Q4 2022 Toronto-Dominion Bank Earnings Call

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This conference is being recorded so it's gonna stay home as it always is.

All participants please standby your conference is now ready to begin good afternoon, everyone and welcome to the TD Bank Group Q4, 2022 earnings conference call.

Now I'll like to turn the meeting over to MS Brook Hills. Please go ahead Michelle.

conference call.

Thank you operator, good afternoon, and welcome to TD Bank group's fourth quarter 2022, Investor presentation. We will begin today's presentation with remarks from Barrett Ms. Ronni, the bank's CEO after which Calvin Tran the bank's CFO will present, our fourth quarter operating results.

Have a now like turned to meaning over to Miss Brooke Hills

Please go ahead, Ms. Hills.

Thank you, operator. Good afternoon and welcome to TD Bank Group's fourth quarter 2022 investor presentation.

We will begin today's presentation with remarks from Barrett Mizrani, the bank's CEO , after which Kelvin Tran, the bank's CFO , will present our fourth quarter operating results. Ajay Bambwale, Chief Risk Officer, will then offer comments on credit quality, after which we will invite questions from pre-qualified analysts and investors on the phone.

Hey, Bob Walsh <unk>, Chief Risk Officer will then offer comments on credit quality after which we will invite questions from prequalified analysts and investors on the phone.

Also present today to answer your questions are Michael Rose Group head Canadian personal banking, Paul Douglas Group head Canadian business banking.

Also present today to answer your questions are Michael Rhodes, Group Head, Canadian Personal Banking, Paul Douglas, Group Head, Canadian Business Banking, Raymond Chun, Group Head, Wealth Management and Insurance, Leo Salaam, President and CEO , TD Bank, America's Most Convenient Bank, and Riaz Ahmed, Group Head, Wholesale Banking. Please turn to slide 2.

Raymond Chen group head wealth management, and insurance Leo Salon, President and CEO TD Bank America's most convenient bank and react on that group had wholesale banking, please turn to slide two.

At this time I would like to caution our listeners that this presentation contains forward looking statements that there are risks that actual results could differ materially from what is discussed and that certain material factors or assumptions were applied in making these forward looking statements any forward looking statements contained in this presentation represent.

At this time, I would like to caution our listeners that this presentation contains forward-looking statements, that there are risks that actual results could differ materially from what is discussed, and that certain material factors or assumptions were applied in making these forward-looking statements.

The views of management 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 forward looking statements may not be appropriate for other purposes. I would also like to remind listeners that the bank uses non-GAAP financial measures such as <unk>.

Any forward-looking statements contained in this presentation represent the views of management 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. Forward-looking statements may not be appropriate for other purposes.

Adjusted results to assess each of its businesses and to measure overall bank performance.

I would also like to remind listeners that the bank uses non-GAAP financial measures such as adjusted results to assess each of its businesses and to measure overall bank performance. The bank believes that adjusted results provide readers with a better understanding of how management views the bank's performance. Barrett will be referring to adjusted results in his remarks.

Bank believes that adjusted results provide readers with a better understanding of how management views. The bank's performance Barrett will be referring to adjusted results in his remarks additional information on items of note. The bank's use of non-GAAP and other financial measures. The bank's reported results and factors and assumptions related to forward looking information.

Additional information on items of note, the bank's use of non-GAAP and other financial measures, the bank's reported results and factors and assumptions related to forward-looking information are all available in our annual 2022 Report to Shareholders.

Are all available in our annual 2022 report to shareholders with that let me turn the presentation over to Barrett.

Thank you Brook, and thanks to everyone for joining us today Q.

With that, let me turn the presentation over to Barrett.

Q4 was a strong quarter for TD.

Thank you, Brooke, and thank you, everyone, for joining us today.

Earnings increased 5% to $4 1 billion and EPS rose, 4% to $2.18 revenue grew 12% year over year, reflecting increased customer activity.

Q4 was a strong quarter for TD. Earnings increased 5% to $4.1 billion and EPS rose 4% to $2.18.

Benefits of our deposit rich franchise.

Revenue grew 12% year over year, reflecting increased customer activity and the benefits of our deposit-rich franchise.

Well, we've seen some increase in PCL this quarter credit performance remains so benefiting from TD is through the cycle underwriting practices with key credit metrics remaining well below normalized levels.

While we've seen some increase in PCLs this quarter, credit performance remains sound, benefiting from TDAs through the cycle underwriting practices, with key credit metrics remaining well below normalized levels.

Our banking businesses have performed well in this environment, enabling us to continue to make strategic investments in our people and technology and in new capabilities in our businesses to drive future growth.

Our banking businesses have performed well in this environment, enabling us to continue to make strategic investments in our people, in technology, and in new capabilities in our businesses to drive future growth.

<unk> common equity tier one ratio ended the quarter at 16, 2%, reflecting significant organic capital generation the goodwill hedged for the first Verizon acquisition and the divestment of abortion of Schwab shares in August we continue to expect the bank's CET one ratio to be constant.

TD's common equity tier 1 ratio ended the quarter at 16.2%, reflecting significant organic capital generation, the goodwill hedge for the first horizon acquisition, and the divestment of a portion of our Schwab shares in August .

Above 11% post closing of the first horizon and Cowen transactions.

We continue to expect the bank's CET1 ratio to be comfortably above 11% post-closing of the first Horizon and Common transactions.

We remain confident in the earnings power of our franchise and today declared a seven cent dividend increase bringing our dividend to <unk> 96 cents per share I'm proud of what we have accomplished this quarter and this year and we are entering 2023 from a position of strength.

We remain confident in the earnings power of our franchise and today declared a 7-cent dividend increase bringing our dividend to 96 cents per share. I am proud of what we have accomplished this quarter and this year and we are entering 2023 from a position of strength.

We continue to innovate to keep pace with market developments and build new capabilities for our customers among financial institutions D. D is the largest patent portfolio in Canada, and the fifth largest patent portfolio in the U S enterprise wide 150 of the bank's patent applications have been.

We continue to innovate to keep pace with market developments and build new capabilities for our customers.

Among financial institutions, TD has the largest patent portfolio in Canada and the fifth largest patent portfolio in the US. Enterprise-wide, 150 of the bank's patent applications have been granted this year. And this quarter, TD was named the best consumer digital bank in North America for the second consecutive year by global finance.

Rented this year.

This quarter <unk> was named the best Consumer Digital Bank in North America for the second consecutive year by global finance, reflecting our industry, leading digital capabilities and the strength of our mobile and online offerings.

reflecting our industry-leading digital capabilities and the strength of our mobile and online offerings.

AI powered insights we are delivering highly personalized experiences to our customers, helping them navigate financial challenges and meet their financial goals.

Using AI-powered insights, we are delivering highly personalized experiences to our customers, helping them navigate financial challenges and meet their financial goals.

Let me now turn to each of our businesses and review some highlights from Q4.

Our Canadian personal and commercial banking segment delivered earnings of $1 $7 billion.

Let me now turn to each of our businesses and review some highlights from Q4.

A Canadian personal and commercial banking segment delivered earnings of $1.7 billion.

The personal bank finished the year with momentum, including the highest net customer acquisition since 2014, with a record acquisition and new to Canada market.

The personal bank finished the year with momentum, including the highest net customer acquisition since 2014 with record acquisition in new to Canada market.

We are committed to helping new Canadians and have introduced customer centric value propositions, including our newly launched banking package specifically designed for international students first among Canadian financial institutions.

We are committed to helping new Canadians and have introduced customer-centric value propositions, including our newly launched banking package, specifically designed for international students, first among Canadian financial institutions.

We saw industry, leading market share gains in non term deposits and achieved dd's highest market share ever in this category.

We saw industry leading market share gains in non-term deposits and achieved TD's highest market share ever in this category.

Real estate secured lending business annual average portfolio loan growth is at its highest level since 2010, and this quarter retention rates increased by three 4% year over year.

In our real estate secured lending business, annual average portfolio loan growth is at its highest level since 2010, and this quarter retention rates increase by 3.4% year over year.

We also had record credit card spend and organic loan growth was driven by a diverse lineup and compelling acquisition offers and rewards Canada readers recognize D D with more awards in 2022 than any other card issuer with the TD Aeroplan visa infinite guard and the TD cashback visa infinite God.

We also had record credit card spend and organic loan growth driven by our diverse lineup and compelling acquisition offers.

And Rewards Canada readers recognize TD with more awards in 2022 than any other card issuer with the TD Aeroplan Visa Infinite card and the TD Cashback Visa Infinite card, ranking best in the respective categories.

Ranking best in their respective categories.

The business again delivered double digit loan growth at 15% year over year did.

The business may again deliver double digit loan growth at 15% year over year.

Did he was particularly proud to be named highest and small business banking customer satisfaction among the big five Canadian banks. According to J D. Power's 2022, Canada small business banking satisfaction study, reflecting our commitment to the two legendary customer experiences.

TD was particularly proud to be named highest in small business banking customer satisfaction among the Big Five Canadian banks according to J.D. Powers' 2022 Canada Small Business Banking Satisfaction Study reflecting our commitment to legendary customer experiences.

Turning to the U S. Our U S retail bank delivered record earnings of 963 million U S dollars with strong revenues. Despite the implementation of the previously announced enhancements to our overdraft policies demonstrating the bank's ability to continue to adapt as the market evolves with the.

Turning to the U.S., a U.S. retail bank delivered record earnings of $963 million with strong revenues despite the implementation of the previously announced enhancements to our overdraft policies, demonstrating the bank's ability to continue to adapt as the market evolves.

From a reinvestment in Schwab.

237 million U S dollars segment earnings were $1 2 billion U S dollars this quarter.

With the contribution from our investment in Schwab of $237 million, Segment Earnings were $1.2 billion this quarter.

Yeah.

We took market share in our footprint and personal deposit with growth of 5% year over year and business deposits were flat in a highly competitive environment as customers continue to entrust TD Bank America's most convenient bank with more of their business mortgage loans grew 17% year over year, while credit card.

We took market share in our footprint in personal deposit with growth of 5% year over year and business deposits were flat in a highly competitive environment as customers continue to entrust TD Bank, America's most convenient bank, with more of their business.

Volumes were up 8% on increased spend from a year ago.

Mortgage loans grew 17% year over year, while credit card volumes were up 8% on increased spend from a year ago.

Commercial loan volumes increased 5% year over year, excluding PPP loan forgiveness, reflecting continued strong growth in middle market and specialty lending and.

Commercial loan volumes increased 5% year over year, excluding PPP loan forgiveness, reflecting continued strong growth in middle market and specialty lending.

And we maintain our leadership in small business banking ranking number one by total number of approved or approved U S. Small business administration loan units for the sixth consecutive year.

We maintain our leadership in small business banking, ranking number one by total number of approved US small business administration loan units for the sixth consecutive year.

We also announced the extension of our agreements with target and Nordstrom to 2030, and 2026, respectively, enabling the bank to continue to be the exclusive issuer of co branded and private label consumer credit cards for these leading retailers.

We also announced the extension of our agreements with Target and Nordstrom to 2030 and 2026, respectively, enabling the bank to continue to be the exclusive issuer of co-branded and private-label consumer credit cards for these leading retailers.

Before we leave the U S retail segment I want to provide an update on our acquisition of first horizon. We are currently planning to close the transaction in the first half of fiscal 2023 subject to customary closing conditions, including approvals from U S and Canadian regulatory authorities. We are excited about the benefits that this acquisition will do.

Before we leave the US retail segment, I want to provide an update on our acquisition of First Horizon.

We are currently planning to close the transaction in the first half of fiscal 2023, subject to customary closing conditions, including approvals from U.S. and Canadian regulatory authorities.

The liver for all of our stakeholders.

We are excited about the benefits that this acquisition will deliver for all of our stakeholders.

As we announced in October effective this quarter, we established a wealth management and insurance segment. This new reporting alignment reflects the significant and growing contribution that these businesses make to TD success. This quarter the segment earned $516 million demonstrating that.

As we announced in October , effective this quarter, we established a Wealth Management and Insurance Segment.

This new reporting alignment reflects the significant and growing contribution that these businesses make to TD's success.

Power of our diversified business mix as higher insurance volumes and the benefit of higher interest rates offset the challenges presented by market volatility severe weather events and trading volume and claims and normalization.

This quarter, the segment earned $516 million, demonstrating the power of a diversified business mix as higher insurance volumes and the benefit of higher interest rates offset the challenges presented by market volatility, severe weather events, and trading volume and claims normalization.

Our advice businesses achieved record net asset growth this year as clients turned to a growing base of advisors to help them navigate the challenging market environment.

Our Advise Business has achieved record net asset growth this year. Its clients turned to our growing base of advisors to help them navigate a challenging market environment.

TD asset management continued to innovate to meet client needs recently launching.

The TD alternative risk focused pool.

TD Asset Management continues to innovate to meet client needs.

Our new retail multi strategy solution to offer exposure to liquid alternative investments. The fund is an extension of our highly successful retirement portfolio of franchise and provides retail investors with access to tools historically only available to institutional investors.

TD alternative risk focus pool.

a new retail multi-strategy solution to offer exposure to liquid alternative investments.

The fund is an extension of our highly successful retirement portfolio franchise and provides retail investors with access to tools historically only available to institutional investors.

Our number one direct to consumer insurance business continue its continued its digital transformation with over 20% of new sales. This quarter are completed digitally from end to end.

Our number one direct to consumer insurance business continued its digital transformation with over 20% of new sales this quarter completed digitally from end to end.

Our insurance business is focused on leveraging its competitive strength and intends to expand its services into an underserved market by launching small business insurance in 2023.

Our insurance business is focused on leveraging its competitive strength and intends to expand its services into an underserved market by launching small business insurance in 2023.

Finally, I want to acknowledge our customers across the Atlantic Canada that were impacted by hurricane Fiona and to thank our reinsurance colleagues for their tremendous efforts on the ground providing support through the TD insurance mobile response unit to ensure that we were there for our customer when it matters most.

Finally, I want to acknowledge our customers across Atlantic Canada that were impacted by Hurricane Fiona and to thank our insurance colleagues for their tremendous efforts on the ground, providing support through the TD Insurance Mobile Response Unit to ensure that we were there for our customer when it mattered most.

Okay.

In our wholesale banking business, we delivered net income of $275 million revenue was roughly flat year over year as the impact of a weaker underwriting environment was offset by strength in other parts of our business, including higher global transaction banking trading and lending revenue again, reflecting the benefits of.

In our wholesale banking business, we deliver net income of $275 million.

Revenue was roughly flat year over year as the impact of a weaker underwriting environment was offset by strength in other parts of our business, including higher global transaction banking, trading and lending revenue, again reflecting the benefits of our diversified business model.

Our diversified business model.

TD Securities acted as sole book runner on the Council of Europe development Banks 100 million Euro reopening of his 1 billion Euro seven year, social inclusion Bon supporting their commitment to address the long term needs of Ukrainian refugees in their host communities.

GED Securities acted as sole book runner on the Council of Europe Development Bank's 100 million euro reopening of its 1 billion euro, 7-year social inclusion bond supporting their commitment to address the long-term needs of Ukrainian refugees in their host communities.

We have made significant progress in preparing for the closing of the Catlin acquisition.

November 15th common shareholders approved the transaction with over 99% of those voting voting in favor.

We have made significant progress in preparing for the closing of the common acquisition.

On November 15th, Cowen Shareholders approved the transaction.

We are awaiting certain regulatory approvals and are planning to close the transaction in the first calendar quarter of 2023.

with over 99% of those voting, voting in favor.

We are awaiting certain regulatory approvals and are planning to close the transaction in the first calendar quarter of 2023.

Overall I'm very pleased with the results we delivered in 2022, we built momentum in our retail segment and one more customers with differentiated legendary experiences and we announced two strategic acquisitions, which when closed will meaningfully accelerate our growth in the years to come.

Overall, I am very pleased with the results we delivered in 2022.

We built momentum in our retail segments.

and want more customers with differentiated legendary experiences.

And we announced two strategic acquisitions which, when closed, will meaningfully accelerate our growth in the years to come.

As you know we have said that we expect to grow adjusted EPS by 7% to 10% over the medium term.

As you know, we have said that we expect to grow adjusted EPS by 7 to 10% over the medium term.

For the year ahead, there are both tail wins, including rate momentum and the anticipated closing of our announced acquisitions and headwinds, including geopolitical tensions the complex operating environment and potential economic slowdown.

For the year ahead, there are both tailwinds, including rate momentum and the anticipated closing of our announced acquisitions, and headwinds, including geopolitical tensions, the complex operating environment, and potential economic slowdown. On balance, unless macroeconomic conditions were to shift dramatically, we believe that we will meet or exceed our medium-term target range.

On balance unless macroeconomic conditions were to shift dramatically. We believe that we will meet or exceed our medium term target range in 2023.

I'm proud of the strong financial results and returns we generated for shareholders. This year and how we have positioned the bank for the macro economic volatility ahead.

in 2023. I am proud of the strong financial results and returns we generated for shareholders this year and how we have positioned the bank for the macroeconomic volatility ahead.

I'm equally proud of the value we deliver for all of our stakeholders.

This quarter, we announced the 10 million investment into the boreal wildlands carbon project in Northern Ontario developed by the nature Conservancy of Canada. This is the largest single private conservation projects ever undertaken in the country.

I'm equally proud of the value we delivered for all of our stakeholders.

This quarter, we announced a $10 million investment into the Boreal Wildlands carbon project in northern Ontario developed by the Nature Conservancy of Canada. This is the largest single private conservation project ever undertaken in the country and supports the fight against biodiversity loss and climate change.

<unk> the fight against bio diversity loss and climate change.

The growth and development of a voluntary carbon markets and through the formation of its carbon advisory business TD Securities is focused on providing new financing solutions to help our clients transition to a lower carbon economy.

By supporting the growth and development of voluntary carbon markets and through the formation of its carbon advisory business, TD Securities is focused on providing new financing solutions to help our clients transition to a lower carbon economy.

We're also innovating and supplier diversity working with the 10th partnership for refugees and the Canadian Aboriginal and minority supplier Council DDS wanted a new certification program for businesses owned by entrepreneurs, who recently arrived in Canada as refugees.

We are also innovating in supplier diversity. Working with the Tent Partnership for Refugees and the Canadian Aboriginal and Minority Supplier Council, TD has sponsored a new certification program for businesses owned by entrepreneurs who recently arrived in Canada as refugees.

This program will provide better market access for refugee owned businesses and promote greater diversity in government and corporate procurement.

This program will provide better market access for refugee-owned businesses and promote greater diversity in government and corporate procurement.

Dd's leadership builds upon our long standing support for suppliers pursuing diversity certificate certifications promoting economic inclusion across supply chains.

TD's leadership builds upon our long-standing support for suppliers pursuing diversity certifications promoting economic inclusion across supply chains.

It is also committed to supporting equitable access to funding as part of the bank is $10 million five year commitment the black opportunity fund announced an inclusive lending program for black entrepreneurs.

It is also committed to supporting equitable access to funding.

as part of the bank's $10 million five-year commitment.

This program aims to support the continued effort of combating antiblack racism and broader systemic discrimination and to help meet the needs of black communities across Canada.

The Black Opportunity Fund announced an inclusive lending program for black entrepreneurs.

This program aims to support the continued effort of combating anti-black racism and broader systemic discrimination and to help meet the needs of black communities across Canada.

In the U S. We invested 5 million U S dollars and citizens Trust Bank minority deposit institution based in Atlanta to further support inclusive growth in the southeast.

In the US, we invested $5 million in Citizens Trust Bank, a minority deposit institution based in Atlanta, to further support inclusive growth in the Southeast.

Enriching the lives of our customers communities and colleagues as the center of everything we do at D D.

Enriching the lives of our customers, communities, and colleagues is the center of everything we do at TD.

I would like to end by thanking our TD bankers around the globe. They are responsible for our strong performance in 2022 and they are the reason that I'm confident we will build upon these achievements in 2023.

I would like to end by thanking our TD Bankers around the globe.

They are responsible for our strong performance in 2022, and they are the reason that I am confident we will build upon these achievements in 2023.

Thank you for your hard work and dedication with that I'll turn things over to Kelvin.

Thank you for your hard work and dedication.

Thank you Sarah good afternoon, everyone. Please turn to slide 11.

With that, I'll turn things over to Kelvin.

Thank you, Barrett. Good afternoon, everyone. Please turn to slide 11.

For 2022.

Bank reported earnings of $17 $4 billion and earnings per share of $9 47.

For 2022, the bank reported earnings of $17.4 billion and earnings per share of $9.47.

Up 22%.

And 23% respectively.

Adjusted earnings were $15 $4 billion.

up 22% and 23% respectively.

And adjusted earnings per share was $8.36.

Adjusted earnings were $15.4 billion and adjusted earnings per share was $8.36.

Up 5% and 6% respectively.

Reported revenue increased 15%.

up 5% and 6% respectively.

And includes the net gain from mitigation of interest rate volatility to closing capital on the first horizon acquisition and the gain on sale of swap shares.

Reported revenue increased 15% and includes the net gain from mitigation of interest rate, volatility to closing capital on the first horizon acquisition, and the gain on sale of Schwab shares. Business and advertising Hot Docs Jeremy

Adjusted revenue increased 8%, reflecting volume growth and margin expansion in the personal and commercial banking businesses.

Adjusted revenue increased 8% reflecting volume growth and margin expansion in the personal and commercial banking businesses.

Provision for credit losses was $1 $1 billion compared with a recovery of $224 million in the prior year.

Provision for credit losses was $1.1 billion compared with a recovery of $224 million in the prior year.

Reported and adjusted expenses increased 7% and 6%, respectively, reflecting higher employee related expenses and higher spend supporting business growth.

Reported and adjusted expenses increased 7% and 6%, respectively, reflecting higher employee-related expenses in higher spans supporting business growth.

Absent the retailer partners net share of the profits from the U S strategic card portfolio.

Absent the retailer partner's net share of the profits from the U.S. Strategic Car Portfolio, adjusted expenses increased 7.2% xFX.

Adjusted expenses increased seven 2% ex FX.

Consistent with prior quarters Slide 28 shows how we calculate total bank PTP and operating leverage removing the impact of the U S strategic card portfolio, along with the impact of foreign currency translation.

Consistent with prior quarters, slide 28 shows how we calculate total bank PTPP and operating leverage removing the impact of the U.S. strategic card portfolio along with the impact of foreign currency translation and the insurance fair value change.

And the insurance fair value change.

Reported total bank PDP was up 24% from fiscal 2021 before these modifications and adjusted <unk> was up 8%. After these modifications.

Reported total bank PTPP was up 24% from fiscal 2021 before these modifications, and adjusted PTPP was up 8% after these modifications.

Please turn to slide 12.

Yeah.

For Q4, the bank reported earnings of $6 7 billion and earnings per share of $3.62 up 76% and 77% respectively.

Please turn to slide 12.

For Q4, the bank reported earnings of $6.7 billion and earnings per share of $3.62, up 76% and 77% respectively.

Adjusted earnings were $4 $1 billion and adjusted earnings per share was $2.18 up 5% and 4% respectively.

Adjusted earnings were $4.1 billion and adjusted earnings per share was $2.18.

Adjusted earnings include favorable tax impact of earnings mix and the recognition of unused tax losses.

up 5% and 4% respectively.

Adjusted earnings include favorable tax impact of earnings mix and the recognition of unused tax losses.

Reported revenue increased 42% and includes the net gain from mitigation of interest rate volatility to closing capital on the first horizon acquisition and the gain on sale of swap shares.

Reported revenue increased 42% and includes the net gain from mitigation of interest rate volatility to closing capital on the first horizon acquisition and the gain on sale of SHWAP shares.

Adjusted revenue increased 12%, reflecting margin expansion and volume growth in the personal and commercial banking businesses and the impact of FX translation.

Adjusted revenue increased 12% reflecting margin expansion and volume growth in the personal and commercial banking businesses and the impact of FX translation.

Provision for credit losses was $617 million compared with a recovery of $123 million in the fourth quarter last year.

Provision for credit losses was $617 million compared with a recovery of $123 million in the fourth quarter last year.

Reported and adjusted expenses increased 10% and 9% respectively.

reported and adjusted expenses increased 10% and 9% respectively.

Driven by higher employee related expenses the.

The impact of FX translation.

during by higher employee related expenses.

And higher spend supporting business growth.

Employee related expenses reflect an increase in our full time equivalent staff as well as the full quarter impact of the additional merit increase announced in Q3.

the impact of FX translation,

and higher spans supporting business growth.

Employee related expenses reflect an increase in our full-time equivalent staff, as well as the full quarter impact of the additional merit increase announced in Q3.

In fiscal 2022, we had a strong revenue environment and made the conscious decision to step up our investments across a number of areas, including digital properties and frontline colleagues.

In fiscal 2022, we had a strong revenue environment and made the conscious decision to step up our investments across a number of areas, including digital properties and frontline coffee.

We expect some of that growth momentum to moderate in fiscal 2023 on a quarter over quarter basis.

We expect some of that growth momentum to moderate in fiscal 2023 on a quarter over quarter basis.

Our goal of delivering positive operating leverage over the medium term remains unchanged.

Our goal of delivering positive offering leverage over the medium term remains unchanged.

Absent the retailer partners net share of the profits from the U S strategic card portfolio adjusted expenses increased nine 8% ex FX.

Absent the retailer partner's net share of the profits from the U.S. Strategic Card portfolio, adjusted expenses increased 9.8% xfx.

Reported total bank PTP with a modification shown on slide 29 was up 81% year over year before modifications and adjusted <unk> was up 9%. After these modifications.

Reported total bank PPPP with the modifications shown on slide 29 was up 81% year-over-year before modifications and adjusted PPPP was up 9% after these modifications.

Please turn to slide 13.

Canadian personal and commercial banking net income for the quarter was $1 $7 billion.

Please turn to slide 13.

Canadian personal and commercial banking net income for the quarter was $1.7 billion, up 11% year over year.

11% year over year.

Revenue increased 16%.

Reflecting margin expansion volume growth and increased client activity.

Revenue increased 16% reflecting margin expansion, volume growth, and increased client activity, including credit card related and foreign exchange revenue.

<unk> credit card related and foreign exchange revenue.

Average loan volumes rose, 9%, reflecting 8% growth in personal volumes and 15% growth in business volumes.

Average loan volumes rose 9%, reflecting 8% growth in personal volumes and 15% growth in business volumes.

Average deposits rose, 4%, reflecting 8% growth in personal deposits and including industry, leading market share gains in non term deposits and a 2% decrease in business deposits.

Average deposits rose 4%, reflecting 8% growth in personal deposits, including industry-leading market share gains in non-term deposits, and a 2% decrease in business deposits.

Net interest margin was two 7%.

11 basis point compared to the prior quarter.

Net interest margin was 2.7%.

Primarily due to higher deposit margins, reflecting rising interest rates, partially offset by lower loan margins.

up 11 basis points compared to the prior quarter.

primarily due to higher deposit margins reflecting rising interest rates.

Total PCL of $229 million increased $59 million sequentially.

partially offset by lower loan margin.

Total PCL of $229 million increased $59 million sequentially.

Total PCL as an annualized percentage of credit volume was 17% up four basis points sequentially.

Total PCL as in annualized percentage of credit volume was 0.17% up 4 basis points sequentially. Non-interest expenses increased 12% year over year primarily reflecting higher spend supporting business growth including technology and employee related expenses.

Noninterest expenses increased 12% year over year, primarily reflecting higher spend supporting business growth, including technology and employee related expenses. Please turn to slide 14.

U S retail segment reported net income for the quarter was $1 2 billion up.

Please turn to slide 14.

US retail segment reported net income for the quarter was $1.2 billion US.

Up 7% year over year.

Adjusted net income was $1 2 billion dollar U S up 10% year over year.

up 7% year over year.

Adjusted net income was $1.2 billion US, up 10% over year.

U S retail bank reported net income was $926 million U S.

Up 3%, reflecting higher revenue.

US retail bank reported net income was $926 million US.

Partially offset by higher PCL, and noninterest expenses, including acquisition and integration related charges for the first horizon acquisition.

up 3%, reflecting higher revenue, partially offset by higher PCL, and non-interest expenses including acquisition and integration related charges for the first Horizon acquisition.

U S retail bank adjusted net income was $963 million U S up 7%.

US retail bank adjusted net income was $963 million US, up 7%.

Revenue increased 22% year over year.

<unk> higher deposit margins and volumes and higher earnings on investments.

Revenue increased 22% year over year, reflecting higher deposit margins and volumes and higher earnings on investments.

Partially offset by lower income from PPP and lower loan margins.

partially offset by lower income from PPP and lower loan margins.

Average loan volumes increased 4% year over year.

Or is it somehow loans increased 10%, reflecting higher residential mortgage and auto originations, coupled with lower prepayments and higher credit card volume.

Average loan volume increases 4% year over year.

Further, sonar loans increased 10%, reflecting higher residential mortgage and auto originations coupled with lower prepayment.

Business loans were flat, reflecting strong originations new customer growth higher commercial line utilization and increased customer activity offset by PPP loan forgiveness.

and higher credit cards volume.

Business loans were flat, reflecting strong origination.

new customer growth, higher commercial line utilization, and increased customer activity offset by PPP loan forgiveness.

Excluding PPP loans business loans increased 5%.

Average deposit volumes, excluding sweep deposits were up 3% year over year.

Excluding PPP loans, business loans increase 5%.

Average deposit volumes excluding sweep deposits were up 3% year over year.

Personal deposits were up 5% as television took market share in our footprint.

Business deposits were flat and sweep deposits declined 5%.

Personal deposits were up 5% as TD took market share in our footprint.

Net interest margin was 313%.

Business deposits were flat and sweep deposits declined 5%.

Up 51 basis points sequentially as higher deposit margins, reflecting the rising interest rate environment and positive balance sheet mix were partially offset by lower loan margins.

Net interest margin was 3.13% up 51 basis points sequentially as higher deposit margins reflecting the rising interest rate environment and positive balance sheet mix were partially offset by lower low margins.

On slide 33, we've continued our disclosure on the impact of the PPP program.

On slide 33, we've continued our disclosure on the impact of the PPP program.

This quarter <unk>.

<unk> revenue contributed approximately $9 million you asked to net interest income and one basis point to net interest margin.

This quarter, PPP revenue contributed approximately $9 million U.S. to net interest income and one basis point to net interest margin.

Total PCI it was $169 million, an increase of $86 million sequentially.

Total PCR was $169 million US, an increase of $86 million sequentially.

The U S retail net PCL ratio, including only the bank's share of PCL for the U S strategic cards portfolio as an annualized percentage of credit volume was <unk>, 4%.

The US retail net PCL ratio including only the bank's share of PCL for the US strategic cards portfolio as an annualized percentage of credit volume was 0.4% higher by 20 basis points sequentially. The US retail net PCL ratio is 0.4% higher by 20 basis points sequentially.

Higher by 20 basis points sequentially.

Reported expenses increased 15% and include acquisition and integration related charges for the first horizon acquisition.

Reported expenses increase 15% and include acquisition and integration related charges for the First Horizon acquisition.

Adjusted expenses were up 11%, reflecting higher employee related expenses and business investments.

Adjusted expenses were up 11%, reflecting higher employee-related expenses in business investments.

The contribution from Td's investment and Schwab was $237 million up 22% from a year ago.

The contribution from TD's investment in Schwab was $237 million US, up 22% from a year ago.

Reflecting higher net interest income, partially offset by higher expenses lower asset management fees and lower trading revenue.

reflecting higher net interest income, partially offset by higher expenses, lower asset management fees and lower trading revenue.

Please turn to slide 15.

Yeah.

Wealth management and insurance net income for the quarter was $516 million down 15% year over year.

Please turn to slide 15.

Wealth management and insurance net income for the quarter was $516 million, down 15% year over year.

Revenue decreased 1%.

Reflecting lower transaction and fee based revenue in the wealth management business and a decrease in the fair value of investments supporting claims liabilities, which resulted in a similar decrease in insurance claims partially offset by higher insurance premiums.

Revenue decrease 1%.

reflecting lower transaction and fee-based revenue in the wealth management business, and a decrease in the fair value of investments supporting claims liabilities, which resulted in a similar decrease in insurance claims, partially offset by higher insurance premiums.

Insurance claims increased 11% year over year, reflecting increased driving activity inflationary costs and more severe weather related events, partially offset by favorable prior year's claims development and the impact of a higher discount rate, which resulted in a similar decrease.

Insurance claims increased 11% year-over-year, reflecting increased driving activity, inflationary costs and more severe weather-related events.

partially offset by favorable prior years claims development, and the impact of a higher discount rate, which resulted in a similar decrease in the fair value of investments supporting claims liabilities reported in non-interest income.

<unk> and the fair value of investments supporting claims liabilities reported in non interest income.

Noninterest expenses increased 1% year over year, reflecting higher spend supporting business growth, including higher employee related expenses and technology costs, largely offset by the impact of lower legal provisions and variable compensation.

Non-interest expenses increase 1% year-over-year, reflecting highest spend supporting business growth, including high employee-related expenses and technology costs, largely offset by the impact of lower legal provisions and variable compensation.

Assets under management and assets under administration, both decreased 7% year over year, reflecting market appreciation, partially offset by net asset growth.

Assets under management and assets under administration both decreased 7% year over year, reflecting market depreciation partially offset by net asset growth.

Turning to slide 16.

Wholesale banking reported net income for the quarter was $261 million.

Please turn to slide 16.

Decrease of 38% year over year, reflecting higher noninterest expenses and PCL.

Wholesale banking reported net income for the quarter was $261 million, a decrease of 38% year over year reflecting higher non-interest expenses and PCL.

Adjusted net income was $275 million down 35% year over year.

Revenue was $1 $2 billion.

Adjusted net income was $275 million, down 35% year over year.

Up 1% year over year, reflecting higher global transaction banking trading related and lending revenue, partially offset by lower underwriting revenue and markdowns in certain loan underwriting commitment.

Revenue was $1.2 billion.

up 1% year over year, reflecting higher global transaction banking, trading related, and lending revenue partially offset by lower underwriting revenue and markdowns in certain loan underwriting commitments.

<unk> for the quarter was $26 million, an increase of $1 million from the prior quarter.

TCL for the quarter was $26 million, an increase of $1 million from the prior quarter.

Reported expenses increased 22% and include acquisition and integration related charges, primarily for the Cowen acquisition.

Reported expenses increase 22% and include acquisition and integration related charges primarily for the cow and acquisition.

Adjusted expenses increased 19%, reflecting continued investments in wholesale banking U S dollar strategy, including the hiring of banking sales and trading and technology professionals timing of employee related costs and the impact of foreign exchange translation.

Adjustive expenses increased 19% reflecting continued investments in wholesale banking's US dollar strategy, including the hiring of banking, sales and trading, and technology professionals, timing of employee-related costs, and the impact of foreign exchange translation.

Please turn to slide 17.

The corporate segment reported net income of $2 $7 billion in the quarter compared with a reported net loss of $150 million in the fourth quarter last year.

Please turn to slide 17.

The corporate assignment reported net income of $2.7 billion in the quarter compared with a reported net loss of $150 million in the fourth quarter last year.

The year over year increase is primarily attributable to gains from the mitigation of interest rate volatility to closing capital on the first horizon acquisition and from the sale of swap shares.

The year over year increase is primarily attributable to gains from the mitigation of interest rate volatility to closing capital on the first horizon acquisition and from the sale of SHWAP shares.

Lower net corporate expenses and a higher contribution from other items.

The increase in other items, primarily reflects the favorable tax impact of earnings mix and the recognition of unused tax losses.

lower net corporate expenses, and a higher contribution from other items.

The increase in other items primarily reflects the favorable tax impact of earnings mix and the recognition of unused tax losses.

Partially offset by lower revenue from Treasury and balance sheet management activities this quarter.

partially offset by lower revenue from Treasury and balance sheet management activities.

Adjusted net loss for the quarter was $10 million compared with an adjusted net loss of $65 million in the fourth quarter last year.

this quarter.

Adjusted net loss for the quarter was $10 million compared with an adjusted net loss of $65 million in the fourth quarter last year.

Please turn to slide 18.

The common equity tier one ratio.

Please turn to slide 18.

Yes.

Ended the quarter at 16, 2% up 126 basis points sequentially.

The common equity tier one ratio.

ended the quarter at 16.2%, up 126 basis points sequentially.

We had strong organic capital generation this quarter, which added 44 basis points to <unk> 81.

We had strong organic capital generation this quarter which added 44 basis points to CET1.

This was partially offset by an increase in <unk>, which decreased CET, one by 19 basis points.

This was partially offset by an increase in RWA which decreased CET1 by 19 basis points.

We saw a 13 basis point increase in CET, one related to the issuance of common shares under our dividend reinvestment plan.

We saw a 13 basis point increase in CET1 related to the issuance of common shares under our dividend reinvestment plan.

The sale of a portion of Td's investment and Schwab to provide the capital required for the Cowen acquisition increased CET, one by 49 basis points.

The sale of a portion of TD's investment in Schwab to provide the capital required for the Cowen acquisition increased CET1 by 49 basis points.

Relating to the first horizon acquisition, the net gain from the mitigation of interest rate volatility could closing capital increase CET one by.

Relating to the first horizon acquisition, the net gain from the mitigation of interest rate volatility to closing capital increased CT1 by 35 basis points.

35 basis points.

And an FX hedge increased <unk> by 12 basis points.

<unk> increased four 3% quarter over quarter, reflecting higher credit risk <unk>.

and an FX hedge increased C81 by 12 basis points.

RWA increased 4.3% quarter over quarter, reflecting higher credit risk RWA.

Credit risk <unk> increased $22 billion, or 5%, mainly reflecting the impact of FX higher volumes and risk migration.

Credit risk RWA increased $22 billion, or 5%, mainly reflecting the impact of FX, higher volumes and risk migration.

Market risk <unk> decreased $1 7 billion or 7%, reflecting lower exposure is partially offset by market volatility.

Market risk RWA decreased $1.7 billion or 7%, reflecting lower exposures partially offset by market volatility.

The leverage ratio was four 9% this quarter and the LCR ratio was 128% both well above published regulatory minimums.

The leverage ratio was 4.9% this quarter and the LCR ratio was 128%, both well above published regulatory minimums.

I will now turn the call over to RJ.

Thank you Kelvin and good afternoon, everyone. Please turn to slide 19.

I will now turn the call over to Ajay. Thank you Kelvin and good afternoon everyone. Please turn to slide 19.

Gross impaired loan formations increased by two basis points to 14 basis points this quarter.

Gross impaired loan formations increased by two basis points.

Afflicting, some normalization of credit performance.

to 14 basis points this quarter, reflecting some normalization of credit performance.

Please turn to slide 20.

Gross impaired loans was stable quarter over quarter and remained at cyclically low levels.

Please turn to slide 20.

Gross impaired loans were stable quarter over quarter and remained at cyclically low levels.

Please turn to slide 21.

Recall that our presentation reports PCL ratios, both gross and net of the partner's share of the U S. Strategic card Bcl's, we remind you that U S card PCL recorded in the corporate segment are fully absorbed by our partners and do not impact the bank's net income.

Please turn to slide 21.

Recall that our presentation reports PCL ratios, both gross and net, of the partner share of the US strategic card PCLs.

We remind you that U.S. card PCLs recorded in the corporate segment are fully absorbed by our partners and do not impact the bank's net income.

The bank's provision for credit losses increased $266 million quarter over quarter to $617 million or 29 basis points. The increase was largely recorded in the Canadian and U S consumer lending portfolios.

The bank's provision for credit losses increased $266 million quarter over quarter to $617 million or 29 basis points.

The increase was largely recorded in the Canadian and US consumer lending portfolios.

Please turn to slide 22.

The bank's impaired PCL was $454 million, an increase of 114 million quarter over quarter.

Please turn to slide 22. The bank's impaired PCL was $454 million, an increase of $114 million quarter over quarter.

Largely related to some normalization of credit performance in our Canadian and U S consumer lending portfolios.

largely related to

some normalization of credit performance in our Canadian and U.S. consumer lending portfolios. The banks' impaired provisions remained well below pre-pandemic levels.

The bank's impaired provisions remained well below pre pandemic levels.

Performing PCL increased by $152 million.

$163 million as reflected across the U S retail corporate and Canadian personal and commercial banking segments.

Performing PCL increased by 152 million to 163 million as reflected across the US retail, corporate and Canadian personal and commercial banking segments.

For 2022, the bank's full year PCL rate was 14 basis points compared to a recovery of three basis points in 2021.

For 2022, the bank's full year PCL rate was 14 basis points.

The higher full year PCL rate was due to its smaller current year performing release and moderately higher impaired provisions.

compared to a recovery of three basis points in 2021.

The higher full-year PCL rate was due to a smaller current year performing release and moderately higher impaired provisions.

Please turn to slide 23.

The allowance for credit losses increased by $445 million quarter over quarter.

Please turn to slide 23. The allowance for credit losses increased by $445 million quarter over quarter.

to slide 23. The allowance for credit losses increased by $445 million QoQ to $7.4 billion.

To seven 4 billion.

Reflecting the impact of foreign exchange deterioration in our economic forecasts, some normalization of credit performance and volume growth.

reflecting the impact of foreign exchange, deterioration in our economic forecasts,

Partially offset by release of overlays previously set aside for economic uncertainty.

some normalization of credit performance.

and volume growth.

partially offset by release of overlays previously set aside for economic uncertainty.

The bank's allowance coverage remains elevated to account for ongoing uncertainty relating to the economic trajectory and credit performance.

The bank's allowance coverage remains elevated to account for ongoing uncertainty relating to the economic trajectory and credit performance.

Yeah.

Now, let me briefly summarize the year.

Bank exhibited strong credit performance this year as evidenced by cyclically low gross impaired loan formations.

Now, let me briefly summarize the year.

The Bank exhibited strong credit performance this year, as evidenced by cyclically low gross impaired loan formations.

Gross impaired loans and impaired PCL loss.

While credit performance remains strong we saw some normalization in certain portfolios this quarter as credit metrics have come off their recent lows in.

gross impaired loans and impaired PCLs.

While credit performance remains strong, we saw some normalization in certain portfolios this quarter as credit metrics have come off their recent lows.

In addition, economic risks remain elevated reflecting persistent inflation and rising interest rates and the increasing risk of a recession.

In addition, economic risks remain elevated.

reflecting, persistent inflation and rising interest rates.

While results may vary by quarter, I expect PCL to be higher in 2023 in the range of 35 to 45 basis points as credit performance continues to normalize and the economic trajectory unfolds.

and the increasing risk of a recession.

While results may vary by quarter, I expect PCLs to be higher in 2023 in the range of 35 to 45 basis points.

as credit performance continues to normalize and the economic trajectory unfolds.

To conclude.

<unk> remains well positioned given we are adequately provisioned, we have a strong capital position and we have a business that is broadly diversified across products and geographies with that operator, we are now ready to begin the Q&A session.

To conclude.

TD remains well positioned given we are adequately provisioned, we have a strong capital position and we have a business that is broadly diversified across products and geographies.

Okay.

With that operator, we are now ready to begin the Q&A session.

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Thank you.

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The first question is from Gabriel <unk> from National Bank Financial. Please go ahead. Your line is open.

The first question is from Gabriel Deschamps from National Bank Financial. Please go ahead. Your line is open.

Hum.

I had a couple of questions here.

All right, take that Abraham. I have a couple questions here. Well, what actually just the all bank name, based on your calculation at seven basis points, you said a little bit smaller if I.

The all bank NIM based on the calculation of seven basis points.

A little bit small.

When you adjust for the trading and stuff.

Hum.

But if I can pull out to the segments, where you kind of look up a level deeper there.

I adjust for the trading stuff.

Can you hear me.

But if I compare that to the segments where Canada's up 11 and the US up 50, pretty huge. Can you give me a bit of a technical explanation as to why there might be some divergence there? Is that the wholesale funding issue at the top of the house or what?

Nicole.

More explanation as to why.

Using diversion theory that the wholesale funding issue at the top of the house or well.

Hi, it's Kelvin trend here I'll take that question so as.

As you said, we what we need to do we need to adjust it out for trading NII.

Hi, it's Kelvin Tran here. I'll take that question. So as you said, what we need to do, we need to adjust it out for trading NII. So the trading NII number is actually disclosed in our MD&A in the wholesale bank section. There's a footnote underneath the table. If you adjust for that and also for the trading loans for the NII number, you can adjust it

So the trading NII numbers actually disclosed in our MD&A in the wholesale bank section, there's a footnote underneath the table if you adjust for that and also for the trading loans for the volume you get to a.

Core or non trading NIM of 12 basis points quarter over quarter.

Okay, Okay, we calculated again.

Computer methodologies or.

My real question I guess is on the horizon.

Yeah.

The subtle shifts in timing expectations against the law school.

Well, we're expecting to close in Q fiscal Q1 call.

a subtle shift in timing expectations, I guess. You know, last quarter you were expecting to close in fiscal Q1, now first half. What's prompting the delayed expectation of closing?

What's what's prompting more below your expectation of closing.

Hi, Gabe this is Barry.

We already in December Gabe, So we thought its appropriate you know.

Hi Gabe, this is Bharat. You know we're already in December Gabe, so we thought it was appropriate.

Can you hear me game, yes.

This is Barrett. You know, we're already in December Gabe, so we thought it was appropriate. Can you hear me Gabe?

Okay, Alright, we already in December .

And so you know we don't control the timing of all the regulatory approvals, but we're confident that we'll get a closing within the timeline that we've put out.

Yes, I can. All right, we're already in December .

And so we don't control the timing of all the regulatory approvals, but we are confident that we'll get closing within the timeline that we put out. Because that comes after the first one,

Thank you.

Taking a closer look at anything are you anticipating having to make any.

Is there, I mean, are they taking a closer look at anything? Are you anticipating having to make any?

Adjustments to.

Oh yeah.

Stable.

adjustments to your product line up or your fee schedule in advance of the close?

The polls.

I'm not aware of anything of the sort do you are you mentioning.

Alright, well, thanks and enjoyable.

No, I'm not aware of anything of the sort you are mentioning.

Have a good holiday season.

Happy holidays to you as well Gabe.

Alright, well thanks and enjoy the rest of the year and have a good holiday season. Thank you. And to you as well Gabe.

Thank you. The next question is from many grauman from Scotiabank. Please go ahead. Your line is open.

Thank you. The next question is from Manny Gromman from Scotiabank. Please go ahead. Your line is open.

Hi, good afternoon wanted to stick to a discussion of the margin.

11 basis points in Kansas 51 in the U S and just wondering if you think we've hit peak margin expansion at T D or could we see coming quarters with bigger sequential increases in the margin.

Hi, good afternoon. I wanted to stick to discussion of the margin up 11 basis points in Canada, 51 in the US and just wondering if

You think we've hit peak margin expansion at TD or could we see coming quarters with bigger sequential increases in the margin?

Right.

It's Kelvin here.

So I would say first of all at the top of the House you know when you look at the total bank afford rates are.

Hi, it's Kelvin here.

Realize we expect that to be favorable to margins.

So I would say first of all at the top of the house when you look at the total bank if forward rates are realized we expect that to be favorable to margins both because of rising short rates and also for tractors re-pricing on rates or higher than off rates.

Both because of rising short rates and also for tractor is repricing.

On our rates are higher than off rates.

Big part of the margin expansion story is that we've seen significant rise in short rates. So that provided a I would say a turbocharged to their margin expansion.

A big part of the margin expansion story is that we've seen significant rise in short rates so that provided a turbo charge to the margin expansion.

And so it really depends on the rise in the short rates going forward.

And so it really depends on the rise in the short rates going forward. And I don't know whether Michael or Leo, do you have anything to add on the customer dynamics front or balance sheet mix?

And I don't know what their might call. Our deal do you have anything to add on the customer dynamics fine or balance sheet mix.

And just.

This is Michael and just for the Canadian personal banking I guess P&C overall.

Just Michael and just for the Canadian personal bank and I guess P&C overall, we expect NIM to improve in the near term, assuming that the forward curves that we see hold. I think the dynamics are lining up well for us and so we would expect to see some further expansion. With the

We expect NIM to improve in the near term assuming that the forward curves that we see hold.

I think the dynamics are lining up well for us and so we would expect to see some further expansion.

And many of them I would just I would just add the NIM for the quarter came in at 313, So a very strong 92 basis points up last.

And many I would just I would just add the name for the quarter came in at 313 So very strong 92 base points up last know on a year-on-year basis 51 base points on a quarter-on-quarter Basis as Kelvin described deposit margin expansion clearly driving that also We've had some good gains in terms of improvement in Treasury returns on our investment portfolio

On a year on year basis, 51 basis points on a quarter on quarter basis.

Basis as Kevin described deposit margin expansion clearly driving that also we've had some good gains in terms of improvement in treasury returns on our investment portfolio.

And those two things obviously have driven the result, as we look forward I agree with Michael and we'll continue to see some additional pricing power if the forward curve holds.

And those two things obviously have driven the result. As we look forward, I agree with Michael, and we'll continue to see some additional pricing power if the forward curve holds. I would expect though that beta begin to increase in the medium term. I'd say as we think about the balance of the year, there's going to be increased pricing sensitivity, certainly amongst the mass affluent.

I would expect though that data.

Begin to increase in the in the medium term I would say as we think about the balance of the year, there's going to be increased pricing sensitivity certainly amongst mass affluent high net worth and sort of institutional and commercial clients and so I would expect to see further improvement in nims, but on a more gradual basis.

high net worth and sort of institutional commercial clients. And so I would expect to see further improvement in NIMS, but on a more gradual basis over time.

Overtime.

And Leo just following up on that are I think we've heard from other banks.

Betas haven't changed as much as we would have expected given the rise in rates is that what you're seeing right now.

Leo, just following up on that, I think we've heard from other banks that betas haven't changed as much as we would have expected given the rise in rates. Is that what you're seeing right now? You're talking about an expectation for that to increase in the future?

You're talking about an expectation for that to incur.

The increase in the future.

I would say that was generally true I am seeing in the fourth quarter I do think we saw a little bit more inflection at the industry level, obviously, our own franchise is very core checking account.

Anyhow, I would say that was generally true. I am seeing in the fourth quarter, I do think we saw a little bit more inflection at the industry level. Obviously, our own franchise is very core checking account dependent, which gives us a little bit more pricing resiliency than some of our other peers. But the reality is in that mass affluent high net worth client, in the large institutional world.

Pendant, which is which gives us a little bit more pricing.

Our resiliency than some of our other.

Peers, but the reality is in that in that mass affluent high net worth client in the large institutional.

There is greater search for yield and greater search for alternative investment opportunities and so I would expect that to crystallize a little bit more of the subsequent quarters.

there is greater search for yield and greater search for alternative investment opportunities. And so I would expect that to crystallize a little bit more over the subsequent quarters.

And then just as a follow up broadly you know we've heard some banks talk about positioning for potential declines in rates.

And then just as a follow-up broadly, you know, we've heard some banks talk about positioning for potential declines in rates.

How are we supposed to TD to declining rates and.

I'll leave it there.

How exposed is TD to declining rates and

Yeah, So we look at that but.

So I would say that.

I'll leave it there. Yeah, so we look at that, but so I would say that it is reflected somewhat in our net interest margin disclosure. You would see a shock of rate hike or rate decline impacting our net interest income. But there are no concerns at this point, just because some of the EmbedauendEC is notously made, it's just because they can have an effect if they go a long way in saving money.

It is reflected somewhat in our net interest margin disclosure.

Yeah, so we look at that, but so I would say that it is reflected somewhat in our net interest margin disclosure. You would see a shock of rate hike or rate decline impacting our net interest income, so there's sensitivity there. So, I would say that it is reflected somewhat in our net interest margin disclosure.

A shock of rate hike or rate decline impacting our net interest income so so their sensitivity there.

Thank you.

Thank you. The next question is from Paul Holden from CIBC. Please go ahead. Your line is open.

Thank you. The next question is from Paul Holden from CIBC. Please go ahead, your line is open.

Good afternoon, so actually I'm going to continue with that line of questioning but just.

As sort of a different question would you consider.

Thank you, good afternoon. So actually I'm going to continue with that line of questioning, but just ask sort of a different question. Would you consider hedging some of that rate exposure? So taking advantage clearly of the upside today, but maybe some point within the next year if you think rates have topped out, you could protect and lock in some of that margin. Is that something you would think about doing?

Hedging some of that rate exposure, so taking advantage of it clearly of the upside today, but maybe some point within the next year. If you think rates have topped out you could protect and lock in some of that margin is that something that you would think about doing.

Hi, it's Kelvin.

Yes, we look at that.

And at the margin, but you have to look at both upside and downside and so on one hand, if you lock it in if rates decline then you benefit but inflation continues to be persistent and rate the rate hike and that.

Hi, it's Kelvin. Yes, we look at that and at the margin but you have to look at both upside and downside and so on one hand if you lock it in, if rates decline then you benefit but inflation continues to be persistent and rate hike then that would go against you. So it's a fine balance that we monitor.

That would go against you so.

It's a fine balance that we monitor.

Okay. Thank you.

Next question is with respect to your HELOC exposure and I guess, particularly in Canada. It's been a lot of discussion lately around variable rate mortgages, but for TD I'm more curious on the HELOC exposure, assuming it's also variable rate what kind of impacts are.

Got it. Okay, thank you.

Next question is with respect to your HELOC exposure and I guess particularly in Canada, there's been a lot of discussion lately around variable rate mortgages, but for TD, I'm more curious on the HELOC exposure assuming it's also variable rate. What kind of impacts are you seeing on your customers or changes in behaviour? Is this something we should be...

Are you seeing on your customers or changes in behavior or is this something we should be focusing on and worried about from a credit perspective.

Jay Let me start and I'll talk a little more.

focusing on and worried about from a credit perspective. Ajay, let me start and I'll talk a little more broadly around housing. You may have noticed from our macro outlook, we have revised our housing outlook.

Broadly around.

Housing you may have noticed from our macro outlook, we have revised our housing outlook downwards because of higher rates were not expecting a crisis, we're definitely expecting an unwind of some of the gains.

downwards because of higher rates. You know, we're not expecting a crisis. We're definitely expecting an unwind of some of the gains.

That have occurred since COVID-19.

But when I look at quality and when I look at quality across whether its HELOC, whether its fixed rate, whether it's variable I would say the asset quality is strong. So we look at distribution of scores, we look at how much equity customers have in homes.

that have occurred since COVID.

But when I look at quality and when I look at quality across whether it's HELOC, whether it's fixed rate, whether it's variable.

I would say that asset quality is strong. So we look at distribution of scores, we look at how much equity customers have in homes, we look at debt service levels, and yes there's a bit of an uptick, but it's generally robust.

Look at debt service levels, and yes, there is a bit of an uptick, but it's generally robust delinquencies formation charge offs. So.

Across all our books our quality is strong.

delinquencies formation charge off.

I don't know Michael if you wanted to add something.

Across all our books, our quality is strong.

I think that captures it and.

Nothing else Ted.

I don't know Michael if you wanted to add something.

Great I'm going to sneak in one more if that's okay.

I think that captures it.

Curious on the increase in the LCR ratio this quarter not unusual to see a jump around maybe two or three points from quarter to quarter, but seven points is a pretty big move. So maybe you can help us unpack that for us.

Nothing else to add. Great, I'm going to sneak in one more if that's okay. Just curious on the increase in the LCR ratio this quarter, not unusual to see it jump around maybe two or three points from quarter to quarter but seven points is a pretty big move so maybe you can help unpack that for us.

Yeah, Thats, partly because of pre funding for the first horizon transaction and also in our wholesale banking TD securities.

Yeah, it's partly because of pre-funding for the First Horizon transaction and also in Wholesale Bank and TD Security.

Okay. Thank you I'll leave it there.

Thank you.

Okay, thank you. I'll leave it there.

Question is from Doug Young from digital Bank capital markets. Please go ahead. Your line is open.

Thank you. The next question is from Doug Young from Desjardins Capital Markets. Please go ahead, your line is open. Hi, good afternoon. Just at page 16, I think it is in wholesale banking, now looking at expense growth, I guess it's for Riaz, there was mention of investing in the US dollar strategy and I just find that a little interesting in light of the fact that you were

Hi, Good afternoon, just a page 16 of the it isn't wholesale banking now looking at expense growth I guess is for me as it was mentioned of investing in the U S. Dollar strategy and I just find that a little interest in light of the fact that you are in the midst of closing the Cowen transaction. So.

Can you kind of help me understand.

What that relates to because I would've thought you would've waited.

in the midst of closing the Cowen transaction. So can you kind of help me understand what that relates to? Because I would have thought you would have waited to make further investments or at least stop investments in the US strategy until you onboarded Cowen, but maybe I'm thinking about this incorrectly. No, Doug, not at all. You have to remember that the US dollar strategy has been unfolding for a while now and then the acquisition of Cowen.

To make further investments or at least stop investments in the U S strategy until you've on boarded Cowen, but maybe I'm thinking about this incorrectly.

Doug I'm not at all the you have to remember that the U S. Dollar strategy has been unfolding for a while now and then the acquisition of Cowen was announced at the beginning of August .

So a fair bit of that is just the increased run rate that was put on prior to the acquisition being announced.

And.

There's a fairly robust our hiring of our front office individuals both in investment banking global markets and their related in there.

Support individuals as well as technology professionals are so it's mostly a just the annualized nation of the bills that had taken place prior to.

didn't

support individuals as well as technology professionals. So it's mostly just the annualization of the build that had taken place prior to. So this is year of year and I guess this is already being going. It's not used incrementally more sequentially. This was already in the running and I guess because you're doing this I mean is there a risk that we're gonna have a restructuring charge of some form as you.

technology professionals so it's mostly a just the annualization of the build that had taken place prior to. So this is year over year and I guess this is already being going it's not like you did incrementally more sequentially this was already in the running and I guess because you're doing this I mean is there a risk that we're gonna have a restructuring charge of some form as you onboard Cowen?

So this is year over year and I guess this is already being done it's not easy to incrementally more sequentially. This was already in the run in and then I guess because youre doing this I mean is there a risk that we're gonna have a restructuring charge of some form as you.

Onboard Cowen.

Well I think as you know a lot of the verticals.

There are Cowen is strong as compared to our TD Securities is strong there's not a lot of overlap. So I think that we would look to.

Well, I think as you know, a lot of the verticals where Cowen is strong as compared to where TD Securities is strong, there's not a lot of overlap. So I think that we would look to...

Usually manage our expenses in the normal course, but as you know when we acquired Cowen we didn't announce any particular synergies.

usually manage our expenses in the normal course, but as you know when we acquired Cowen we didn't announce any particular synergy.

From an expense perspective.

Okay, and then just lastly, Kelvin it looked like in corporate.

from an expense perspective.

It was a lower adjusted loss than normal.

Okay, and then just last, Kelvin, it looked like in corporate, it was a lower adjusted loss than normal. I mean, there's lots going in through that line item, so I get that, but is there anything unusual in there? Should we expect the loss to kind of go back to more of a normal loss level, if you can unpack that? Okay.

There's lots going in to that line item, so I get that but is there anything unusual in there.

Should we expect the loss to kind of go back to more of a normal loss level.

If you can unpack that.

Sure.

This quarter, we benefited from a lower tax rate and if you quantified that it's about $170 million even have an impact.

Sure, so this quarter we benefited from lower tax rates and if you quantify that it's about $170 million dollars of an impact.

And that related to anything in particular.

It's just business mix and unused tax losses. So you have there.

Can that relate to anything in particular?

These items that bounce around quarter over quarter, sometimes they're positive sometimes negative in this quarter.

It's just business mix and unused tax losses. So you have these items that bounce around quarter, over quarter, sometimes they're positive, sometimes they're negative, and this quarter, the items just happens to be larger of that magnitude. Okay, I'll leave it at that. Thank you.

The items just happens to be larger.

Some of that magnitude.

Okay I'll leave it at that thank you.

Thank you. The next question is from Lamar peso from <unk> Securities. Please go ahead. Your line is open.

Thank you. The next question is from Lamar Persaud from Coremark Securities. Please go ahead, your line is open.

Thanks, just looking at your sensitivity to higher interest rates and it looks like it's still relatively I think $1 2 billion.

Thanks. Just looking at your sensitivity to higher interest rates and it looks like it's still relatively high, I think 1.2 billion.

Increase in NII for 100 basis point increase in.

In rates across the curve.

That number is $1 $3 billion last quarter. So did I hear you right in that higher deposit betas are going to limit the upside and if so why isn't that showing up in this rate sensitivity table more meaningfully or is a rising deposit betas is simply not considered in this sensitivity.

increase in NII for 100 basis point increase in rates across the curve. I think that number is 1.3 billion last quarter. Did I hear you right in that higher deposit betas are going to limit some of the upside and if so why isn't that showing up in this rate sensitivity table more meaningfully or is our rising deposit beta simply not considered in this sensitivity.

Hi, it's Kelvin I'll take that question.

Betas are taken into account.

Hi, it's Kelvin. I'll take that question.

That model.

And as a matter of fact some of the.

betas are taken into account in that model. And as a matter of fact, some of the reduction in NIS quarter over quarter is due to the higher beta as rates rise, then you have less sensitivity to the next rate hike. But in that number, there are a lot of things that happen. There are also hedges that expires, and so that would add a lot of things that happen.

A reduction in NAV quarter over quarter is due to the higher beta as rates rise then you have less sensitivity to the next.

A rate hike.

But in that number there are a lot of things that happen. There also hedges that expires and so that would add.

Sensitivity to it but.

But it isn't there.

Okay. Thanks, and then one thing that stuck out to me was the 5% sequential mortgage growth in the U S. Can you help me reconcile what's driving such strong growth.

sensitivity to it, but it is in there. Okay, thanks. And then one thing that stuck out to me was the 5% sequential mortgage growth in the US. Can you help me reconcile what's driving such strong growth when we're seeing volume slowing across the industry? And then maybe talk about mortgage spreads in the US. Would it be fair to suggest that the

When were seeing volume slowing across the industry and then maybe talk about mortgage spreads in the U S. Whether it'd be fair to suggest that.

Spreads are tightening there and maybe it's a lesson the concern for TD, just given the excess deposit position.

Spreads are tightening there and maybe it's a less of a concern for TD just given the excess deposit position. Is that kind of the right way to think about why you guys are putting up such a strong mortgage growth in the US?

Kind of the right way to think about.

While you guys are putting up such a strong market growth in U S.

A lot more of this later thanks for the question.

You're right, we had a really strong mortgage quarter. So total balances grew 17% on a year on year basis, and I think this question came up last quarter as well two fundamental strategies driving the volume growth.

Lamar, this is Leo. Thanks for the question. You're right. We had a really strong mortgage quarter. So total balances grew 17% on a year-on-year basis. And I think this question came up last quarter as well. Two fundamental strategies driving the volume growth. One, we reintroduced an in-store direct origination model.

One we reintroduced an in store.

Direct origination model.

<unk> has been extremely well received and has allowed us to be able to.

Counteract some of the contraction trend that we've seen in the marketplace and second we've been successful in our correspondent mortgage business, attracting a high quality.

which has been extremely well received and has allowed us to be able to counteract some of the contraction trend that we've seen in the marketplace. And second, we've been successful in our correspondent mortgage business, attracting high quality mass affluent, high net worth mortgage relationships. That coupled with a sharp decline in paydowns.

Mass affluent high net worth.

Mortgage relationships that coupled with a sharp decline in pay downs meant that we saw a good balanced growth and we do think that will moderate a little bit as we go into 'twenty three but for the most part we think that the near term quarters will remain strong in terms of overall margins the margins have been relatively stable. So.

meant that we saw good balance growth. And we do think that will moderate a little bit as we go into 23, but for the most part, we think that the near-term quarters will remain strong. In terms of overall margins, the margins have been relatively stable. So we're not seeing a price competition that's outsized at this point. So we like the volumes that we're putting on.

We're not seeing a.

For a price.

Competition, that's outsized at this point so we like the volumes that we're putting on and so we'll continue to do that I would say one final thing we've also been.

Less active in terms of selling our mortgage portfolio, such that where we're seeing spreads we like we like the portfolio risk associated with it and that's giving us the ability to be able to build out our mortgage book a little bit more so you put all those factors together and I think it's it's been certainly positive in terms of our mortgage portfolio growth.

And so we'll continue to do that. I would say one final thing. We've also been less active in terms of selling our mortgage portfolio, such that we're seeing spreads we like. We like the portfolio risk associated with it, and that's giving us the ability to be able to build out our mortgage book a little bit more. So you put all those factors together, and I think it's been certainly positive in terms of our mortgage portfolio growth.

Thanks, I'll leave it there.

Thank you.

The next question is from Sohrab <unk> from BMO capital markets. Please go ahead. Your line is open.

Thanks, I'll leave it there. Thank you.

The next question is from Saurabh Movahedi from BMO Capital Markets. Please go ahead. Your line is open.

Thank you just one quick clarification first Kelvin do you think the total bank tax rate will go back to that.

Thank you. Just one quick clarification first. Kelvin, do you think the total bank tax rate will go back to that?

21, 22% effective.

Slide 23.

Let's put it this way this quarter is lower than normal.

21, 22% effective.

Kind of cloud 23. Let's put it this way. This quarter is lower than normal.

And with the last seven or eight quarters be consistent with what you would expect normal to me.

And with the last seven or eight quarters be consistent with what you would expect normal to be. Yeah.

Thank you and then just to clarify Barrett or Calvin I guess than the 7% to 10% EPS growth in 2023.

Thank you. And then just to clarify Barrett or Calvin, I guess, you know, the 7 to 10% EPS growth in 2023.

And you know the target maybe being exceeded met or exceeded in 2023.

Can you just.

you know, the target may be being exceeded, or exceeded in 2023.

Provide any guideposts is how much of that growth you would attribute.

Can you just provide any guideposts as to how much of that growth you would attribute?

Two existing versus acquired business.

Hard to split it.

to existing versus acquired business.

But precisely because of the timing of acquisitions, there's no certainty as to when exactly they close.

Hard to split it that precisely because timing of acquisitions, there's no certainty as to when exactly they close. But overall, when you think of the bank, you've got interest rates, which we've talked a lot about on this call as to what it does to TD's P&L, and you've got the acquisitions. So those, I would say, are plus points going into 23. And of course, the...

But overall when you think of the bank you've got interest rates, which you know we've talked a lot about on this call as to what it does to Tvs, a P&L and you've got the acquisition. So those I would say a plus points going into 'twenty three and of course, the the very good organic growth that the bank has boasted a over many years and I expect it will continue.

To do so next year.

the very good organic growth that the bank has posted over many years and I expect it will continue to do so next year.

On the other hand, we are.

In a complex operating environment geopolitical tensions that are out there and of course, there is the potential for an economic slowdown.

On the other hand, we are in a complex operating environment, geopolitical tensions are out there, and of course there is the potential for an economic slowdown. So the way I said it in my remarks, Sohrab, is on balance we feel we will meet or exceed the medium-term guidance that we provided, but it could shift based on the points that I've just made. If any one of those turns out to be dramatically different.

So the way I said it in my remarks, so Rab is on balance we feel you know we will meet or exceed.

The guidance the medium term guidance that we've provided but it could shift based on you know the points that I've just made if any one of those turns out to be dramatically different.

Then what we know today then of course, you know the numbers will change and that's how we've been thinking about it.

than what we know today, then of course the numbers will change. And that's how we've been thinking about it.

No I appreciate that I, just wanted to kind of distinguish between what where that screen.

Indigenous tea growth so to speak.

No, I appreciate that.

Absent the acquisitions.

Okay.

indigenous TD growth so to speak absent the acquisitions

Yeah.

Thank you. The next question is from <unk> Kim from Credit Suisse. Please go ahead. Your line is open.

Thank you.

Thank you. The next question is from JooHoo Kim from Credit Suisse. Please go ahead. Your line is open.

Yeah.

Alright, Thank you and.

Thanks for taking my question just wanted to stick with U S retail and I'm looking at the expenses up 11% year on year.

Hi, thank you and thanks for taking my question. Just wanted to stick with U.S. retail and I'm looking at the expenses up 11% year-on-year on just a basis. And I'm also looking at the total employees in that segment and that's up about 8% over that time. So I'm just wondering if you can speak to how much of the increase in expenses is the

And then just the basis and.

And I'm also looking at the total employees in that segment and Thats up about 8% over that time.

And so I'm just wondering if you can speak to how much of the increase in expenses. This quarter was due to inflation in that segment and also how you think about the pace of hiring.

this quarter was due to inflation in that segment, and also how you think about the pace of hiring from the business and whether we could see that FTE number kind of continue to climb up from here. Thank you. Thank you very much for the question, Jehu. Maybe just to give you a little bit of context, expenses up 11%, essentially two factors. One is inflationary pressures.

From the business and whether we could see that FTE number kind of continue.

Continue to climb up some here thank you.

Thank you very much for the questions you may.

Maybe just to give you a little bit of context expenses up 11%.

Essentially two factors one is inflationary pressures.

Both in terms of wage and other core expenses, but a very significant portion of it investment spending let me just describe some of the areas that we've been very deliberate about in terms of investing one we added to our retail and wealth advisory ranks part of that was making up for some lost ground.

both in terms of wage and other core expenses, but a very significant portion of it, investment spending. And let me just describe some of the areas that we've been very deliberate about in terms of investing. One, we added to our retail and wealth advisory ranks. Part of that was making up for some lost ground. The pandemic did result in higher attrition rates.

Pandemic did result in higher attrition rates and so we did hire to be able to bring back staffing levels to sort of a pre pandemic level.

So we did hire to be able to bring back staffing levels to sort of a pre-pandemic level. But we also, consistent with what I shared earlier in the year, we've been very focused in building out our wealth advisory ranks. And so that was another area of investment.

But we also are consistent with what I shared.

Earlier in the year, we've been very focused in building out our wealth advisory ranks and so that was another area of investment.

We also in our commercial banking.

Our teams we have been investing in our mid market and our specialty verticals and so I'm very focused on you know build.

We also in our commercial banking teams, we have been investing in our mid-market and our specialty verticals. And so very focused on building greater national scale in that area. And then finally we did something that would have influenced our FTE numbers, not necessarily our expenses, is that we did repatriate our cards servicing platform.

Building greater national scale in that in that area.

And then finally, we did something that would've influenced our FTE numbers not necessarily our expenses is that we did repatriate our cards servicing platform.

Which amounted to just under 400.

Overall employees and we did that because we wanted to upscale the actual services that we were rendering to our cards clients. So those are some of the big categories. In addition to that from a technology standpoint, we have been very focused on investing in digital.

which amounted to just under 400 overall employees. And we did that because we wanted to upscale the actual services that we were rendering to our CARDS clients. So those are some of the big categories. In addition to that, from a technology standpoint, we have been very focused on investing in digital and also investing in our CARDS next generation platform. So those are some of the areas that we've been investing in. We're quite comfortable.

And also investing in our cards next generation platform. So those are some of the areas that we've been investing in we're quite comfortable that those will allow us to continue to maintain a strong revenue growth going forward.

I would imagine your follow up question is going to be how do we look at think about expenses going forward I would expect us to moderate the rate of expense growth over the subsequent quarters and so we're deliberately mindful of our operating leverage focus.

that those will allow us to continue to maintain a strong revenue growth going forward. I would imagine your follow-up question is going to be, how do we think about expenses going forward? I would expect us to moderate the rate of expense growth over the subsequent quarters. We are deliberately mindful of our operating leverage focus.

Thank you that's very helpful and just one last one for me I wanted to go back to wholesale banking segment the loan growth from that segment, it's up 18% sequentially.

Thank you, that's very helpful. And just one last one for me. I wanted to go back to wholesale banking segment. The loan growth from that segment is up 18% sequentially. So wondering if you could let me know what role the results there looks like have come from perhaps financial sectors or some of the other sectors. Wondering what's from the growth and how we should think about that going forward.

Sequentially. So wondering if you could let me know what drove the results there it looks like <unk> come from perhaps a financial sectors or some of the other sectors wondering.

What drove the growth and how we should think about that going forward.

A J, it's react look there's been a really attractive growth hum.

There's been a really attractive growth in really all parts of our lending book, whether that's in corporate lending, in our prime businesses, in our securitized businesses. So it's quite widely spread out in the businesses. We'll get through it later, and thank you guys again, we'll see you guys next time. Bye.

In really all parts of our lending book, whether thats in corporate lending in our prime business is in a securitized businesses. So it's quite widely spread out between the businesses and ER.

I think we've been really happy with the business that we're doing with our clients and as we continue to add clients.

I think we've been really happy with the business that we're doing with our clients and as we continue to add clients.

I mean, obviously the environment.

For deals is it a has been a bit slower I would expect that growth rate to moderate a bit but.

I mean obviously the environment for deals as it has been a bit slower, I would expect that growth rate to moderate a bit, but as you know that can change very quickly depending on economic circumstances.

That can be there that can change very quickly depending on economic circumstances. So.

I feel pretty good about the growth that we were able to deliver in 'twenty two across the board.

I feel pretty good about the growth that we were able to deliver in 22 across the board.

Thank you.

Thank you.

The next question is from Mike Donovan from K B W. Research. Please go ahead your line is open.

Thank you.

Thank you.

The next question is from Mike Risvanovich from KBW Research. Please go ahead. The line is open.

Good afternoon, probably one for Michael.

And first off thanks for updating your disclosure on remaining amortization of the mortgage book, So I'm referencing the 25% that's greater than 35 years amortization one.

Thanks. Good afternoon. Probably one for Michael. And first off, thanks for updating your disclosure on remaining amortization in the mortgage book. So I'm referencing the 25% that's greater than 35 years amortization.

So what I'm wondering is.

Do you face any sort of regulatory or legal constraints in terms of how much you could renew.

And what I'm wondering is, do you face any sort of regulatory or legal constraints in terms of how much you could renew?

In terms of amortization. So so you've got a quarter of your book above 35, I'm guessing, there's probably a portion about 40 even.

in terms of that amortization. So you've got a quarter of your book above 35. I'm guessing there's probably a portion above 40 even. Is there some sort of constraint that you face? I'm trying to get a better understanding of how much leeway you may have when you have your customers renewing and for the ones that maybe potentially have a bit of a struggle to make a higher payment.

Is there some sort of constraint that you say, so I'm trying to get a better understanding of how much leeway you may have when you.

When you have your customers renewing and for the ones that may be potentially have a bit of a struggle to make.

To make a higher payment.

Yeah. So for the for the most part and you are right. We did first of all we did update the table to.

So for the most part, and you're right, we did, first of all, we did update the table to reflect current payment trends as opposed to the contractual obligation for the customer. And the contractual obligations haven't changed for a customer, and so if a customer is a 25-year term, even if they may be amortizing currently at a lower rate.

Reflect current payment trends as opposed to the contractual obligation for the customer.

Its contractual obligations haven't changed for a customer and so if a customer has a 25 year term even if they may be amortizing currently at a lower rate.

They still do have a 25 year term and so when the renewal comes the options are either reset the payment to reflect what's required in order to amortized over the contractual term from from origination or where you can actually reset the amortization basically re underwrite alone, but there we generally look to re underwrite them for you now.

They still do have a 25-year term. And so when the renewal comes, the options are either reset the payment to reflect what's required in order to amortize it over the contractual term from origination.

Or you can actually reset the amortization, basically re-underwrite the loan. But there we generally look to re-underwrite them for, again, a 25-year term. On a case-by-case basis, we'll look at longer terms, but come that moment when the renewal comes, we're generally looking to either reset to the initial term or possibly re-underwrite for a new 25-year term.

Again, a 25 year term on a case by case basis, we'll look at longer terms, but.

From that moment when the renewal comes we're generally looking to either.

Reset to the initial term or possibly re underwrite for.

Colorado, New 25 year term.

Okay.

The only the only additional comment.

We are watching the rate reset risk across.

Okay, so the only additional comment I'd add is, no, we are watching the rate reset risk across our fixed and variable books like very, very closely. You know, we've done a lot of stress testing, what happens at 5%, what happens at 6%. We've actually estimated potential.

Fixed and variables books like very very closely.

Done a lot of stress testing and what happens.

5% what happens at 6%.

Actually estimated potential.

Formations Prudential PCL and a lot of that thinking is already incorporated into our allowance.

formations, potential, PCL, and a lot of that thinking is already incorporated into our lounge.

formations, you know potential PCL and a lot of that thinking is already incorporated into our allowance So I just thought I'd share that.

I just thought I'd share that.

Okay. That's helpful. So so it's fair to say that you do have leeway theres no real limitation that regulators would.

Okay, that's helpful. So it's fair to say that you do have leeway. There's no real limitation that regulators would have. I don't see anything in the B20, correct me if I'm wrong, but no real limitation. So you aim for the 25 year or the original amortization period, but you will work with your customers and I'm guessing really try to limit any sort of disruption in that.

Would have I don't see anything in the B 20, correct me, if I'm wrong, but no real limitations. So you aimed for the 25 year or the original amortization period, but you will work with your customers and I'm guessing really try to.

Limit any sort of.

Disruption in that.

In your book.

We worked with our customers.

So on a case by case basis, but that aside the contractual amortization terms you know that today. They are generally 25 years.

In your book, we work with our customers on a case by case basis, but that aside the contractual anerization terms, they are generally 25 years. And if someone is slow amming today, there is an expectation under the obligation that when the...

And if someone's slow Amin today, there was an expectation under the obligation that window.

When the loan renews that the payment resets to reflect the initial term.

Okay. Thanks for the insight.

when the loan renews, that the payment resets to reflect the initial term.

renews that the payment resets to reflect the initial term. Okay, thanks for the insight.

Okay.

Thank you.

And we have a last question from Scott Chan from Canaccord Genuity. Please go ahead. Your line is open.

Thank you. And we have a last question from Scott Chan from Canaccord Danuity. Please go ahead. Your line is open.

Thanks, a lot just a quick clarification question for Jay Jay on the you you talked about a PCL ratio target for 'twenty 'twenty 335 to 40 45 bps was that a total.

Thank you so much. Just a quick clarification question first, AJ. You talked about a PCL ratio target for 2023, 35 to 45 beeps. Is that a total? Yes, that is total, but I do expect, like you go and look at 19 for example, a large part of that will be impaired.

Yes.

That is total, but I do expect that youre going to look at 19 for example, a large part of that will be impaired.

Got it Okay, and then a last question for Barrett, 8% dividend increase I am obviously very strong and I think it signals.

Okay, and then last question for Barrett 8% dividend increase Obviously very strong and I think it signals I really struggle organic outlook and then you've got the acquisitions coming and maybe talk about You know the reason for the increase now the amount and does this set the bar for? for TV to

I really struggle organic outlook and then you've got the acquisitions coming in maybe talk about you know the reason for the increase now the amount and does this set the bar for our TD to raise our dividend once a year like they did pre pandemic.

Thanks, Thanks, Scott for the question.

raise their dividend once a year like they did pre-pandemic. Thanks, Scott, for the question. I outlined earlier, somebody asked me about how we are feeling about next year and as you rightly pointed out, with the momentum we have, we have further rate increases that are...

And I I outlined earlier somebody asked me about how you're feeling about next year and as you rightly points pointed out with the.

With the momentum we have with a further rate increases that are.

Embedded in the forward curve with the acquisitions you know, we feel that we should be able to meet or exceed our.

embedded in the forward curve with the acquisitions, you know, we feel that we should be able to meet or exceed our target. But there are headwinds as well, things could change and when they change, they change quite dramatically. The economic environment, etc., etc., so I pointed that out.

Target and but there are headwinds as well things could change and when they change that changed dramatically.

Economic environment et cetera, et cetera, as I pointed that out.

On dividends we.

Don't look at it from that perspective, you know we wanted to look at the earnings power of the bank, we want to look at.

On dividends, we don't look at it from that perspective. We want to look at the earnings power of the bank. We want to look at the overall environment and feel very comfortable with what we've done this quarter. Generally, our view is we don't like to think about dividends every quarter or every little while. We like to think of it from a long-term perspective.

The overall environment.

And feel very comfortable with what we've done this quarter generally a view as you know we don't like to think about dividends you know every quarter or every little while we'd like to think of it from a long term perspective, but it depends on the circumstance is it's hard to speculate on future events and what.

But it depends on the circumstance. It's hard to speculate on future events and what may or may not happen. But very happy with what we've done today with the increase that we announced earlier.

May or may not happen, but really happy with what we've done today.

It depends on the circumstance. It's hard to speculate on future events and what may or may not happen, but very happy with what we've done today with the increase that we announced earlier. Fair enough. Thank you very much.

With the increase that we announced earlier.

Fair enough. Thank you very much.

Yeah.

Thank you there are no further questions registered at this time I will return the call back to Mr. Mrs. Ronnie.

Thank you. There are no further questions registered at this time. I will return the call back to Mr. Misrani. Thanks very much, operator, and thank you all for joining us today. A very strong quarter from TD, very happy with how the year has turned out. I would once again like to take this opportunity to thank our TD bankers around the world. They continue to deliver for all our stakeholders, including our shareholders.

So very much operator, and thank you all for joining us today, and a very strong quarter from TD very happy with how the year has turned out would once again like to take this opportunity to thank our TD bankers around the world. They continue to deliver for all our stakeholders, including our shareholders and it's terrific to see that.

<unk> continues to make progress on a consistent basis and if I don't see any of you before the holidays happy holidays to all of you and we will talk again in about 90 days. Thank you.

And it's terrific to see that the bank continues to make progress on a consistent basis.

And if I don't see any of you before the holidays, happy holidays to all of you, and we will talk again in about 90 days. Thank you.

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