TORONTO, Ontario, Canada - December 1, 2009 - Toronto-Dominion Bank's exposure to the troubled U.S. commercial real estate market is significantly higher than many of its investors believe, a new report suggests.

The sector's continuing deterioration is fueling concerns about the banking industry and the recovery of the U.S. economy.

While this has been seen as a lesser problem for Canadian banks, TD's filings with U.S. regulators suggest it has about $19.5 billion (USD) in exposure, versus the roughly $12 billion that the bank disclosed in a recent presentation to shareholders, says Hamilton Capital, a new Toronto-based boutique asset manager specializing in financial services.

The difference appears to come from the way TD classifies the loans it makes on owner-occupied premises, such as a factory where the owner has a commercial mortgage against the building.

In its presentation to analysts, the bank appears to deem those loans to be business loans rather than commercial real estate, which is what they're classified as in the disclosure to U.S. regulators, the report suggests.

A spokesman for the bank said the U.S. filings are not an extension of TD's formal corporate disclosure record.

“Trying to bridge from them to the bank's official reporting is difficult and could lead to confusing and misleading interpretations of our exposures and results,” he said.