DBRS Confirms TD Bank at AA (low) and R-1 (middle)

Dominion Bond Rating Service (“DBRS”) has today confirmed the ratings of The Toronto-Dominion Bank (“TD” or the “Bank”) and related entities as indicated above. 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. During fiscal 2005, TD has been executing on its growth strategy while generating operating efficiencies in its Canadian retail banking franchise. DBRS views TD’s non-domestic growth strategies as contributing positively to the rating in the long term, provided they are properly executed.

DBRS believes that the ratings are limited by the Bank’s ability to grow in under-represented retail markets in Canada and challenges associated with its U.S. retail banking growth strategy.

DBRS expects TD’s Canadian retail banking franchise to provide ongoing earnings stability given its low business risk profile. Challenges include leveraging its personal customer base to grow TD’s market shares in credit cards, P&C insurance, small business, and commercial banking.

On March 1, 2005, TD closed the acquisition of 51% of the outstanding stock of Banknorth Group Inc. (“TD Banknorth”). Subsequently, TD Banknorth announced the acquisition of 100% of the common shares of Hudson United Bancorp (“Hudson”). (Please see the DBRS press release on TD Banknorth dated July 12, 2005.) DBRS views these acquisitions as consistent with TD’s U.S. retail banking growth strategy to position TD to benefit from U.S. banking consolidation. Although TD Banknorth has been an active consolidator of U.S. Northeast community banks, Hudson carries higher integration risks, given the size relative to historic purchases and being outside of TD Banknorth’s existing footprint, but TD and TD Banknorth have experience in executing acquisitions successfully.

In June 2005, TD announced the sale of TD Waterhouse USA to Ameritrade in exchange for a 32% ownership in the combined entity. DBRS believes the transaction is consistent with TD’s strategy to obtain scale for its U.S. discount brokerage operations, thereby better positioning it to defend against future industry consolidation and generating efficiencies, while continuing to benefit from favourable long-term industry trends.

TD’s core activities are divided into four lines of business: Canadian Personal and Commercial Banking (TD Canada Trust), U.S. Personal and Commercial Banking (TD Banknorth), Wealth Management (TD Wealth Management), and Wholesale Banking (TD Securities), representing 60%, 5%, 20%, and 15% of net income (excluding intangible amortization and corporate) in 2005, respectively.

Headquartered in Toronto, Canada, The Toronto-Dominion Bank has a full-service banking operation in retail and wholesale banking and wealth management in Canada, U.S. retail banking, and global discount brokerage. In Canada, TD has one of the largest personal banking operations with ten million customers.

Notes:
Debts for TD Mortgage Corporation, TD Pacific Mortgage Corp., and the Canada Trust Company are unconditionally quaranteed by TD.
y - designates hybrid instrument.
n - This security is non-cumulative.