The Toronto-Dominion Bank (TD) 26 May 222022 Q2 Earnings call transcript

Good afternoon, everyone, and welcome to the TD Bank Group Q2 2022 Earnings Conference Call. I would now like to turn the meeting over to Ms. Brooke Hales. Please go ahead, Ms. Hales.

operator. you, Thank welcome Investor and Bank Second Group's Good to XXXX Presentation. Quarter afternoon, TD

Banking. today begin phone. Michael listeners remarks comments Group questions CEO, the Rhodes, and At We the X. presentation Officer, and Raymond will that statements. operating Head, today's Paul will with Most invite Chief Bambawale, Group our quality, Also Group and Head, present second I questions Please time, on and to are Canadian to forward-looking this Risk Hotel caution and which Management investors after results. Bank TD Personal this Chun, will turn like we Ajai bank's then Head, Banking; answer from Douglas, Bank; analysts after Kelvin credit your to Insurance; Wealth CFO, contains President Ahmed, Convenient Banking; Slide from Tran, offer Canadian present prequalified Salom, presentation bank's would America's Leo will Business our the quarter on Riaz CEO, Group Head, Masrani, Bharat which

objectives and priorities, the represent that forward-looking results shareholders are position, applied risks or making views the and presented presentation were bank's what this purpose anticipated performance. statements. certain of are and assisting material understanding actual the financial bank's the and in there could factors management assumptions from differ in financial of forward-looking these is statements Now contained discussed for Any materially and in that analysts

a adjusted provide of financial bank of and adjusted as in results, Forward-looking would risk uses listeners purposes. better management to his the referring the Bharat also such will I bank believes performance. statements views like adjusted for non-GAAP remind results The not each that its other readers assess to performance. may to bank measure bank's understanding to businesses remarks. appropriate overall be be how measures that with

financial in QX measures, let the and the bank's assumptions of shareholders. forward-looking available that, and to Additional presentation factors and report use to bank's note, related to our items of results XXXX the turn over all information Bharat. reported other me non-GAAP With on are information

Thank TD. our basis XXX good $X.X increased EPS benefits you, performance, had reflecting were ability see capital reflecting thank of strong XX.X%, joining the billion was for deposit-rich was quarter TD's points CETX and you, up us to everyone, operating X% at a organically. generate Earnings delivered $X.XX. enterprise, QX and quarter franchise. and today. approximately customer Brook, our The across ratio We for from to as revenue consistent we activity returns leverage of the the investments. bank's continue We strong ended year-over-year,

the environment. As Kelvin response remarks, will discount as we in prudent are DRIP his changes this quarter, discuss the in operating activating to a

while us to communities model shareholders, and our business digital Our to enables the proven deliver the in better our continue building bank for for colleagues customers, age.

our Let and me each QX. some from highlights turn to now review of businesses

a and deposits this this franchise we seeing strong as power segment Retail our X% environment income continued to had The Personal customer was significant up quarter, by by increased rising year-over-year. with Canadian accelerate. activity Revenue quarter. critical fee volume deposit driven earned are Our billion. growth Moreover, rate growth amplified in Bank X%, $X.X segments. strength The in of

conversion real in retention. everything branch is pull-through effectiveness management benefiting in progress acquisition And approach rates. and from For XXX% to in estate are more journey-based lending account increased to adviser up productivity a our Canada we we example, are our seeing new account network, business, than to branch secured year-over-year. from In and pipeline seeing

lenders redeem new we were very Focus with Finance loyalty, and rewards in as strong travel-related Power rewards, launched on the in double-digit Expedia in creating hub fee-based engagement direct volumes net satisfaction Card retail last spend. Amazon, quarter easily customers perform able more fifth programs an unlock access peak take platform, Our a was growth a adds up non-captive be Canada, cards to higher deeper year-over-year, bank, customers dealer business, rewards the can with with our sales will business and everyday purchases. the Canada, Air year. on credit In in where and the Through rebound from revenue or TD with year existing wealth TD and helping value world. Canada helped this of a with a consumer XX% growth on offset collaborate trading loans. continues all-time to a loyalty among partnership benefits And we them My loyalty integrated for well. to TD biggest continued advantage even online J.D. asset our partnership for moderation very retail notable This in It the business to go. and saw brands ranked and Post, Auto with highest by the in row. Starbucks also investing

also We share both direct industry quarter. as and spaces. And in as we one demonstrating segments. TD Management and advantage number the business our led the sales Asset in consecutive and direct-to-consumer evident position wealth affinity accounts, of competitive for by banking new private across in revenue have mutual the the trades of investing, the fund investor our strengthened taken The management, strength second was insurance market quarter both measured our offerings

enhance response including We we and also which intent-based AI believe center experience capabilities, out this that We accelerate modernized call customer will cloud-based more investment, broadly bank, for the times. across to launched roll time, routing. plan leveraging contact over

Retail to QX. Retail in US$XXX million earned U.S. U.S. -- bank Turning the

store loan year-over-year, momentum and we customers, into increasing planning good and beyond deposit fintech card card. and automate digital leading support We auto XX% growth, continued added banking channels, rates. and rate commercial benefiting software. originations Mastercard from their deposit offerings and to and strong higher a a general Excluding a utilization rising cash red originations our to our their margins management quarter-over-quarter further with services Credit resource retail TD sales up embedding card To program volumes respectively. growing the PPP saw strategic with we partnership runoff, pilot were And loan a purpose while in of in store-only enterprise volume by accounting launched commercial environment. XX% directly Target's products

footprint. We to than an its continue first overnight, outstanding launched our the for to and opportunities Community nationwide innovate to to in recently the became communities a auto within Reinvestment throughout also the in rating the This in indirect significant batch U.S. our we homeownership Act Hispanic Black several markets payments payment space TD TD concluded received benefit Home in TD clients clients. day payments Finance Mortgage, dealer And rather designed product sending our Auto lender a increase offer real-time new Access examination. across quarter,

hundreds the by we've hard the February, in local U.S. our pleased of communities the from of investment to letters groups With for support sessions community were And have the I'm investment on broad heard received, part listening of make and quarter. community we over been late held progress Schwab work. Horizon. well and and contributed we our agreement including of history this transaction, as serve by process. delivered to comment with contribution performance and the environment, business, period Since driven public the of a and challenging quarter this in largely solid with of our in footprint. XXX geopolitical In US$XXX markets with our in million We've Wholesale our TD's in groups the was continue revenues. segment $XXX we First by met higher at Banking US$XXX First TD earnings million, trading commitment teams were transaction market million, earnings regulatory announced Horizon's across support,

Securities to enhance generation. saw This consecutive three closely way businesses. Securities TD Securities and was year. was a low-carbon Reflecting support enable clients work Canada's the XXXX sectors, to I'm study green Coalition growth service the income the be the reflect our green two base And inaugural as largest metals, Credit in two Canadian the for with investments overall the capabilities date. and top also and the performance our offer our $X bank transitions quarter, platform remained quarter. bond we The commodities joint fourth of set global our manager focused made was energy of TD in number as we To rankings leader energy help quarter, named billion selected was support in in and Canadian bond to the fixed issued business interim TD goals, the the leadership government net-zero sustainable for high precious this recognized their Overall, adviser the power dealers' commodity overall on environment. targets Securities issuance, finance, our emitting future. the evolving the strong, TD category are number strengthen rapidly we've co-structuring we Greenwich and quality risk to respectively. I two a continues and to lead And on emissions finance on navigated and pleased and we in with clients. will

risk number seize we're business inflation of challenges a TD the and potential that higher ahead. risk model, the and economic exceed elevated lie increased our to been of opportunities of approach we or With the positioned However, TD, continue Evolution seeing face management expectations we've also most uncertainty, is slowdown. and short. designed Historically, disciplined sustainable initiative us NEW, To to well of Work, customers, well. Next our for changing large-scale initiatives. the support including model It a served of operating to an rapidly has smaller launched call the has banks,

maximize foster faster including of shifted are today With AI our what introduce new TD market the and parts lead and have designed on future. need of but new move modernizing of cross-functional for a our also It's scale still our continues path. in enabling that are focusing weeks. not adopting use including model we services customer capabilities. right to enabling capabilities, the we is it we speed to operating by to of and in the so offers This and market processes. organization the the However, technology includes, at the to certain days, the Key will on industry journeys positive model matter we driving the are platform we functions building in cloud, and are to adapting organizations and to improvement, of how in we building seeing innovation. effectiveness, for are results, to far, of continuous upon are efficiencies the is we agile confident the customers and us technology. tooling the greater at to This NEW drive strengths NEW, change time deploying and early volume

year, X, the TD AIT. in-house research Intelligence a was honored of experiences winner AI-powered and Model also for developed improve advisory insights the the our our our For by XXXX firm app was Layer global focused banking institutions, by technology financial AI-powered for for financial a second recognized Group for the intended digital engagement Celent, Business Bank consecutive customers. on to for Award Canadian by as customer outcomes

at capabilities also were AI a apply heightened will world-leading Signal banking. TD, care and on clear AI X. have proud been has investment healthy everyone, our help health extend their we X We amplified our to delivery announce to facilities. that month, improve throughout for the far applications COVID-XX Signal in Last focus need beyond pandemic.

DiversityInc This quarter, our entire was for few estate Forbes more future. asset. one safety harder And invest retail them that work Most globally a to only and portfolio. the real as certified most have diverse best a fourth XXth across by as valuable the of American are well of awards entire our TD to Bank rating TD achieved year. Bank proud for diversity Convenient we for we strive a company employers health to diversity footprint, motivate continue that recognized America's their and inclusive for in TD only top were by one the to certification and organizations as corporate the for as they These colleagues contribute year will we and us consecutive consecutive future, North

I of circumstances, one-time raise majority level. do, This it for to over every effort, workforce of deliver award and our a through to Kelvin. years globe, is for Kelvin? them right they I'll After quarter, stakeholders. the TD below I all or a work the thank around turn the alongside for With thing our pay President challenging our X% to cash over was Vice all announce that, do pleased privilege is to day. of two things It XX,XXX to bankers the

Please turn everyone. Thank Good you, afternoon, Bharat. Slide XX. to

and lower to expenses increased partially costs, higher a business income decrease decline of reflecting on Slide of and and loan an by variable loans offset U.S. year-over-year. to the was PCL mortgage by higher U.S. volumes X% and million, expenses related income PTPP primarily primarily XX% commercial partially million loans due up operating growth, annualized discount growth, excluding gains income and Average we including Adjusted was up income. shows fee deposit the card spend costs. loans, income up net margins Reported primarily Average was U.S. pay net strategic normalization down reflecting continued year credit heart insurance in an Retail X.XX%, leverage the in the X% and X.XX%, Wealth total reported Noninterest X.X% customers these loss year-over-year litigation Average and credit of segment PPP PCL, including This billion and insurance were declined X personal volumes our adjusted fair higher higher loan bank technology adjusted and growth reflecting claims, earnings quarter includes business employee-related customer net compared in PPP with on X.X% as also million, a Total US$XXX revenue personal higher impact supporting offset noninterest claims business and growth On wealth reflecting million. loans. businesses, customers, higher deposits, X% higher from interest adjusted year-over-year, adjusted net was to increased total fair lower US$XXX the higher mainly X% offset by recovery XX. for of of Expenses and volume. interest compensation. change. up the Revenue XX% respectively. year-over-year. $XX was lower net the offset modifications, increased the revenue. volumes of was these to and ex-FX. down employee-related deposits before US$X.X of X% rate X% insurance XX% $X.X businesses, revenue EPS Personal recovery profits respectively, and in rising increased respectively, the in in XX% earnings Reported for growth higher reflecting X%, disclosure banking Net increased and Canadian revenue, revenue the X%. volumes how of the the also and billion XX% the removing reflecting by due billion, activity. as bank year-over-year deposit the and Reported revenue liability X%, as our reported prior Bank's commercial business Reported our PCL was XX% U.S. in X% and deposits. loan volume personal in the X%. Retail Net income was loan reported by a million. X% basis our quarter X%, after reflecting in XX% was margin partially included lower revenue or value assets portfolio, partially X% business. wealth Slide prior recovery. Total PCL. Adjusted sale decreased of earnings XX increased portfolio, Retail up reported prior PTPP retailer's marketing the prior and XX% US$XXX resulted PTPP the we've rose down X.XX%, XX, optimization million in impact partially XX% Slide from wealth XX% lower of banking XX%, share Retail fee-based partially X%, overcame the year-over-year businesses. Please prior X%, rebates impact and rose and similar increased lower adjusted related growth X%. $X.XX, year-over-year, year reflecting of with up from margin up expenses, per excluding litigation million. share for offset of basis to growth Absent reflecting lower Bank quarter, up wealth business. were revenues volumes, X% recovery with in and US$XXX increased offset banking increase businesses, to Consistent of fee-based or favorable X%, up an loans, for Provision revenue and Reported partners deposit $X.X recovery for bank revenue turn premium earnings downs X by Please $XX offset year-over-year. of income were our year-over-year, supporting transaction higher were value $X.XX, Adjusted up and sequentially. litigation. year settlement spend $X.X and X% continued respectively. up business forgiveness higher includes investments percentage growth in insurance were PPP X% supporting was wealth the and year-over-year, modifications net and and increased Average expenses turn in transaction an flat a store revenue in insurance volume due currency increased sequentially. which growth to in reflecting deposits quarters, rate, personal our adjusted points volumes, prior our strategic income forgiveness, year-over-year, was margin lower premium higher sweep of rate impact $XX sequentially, billion, year-over-year. in deposits, calculate loan claims XX% and Reported foreign interest was interest growth margins XX. business U.S. of translation the along primarily rebates margins environment. deposits Insurance program. growth Strip rising X%. on quarter. to higher our business PPP volumes by the higher income reflecting Slide was deposits prepayment environment quarter, points XX% X%, margin expense banking in a volume

by PPP reflecting X% the The net Schwab revenues. for current of X% recovery for PCL compared to recovery, by Revenue decrease X% year-over-year, in lower was the technology net from NII a loss compared Please of Corporate was realized. Headlands the offset a with the Retail $XX of recovery Most the contribution sequentially. underwriting for reflects of compared Global decline $XX U.S. of in was year-over-year, corporate fees. PCL partially decreased investment bank's automated basis down benefit $XXX and strong of common noninterest XX the year. XX.X%, $X.X basis million with reflecting and the year. trading-related This LLC. of equity was income million, Please share XX. quarter, was recovery loss million partially prior NIM. higher trading, than billion, lower The turn in down The $XXX expenses of of business Slide banking, the million loss approximately to CETX net cards basis by an last productivity repurchase quarter basis an the in quarter the reflecting million last has annualized Adjusted PCL of Expenses second strategy, PCL revenue million turn credit store the the million, only quarter, net sequentially. investments to the net which primarily Slide RWA, impact a Slide offset hiring year year. US$XX reported same higher the a TD's convertible the Horizon shares and of net turn a $X X PCL more $X PPP of million lower stock, for employee-related segment sales lower points million, accounted X offset a for to previously expenses quarter and higher net increased this primarily This volume, Please been of CETX year-over-year, expenses year-over-year, quarter XX% Securities' reflecting a points and acquisition lower sequentially. last Wholesale Total investments, points We was to to lower higher was XX. U.S. with the increase our US$XXX capital. including the the partially costs, a X% by loss savings Wholesale contributed million an $XXX ago. strategic corporate as in Expenses of continued ended revenue, of quarter $XX U.S. million basis and announcement in portfolio, organic First and Net X.XX%, points the had revenue minus percentage year. impact XX The at investment optimization which year-over-year of year TD in quarter. prior was X million and in compared ratio, capital. adjusted capital including XX. trading, ratio from intangibles. common reported $XXX COVID-XX Tier of of prior by a Horizon now of quarter offset generation the points expenses million Banking's quarter to $XX decrease preferred increased up amortization added acquisition second The First to quarter US$XXX expenses Tech Markets and X professionals dollar in

there number developments increased interest to have are slowdown. initial requirement margins value to adjustments continue time. and possibility uncertainties value of capital fair the Canadian Inflationary higher rates segment earnings into for and is should activating to as which led accretion adjustments accounting a in First economic expanding a environment. would dividend and closing We over result of the of pressures the rate fair upon prudent in TD's upcoming a rise, markets, we for operating higher DRIP would Horizon and U.S. higher transaction, our interest volatility and retail discount an response expect the in of Conversely, greater

is in believe to into risk We X% these increased also all steps buffer Credit appropriate to to build growth. RWA risk expect above to reflecting the capital leverage X%, reflecting business XXX%, RWA CETX. was well and quarter-over-quarter, and and ratio market developments we reflecting support Canadian minimums. I both turn In risk Canada mainly it or and Market this RWA. an continued call ratio impact volumes recovery regulatory quarter, wholesale. X.X% over have will credit retail increased to our $X.X account, billion $XX.X volatility. uncertainties RWA The higher risk higher market billion mainly now the was take increased dividend of the LCR or adverse XX%, to Ajay.

reflecting the million remind points, release. the this X share Thank resolution was $XXX additional Please to Performing by $XXX basis net Please income. turn U.S. million you, to Please million and compared PCL $XX remaining or was loan formations the impaired gross loans lower The points, for allowance not turn losses Please across billion our at a in basis by provisions turn to new reflecting to of decreasing reflecting largely quarter-over-quarter turn do Protection turn everyone. government reports quarter. and $XX X conditions. million PCLs allowance decreasing segment Program U.S. or PCL basis strategic both quarter-over-quarter cyclically Slide afternoon, impact of Slide The Slide fully Kelvin, good quarter, ratios, $X.X The in XX are all low decreased $XXX to bank's reflecting decreased a basis Paycheck portfolio. impaired XX We to XX. of low Slide Paycheck allowance releases the to points, related bank's Slide The PCL segments. and further partner $XXX presentation XX. million, commercial largely PCLs. absorbed current in partners XX. $XX credit million decreased prior X credit you Gross of net performing by recovery Recall XX. to impaired of basis quarter points Protection last point recorded PCLs quarter-over-quarter, U.S. Gross formations Please that quarter-over-quarter of commercial, and loans. cyclical a Corporate to a that higher improved the recovery of XX quarter-over-quarter quarter levels. and recovery reflects impaired larger points Program million XX. bank basis loans guaranteed card our to recorded

the risks ongoing affect bank's gross the elevated However, geopolitical and related strong release tempered could The allowance account inflation. performance coverage this In uncertainty uncertainty lower economic increased remains and that the was bank impaired largely to the to to for credit due summary, economic gross to credit evidenced PCLs. quarter loan loans by formations, performance. continued trajectory as impaired and exhibit this

we While we are remain cyclical economic given we geographies. operator, credit is be metrics continues With broadly near well these have capital key low diversified however, to remains products elevated. uncertainty the positioned, provisioned, levels, at that a strong to TD, position, have or we that now business adequately are across a ready and and begin Q&A session.

Ebrahim from Instructions] of America. Poonawala ahead. go first is Please Bank question The [Operator from

a out if meaningful a of from whether movement hit? and abundance I interest DRIP you're what of now to is how So trying on up rates, the were there if today? follow-up of for the and you just us us a would then results? understand better quantify to to follow just the the maybe understand, are to that. Or CETX initiation hit I'm the capital to what be capital they sense stay of wanted just one, managing rates help I could just close where is impact Kelvin. and the deal DRIP guess, and tied you could the what be I and you Give would in If the caution? appreciate would quantify

this Kelvin Before to it hear you. Bharat. picks Ebrahim, Nice is up,

well. earlier Just -- I know calls on there's as been lots me of Kelvin questions on told the this.

because offset go in whatever you earnings with happens Just the case, comment on particular to issue, a rates In finally, additional we in our the we would what net here, are closed particular we historically, even don't this rates at fair said that bank bank, offsets this go sensitivities, up. earn give sense what accretion underlying interest transaction, value to the at his then bank, Kelvin we transaction. the the you one, the happens our First and if look this after to Horizon, in be adjustment itself, there's out this hedge as earnings when them would when rising? And have

provide years done. So for you you our some about with many, with this that you sense numbers to of asking as just the we been acquisitions this. Maybe Kelvin can in of. the help wanted we've to And has how think were many all framework

Thanks, Bharat.

our do Horizon. give when underlying interest would basis this of Canadian I natural because earnings in we maybe It's move around. just have rise sensitivity in I U.S. including But can First see XX measure margin you of words, we number think, expansion points. other a rates both about hedge because more a and businesses,

For every an after-tax about is point basis increase basis. XX million on $XXX

it, U.S. That's year. timing totally over a it's And comes where Horizon over prolonged through terms of question, process I extremely And of think Bharat, issue and regulatory one become First I it more the just if in a earnings period just little time. the helpful. more last mean, I get on has a

five terms as regulatory a line? finish deal I your is G-SIB One one love because thoughts announced, other around the that are concerns other of in TD the would I bank of to relative there TD through G-SIB? the than the M&A different uniquely been sort the that of conviction level heard being of And getting that's out hear the to transactions

very the there Well, want transactions to I what we but comment be, might other comfortable. don't on feel

did the it all requirements regular transaction we of on this -- process continues. basis the all the regulators. meets And Our that

it continue and closing. are we be to get comfortable working to So, to hard

this one And think compares to out for feature. own its there I unique be me so, deals appropriate comment on other each it would how because has don't to

for just earnings? like pre-COVID is levels pre-COVID or Ajay, going your peers because the billion. flow you to loss perceive backdrop? just of below. $X.X on still regards excess into down could how billion And some or Is or reserves of fair. with on portfolio? have to last as than is loan one macro That's uncertain seen more allowance, We've the this entire Or of something else there about you $X.X mix this which take reserves, And

respond. me the for thanks let No, Yes. question, and

is say even are I is us. from call, would the on changing. prudence And I the out what as said, uncertainty sources, expect last There So there.

extent then this quite really to more macro of what in it the that, to would future who fluid But the And scenario, the may we if stagflation improved situation aware, recessionary have be to conditions now. as allowance uncertainty a the But reserves. said you're possible build we kind Our results. that's a knows. holds, is there. out release reduces, right Having scenario or in for and we accounts uncertainty yes, even is looking the are

because we this we're being point, we all thoughtful, in I think, seeing deliberate results. uncertainty, prudent, very just how are this releasing careful, very and at our are

So hopefully, that helps.

you. Thank

Next Genuity. Scott ahead. from Canaccord question Please go Chan is from

about you like a personalize, that? maybe culture have level, at in on after could talked anything And or town hard a high of with or like lot you Bharat, that you learned maybe executives. share, just of anything these So meetings halls people senior possibly the on terms announcement

in our in of Bank in these Leo his we've with generally lives, our color always Convenient a can and only on to some of And been because Leo has more maybe TD to you a himself and communities. TD meetings was well the give team has color as Most the our as the received of that second. communities well. was but America's on give and Bank had. played meetings engage. well, old to meetings collegues, and you not pass bit enrich can groups I But and customers meetings attend I'll all Leo And the our various is we've it well a terrific And various it purpose that in had.

strong the know opportunity town much the with cities of opportunity across four of XX terrific get middle talent our deep in organization. space. say strong stood build it a category local as met came reaffirming and a across, very One, we market And commercial continue in. is entire and question. more bank essentially that do the X,XXX I'd a is the bank, there's halls things of employees. with that and it's out, in to And space the as going we First over had in think no you for be couple I grow very try last Sure, and our additive very that to to beliefs very Horizon XX We've the We to to over ties communities. to question to falls Thank commercial view course continue going a we the Scott. been weeks. the

are quite to us how that I in bring a those got of that formation. growth can cities the model able think about We Coast, Southeast many visit very And experiencing we're banking East to I served that is in the got our excited above-average bring franchise. think to well and model a compelling. grow retail XXX retail actually distribution population the very that bear, chance branches. be we they've above-average the built They've to across

And encouraging. most culture. I I on would is think so, the just thing the that think was probably But I that quite the harp

achieve of core, the to I in I organization calls. our their franchise end humble sharing It's streams ambitious to And at future us. want we very spent the really, And most closely going together. terms to bringing our serving together very the they work their we clients And in forward that on to but stitch on been progress start organizations an is and working think these communities. of organization that's local look of sort U.S., with to in how its two it's think to what I to resonates what that's look built that some combined and and recently very is certainly like. forward time our committed look

you. Thank

ahead. Grauman Scotiabank. question from Next Please from Meny go is

And process? wondering is up likely concessions through that August. community Horizon, First for -- to in if Sticking are the I'm coming that meeting any

Sorry, we just to you What by do sure concession? Meny, mean understand. make

there have U.S. I'm Is to business? Specifically, a overall a you overdraft. for that? be specifically your where about there scenario fees more risk there wondering Could overdraft on something for do

these expect how work, similar a and answer. on to Leo color pretty would are that? all Leo, they consistent let follow But I community line. with I'll further arrangements we think do you any have

go I last can I maybe -- to what give just back just quarter. shared Meny. you to

executing are with we the shared you overdraft We that strategy before.

threshold other part very to proposed. of on overdraft changes changes was much additional for tracking we to going April the the minimum the $XX, big the only X, First fees. and it what NSF of fourth got a implemented increasing that The we on we to In are quarter. We've Horizon, shared impact planned is in The that we've fact those terms fact, to fees new a of had series and for unrelated in quite of provided that made is quarter. that change our interim, the the zero guidance go that to frankly, is we last we

a incremental I last So impact. was that will can million that overall less from for change be than you. It quarter's one quantify year. the $XX

on plus So, with puts collectively, provides that its not those competitive believe the NFV, material think I we've And us we those it's that last changes, But value. and clients choice space. in a own. our announced it quarter, very

quite overdraft we've we're So comfortable standpoint. made changes with the from an

We are discussions. point, just on to your community the working,

groundwork be the the will -- hearing that in met with agreement community That's to the be quite useful the have actual that by was unrelated We for tours community have will been leaders listening that input NCRC, public community time. over those benefit strike will the XXX organized that five and over itself. leaders and

a Got and lower about loans. could as sale going U.S. and on mortgage both out income break the impact as we think the business, that overdraft, then you it. and lower follow-up. gains the well? I'm highlight And should how you of then the if those forward fee changes of In wondering from just overdraft of

Well, overdraft standpoint, an I April implemented would say we X. from

I million. that of some will aggregate small you that, And give sale be conditions. the to you time So $XX add on of and prepayment what The going really should on depends regards the you to it overall was other shared all $XXX impact, some of to number. impact is last And overdraft. the gain with quarter, a With relatively the related series. the million that sense to which a market was changes, the mortgages, changes impact of it was

help would fee the some accelerate as I continue compensate to we our cards business, the To our time. the would conditions to expect certainly of account So I extent and us read want generate to I to -- grow market do in base to to that would wouldn't the flow be growth our growing continue lean space. activities from we over much comment we we into to necessarily look it. too franchise, those as declines continue seeing to checking the core say numbers those wealth overdraft change, income into able to be in able just

you. Thank

Sohrab from Markets. ahead. from Movahedi Capital Please Next go is question BMO

Just synergies about a able First since Are Horizon. two some of spent you talk some have quickies time where here. Leo, coming? may of you to lot the obviously be announcing that revenue also quantify

Sohrab, thanks again for the question.

the last shared I in revenue we synergies model. put together, the our model. didn't we As time were We in didn't

really our believe organizations we generate undoubtedly together, there's that I synergies. opportunities as will bring do two some Now revenue compelling which said,

grow banks some base. commercial of capabilities, the the list mind that of retail no I'm over think when mentioned that, pace be accelerated to product for balance at space and I will you our to and might top previous a sheet excited question, able in Securities to the our role my bringing the be together, a we is about to space. on question I combine There's the platform able -- previous two in their mid-market an that us playing grow the what time. bigger TD be much in do. opportunity

that that can be another significant If rates the bring sets and you simply some build. to that enjoy of Horizon base product First take we would of today that we synergy on source the penetration our

synergies, to through we It overall. synergies certainly, the on provided those. these efforts. our that help expense work but of a accelerate prioritize So, growth equally we're we'll in going overall as integration exciting. $XXX revenue will we'll leaning it's terms I try in of us of because the franchise Obviously, part be And guidance to think million

yet. quantifiable Is it? the Exciting to Okay. right but not that think about way

working those. very to that optimistic. But We're we're through suffice say

think, that I basis sensitivity points, rate million is capital for XX Or XXX dollars? in Canadian hikes. every Okay. provided And the Kelvin, about you of that dollars? just in the I U.S. for in sensitivity think clarification, Was

That U.S. in be would dollars.

in basis to about hikes, XX that So US$XXX the right every Fed way Is for points rate think it?

Yes.

you. Thank

ahead. Please Dechaine, from is Gabriel question Next Bank National Financial. go

million, in one. in that goodwill that's The increase $XXX clarify to consumption? an Just increase or an CETX

goodwill. an It in would be increase

where asset expect that? kind when the Okay. time of trying I'm time to you over that that what of you'd the think make duration? timing with talk maybe lines about along frame, five-year a accretion frame up Is three-year frame? you that time, asset And time

Yes. line to of Along four the asset five duration, typically years.

your along Got announced hikes other some of most with you've it. wage you, -- banks, employees. for Expenses

ratio that this of positive plays Just terms what? near-term and near that -- and out wondering half could near-term operating outlook improvement? leverage we the in efficiency see operating zero for leverage second outlook have term Is in your how it or likely you

Yes.

like when look more we leverage, quarter-to-quarter, a on a manage on operating So it's at don't expenses medium-term we basis.

impact of And to And to about a building X%, help so, work positive quantify towards annualized rate $XXX we basis. frame. you over that continue the million it's leverage time on expense run operating the

you. Thank

Next ahead. question from is Veritas Please Nigel Investment. go from D'Souza

of well? with just properties loan-to-value information some your Slide associated XX, mortgage as to HELOC that wanted LTVs on inclusive question for with the just on a quick to you clarify, your slide, of that just first, The is those I disclosure. had balances clarify

be, should It yes.

Okay.

because in when the wonder and LTV LTVs, actually HELOC you could plus I'm on have the HELOCs I your would would which custom So at just mortgages? borrowers with with if mortgage LTVs that follow is below the is LTV looking think I mortgages borrowers higher book,

data and We'll take to the back away. to look at on to that. have have you that We'll come

Okay. Sure.

in built-in your you have gears to your less or But forward-looking Stage at indicators can I your I stage X. provisions. deterioration of portfolio in how look to about understand more lead two a switch reversals sitting total can if could loans, when I So allowances. loan X%

was X%. that to the closer pandemic, Before

Stage levels. about at Stage running you're So Xx to loan X -- Xx your pre-pandemic X

Just wondering Stage And still those to migrated X? migration? preventing that loans why what's have been

Yes.

is Not seen the the migration So, because Stage migration of the back. back few And to quarters, we're migrated last loans delinquency over PDs, a using. got But X different drive of keep of these scenarios a pandemic. of lot What the you in macroeconomic and at to because of say extent out we've saw stage X the loans a different the all through uncertainty the we numbers. I'd reflect you're lot just your to don't scenarios there mind are Stage loans. macroeconomic

macro the should and as So more migration over uncertainty I conditions improve, see time, the we said, reduces. if

However, as other well. things the could go way

it's right fluid said, I pretty situation. whole now, As the

that the say loans? X ones to fair But higher Okay. have than PD Stage your

Right.

Okay. higher I the disclosure you And where looking the GDP downside move could forward-looking scenario, term decline. could in when at quarter, scenario and this look your now real at rates short indicator have a

representative your how that is of modeling impact stagflation So this scenario? credit And loss does quarter? that expected your

Yes.

What's so part stagflation, case downside higher your a question? of for the our is second GDP. lower inflation, sure, formal So

scenario? loss kind modeling loans provisions impact of expected did your How quarter and for that this introducing by it performing

Yes.

out. the led look called So on if overall, factor, actually the the a is the change which we temper downside what on to the is you release, uncertain the downside situation And macro didn't us downside. and weight and like we weight the

the between of to led release. the our base actually macro a downside, So overall, and tempering

downside higher And assumption case in despite me. the about scenario downside moving last scenario. When Got at it. for is base question scenario, home the the for same prices you I have look rates as your the

home are we remain they So going declining take move expectation to where the... in should not rates your expectation away as are up prices that an that

let out. for question, That's a me you thank a for and it minute. just housing And about talk calling great

the for for When for two I because point the two last view that housing the ago. A data I'd mitigant scenarios, allowance is the downside and, And adapted. there correction over constraints our I both including would timing, there And is market. that view, house did actually are big risk we believe partly now, some view book. growth. be we've number unemployment, of growth, house expecting say seen the increase are a we prices that years, many really some and this starting is income years recent base and So, levels, the has material reason think XX%, the population factors, is however, the a supply that did and And is house been there's price housing in supporting in our case. in of course, we

gain And some XX% I going of about talked is that that to recalibrate.

their in and a our But see from we our in unwinding is in did put I some comfort coming profile is base an And drive strong. One overlay. consideration what things. customer that into take is allowance risk quarters. So the actually would and that of few we process

standards the really and through changed, Second, our they've underwriting haven't cycle. been

strong. are an we a loans. to using point, okay, market rate, important and is still job qualifying these a this And lastly, very is is rate Third approve stress the

it but it calling And it's point at completely those ignored time, next quarter, relook and yes, like that in numbers out. you call you're a in we we'll not So, out it. right

Thank you.

from Next Lemar question Persaud is from Please go Cormark Securities. ahead.

quick off Hopefully, with modeling here. just start a question to

I expenses how think I I out is onetime big there award. remarks, be X% one-time award would pay either pay the in or split raise non-recurring presumably a since noninterest cash in was cash the opening heard wonder nature? -- could you in a rate if

only Yes, cash it's time. million is award The one it $XX is right. onetime Kevin. That's and

Okay, consequential.

into But assist touch Or or often you're the referring hedge the consideration? to to the deal that particularly benefits get of relates discussion capital, Okay. I to Horizon. accretion Then rates would kind CETX take if higher it XX.X%? temporarily as my to does even want that question First from the you to back of real come here. natural when understand that just on I ratio, closes. additional

the has been traditional Great comment. capital is to Bharat, been we've managers. how our This Hard this on comment this, Lemar. but look at doing And of to prudent question. way it. exactly Hard regulators

close that way transaction, that but I -- we capital intended, only the we regulatory not levels requirements. have So the will all meet have comfortable will feel we'll

as hedge be well this -- is increases day period. And add one one talk to I can -- the one, an not rate the is what during would just just about post day okay? so clarify capital Maybe day but accretion post we the natural post then

First more revenue. Horizon, we've earned

the bank of the business. Canadian U.S. retail in so terms And does the in

that of all natural well. hedge as as so, And acts a

Thank you.

Next question Holden is Paul from CIBC. Please from go ahead.

Sorry a but to to follow-up going Horizon fair First belabor at adjustment. have question I'm value this to ask on this, point, first

plausible now decreased between take if a Would a goodwill you rates suggest is scenario think therefore that would and and possibility how increase a thereafter. then decrease with down the where then, impairment natural one significantly and thereby rates to capital there's then on So road, associated that your about charge later the hedge scenario? transaction? that Is type that the in of

goodwill is the you rates the to at a look write-down entire value based have and and that alone, just on It's Kelvin it's the like not generates. it business here. event, Like significant

wouldn't the conclusion those between I So, draw X.

Okay.

there back? a again, that going we they're you And do earning months. type move significantly think back rates six, down? come so higher of to that in then next scenario, how nine the about in And But recession, is if

Yes.

acquisition. accounting the business of the really this is the So -- way

I'm -- to little bit here, on get a bear So technical me. with going so

So XXX. would of on time, is down say, clothing, what fair And to it so $XX. -- at par value $XX to over down the let's and the you accrete write that you is you write loans the par, do

would that that of to into all as collect So, will back get and earnings. you you cash, come

Understand.

you Thank for that. Okay.

in mean expecting I perhaps or your So about housing on question was here. up you're Does tighten credit allowances managing really, conservative comments view, wanted clear of also decline how terms credit you just very some underwriting I guess, prices decrease made Today, your today? taking parameters and a ask to other the appetite. to your that your you underwriting appetite

Ajai. it's Yes,

the is change no. not So to credit simple going answer our We're parameters.

from consistent, and standards we'd through to that's times underwriting heard the you've and keep think our the I us like cycle intent. many underwriters where

our change going be loss. standards, unexpected not would we unless So there was underwriting we thought to

consistent from So, be underwriting expected should standards us.

the make comment Where like And quality, that they're seeing good -- or lows. in of you origination shape. look you on our good very look The the actually are historical it's residential at in look you very metrics, just I'd other delinquencies, they're scores, And our very formations, good at customer whether gross quality if book, our impaired charge-offs, at is we're mortgages. HELOC shape. res loans, at customers sort

certainly change, about of our things factor changing into of And monitor customer change allowance So, how feel need change. things we pretty book. good to I we to know how and attributes we'll as now, process. it our the quality But will they are and may like extent the

you. Thank

Kim Next Jooyoung Please question go is from ahead. Suisse. from Credit

in commercial to question where quick loans, I wondering utilization demand the Retail. a what the slowed U.S. of have diminishing. and seems pick of could seeing a wondering think down. I'm growth that part is I'm of start PPP commercial seeing for terms you're just Just that And we up client that decline impact ahead? rate loan on

for Yes. the Thank much you very question.

right. quarter. You're really of terms in lending see commercial did in We the acceleration an

XX% basis number give by of XXX we pay some is increased Just sense, the points. you a is year-on-year saw slowdown And a down provide, to more that utilization, probably which originations activities. a we and relevant increased in do gross line

into factors three in-quarter X%. So put spot of you strong it about those and resulted together, growth

color now because market middle that So the we're in a can it's I our and that. lending little seeing important, And I where to We're think bit pleased if you in specialty give as more space businesses. with growth

much some -- of community find health have, we trying verticals as demand to are the way not banking quite -- post-pandemic. the what and small municipal, businesses I loan care, more those not-for-profit lower that think So, space. education, established their business still our seeing sort in those end we're is And demand still of of

specialty going it's that And the established pleased businesses. we like quarter, from what really sectors. in some mid-market I I'm I'm the growth little with think to we'd certainly see of our so encouraged. those from But take And a longer certainly and to saw

right Now uncertainty Ajai that plenty there's the marketplace raised, in the now. to -- there's of point

to So outlook. the but with it, we cautious I'm remain by encouraged regards

quick just And on a capital. follow-up

know of it, a lot I -- Just but discussion just one. a on was quick there

growth constructive, and on if ratio I sort closes, the see to of acquisition any in guess, any there's DRIP the ahead, the First speak the Horizon discount change you Given if whether there's outlook change? after landing could the you where

Kevin. It's see don't changes. we Yes. No, any

question Please last go And RBC you. from Markets. is Mihelic Darko Thank Capital ahead. from

I And for Riaz. is Two guess questions. one for maybe is One other Bharat. Kelvin, for maybe the

for you Horizon then. deal, Just the First moment. mentioned the announce -- capital you But DRIP which announced you going back to a you When makes didn't thing the the terminated NCIB, sense.

guys factored to about maybe gruesome the make now can thing, and think already of you into think the employing budget, increases I mean, looked have environment rate back I DRIP? were is pretty from process. So that then what then has would until the of sort changed thought I federal one your which but thought

just anything February isn't you to sure to that make to what has use there changed now actually So since have says want missed. Like that there a I DRIP?

a of uncertainty see you Darko. I out there, lot think

up than rather cap prudent You We All volatilities. the volatility have think say, want buys. covering all basis here. And the just is been This see the we're we'd in sure intense. market, We'll and I us, to to the that quite this you make know we've right.

the February For approach, us, in. given to reality war we in since Europe. thing changed. February, this it's prudent is a live things -- is the environment And do, and the right The have uncertain

You see energy prices all and place. the over

So is there and here. this address volatility of is prudent. usual TD, And a we lot uncertainty as be volatility to of from type, to want

to Bharat? Is now, late too it hedge

at The not well, us I'm us well. we it our well way here serve it look It's and natural will served sure as approach. it been is,

has purchase the experts to we become But And Kelvin So, and the at this each of going I on are that And about, are comfortable course, I that you're in interest is look think comfortable one and before the comes deal we then, and with after closing. taken. sensitivity, feel sensitivity TD's net look this. are explained know net accounting. of quite to exactly what we you ends, takes Horizon's puts rate very what if now you would the at accounting worried approach interest have First accretion

overall, we capitalization given us, are of all feel we of the experiencing. but very level So that a we, maintain I particular volatility think to want comfortable,

trading why the out and looking a Or loans a loan as book. Okay. Once explanation Securities on loans there sheet. to you've assets really quarter-over-quarter. And we odd such The of average TD sort got a growth wholesale they take on is big the big little it at fell component I've that increase question pretty to that Securities. I with some loan your low margin always of causes seen real quick wrong? Securities? those though the now on NII, that on -- balance businesses TD in is all TD a saw one I very found in bit with margin thing of drop a that Am

billion of think brokerage that, Thanks book prime Look, I $X our and securitizations some products. mean, loan -- lending, components for corporate I Darko. of other aggregate has similar Yes.

funds that the is areas, fairly -- In cost a lending to at be you maybe book, little product quickly we're margins. able adjust bit. adjust margin down an to margin you that last And can then, corporate as the that their know, we as then you would tends and margins increase, looking So, would be aggregation as comes see of of those. to the some

basically So, the earning and need we it earn. make we're continuing that book to to managing want sure the prudently returns to and clients pricing sure make that we're that support to that supporting that we just we are

with you may afterwards. I up follow Okay.

a my of Just mechanism your lower there behind much peers? love may math why be is I'd have to if margin so could. follow-up, versus a we So

where your markets And very the don't be good do. world But it's now. of never guessing to clairvoyant point with say I way be on I say, Darko, I might to want say, we're comfortable guess, position When our and a never. --

very are but we've never, in continue the say with very on feel and what never comfortable. we based taken comfortable the we approach I'll see, So historically to where cycle we

to There like I call time. no over Bharat you. questions further would Thank return are at this for Masrani the closing to remarks. registered

like for joining for taking from good have end I great to all everybody's thank is around of bankers to purchase experts busy world. to once you continue very all all thank shareholders. to this stakeholders, our and again, year, are And I been the of before XX,XXX on going which operator, you, become like of Thank you our But for opportunity including everybody I'd it's time. day. we TD. They accounting, appreciate our said, I us. benefit. take a the numbers the know this deliver

really in much. very you they days. And next we'll the Thank I appreciate everything So folks do. you see XX

you. Thank

lines Your you conference participation. has now this and your disconnect for ended. at your thank Please we time,