TD Securities

Corporate banking revenues declined by 15% in 2002, reflecting lower assets and capital in the business, higher non-accrual loan balances and an increase in the losses from asset sales. In 2003, core lending capital in TD Securities will amount to approximately $1 billion as we focus on providing credit only where we can generate relationship returns of 20% or more.

Investment banking and capital markets revenues declined by 10% in 2002 as compared with 2001. Investment banking revenues in 2002 were consistent with 2001. A substantial slowdown in industry-wide mergers and acquisitions volumes and muted new equity issue volumes were offset by continued strength in new debt issuance, demand for income trusts and higher fees from private equity placement. Total revenues from our portfolio of capital markets businesses in 2002 were down approximately 10% from 2001. In debt capital markets, the low interest rate environment led to strong new debt issue volumes offset by widening credit spreads, reduced volatility and a relatively flat yield curve which led to lower trading revenues and weaker client flows. Equity capital markets revenues were also down, reflecting decreased equity market volatility, lower client-driven trading activity and a decline in trading volumes.

TD Securities private equity business performed poorly as revenues were down approximately $135 million reflecting lower realizations and higher writedowns. The private equity business was scaled down in 2002 through closure of the U.K. office and reductions in the U.S. business.

TD Securities