Bharat Masrani - Chief Executive Officer Riaz Ahmed - Chief Financial Officer Ajai Bambawale - Chief Risk Officer Greg Braca - Chief Executive Officer, TD Bank America's Most Convenient Bank Teri Currie - Group Head, Canadian Personal Banking Bob Dorrance - Group Head, Wholesale Banking Gillian Manning - Head of Investor Relations

Good afternoon, ladies and gentlemen. Welcome to the TD Bank Group Q3 2021 Earnings Conference Call. I would now like to turn the meeting over to Ms. Gillian Manning. Please go ahead, Ms. Manning.

Thank you, operator. Good afternoon and welcome to TD Bank Group's third quarter 2021 investor presentation. We will begin today's presentation with remarks from Bharat Masrani, the bank's CEO, after which Riaz Ahmed, the bank's CFO, will present our third quarter operating results. Ajai Bambawale, 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 Teri Currie, Group Head, Canadian Personal Banking; Greg Braca, President and CEO of TD Bank America's Most Convenient Bank; and Bob Dorrance, Group Head, 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 are applied in making these forward-looking statements. 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. I would also like to remind listeners that the bank uses non-GAAP financial measures to arrive at 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. Bharat will be referring to adjusted results in his remarks. Additional information on items of note, the Bank’s reported results and factors and assumptions related to forward-looking information are all available in our Q3 2021 Report to Shareholders. With that, let me turn the presentation over to Bharat.

Thank you, Gillian, and thank you, everyone, for joining us today. Q3 was a strong quarter for TD, with net income after tax of $3.6 billion and EPS of $1.96, well above last year's levels and just shy of our record Q2 results. We had strong revenue growth in the Personal and Commercial banking businesses as rising customer activity drove higher volumes and fee income and margin pressure eased. Wealth, insurance and wholesale earnings moderated, but remained well above pre-pandemic levels and aggregate AUA and AUM across our Canadian and U.S. wealth platforms surpassed $1 trillion for the first time. Our CET1 ratio ended the quarter at 14.5%, reflecting these strong fundamentals and good credit conditions against the backdrop of an improving macro environment. This capital position gives us considerable flexibility to pursue organic and inorganic growth opportunities, as well as return capital to shareholders when current restrictions are eased. As always, we will be disciplined in our approach, deploying capital thoughtfully and in support of our long-term strategic objectives. I'm very pleased with our performance this quarter, and encouraged by the progress we are seeing in the North American economy and across our client base. The pandemic is still very much with us, but there’s growing evidence that everyone is learning how to manage through it. Last quarter, I said that as economic conditions normalize, TD strength would come to the fore. That is exactly what is happening. We're adding new customers and deepening existing relationships and we look forward to supporting our customers through the next phase of the recovery with advice and solutions to meet their revolving financial needs leveraging our One TD model. Our Canadian Retail segment earned $2.1 billion in the third quarter, with strong revenue and volume growth. The Personal and Commercial bank had…

Thank you, Bharat. Good afternoon, everyone. Please turn to slide nine. At this quarter, the bank reported earnings of $3.5 billion and EPS of $1.92 and adjusted earnings were $3.6 billion and adjusted EPS was $1.96. Revenue was even on a year-over-year basis, continued strong volume growth and higher fee income in the retail segments were offset by lower wholesale revenue and the impact of foreign currency translation and lower margins. Provisions for credit losses was a recovery of $37 million as impaired PCL was more than offset by a performing PCL release. Expenses increased 6% year-over-year, mainly reflecting an increase in the retailer program partner net share of profits from the U.S. Strategic Card portfolio, primarily on lower PCL. Absent the partnership of PCL adjusted expenses increased 1%. Because the year-over-year change in PCL remains large, the accounting for the U.S. Strategic Cards portfolio program continues to have a significant impact on expenses, as well as total bank pre-tax, pre-provision earnings and operating leverage. Slides 22 to 23 of the presentation show how we calculate PTPP and operating leverage at the total bank level by removing this impact, along with the impact of foreign currency translation, which was significant again this quarter. The slide showed that total bank PTPP was up 3% year-over-year and 11% quarter-over-quarter, reflecting strong revenue growth in our retail segments, partly offset by a decline in wholesale revenue. Please turn to slide 10. Canadian retail net income was $2.1 billion, up $862 million year-over-year, and on an adjusted basis net income increased $837 million year-over-year. Revenue increased 9% reflecting higher fee based revenue in the banking and wealth businesses and higher loan and deposit volumes, partially offset by lower deposit margins. Average loan volumes rose 7%, reflecting growth in personal and business volumes, average deposits…

Thank you, Riaz, and good afternoon everyone. Please turn to slide 15. Gross impaired loan formations decreased 3 basis points quarter-over-quarter, 11 basis, a 16 year low and were lower across all segments. Please turn to slide 16. Gross impaired loans declined 3 basis points or $152 million quarter-over-quarter to $2.65 billion, reflecting the ongoing impact of support programs, customer resilience and the economic recovery. Please turn to slide 17. Recall that our presentation reports PCL ratios, both gross and net of the partner’s share of the U.S. Strategic Card PCLs. We remind you that PCLs recorded in the corporate segment are fully absorbed by our partners and do not impact the bank's net income. The bank recorded a PCL recovery of $35 million in the quarter, reflecting a performing allowance release partially offset by cyclically low impaired provisions. Please turn to slide 18. Bank’s impaired PCL was $244 million with all segments contributing to $141 million quarter-over-quarter decrease. Performing PCL was a recovery of $279 million this quarter, compared to a recovery of $758 million last quarter. The current quarter recovery reflects additional allowance releases in the Canadian retail, U.S. retail and corporate segments. Please turn to slide 19. The allowance for credit losses decreased $258 million to $7.7 billion quarter-over-quarter, reflecting a performing allowance release, largely related to continued improvement in credit conditions. In summary, credit performance has trended positively this year as we have progressed through the pandemic, and these sales may continue to be relatively low through the balance of the fiscal year. While credit performance has been satisfactory, uncertainty associated with the ultimate credit impact of COVID-19 remains elevated and credit results may vary by quarter. TD however remains well positioned to manage through the balance of the pandemic 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.

Thank you. We will now take questions from the telephone lines. [Operator Instructions] The first question is from Gabriel Dechaine with National Bank Financial. Please go ahead.

Woohoo! Number one. First of all, Bob, congratulations on the retirement and good luck in the next phase and congrats to Riaz for stepping in there. So as far as my question goes, it's for the U.S. business. I saw that you made some changes to your deposit product line up. You added one that doesn't charge overdraft fees anymore? And then the, I guess the existing product, some more – some curves or limits on how many times you can charge overdraft and at what level they are triggered? Is this the stuff that's going to have any noticeable impact on the revenue line in the U.S. in coming quarters, because I understand that the source is a pretty financial one?

Is that per annum or per quarter?

Okay, all right. Well, thanks a lot, Greg. I appreciate the quantification there and the rationale, which I totally understand as well. Thank you and enjoy the rest of your summer.

Thank you. The next question is from Doug Young with Desjardins Capital Markets. Please go ahead.

Hi! Good afternoon. Just Bharat, in your opening remarks, you talked a bit about P&C margin pressure easing. So the question maybe is more to Teri and Greg, but – and for Riaz, but have we – I guess the question is, have we hit a trough in NIMs at the divisional level? Or is there structurally some further pressure that we should be expecting any guidance on that side. And then as we roll that up to top of the house, is there anything else in corporate that could cause some noise in NIMs as we go forward? And maybe Greg, within your answer, was there any impact from the PPP prepayment on margins in this quarter? Thanks.

Let me just, just from an overall bank perspective, Doug, this is Bharat – and then pass it on to Teri and Greg to talk about each of our major businesses. But generally, this number keeps on bumping around as you’ve heard. Generally, there's been a downward pressure on this, so quarter-to-quarter, it can bump around. But as long as rates are where they are and business continues to grow, there may be pressure, downward pressure. Without a doubt, a lot of the repricing that has occurred, we're coming towards the end of this cycle rather than towards the beginning of this cycle. So why don't I pass it over to Teri, perhaps she can comment on your divisional question and then maybe Greg can pick it up at his end, and then Greg can pick-up your question on the PPP loans.

Okay. Thanks, Bharat, it’s Terri. I would say there's not a lot to add from our business perspective to what Bharat had said. We were pleased that the pressures eased and in fact margins were flat sequentially. There are still –there’s still downward pressure going forward and that's again there are a lot of moving parts, so not a lot to add Bharat to what you said.

Well, thanks for the question. And the way I'd say about the U.S., I think, Bharat categorized it very appropriately. In any given quarter, this thing will bump around a bit. But I would say, the general direction, it could still have some pressure in subsequent quarters and it's mostly because what we're seeing is we're still seeing the mix of the business in deposits. Really overwhelming loan growth and deposits continue to come in at a very robust pace, even though we still have some of that growth in our year-over-year comparisons at this point and still growing double digits. The other aspect of it as we know is that while the long rates – while the short end of the curve is in the base year-over-year, you still have some pressure on the long end as we reprice investments that are maturing and there's still some downward pressure there. What I was pleased to see in this past quarter is some stabilization and strengthening in our loan margins, which was very constructive as we were up 1 basis point quarter-over-quarter. And to answer your question directly PPP in this quarter, it may had, maybe 2 basis points of impact to the upside.

Okay. And Riaz, there's something as I pulled that up to the top of the house, none of that’s surprising but as I pull up to the top of the house, there’s nothing else that I should be thinking about at the corporate level?

No Doug, not in a structural way. I mean, Teri and Greg have called out balance sheet flows and the volatility in rates and market conditions, but sometimes sort of in the corporate segment, you can see some volatility come out from hedging arrangements and issues like that. So I would say that to echo Bharat’s comments that we're kind of more into closer to just business as usual developments on margins as some of the rate cut impacts that we saw, the significant rate cute impacts we saw last year are now kind of in our year-over-year sense, so it worked out.

Perfect. Helpful. And then just second, Teri, on the wealth management earnings, they were down $45 million sequentially from last quarter sequentially. But can you talk a bit about what drove this? I was a bit surprised by that and is there anything unusual in there?

So, thanks for the question. I guess I would say, Wealth Management was up 16% year-over-year; there was a sequential decline, as you mentioned. Really, that would be all to do with certain levels of trading activity. You can see in the appendix of the presentation on Page 25, sort of the makeup of the wealth earnings. And so I guess I would comment that real strength in the advisory parts of the business, Q3 was our highest Q3 ever for mutual fund, long-term mutual fund net sales, and I think we haven't seen levels like that back to probably 2015 or something like that. So real strength and that's really a tribute to the investments that Leo Salom and our teams have been making in advisors and in capabilities to serve our customers. And on the transaction revenue, I mean, we probably come from 3x what would have been the normal rate pre-pandemic down to something like 2x what we would have seen. And I think as we think forward around transaction revenue, we would still expect it to remain above pre-pandemic levels.

Helpful. Thank you.

Thank you. The next question is from Meny Grauman with Scotiabank. Please go ahead.

Hi! Good afternoon. This is a question regarding loan growth in P&C Canada. When I look at TD and track it versus the pure average, it looks like TD’s been lagging the pure average since about Q1 ‘20. So when I look at that, I wonder what's going on. One thing that comes to mind is that you adjusted your risk appetite more aggressively as a result of COVID and certainly the gap with peers appears to have enlarged around the height of COVID. So I'm just wondering if that is in any way part of the story and then I have a follow-up.

So, maybe I'll step back. Really pleased and you know we're really paying attention to what are those signs of momentum and I think our sequential performance was very strong across the board for P&C. If I look at lending and sort of break it apart, you know commercial lending was really strong this quarter, and that had three elements to it; one was the wells acquisition. But even without that, real strength in growth and commercial lending, and we saw that with some commercial loan utilization coming back. Obviously its still well-off pre-pandemic levels, but kind of Q1 was the dip and it's continued to – we’ve continued to see utilization grow since then, so that's a positive and there's room to grow there. And then real estate and sort of any real estate related businesses, obviously there's real strength in demand there and so commercial was a real source of strength. Real estate secured lending, on a sequential basis we were a bit behind the peers. If you look at market share data for the 2021 calendar year, what's been reported to-date given the scale of our business over the first four months of the calendar year, we did take share. That may bump around over the next few quarters, but I'm confident with the investments that we've made in advisors and capabilities for our customers that will see us continuing to build that market share position over the coming year. And then credit card is obviously another component and to the specific of your question, both for unsecured personal lending and credit cards, we would have seen both the economic activity impacts, which disproportionately given our particular cards mix towards travel and premium cards you know has impacted us. Having said that, you would have seen in this quarter you know unbelievable sales results strength, 21% up year-over-year. So we're really seeing the economic activity come back in spend, and we're seeing that in a time when still travel is about 62% off sort of the levels pre-pandemic. Part of the story is the return to some of the risk strategies that we've been a little more cautious on through the pandemic. Things like balance transfer and limit increase offers and those are predominantly back end market and we should see the benefits of those going forward. If you look at Q3 results, interest bearing loans are down slightly, but promo loans in the free period are actually up, and historically those turn into interest bearing loans over a period of time. So I think we're well positioned, both with travel to come back, international travel and FX in particular, and then these offers being back in market and the breadth of our product availability and our partnerships in cards to capture demand going forward.

And just if I can turn in a comment or two, you know from my perspective there's really no change in risk appetite in Teri’s business and as she outlined, there was some selective tightening during the pandemic that’s for the large part reinstated. The other comment I’d make is in the risk of department. We certainly look at the origination quality very closely and we’re satisfied with what we're seeing.

Just as a follow-up, Teri how important is it to get back above average? Is that something you track or you don't look at it that way? And then when do you expect to get above average?

So in the – so I guess commercial I'd say going really well. In terms of real estate secured lending, as I mentioned the percentage growth versus the scale of our business and the share growth, we are actually taking share in the first four months of the year and expect to continue to take share going forward. So comfortable that we've got the right strategies and investments in place. And then on credit cards, I would attribute you know kind of the middle of the pack right now and I would attribute that again to the mix of the book. We've got the Amazon partnership, which is unique to TD and delivering great results. Bharat mentioned the Schwab’s [ph] points redemptions that are only available to TD customers. We have the partnerships through Aeroplan, including a unique capability for Canadians to get bonus offers through Starbucks and you may have just seen an announcement that Aeroplan will be partnering with the LCDL, so another great opportunity for TD cardholders holders only. And then the Instacart subscription, sort of work that we're doing. So I feel overall like we are well positioned. There's nothing sort of standing in our way as economic activity returns to regaining the leadership position.

Thank you guys.

Thank you. The next question is from Ebrahim Poonawala with Bank of America. Please go ahead.

Good afternoon. I guess just Teri maybe, sticking with credit cards, there's been a fair amount of conversation around BNPL over the last few months. As you think about the growth of that product, one, remind us everything that you are doing in terms of partnerships to grow that; and secondly, given just your positioning in the credit card business, both in the U.S. and Canada, do you agree with the view that the economics of the cards business and what that business might look as we emerge and come out of the pandemic is likely to be very different, impacted by the liquidity that the consumers have and the adoption of the BNPL?

There's a lot in that question. Let me start with sort of the end of your question, on the economics of the business. So as I talked about real strength in customer activity in there for other income was very strong, and I would think that as that activity continues, we would continue to see strength there. Clearly what – you know we are building loan balances, but that will lag the customer activity and – but I have no reason not – I believe that we will have sequential loan balance growth sustained over the coming period of time as the activity returns, and that will obviously lead to further profitability. So I don't see any sort of permanent impact. It's a timing issue from my perspective more than an issue. As it relates to Buy Now Pay Later, we are paying attention to this evolution. I don't see it in the near term being an impact to our ability to continue to grow profitably. Having said that, we are playing in the space with our MD&A card offering. We do have a post purchase installment plan capability that's been in market for a number of months and it has – it's worked well, and we built that in such a way that it is leverage able in our Visa credit card portfolio and so that's something that we'll continue to evaluate. And then in the U.S. business, you may be aware that we have both pre and post purchase capability in the retail card services business. And we have also an opportunity with select merchants in a partnership with a fintech to do point-of-sale purchase, installment lending. And so one of the things TD’s done a great job of is sort of leveraging capabilities on either side of the border, learning on either side of the border and then implementing as it makes sense for our customers going forward. So I'd say it's a space we’re paying attention to. I don't see it having any material impact in the near term and we've got good experience in the product.

That’s helpful, thank you. And I guess just Bob, let me add congratulations to both of you. Maybe a word on the wholesale business. You've been investing and growing that for the last number of years. Give us a sense of, as we come out of this, where are the market share opportunities for TD in the wholesale business? Is it a product, is it a geography, and kind of how do we think about where we are in the market share growth opportunity and outlook there for the business?

Bob, you can really set this up for Riaz.

I could set it up and give the responsibility to Riaz. So it definitely is in the U.S. dollar business Ebrahim, of course in the U.S. region, but also in U.S. dollar products globally and think the big opportunities for growth is just the ongoing addition of corporate clients which we're growing organically. We continue to invest in adding people and adding credit relationships, enhancing those relationships with the introduction of the product suite that we've been building. We've more recently invested in U.S. asset securitization products, asset backed securities. You know that we have whereas adding to our corporate bond capabilities. Now we're very focused as well on how we can do more in the private equity part of the landscape, because that is really growing as you all know. And so we're – we've been building out relationships with the private equity, major private equity funds in the U.S. and the mid cap ones as well where they set the product suite. We’ve been focused on – also been focused on the Canadian European pension clients that have active interest in that market as well, adding to our product capabilities in a leverage financed high yield bond markets, etc. So we are seeing growth there, lots of opportunity for growth. It's a very large market. We're looking to focus on the segments of that market that we are comfortable and have expertise and can add increasingly to. On the product side we're also continuing to build the prime service business. We continue to build our energy and commodity trading businesses, our equity structured product businesses. So there's lots of opportunity, but we are doing this organically and they do take time. We've more than doubled our workforce in the U.S. in the last seven to eight years and we're adding to it this year as well, and we will add over the next number of years. So that, I think it's important. It will diversify our business model. You know we all fight for market share in Canada, but Canada’s been – you know it’s a relatively mature market. It's not like the U.S. is immature, but it's just much, much larger. And we've also been working hand-in-hand with Greg’s team as to how we become increasingly successful as being a good partner in pursuing universal banking model in the U.S. and that's showing lots of opportunity and we look forward to continue to do this on.

Thank you.

Thank you. The next question is from Paul Holden with CIBC. Please go ahead.

Thank you. Good afternoon. I didn't think I'd be asking this question to steep into the Q&A session, but I guess I'll ask on the discount broker threat in Canada with one of your competitors moving commissions to zero. How do you view that competitive threat and what strategies will you use to retain clients and assets?

So it's Terry. Thanks for the question, Paul. Maybe I'll just level set, because I know there's been some attempt to quantify what this could mean if a similar strategy was taken by us, and so I’ll start with about 1% of TD’s total revenue, it would be how we would estimate it. There's a broker dealer fees in commissions line one in the subpac page six and it's about 50% of that line would be represented by a change that would be similar. So just to give you the quantification, I guess I'd start with, we have a unique and differentiated offering in TD Direct Investing, and so I think we provide significant value that enables our customers and clients to achieve their goals with us and also to feel very well informed through our industry leading, learning center and tools and capabilities that we provide the dashboards with WebBroker and Thinkorswim. We have unique trading offerings. We have advisors who are available and specialists who are available to our customers, and we continue to really add content customers who leverage our learning content, provide us with very high satisfaction scores, like 20 points ahead of those that don't, and so I think that we have an offering and a platform that is a very unique and adds significant value. And so our starting point wouldn't be that we need to make a change. Obviously we'll continue to evaluate what happens in the marketplace and continue to make the right decisions for our business. I would also allow for that – you know we have recently launched TD GoalAssist, and so we have a new offering that is available to customers who really are self-service investors, where they want to follow a plan, there's no minimums, there's no monthly fee, no commissions for trading TD ETFs. So there is an offering sort to meet the breadth of needs of Canadian investors that we feel very confident will continue to win in the future.

Great! That's a very helpful answer. And then just one more for me, and I guess a bigger picture one. The federal government announced proposals around open banking relatively recently. So just wondering what your thoughts are around open banking as a potential risk or opportunity and how TD is prepared for that eventuality.

Thanks. It's Teri again. And so this has been a file that we’ve paid a lot of attention to. Obviously the ability for customers to share their data safely and securely with full knowledge of where it's going and how it's being used is incredibly important for us at TD and we've talked about that over the years. I think we're very well prepared and interested in continuing to leverage data and third party data in particular for our TD customers and think that we have some unique ability to do that. We've been involved in the U.S. marketplace in standing up a data sharing platform [inaudible] and by the end of this year, along with other large banks in the U.S., we'll be able to using APIs share data, as customers have asked us to in an appropriate and safe fashion. And so again, another example of where we're able to take learnings from one market and apply them in another. So we look forward to the continuing evolution of open banking. We also think an industry led solution like in the U.S. makes a lot of sense in some other global markets. You know this has been put forward as a response to Unbanked, that's a very small population in Canada, and I would say from a TD perspective we think our Canada Post alliance will be a way to get at unbanked indigenous communities across the country. And then often it's talked about as a way to help customers switch bank accounts. More cust – very few customers switch, but more customers switch in Canada than in other markets that have enabled this capability. So I don't see it as an access requirement, but what I do see is for customers who want to have the ability to have their data shared, we will be well positioned to take advantage of that capability and help them meet their goals.

Great! Thank you. That's it for me.

Thank you. The next question is from Nigel D’Souza with Veritas Investment Research. Please go ahead. Nigel D’Souza: Thank you. Good afternoon. I wanted to first start off on a quick question related to trading revenue. When I look at the income statement, there's a trading income loss there of about $60 million and that's against, you know on the segment level as wholesale banking and trading related revenue of $467 million. So I was wondering if you could just provide some color on the reconciliation there between that and what drove at the bank level that loss that we're seeing this quarter?

Nigel, let me take that, its Riaz. As you know, in trading products you can have a combination of both interest income as well as gains and losses that materialize from the daily flows. And so the accounting for that is that the interest income and taxable equivalent dividends and what not going to NII lines and then the market gains and losses going to the other income lines. So what we're doing in the subpac is we break that all out for you and present it as a trading related revenue, which is actually the proper line to focus on because the trading gains and losses that gets offset with NII lines as well to come up with that trading related number is how I position it, but unpacking it is a set of complexity between line items that can be very detailed. So better to just focus on the trading related line item as a way of comparing quarter-to-quarter trends and how our global markets business are doing. Nigel D’Souza: Okay, that's helpful. Maybe I'll look into the details offline. If I could just pivot on to your allowances and when I look at TD release this quarter, it's a appears that TDs being a bit more conservative than some of your peers in releasing allowances on your performing loans. And I was wondering if there's anything you're seeing that makes you more cautious or more conservative or maybe some color on how you're thinking of how the reversal would play out over the coming quarters?

Yes. It's Ajay, let me share my thoughts with you. I can't speak about the peers, but sort of if you go back and look over three quarters, you will find that we have released 40% of the reserves we built since COVID and those reserve releases are really driven by two things, you know the movement in macro and then the second is credit conditions. This quarter what I would say is the delta variant was considered in greater detail and mostly I would say in our downside case. So what we did is we selected a tougher downside case, which is a global slump, and that reflects that countries including Canada and the United States struggle to control the virus, and this could lead to additional containment measures. We also added some more weight on the downside, both for Canada and the U.S. So it's really the delta variant that led to the overall macro factors tempering our release this quarter. And then if I look ahead, there are possibilities of course of future releases, and I think those would largely be driven by macro conditions. We would also look at the forward looking uncertainty to that extent it reduces. There are possibilities of additional releases. Again, as Bharat said, the pandemic is not over. So you should expect continued prudence from us. So let me pause there. Nigel D’Souza: Yes, that's helpful. Just a quick clarification on the delta variant. It seems to be having more regional impact in the U.S. So are you seeing something difference in the Southeast footprint versus your Northeast or do you think about it regional?

Well, what we know is it's spreading and right now it may be reasonable, but again IFRS 9 is a forward-looking measure and we have to sort of think about where it might be in six months or even three months time and it has a lot of momentum. So as I said, it's not in our basis. It's mostly in our downside case, but we did consider it for this quarter. Nigel D’Souza: Okay, thanks helpful. Thank you.

Thank you. The next question is from Mike Rizvanovic with Credit Suisse. Please go ahead.

Hi, good afternoon. A question for Greg. I wanted to go back to the NSF change in the U.S. and the $40 million that you referenced, now can we use the call reports, the regulatory call reports as a sort of proxy to how much you actually earned on NSF fees in the U.S. business?

You can. I would just say that the call reports are a fine proxy, but a lot of times when we get talked about as a U.S. Bank and our non-interest income percentage of overdrafts is higher than a lot of our peers, obviously some of that goes to the fact that we don't have the wholesale numbers in the U.S. Business and we don't have a large, as large of a wealth business built up yet and you have lower drivers from some of those businesses, but those fee income numbers that you call out are trying to use as a proxy, sure.

Okay, that's helpful. So then with respect to the $40 million comment, that seems to be only about 10% of what the…

Well, I said $40 million to $50 million and it depends on volume, right, the interactions that you'd see, but as we model this thing out and a return to normal activity levels, that's what we would see as to be the impact from these changes we made reducing the number of overdrafts you can incur per day and reducing them from five to three and raising the threshold from $5 to $10, but we were using normalized activity in the market.

Got it. I'm just curious, like with respect to your existing client base, it just seems a bit light given if you've got an option to not ever have to pay those fees. Like, why would you have not – sorry, why would you not have more gravitation to that account with your existing client base?

It's a good question, but I'll go back to my opening when I talked about the product. It doesn't have an overdraft feature, first and foremost because there's no checks that come with this product. So a lot of your existing portfolio, our existing point portfolio are not going to gravitate towards not having the ability to have check writing capabilities, number one, most people want that, a lot of people are going to want that. And then secondly, a lot of people find it actually very comforting that if something comes in or whether it's an ACH debit or a recurring payment that there is some sort of overdraft protection that doesn't allow that item to get bounced back. For a certain segment of the population though that are either new to banking or are trying to make sure that they are not drafting their account and have limited transactions don’t need check writing capability, this will be attractive. But again, there's no checks that come with products. So you are going have some folks that this would not be applicable for, right?

Got it. Thanks for that color. And maybe I just quickly pivot to Teri. Is this something that could potentially come to Canada inevitably and not sure if you can quantify, but should we be looking at maybe the U.S. as a proxy in terms of how much of the revenue in the Canadian business would come from the NSFs activities?

So, it's Teri. So the proportion would be much lower in the Canadian business as a starting point. And then I would say, we do have a basic banking account available in Canada, and for many of the same reasons that Greg has cited, overdraft protection is a convenience and peace of mind product, and we have the opportunity for people to either pay as they go in most provinces or pay a flat fee for the service. And so I don't necessarily see a reaction to this in the same way, just given that it's a very meaningful and useful product for Canadians.

Okay. Thank you both for the color.

Thank you. The next question is from Darko Mihelic with RBC Capital Markets. Please go ahead.

Hi! Thank you. Teri, I just want to go back to the discussion on the transaction fees and the decline there. So from the outside looking in, it's hard for us to know with such a big decline quarter-over-quarter, you know it’s hard for us to know whether there is other underlying recurrence happening in the business. And what I mean by that is apart from potentially some of your customers going to – starting to trade with zero commissions, I doubt that's had impact this quarter. But things like fractional share ownership, crypto currency trading, is there any – do you think that's having any impact to the business? Is this something that TD is considering addressing? Can you maybe just talk to those potential threats to the business or conversely maybe they are opportunities; I don't know. But do you think any of that's having any impact with respect to those revenues?

Thanks for the questions. I’d probably go back to, you know we're coming off of very high levels of trading relative to what would have been the normal pre-pandemic. And so that's three times to two times and an expectation that we have that we would continue to remain above pre-pandemic levels I think is a positive, and speaks to the breadth of offering and the value of the platform that I talked to about earlier. Obviously we continue to monitor the market and some of the things that you've identified are likely opportunities for the business in the longer term. We do pay close attention to the flows and I think one stat that might be helpful is when we look at the assets under administration in Q3 of customers under the age of 30 they actually grew sequentially. And so, we are seeing a capture of quality customers in that age bracket, which is something that I know people pay attention to. So just I would reiterate just the strength and breadth of this offering. And obviously we stay close to the market and the launch of TD GoalAssist was very recent and it is a reaction to what's happening in the market and I can anticipate us continuing to deliver against enhanced customer expectations over the coming periods.

Okay. Thanks for that and Teri you had a big jump in card services fees and even service charges. Can just give us an idea of – I mean it looks different from peers as well. Can you give us any insight into that?

Certainly! The service charges would be just again client activity returning, and so activity levels would be the main driver.

Okay. Thank you very much. And again Bob, best of luck in retirement. And Riaz, congrats!

Thank you. Our next question is from Lemar Persaud with Cormark Securities. Please go ahead.

Thanks. My question is probably for Greg. Can you provide the total dollar impact of pay-downs downs in the U.S. on loan growth this quarter? Then maybe some comments on the expectation moving forward. I guess ultimately what I'm trying to get at is, I'm trying to understand what we can expect to see loan growth in the U.S. come back in a more meaningful way. Are we talking say a quarter or two out or is it somewhere further down the road?

Hi! Well, thanks for the question. And it’s something obviously we're certainly very focused on, but let me just take a step back and just make sure we just level set where we are in the U.S. and what most of our peers are seeing as far as loan growth. I think it's important to provide that context. And as you would have seen by much of their second quarter numbers as well, we would have been on the better side of the group, whether it's the regionals and really especially if you measure in the money centers, had far more substantial declines year-over-year in loan growth because of pay-downs downs, particularly on the commercial side and in some of their card portfolios. And then just going on the context that as I said in the last couple of quarters, you're seeing pressure on loan growth because of all of the government stimulus and that's showing up on our deposit balances. And so on the consumer side, there's been a whole host of programs that continue to play out and are providing liquidity and you're seeing pressure on cards balances on the commercial side. Starting on the low end on the small business side, PPP has had just a tremendous impact with a hundreds of billions of and liquidity that's put into the system and you're seeing depressed loan growth in pay-downs downs. On the commercial and corporate side, certainly Bob's business and my business, you're seeing pay-downs occur specifically because of excess liquidity in the system, but also because of the cheap money and access to capital markets. You're seeing a lot of even revolving credits paid down in various forms of bank debt being retired or certainly not being leveraged. Utilization rates are at all-time lows, but I…

Okay, thank you.

Thank. There are no more questions in the queue at this time. I would now like to return the call to Mr. Bharat Masrani for closing remarks.

Thank you, operator and great questions on many issues. Just to reiterate and I think you heard it in some of the responses, given the scale and profile of our business in the U.S. we have 10 million customers. TD Essential Banking, which is a new product that just got introduced, addresses a specific small segment of the under bank within our footprint. So just to keep that in perspective, with respect to some of the questions that Teri was getting, once again it's not we haven't seen compression in pricing in some of these products before. But as you have seen previously that you know we adjust our products, we just how we position the market and we think we have a value proposition that is compelling. So we'll see all these things play out, but suffice it to say given the scale, size and profile of TD, we feel comfortable as to how we can sort to navigate to some of these issues that was brought up on the call. I think overall, very happy with the results. I think the momentum as it gets built as we get this pandemic more behind us is great. I think sequential quarter performance in various metrics that folks have been citing, like PTPP growth, and I know it's a complicated number for us because we got to adjust for partnership, strategic card adjustments, etc., but I'm sure Gillian and Riaz and Kelvin, will help you folks out. But overall I feel good. There’s great momentum in the business and it looks like we're getting out of this pandemic with good growth potential. I do want to as usual you know thank 90,000 TD Bankers around the world. They do a great job and continue to deliver for our shareholders. I also want to take a moment to recognize the changes we announced to our senior executive team, which take effect on September 1. Now many of you mentioned this, Bob will be retiring from his role as President and CEO of TD Securities, but he is not going far. He will stay on as Chairman at TD Securities as well as an adviser to me. Riaz as all of you know will be taking on the President and CEO role at TD Securities after almost six years as CFO, and we will welcome Kelvin Tran and Barbara Hooper to the Senior Executive Team; Kelvin as CFO and Barbara as EVP of Corporate Development, Treasury and Strategic Sourcing. I look forward to continuing to work with all of them in their new roles, and since this is Riaz’s last call as CFO and Bob's last earnings call, I'd like to invite each of them to say a few words. Riaz.

Thank you, Bharat. It's been real privilege to serve as TD’s CFO for nearly six years. It's really been fantastic to work with our investors and analysts and I look forward to continuing to see many of you in my new role. I'm really excited to be joining TD Securities with sincere thanks and appreciation to Bharat and to the Board for the opportunity. Bob and the TDS leadership team have built a terrific franchise and I feel lucky to be joining this very talented team. And also trilled, equally trilled to see Kelvin and Barb taking on the new roles. We do have a top finance and treasury organization, and to my colleagues there, I just like to say thank you. It's been a real privilege working you. Bob.

Thanks, Riaz. These last 20-plus years at TD have been incredibly rewarding. I feel very fortunate to have had the opportunity to work with so many great people, at the dealer across the bank and in the business community. I believe that working together we've built an impressive dealer franchise that continues to evolve and support our clients, track and retain great talent and make a lasting difference in the communities in which we’re involved. I look forward to all the success to come for TD Securities as Riaz transitions into the President and CEO role next week. He’s got a great team to work with. I also look forward to continue to support the dealers client coverage from my efforts as a Chairman and also continue to work with Bharat. I'd like to thank Bharat, the entire Senior Executive Team and the Board for their support and guidance over the years. And last but not least, thank you to everyone at TD Securities for a great partnership. We've accomplished so much together. And now, I'll turn it back to Bharat for his final words.

Thanks very much, Bob, and thank you Riaz. Congratulations to all the new folks in their new positions, looking forward to great things and thank you all for calling in and a great engaging call. I look forward to seeing you in the next – and hopefully we can meet in person one of these days. Otherwise we we'll talk 90 days from now. Stay safe and stay healthy. All the best!

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.