TD Will Increase Focus on Super Prime

TD Bank has evolved its auto strategy over the past year.

During the bank’s second quarter earnings call May 22, Mike Pedersen, chief executive officer at TD Bank’s US operations, said that the bank has been sharper in terms of business and the dealers it is targeting. Specifically, the bank is looking to move up the credit scale.

Pedersen told analysts that the bank’s narrowed focus should stabilize moving forward, and there may be some upside for growth again.

Later, Mark Chauvin, group head and chief risk officer, confirmed that TD is actually reducing its dealer base going forward and focusing more on super prime and productive dealers.

“I’m looking for those [dealers] to be relatively stable and continuing at same or slightly lower levels going forward,” said Chauvin.

For the second quarter, TD reported a 1.3% decline in its U.S. indirect auto loan portfolio. Indirect loans fell to $15.7 billion from $15.9 billion in the prior quarter. Despite the lower volume, the bank noted “improved” credit quality in its auto portfolio.