The ratings on The Toronto-Dominion Bank (TD Bank) reflect the bank's formidable domestic retail operations--the largest of the Canadian banks--and benefit from a low-risk industry and refocus on this business segment. The ratings also reflect significantly better-than-expected progress cleaning up the balance sheet, reducing risk, eliminating some of the variability in earnings through the disposition of noncore large corporate loans, and avoiding financial losses as credit markets improved markedly. Future revenue growth, however, will be challenged due to the scaling back of international businesses resulting in more focused niche wholesale and investment banking operations but also reducing risk, and limited revenue upside in a very competitive, mature, domestic retail banking industry. Execution risk and the successful expansion into the U.S.
