Toronto Dominon FY 2Q15 Earnings Call Notes

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Partnering with Nordstrom for credit cards

“You would have seen our recent announcement about our program agreement with Nordstrom, to purchase their existing U.S. Visa and private-label card portfolio and to become their exclusive credit card issuer in the U.S.. We’re proud to have been selected in this competitive process for our customer-centric approach and proven capabilities by an organization who shares our common values on customer experience. Nordstrom is one of the most respected retail brands in the world and this announced transaction will build on the success of our growing North American credit card portfolio.”

Operating environment remains challenging

“our operating environment remains challenging. Prolonged lower rates, a slowing Canadian economy, mixed recovery signals from the U.S., continued expectations for low oil prices and regulatory and legislative pressures in both the U.S. and Canada will continue to result in slower revenue growth. ”

Credit performance remained strong

“Credit performance remained strong across all portfolios throughout the Second Quarter. Gross impaired loans and new formations remained at cyclically low levels and are in line with results over the past four quarters. ”

Oil book is holding up

“With respect to our oil and gas exposure, outstanding exposure remains stable at CAD3.8 billion representing less than 1% of total loans and acceptances. Our oil and gas book is performing within our expectations and we’re not seeing a significant deterioration in consumer credit quality in the impacted provinces. As it is still early days, however, we continue to maintain a cautious approach across retail and non-retail exposures impacted by low oil prices.’

Tracking alberta closely but haven’t seen anything

“we’re tracking Alberta very closely. It’s very heightened alert but what we’re seeing is very little if any change in the core credit metrics that would say that any, in fact that has not driven any increase in the reserves for those areas on the consumer credit side. Now maybe it’s a little early and it’s not over yet but I would say anything that is required will be captured naturally in our reserve process.”

I think we’re seeing a low end of the credit cycle

“I think we’re at the point where we’re seeing kind of at the low end of the cycle of credit losses and I personally would not expect to see material significant downside going forward, on a positive downside.”