Awards for Excellence 2018
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Another year, another record. TD Bank clocked up its eighth year of record earnings in fiscal 2017 and has already posted a 20% increase in pre-tax profits for the first half of fiscal 2018, indicating that it is on track for yet another triumph as it continues to build across its whole franchise. It is once again Euromoney’s pick for Canada’s best bank.
The engine of TD continues to be its Canadian retail segment, more than double the size of its US operation and six times the size of its wholesale business. The firm has benefited from the fact that its loan book is less exposed than peers to the energy sector and it is less dependent on volatile capital markets revenues.
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Bharat Masrani |
The bank has pushed on with digital development, adding a design research lab in Toronto to its existing Communitech Innovation Lab. It has also opened a new cybersecurity office, based in Israel, and this year bought Layer 6, a Toronto-based artificial intelligence startup.
TD has long been recognized as a leading digital banking player in Canada: it has the number one mobile app and it is regularly top of the finance section of Apple’s Canadian app store. This year’s newly upgraded version of the bank’s MySpend app has focused on giving users more tools to monitor their spending patterns. This year has also seen the launch of a digital pre-approval tool for mortgages.
While it can’t match the scale of the investment bank at RBC Capital Markets, TD Securities performs well in those areas where it puts its efforts. It is regularly the leading block equity trader in Toronto, it has a well-regarded research team and competes with RBC for the biggest equity capital markets mandates.
In debt capital markets it features in all segments, but makes a particular virtue of its government work. Highlights in the period included a C$4.75 billion ($3.57 billion) deal for Canada Housing Trust as well as a flurry of deals for Alberta and Ontario. And in M&A the bank scored a coup in its role advising Thomson Reuters on the sale of its Financial & Risk business to Blackstone, a pending deal with an implied value of $20 billion.
Community responsibility is high on the agenda at TD. The bank’s latest focus is on giving people from all backgrounds the chance to succeed despite rapidly changing conditions. TD calls it ‘The Ready Commitment’, and in practical terms it means committing C$1 billion of community funds by 2030.
The effort, launched in March 2018, is grouped around four themes: financial security, which includes improving financial literacy, early learning, entrepreneurship and affordable housing; vibrant planet, spanning everything from park development to green bonds; connected communities, supporting local artistic and cultural development efforts; and better health, which targets hospitals and health care programmes.
Chief executive Bharat Masrani often speaks of what he calls TD’s “higher calling”. But the reality is that such initiatives cannot work without a relentless focus on the bottom line, positioning the firm to handle the challenge of finding growth. So far, the bank is meeting that challenge.
