TD Canada Trust revenue grew during 2002 and we generated good increases in a number of key product segments. Our Customer Satisfaction Index reached a record high at year end, which we believe is a testament to the hard work and dedication of our employees.

At year end, TD Canada Trust's overall share of its market was 21.46 percent, compared to 21.86 percent a year ago. Notwithstanding this slight overall decline and the challenges presented by branch integration, our share of the market is stable, close to pre-merger levels and well within our expectations.

This year, we will direct much of our attention to streamlining our processes and investing in our infrastructure to support our service model. In doing so, we expect to realize improved operational and cost efficiencies.

We are also working to capitalize on the many growth opportunities in our existing product lines and markets, and are improving our capacity to cross-sell our services to both existing and prospective customers, across all of our businesses.

Given our leading TD Canada Trust position in the Canadian market, we expect to augment the inherent growth in our retail business by continuing to benefit from growth in those areas where we are below our market share. For instance, we see potential in small business and commercial banking, and in life, property and casualty insurance through TD Insurance and TD Meloche Monnex.

Overall, our commitment is to ensure our customers continue to have the most comfortable banking experience possible, and we believe we are in the best position to provide just that – we did not undertake the TD-CT integration to build a bigger bank, but rather to build a better one.

We are also in the process of providing TD Securities with a more appropriate capital base and affirmative steps are being taken to change its risk profile, to bring it to a level that is more consistent with our overall, retail-focused strategy.

We believe that this strategy will restore our position as a leading Canadian wholesale banking franchise, both in corporate lending and investment banking, with a highly diversified portfolio across industries and companies.

Outside of Canada, we will lend on a much more restricted and limited basis, and expand on our strong capital markets capabilities. Our selective focus on clients with whom we have strong relationships will strengthen our wholesale banking operation in 2003 and beyond.

Last year, we integrated our Canadian wealth management retail operations – Discount Brokerage, Investment Advice and Financial Planning – under the TD Waterhouse brand, providing our customers with a range of products and superior advice and guidance under one strong and reputable brand.

We were profitable in 2002. We ended the year with more professional advisors and implemented a new Uniform Referral Process that enables smooth handoffs between our businesses. This supports our efforts to increase our cross-selling abilities to our 10 million retail customers – which is a core part of our wealth management strategy.

In the United States, we are also profitable. Last year, we significantly reduced the cost base and breakeven point of our TD Waterhouse USA operation. We also continued to build a strong and differentiated brand, and stepped up our efforts of optimizing each and every customer relationship.

Looking ahead, we will continue to make TD Waterhouse in the U.S. more competitive on costs and technology while developing a long-term growth strategy that integrates with our developing retail vision for the U.S. market.

Globally, we are focused on finding ways to improve and leverage our scale, and on reducing costs, improving efficiency and increasing productivity. Specific initiatives include our recent relationship with The Royal Bank of Scotland Group and its NatWest Personal Finance Management Limited subsidiary, the holding company for NatWest Stockbrokers.

Under the arrangement, we are providing the operational and settlement platform to The Royal Bank of Scotland and NatWest customers for the execution of share transactions. We have extensive experience in this area and expect to benefit from increased order flow.

Across our wealth business, we believe that we have taken the right steps and have the right strategy in place – one that will allow us to be profitable in difficult markets and realize significant upside in improved markets.

Our challenge now is to deliver – we intend to do that through a combination of more aggressive growth in Investment Advisors and Financial Planners, supported by superior service and cross-sell strategies, and by becoming more competitive on costs and technology.

Our personal and commercial business is strong, we have adopted a new strategy for our wholesale banking operation and we have repositioned our wealth management business.

Our commitment to growing and strengthening our Bank has never been stronger. So, too, is our determination to build a better bank – one that provides superior service and is capable of meeting and exceeding customer expectations.

Underpinning all that we do is a rigorous and unrelenting emphasis on operational excellence. For us, this means everyone within our organization knowing their business and their customer. It also means adhering to meaningful processes that support all of our activities.

Our mandate is straightforward:

On behalf of management, we would like to thank the Board of Directors for their continued guidance, our great team of employees – now over 42,000 strong – for their dedication and our shareholders for their ongoing support.

Together, we are building a better bank – a leading Canadian-based North American financial institution that is prepared for the future.

A. Charles Baillie Chairman of the Board Toronto January 23, 2003		W. Edmund Clark President and Chief Executive Officer

Under his progressive leadership, he led the Bank through many significant changes, including the merger of The Dominion Bank with the Bank of Toronto in 1955. He also oversaw the Bank in adopting a culture of change and innovation – which included the introduction of its Green Machine automated banking system. Among his most visible legacies was the construction of world-renowned architect Mies van der Rohe’s TD Centre in the early 1960’s, an important contribution to the regeneration of Toronto’s downtown city core.

Allen remained as an advisor to TDBFG’s management following his retirement, and was also extremely active outside of the Bank. He served as President of the International Monetary Conference and as Chairman of the much-lauded Royal Commission on Financial Management and Accountability in the Federal Public Service, which became more fittingly known as the Lambert Commission. Additionally, he continued to serve within the Canadian business community, as a contributing member to the Board of Directors of several significant Canadian companies.

Allen Lambert was an Officer of the Order of Canada, received numerous honourary degrees from several Canadian institutions and made significant contributions to many charitable causes.

He passed away peacefully and unexpectedly at home in Toronto on October 25, 2002 at the age of 90.