TD Waterhouse Group, Inc. Reports Record 1st Quarter Results

Market Wire, 20050229

TD Waterhouse Group, Inc. (NYSE/TSE: TWE) today announced record earnings for the first quarter of 2000 with earnings soaring 184% from the first quarter of 1999. "We believe our four growth strategies are delivering exceptional results in all key metrics," said Stephen D. McDonald, Chief Executive Officer. "In each strategic area we have experienced major successes, be it extending our global reach, expanding core and new growth segments, optimizing customer relationships or leveraging technology."

Active accounts increased 37% with customer assets growing 57%, to top $150 billion. Average trades per day rose to 190,000 compared to 98,000 a year ago and 103,500 in the last quarter of 1999. Online trades continue to grow to 72% of total trades versus 58% a year ago and 68% in the last quarter.

"Our business model of 'clicks and bricks' combined with leading edge technology and a wide array of products and services at an attractive price is playing a critical role in building shareholder value. And, all are important building blocks in helping us to realize our vision of becoming the global online financial services powerhouse," he continued.

Global Reach

McDonald pointed to recent TD Waterhouse initiatives in Japan, India and the United Kingdom as evidence of the firm's global growth strategies.

"In the first quarter of fiscal 2000, we signed an agreement with Tata Finance Limited, a member of one of India's most prominent business firms, the Tata Group, to offer discount brokerage and other online financial services in India. We also signed an agreement with one of Japan's largest and most prestigious retail banks - The Bank of Tokyo-Mitsubishi - to form a joint venture to offer on-line investing in Japan," McDonald said.

"Our goal is to serve the increasingly sophisticated investor who wants a broad range of financial services that are available through a variety of entry points, offer excellent customer service on a global scale and take advantage of the speed and accessibility of the internet. Japan's investors are a large segment as it is the second largest securities market in the world. Through our joint venture with The Bank of Tokyo-Mitsubishi we look forward to building a major online financial services company to meet the needs of the Japanese investor," he said.

In the United Kingdom, TD Waterhouse doubled market share with the acquisition of YorkSHARE Limited and introduced online trading during the quarter. "We are very pleased with this acquisition, its ongoing integration and the recent rapid growth in our business overall. In the past quarter, we have become a significant player in the U.K., and saw both rapid growth and acceptance of our internet delivery channel," he said. "We now have the base in the U.K. to develop significant growth opportunities."

McDonald also noted emerging opportunities in Canada as a result of TD Bank's acquisition of CT Financial Services, Inc. on February 1, 2000. This made TD Bank Financial Group Canada's leading financial institution with more than 10 million retail customers.

"As part of the integration of CT businesses within the TD Bank Financial Group, TD Waterhouse will acquire CT Securities' discount brokerage from TD Bank in the next quarter. Through CT's retail banking division, Canada Trust, TD Waterhouse will have the opportunity to offer the services of Canada's number one retail broker for the self-directed investor to CT's 3.7 million banking customers," McDonald said.

"TD Bank Financial Group has been a major source of support for TD Waterhouse providing talented people, e-commerce capabilities and leadership, and a strong global reputation that is facilitating growth and expansion in every locale."

Generating Growth on All Fronts

TD Waterhouse also made significant progress in pursuit of its other key growth strategies during the quarter, said Frank J. Petrilli, President and Chief Operating Officer. He outlined a number of significant achievements:

Expanding Core and New Growth Segments In conjunction with TD Capital, the merchant banking division of TD Bank (TD Waterhouse's major shareholder), TD Waterhouse launched TD iCapital, a $100 million online financial services venture capital fund. TD iCapital will serve as an incubator for new products and services to be potentially offered by TD Waterhouse as it will focus on internet oriented financial services companies and related opportunities - in services, content or enabling technologies - and it will provide a source for additional revenues.

Additionally, the online investment bank joint venture with Schwab and Ameritrade continues to progress. "We expect to be online in March providing internet IPO's to be available to a significant portion of our online customer base," commented Mr. Petrilli.

Optimizing Customer Relationships

"By providing easy access to products and services, we enhance our ability to grow both the number and average investment size of our customer base," Petrilli continued. "In this quarter we expanded our product range to include an alliance with AnnuityNet.com to offer annuities online, mortgages online with Mortgage.com, and introduced a TD Waterhouse S&P- Indexed Note Certificate of Deposit. We also launched the first in a series of seminars for our customers that takes advantage of our presence in communities.