Moody's Investors Service (Moody's) has assigned an A1 long-term issuer rating, in local and foreign currency, to Toronto-Dominion Bank, New York Branch. The outlook on the issuer rating is stable. RATINGS RATIONALE Moody's said Toronto-Dominion Bank, New York Branch forms part of the same legal...
On May 4, 2023, DBRS Limited (DBRS Morningstar) confirmed its ratings on The Toronto-Dominion Bank (TD or the Bank) and its related entities, including TD’s Long-Term Issuer Rating of AA (high) and Short-Term Issuer Rating of R-1 (high). The trend on all ratings is Stable. TD’s Long-Term Issuer Rating is composed of an Intrinsic Assessment (IA) of AA and a Support Assessment (SA) of SA2, which reflect the expectation of timely systemic support from the Government of Canada (rated AAA with a Stab...
On June 20, 2023, the Office of the Superintendent of Financial Institutions (OSFI) raised the Domestic Stability Buffer (DSB) to 3.5% from 3.0% of total risk-weighted assets for domestic systemically important banks (D-SIBs). Key highlights include: -- OSFI raised the DSB by 50 basis points (bps) to 3.5% in light of mounting vulnerabilities, increasing the minimum CET1 requirement to 11.5%. -- All of the D-SIBs already meet the new requirement, which is effective on November 1, 2023. -- We v...
The Big Six Canadian banks have faced a challenging operating environment and headwinds from persistent inflation, higher interest rates, heightened macroeconomic uncertainty, and U.S. regional banking sector turmoil. As a result, Q2 2023 sequential earnings were negatively affected by a surge in provisions for credit losses (PCL), along with lower revenues resulting from moderating loan growth, rising funding costs, and a continued challenging environment for capital markets and wealth manageme...
This commentary reviews the potential implications from the mutually terminated acquisition of First Horizon Corp. by The Toronto-Dominion Bank. Key highlights include: •The terminated deal comes at an inopportune time for the U.S. banking sector, as some regional bank stocks remain under severe pressure despite most having reported solid credit fundamentals in 1Q23. •Although we view TD’s risk and operational management as strong, the closing delay, especially considering that other large de...
Moody's Investors Service (Moody's) has today assigned a Aa2 rating with a stable outlook to The Toronto-Dominion Bank's (TD, Aa1/Aa2 stable, a1) $25 million, Fixed-to-Floating Rate Notes due May 1 2024 (CUSIP 89114YWC1). At the same time, Moody's has withdrawn the P-1 rating previously assigned to ...
In light of the recent global banking sector turmoil driven by the two significant bank failures in the United States (Silicon Valley Bank and Signature Bank, both unrated by DBRS Morningstar), the risks associated with the U.S. regional banking sector have increased. The Toronto-Dominion Bank (TD or the Bank; rated AA (high) with a Stable trend by DBRS Morningstar) is currently the eighth-largest bank in the U.S. by assets and the largest foreign-owned bank. TD also has an ownership interest in...
DBRS Morningstar published a commentary discussing the differences between the limited recourse capital notes (LRCNs) issued by Canadian banks and insurance companies and the AT1 notes issued by Credit Suisse. The commentary explains why Canadian LRCNs will not function in the same manner as the Credit Suisse AT1s in a default scenario and what the implications are for investors. Key highlights include the following: -- LRCNs issued by Canadian financial institutions differ from the AT1s issue...
The Big Six Canadian banks lost approximately $57 billion (or 9.2%) in market capitalization over the past two weeks. We do not view the two significant U.S. bank failures as representative of the Canadian banking sector. Moreover, we do not expect the failure of Silicon Valley Bank (SVB) at this stage to have a significant adverse impact on Canadian banks. Our rating coverage universe of Canadian banks generally has a lower exposure to fixed-income securities, diversified and stable funding, su...
Results in Q1 2023 remained resilient for the Big Six Canadian banks despite macroeconomic headwinds. Trading revenues provided a boost to sequential earnings, partially offset by higher provisions for credit losses (PCL) and noninterest expenses (i.e., higher personnel-related costs and technology spend for digital investments and to support growth). As a result, aggregate quarterly adjusted earnings increased 7% quarter over quarter (QOQ) but declined by 2% year over year (YOY) as a result of ...
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