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Apr 6, 2020

TD CEO sees 'meaningful recovery' after COVID-19 lockdowns end

'We have no plans to change our dividend': TD CEO


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Toronto-Dominion Bank chief executive officer Bharat Masrani is striking an optimistic tone for how Canada’s economy will recover once the COVID-19 pandemic subsides.

In an interview with BNN Bloomberg on Monday, Masrani said it’s anyone’s guess when it will happen, but that the domestic economy should respond well once activity gets back into full swing.

“How deep this [downturn] is is obviously important but more important is how long, what’s the duration of this. If this turns out that we can bounce back to some extent next quarter, there is a good chance of having a V-type, or V-ish type of recovery,” he said. “But without a doubt, you can see some recovery, and then a meaningful recovery to come because you will not have some kind of forced lockdown.”

Economic forecasters have been trying to model the exact nature of a potential recovery, with a “v-shape” used to illustrate a sharp rebound in activity after the initial economic shock.

Masrani said the forced nature of the shutdown of the domestic economy will likely lead to some shocking figures in the weeks and potentially months ahead. While those closures of non-essential businesses could potentially result in some historically weak economic data on the jobs and output side of the equation, Masrani said the eventual return to normalcy and its timeline will help determine the velocity of the recovery.

“The health crisis has meant parts of our economy are in a forced lockdown and that’s why the numbers are going to be pretty bad. But as lockdowns get lifted, people go back to work, then of course the economy will come back,” he said. “Now, it will be interesting to see how steep the V[-shaped recovery] is, but I certainly expect good growth coming out of the crisis.”

Masrani also reaffirmed the bank’s commitment to its dividend, echoing his major peers in assuring investors the payout is safe.

“We’ve been paying dividends for a long, long time, including through the financial crisis when a lot of jurisdictions stopped their banks from paying dividends. We have no plans to change our dividend policy at this time,” he said. “We went into this crisis with very good capital levels and the way the bank operates, we should have more than enough [capital to fund the] dividend through the recovery that will come.”