Toronto-Dominion Bank Q2 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : I want to talk first about the commercial book in Canada. And it looks like you guys didn't have any credit noise there, no real losses out of the ordinary like we've seen from a few other banks this quarter and last, mind you. I guess I'm kind of -- outside of your in-quarter performance, we have seen some issues then the Bank of Canada is raising their own concerns about corporate indebtedness and then we've also got this massive growth in commercial and wholesale loans in Canada. I'm just wondering, what do you think about that growth and what are you seeing differently than what the Bank of Canada is maybe concerned about? Why are you not concerned about credit quality in commercial lending in Canada in general? Sorry, that's a bit of a wordy question but...

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : And what's driving that?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Teri, while I have you at the mic, thought I'd ask you something with a bit more of a positive spin, we've seen the housing market go from source of intense concern last year and in the wake of B20 and starts data was dipping lower and lower. In the last few weeks or months, we started to see some good starts data, some positive sales data coming out of the GTA and Montreal as well. And the industry seems to be, I guess, bottoming out in terms of mortgage growth, RESL, I would say. I'm just wondering if you're generally as optimistic as you were about this business a little while ago or maybe if there's some additional optimism today in your growth outlook for RESL growth and the ancillary businesses.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Outside of what you're doing, though, is there anything in the macro that's maybe more...

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Just 2 quickies. Teri, do you -- does your business do any lending to the private mortgage market?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : And so Ajai, is there a policy around any lending to mortgage investment corporations or otherwise at the bank?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Can you quantify it?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. And then just to go back to Darko's question, if you have negative migration and you are reflecting that negative migration through higher provisions, whether it's stage 1, 2 or 3, will that then relieve some of the pressure that we would've otherwise expected to see from RWA appreciation?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : So just to play that back to, Riaz, maybe take another kick at it, if capital ultimately is intended to defend against unexpected losses and you, therefore, have expected deterioration in the credit quality and reflected through higher RWAs then presumably -- or through higher provisions then presumably, you will need to also account for it through higher capital retention. Is that fair? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.