Toronto Dominion 4Q16 Earnings Call Notes

Toronto-Dominion Bank (TD) CEO Bharat Masrani on Q4 2016 Results

The economic picture is brighter in the US

” the economic picture is brighter in the U.S. The Fed appears likely to raise rates in the coming months and the market has responded with bond yields rising and the U.S. dollar on the upswing. While there are global risks, these conditions in the U.S. if sustained, will enable us to deliver total bank adjusted EPS growth for 2017 inside our 7% to 10% medium term target range.”

Even though our effective tax rate is lower, we would expect it to go even lower if the statutory rate goes down

“I think Sumit the way you should think about that is the tax rate is established by reference to statutory rates that are in place at the time and then there is deducts from that. So for example as an example we participate in various community reinvestment activities that are subject to tax credits etcetera and so those tend to be deductions that get you to your effective tax rate. So if the overall tax rate would reduce, then yes we would have benefits come up.”

Mike Pedersen

Good growth in the US. It’s possible we could see moderation in auto lending

“Yes, so it’s Mike. So we’ve obviously seen very good revenue growth in the U.S. this year and based on what I see right now, I expect that to continue, but I expect our volumes to continue to be strong. I also expect our margins to increase based on what we’re seeing. It’s possible we’ll see a bit of moderation in categories like commercial and auto finance lending, but not seeing that yet. There are some signs that there’s a bit of pricing pressure in some of those sectors. So that may adjust our flows a bit but broadly speaking, I expect good growth across the categories that have produced good growth this year with improving margins.”