS COVERAGE ON SUBORDINATED
NOTES AND DEBENTURES,
PREFERRED SHARES CLASSIFIED AS EQUITY,
AND LIABILITIES FOR
PREFERRED SHARES AND OTHER EQUITY INSTRUMENTS
AND CAPITAL
TRUST SECURITIES
FOR THE TWELVE
MONTHS ENDED APRIL 30, 2025
TD Bank Group (“TD” or the “Bank”) dividend
requirements on all its outstanding preferred
shares and other equity instruments in respect
of the twelve months
ended April 30, 2025 and adjusted to a before-tax
equivalent using an effective tax rate of approximately
18.1% for the twelve months ended April
30, 2025,
amounted to $670 million. The Bank’s interest and
dividend requirements on all subordinated notes
and debentures, preferred shares and liabilities
for preferred
shares and other equity instruments and
capital trust securities, after adjustment
for new issues and retirement, amounted
to $1,204 million for the twelve months
ended April 30, 2025.
The Bank’s reported net income, before interest
on subordinated debt and liabilities for
preferred shares and capital trust securities and
income taxes was $20,241 million for the
twelve months ended April 30,
2025, which was 16.8 times the Bank’s aggregate
dividend and interest requirement for
this period.
On an adjusted basis, the Bank’s net income before
interest on subordinated debt and liabilities
for preferred shares and other equity instruments
and capital
trust securities and income taxes for the twelve
months ended April 30, 2025,
was $17,309 million, which was 14.4 times
the Bank’s aggregate dividend and
interest requirement for this period.
The Bank prepares its interim consolidated
financial statements in accordance with International
Financial Reporting Standards (IFRS),
the current generally
accepted accounting principles (GAAP),
and refers to results prepared in accordance
with IFRS as “reported”
results. The Bank also utilizes non-GAAP
financial
measures such as “adjusted”
results (i.e. reports results excluding
“items of note”) and non-GAAP ratios to
assess each of its businesses and measure
overall
Bank performance. The Bank believes that non-GAAP
financial measures and non-GAAP ratios
provide the reader with a better understanding
of how
management views the Bank’s performance.
Non-GAAP financial measures and ratios used
in this presentation are not defined under
IFRS, and, therefore, may
not be comparable to similar terms used by
other issuers. See “How We Performed”
and “Quarterly Results” sections of the
Bank’s second quarter 2025 MD&A
(available at www.td.com/investor and www.sedarplus.ca), which are incorporated
by reference, for further explanation,
reported basis results, a list of the items
of
note, and a reconciliation of adjusted to reported
results.
ex993
RETURN ON ASSETS, DIVIDEND PAYOUTS, AND EQUITY TO ASSETS RATIOS
1
For the three months ended
For the year ended
April 30, 2025
January 31, 2025
October 31, 2024
Return on Assets – reported
2
2.08
%
0.52
%
0.42
%
Return on Assets – adjusted
3
0.65
0.68
0.70
Dividend Payout Ratio – reported
4
16.7
67.9
86.3
Dividend Payout Ratio – adjusted
5
53.3
52.0
52.2
Equity to Asset Ratio
6
5.8
5.7
5.7
1
The Bank prepares its consolidated financial statements in accordance with International Financial Reporting Standards
(IFRS), the current generally accepted accounting principles
(GAAP), and refers to results prepared in accordance with IFRS as the “reported” results. The Bank also utilizes
non-GAAP financial measures such as “adjusted” results (i.e. reported
results excluding “items of note”) and non-GAAP ratios to assess each of its businesses and measure overall Bank
performance. The Bank believes that non-GAAP financial measures
and non-GAAP ratios provide the reader with a better understanding of how management views the Bank’s
performance. Non-GAAP financial measures and ratios used in this
presentation are not defined terms under IFRS and, therefore, may not be comparable to similar terms used by other
issuers. For further explanation regarding reported basis results, list
of the items of note, and a reconciliation of adjusted to reported results,
refer to “Significant Events”, “How We Performed”,
and “How Our Businesses Performed“ sections
of the Bank’s
second quarter 2025 MD&A (available at www.td.com/investor and www.sedar.com),
which are incorporated by reference.
2
Calculated as reported net income available to common shareholders divided by average total assets.
3
Calculated as adjusted net income available to common shareholders divided by average total assets.
4
Calculated as dividends declared per common share divided by reported basic earnings per share.
5
Calculated as dividends declared per common share divided by adjusted basic earnings per share.
6
Calculated as average total equity divided by average total assets.
ex994
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 1
TD Bank Group Reports Second Quarter 2025 Results
Earnings News Release
•
Three and six months ended April 30, 2025
This quarterly Earnings News Release (ENR)
should be read in conjunction with the
Bank’s unaudited second quarter 2025
Report to Shareholders for the three
and six months ended April 30,
2025, prepared in accordance with International
Financial Reporting Standards (IFRS)
as issued by the International
Accounting
Standards Board (IASB), which is available
on our website at http://www.td.com/investor/.
This ENR is dated May 21, 2025. Unless
otherwise indicated, all
amounts are expressed in Canadian dollars, and
have been primarily derived from the Bank’s
Annual or Interim Consolidated Financial
Statements prepared in
accordance with IFRS. Certain comparative
amounts have been revised to conform with
the presentation adopted in the current period.
Additional information
relating to the Bank is available on the Bank’s website
at http://www.td.com,
as well as on SEDAR+ at http://www.sedarplus.ca
and on the U.S. Securities and
Exchange Commission’s (SEC) website at http://www.sec.gov
(EDGAR filers section).
Reported results conform with generally
accepted accounting principles (GAAP),
in accordance with IFRS.
Adjusted results are non-GAAP financial
measures.
For additional information about the Bank’s use
of non-GAAP financial measures, refer
to “Significant Events”,
“Non-GAAP and Other Financial
Measures” in the
“How We Performed”,
or “How Our Businesses Performed” sections
of this document.
SECOND QUARTER FINANCIAL HIGHLIGHTS,
compared with the second quarter last
year:
●
Reported diluted earnings per share were
$6.27, compared with $1.35.
●
Adjusted diluted earnings per share were
$1.97, compared with $2.04.
●
Reported net income was $11,129 million, compared with
$2,564 million.
●
Adjusted net income was $3,626 million,
compared with $3,789 million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended April
30, 2025, compared with the corresponding
period last year:
●
Reported diluted earnings per share were
$7.81, compared with $2.89.
●
Adjusted diluted earnings per share were
$3.99, compared with $4.04.
●
Reported net income was $13,922 million,
compared with $5,388 million.
●
Adjusted net income was $7,249 million,
compared with $7,426 million.
SECOND QUARTER ADJUSTMENTS (ITEMS
OF NOTE)
The second quarter reported earnings figures
included the following items of note:
●
Amortization of acquired intangibles
of $43 million ($35 million after tax or 2
cents per share), compared with $72 million
($62 million after tax or
4 cents per share) in the second quarter
last year.
●
Acquisition and integration charges related
to the Cowen acquisition of $34 million
($26 million after tax or 2 cents
per share), compared with
$102 million ($80 million after tax or 4 cents
per share) in the second quarter last year.
●
Impact from the terminated First Horizon
Corporation (FHN) acquisition-related
capital hedging strategy of $47 million ($35
million after tax or
2 cents per share), compared with $64 million
($48 million after tax or 3 cents per
share) in the second quarter last year.
●
U.S. balance sheet restructuring of $1,129
million ($847 million after tax or 49 cents
per share).
●
Restructuring charges of $163 million
($122 million after tax or 7 cents per share),
compared with $165 million ($122 million
after tax or 7 cents per
share) under a previous program in the
second quarter last year.
●
Gain on sale of Schwab shares of $8,975
million ($8,568 million after tax or $4.92
per share).
TORONTO
, May 22, 2025 – TD Bank Group (“TD” or the “Bank”)
today announced its financial results for the second quarter
ended April 30, 2025. Reported earnings were
$11.1 billion, up 334% compared
with the second quarter last year,
reflecting the Bank's sale of its remaining equity investment
in The Charles Schwab Corporation
(“Schwab”), and adjusted earnings were $3.6 billion, down
4%.
“TD delivered strong results this quarter,
with robust trading and fee income in our markets-driven
businesses as well as deposit and loan growth in Canadian
Personal and
Commercial Banking,”
said Raymond Chun, Group President and CEO, TD
Bank Group. “Our U.S. balance sheet restructuring is
on track, and we are making consistent
progress on AML remediation. We are well positioned
as we enter the second half of the year,
and we continue to strengthen our Bank by investing
in the client experience,
enhancing our digital capabilities, and simplifying how we
operate to achieve greater speed and execution excellence.
”
Canadian Personal and Commercial Banking results
driven by continued volume growth in loans and
deposits
Canadian Personal and Commercial Banking net income was
$1,668 million, a decrease of 4% compared with the second
quarter last year, reflecting higher
provisions for
credit losses (PCL) and non-interest expenses, partially offset
by higher revenue. Revenue increased 3%, primarily
reflecting loan and deposit growth.
The Canadian Personal Bank reported another quarter
of solid acquisition growth, including a record in digital
day-to-day sales. The Canadian Personal Bank
also delivered a
strong quarter of credit card growth and referral volumes
to Wealth and Business Banking. This quarter,
Business Banking reported strong commercial loan
growth, record
second-quarter retail originations in TD Auto Finance (TDAF),
and robust customer acquisition in Small Business Banking.
In addition, TDAF scored highest in two segments
of the J.D. Power 2025 Canada Dealer Financing Satisfaction
Study, ranking #1 for
Dealer Satisfaction among Non-Prime and Prime Credit Non
-Captive Automotive
Financing Lenders
1
.
The U.S. Retail Bank delivered continued momentum
and progress on balance sheet restructuring
U.S. Retail reported net income for the quarter was $120
million (US$89 million), down 76% (77% in U.S. dollars),
compared with the second quarter last year.
On an adjusted
basis, net income was $967 million (US$680 million),
down 19% (23% in U.S. dollars). Reported net income
for the quarter from the Bank’s prior investment
in Schwab was
$78 million (US$54 million), a decrease of 57% (60% in
U.S. dollars), compared with the second quarter last year
reflecting the Bank’s sale of its remaining
equity investment
in Schwab this quarter.
The U.S. Retail Bank, which excludes the Bank’s
prior investment in Schwab, reported net income was $42
million (US$35 million), down 87% (86% in U.S.
dollars),
compared with the second quarter last year,
primarily reflecting the impact of balance sheet restructuring
activities, higher governance and control investments,
including costs
1
TD Auto Finance received the highest score in the retail non-captive non-prime segment and the retail non-captive prime segment in the J.D. Power 2024-2025 Canada Dealer Financing Satisfaction
Studies, which measure Canadian auto dealers’ satisfaction with their auto finance providers. Visit jdpower.com/awards for more details.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 2
for U.S. BSA/AML remediation, and higher PCL, partially
offset by the impact of charges for the global
resolution of the investigations into the Bank’s
U.S. BSA/AML program
and FDIC special assessment charge in the second
quarter last year. On an adjusted
basis, net income was $889 million (US$626 million),
down 13% (16% in U.S. dollars)
compared with the second quarter last year,
reflecting higher governance and control investments,
including costs for U.S. BSA/AML remediation, and
higher PCL, partially
offset by higher revenue.
This quarter, the U.S. Retail Bank
demonstrated
resilience and delivered continued momentum, with its
sixth quarter of consumer deposit growth and double
-digit growth in
U.S. Wealth assets year over year.
This quarter, TD Bank, America’s
Most Convenient Bank
®
, ranked #1 in Florida for retail banking customer satisfaction
in the J.D. Power
2025 U.S. Retail Banking Satisfaction Study
2
.
Wealth Management and Insurance delivered strong
results across diversified businesses
Wealth Management and Insurance net income
was $707 million, an increase of 14% compared with
the second quarter last year, with
strong revenue growth in both
businesses. This quarter’s revenue growth of 12% reflected higher
insurance premiums, higher fee-based revenue, and transaction
revenue.
This quarter, Wealth Management
and Insurance continued to invest in client-centric innovation
and deliver growth. TD Asset Management
(TDAM) launched the TD
Greystone Infrastructure iCapital Canada Access Fund, expanding
access to direct private infrastructure to retail investors.
TDAM also added more than $5 billion in net
institutional assets, demonstrating its strength as the #1 institutional
asset manager in Canada among the Big 5 banks.
The TD Private Wealth Management and TD
Financial
Planning businesses delivered strong net asset growth this
quarter. Additionally,
TD Insurance continued to deliver double-digit premium
growth and further increased its
market share
3
.
Wholesale Banking delivered record revenue including
fees earned from TD’s sale of its remaining
equity investment in Schwab
Wholesale Banking reported net income for the quarter was
$419 million, an increase of 16% compared with the second
quarter last year, primarily reflecting
higher revenue,
partially offset by higher PCL and non-interest expenses.
On an adjusted basis, net income was $445 million,
an increase of 1% compared with the second
quarter last year.
Revenue for the quarter was a record $2,129 million, an
increase of 10% compared with the second quarter
last year, primarily reflecting higher
trading-related revenue, and
underwriting fees, including those associated with the Bank’s
sale of its remaining equity investment in Schwab.
This quarter, Wholesale Banking executed
the largest sole-managed convertible offering in
the U.S. since 2020, demonstrating the strength
of its capabilities and market
influence. Wholesale Banking was voted Overall Commodities
Dealer in the Energy Risk Commodity Rankings
2025, run by Risk.net, reflecting its global leadership,
reliability,
and client trust.
Capital
TD’s Common Equity Tier 1 Capital
ratio was 14.9%.
Conclusion
“We are operating in a fluid macroeconomic environment.
As we navigate this period of uncertainty,
TD is very well-capitalized, prepared for a broad range
of economic
scenarios, and remains focused on the needs and goals of
our clients,” added Chun. “I want to thank our colleagues
for their continued efforts as we further
strengthen our
Bank and build for the future.”
The foregoing contains forward-looking statements. Please refer to the “Caution Regarding Forward-Looking Statements”
on page 3.
2
TD Bank received the highest score in a tie in Florida in the J.D. Power 2025 U.S. Retail Banking Satisfaction Study, which measures customers’ satisfaction with their primary bank. Visit
jdpower.com/awards for more details.
3
Rankings based on data provided by OSFI, Insurers and the Insurance Bureau of Canada for the year ended December 31, 2024. Excludes public insurance regimes (ICBC, MPI and SAF).
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 3
Caution Regarding Forward-Looking Statements
From time to time, the Bank (as defined in this document) makes written and/or oral forward-looking statements, including
in this document, in other filings with Canadian regulators or the United States (U.S.) Securities
and
Exchange Commission (SEC), and in other communications. In addition, representatives of the
Bank may make forward-looking statements orally to analysts, investors, the media, and others. All such
statements are made
pursuant to the “safe harbour” provisions of, and are intended to be forward-looking statements
under, applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements include, but are not limited to, statements made in this document,
the Management’s Discussion and Analysis (“2024 MD&A”) in the Bank’s 2024 Annual Report under the heading
“Economic
Summary and Outlook”, under the headings “Key Priorities for 2025” and “Operating Environment and
Outlook” for the Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance,
and
Wholesale Banking segments, and under the heading “2024 Accomplishments and Focus for
2025” for the Corporate segment, and in other statements regarding the Bank’s objectives and priorities for
2025 and beyond
and strategies to achieve them, the regulatory environment in which the Bank operates, and the Bank’s anticipated
financial performance.
Forward-looking statements are typically identified by words such as “will”, “would”, “should”, “believe”,
“expect”, “anticipate”, “intend”, “estimate”, “forecast”, “outlook”, “plan”, “goal”, “target”, “possible”,
“potential”,
“predict”, “project”, “may”, and “could” and similar expressions or variations thereof, or the negative thereof,
but these terms are not the exclusive means of identifying such statements. By their very
nature, these forward-
looking statements require the Bank to make assumptions and are subject to inherent risks and
uncertainties, general and specific. Especially in light of the uncertainty related to the physical, financial,
economic, political,
and regulatory environments, such risks and uncertainties – many of which are beyond the Bank’s control
and the effects of which can be difficult to predict – may cause actual results to differ materially from the
expectations expressed in the forward-looking statements.
Risk factors that could cause, individually or in the aggregate, such differences include: strategic, credit,
market (including equity, commodity, foreign exchange, interest rate, and credit spreads), operational (including
technology, cyber security, process, systems, data, third-party, fraud, infrastructure, insider and conduct), model, insurance, liquidity, capital adequacy, compliance and legal, financial crime, reputational, environmental and
social, and other risks. Examples of such risk factors include general business and economic conditions
in the regions in which the Bank operates; geopolitical risk (including policy, trade and tax-related risks and the
potential impact of any new or elevated tariffs or any retaliatory tariffs); inflation, interest rates and recession uncertainty; regulatory
oversight and compliance risk; risks associated with the Bank’s ability to satisfy the terms
of the global resolution of the investigations into the Bank’s U.S.
Bank Secrecy Act
(BSA)/anti-money laundering (AML) program; the impact of the global resolution of the investigations
into the Bank’s U.S. BSA/AML
program on the Bank’s businesses, operations, financial condition, and reputation; the ability of the Bank to execute
on long-term strategies, shorter-term key strategic priorities, including the successful completion of
acquisitions and dispositions and integration of acquisitions, the ability of the Bank to achieve its financial
or strategic objectives with respect to its investments, business retention plans, and other strategic
plans; technology
and cyber security risk (including cyber-attacks, data security breaches or technology failures) on the
Bank’s technologies, systems and networks, those of the Bank’s customers (including their own devices), and third
parties providing services to the Bank; data risk; model risk; fraud activity; insider risk; conduct
risk; the failure of third parties to comply with their obligations to the Bank or its affiliates, including
relating to the care and
control of information, and other risks arising from the Bank’s use of third-parties; the impact of new and changes
to, or application of, current laws, rules and regulations, including without limitation consumer
protection laws
and regulations, tax laws, capital guidelines and liquidity regulatory guidance; increased competition
from incumbents and new entrants (including Fintechs and big technology competitors); shifts in consumer
attitudes and
disruptive technology; environmental and social risk (including climate-related risk); exposure related to
litigation and regulatory matters; ability of the Bank to attract, develop, and retain key talent;
changes in foreign
exchange rates, interest rates, credit spreads and equity prices; downgrade, suspension or withdrawal
of ratings assigned by any rating agency, the value and market price of the Bank’s common shares and other securities
may be impacted by market conditions and other factors; the interconnectivity of financial institutions
including existing and potential international debt crises; increased funding costs and market volatility due to
market
illiquidity and competition for funding; critical accounting estimates and changes to accounting standards,
policies, and methods used by the Bank; and the occurrence of natural and unnatural catastrophic
events and
claims resulting from such events.
The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other
factors could also adversely affect the Bank’s results. For more detailed information, please refer to the “Risk
Factors and
Management” section of the 2024 MD&A, as may be updated in subsequently filed quarterly reports to shareholders
and news releases (as applicable) related to any events or transactions discussed under the headings
“Significant Events”, “Significant and Subsequent Events” or “Update on U.S. Bank Secrecy
Act (BSA)/Anti-Money Laundering (AML) Program Remediation and Enterprise AML Program Improvement
Activities“ in the
relevant MD&A, which applicable releases may be found on www.td.com. All such factors, as well as other
uncertainties and potential events, and the inherent uncertainty of forward-looking statements, should be
considered carefully when making decisions with respect to the Bank. The Bank cautions readers
not to place undue reliance on the Bank’s forward-looking statements.
Material economic assumptions underlying the forward-looking statements contained in this document are set
out in the 2024 MD&A under the headings “Economic Summary and Outlook” and “Significant Events”,
under
the headings “Key Priorities for 2025” and “Operating Environment and Outlook” for the Canadian
Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking segments,
and under the heading “2024 Accomplishments and Focus for 2025” for the Corporate segment,
each as may be updated in subsequently filed quarterly reports to shareholders and news releases (as
applicable).
Any forward-looking statements contained in this document represent the views of management only as
of the date hereof and are presented for the purpose of assisting the Bank’s shareholders and analysts in
understanding the Bank’s financial position, objectives and priorities and anticipated financial performance as at and
for the periods ended on the dates presented, and may not be appropriate for other
purposes. The Bank
does not undertake to update any forward-looking statements, whether written or oral, that may be
made from time to time by or on its behalf, except as required under applicable securities legislation.
This document was reviewed by the Bank’s Audit Committee and was approved by the Bank’s Board of Directors,
on the Audit Committee’s recommendation, prior to its release.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 4
TABLE 1: FINANCIAL HIGHLIGHTS
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Results of operations
Total revenue – reported
$
22,937
$
14,049
$
13,819
$
36,986
$
27,533
Total revenue – adjusted
1
15,138
15,030
13,883
30,168
27,654
Provision for (recovery of) credit losses
1,341
1,212
1,071
2,553
2,072
Insurance service expenses (ISE)
1,417
1,507
1,248
2,924
2,614
Non-interest expenses – reported
8,139
8,070
8,401
16,209
16,431
Non-interest expenses – adjusted
1
7,908
7,983
7,084
15,891
14,209
Net income – reported
11,129
2,793
2,564
13,922
5,388
Net income – adjusted
1
3,626
3,623
3,789
7,249
7,426
Financial position
(billions of Canadian dollars)
Total loans net of allowance for loan losses
$
936.4
$
965.3
$
928.1
$
936.4
$
928.1
Total assets
2,064.3
2,093.6
1,966.7
2,064.3
1,966.7
Total deposits
1,267.7
1,290.5
1,203.8
1,267.7
1,203.8
Total equity
126.1
119.0
112.0
126.1
112.0
Total risk-weighted assets
2
624.6
649.0
602.8
624.6
602.8
Financial ratios
Return on common equity (ROE) – reported
3
39.1
%
10.1
%
9.5
%
24.8
%
10.2
%
Return on common equity – adjusted
1
12.3
13.2
14.5
12.7
14.3
Return on tangible common equity (ROTCE)
1,3
48.0
13.4
13.0
31.3
13.9
Return on tangible common equity – adjusted
1
15.0
17.2
19.2
15.9
18.9
Efficiency ratio – reported
3
35.5
57.4
60.8
43.8
59.7
Efficiency ratio – adjusted, net of ISE
1,3,4
57.6
59.0
56.1
58.3
56.7
Provision for (recovery of) credit losses
as a % of net
average loans and acceptances
0.58
0.50
0.47
0.54
0.45
Common share information – reported
(Canadian dollars)
Per share earnings
Basic
$
6.28
$
1.55
$
1.35
$
7.81
$
2.90
Diluted
6.27
1.55
1.35
7.81
2.89
Dividends per share
1.05
1.05
1.02
2.10
2.04
Book value per share
3
66.75
61.61
57.69
66.75
57.69
Closing share price (TSX)
5
88.09
82.91
81.67
88.09
81.67
Shares outstanding (millions)
Average basic
1,740.5
1,749.9
1,762.8
1,745.3
1,769.8
Average diluted
1,741.7
1,750.7
1,764.1
1,746.3
1,771.2
End of period
1,722.5
1,751.7
1,759.3
1,722.5
1,759.3
Market capitalization (billions of Canadian dollars)
$
151.7
$
145.2
$
143.7
$
151.7
$
143.7
Dividend yield
3
5.0
%
5.4
%
5.1
%
5.2
%
5.0
%
Dividend payout ratio
3
16.6
67.8
75.6
26.8
70.3
Price-earnings ratio
3
9.1
17.5
13.8
9.1
13.8
Total shareholder return (1 year)
3
13.6
6.9
4.5
13.6
4.5
Common share information – adjusted
(Canadian dollars)
Per share earnings
Basic
$
1.97
$
2.02
$
2.04
$
3.99
$
4.05
Diluted
1.97
2.02
2.04
3.99
4.04
Dividend payout ratio
53.0
%
51.9
%
49.9
%
52.4
%
50.3
%
Price-earnings ratio
11.4
10.6
10.5
11.4
10.5
Capital ratios
3
Common Equity Tier 1 Capital ratio
14.9
%
13.1
%
13.4
%
14.9
%
13.4
%
Tier 1 Capital ratio
16.6
14.7
15.1
16.6
15.1
Total Capital ratio
18.5
17.0
17.1
18.5
17.1
Leverage ratio
4.7
4.2
4.3
4.7
4.3
TLAC ratio
31.0
29.5
30.6
31.0
30.6
TLAC Leverage ratio
8.7
8.5
8.7
8.7
8.7
1
The Toronto-Dominion Bank (“TD”
or the “Bank”) prepares its Interim Consolidated Financial Statements in accordance with IFRS,
the current GAAP, and
refers to results prepared in
accordance with IFRS as the “reported” results. The Bank also utilizes non-GAAP financial measures
such as “adjusted” results and non-GAAP ratios to assess each of its businesses
and to measure overall Bank performance. To
arrive at adjusted results, the Bank adjusts reported results for “items of note”. Refer to “Significant
Events”, “How We Performed” or “How
Our Businesses Performed” sections
of this document for further explanation, a list of the items of note, and a reconciliation of
adjusted to reported results. Non-GAAP financial measures
and ratios used in this document are not defined terms under IFRS and, therefore, may not be comparable to similar
terms used by other issuers.
2
These measures have been included in this document in accordance with the Office of the Superintendent
of Financial Institutions Canada’s (OSFI’s) Capital Adequacy
Requirements,
Leverage Requirements, and Total Loss
Absorbing Capacity (TLAC) guidelines. Refer to the “Capital Position” section in the second
quarter of 2025 Management’s Discussion and
Analysis (MD&A) for further details.
3
For additional information about these metrics, refer to the Glossary in the second quarter of 2025 MD&A,
which is incorporated by reference.
4
Efficiency ratio – adjusted, net of ISE is calculated by dividing adjusted non-interest expenses by adjusted
total revenue, net of ISE. Adjusted total revenue, net of ISE –
Q2 2025: $13,721 million, Q1 2025: $13,523 million, Q2 2024: $12,635 million, 2025 YTD: $27,244 million, 2024
YTD: $25,040 million.
5
Toronto Stock Exchange closing market
price.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 5
SIGNIFICANT EVENTS
a)
Sale of Schwab Shares
On February 12, 2025, the Bank sold its entire
remaining equity investment in the Charles
Schwab Corporation (“Schwab”) through a
registered offering and share
repurchase by Schwab. Immediately prior
to the sale, TD held 184.7 million shares of
Schwab’s common stock, representing 10.1%
economic ownership. The sale
of the shares resulted in proceeds of approximately
$21.0 billion (US$14.6 billion) and
the Bank recognized
a net gain on sale of approximately $8.6 billion
(US$5.8 billion). This gain is net of the release
of related cumulative foreign currency
translation from AOCI, the release of AOCI on
designated net investment
hedging items, direct transaction costs,
and taxes. The Bank also recognized
$184 million of underwriting fees in its
Wholesale segment as a result of TD
Securities acting as a lead bookrunner on
the transaction.
The transaction increased
Common Equity Tier 1 (CET1) capital by approximately
238 basis points (bps). The Bank discontinued
recording its share of
earnings available to common shareholders
from its investment in Schwab following
the sale. The Bank continues to have a
business relationship with Schwab
through the IDA Agreement.
b) Restructuring Charges
The Bank initiated a new restructuring program
in the second quarter of 2025 to reduce its
cost base and achieve greater efficiency. In connection with this
program, the Bank incurred $163 million
pre-tax of restructuring charges in
the second quarter of 2025 which primarily
relate to real estate optimization, employee
severance and other personnel-related
costs, and asset impairment and other rationalization,
including certain business wind-downs.
The Bank expects to incur
total restructuring charges of $600 million
to $700 million pre-tax over the next several
quarters, to generate savings of approximately
$100 million pre-tax in fiscal
2025 and fully realized annual savings of $550
million to $650 million pre-tax, including savings
from an approximate 2% workforce
reduction
4
.
UPDATE ON U.S. BANK
SECRECY ACT (BSA)/ANTI-MONEY LAUNDERING (AML
)
PROGRAM REMEDIATION
AND
ENTERPRISE AML PROGRAM IMPROVEMENT ACTIVITIES
As previously disclosed in the Bank’s 2024
MD&A, on October 10, 2024, the Bank announced
that, following active cooperation and engagement
with authorities
and regulators, it reached a resolution of previously
disclosed investigations related to its
U.S. BSA/AML compliance programs (the “Global
Resolution”). The Bank
and certain of its U.S. subsidiaries consented
to orders with the Office of the Comptroller
of the Currency (OCC), the Federal Reserve
Board, and the Financial
Crimes Enforcement Network (FinCEN) and
entered into plea agreements with the
Department of Justice (DOJ), Criminal
Division, Money Laundering and Asset
Recovery Section and the United States
Attorney’s Office for the District of New Jersey. The Bank is focused
on meeting the terms of the consent orders and
plea
agreements, including meeting its requirements
to remediate the Bank’s U.S. BSA/AML programs.
In addition, the Bank is also undertaking several
improvements
to the Bank’s enterprise-wide AML/Anti-Terrorist Financing and Sanctions Programs
(“Enterprise AML Program”).
For additional information on the Global
Resolution, the Bank’s U.S. BSA/AML program
remediation activities, the Bank’s Enterprise
AML Program improvement
activities, and the risks associated with the
foregoing, see the “Significant Events – Global
Resolution of the Investigations into the Bankְ’s U.S. BSA/AML
Program”
and “Risk Factors That May Affect Future Results
– Global Resolution of the Investigations into
the Bank’s U.S. BSA/AML Program” sections of
the Bank’s
2024 MD&A.
Remediation of the U.S. BSA/AML Program
The Bank remains focused on remediating
its U.S. BSA/AML program to meet the requirements
of the Global Resolution. As noted in the
Bank’s first quarter 2025
MD&A, the Bank continues to expect to have
the majority of its management remediation
actions implemented in calendar 2025
with remaining management
implementations planned for calendar 2026
and into calendar 2027. Sustainability
and testing activities are planned for calendar
2026 and calendar 2027 following
management implementations, and the Bank
is targeting to have the Suspicious Activity
Report lookback completed in calendar 2027
per the OCC consent order.
For fiscal 2025, the Bank continues to expect
U.S. BSA/AML remediation and related
governance and control investments of
approximately US$500 million pre-tax
and expects similar investments in fiscal
2026
5
. As noted in the Bank’s 2024 MD&A, all
management remediation actions will be
subject to validation by the Bank’s
internal audit function, followed by the review
and acceptance by the appointed monitor, demonstrated
sustainability, and, ultimately, the review and approval of
the Bank’s U.S. banking regulators and the DOJ.
Following such independent reviews, testing,
and validation, there could be additional remediation
related
implementations required from the Bank
that would take place after calendar 2027.
In addition, as the Bank undertakes the lookback
reviews, the Bank may be
required to further expand the scope of the review, either in
terms of the subjects being addressed and/or
the time period reviewed. The following
graph illustrates
the Bank’s expected remediation plan and progress
on a calendar year basis, based on its
work to date:
As noted in the Bank’s 2024 MD&A including in the
“Risk Factors That May Affect Future Results
– Global Resolution of the Investigations
into the Bank’s U.S.
BSA/AML Program” section thereof, the Bank’s
remediation timeline is based on the Bank’s
current plans, as well as assumptions related
to the duration of
4
The Bank's expectations regarding the restructuring program are subject to inherent uncertainties and are based on the Bank's assumptions regarding certain factors, including rate of natural attrition,
talent re-deployment opportunities, years-of-service, execution timing of actions, decisions to expand on or reduce the restructuring actions (e.g., scope of real estate optimization, additional
rationalizations), and foreign exchange translation impacts. Refer to the “Risk Factors That May Affect Future Results” section of this document for additional information about risks and uncertainties
that may impact the Bank’s estimates.
5
The total amount expected to be spent on remediation and governance and control investments is subject to inherent uncertainties and may vary based on the scope of work in the U.S. BSA/AML
remediation plan which could change as a result of additional findings that are identified as work progresses as well as the Bank’s ability to successfully execute against the U.S. BSA/AML remediation
program in accordance with the U.S. Retail segment’s fiscal 2025 and medium term plan.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 6
planning activities, including the completion
of external benchmarking and lookback
reviews. The Bank’s ability to meet its planned
remediation milestones
assumes that the Bank will be able to
successfully execute against its U.S. BSA/AML
remediation program plan, which
is subject to inherent risks and
uncertainties including the Bank’s ability to attract
and retain key employees, the ability
of third parties to deliver on their contractual
obligations, and the successful
development and implementation of required
technology solutions. Furthermore, the execution
of the U.S. BSA/AML remediation plan, including
these planned
milestones, will not be entirely within the
Bank’s control because of various factors such
as (i) the requirement to obtain regulatory
approval or non-objection before
proceeding with various steps, and (ii) the requirement
for the various deliverables to be acceptable
to the regulators and/or the monitor. As of the date hereof,
the
Bank believes that it and its applicable
U.S. subsidiaries have taken such actions as
are required of them to date under the terms
of the consent orders and plea
agreements and is not aware of them being in
breach of the same.
While substantial work remains, in addition
to the work that has been completed and
previously outlined in the Bank’s 2024 MD&A and
first quarter 2025 MD&A,
the Bank continued to make progress on
remediating and strengthening its U.S. BSA/AML
program during the second fiscal quarter
of 2025, including:
1)
incremental improvements to transaction
monitoring capabilities with the implementation
of the final round of planned scenarios into
the Bank’s U.S.
transaction monitoring system as set out in
our U.S. BSA/AML program remediation plan;
2)
the continued implementation of enhanced,
streamlined investigation practices including
the introduction of updated procedures
for analyzing
customer activity;
3)
progress with data staging in relation to lookback
reviews;
4)
the implementation of further enhancements
to cash deposit requirements at store locations;
5)
updated policies, including those with respect
to Know Your Customer activities, and revised escalation standards
across all of U.S. Financial Crime
Risk Management; and
6)
further hiring of U.S. investigative analysts,
as planned, to help manage higher case
volumes resulting from the additional monitoring
capabilities that
have been implemented.
For the remainder of fiscal 2025, the
Bank’s focus will be on implementing incremental
enhancements to its transaction monitoring
and reporting controls,
including:
1)
continued improvements to transaction
monitoring standards, procedures and
training;
2)
the implementation of additional reporting
and controls for cash management activities;
3)
further progress with data staging and analysis
in relation to lookback reviews; and
4)
the deployment of machine learning analysis
capabilities beginning in the third fiscal quarter
of 2025.
As noted in the Bank’s 2024 MD&A, to help ensure
that the Bank can continue to support its
customers’ financial needs in the U.S.
while not exceeding the
limitation on the combined total assets of
the U.S. Bank, the Bank is focused on executing
multiple U.S. balance sheet restructuring actions
in fiscal 2025. Refer to
the “Update on U.S. Balance Sheet Restructuring”
section of the U.S. Retail segment section
for additional information on these actions.
For additional information
about expenses associated with the Bank’s U.S. BSA/AML
program remediation activities, refer
to the U.S. Retail segment section.
Assessment and Strengthening of the
Bank’s Enterprise AML Program
The Bank is continuing to implement improvements
to the Enterprise AML Program and
continues to target implementation of
the majority of its Enterprise AML
Program remediation and enhancement actions
by the end of calendar 2025. As noted in
the Bank’s first quarter 2025 MD&A, once implemented,
those
remediation and enhancement actions will
then be subject to internal review, challenge and validation
of the activities. Following the end of the
first fiscal quarter,
the Financial Transactions and Reports Analysis Centre
of Canada (“FINTRAC”) commenced a
review of certain remediation steps that
the Bank has taken to date
to address the FINTRAC violations. This review
is ongoing,
and subject to the outcome, may result
in additional regulatory actions.
As noted in the “Risk Factors That May
Affect Future Results – Global Resolution of
the Investigations into the Bank’s U.S. BSA/AML
Program” section of the
Bank’s 2024 MD&A, the remediation and enhancement
of the Enterprise AML program is exposed
to similar risks as noted in respect
of the remediation of the
Bank’s U.S. BSA/AML program. In particular,
as the Bank continues its remediation and
improvement activities of the Enterprise
AML Program, it expects an
increase in identification of reportable transactions
and/or events, which will add to the operational
backlog in the Bank’s Financial Crime
Risk Management
(FCRM)
investigations processing that the Bank
currently faces, but is working towards
remediating, across the enterprise. In addition,
it continues to assess (i)
whether issues that have been, and continue
to be, identified in the U.S. BSA/AML program
exist in the Enterprise AML Program in Canada,
Europe or Asia, and
(ii) the impact of such issues. The results of
these assessments may also broaden
the scope of the remediation and improvements
required for the Enterprise AML
Program. Furthermore, the Bank’s regulators
or law enforcement agencies may identify
other issues with the Bank’s Enterprise AML
Program, which may result in
additional regulatory actions.
While substantial work remains, the
Bank has made progress on the improvements
to the Enterprise AML Program over the
second fiscal quarter of 2025,
including:
1) new reporting on workloads, which has
improved our ability to forecast resource
needs and expanded our FCRM program
reporting to the Bank’s
Boards and senior management;
2) launching technology initiatives to consolidate
electronic document and data availability, to improve quality and
timeliness of monitoring and oversight
of escalated AML issues;
3) continued improvements in the Bank’s process
and procedural guidance, reinforced
with targeted training across FCRM and
individual business
lines; and
4) hiring of additional investigative analysts,
to help improve management of
case volumes, with further expansion planned over
the rest of the fiscal
year.
For the remainder of fiscal 2025, the
Bank’s focus will be on the following improvements
to the Enterprise AML Program:
1) the Enterprise-wide adoption of a new
centralized case management tool that is already
in production in the U.S., with the goal of
strengthening
oversight and investigations of identified
FCRM risks; and
2) the ongoing rollout of an enhanced risk
assessment methodology and tools to
strengthen identification and measurement
of FCRM risks across
clients, products, and transactions, supported
by improved data capabilities.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 7
HOW WE PERFORMED
ECONOMIC SUMMARY AND OUTLOOK
The global economic outlook has weakened
in the wake of the historically elevated import
tariffs levied by the United States on its trading partners
around the
world. The future path of tariff policy is highly uncertain
and financial market volatility has risen.
At the same time, inflation expectations have
increased as the U.S.
tariffs – and retaliatory measures – are expected
to raise prices and complicate global
supply chains. This puts global central banks
in the challenging position of
gauging whether any resulting inflationary
pressures are one-time or prove persistent.
TD Economics still expects future interest
rate reductions, but uncertainty on
the outlook has increased.
After growing at a healthy 2.8% annualized
pace in calendar 2024, the U.S. economy recorded
a small contraction in the first quarter of
calendar 2025.
Economic growth was held back by a surge in
goods imports, as businesses rushed
to stockpile ahead of tariffs. American households and
businesses rushed to
buy big-ticket items such as cars and equipment
before tariffs either lead to increased prices
or made certain goods more difficult to obtain.
This boosted growth in
the domestic economy to a 3% annualized
pace in the first quarter of calendar 2025.
These trends are likely to reverse in the second
calendar quarter, putting the
U.S. economy on track to record a modest
improvement in economic growth even
as momentum in the domestic economy
slows. TD Economics expects that U.S.
tariffs will be partially rolled back over the second
half of 2025 as trade deals are reached
between the U.S. and many other countries.
As a result of heightened
uncertainty and tariffs, TD Economics has
substantially downgraded its forecast for
U.S. economic growth in calendar 2025,
followed by only a modest recovery
next calendar year.
Based on April 2025 data, the U.S. job market
has remained resilient so far this
year. The unemployment rate has held largely steady at around
4.2%. The U.S.
economy had been on track for a “soft landing”
only a few months ago, where inflation
pressures were expected to gradually
drift lower. The rise in tariffs has
raised uncertainty on whether a soft landing
is still likely, and the Federal Reserve has kept interest rates
unchanged as it assesses the impact of the
tariffs on the
economy.
TD Economics expects that by July 2025,
the U.S. central bank will have sufficient clarity around
the economic outlook to resume monetary
easing, with the
federal funds rate expected to be lowered
to 3.50-3.75% by the end of calendar 2025
– a level still on the restrictive side.
Canada’s economic outlook for 2025 has softened
due to the impact of U.S. tariffs. Canada’s economy had
expanded at a solid pace in calendar
2024, boosted
by strong population gains and lower interest
rates. U.S tariffs on Canada have not been
as severe as initially threatened, however, the effect of elevated
uncertainty about tariff policy has resulted in a deterioration
in business confidence about the future,
which is expected to dampen business investment
and weigh
on Canada’s economy for some time. TD Economics
expects Canada’s economy to slip into a
shallow recession beginning in the second
quarter of calendar 2025,
before likely gaining some modest traction by
year end. This soft backdrop is expected
to lift the unemployment rate from 6.9% in
April to 7.2% by (calendar) year
end. TD Economics also expects population
growth to slow sharply over the next
few years as immigration policy changes
restrict inflows.
The Canadian central bank lowered its overnight
rate further to 2.75% in March 2025, before
pausing to assess the impact of U.S. tariffs on
the economic
outlook. TD Economics expects the Bank of
Canada to continue trimming interest rates, reaching
2.25% by the third quarter of calendar 2025.
Concerns about the
U.S. economic outlook and larger U.S. government
deficits have weakened the U.S. dollar, lifting the
Canadian dollar. TD Economics expects the Canadian dollar
will trade in the 72 to 73 U.S. cent range over
the next few quarters, although that is likely
to be influenced by the path of U.S. trade policy.
HOW THE BANK REPORTS
The Bank prepares its Interim Consolidated
Financial Statements in accordance
with IFRS, the current GAAP, and refers to results prepared in accordance with
IFRS as “reported”
results.
Non-GAAP and Other Financial Measures
In addition to reported results, the Bank also
presents certain financial measures, including
non-GAAP financial measures that are historical,
non-GAAP ratios,
supplementary financial measures and capital
management measures, to assess its results.
Non-GAAP financial measures, such as “adjusted”
results, are utilized
to assess the Bank’s businesses and to measure
the Bank’s overall performance.
To
arrive at adjusted results, the Bank adjusts
for “items of note” from reported
results. Items of note are items which management
does not believe are indicative of underlying
business performance and are disclosed
in Table 3. Non-GAAP
ratios include a non-GAAP financial measure
as one or more of its components. Examples
of non-GAAP ratios include adjusted net
interest margin, adjusted basic
and diluted earnings per share (EPS), adjusted
dividend payout ratio, adjusted efficiency ratio,
net of ISE, and adjusted effective income tax rate.
The Bank
believes that non-GAAP financial measures and
non-GAAP ratios provide the reader with
a better understanding of how management
views the Bank’s
performance. Non-GAAP financial measures
and non-GAAP ratios used in this document
are not defined terms under IFRS and,
therefore, may not be
comparable to similar terms used by other issuers.
Supplementary financial measures depict
the Bank’s financial performance and position, and
capital
management measures depict the Bank’s capital
position, and both are explained in this document
where they first appear.
U.S. Strategic Cards
The Bank’s U.S. strategic cards portfolio is comprised
of agreements with certain U.S. retailers
pursuant to which TD is the U.S. issuer
of private label and co-
branded consumer credit cards to their U.S.
customers. Under the terms of the individual
agreements, the Bank and the retailers
share in the profits generated by
the relevant portfolios after credit losses.
Under IFRS, TD is required to present the gross
amount of revenue and PCL related to these
portfolios in the Bank’s
Interim Consolidated Statement of Income.
At the segment level, the retailer program
partners’ share of revenues and credit
losses is presented in the Corporate
segment, with an offsetting amount (representing
the partners’ net share) recorded in Non-interest
expenses, resulting in no impact to Corporate’s
reported net
income (loss). The net income included in
the U.S. Retail segment includes only the
portion of revenue and credit losses attributable
to TD under the agreements.
Investment in The Charles Schwab Corporation
and IDA Agreement
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab
through a registered offering and share repurchase
by Schwab. For further
details, refer to the “Significant Events”
section of this document. The Bank
discontinued recording its share of earnings
available to common shareholders from its
investment in Schwab following the sale.
Prior to the sale, the Bank accounted
for its investment in Schwab using the equity
method. The U.S. Retail segment reflected
the Bank’s share of net income
from its investment in Schwab. The Corporate
segment net income (loss) included
amounts for amortization of acquired intangibles,
the acquisition and integration
charges related to the Schwab transaction,
and the Bank’s share of restructuring and other
charges incurred by Schwab. The Bank’s share of
Schwab’s earnings
available to common shareholders was reported
with a one-month lag. For further details,
refer to Note 12 of the Bank’s 2024 Annual
Consolidated Financial
Statements.
On November 25, 2019, the Bank and Schwab
signed an insured deposit account agreement
(the “2019 Schwab IDA Agreement”), with an
initial expiration
date of July 1, 2031. Under the 2019 Schwab
IDA Agreement, starting July 1, 2021, Schwab
had the option to reduce the deposits by up
to US$10 billion per year
(subject to certain limitations and adjustments),
with a floor of US$50 billion. In addition, Schwab
requested some further operational flexibility
to allow for the
sweep deposit balances to fluctuate over
time, under certain conditions and subject to
certain limitations.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 8
On May 4, 2023, the Bank and Schwab entered
into an amended insured deposit account
agreement (the “2023 Schwab IDA Agreement”
or the “Schwab IDA
Agreement”), which replaced the 2019 Schwab
IDA Agreement. Pursuant to the 2023 Schwab
IDA Agreement, the Bank continues to make
sweep deposit
accounts available to clients of Schwab. Schwab
designates a portion of the deposits
with the Bank as fixed-rate obligation amounts
(FROA). Remaining deposits
are designated as floating-rate obligations.
In comparison to the 2019 Schwab IDA Agreement,
the 2023 Schwab IDA Agreement extends
the initial expiration date
by three years to July 1, 2034 and provides
for lower deposit balances in its first
six years, followed by higher balances in
the later years. Specifically, until
September 2025, the aggregate FROA
will serve as the floor. Thereafter, the floor will be set at US$60 billion.
In addition, Schwab had the option to buy
down up
to $6.8 billion (US$5 billion) of FROA by paying
the Bank certain fees in accordance with
the 2023 Schwab IDA Agreement, subject
to certain limits.
During the first quarter of fiscal 2024, Schwab
exercised its option to buy down the remaining
$0.7 billion (US$0.5 billion) of the US$5 billion
FROA buydown
allowance and paid $32 million (US$23
million) in termination fees to the Bank in accordance
with the 2023 Schwab IDA Agreement. By the
end of the first quarter
of fiscal 2024, Schwab had completed its buydown
of the full US$5 billion FROA buydown allowance
and had paid a total of $337 million (US$250
million) in
termination fees to the Bank. The fees were
intended to compensate the Bank for losses
incurred from discontinuing certain hedging
relationships and for lost
revenues. The net impact was recorded in
net interest income.
Subsequent to the sale of the Bank’s entire remaining
equity investment in Schwab, the Bank
continues to have a business relationship
with Schwab through
the IDA Agreement.
Refer to Note 27 of the Bank’s 2024 Annual
Consolidated Financial Statements for further details
on the Schwab IDA Agreement.
Strategic Review Update
The Bank is conducting a strategic review. The strategic review
is organized across four pillars:
1)
Adjust business mix and capital allocation –
re-allocate capital and disproportionately
invest in targeted segments;
2)
Simplify the portfolio and drive ROE
focus – simplify, optimize, and reposition portfolios to drive returns;
3)
Evolve the Bank and accelerate capabilities
– simplify operating model and strengthen
capabilities to deliver exceptional client experiences;
and
4)
Innovate to drive efficiency and operational excellence
– redesign operations and processes.
The Bank will provide an update on its strategic
review, and on the Bank’s medium-term financial targets, in
the second half of 2025. For additional information
on
current initiatives that are part of the
strategic review, refer to “Significant Events – Sale of Schwab
Shares”, “How Our Businesses Performed
– U.S. Retail –
Update on U.S. Balance Sheet Restructuring
Activities”, and “Significant Events –
Restructuring Charges”
in this document.
The following table provides the operating results
on a reported basis for the Bank.
TABLE 2: OPERATING RESULTS – Reported
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income
$
8,125
$
7,866
$
7,465
$
15,991
$
14,953
Non-interest income
14,812
6,183
6,354
20,995
12,580
Total revenue
22,937
14,049
13,819
36,986
27,533
Provision for (recovery of) credit losses
1,341
1,212
1,071
2,553
2,072
Insurance service expenses
1,417
1,507
1,248
2,924
2,614
Non-interest expenses
8,139
8,070
8,401
16,209
16,431
Income before income taxes and share
of net income from
investment in Schwab
12,040
3,260
3,099
15,300
6,416
Provision for (recovery of) income taxes
985
698
729
1,683
1,363
Share of net income from investment in
Schwab
74
231
194
305
335
Net income – reported
11,129
2,793
2,564
13,922
5,388
Preferred dividends and distributions on other
equity instruments
200
86
190
286
264
Net income attributable to common shareholders
$
10,929
$
2,707
$
2,374
$
13,636
$
5,124
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 9
The following table provides a reconciliation between
the Bank’s adjusted and reported results.
For further details refer to the “Significant
Events”, “How We
Performed”,
or “How Our Businesses Performed” sections.
TABLE 3: NON-GAAP FINANCIAL MEASURES – Reconciliation
of Adjusted to Reported Net Income
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Operating results – adjusted
Net interest income
1,2
$
8,208
$
7,920
$
7,529
$
16,128
$
15,074
Non-interest income
3
6,930
7,110
6,354
14,040
12,580
Total revenue
15,138
15,030
13,883
30,168
27,654
Provision for (recovery of) credit losses
1,341
1,212
1,071
2,553
2,072
Insurance service expenses
1,417
1,507
1,248
2,924
2,614
Non-interest expenses
4
7,908
7,983
7,084
15,891
14,209
Income before income taxes and share of net income from
investment in Schwab
4,472
4,328
4,480
8,800
8,759
Provision for (recovery of) income taxes
929
962
920
1,891
1,792
Share of net income from investment in Schwab
5
83
257
229
340
459
Net income – adjusted
3,626
3,623
3,789
7,249
7,426
Preferred dividends and distributions on other equity instruments
200
86
190
286
264
Net income available to common shareholders –
adjusted
3,426
3,537
3,599
6,963
7,162
Pre-tax adjustments for items of note
Amortization of acquired intangibles
6
(43)
(61)
(72)
(104)
(166)
Acquisition and integration charges related to the Schwab
transaction
4,5
–
–
(21)
–
(53)
Share of restructuring and other charges from investment
in Schwab
5
–
–
–
–
(49)
Restructuring charges
4
(163)
–
(165)
(163)
(456)
Acquisition and integration-related charges
4
(34)
(52)
(102)
(86)
(219)
Impact from the terminated FHN acquisition-related capital
hedging strategy
1
(47)
(54)
(64)
(101)
(121)
Gain on sale of Schwab shares
3
8,975
–
–
8,975
–
U.S. balance sheet restructuring
2,3
(1,129)
(927)
–
(2,056)
–
Civil matter provision
4
–
–
(274)
–
(274)
FDIC special assessment
4
–
–
(103)
–
(514)
Global resolution of the investigations into the Bank’s
U.S. BSA/AML program
4
–
–
(615)
–
(615)
Less: Impact of income taxes
Amortization of acquired intangibles
(8)
(9)
(10)
(17)
(25)
Acquisition and integration charges related to the Schwab
transaction
–
–
(5)
–
(11)
Restructuring charges
(41)
–
(43)
(41)
(121)
Acquisition and integration-related charges
(8)
(11)
(22)
(19)
(46)
Impact from the terminated FHN acquisition-related capital
hedging strategy
(12)
(13)
(16)
(25)
(30)
Gain on sale of Schwab shares
407
–
–
407
–
U.S. balance sheet restructuring
(282)
(231)
–
(513)
–
Civil matter provision
–
–
(69)
–
(69)
FDIC special assessment
–
–
(26)
–
(127)
Total adjustments for items
of note
7,503
(830)
(1,225)
6,673
(2,038)
Net income available to common shareholders – reported
$
10,929
$
2,707
$
2,374
$
13,636
$
5,124
1
After the termination of the merger agreement between the Bank and FHN on May 4, 2023, the residual
impact of the strategy is reversed through net interest income – Q2 2025: ($47) million,
Q1 2025: ($54) million,
2025 YTD: ($101) million, Q2 2024: ($64) million, 2024 YTD: ($121) million, reported in the Corporate segment.
2
Adjusted net interest income excludes the following item of note:
i.
U.S. balance sheet restructuring – Q2 2025: $36 million, 2025 YTD: $36 million, reported in the U.S.
Retail segment.
3
Adjusted non-interest income excludes the following items of note:
i.
The Bank sold common shares of Schwab and recognized a gain on the sale – Q2 2025: $8,975
million, 2025 YTD: $8,975 million, reported in the Corporate segment; and
ii.
U.S. balance sheet restructuring – Q2 2025: $1,093 million, Q1 2025: $927 million, 2025 YTD: $2,020 million, reported in
the U.S. Retail segment.
4
Adjusted non-interest expenses exclude the following items of note:
i.
Amortization of acquired intangibles – Q2 2025: $34 million, Q1 2025: $35 million, 2025 YTD: $69 million,
Q2 2024: $42 million, 2024 YTD: $105 million, reported in the Corporate segment;
ii.
The Bank’s own acquisition and integration charges related to the Schwab transaction – Q2 2024: $16
million, 2024 YTD: $39 million, reported in the Corporate segment;
iii.
Restructuring charges – Q2 2025: $163 million, 2025 YTD: $163 million, compared with Q2 2024: $165 million, 2024
YTD: $456 million under a previous program, reported in the Corporate segment;
iv.
Acquisition and integration-related charges – Q2 2025: $34 million, Q1 2025: $52 million, 2025 YTD:
$86 million, Q2 2024: $102 million, 2024 YTD: $219 million, reported in the Wholesale Banking segment;
v.
Civil matter provision – Q2 2024: $274 million, 2024 YTD: $274 million, reported in the Corporate segment;
vi.
FDIC special assessment – Q2 2024: $103 million, 2024 YTD: $514 million, reported in the U.S. Retail
segment; and
vii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program – Q2 2024:
$615 million, 2024 YTD: $615 million, reported in the U.S. Retail segment.
5
Adjusted share of net income from investment in Schwab excludes the following items of note on
an after-tax basis. The earnings impact of these items is reported in the Corporate segment:
i.
Amortization of Schwab-related acquired intangibles – Q2 2025: $9 million, Q1 2025: $26 million, 2025 YTD:
$35 million, Q2 2024: $30 million, 2024 YTD: $61 million;
ii.
The Bank’s share of acquisition and integration charges associated with Schwab’s acquisition of TD Ameritrade – Q2 2024: $5
million, 2024 YTD: $14 million;
iii.
The Bank’s share of restructuring charges incurred by Schwab – 2024 YTD: $27 million; and
iv.
The Bank’s share of the FDIC special assessment charge incurred by Schwab – 2024 YTD: $22 million.
6
Amortization of acquired intangibles relates to intangibles acquired as a result of asset acquisitions and
business combinations, including the after-tax amounts for amortization of acquired intangibles relating
to the share
of net income from investment in Schwab, reported in the Corporate segment. Refer to footnotes 4 and
5 for amounts.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 10
TABLE 4: RECONCILIATION OF REPORTED TO ADJUSTED EARNINGS PER SHARE
1
(Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Basic earnings (loss) per share – reported
$
6.28
$
1.55
$
1.35
$
7.81
$
2.90
Adjustments for items of note
(4.31)
0.47
0.69
(3.82)
1.15
Basic earnings per share – adjusted
$
1.97
$
2.02
$
2.04
$
3.99
$
4.05
Diluted earnings (loss) per share – reported
$
6.27
$
1.55
$
1.35
$
7.81
$
2.89
Adjustments for items of note
(4.30)
0.47
0.69
(3.82)
1.15
Diluted earnings per share – adjusted
$
1.97
$
2.02
$
2.04
$
3.99
$
4.04
1
EPS is computed by dividing net income available to common shareholders by the weighted-average number of
shares outstanding during the period. Numbers may not add due to
rounding.
Return on Common Equity
The consolidated Bank ROE is calculated
as reported net income available to common
shareholders as a percentage of average
common equity. The
consolidated Bank adjusted ROE is calculated
as adjusted net income available to
common shareholders as a percentage of average
common equity. Adjusted
ROE is a non-GAAP financial ratio and
can be utilized in assessing the Bank’s use of equity.
ROE for the business segments is calculated
as the segment net income attributable
to common shareholders as a percentage of average
allocated capital. The
Bank’s methodology for allocating capital to its
business segments is largely aligned
with the common equity capital requirements
under Basel III. Capital allocated
to the business segments was 11.5% CET1 Capital effective fiscal 2024.
TABLE 5: RETURN ON COMMON EQUITY
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Average common equity
$
114,585
$
106,133
$
101,137
$
110,708
$
100,573
Net income (loss) attributable to common
shareholders – reported
10,929
2,707
2,374
13,636
5,124
Items of note, net of income taxes
(7,503)
830
1,225
(6,673)
2,038
Net income available to common shareholders
– adjusted
$
3,426
$
3,537
$
3,599
$
6,963
$
7,162
Return on common equity – reported
39.1
%
10.1
%
9.5
%
24.8
%
10.2
%
Return on common equity – adjusted
12.3
13.2
14.5
12.7
14.3
Return on Tangible Common Equity
Tangible common equity (TCE) is calculated as common shareholders’ equity
less goodwill, imputed goodwill and intangibles
on the investments in Schwab and
other acquired intangible assets, net of related
deferred tax liabilities. ROTCE is calculated
as reported net income available to common
shareholders after
adjusting for the after-tax amortization of
acquired intangibles, which are treated as an
item of note, as a percentage of average
TCE. Adjusted ROTCE is
calculated using reported net income available
to common shareholders, adjusted for all
items of note, as a percentage of average
TCE. TCE, ROTCE, and
adjusted ROTCE can be utilized in assessing
the Bank’s use of equity. TCE is a non-GAAP financial measure,
and ROTCE and adjusted ROTCE are
non-GAAP
ratios.
TABLE 6: RETURN ON TANGIBLE COMMON EQUITY
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Average common equity
$
114,585
$
106,133
$
101,137
$
110,708
$
100,573
Average goodwill
19,302
19,205
18,380
19,207
18,322
Average imputed goodwill and intangibles on
investments in Schwab
1,304
5,116
6,051
2,924
6,062
Average other acquired intangibles
1
450
482
574
456
595
Average related deferred tax liabilities
(236)
(237)
(228)
(236)
(230)
Average tangible common equity
93,765
81,567
76,360
88,357
75,824
Net income attributable to common
shareholders – reported
10,929
2,707
2,374
13,636
5,124
Amortization of acquired intangibles, net of income
taxes
35
52
62
87
141
Net income attributable to common shareholders
adjusted for amortization of acquired intangibles,
net of income taxes
10,964
2,759
2,436
13,723
5,265
Other items of note, net of income taxes
(7,538)
778
1,163
(6,760)
1,897
Net income available to common shareholders
– adjusted
$
3,426
$
3,537
$
3,599
$
6,963
$
7,162
Return on tangible common equity
48.0
%
13.4
%
13.0
%
31.3
%
13.9
%
Return on tangible common equity – adjusted
15.0
17.2
19.2
15.9
18.9
1
Excludes intangibles relating to software and asset servicing rights.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 11
HOW OUR BUSINESSES PERFORMED
For management reporting purposes, the Bank’s business
operations and activities are organized around
the following four key business segments:
Canadian
Personal and Commercial Banking, U.S.
Retail, Wealth Management and Insurance, and
Wholesale Banking. The Bank’s other activities
are grouped into the
Corporate segment.
Results of each business segment reflect revenue,
expenses, assets, and liabilities generated
by the businesses in that segment. Where
applicable,
the Bank
measures and evaluates the performance of
each segment based on adjusted results
and ROE, and for those segments,
the Bank indicates that the measure is
adjusted. For further details, refer to the “How
We Performed”
section of this document, the “Business
Focus”
section in the Bank’s 2024 MD&A, and Note
28 of
the Bank’s Annual Consolidated Financial
Statements for the year ended October 31,
2024.
Effective the first quarter of 2025, certain
U.S. governance and control
investments, including costs for U.S. BSA/AML
remediation, previously reported
in the Corporate segment are now reported
in the U.S. Retail segment.
Comparative amounts have been reclassified
to conform with the presentation adopted
in the current period.
PCL related to performing (Stage 1 and Stage
2) and impaired (Stage 3) financial assets, loan
commitments, and financial guarantees is recorded
within the
respective segment.
Net interest income within Wholesale Banking
is calculated on a taxable equivalent basis
(TEB), which means that the value of non-taxable
or tax-exempt
income, including certain dividends, is adjusted
to its equivalent pre-tax value. Using
TEB allows the Bank to measure income from
all securities and loans
consistently and makes for a more meaningful
comparison of net interest income with similar
institutions. The TEB increase to net interest income
and provision for
income taxes reflected in Wholesale Banking
results is reversed in the Corporate segment.
The TEB adjustment for the quarter was $13
million, compared with
$15 million in the prior quarter and $4 million in
the second quarter last year.
On February 12, 2025, the Bank sold its entire
remaining equity investment in Schwab.
Prior to the sale, the Bank accounted
for its investment in Schwab using
the equity method and the share of net income
from investment in Schwab was reported in
the U.S. Retail segment. Amounts for amortization
of acquired
intangibles,
the acquisition and integration charges related
to the Schwab transaction, and the Bank’s share
of restructuring and other charges incurred
by Schwab
are recorded in the Corporate segment.
Refer to “Significant Events”
for further details.
TABLE 7: CANADIAN PERSONAL AND COMMERCIAL BANKING
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income
$
4,023
$
4,135
$
3,812
$
8,158
$
7,645
Non-interest income
968
1,014
1,027
1,982
2,078
Total revenue
4,991
5,149
4,839
10,140
9,723
Provision for (recovery of) credit losses –
impaired
428
459
397
887
761
Provision for (recovery of) credit losses –
performing
194
62
70
256
129
Total provision for (recovery of) credit losses
622
521
467
1,143
890
Non-interest expenses
2,052
2,086
1,957
4,138
3,941
Provision for (recovery of) income taxes
649
711
676
1,360
1,368
Net income
$
1,668
$
1,831
$
1,739
$
3,499
$
3,524
Selected volumes and ratios
Return on common equity
1
28.9
%
31.4
%
32.9
%
30.2
%
33.8
%
Net interest margin (including on securitized
assets)
2
2.82
2.81
2.84
2.82
2.84
Efficiency ratio
41.1
40.5
40.4
40.8
40.5
Number of Canadian retail branches
1,059
1,063
1,062
1,059
1,062
Average number of full-time equivalent staff
27,371
27,422
29,053
27,397
29,163
1
Capital allocated to the business segment was 11.5% CET1 Capital.
2
Net interest margin is calculated by dividing net interest income by average interest-earning assets. Average
interest-earning assets used in the calculation of net interest margin is a non-
GAAP financial measure. Refer to “Non-GAAP and Other Financial Measures” in the “How We Performed”
section of this document and the Glossary in the Bank’s second quarter 2025
MD&A for additional information about these metrics.
Quarterly comparison – Q2 2025 vs. Q2 2024
Canadian Personal and Commercial
Banking net income for the quarter was
$1,668 million, a decrease of $71 million, or
4%, compared with the second quarter
last year, primarily reflecting higher PCL and non-interest expenses,
partially offset by higher revenue. The annualized
ROE for the quarter was 28.9%, compared
with 32.9%, in the second quarter last year.
Revenue for the quarter was $4,991
million, an increase of $152
million, or 3%, compared with the second quarter
last year. Net interest income was
$4,023 million, an increase of $211 million, or 6%, primarily reflecting
volume growth. Average loan volumes increased
$21 billion, or 4%, reflecting 3% growth in
personal loans and 6% growth in business
loans. Average deposit volumes increased $25
billion, or 5%, reflecting 4% growth in personal
deposits and 8% growth
in business deposits. Net interest margin
was 2.82%, a decrease of 2 bps, primarily
due to changes to balance sheet mix reflecting
the transition of Bankers’
Acceptances (BAs) to Canadian Overnight
Repo Rate Average (CORRA)-based loans. Non-interest
income was $968 million, a decrease
of $59 million, or 6%,
compared with the second quarter last
year, primarily reflecting lower fees due to the transition of
BAs to CORRA-based loans in the prior
year, the impact of
which is offset in net interest income.
PCL for the quarter was $622 million, an increase
of $155 million compared with the second
quarter last year. PCL – impaired was $428
million, an increase of
$31 million, or 8%, largely reflecting credit
migration in the consumer lending portfolios.
PCL – performing was $194 million, an increase
of $124
million compared
to the prior year. The performing provisions this quarter largely
reflect credit impacts from policy and
trade uncertainty, including overlays and an update to our
macroeconomic forecasts. Total PCL as an annualized percentage of credit
volume was 0.44%, an increase of 10 bps
compared with the second quarter last year.
Non-interest expenses for the quarter were $2,052
million, an increase of $95 million, or
5%, compared with the second quarter
last year, primarily reflecting
higher technology spend and other operating
expenses.
The efficiency ratio for the quarter was 41.1%,
compared with 40.4% in the second quarter
last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Canadian Personal and Commercial
Banking net income for the quarter was
$1,668 million, a decrease of $163
million, or 9%, compared with the prior quarter,
primarily reflecting lower revenue and higher
PCL, partially offset by lower non-interest
expenses. The annualized ROE for the quarter
was 28.9%, compared with
31.4% in the prior quarter.
Revenue decreased $158
million, or 3%, compared with the prior quarter. Net interest
income decreased $112 million, or 3%, reflecting fewer days
in the
second quarter, partially offset by volume growth. Average loan volumes
increased $2 billion,
relatively flat compared with the prior
quarter. Average deposit
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 12
volumes increased $1 billion, relatively
flat compared with the prior quarter.
Net interest margin was 2.82%, an increase
of 1 basis point, primarily due to higher
margins on loans. As we look forward to the
third quarter,
while many factors can impact margins,
we again expect net interest margin to be relatively
stable
6
. Non-
interest income decreased $46 million,
or 5% compared with the prior quarter, reflecting lower
fee revenue.
PCL for the quarter was $622 million, an increase
of $101 million compared with the prior
quarter. PCL – impaired was $428
million, a decrease of $31 million,
or 7%, recorded across the consumer and
commercial lending portfolios. PCL – performing
was $194 million, an increase of $132
million. The performing
provisions this quarter largely reflect credit
impacts from policy and trade uncertainty, including overlays
and an update to our macroeconomic forecasts.
Total PCL
as an annualized percentage of credit volume
was 0.44%, an increase of 9 bps compared
with the prior quarter.
Non-interest expenses decreased $34 million,
or 2% compared with the prior quarter, primarily reflecting
fewer days in the second quarter, the impact of TD
Share Compensation Initiative from the prior
quarter,
and lower other operating expenses.
The efficiency ratio was 41.1%, compared with 40.5%
in the prior quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Canadian Personal and Commercial
Banking net income for the six months ended
April 30, 2025, was $3,499 million, a decrease
of $25 million, or 1%, compared
with the same period last year, reflecting higher PCL and non-interest
expenses, partially offset by higher revenue.
The annualized ROE for the period was 30.2%,
compared with 33.8%, in the same period
last year.
Revenue for the period was $10,140 million,
an increase of $417 million, or 4%, compared
with the same period last year. Net interest income was
$8,158 million, an increase of $513 million, or
7%, compared with the same period last
year, primarily reflecting volume growth. Average loan volumes increased
$23 billion, or 4%, reflecting 4% growth in
personal loans and 6% growth in business
loans. Average deposit volumes increased $25 billion,
or 5%, reflecting 4%
growth in personal deposits and 8% growth in
business deposits. Net interest margin
was 2.82%, a decrease of 2 bps, primarily due
to changes to balance sheet
mix reflecting the transition of BAs to CORRA-based
loans. Non-interest income was $1,982
million, a decrease of $96
million, or 5%, reflecting lower fees due
to
the transition of BAs to CORRA-based loans in
the prior year, the impact of which is offset in net interest income,
partially offset by higher fee revenue.
PCL was $1,143 million, an increase of $253
million compared with the same period last
year. PCL – impaired was $887 million, an increase of $126
million, or
17%, largely reflecting credit migration in
the consumer lending portfolios. PCL – performing
was $256 million, an increase of $127 million
compared with the same
period last year. The current year performing provisions largely
reflect credit impacts from policy and
trade uncertainty, including overlays and an update to our
macroeconomic forecasts, and volume growth.
Total PCL as an annualized percentage of credit volume was 0.39%, an
increase of 7 bps compared with the same
period last year.
Non-interest expenses were $4,138 million,
an increase of $197
million, or 5%, compared with the same period
last year, reflecting higher technology spend
and other operating expenses.
The efficiency ratio was 40.8%, compared with 40.5%,
for the same period last year.
U.S. Retail
Update on U.S. Balance Sheet Restructuring
Activities
The Bank continued to focus on executing
the balance sheet restructuring activities
disclosed in the 2024 MD&A to help ensure
the Bank can continue to support
customers’ financial needs in the U.S. while not
exceeding the limitation on the combined
total assets of TD Bank, N.A. and TD
Bank USA, N.A. (the “U.S. Bank”).
As previously disclosed, the Bank expects
to reposition its U.S. investment portfolio by
selling up to US$50 billion of lower yielding investment
securities and
reinvesting the proceeds into a similar composition
of assets but yielding higher rates.
During the second quarter of fiscal 2025, the
Bank sold approximately
US$3.1 billion of bonds which resulted in a
loss of US$199 million pre-tax. In the
aggregate, since the announcement of
the U.S. balance sheet restructuring
activities on October 10, 2024, through April
30, 2025, the Bank sold approximately
US$19 billion of bonds from its U.S. investment
portfolio for an aggregate loss
of US$1.1 billion pre-tax. Between May
1, 2025, through May 21, 2025, the Bank
sold an additional US$4.3 billion of bonds,
resulting in a loss of US$178 million
pre-tax. The Bank expects to complete its
investment portfolio repositioning no later
than the first half of calendar 2025 and expects
the net interest income benefit
from these sales to be at the upper end of
the previously disclosed range of US$300
million to US$500 million pre-tax in fiscal
2025
7
.
In addition, the Bank continues to target reducing
the U.S. Bank’s assets by approximately 10% from
the asset level as of September 30, 2024, largely
by selling
or winding down certain non-scalable or non-core
U.S. loan portfolios that do not align
with the U.S. Retail segment’s focused strategy
or have lower returns on
investment such as the correspondent lending,
residential jumbo mortgage, export
and import lending, and commercial
auto dealer portfolios. This reduction in
assets combined with natural balance sheet
run-off, is expected to be largely complete by
the end of fiscal 2025 and reduce net interest
income in the U.S. Retail
segment by approximately US$200 million
to US$225 million pre-tax in fiscal 2025
8
.
This quarter, the Bank completed the sale of US$8.6 billion
of certain U.S. residential mortgage loans (the
“correspondent loans”), which resulted
in the recognition
of a pre-tax loss including transaction
costs of US$564 million; net interest income
was US$25 million lower as a result of the related
hedge rebalance before
close. In addition to the correspondent loan
sale, loans were further reduced by US$2
billion, reflecting run-off and sales in the
non-core U.S. loan portfolios. The
Bank used proceeds from the sale of the loans,
investment maturities, and cash on hand,
to pay down US$4 billion of short-term
borrowings. Accordingly, as of
April 30, 2025, the combined total assets of the
U.S. Bank were US$399 billion. Between
May 1, 2025, through May 21, 2025, the Bank
paid down an additional
US$7 billion of bank borrowings from loan
sales, investment maturities and normalized
cash levels.
As of March 31, 2025, the combined total assets
of the U.S. Bank, as measured in accordance
with the OCC Consent Order which utilizes
the average of spot
balances of December 31, 2024, and
March 31, 2025, was US$405 billion.
In the aggregate, total losses associated
with the Bank’s U.S. balance sheet restructuring
activities from October 10, 2024,
through April 30, 2025, are
US$1,666 million pre-tax and US$1,250
million after-tax. In total, the Bank’s collective
balance sheet restructuring actions are
expected to result in a loss up to
US$1.5 billion after-tax, and impact capital
as executed
7
,8
.
6
The Bank’s Q3 2025 net interest margin expectations for the segment are based on the Bank’s assumptions regarding factors such as Bank of Canada rate actions, competitive market dynamics, and
deposit reinvestment rates and maturity profiles, and are subject to inherent risks and uncertainties, including those set out in the “Risk Factors That May Affect Future Results” section of the Bank’s
2024 MD&A and the second quarter 2025 MD&A.
7
The amount of bonds that the Bank sells and the timing of such sales, are subject to market conditions and other
factors. Accordingly, the expected loss incurred as well as the expected
amount of net interest income benefit, are subject to risk and uncertainties and are based on assumptions regarding
the timing of when such bonds are sold, the interest rates at the time
of sale as well as other market factors and conditions which are not entirely within the Bank’s control.
8
The Bank’s estimates regarding net interest income impacts are based on assumptions regarding the timing of
when such assets are sold or wound down. The Bank’s ability to
successfully dispose of the assets is subject to inherent risks and uncertainty and there is no guarantee that the
Bank will be able to sell the assets in the timeline outlined or achieve the
purchase price which it currently expects. The ability to sell the assets will depend on market factors and conditions and any
sale will likely be subject to customary closing terms and
conditions which could involve regulatory approvals which are not entirely within the Bank’s control.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 13
In addition to the asset reductions identified on
October 10, 2024, the Bank made the strategic
decision to gradually wind-down the approximately
US$3 billion
point of sale financing business which
services third-party retailers, as part of
the Bank’s efforts to reduce non-scalable and niche portfolios
that do not fit the
Bank’s focused strategy.
TABLE 8: U.S. RETAIL
(millions of dollars, except as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
Canadian Dollars
2025
2025
2024
2025
2024
Net interest income – reported
$
3,038
$
3,064
$
2,841
$
6,102
$
5,740
Net interest income – adjusted
1,2
3,074
3,064
2,841
6,138
5,740
Non-interest income (loss) – reported
(445)
(282)
606
(727)
1,210
Non-interest income – adjusted
1,3
648
645
606
1,293
1,210
Total revenue – reported
2,593
2,782
3,447
5,375
6,950
Total revenue – adjusted
1,2,3
3,722
3,709
3,447
7,431
6,950
Provision for (recovery of) credit losses –
impaired
309
529
311
838
688
Provision for (recovery of) credit losses –
performing
133
(78)
69
55
77
Total provision for (recovery of) credit losses
442
451
380
893
765
Non-interest expenses – reported
2,338
2,380
2,694
4,718
5,153
Non-interest expenses – adjusted
1,4
2,338
2,380
1,976
4,718
4,024
Provision for (recovery of) income taxes – reported
(229)
(192)
49
(421)
32
Provision for (recovery of) income taxes – adjusted
1
53
39
75
92
159
U.S. Retail Bank net income – reported
42
143
324
185
1,000
U.S. Retail Bank net income – adjusted
1
889
839
1,016
1,728
2,002
Share of net income from investment in
Schwab
5,6
78
199
183
277
377
Net income – reported
$
120
$
342
$
507
$
462
$
1,377
Net income – adjusted
1
967
1,038
1,199
2,005
2,379
U.S. Dollars
Net interest income – reported
$
2,136
$
2,160
$
2,094
$
4,296
$
4,235
Net interest income – adjusted
1,2
2,161
2,160
2,094
4,321
4,235
Non-interest income (loss) – reported
(306)
(198)
446
(504)
892
Non-interest income – adjusted
1,3
457
454
446
911
892
Total revenue – reported
1,830
1,962
2,540
3,792
5,127
Total revenue – adjusted
1,2,3
2,618
2,614
2,540
5,232
5,127
Provision for (recovery of) credit losses –
impaired
216
371
229
587
508
Provision for (recovery of) credit losses –
performing
95
(53)
51
42
57
Total provision for (recovery of) credit losses
311
318
280
629
565
Non-interest expenses – reported
1,644
1,675
1,980
3,319
3,795
Non-interest expenses – adjusted
1,4
1,644
1,675
1,455
3,319
2,970
Provision for (recovery of) income taxes – reported
(160)
(136)
37
(296)
25
Provision for (recovery of) income taxes – adjusted
1
37
27
56
64
118
U.S. Retail Bank net income – reported
35
105
243
140
742
U.S. Retail Bank net income – adjusted
1
626
594
749
1,220
1,474
Share of net income from investment in
Schwab
5,6
54
142
136
196
280
Net income – reported
$
89
$
247
$
379
$
336
$
1,022
Net income – adjusted
1
680
736
885
1,416
1,754
Selected volumes and ratios
Return on common equity – reported
7
1.1
%
2.9
%
4.7
%
2.1
%
6.4
%
Return on common equity – adjusted
1,7
8.8
8.6
11.0
8.7
11.0
Net interest margin – reported
1,8
3.00
2.86
2.99
2.93
3.01
Net interest margin – adjusted
1,8
3.04
2.86
2.99
2.95
3.01
Efficiency ratio – reported
89.8
85.4
78.0
87.5
74.0
Efficiency ratio – adjusted
1
62.8
64.1
57.3
63.4
57.9
Assets under administration (billions of U.S.
dollars)
9
$
45
$
43
$
40
$
45
$
40
Assets under management (billions of U.S.
dollars)
9
9
9
7
9
7
Number of U.S. retail stores
1,137
1,134
1,167
1,137
1,167
Average number of full-time equivalent staff
28,604
28,276
27,957
28,437
27,971
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted net interest income excludes the following item of note:
i.
U.S. balance sheet restructuring (impact of loan hedge rebalancing before the close of the correspondent loan
sale) – Q2 2025: $36 million or US$25 million ($26 million or
US$19 million after-tax), 2025 YTD: $36 million or US$25 million ($26 million or US$19 million after-tax).
3
Adjusted non-interest income excludes the following item of note:
i.
U.S. balance sheet restructuring – Q2 2025: $1,093 million or US$763 million ($821 million or US$572 million after
-tax), Q1 2025:
$927 million or US$652 million ($696 million or
US$489 million after-tax), 2025 YTD: $2,020
million or US$1,415 million ($1,517 million or US$1,061 million after-tax).
4
Adjusted non-interest expenses exclude the following items of note:
i.
FDIC special assessment – Q2 2024: $103 million or US$75 million ($77 million or US$56 million after
-tax), 2024 YTD: $514 million or US$375 million ($387 million or
US$282 million after-tax); and
ii.
Charges for the global resolution of the investigations into the Bank’s U.S. BSA/AML program –
Q2 2024: $615 million or US$450 million (before and after-tax),
2024 YTD:
$615 million or US$450 million (before and after-tax).
5
The Bank’s share of Schwab’s earnings is reported with a one-month lag. Refer to
Note 7 of the Bank’s second quarter 2025
Interim Consolidated Financial Statements for further details.
6
The after-tax amounts for amortization of acquired intangibles, the Bank’s share of acquisition and integration
charges associated with Schwab’s acquisition of TD Ameritrade, the Bank’s
share of Schwab’s restructuring charges,
and the Bank’s share of Schwab’s FDIC special assessment charge are recorded
in the Corporate segment.
7
Capital allocated to the business segment was 11.5% CET1
Capital.
8
Net interest margin is calculated by dividing U.S. Retail segment’s net interest income
by average interest-earning assets excluding the impact related to sweep deposits arrangements
and the impact of intercompany deposits and cash collateral, which management believes better reflects segment
performance.
In addition, the value of tax-exempt interest income is
adjusted to its equivalent before-tax value. For investment securities, the adjustment to fair value is included in the
calculation of average interest-earning assets. Net interest income and
average interest-earning assets used in the calculation are non-GAAP financial measures.
Management believes this calculation better reflects segment performance.
9
For additional information about this metric, refer to the Glossary in the Bank’s second
quarter 2025 MD&A.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 14
Quarterly comparison – Q2 2025 vs. Q2 2024
U.S. Retail reported net income for the quarter
was $120 million (US$89 million), a decrease
of $387 million (US$290 million), or 76%
(77% in U.S. dollars),
compared with the second quarter last
year. On an adjusted basis, net income for the quarter
was $967 million (US$680 million), a decrease
of $232
million
(US$205 million), or 19% (23%
in U.S. dollars). The reported and adjusted
annualized ROE for the quarter were 1.1%
and 8.8%, respectively, compared with 4.7%
and 11.0%, respectively, in the second quarter last year.
U.S. Retail net income includes contributions
from the U.S. Retail Bank and the Bank’s investment
in Schwab. Reported net income for the
quarter from the
Bank’s investment in Schwab was $78 million (US$54
million), a decrease of $105 million (US$82
million), or 57% (60% in U.S. dollars),
compared with the second
quarter last year.
U.S. Retail Bank reported net income
was $42 million (US$35 million), a decrease
of $282
million (US$208 million), or 87% (86% in
U.S. dollars), compared
with the second quarter last year, primarily reflecting the impact
of U.S. balance sheet restructuring
activities, higher governance and control investments,
including
costs for U.S. BSA/AML remediation,
and higher PCL, partially offset by the impact of
the charges for the global resolution of the investigations
into the Bank’s
U.S. BSA/AML program, and FDIC special
assessment charge, in the second quarter
last year. U.S. Retail Bank adjusted net income was $889
million
(US$626 million), a decrease of $127
million (US$123 million), or 13% (16% in
U.S. dollars), compared with the second quarter
last year, reflecting higher
governance and control investments, including
costs for U.S. BSA/AML remediation, and
higher PCL, partially offset by higher revenue.
Reported revenue for the quarter was US$1,830
million, a decrease of US$710 million, or 28%,
compared with the second quarter last
year. On an adjusted
basis, revenue for the quarter was US$2,618
million, an increase of US$78 million, or 3%.
Reported net interest income of US$2,136
million, increased
US$42 million, or 2%, and adjusted net interest
income of US$2,161 million, increased US$67
million, or 3%, driven by the impact of U.S. balance
sheet
restructuring activities and higher deposit
margins, partially offset by the adjustment related
to certain deferred product acquisition
costs (the “deferred cost
adjustment”). Reported net interest
margin of 3.00% increased 1 basis point,
and adjusted net interest margin of 3.04%
increased 5 bps, due to the impact of U.S.
balance sheet restructuring activities and higher
deposit margins, partially offset by maintaining
elevated liquidity levels (which negatively impacted
net interest
margin by 8 bps) and the deferred cost adjustment.
Reported non-interest loss was US$306
million, a decrease of US$752 million,
compared with the second
quarter last year, reflecting the impact of U.S. balance sheet
restructuring activities, partially offset by higher
fee income. On an adjusted basis, non-interest
income of US$457 million increased US$11 million, or 2%, compared
with the second quarter last year, reflecting higher fee income.
Average loan volumes decreased US$6 billion,
or 3%, compared with the second quarter
last year. Personal loans decreased 2% and business
loans
decreased 4%, reflecting U.S. balance sheet
restructuring activities. Excluding the impact
of the loan portfolios identified for sale
or run-off under our U.S. balance
sheet restructuring program, average loan
volumes increased US$3 billion, or 2%
9,10
. Average deposit volumes decreased US$7 billion, or
2%, reflecting a 7%
decrease in sweep deposits and a 4% decrease
in business deposits, partially offset by a 3% increase
in personal deposits.
Assets under administration (AUA) were
US$45 billion as of April 30, 2025, an increase
of US$5 billion, or 13%, compared
with the second quarter last year,
reflecting net asset growth. Assets under
management (AUM) were US$9 billion as
of April 30, 2025, an increase of US$2 billion,
or 29%, compared with the
second quarter last year.
PCL for the quarter was US$311 million, an increase of US$31
million compared with the second quarter
last year. PCL – impaired was US$216 million, a
decrease of US$13 million, or 6%, largely recorded
in the consumer lending portfolios. PCL
– performing was US$95 million, an increase
of US$44 million
compared to the prior year. The performing provisions this quarter
largely reflect credit impacts from policy
and trade uncertainty, including overlays and an update
to our macroeconomic forecasts, partially
offset by lower volume. U.S. Retail PCL including
only the Bank’s share of PCL in the U.S. strategic
cards portfolio, as an
annualized percentage of credit volume
was 0.70%, an increase of 10 bps compared
with the second quarter last year.
Effective the first quarter of 2025, U.S. Retail segment
non-interest expenses include certain U.S.
governance and control investments, including
costs for U.S.
BSA/AML remediation which were previously
reported in the Corporate segment.
Comparative amounts have been reclassified
to conform with the presentation
adopted in the current period.
Reported non-interest expenses for the quarter
were US$1,644 million, a decrease of US$336
million, or 17%, compared to the
second quarter last year, reflecting the impact of charges for
the global resolution of the investigations
into the Bank’s U.S. BSA/AML program, and
the FDIC
special assessment charge, in the second
quarter last year, partially offset by higher governance and control
investments including costs of US$110 million for
U.S. BSA/AML remediation,
and higher employee-related expenses, in
the current quarter. Our governance and control investments
in this quarter were higher
compared to the second quarter last year as
remediation efforts progressed over this period.
On an adjusted basis, non-interest expenses
increased US$189
million, or 13%, reflecting higher governance
and control investments, including
costs for U.S. BSA/AML remediation, and
higher employee-related expenses.
The reported and adjusted efficiency ratios for
the quarter were 89.8% and 62.8%, respectively, compared with 78.0%
and 57.3%, respectively, in the second
quarter last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
U.S. Retail reported net income was $120
million (US$89 million), a decrease of $222
million (US$158 million), or 65% (64% in
U.S. dollars), compared with the
prior quarter. On an adjusted basis, net income for the
quarter was $967 million (US$680 million),
a decrease of $71 million (US$56 million),
or 7% (8% in U.S.
dollars). The reported and adjusted annualized
ROE for the quarter were 1.1% and 8.8%,
respectively, compared with 2.9% and 8.6%, respectively, in the prior
quarter.
The contribution from Schwab of $78
million (US$54 million) decreased $121 million
(US$88 million), or 61% (62% in U.S.
dollars), compared with the prior
quarter.
U.S. Retail Bank reported net income
was $42 million (US$35 million), a decrease
of $101
million (US$70 million), or 71% (67% in U.S.
dollars) compared with
the prior quarter, primarily reflecting the impact of U.S. balance
sheet restructuring activities and higher PCL,
partially offset by the impact of fewer days in
the
current quarter. U.S. Retail Bank adjusted net income was $889
million (US$626 million), an increase of $50
million (US$32 million), or 6% (5% in U.S.
dollars),
compared to the prior quarter, primarily reflecting lower expenses,
lower PCL, and higher non-interest income.
Reported revenue was US$1,830 million,
a decrease of US$132
million, or 7%, compared with the prior quarter. On an adjusted
basis, revenue was
US$2,618 million, an increase of US$4
million, relatively flat, compared with the
prior quarter. Reported net interest income of US$2,136
million decreased
US$24 million, or 1%, driven by the deferred
cost adjustment,
and fewer days in the quarter, partially offset by the impact of
U.S. balance sheet restructuring
activities. On an adjusted basis, net interest
income was US$2,161 million, relatively flat
compared with the prior quarter, as the impact of U.S. balance
sheet
restructuring activities was offset by the deferred
cost adjustment,
and fewer days in the quarter.
Reported net interest margin of 3.00% increased
14 bps, and
adjusted net interest margin of 3.04% increased
18 bps, compared with the prior quarter, due to impact of
U.S. balance sheet restructuring activities,
normalization
of elevated liquidity levels (which positively impacted
net interest margin by 11 bps), and higher deposit margins, partially
offset by the deferred cost adjustment.
Net interest margin in the third quarter is expected
to deliver substantial expansion, reflecting
the benefits from ongoing U.S. balance
sheet restructuring activities
9
Loan portfolios identified for sale or run-off include the point of sale finance business which services third
party retailers,
correspondent lending, residential jumbo mortgage, export and
import lending, commercial auto dealer portfolio, and other non-core portfolios. Q2 2025 average loan volumes:
US$187 billion (Q1 2025: US$193
billion; 2025 YTD: US$190 billion;
Q2 2024: US$193
billion; 2024 YTD: US$192 billion). Q2 2025 average loan volumes of loan portfolios identified for sale or
run-off: US$31 billion (Q1 2025: US$37 billion; 2025 YTD:
US$34 billion; Q2 2024: US$40 billion; 2024 YTD: US$40 billion). Q2 2025 average loan volumes excluding loan
portfolios identified for sale or run-off: US$156 billion (Q1 2025:
US$156 billion; 2025 YTD: US$156 billion; Q2 2024: US$153
billion; 2024 YTD: US$152
billion).
10
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP and Other Financial Measures”
in the “How We Performed” section of this
document.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 15
and further normalization of elevated liquidity
levels
11
. Reported non-interest loss was US$306
million, compared with reported non-interest
loss of US$198 million
in the prior quarter, reflecting the impact of U.S. balance
sheet restructuring activities, partially offset by
higher fee revenue. On an adjusted basis,
non-interest
income of US$457 million increased US$3
million, or 1%, compared with the prior
quarter, reflecting higher fee revenue.
Average loan volumes decreased US$6 billion,
or 3%, compared with the prior quarter, reflecting a 5% decrease
in personal loans and a 2% decrease in
business loans. Excluding the impact of the
loan portfolios identified for sale or run-off
under our U.S. balance sheet restructuring
program, average loan volumes
were flat
9
,10
. Average deposit volumes were relatively flat
compared with the prior quarter, reflecting a 2% decrease
in business deposits and a 1% decrease
in
sweep deposits,
partially offset by a 1% increase in personal
deposits.
AUA were US$45 billion as of April 30,
2025, an increase of US$2 billion, or 5%,
compared with the prior quarter. AUM were US$9 billion, flat
compared with
the prior quarter.
PCL for the quarter was US$311 million, a decrease of US$7
million compared with the prior quarter. PCL – impaired was
US$216 million, a decrease of
US$155 million, or 42%, recorded across
the consumer and commercial lending portfolios,
including seasonal trends in the credit card and
auto portfolios, and a
prior quarter adoption impact of a model
update in the credit card portfolio. PCL –
performing was a build of US$95
million, compared with a recovery of
US$53 million in the prior quarter. The performing provisions
this quarter largely reflect credit impacts
from policy and trade uncertainty, including overlays and an
update to our macroeconomic forecasts,
partially offset by lower volume. U.S. Retail PCL
including only the Bank’s share of PCL in
the U.S. strategic cards
portfolio, as an annualized percentage of
credit volume was 0.70%, an increase
of 3 bps compared with the prior quarter.
Non-interest expenses for the quarter were
US$1,644 million, a decrease of US$31 million,
or 2%, compared with the prior quarter, reflecting fewer days
in the
quarter and lower operating expenses, partially
offset by higher governance and control investments,
including costs for U.S. BSA/AML remediation.
The reported and adjusted efficiency ratios for
the quarter were 89.8% and 62.8%, respectively, compared with 85.4%
and 64.1%, respectively, in the prior
quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
U.S. Retail reported net income for the
six months ended April 30, 2025, was $462
million (US$336 million), a decrease of $915
million (US$686 million), or 66%
(67% in U.S. dollars), compared with the
same period last year. On an adjusted basis, net income
for the period was $2,005 million (US$1,416
million), a decrease
of $374 million (US$338 million), or 16%
(19% in U.S. dollars). The reported and
adjusted annualized ROE for the period
were 2.1% and 8.7%, respectively,
compared with 6.4% and 11.0%, respectively, in the same period last year.
The contribution from Schwab of $277
million (US$196 million), decreased $100 million
(US$84 million), or 27%
(30%
in U.S. dollars).
U.S. Retail Bank reported net income
for the period was $185 million (US$140
million), a decrease of $815 million (US$602
million), or 82% (81% in U.S.
dollars), compared with the same period
last year, reflecting the impact of U.S. balance sheet restructuring
activities, higher PCL, and higher non-interest
expenses, partially offset by the impact of the charges
for the global resolution of the investigations
into the Bank’s U.S. BSA/AML program, and
FDIC special
assessment charge, in the same period last
year, and higher revenue. U.S. Retail Bank adjusted net
income was $1,728 million (US$1,220 million),
a decrease of
$274 million (US$254 million), or 14% (17%
in U.S. dollars), primarily reflecting higher
non-interest expenses and higher PCL, partially
offset by higher revenue.
Reported revenue for the period was US$3,792
million, a decrease of US$1,335 million, or
26%, compared with the same period last
year. On an adjusted basis,
revenue for the period was US$5,232 million,
an increase of US$105 million, or 2%,
compared with the same period last year. Reported net interest
income of
US$4,296 million increased US$61 million, or
1%, and adjusted net interest income
of US$4,321 million increased US$86
million, or 2%, reflecting the impact of
U.S. balance sheet restructuring activities and
higher deposit margins, partially offset by
the deferred cost adjustment.
Reported net interest margin of 2.93%,
decreased 8 bps, and adjusted net interest
margin of 2.95% decreased 6 bps, due to
maintaining elevated liquidity levels (which
negatively impacted net interest
margin by 13 bps) and the deferred cost adjustment,
partially offset by the impact of U.S. balance
sheet restructuring activities, and higher deposit
margins.
Reported non-interest loss of US$504
million decreased US$1,396 million, primarily reflecting
the impact of U.S. balance sheet restructuring
activities, partially
offset by higher fee revenue. On an adjusted
basis, non-interest income of US$911 million increased US$19
million, or 2%, primarily reflecting higher
fee income.
Average loan volumes for the period decreased $2
billion, or 1%, compared with the same
period last year, reflecting a 3% decrease in business loans,
partially
offset by a 1% increase in personal loans. Excluding
the impact of the loan portfolios identified
for sale or run-off under our U.S. balance
sheet restructuring
program, average loan volumes for the period
increased US$4 billion, or 3%, compared
with the same period last year
9
,10
.
Average deposit volumes decreased
US$8 billion, or 3%, reflecting a 9% decrease
in sweep deposits and a 4% decrease in
business deposits,
partially offset by a 3% increase in personal deposits
compared with the same period last year.
PCL was US$629 million, an increase of
US$64 million compared with the same period
last year. PCL – impaired was US$587 million, an increase of
US$79 million, or 16%, largely reflecting
credit migration in the commercial lending portfolio
and the adoption impact of a model update in
the credit card portfolio.
PCL – performing was US$42 million,
a decrease of US$15 million compared
with the same period last year. The current year performing provisions
largely reflect
credit impacts from policy and trade uncertainty, including overlays
and an update to our macroeconomic forecasts,
partially offset by lower volume and the
adoption impact of a model update in
the credit card portfolio.
U.S. Retail PCL including only the Bank’s share
of PCL in the U.S. strategic cards portfolio,
as an
annualized percentage of credit volume
was 0.68%, an increase of 8 bps, compared
with the same period last year.
Reported non-interest expenses for the period
were US$3,319 million, a decrease of
US$476 million, or 13%, compared with the
same period last year,
reflecting the impact of the charges for the global
resolution of the investigations into the Bank’s
U.S. BSA/AML program, and FDIC special
assessment charge, in
the same period last year, partially offset by higher governance
and control investments,
including costs for U.S. BSA/AML remediation,
and higher employee-
related expenses. On an adjusted basis, non-interest
expenses increased US$349 million, or 12%,
reflecting costs related to the Bank’s governance
and control
investments,
including costs for U.S. BSA/AML remediation,
and higher employee-related expenses.
The reported and adjusted efficiency ratios for
the period were 87.5% and 63.4%, respectively, compared
with 74.0% and 57.9%, respectively, for the same
period last year.
11
The Bank’s Q3 2025 net interest margin expectations for the segment are based on the Bank’s assumptions regarding
interest rates, deposit reinvestment rates, average asset levels,
execution of planned restructuring opportunities, and other variables, and are subject to inherent risks and uncertainties,
including those set out in the “Risk Factors That May Affect
Future Results” section of this document.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 16
TABLE 9: WEALTH MANAGEMENT AND INSURANCE
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income
$
362
$
369
$
304
$
731
$
589
Non-interest income
3,141
3,229
2,810
6,370
5,660
Total revenue
3,503
3,598
3,114
7,101
6,249
Insurance service expenses
1
1,417
1,507
1,248
2,924
2,614
Non-interest expenses
1,131
1,173
1,027
2,304
2,074
Provision for (recovery of) income taxes
248
238
218
486
385
Net income
$
707
$
680
$
621
$
1,387
$
1,176
Selected volumes and ratios
Return on common equity
46.8
%
42.7
%
40.8
%
44.7
%
39.2
%
Return on common equity – Wealth Management
2
57.8
61.9
54.4
59.9
49.4
Return on common equity – Insurance
33.5
21.9
26.9
27.3
28.0
Efficiency ratio
32.3
32.6
33.0
32.4
33.2
Efficiency ratio, net of ISE
3
54.2
56.1
55.0
55.2
57.1
Assets under administration (billions of Canadian
dollars)
4
$
654
$
687
$
596
$
654
$
596
Assets under management (billions of Canadian
dollars)
542
556
489
542
489
Average number of full-time equivalent staff
15,077
15,059
15,163
15,068
15,276
1
Includes estimated losses related to catastrophe claims – Q2 2025: $50 million, Q1 2025: nil, Q2 2024: $7 million
,
YTD 2025: $50 million, YTD 2024: $17 million.
2
Capital allocated to the business was 11.5% CET1 Capital.
3
Efficiency ratio, net of ISE is calculated by dividing non-interest expenses by total revenue, net of ISE.
Total revenue, net of ISE
– Q2 2025: $2,086
million, Q1 2025: $2,091 million,
Q2 2024: $1,866 million, YTD 2025: $4,177 million, YTD 2024: $3,635 million. Total
revenue, net of ISE is a non-GAAP financial measure. Refer to “Non-GAAP and Other Financial
Measures” in the “How We Performed” section and the Glossary in the Bank’s second quarter 2025
MD&A for additional information about this metric.
4
Includes
AUA administered by TD Investment Services Inc. which is part of the Canadian Personal and Commercial
Banking segment.
Quarterly comparison – Q2 2025 vs. Q2 2024
Wealth Management and Insurance net income
for the quarter was $707 million, an increase
of $86 million, or 14%, compared with the second
quarter last year,
reflecting Wealth Management net income of
$480 million, an increase of $62 million,
or 15%, compared with the second quarter
last year, and Insurance net
income of $227 million, an increase of $24
million, or 12%, compared with the second
quarter last year. The annualized ROE for the quarter was 46.8%,
compared
with 40.8% in the second quarter last year. Wealth Management
annualized ROE for the quarter was 57.8%,
compared with 54.4% in the second quarter last
year,
and Insurance annualized ROE for the quarter
was 33.5% compared with 26.9% in the
second quarter last year.
Revenue for the quarter was $3,503 million, an
increase of $389 million, or 12%,
compared with the second quarter last year. Non-interest income
was
$3,141 million, an increase of $331 million, or
12%, reflecting higher insurance
premiums, fee-based revenue, and transaction
revenue. Net interest income was
$362 million, an increase of $58 million, or 19%,
compared with the second quarter last
year, reflecting higher deposit volumes and margins.
AUA were $654 billion as at April 30, 2025, an
increase of $58 billion, or 10%, and
AUM were $542 billion as at April 30, 2025, an
increase of $53 billion, or 11%,
compared with the second quarter last
year, both reflecting market appreciation and net asset growth.
Insurance service expenses for the quarter
were $1,417 million, an increase of $169
million, or 14%, compared with the second quarter
last year, primarily
reflecting increased claims severity.
Non-interest expenses for the quarter were $1,131
million, an increase of $104 million, or
10%, compared with the second quarter last
year, reflecting higher
variable compensation, higher spend supporting
business growth initiatives from technology
spend and employee-related expenses.
The efficiency ratio for the quarter was 32.3%,
compared with 33.0% in the second quarter
last year. The efficiency ratio, net of ISE for the quarter was 54.2%,
compared with 55.0% in the second quarter
last year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Wealth Management and Insurance net income
for the quarter was $707 million, an increase
of $27 million, or 4%, compared with the prior
quarter, reflecting
Wealth Management net income of $480 million,
a decrease of $32 million, or 6%, compared
with the prior quarter, and Insurance net income of $227 million,
an
increase of $59 million, or 35%, compared
with the prior quarter. The annualized ROE for the quarter
was 46.8%, compared with 42.7% in the prior quarter. Wealth
Management annualized ROE for the quarter
was 57.8%, compared with 61.9% in
the prior quarter, and Insurance annualized ROE for the quarter
was 33.5%
compared with 21.9% in the prior quarter.
Revenue decreased $95 million, or 3%, compared
with the prior quarter. Non-interest income decreased $88
million, or 3%, reflecting lower fee-based revenue
and transaction revenue. Net interest income
decreased $7 million, or 2%, reflecting
the effect of fewer days in the second quarter.
AUA decreased $33 billion, or 5%, and AUM
decreased $14 billion, or 3%, compared
with the prior quarter, both reflecting market depreciation and lower
net asset
growth.
Insurance service expenses for the quarter
decreased $90 million, or 6%, compared
with the prior quarter, primarily driven by seasonally lower claims.
Non-interest expenses decreased $42 million,
or 4%, compared with the prior quarter, primarily reflecting
lower employee-related expenses
and lower variable
compensation.
The efficiency ratio for the quarter was 32.3%,
compared with 32.6% in the prior quarter. The efficiency ratio,
net of ISE for the quarter was 54.2%, compared
with 56.1% in the prior quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Wealth Management and Insurance net income
for the six months ended April 30, 2025, was
$1,387 million, an increase of $211 million, or 18%, compared with
the same period last year, reflecting Wealth Management net income
of $992 million, an increase of $219
million, or 28%, compared with the same period
last
year, and Insurance net income of $395 million, a decrease
of $8 million, or 2%, compared with the
same period last year. The annualized ROE for the period was
44.7%, compared with 39.2%, in the same
period last year. Wealth Management annualized ROE for the period
was 59.9%, compared with 49.4% in the same
period last year, and Insurance annualized ROE for the period
was 27.3% compared with 28.0% in the
same period last year.
Revenue for the period was $7,101 million,
an increase of $852 million, or 14%,
compared with same period last year. Non-interest income increased
$710 million, or 13%, reflecting higher insurance
premiums, fee-based revenue commensurate
with market growth, and transaction revenue.
Net interest income
increased $142 million, or 24%, reflecting
higher deposit volumes and margins.
Insurance service expenses were $2,924
million, an increase of $310 million, or 12%,
compared with the same period last year, reflecting business
growth,
increased claims severity and higher occurrences
of catastrophe claims.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 17
Non-interest expenses were $2,304 million,
an increase of $230 million, or 11%, compared with the
same period last year, reflecting higher variable
compensation commensurate with higher
revenues, and increased technology
spend to support strategic initiatives.
The efficiency ratio for the period was 32.4%, compared
with 33.2% for the same period last
year. The efficiency ratio, net of ISE for the period was 55.2%,
compared with 57.1% in the same period last
year.
TABLE 10: WHOLESALE BANKING
1
(millions of Canadian dollars, except
as noted)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net interest income (loss) (TEB)
$
45
$
(107)
$
189
$
(62)
$
387
Non-interest income
2,084
2,107
1,751
4,191
3,333
Total revenue
2,129
2,000
1,940
4,129
3,720
Provision for (recovery of) credit losses –
impaired
61
33
(1)
94
4
Provision for (recovery of) credit losses –
performing
62
39
56
101
61
Total provision for (recovery of) credit losses
123
72
55
195
65
Non-interest expenses – reported
1,461
1,535
1,430
2,996
2,930
Non-interest expenses – adjusted
1,2
1,427
1,483
1,328
2,910
2,711
Provision for (recovery of) income taxes
(TEB) – reported
126
94
94
220
159
Provision for (recovery of) income taxes
(TEB) – adjusted
1
134
105
116
239
205
Net income – reported
$
419
$
299
$
361
$
718
$
566
Net income – adjusted
1
445
340
441
785
739
Selected volumes and ratios
Trading-related revenue (TEB)
3
$
856
$
904
$
693
$
1,760
$
1,423
Average gross lending portfolio (billions of Canadian
dollars)
4
103.1
100.9
96.3
102.0
96.3
Return on common equity – reported
5
10.2
%
7.3
%
9.2
%
8.8
%
7.3
%
Return on common equity – adjusted
1,5
10.9
8.3
11.3
9.6
9.5
Efficiency ratio – reported
68.6
76.8
73.7
72.6
78.8
Efficiency ratio – adjusted
1
67.0
74.2
68.5
70.5
72.9
Average number of full-time equivalent staff
6,970
6,919
7,077
6,944
7,089
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
Adjusted non-interest expenses exclude the acquisition and integration-related charges for the Cowen acquisition
– Q2 2025: $34 million ($26 million after tax), Q1 2025: $52 million
($41 million after tax), 2025 YTD: $86 million ($67 million after tax), Q2 2024: $102 million ($80 million
after tax), 2024 YTD: $219 million ($173 million after tax).
3
Includes net interest income (loss) TEB of ($272) million, (Q1 2025: ($404) million, 2025 YTD: ($676)
million, Q2 2024: ($118) million, 2024 YTD: ($172) million
), and trading income (loss)
of $1,128 million (Q1 2025: $1,308 million, 2025 YTD: $2,436 million, Q2 2024: $811
million, 2024 YTD:
$1,595 million). Trading-related revenue (TEB) is a non-GAAP financial
measure.
Refer to “Non-GAAP and Other Financial Measures” in the “How We Performed” section and the Glossary
in the Bank’s second quarter 2025 MD&A for additional information about this
metric.
4
Includes gross loans and bankers’ acceptances relating to Wholesale Banking, excluding letters of credit, cash
collateral, credit default swaps, and allowance for credit losses.
5
Capital allocated to the business segment was 11.5% CET1 Capital.
Quarterly comparison – Q2 2025 vs. Q2 2024
Wholesale Banking reported net income for
the quarter was $419 million, an increase
of $58 million, or 16%, compared with the
second quarter last year, primarily
reflecting higher revenues, partially offset by higher
PCL, income taxes and non-interest
expenses. On an adjusted basis, net income
was $445 million, an
increase of $4 million, or 1%, compared
with the second quarter last year.
Revenue for the quarter was $2,129 million, an
increase of $189 million, or 10%,
compared with the second quarter last year. Higher revenue
primarily reflects
higher trading-related revenue, and underwriting
fees, including those associated with the
sale of Schwab shares, partially offset by the net
change in fair value of
loan underwriting commitments and the equity
investment portfolio,
and lower advisory fees.
PCL for the quarter was $123 million, an increase
of $68 million compared with the second
quarter last year. PCL – impaired was $61 million, an
increase of
$62 million compared with the prior year, primarily reflecting
a small number of impairments across
various industries. PCL – performing was
$62 million, an
increase of $6 million compared with the prior
year. The performing build this quarter reflects credit impacts
from policy and trade uncertainty, including overlays
and an update to our macroeconomic forecasts.
Reported non-interest expenses for the quarter
were $1,461 million, an increase of $31
million, or 2%, compared with the second
quarter last year, primarily
reflecting higher technology and front office costs,
and the impact of foreign exchange translation,
partially offset by lower acquisition and integration-related
costs
and variable compensation. On an adjusted
basis, non-interest expenses were $1,427
million, an increase of $99 million, or 7%.
Quarterly comparison – Q2 2025 vs. Q1 2025
Wholesale Banking reported net income for
the quarter was $419 million, an increase
of $120 million, or 40%, compared
with the prior quarter, primarily reflecting
higher revenues and lower non-interest expenses,
partially offset by higher PCL. On an adjusted
basis, net income was $445 million, an increase
of $105 million,
or 31%.
Revenue for the quarter increased $129 million,
or 6%, compared with the prior quarter. Higher revenue
primarily reflects higher underwriting fees, including
those associated with the sale of Schwab
shares, partially offset by lower trading-related
revenue.
PCL for the quarter was $123 million, an increase
of $51 million compared with the prior
quarter. PCL – impaired was $61 million, an increase
of $28
million,
primarily reflecting a small number of impairments
across various industries. PCL – performing
was $62 million, an increase of $23 million.
The performing build
this quarter reflects credit impacts from policy
and trade uncertainty, including overlays and an update to our
macroeconomic forecasts.
Reported non-interest expenses for the quarter
decreased $74 million, or 5%, compared
with the prior quarter, primarily reflecting lower variable
compensation
and acquisition and integration-related
costs. On an adjusted basis, non-interest expenses
decreased $56 million, or 4%.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Wholesale Banking reported net income for
the six months ended April 30, 2025
was $718 million, an increase of $152
million, or 27%, compared with the same
period last year, reflecting higher revenues, partially offset by higher
PCL, non-interest expenses and income
taxes. On an adjusted basis, net income
was
$785 million, an increase of $46 million, or 6%.
Revenue was $4,129 million, an increase of
$409 million, or 11%, compared with the same period last year. Higher revenue
primarily reflects higher trading-
related revenue, and underwriting fees, including
those associated with the sale of Schwab
shares, partially offset by the net change in fair
value of loan
underwriting commitments and the equity
investment portfolio,
and lower advisory fees.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 18
PCL was $195 million, an increase of $130
million compared with the same period last
year. PCL – impaired was $94 million, an increase of $90
million,
primarily reflecting a small number of impairments
across various industries. PCL – performing
was $101 million, an increase of $40 million.
The current year
performing provisions reflect credit impacts
from policy and trade uncertainty, including overlays and an update
to our macroeconomic forecasts.
Reported non-interest expenses were $2,996
million, an increase of $66 million, or 2%,
compared with the same period last year, reflecting higher technology
and front office costs, and the impact of
foreign exchange translation, partially offset by lower
acquisition and integration-related costs, and
the impact of a
provision related to the U.S. record keeping
and trading regulatory matters recorded in
the same period last year. On an adjusted basis, non-interest
expenses
were $2,910
million, an increase of $199 million, or 7%.
TABLE 11: CORPORATE
(millions of Canadian dollars)
For the three months ended
For the six months ended
April 30
January 31
April 30
April 30
April 30
2025
2025
2024
2025
2024
Net income (loss) – reported
$
8,215
$
(359)
$
(664)
$
7,856
$
(1,255)
Adjustments for items of note
Amortization of acquired intangibles
43
61
72
104
166
Acquisition and integration charges related
to the Schwab transaction
–
–
21
–
53
Share of restructuring and other charges
from investment in Schwab
–
–
–
–
49
Restructuring charges
163
–
165
163
456
Impact from the terminated FHN acquisition-related
capital hedging strategy
47
54
64
101
121
Gain on sale of Schwab shares
(8,975)
–
–
(8,975)
–
Civil matter provision
–
–
274
–
274
Less: impact of income taxes
(346)
22
143
(324)
256
Net income (loss) – adjusted
1
$
(161)
$
(266)
$
(211)
$
(427)
$
(392)
Decomposition of items included in net
income (loss) – adjusted
Net corporate expenses
2
$
(431)
$
(370)
$
(338)
$
(801)
$
(555)
Other
270
104
127
374
163
Net income (loss) – adjusted
1
$
(161)
$
(266)
$
(211)
$
(427)
$
(392)
Selected volumes
Average number of full-time equivalent staff
23,250
22,748
23,270
22,995
23,354
1
For additional information about the Bank’s use of non-GAAP financial measures, refer to “Non-GAAP
and Other Financial Measures” in the “How We Performed” section of this
document.
2
For additional information about this metric, refer to the Glossary in the second quarter of 2025 MD&A, which is incorporated
by reference.
Quarterly comparison – Q2 2025 vs. Q2 2024
Corporate segment’s reported net income for the quarter
was $8,215 million, compared with a reported
net loss of $664 million in the second quarter
last year. The
higher net income primarily reflects the gain
on the Schwab sale transaction,
the prior year impact of a civil matter
provision
and higher revenue from treasury and
balance sheet activities in the current quarter. Net corporate
expenses increased $93 million compared
to the second quarter last year, primarily reflecting higher
governance and control costs. The adjusted
net loss for the quarter was $161
million, compared with an adjusted net loss
of $211 million in the second quarter last
year.
Quarterly comparison – Q2 2025 vs. Q1 2025
Corporate segment’s reported net income for the quarter
was $8,215 million, compared with a reported
net loss of $359 million in the prior quarter. The higher net
income primarily reflects the gain on the Schwab
sale transaction and higher revenue from
treasury and balance sheet activities, partially
offset by restructuring
charges. Net corporate expenses increased
$61 million compared to the prior quarter. The adjusted net
loss for the quarter was $161 million, compared
with an
adjusted net loss of $266 million in the prior
quarter.
Year-to-date comparison – Q2 2025 vs. Q2 2024
Corporate segment’s reported net income for the
six months ended April 30, 2025 was $7,856
million, compared with a reported net loss
of $1,255 million in the
same period last year. The higher net income primarily reflects
the gain on the Schwab sale transaction,
higher revenue from treasury and balance sheet
activities
and lower restructuring charges compared
to the previous program in the same period
last year.
Net corporate expenses increased $246
million compared to the
same period last year, primarily reflecting higher governance
and control costs. The adjusted net loss
for the six months ended April 30, 2025
was $427 million,
compared with an adjusted net loss of $392
million in the same period last year.
TD BANK GROUP • SECOND QUARTER 2025 •
EARNINGS NEWS RELEASE
Page 19
SHAREHOLDER AND INVESTOR INFORMATION
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And your inquiry relates to:
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on your TD share certificate)
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questions, address changes to the share register,
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of
shareholder materials or stopping (or resuming)
receiving annual and quarterly reports
Transfer Agent:
TSX Trust Company
301-100 Adelaide Street West
Toronto, ON M5H 4H1
1-800-387-0825 (Canada and U.S. only)
or 416-682-3860
Facsimile: 1-888-249-6189
shareholderinquiries@tmx.com or www.tsxtrust.com
Hold your TD shares through the
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Missing dividends, lost share certificates, estate
questions, address changes to the share register,
eliminating duplicate mailings of shareholder
materials or stopping (or resuming) receiving
annual
and quarterly reports
Co-Transfer Agent and Registrar:
Computershare Trust Company, N.A.
P.O. Box 43006
Providence, RI 02940-3006
or
Computershare Trust Company, N.A.
150 Royall Street
Suite 101
Canton, MA 02021
1-866-233-4836
TDD for hearing impaired: 1-800-231-5469
Shareholders outside of U.S.: 201-680-6578
TDD shareholders outside of U.S.: 201-680-6610
Email inquiries: web.queries@computershare.com
For electronic access to your account visit:
www.computershare.com/investor
Beneficially own TD shares that are
held in the
name of an intermediary, such as a bank,
a trust
company, a securities broker or other nominee
Your TD shares, including questions
regarding the
dividend reinvestment plan and mailings of
shareholder materials
Your intermediary
For all other shareholder inquiries, please
contact TD Shareholder Relations at
416-944-6367 or 1-866-756-8936 or email
tdshinfo@td.com. Please note that by
leaving us an e-mail or voicemail message,
you are providing your consent for us to
forward your inquiry to the appropriate party
for response.
Access to Quarterly Results Materials
Interested investors, the media and others
may view the second quarter earnings news
release, results slides, supplementary
financial information, and the Report
to Shareholders on the TD Investor Relations
website at www.td.com/investor/.
Quarterly Earnings Conference Call
TD Bank Group will host an earnings conference
call in Toronto, Ontario on May 22, 2025.
The call will be audio webcast live through
TD’s
website at 8:00 a.m. ET.
The call will feature presentations by
TD executives on the Bank’s financial results
for the second quarter and discussions
of related disclosures, followed by a
question-and-answer period with analysts.
The presentation material referenced
during the call will be available on the
TD website at
www.td.com/investor
on
May 22, 2025, in advance of the call.
A listen-only telephone line
is available at 416-340-2217 or 1-800-806-5484
(toll free) and the passcode is 2829533#.
The audio webcast and presentations will be
archived at
www.td.com/investor
. Replay of the teleconference will be available
from 5:00 p.m. ET on May 22, 2025,
until 11:59 p.m. ET on June 6, 2025,
by calling 905-694-9451 or 1-800-408-3053 (toll
free). The passcode is 8753393#.
About TD Bank Group
The Toronto-Dominion Bank and its
subsidiaries are collectively known as
TD Bank Group (“TD” or the “Bank”).
TD is the sixth largest bank in North
America by
assets and serves over 27.9 million customers
in four key businesses operating in
a number of locations in financial centres around
the globe: Canadian Personal
and Commercial Banking, including
TD Canada Trust and TD
Auto Finance Canada; U.S. Retail,
including TD Bank, America’s
Most Convenient Bank®, TD
Auto
Finance U.S., and TD Wealth (U.S.); Wealth
Management and Insurance, including
TD Wealth (Canada), TD Direct Investing,
and TD Insurance; and Wholesale
Banking, including TD Securities and
TD Cowen.
TD also ranks among the world’s leading
online financial services firms, with more
than 18 million active online
and mobile customers. TD had $2.1
trillion in assets on April 30, 2025.
The Toronto-Dominion Bank trades
under the symbol “TD” on the Toronto
Stock Exchange
and New York Stock Exchange.
For further information contact:
Brooke Hales,
Senior Vice President, Investor Relations,
416-307-8647, Brooke.hales@td.com
Elizabeth Goldenshtein,
Senior Manager, Corporate Communications,
416-994-4124, Elizabeth.goldenshtein@td.com
ex995
TORONTO – May 22, 2025 -
The Toronto
-Dominion Bank (the "Bank") today announced that
a
dividend in an amount of one dollar and five cents ($1.05)
per fully paid common share in the
capital stock of the Bank has been declared for the quarter
ending July 31,
2025, payable on and
after July 31, 2025, to shareholders of record at the close
of business on July 10, 2025.
In lieu of receiving their dividends in cash, holders of the Bank’s
common shares may choose to
have their dividends reinvested in additional common shares
of the Bank in accordance with the
Dividend Reinvestment Plan (the “Plan”).
Under the Plan, the Bank has the discretion to either
purchase the additional common shares in
the open market or issue them from treasury.
If issued from treasury,
the Bank may decide to
apply a discount of up to 5% to the Average Market
Price (as defined in the Plan) of the additional
shares.
For the July 31,
2025 dividend, the Bank will purchase the additional
shares in the open
market and therefore no discount will apply.
Registered holders of record of the Bank's common shares
wishing to join the Plan can obtain an
Enrolment Form from TSX Trust
Company (1-800-387-0825) or on the Bank's website,
www.td.com/investor/drip.jsp.
In order to participate in the Plan in time for this dividend,
Enrolment Forms for registered holders must be received
by TSX Trust Company at P.O.
Box
4229, Postal Station A, Toronto,
Ontario, M5W 0G1, or by facsimile at 1-888-488-1416,
before
the close of business on July 10, 2025.
Beneficial or non-registered holders of the Bank's
common shares wishing to join the Plan must contact their
financial institution or broker for
instructions on how to enroll in advance of the above
date.
Registered holders who participate in the Plan and who wish to
terminate that participation so that
cash dividends to which they are entitled to be paid on and
after July 31, 2025 are not reinvested
in common shares under the Plan must deliver written notice
to TSX Trust Company at the above
address by no later than July 10, 2025.
Beneficial or non-registered holders who participate in
the Plan and who wish to terminate that participation so that
cash dividends to which they are
entitled to be paid on and after July 31,
2025 are not reinvested in common shares under the
Plan must contact their financial institution or broker for
instructions on how to terminate
participation in the Plan in advance of July 10, 2025.
The Bank also announced that dividends have been declared
on the following Non-Cumulative
Redeemable Class A First Preferred Shares of the Bank, payable
on and after July 31, 2025, to
shareholders of record at the close of business on July
10, 2025:
●
Series 1, in an amount per share of $0.310625;
●
Series 7, in an amount per share of $0.2000625;
●
Series 9, in an amount per share of $0.202625;
●
Series 16, in an amount per share of $0.3938125; and
●
Series 18, in an amount per share of $0.3591875.
The Bank for the purposes of the Income Tax
Act (Canada) and any similar provincial legislation
advises that the dividend declared for the quarter ending
July 31, 2025 and all future dividends
will be eligible dividends unless indicated otherwise.
About TD Bank Group
The Toronto
-Dominion Bank and its subsidiaries are collectively
known as TD Bank Group ("TD"
or the "Bank"). TD is the sixth largest bank in North America
by assets and serves over 27.9
million customers in four key businesses operating in a
number of locations in financial centres
around the globe: Canadian Personal and Commercial Banking,
including TD Canada Trust and
TD Auto Finance Canada; U.S. Retail, including TD
Bank, America's Most Convenient Bank®, TD
Auto Finance U.S., and TD Wealth (U.S.); Wealth
Management and Insurance, including TD
Wealth (Canada), TD Direct Investing, and TD Insurance;
and Wholesale Banking, including TD
Securities and TD Cowen. TD also ranks among the world's
leading online financial services
firms, with more than 18 million active online and mobile
customers. TD had $2.1 trillion in assets
on April 30, 2025. The Toronto
-Dominion Bank trades under the symbol "TD" on
the Toronto
and
New York
Stock Exchanges.
For more information contact:
Jennifer dela Cruz
Senior Legal Officer,
Corporate
Legal Department – Shareholder Relations
(416) 944-6367
Toll
free 1-866-756-8936
Elizabeth Goldenshtein
Senior Manager, Corporate
Communications
(416) 994-4124
ex996
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Raymond Chun, Group President and Chief Executive Officer of The Toronto-
Dominion Bank, certify the following:
1.
Review
: I have reviewed the interim financial report and interim MD&A
(together, the
"interim filings") of The Toronto-Dominion Bank (the "issuer") for the interim period
ended April 30, 2025.
2.
No misrepresentations
: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement
of a material fact or omit
to state a material fact required to be stated or that is necessary
to make a statement not
misleading in light of the circumstances under which it was
made, with respect to the
period covered by the interim filings.
3.
Fair presentation
: Based on my knowledge, having exercised reasonable diligence,
the interim financial report together with the other financial information
included in the
interim filings fairly present in all material respects the financial condition,
financial
performance and cash flows of the issuer, as of the date of and for the periods
presented in the interim filings.
4.
Responsibility
: The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures
(DC&P) and internal
control over financial reporting (ICFR), as those terms are defined
in National Instrument
52-109
Certification of Disclosure in Issuers' Annual and Interim Filings
, for the issuer.
5.
Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the
issuer's other certifying officer(s) and I have, as at the end of the period covered
by the
interim filings
(a) designed DC&P,
or caused it to be designed under our supervision, to provide
reasonable assurance that
(i) material information relating to the issuer is made known
to us by others,
particularly during the period in which the interim filings are being prepared;
and
(ii) information required to be disclosed by the issuer in its annual
filings, interim
filings or other reports filed or submitted by it under securities legislation
is recorded,
processed, summarized and reported within the time periods specified
in securities
legislation; and
(b) designed ICFR, or caused it to be designed under our supervision,
to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation
of financial statements for external purposes in accordance with the
issuer's GAAP.
5.1
Control framework
: The control framework the issuer's other certifying officer(s)
and I used to design the issuer's ICFR is
based on criteria established in Internal Control
– Integrated Framework issued by the Committee of Sponsoring
Organizations of the
Treadway Commission (the COSO criteria) in 2013.
5.2
N/A
5.3
N/A
6.
Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any
change in the issuer's ICFR that occurred during the period beginning
on February 1,
2025 and ended on April 30, 2025 that has materially affected, or is reasonably
likely to
materially affect, the issuer's ICFR.
Date: May 22, 2025
/s/ Raymond Chun
Raymond Chun
Group President and Chief Executive Officer
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Kelvin Tran, Group Head and Chief Financial Officer of The Toronto-Dominion Bank,
certify the following:
1.
Review
: I have reviewed the interim financial report and interim MD&A
(together, the
"interim filings") of The Toronto-Dominion Bank (the "issuer") for the interim period
ended April 30, 2025.
2.
No misrepresentations
: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement
of a material fact or omit
to state a material fact required to be stated or that is necessary
to make a statement not
misleading in light of the circumstances under which it was
made, with respect to the
period covered by the interim filings.
3.
Fair presentation
: Based on my knowledge, having exercised reasonable diligence,
the interim financial report together with the other financial information
included in the
interim filings fairly present in all material respects the financial condition,
financial
performance and cash flows of the issuer, as of the date of and for the periods
presented in the interim filings.
4.
Responsibility
: The issuer's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures
(DC&P) and internal
control over financial reporting (ICFR), as those terms are defined
in National Instrument
52-109
Certification of Disclosure in Issuers' Annual and Interim Filings
, for the issuer.
5.
Design
: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the
issuer's other certifying officer(s) and I have, as at the end of the period covered
by the
interim filings
(a) designed DC&P,
or caused it to be designed under our supervision, to
provide
reasonable assurance that
(i) material information relating to the issuer is made known
to us by others,
particularly during the period in which the interim filings are being
prepared; and
(ii) information required to be disclosed by the issuer in its annual
filings, interim
filings or other reports filed or submitted by it under securities legislation
is recorded,
processed, summarized and reported within the time periods specified
in securities
legislation; and
(b) designed ICFR, or caused it to be designed under our supervision,
to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation
of financial statements for external purposes in accordance with the
issuer's GAAP.
5.1
Control framework
: The control framework the issuer's other certifying officer(s)
and I used to design the issuer's ICFR is
based on criteria established in Internal Control
– Integrated Framework issued by the Committee of Sponsoring
Organizations of the
Treadway Commission (the COSO criteria) in 2013.
5.2
N/A
5.3
N/A
6.
Reporting changes in ICFR
: The issuer has disclosed in its interim MD&A any
change in the issuer's ICFR that occurred during the period beginning
on February 1,
2025 and ended on April 30, 2025 that has materially affected, or is reasonably
likely to
materially affect, the issuer's ICFR.
Date: May 22, 2025
/s/ Kelvin Tran
Kelvin Tran
Group Head and Chief Financial Officer