TD Thrives: Year-Over-Year Mortgage Market Share Gains Amid Challenges!
In the competitive world of real estate lending, TD Bank is making waves with impressive year-over-year gains! While specific lender market share data remains under wraps, the buzz is that TD has successfully carved out a stronger position in real estate secured lending (RESL), according to insights from the bank’s COO and soon-to-be President and CEO.
Hold onto your hats, because personal mortgage volumes surged by 4% in Q4 compared to last year. What’s behind this growth? Sona Mehta, the Group Head of Canadian Personal Banking, credits their robust distribution network and innovative tools like TD Mortgage Direct. This platform is not just a game-changer; it’s achieving conversion rates that are nearly three times higher than traditional methods!
Launched just a year ago, TD Mortgage Direct is a breath of fresh air, revolutionizing the mortgage application experience with seamless online tools and direct access to knowledgeable mortgage specialists. Outgoing President and CEO Bharat Masrani emphasized that this channel is striking a chord with customers, modernizing how they receive tailored advice, and making the whole process smoother.
But it doesn’t stop there! Mehta revealed that TD is advancing to the next level with a specialized advice strategy. Branches now feature specialized bankers dedicated to real estate secured lending and investments, creating a dynamic ecosystem alongside the mobile mortgage sales force. The results? Strong performance that’s turning heads!
This approach not only enhances customer relationships but also strengthens retention and profitability, proving TD’s commitment to excellence.
In an exciting twist, TD has observed a reduction in average remaining amortization periods across its mortgage portfolio. This trend mirrors shifts noted by other banking giants, showcasing a collective evolution in the lending landscape.
As one of Canada’s leading banks offering fixed-payment variable-rate mortgages, TD is adapting to new market dynamics, especially following recent interest rate cuts by the Bank of Canada. The latest figures reveal that a mere 8.7% of its portfolio now carries an amortization period of 35 years or more—a significant drop from a staggering 27.4% peak earlier this year!
Remaining Amortizations for TD Residential Mortgages
| Q4 2023 | Q3 2024 | Q4 2024 | |
|---|---|---|---|
| 15-20 years | 14.1% | 15.4% | 16.8% |
| 20-25 years | 31.5% | 32.2% | 33.3% |
| 25-30 years | 24.6% | 27.6% | 28.9% |
| 30-35 years | 1.4% | 1.9% | 2.4% |
| 35 years and more | 19.2% | 13.3% | 8.7% |
TD Earnings Highlights
2024 Net Income (Adjusted): $8.8 Billion (-17% Y/Y)
Q3 Net Income (Adjusted): $3.2 Billion (+8% Y/Y)
Earnings Per Share: $1.97
| Q4 2023 | Q3 2024 | Q4 2024 | |
|---|---|---|---|
| Residential Mortgage Portfolio | $261.3B | $269.1B | $270.9B |
| HELOC Portfolio | $117.6B | $121.2B | $123B |
| Percentage of Mortgage Portfolio Uninsured | 83% | 83% | 83% |
| Avg. Loan-to-Value (LTV) of Uninsured Book | 50% | 51% | 52% |
| Portfolio Mix: Percentage with Variable Rates | 37% | 34% | 34% |
| % of Mortgages Renewing in Next 12 Months | 13% | 59% | 59% |
| Canadian Banking Gross Impaired Loans | 0.14% | 0.16% | 0.18% |
| Canadian Banking Net Interest Margin (NIM) | 2.78% | 2.81% | 2.80% |
| Total Provisions for Credit Losses | $878M | $1.072B | $1.109B |
| CET1 Ratio | 15.2% | 12.8% | 13.1% |
Recent Conference Call Insights
- TD reported that deposit growth has outstripped loan growth, with personal deposits climbing 6%. CFO Kelvin Vi Tran noted, “TD’s stable retail and commercial deposit base is our cornerstone for long-term funding.”
Addressing the $3 billion AML-related fines:
- TD has temporarily put its medium-term financial targets on hold as it undergoes a thorough strategy review following recent U.S. sanctions for inadequate money laundering monitoring.
- This review is anticipated to pose challenges in earnings growth, prompting a pause on previous targets aiming for 7-10% earnings per share growth and 16% return on equity, with new targets expected by late 2025.
- “We’re re-evaluating our business mix, focusing on profitability and risk-adjusted returns, and assessing where to invest and divest,” stated incoming President and CEO Raymund Chun.
- TD is actively addressing its AML compliance gaps, aiming to complete most remediation actions by the end of 2025.
Note: The information provided is subject to change and should be verified for accuracy.
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Last modified: December 5, 2024
