



		TD Canada Trust

			Review of financial performance for the year

			Financial results of key product segments within TD Canada Trust



		TD Securities



		TD Wealth Management



		Other








		Managing risk



		Managing capital



		Supplemental information


How we performed	How our businesses performed	The economic outlook

CHART

Revenues

TABLE

TD Canada Trust

Financial results of key product segments within TD Canada Trust

Real estate secured lending

Offers mortgages and home equity secured lines of credit through branches and other sales channels.
Highlights for 2002 include:
- growing average volumes by $4.3 billion or 5%.
- introducing over 40 process improvements designed to enhance the customer’s mortgage purchase and renewal experience.
- launching the new Great Rate Mortgage – a less than prime variable rate mortgage with lock-in capability at guaranteed favourable rates.
2002 proved to be a buoyant year for real estate in both home purchase and refinance activity.
Process challenges earlier in the year stemming from integration activities and a highly competitive mortgage market contributed to a market share decline of approximately one percentage point despite a 40% increase in mortgage origination volume.
Market share stabilized towards the end of the year as customers responded to our service improvements.
Looking forward, the industry will continue to be extremely competitive due to the historical low interest rates, the growing influence of mortgage brokers and the emergence of non-traditional mortgage providers.
Objectives for 2003 are to maintain market share and grow volume and revenue by continuing to improve the mortgage process and introducing new products designed to enhance our customer’s comfortable real estate financing experience.

Personal deposits

Offers a complete range of Canadian and U.S. dollar chequing, savings and term investment vehicles designed to promote primary banking relationships.
During 2002, the industry experienced strong growth in non-term deposits as customers opted for guaranteed returns and liquidity against a backdrop of declining equity markets and an uncertain economic environment.
We maintained the number one position in personal deposit market share as our overall share improved on growth in average non-term volumes of 24% (primarily savings) partly offset by a decline in average term volumes of 6%.
We do not expect the strong non-term deposit volume growth to repeat in 2003, however we do expect a turnaround in term deposit volumes as customers switch back to term products as interest rates increase from historic lows.

Consumer lending

Offers Lines of Credit, Loans, Overdraft Protection products and a wide selection of Visa credit cards including Classic, Premium and Rewards cards such as the GM Visa card and the TD Gold Travel Visa card.
Revenue growth in 2002 came from credit cards while revenues and volumes from other products were flat.
Provision for credit losses increased during the year due to seasoning of our unsecured lending portfolio following two years of strong growth, as well as operational and collection issues following the merger (which were successfully resolved by the end of the second quarter).
Strengthening and deepening relationships with existing customers, pricing for risk and striving to grow low risk business to generate shareholder value will be the key initiatives in 2003.

Small business banking and merchant services

Provide lending, deposit, and electronic banking services for small businesses as well as credit/debit card point of sale services.
As our small business market share is below our share for personal banking products, this is a business that we have targeted for higher growth.
In 2002, market share grew with average lending and deposit volumes increasing by 8% and 17% respectively on improved customer satisfaction scores.
We will continue to build on this momentum in 2003 and have set a double-digit revenue growth target for the year.

Commercial banking

Provide lending, deposit, cash management and other services for mid-market businesses.
Highlights for 2002 include:
- successfully completed the first phase of the migration of cash management services to the web.
- achieved strong growth in commercial deposits, increasing average volume by $2.1 billion or 24%.
- realized a loan loss ratio of .19% well within the target and improved the credit quality of the loan portfolio.

Average lending volume decreased by $1.2 billion or 8% in 2002 as the economic environment discouraged our customers’ capital expenditures.
Focus for 2003 is to continue to emphasize deposit growth and maintain a disciplined use of our capital.

Insurance

Offer a broad range of insurance products through the TD Insurance and TD Meloche Monnex brands, including credit protection coverage on TD Canada Trust lending products.

In 2002 total premiums collected surpassed the one billion-dollar mark for the first time. Other key highlights and outlook are as follows:

TD Life Group

Grew revenue by 10% year-over-year.
Significantly improved the creditor insurance sales experience in the branches through a major systems automation initiative that will lead to further growth in 2003.
Pursuing continued growth in critical illness insurance, now providing protection to over 400,000 individuals, giving us a leadership position in Canada.

TD Meloche Monnex

Provides insurance services to almost 520,000 clients and is the largest group insurer for home and auto in Canada through affinity arrangements with professional and university alumni organizations.
Despite poor industry results at the bottom of the traditional underwriting cycle, TD Meloche Monnex grew premium volume by 28% and net revenue by 25% over the prior year and achieved a direct expense ratio of 21%, which is well below industry average.
Our objective is to achieve double-digit revenue growth in 2003, building on 2002 sales growth, industry pricing increases and a continued emphasis on service and quality products.

TD Insurance

Cater to TD customers, members of employer groups and a broader clientele under the banner of TD Insurance through a direct marketing approach, including e-commerce, direct mail and telephone.
Developed a successful web-based application, which is now responsible for 25% of new auto and home insurance sales and 35% of new individual life insurance sales.
Targeting continued strong growth in the employer market and direct marketing sales, particularly e-commerce driven.

¹ Other revenue includes internal commissions on sales of mutual funds and other TD Wealth Management products, fees for foreign exchange, safety deposit box rentals and other branch services. The funding costs for the Canada Trust acquisition is also included in Other. Revenues in 2001 also include certain revenues that are of a non-recurring nature.

TD Canada Trust


(millions of dollars)	2002		2001		2000

Net interest income (TEB)	$	4,058	$	3,951	$	3,265
Other income		1,710		1,688		1,438

Total revenue		5,768		5,639		4,703
Provision for credit losses		505		380		332
Non-interest expenses excluding non-cash goodwill/intangible amortization		3,501		3,467		2,944

Income before taxes	$	1,762	$	1,792	$	1,427
Provision for income taxes (TEB)		648		702		602

Net income – cash basis	$	1,114	$	1,090	$	825


Selected volumes and ratios
Average loans and customers' liability under acceptances (billions of dollars)	$	99	$	91	$	81

Average deposits (billions of dollars)		103		97		86

Economic profit		450		369		213

Full-time equivalent staff at October 31		28,452		30,538		27,902

Return on economic capital – cash basis¹		27%		29%		24%

Efficiency ratio – cash basis¹		58.9%		59.6%		60.9%

¹ Excludes Canada Trust acquisition funding costs.

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