DBRS Confirms TD at AA, R-1 (high)

DBRS has today confirmed the ratings of The Toronto-Dominion Bank (TD or the Bank) and related entities, including TD’s Deposits & Senior Debt at AA and Short-Term Instruments at R-1 (high). All trends are Stable. The ratings are supported by TD’s leadership position in Canadian personal banking, low business risk profile and strong credit risk profile.

DBRS expects TD’s Canadian Personal & Commercial (P&C) franchise to provide ongoing earnings stability given its low business risk profile. TD has been successful in growing its Canadian retail market shares including credit cards, P&C insurance, small business and commercial banking. TD has a lower business risk profile than some of its peers as a result of its large retail operations, which is instrumental to its strong ratings.

DBRS believes successful integration and execution of the Bank’s U.S. retail banking strategy will contribute positively to its ratings in the long term as it provides the Bank with potential growth opportunities. Currently TD faces challenges in the execution of its latest acquisition, Commerce Bancorp, Inc., which closed on March 31, 2008.

TD’s long-term Deposits & Senior Debt rating, at AA, is composed of its Intrinsic Assessment at AA (low) and its Support Assessment at SA2 (reflecting the expectation of systemic and timely external support by the government of Canada). The SA2 designation results in a one-notch rating benefit to the Intrinsic Assessment.

Headquartered in Toronto, Canada, The Toronto-Dominion Bank has a full-service banking operation in retail and wholesale banking and wealth management in Canada, and U.S. retail banking and discount brokerage operations.

TD has five segments – four operating lines of business and Other. The operating businesses are Canadian Personal and Commercial Banking, U.S. Personal and Commercial Banking, Wealth Management, and Wholesale Banking, representing 59%, 12%, 13% and 21%, respectively, of net income in 2007 (excluding intangible amortization and corporate and DBRS adjustments). In aggregate, the first three aforementioned lines of business generate approximately 82% of earnings, which is consistent with TD’s objective to minimize earnings volatility through its strategy of higher proportion in retail operations. The last segment, Other, contributed 1% of net income.

Canadian Personal and Commercial Banking is one of the largest personal banking operations in Canada, with ten million customers. U.S. Personal and Commercial Banking consists of TD Banknorth, a U.S. regional bank headquartered in Portland, Maine, and Commerce Bancorp, Inc., concentrated primarily in New York and New Jersey. TD Wealth Management is composed of discount and full-service brokerage operations in Canada and U.S. discount brokerage through TD’s 40% investment in TD Ameritrade. TD Securities is primarily a Canadian corporate and investment bank.

Notes:
All figures are in Canadian dollars unless otherwise noted.
DBRS ratings also apply to TD Mortgage Corp., TD Pacific Mortgage Corp., and The Canada Trust Company, which are unconditionally guaranteed by The Toronto-Dominion Bank.