Scotiabank's 2012 audited annual consolidated financial
statements and accompanying management's discussion & analysis
(MD&A) will be available today at www.scotiabank.com, along
with the supplementary financial information report, which includes
fourth quarter financial information. All amounts are in
Canadian dollars and are based on our audited annual consolidated
financial statements and accompanying MD&A for the year
October 31, 2012 and related notes
prepared in accordance with International Financial Reporting
Standards (IFRS), unless otherwise noted. The Bank
transitioned from Canadian GAAP to IFRS effective for the interim
and annual periods beginning the first quarter of fiscal
2012. Comparative periods in 2011 were also restated to
reflect IFRS changes.
Additional information relating to the Bank, including the Bank's
Annual Information Form, can be found on the SEDAR website at
www.sedar.com and on the EDGAR section of the SEC's website at
www.sec.gov.
Fiscal 2012 Highlights
- Net income of $6,466 million, up
21% from last year
- Earnings per share (diluted) of $5.22 versus $4.53,
up 15.2%
- ROE was 19.7% versus 20.3%
- Productivity ratio of 52%, versus 53.9%
- Annual dividends per share of $2.19, compared to $2.05, an increase of 6.8%
- Tier 1 capital ratio of 13.6%, compared to 12.2% last year
- Tangible common equity ratio of 11.3%, compared to 9.6% last
year
Fourth Quarter Highlights (versus Q4, 2011)
- Net income of $1,519 million, up
31% from $1,157 million
- Earnings per share (diluted) of $1.18 compared to $0.97, up 22%
- ROE of 16.4%, unchanged from last year
- Productivity ratio of 54.9%, versus 57.9%
- Quarterly dividend of 57 cents
per common share
Fiscal 2012 Performance versus Objectives:
The Bank met or exceeded its four key financial and operational
objectives this year as follows (2012 performance excluding 2012
real estate gains is reflected in parentheses):
- Earn a return on equity (ROE)1 of 15 to 18%.
For the full year, Scotiabank earned an ROE of 19.7% (17.6%).
- Generate growth in EPS (diluted) of 5 to 10%2.
The year-over-year EPS growth was 22.2%2 (8.0%).
- Maintain a productivity ratio1 of less than 58%.
Scotiabank's performance was 52.0% (54.3%).
- Maintain sound capital ratios. With a Tier 1 ratio of
13.6% and a TCE ratio of 11.3%, Scotiabank's capital ratio remains
strong.
(1) |
Refer below for a discussion of non-GAAP
measures. |
(2) |
Excluding $286 million of acquisition-related
gains reported in the second quarter of 2011.
|
TORONTO, Dec. 7, 2012 /PRNewswire/ - For the full year
Scotiabank achieved record net income of $6,466 million in 2012, up 21%. Earnings
per share (EPS) (diluted) were $5.22,
compared to $4.53 in 2011, an
increase of 15.2%. Adjusting for real estate gains in 2012
(61 cents per share) and
non-recurring acquisition-related gains in 2011 (26 cents per share), diluted earnings per share
rose 8.0% in 2012.
Scotiabank reported net income for the fourth quarter ended
October 31, 2012 of $1,519 million, up 31% from $1,157 million for the same period last
year. Diluted earnings per share (EPS) were $1.18, compared to $0.97 last year, an increase of 22.2%.
Return on equity was 16.4%, unchanged from last year.
"Scotiabank had strong overall results this year with record net
income and revenues and very good contributions from each of our
four business lines," said Rick
Waugh, Scotiabank CEO. "Our keen focus on expense
management resulted in positive operating leverage across the
Bank. We continue to have a solid track record of earnings
and dividend growth with superior compound annual shareholder
returns of 13.0% over 10 years and 15.6% over 20 years. In an
uncertain global environment, our proven, straightforward business
model, anchored in diversity, as well as our strong focus on risk
management positions us well for continued success.
"Canadian Banking had a very good quarter with net income of
$481 million. Results were
driven by volume growth in residential mortgages and commercial
lending. There were higher deposit volumes in retail, commercial
and small business banking and margins remained stable. As
well, provisions improved compared to last year. Our recently
completed acquisition of ING DIRECT Canada solidifies Scotiabank as
Canada's third largest retail bank
and provides an excellent opportunity to continue to grow and
diversify our business and funding base.
"International Banking delivered strong earnings with net income
of $453 million. Year-over-year
growth was driven by our acquisition of Banco Colpatria and solid
contributions from Latin America
and Asia. Good retail and
commercial lending and deposit growth underpinned these results,
particularly in Latin
America. These results continue to reflect the benefit
of our diverse geographic footprint across the Caribbean, Latin
America and Asia.
"Net income in Global Wealth Management was $300 million this quarter, a strong
performance. The business line continued to earn through
uncertainty in
financial markets, with assets under management growing to
$115 billion. Expense growth
was effectively contained.
"Global Banking and Markets reported net income of $396 million, with growth in revenues of 37%,
compared to the same period last year due in part to more
favourable market conditions. This year's results reflect higher
revenues from fixed income initiatives that performed well and
growth in other key product areas. Diversification across the
business allowed for effective management of risk and stable
results despite continued volatility in markets.
"Going forward, the four business lines, which now report to
Brian Porter, our new President,
will continue to execute on the Bank's strategy and adapt to our
increasingly changing environment.
"I would like to thank the entire Scotiabank team for their hard
work over this past year in meeting the needs of our customers and
our financial objectives. Our efforts were most recently recognized
by The Banker, a Financial Times publication that
named Scotiabank as the Global Bank of the Year and Bank of the
Year in the Americas. This is the first time that a Canadian bank
has received either of these prestigious awards. We were also named
Bank of the Year in Canada,
Antigua, Barbados, Belize, Turks and Caicos and the British Virgin Islands.
"The Bank is well positioned to continue to deliver growth in
all business lines. Earnings have remained resilient despite the
moderated global economic growth. The Bank's diversified platforms,
sustainable revenues, high profitability, strong capital and its
focus on adding new customers, particularly in the higher growth
markets, should continue to support growth in 2013 and beyond."
Financial Highlights(1)
|
As at and for the
three months ended |
For the year
ended |
|
October 31 |
|
July 31 |
|
October 31 |
|
October 31 |
|
October 31 |
|
(Unaudited) |
2012 |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
($ millions) |
|
|
|
|
|
|
|
|
|
|
Net interest income |
2,580 |
|
2,567 |
|
2,329 |
|
10,003 |
|
9,014 |
|
Net interest income
(TEB(2)) |
2,584 |
|
2,572 |
|
2,334 |
|
10,020 |
|
9,035 |
|
Non-interest revenue |
2,284 |
|
2,945 |
|
1,896 |
|
9,698 |
|
8,296 |
|
Non-interest revenue
(TEB(2)) |
2,354 |
|
3,017 |
|
1,965 |
|
9,969 |
|
8,562 |
|
Total revenue |
4,864 |
|
5,512 |
|
4,225 |
|
19,701 |
|
17,310 |
|
Total revenue
(TEB(2)) |
4,938 |
|
5,589 |
|
4,299 |
|
19,989 |
|
17,597 |
|
Provision for credit losses |
321 |
|
402 |
|
281 |
|
1,252 |
|
1,076 |
|
Operating expenses |
2,713 |
|
2,618 |
|
2,489 |
|
10,403 |
|
9,481 |
|
Provision for income taxes |
311 |
|
441 |
|
298 |
|
1,580 |
|
1,423 |
|
Provision for income taxes
(TEB(2)) |
385 |
|
518 |
|
372 |
|
1,868 |
|
1,710 |
|
Net income |
1,519 |
|
2,051 |
|
1,157 |
|
6,466 |
|
5,330 |
|
Net income attributable to common
shareholders |
1,398 |
|
1,946 |
|
1,071 |
|
6,023 |
|
4,965 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating performance |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
($) |
1.20 |
|
1.70 |
|
0.99 |
|
5.31 |
|
4.63 |
|
Diluted earnings per share
($) |
1.18 |
|
1.69 |
|
0.97 |
|
5.22 |
|
4.53 |
|
Adjusted diluted earnings per
share(2) ($) |
1.21 |
|
1.72 |
|
1.00 |
|
5.33 |
|
4.62 |
|
Return on equity(2)
(%) |
16.4 |
|
24.6 |
|
16.4 |
|
19.7 |
|
20.3 |
|
Productivity ratio (%)
(TEB(2)) |
54.9 |
|
46.9 |
|
57.9 |
|
52.0 |
|
53.9 |
|
Core banking margin (%)
(TEB(2)) |
2.35 |
|
2.33 |
|
2.26 |
|
2.32 |
|
2.32 |
|
Banking margin on
average total assets (%) (TEB(2)) |
2.12 |
|
2.11 |
|
2.07 |
|
2.10 |
|
2.11 |
|
|
|
|
|
|
|
|
|
|
|
|
Financial position
information ($ millions) |
|
|
|
|
|
|
|
|
|
|
Cash and deposits with banks |
54,804 |
|
62,438 |
|
45,222 |
|
|
|
|
|
Trading assets |
87,596 |
|
93,797 |
|
75,799 |
|
|
|
|
|
Loans |
364,766 |
|
356,558 |
|
327,573 |
|
|
|
|
|
Total assets |
668,044 |
|
669,970 |
|
594,423 |
|
|
|
|
|
Deposits |
463,609 |
|
461,022 |
|
421,335 |
|
|
|
|
|
Common equity |
35,252 |
|
32,414 |
|
26,356 |
|
|
|
|
|
Preferred shares |
4,384 |
|
4,384 |
|
4,384 |
|
|
|
|
|
Assets under
administration(2) |
327,977 |
|
315,403 |
|
297,668 |
|
|
|
|
|
Assets under
management(2) |
114,694 |
|
108,680 |
|
102,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
measures(1) |
|
|
|
|
|
|
|
|
|
|
Tier 1 capital ratio (%) |
13.6 |
|
12.6 |
|
12.2 |
|
|
|
|
|
Total capital ratio (%) |
16.7 |
|
14.4 |
|
13.9 |
|
|
|
|
|
Tangible common equity to
risk-weighted assets(2) (%) |
11.3 |
|
10.2 |
|
9.6 |
|
|
|
|
|
Assets-to-capital multiple |
15.0 |
|
17.2 |
|
16.6 |
|
|
|
|
|
Risk-weighted assets ($
millions) |
253,309 |
|
252,399 |
|
233,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit quality |
|
|
|
|
|
|
|
|
|
|
Net impaired loans
($ millions)(3) |
1,973 |
|
2,032 |
|
1,957 |
|
|
|
|
|
Allowance for credit losses ($
millions) |
2,969 |
|
2,862 |
|
2,689 |
|
|
|
|
|
Net impaired loans as
a % of loans and acceptances(3) |
0.53 |
|
0.56 |
|
0.58 |
|
|
|
|
|
Provision for credit losses as a % of
average loans and acceptances (annualized) |
0.34 |
|
0.44 |
|
0.34 |
|
0.35 |
|
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
Common share
information |
|
|
|
|
|
|
|
|
|
|
Share price ($) |
|
|
|
|
|
|
|
|
|
|
|
High |
55.00 |
|
54.89 |
|
54.96 |
|
57.18 |
|
61.28 |
|
|
Low |
51.24 |
|
50.25 |
|
49.00 |
|
47.54 |
|
49.00 |
|
|
Close |
54.25 |
|
52.35 |
|
52.53 |
|
|
|
|
|
Shares outstanding
(millions) |
|
|
|
|
|
|
|
|
|
|
|
Average - Basic |
1,166 |
|
1,142 |
|
1,086 |
|
1,133 |
|
1,072 |
|
|
Average - Diluted |
1,184 |
|
1,160 |
|
1,118 |
|
1,160 |
|
1,108 |
|
|
End of period |
1,184 |
|
1,146 |
|
1,089 |
|
|
|
|
|
Dividends per share ($) |
0.57 |
|
0.55 |
|
0.52 |
|
2.19 |
|
2.05 |
|
Dividend yield(4)
(%) |
4.3 |
|
4.2 |
|
4.0 |
|
4.2 |
|
3.7 |
|
Market capitalization
($ millions) |
64,252 |
|
59,988 |
|
57,204 |
|
|
|
|
|
Book value per common share
($) |
29.76 |
|
28.29 |
|
24.20 |
|
|
|
|
|
Market value to book
value multiple |
1.8 |
|
1.9 |
|
2.2 |
|
|
|
|
|
Price to earnings multiple |
10.2 |
|
10.3 |
|
11.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other information |
|
|
|
|
|
|
|
|
|
|
Employees |
81,497 |
|
81,281 |
|
75,362 |
|
|
|
|
|
Branches and offices |
3,123 |
|
3,115 |
|
2,926 |
|
|
|
|
|
(1) |
The Bank has adopted IFRS effective November 1,
2011. All amounts reflect the adoption of IFRS, except for capital
measures. Capital measures have not been restated for IFRS as they
represent the actual amounts in that period for regulatory
purposes. |
(2) |
Refer to Non-GAAP measures section of this
press release for a discussion of these measures. |
(3) |
Excludes Federal Deposit Insurance Corporation (FDIC)
guaranteed loans related to the acquisition of R-G Premier Bank of
Puerto Rico.
|
(4) |
Based on the average of the high and low common share price
for the year. |
Forward Looking Statements
Our public communications often include oral or written forward
looking statements. Statements of this type are included in this
document, and may be included in other filings with Canadian
securities regulators or the U.S. Securities and Exchange
Commission, or in other communications. All such statements
are made pursuant to the "safe harbour" provisions of the U.S.
Private Securities Litigation Reform Act of 1995 and any applicable
Canadian securities legislation. Forward-looking statements may
include comments with respect to the Bank's objectives, strategies
to achieve those objectives, expected financial results (including
those in the area of risk management), and the outlook for the
Bank's businesses and for the Canadian, U.S. and global
economies. Such statements are typically identified by words
or phrases such as "believe," "expect," "anticipate," "intent,"
"estimate," "plan," "may increase," "may fluctuate," and similar
expressions of future or conditional verbs, such as "will,"
"should," "would" and "could."
By their very nature, forward-looking statements involve
numerous assumptions, inherent risks and uncertainties, both
general and specific, and the risk that predictions and other
forward-looking statements will not prove to be accurate. Do not
unduly rely on forward-looking statements, as a number of important
factors, many of which are beyond our control, could cause actual
results to differ materially from the estimates and intentions
expressed in such forward looking statements. These factors
include, but are not limited to: the economic and financial
conditions in Canada and globally;
fluctuations in interest rates and currency values; liquidity;
significant market volatility and interruptions; the failure of
third parties to comply with their obligations to us and our
affiliates; the effect of changes in monetary policy; legislative
and regulatory developments in Canada and elsewhere, including changes in tax
laws; the effect of changes to our credit ratings; amendments to,
and interpretations of, risk-based capital guidelines and reporting
instructions and liquidity regulatory guidance; operational and
reputational risks; the risk that the Bank's risk management models
may not take into account all relevant factors; the accuracy and
completeness of information the Bank receives on customers and
counterparties; the timely development and introduction of new
products and services in receptive markets; the Bank's ability to
expand existing distribution channels and to develop and realize
revenues from new distribution channels; the Bank's ability to
complete and integrate acquisitions and its other growth
strategies; changes in accounting policies and methods the Bank
uses to report its financial condition and financial performance,
including uncertainties associated with critical accounting
assumptions and estimates; the effect of applying future accounting
changes; global capital markets activity; the Bank's ability to
attract and retain key executives; reliance on third parties to
provide components of the Bank's business infrastructure;
unexpected changes in consumer spending and saving habits;
technological developments; fraud by internal or external parties,
including the use of new technologies in unprecedented ways to
defraud the Bank or its customers; consolidation in the Canadian
financial services sector; competition, both from new entrants and
established competitors; judicial and regulatory proceedings; acts
of God, such as earthquakes and hurricanes; the possible impact of
international conflicts and other developments, including terrorist
acts and war on terrorism; the effects of disease or illness on
local, national or international economies; disruptions to public
infrastructure, including transportation, communication, power and
water; and the Bank's anticipation of and success in managing the
risks implied by the foregoing. A substantial amount of the Bank's
business involves making loans or otherwise committing resources to
specific companies, industries or countries. Unforeseen
events affecting such borrowers, industries or countries could have
a material adverse effect on the Bank's financial results,
businesses, financial condition or liquidity. These and other
factors may cause the Bank's actual performance to differ
materially from that contemplated by forward-looking statements.
For more information, see the discussion starting on page 55 of the
MD&A.
The preceding list of important factors is not exhaustive. When
relying on forward-looking statements to make decisions with
respect to the Bank and its securities, investors and others should
carefully consider the preceding factors, other uncertainties and
potential events. The Bank does not undertake to update any
forward-looking statements, whether written or oral, that may be
made from time to time by or on its behalf.
The "Outlook" sections in this document are based on the Bank's
views and the actual outcome is uncertain. Readers should consider
the above-noted factors when reviewing these sections.
Additional information relating to the Bank, including the
Bank's Annual Information Form, can be located on the SEDAR website
at www.sedar.com and on the EDGAR section of the SEC's website at
www.sec.gov.
Notable Business Highlights
Scotiabank became the first Canadian bank to be named Global
Bank of the Year and Bank of the Year in the Americas by The
Banker magazine. Scotiabank was also recognized by the magazine
as Bank of the Year in Canada,
Antigua, Barbados, Belize, Turks and Caicos and the British Virgin Islands.
Recent initiatives
- The Bank completed the acquisition of ING DIRECT Canada.
This acquisition solidifies Scotiabank as Canada's third largest retail bank and
provides an excellent opportunity to continue to grow and diversify
our business and our funding base. ING DIRECT Canada will continue
to operate as a separate and distinct wholly-owned subsidiary,
providing low cost and highly competitive products to self-directed
customers.
- In Canada, the Bank launched a
strategic partnership with American Express offering a leading
suite of Scotiabank American Express Cards. These new cards are now
among the best customer offers in travel rewards providing up to 4X
reward earning power. Scotiabank Canadian customers now have a
choice between two card networks - Visa and American Express.
- Scotiabank announced that it had reached an agreement to
acquire 51 per cent of Colfondos AFP, a Colombian pension fund
company. With an existing presence in the retail space
through Banco Colpatria, and now the wealth market through
Colfondos, Scotiabank is well positioned to take advantage of
Latin America's fourth-largest
economy and increase its regional footprint in this segment.
Recognized for success
- Cited by Bill Clinton in
'Time magazine' for outstanding progress in mobile
technology and banking. The Bank's mobile wallet partnership
with Digicel and YellowPepper in Haiti has helped make banking easy, affordable
and accessible to all Haitians.
- Global Banking and Markets' Global Equity Sales group was
recognized by Brendan Wood International as the industry leader in
Canada in six categories,
including Overall Quality of Sales Service, Understanding Client
Portfolios and Trading Style, and Quality of Investment Ideas and
Original Thinking.
- Scotiabank continues to gain market share in mutual funds, with
year-to-date net sales second highest in the industry, according to
the most recent IFIC data (as of September
2012). Scotiatrust, meanwhile, has regained its #1 position
among trust companies in estate assets, and remains #1 in personal
custody assets, according to the most recent Investor Economics
data (as of June 2012).
Serving customers
- Global Banking and Markets acted as Financial Advisor and
Co-Bookrunner to Alimentation Couche-Tard Inc. on its acquisition
of Statoil Fuel & Retail ASA, for approximately US$3.6 billion, the largest transaction ever by a
Canadian retailer.
Scotiabank's Bright Future Program in Action
- Eight National finalists for the 2012 Scotiabank Game Changer
program were chosen from 72 Scotiabank Game Changers recognized
over the course of the 2012 CFL regular season, for their
commitment to doing outstanding work for causes and people in their
communities. The winner received $100,000 towards their chosen charity.
- Peru launched "Proyecto Logro"
- an online community philanthropic initiative. "Create,
share and donate" are the key elements of this campaign where users
upload a personal picture that shows a moment in time that
they were proud of and Scotiabank donates 5
Soles (about $2) to a known
charity in Peru called
Ceritas. Since the campaign began there have been more than
102,000 'likes' and more than 1,300 photos have been uploaded.
Non-GAAP Measures
The Bank uses a number of financial measures to assess its
performance. Some of these measures are not calculated in
accordance with International Financial Reporting Standards (IFRS),
are not defined by IFRS and do not have standardized meanings that
would ensure consistency and comparability between companies using
these measures. These non-GAAP measures are used throughout this
report and defined below.
Assets under administration (AUA)
AUA are assets administered by the Bank which are beneficially
owned by clients and therefore not reported on the Bank's
Consolidated Statement of Financial Position. Services provided for
AUA are of an administrative nature, such as trusteeship,
custodial, safekeeping, income collection and distribution,
securities trade settlements, customer reporting, and other similar
services.
Assets under management (AUM)
AUM are assets managed by the Bank on a discretionary basis and for
which the Bank earns investment management fees. AUM are
beneficially owned by clients and are therefore not reported on the
Bank's Consolidated Statement of Financial Position. Some AUM are
also administered assets and are therefore included in assets under
administration, under these circumstances.
Adjusted diluted earnings per share
The adjusted diluted earnings per share is calculated by adjusting
the diluted earnings per share to add back the non-cash, after-tax
amortization of intangible assets.
Economic equity and return on economic equity
For internal reporting purposes, the Bank attributes capital to its
business segments based on their risk profile and uses a
methodology that considers credit, market, operational and other
risks inherent in each business segment. The amount of risk capital
attributed is commonly referred to as economic equity. Return on
economic equity for the business segments is calculated as a ratio
of Adjusted Net Income of the business segment and the economic
equity attributed. Adjusted Net Income is net income attributable
to common shareholders adjusted for the incremental cost of
non-common equity capital instruments.
Core banking margin (TEB)
This ratio represents net interest income (on a taxable equivalent
basis) divided by average earning assets excluding bankers
acceptances and total average assets relating to the Global Capital
markets business within Global Banking and Markets. This is
consistent with the Bank's Consolidated Statement of Income
presentation where net interest income from trading operations is
recorded in trading revenues included in other operating
income.
Banking margin on average total assets (TEB)
The banking margin represents net interest income (on a taxable
equivalent basis) divided by average total assets excluding average
total assets relating to Global Capital markets business within
Global Banking and Markets.
Operating leverage (TEB)
The Bank defines operating leverage as the rate of growth in total
revenue (on a taxable equivalent basis), less the rate of growth in
operating expenses.
Productivity ratio (TEB)
Management uses the productivity ratio as a measure of the Bank's
efficiency. This ratio represents operating expenses as a
percentage of total revenue (TEB).
Return on equity
Return on equity is a profitability measure that presents the net
income attributable to common shareholders as a percentage of
common shareholders' equity. The Bank calculates its return on
equity using average common shareholders' equity.
Tangible common equity to risk-weighted assets
Tangible common equity to risk-weighted assets is an important
financial measure for rating agencies and the investing community.
Tangible common equity is total common equity plus non-controlling
interests in subsidiaries, less goodwill and unamortized intangible
assets (net of taxes). Tangible common equity is presented as a
percentage of risk-weighted assets. Regulatory capital ratios, such
as Tier 1 and Total Capital ratios, have standardized meanings as
defined by the Office of the Superintendent of Financial
Institutions, Canada.
Taxable equivalent basis
The Bank analyzes net interest income, other operating income, and
total revenue on a taxable equivalent basis (TEB). This methodology
grosses up tax-exempt income earned on certain securities reported
in either net interest income or other operating income to an
equivalent before tax basis. A corresponding increase is made to
the provision for income taxes; hence, there is no impact on net
income. Management believes that this basis for measurement
provides a uniform comparability of net interest income and other
operating revenue arising from both taxable and non-taxable sources
and facilitates a consistent basis of measurement. While other
banks also use TEB, their methodology may not be comparable to the
Bank's methodology. For purposes of segmented reporting, a
segment's revenue and provision for income taxes are grossed up by
the taxable equivalent amount. The elimination of the TEB gross up
is recorded in the Other segment. The TEB gross up to net interest
income, other operating income, total revenue, and provision for
income taxes are presented below:
TEB Gross up
|
For the three months ended |
|
For the year ended |
TEB Gross up
($ millions) |
|
October 31
2012 |
|
July 31
2012 |
|
October 31
2011 |
|
October 31
2012 |
|
October 31
2011 |
Net interest income |
|
$ |
4 |
|
$ |
5 |
|
$ |
5 |
|
$ |
17 |
|
$ |
21 |
Other operating income |
|
|
70 |
|
|
72 |
|
|
69 |
|
|
271 |
|
|
266 |
Total revenue and provision for taxes |
|
$ |
74 |
|
$ |
77 |
|
$ |
74 |
|
$ |
288 |
|
$ |
287 |
Group Financial Performance
Q4 2012 v Q4 2011
Net income
Net income was $1,519 million in the
fourth quarter, an increase of $362
million or 31% above the same quarter last year. The
increase mainly reflected higher revenues, including the
contributions of acquisitions, growth in earning assets and
stronger trading revenues. These increases were partially offset by
higher operating expenses and increased provision for credit
losses.
Total revenue
Total revenue (TEB) of $4,938 million
was $639 million or 15% higher than
the same quarter last year, with significant increases in all three
revenue categories. Net interest income rose from a wider core
banking margin, mostly due to acquisitions, and higher volumes of
core banking assets. Net fee and commission revenues were up due
primarily to higher banking, underwriting and wealth management
fees. The increase in other operating income was primarily from
higher trading revenues, as well as a favourable change in the fair
value of financial instruments used for asset/liability
management.
Net interest income
Net interest income (TEB) was $250
million or 11% above the same period last year. This
increase was a result of both a 7% increase in core banking assets
and a nine basis point increase in the core banking margin. The
former was from higher lending volumes across all business lines.
The nine basis point widening of the margin was primarily from the
acquisition of Banco Colpatria, partly offset by a narrower spread
on Canadian currency personal deposits.
Net fee and commission revenues
Compared to the same period last year, net fee and commission
revenue of $1,634 million was up
$145 million or 10%. This increase
was primarily from increased revenues from cards, deposit and
payment services including the contribution from the acquisition of
Banco Colpatria. Underwriting fees rose $39
million, and mutual fund fees were up $26 million, in both DundeeWealth and Scotia
Funds.
Other operating income
Other operating income (TEB) was $720
million, a significant $244
million or 51% increase from the fourth quarter of the
previous year. Most of this increase was from stronger
trading revenues, particularly in fixed income. In addition, there
was higher insurance underwriting income and a favourable change in
the fair value of financial instruments used for asset/liability
management.
Provision for credit losses
The provision for credit losses was $321
million in the fourth quarter compared to $281 million in the same period last year. This
increase in provisions was due primarily to a decrease of
$30 million in the collective
allowance on performing loans last year, and higher provisions in
International Banking this year.
Operating expenses and productivity
Operating expenses were $2,713
million in the fourth quarter, an increase of $224 million or 9% over the same quarter last
year. Acquisitions accounted for approximately $123 million or 55% of the growth in expenses.
The remaining increase was due mainly to higher salaries from
annual pay increases and additional staff for business expansion,
as well as higher performance-based compensation.
Additionally, premises costs, technology and professional expenses
rose, reflecting spending to support growth initiatives. Partially
offsetting this increase were lower benefit costs due to actuarial
revaluations of long-term benefit plans.
The productivity ratio was 54.9% in the fourth quarter, an
improvement from 57.9% in the same quarter last year.
Taxes
The effective tax rate was 17.0% this quarter compared to 20.5% in
the same quarter last year. The decrease was primarily due to a
reduction in the statutory tax rate in Canada and the inclusion in last year's
results of a valuation allowance recorded against a deferred tax
asset related to a loss on disposal of subsidiary operations in a
prior year. These decreases were partially offset by lower tax
recoveries in foreign subsidiaries and proportionately lower
tax-exempt dividend income.
Q4 2012 v Q3 2012
Net income
Net income was $1,519 million this
quarter, down 26% compared to $2,051
million in the previous quarter. Last quarter's results
included an after-tax gain on sale of real estate in Toronto of $614
million. Adjusting for this, net income grew 6%
quarter over quarter. The favourable impact of lower taxes
and provisions was partly offset by higher operating expenses.
Total revenue
Total revenue (TEB) of $4,938 million
fell $651 million or 12% from the
prior quarter entirely due to last quarter's real estate gain. The
underlying increase of $76 million
was driven by a slight rise in net interest income from a widening
of the core banking margin, higher fee and commission revenues and
increased gains on investment securities. These were partly
offset by lower trading revenues.
Net interest income
Net interest income (TEB) rose $12
million to $2,584 million.
This increase reflected growth in residential mortgages and
personal lending. Partly offsetting were lower margins in
Chile and in the fixed rate
Canadian currency portfolio.
Net fee and commission revenues
Compared to the previous quarter, net fee and commission revenue of
$1,634 million was $71 million or 5% higher. This increase was
primarily from seasonally higher banking fees in Latin America, higher mutual fund revenues,
brokerage commissions and underwriting and other advisory fees.
Other operating income
Other operating income (TEB) was $720
million, a reduction of $734
million from the prior quarter, almost entirely from the
real estate gain in the third quarter. The remaining revenues
were relatively flat as lower trading revenues (mainly in the fixed
income and equity businesses) and the impact of the gain on sale of
a leasing business in the prior quarter, were offset by higher
gains on investment securities.
Provision for credit losses
The provision for credit losses of $321
million for the fourth quarter was down $81 million from last quarter. This was due to an
increase of $100 million in the
collective allowance on performing loans in the last quarter,
partially offset by higher commercial provisions in Canadian
Banking.
Operating expenses and productivity
Quarter over quarter, operating expenses were up $95 million or 4%, due mainly to higher levels of
investment in revenue generating initiatives resulting in increased
expenditures on advertising and business development, as well as
growth in technology and professional expenses. This was
partially offset by lower benefit costs due to actuarial
revaluation of long-term benefit plans.
The productivity ratio was 54.9% in the fourth quarter, compared
to 53.9% in the third quarter adjusted for the real estate gain
last quarter.
Taxes
The effective tax rate this quarter was 17.0%, compared to 17.7% in
the prior quarter. This quarter benefitted from tax recoveries, an
increase in deferred tax assets due to changes in tax rates in a
foreign subsidiary and proportionately higher tax-exempt income.
Last quarter benefitted from lower taxes on the gain on sale of
real estate and a decline in non-deductible expenses.
Common Dividend
The Board of Directors at its meeting on December 6, 2012 approved the quarterly dividend
of 57 cents per common share.
This quarterly dividend applies to shareholders of record as of
January 2, 2013 and is payable
January 29, 2013.
Outlook
Global growth has moderated and will likely remain subdued in
2013 as governments in many debt-heavy developed nations impose
additional austerity measures to rein in outsized deficits.
Momentum in major emerging markets is moderating, but these markets
remain the major drivers of global growth through next year and
beyond. Robust domestic demand in these nations has helped to
underpin world commodity markets and is becoming an important
market opportunity for manufacturers and service industries around
the globe.
The U.S. economy is benefiting from stronger consumer spending and
the beginnings of a revival in the housing industry and is expected
to be supported by continued monetary stimulus. Canadian
prospects will also benefit both from an improvement in U.S.
domestic demand and generally buoyant markets for many
commodities. In Canada,
despite concerning growth in debt levels, the Bank's customers and
portfolios are in strong shape. The Bank expects softening
house prices will result in a soft landing due to high equity
values in homes and continued growth in the Canadian economy.
The Bank is well positioned to continue to deliver growth in all
business lines. Earnings have remained resilient despite the
moderated global economic growth. The Bank's diversified platforms,
sustainable revenues, high profitability, strong capital and its
focus on adding new customers, particularly in the higher growth
markets, should continue to support growth in 2013 and beyond.
Targets
The Bank's targets for 2013 are as follows:
- Earn a return on equity (ROE) of 15 to 18%
- Generate growth in EPS (diluted) of 5 to 10%(1)
- Maintain a productivity ratio of less than 56%
- Maintain strong capital ratios.
(1) |
Excluding $708 million or 61 cents per share
related to real estate gains in 2012. |
Statement of Financial Position
Assets
The Bank's total assets at October 31,
2012 were $668 billion, up
$74 billion or 12% from October 31, 2011. The impact of foreign currency
translation was not significant.
Cash and deposits with banks grew by $10
billion, due mainly to increases in interest bearing
deposits with central banks in the U.S. and the United Kingdom.
Precious metals rose $3 billion
and securities purchased under resale agreements increased by
$13 billion.
Trading assets
Trading assets increased $12 billion
from October 31, 2011, primarily in
trading securities which were up $12
billion from higher holdings of U.S. and other foreign
government debt, and common equities.
Investment securities
Investment securities grew by $3
billion due mainly to increased holding of U.S. and other
foreign government debt, partially offset by reduced holdings of
Canadian government debt.
As at October 31, 2012, the
unrealized gain on available-for-sale securities, after the impact
of qualifying hedges is taken into account, was $891 million, an increase of $155 million from October
31, 2011. The change was due mainly to increases in the
values of corporate bonds and equities.
Loans
Loans increased $37 billion or 11%
from October 31, 2011. Business and
government loans rose $19 billion due
primarily to growth in Latin
America, including the acquisition of Banco Colpatria in
Colombia, and growth in Global
Banking and Markets, mainly investment grade corporate loans in the
U.S. and Europe. In retail
lending, residential mortgages increased $14
billion due primarily to growth in Canada. Personal and credit card loans rose
$5 billion due mainly to Banco
Colpatria and growth in Canada.
Liabilities
Total liabilities were $627 billion
as at October 31, 2012, up
$64 billion or 11% from October 31, 2011.
Deposits
Total deposits increased by $42
billion. Personal deposits grew by $5
billion primarily from growth in deposits in Canada and the acquisition of Banco Colpatria.
Business and government deposits increased $29 billion due mainly from growth in the U.S.
and Canada as well as the
inclusion of Banco Colpatria. Deposits by banks increased
$9 billion in the U.S. and
Asia.
Other Liabilities
Obligations related to securities sold under repurchase agreements
and obligations related to securities sold short grew by
$19 billion and $3 billion, respectively. Derivative instrument
liabilities decreased $5 billion,
which was similar to the decrease in derivative instrument
assets.
Equity
Total equity increased $9,139 million
from October 31, 2011. This increase
was driven by internal capital generation of $3,557 million, the issuance of common shares of
$4,803 million including public
offerings of $3,329 million, and
$518 million for the purchase of
Banco Colpatria, as well as $956 million through the Dividend
Reinvestment Plan and the exercise of options.
The accumulated other comprehensive loss decreased $466 million due to higher unrealized gains on
available-for-sale securities, improvements in unrealized foreign
exchange losses on the Bank's investments in its foreign
operations, and lower unrealized losses on cash flow hedges.
Non-controlling interests
Non-controlling interests in subsidiaries increased $340 million due mainly to the acquisition of
Banco Colpatria and current period net income attributable to
non-controlling interests. Non-controlling interests capital
instrument equity holders decreased $97
million due mainly to distributions.
Capital ratios
In 2012, the Bank's regulatory capital ratios improved and the
Bank's capital position remains strong.
Tier 1 and Total capital ratios as at year end were 13.6% and
16.7 %. These ratios continued to be well in excess of OSFI's
minimum capital ratios of 7% and 10% and were strong by
international standards. Excluding the equity issued in 2012
for the Bank's acquisition of ING DIRECT Canada, Tier 1 and Total
Capital ratios were 12.9% and 16.0% respectively.
Tangible common equity (TCE) is generally considered to be an
important measure of a bank's capital strength, and is often used
by rating agencies and investors in their assessment of the quality
of a bank's capital position. During the year, the Bank's TCE ratio
improved. At year end, the Bank's TCE was 11.3%,
or 10.6 % excluding the equity issued in 2012 for the
Bank's acquisition of ING DIRECT Canada.
Based on the Bank's analysis and assumptions, as at October 31, 2012, its Basel III fully implemented
common equity Tier 1 ratio was 8.6%. The ING DIRECT Canada
acquisition which closed on November 15,
2012, will reduce the common equity Tier 1 ratio by
approximately 85 basis points.
Business Segment Review
Canadian Banking
|
|
For the three months ended |
For the year ended |
|
(Unaudited) ($ millions) |
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
|
(Taxable equivalent basis)(1) |
|
|
2012 |
|
|
2012 |
|
|
2011 |
(2) |
|
2012 |
|
|
2011 |
(2) |
Business segment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
1,229 |
|
$ |
1,197 |
|
$ |
1,145 |
|
$ |
4,756 |
|
$ |
4,553 |
|
Net fee and commission revenues |
|
|
376 |
|
|
375 |
|
|
363 |
|
|
1,477 |
|
|
1,418 |
|
Net income from investments in associated corporations |
|
|
(2) |
|
|
5 |
|
|
2 |
|
|
4 |
|
|
7 |
|
Other operating income |
|
|
(2) |
|
|
43 |
|
|
2 |
|
|
50 |
|
|
13 |
|
Provision for credit losses |
|
|
132 |
|
|
118 |
|
|
135 |
|
|
506 |
|
|
592 |
|
Operating expenses |
|
|
820 |
|
|
793 |
|
|
797 |
|
|
3,152 |
|
|
3,084 |
|
Provision for income taxes |
|
|
168 |
|
|
188 |
|
|
161 |
|
|
691 |
|
|
645 |
|
Net income |
|
$ |
481 |
|
$ |
521 |
|
$ |
419 |
|
$ |
1,938 |
|
$ |
1,670 |
|
Net income attributable to non-controlling interests |
|
$ |
- |
|
$ |
1 |
|
$ |
- |
|
$ |
2 |
|
$ |
3 |
|
Net income attributable to equity holders of the Bank |
|
$ |
481 |
|
$ |
520 |
|
$ |
419 |
|
$ |
1,936 |
|
$ |
1,667 |
|
Other measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on economic equity(1) |
|
|
37.7 |
% |
|
41.7 |
% |
|
35.2 |
% |
|
39.1 |
% |
|
35.7 |
% |
Average assets ($ billions) |
|
$ |
232 |
|
$ |
227 |
|
$ |
216 |
|
$ |
225 |
|
$ |
210 |
|
Average liabilities ($ billions) |
|
$ |
153 |
|
$ |
152 |
|
$ |
145 |
|
$ |
150 |
|
$ |
143 |
|
(1) |
Refer to Non-GAAP measures section of this
press release for a discussion of these measures.
|
(2) |
Prior period amounts have been restated as the
Bank implemented changes in its methodology for certain business
line allocations relating to fund transfer pricing, revenue and
cost sharing agreements between Canadian and International Banking
and Global Wealth Management, tax normalization and Global
Transaction Banking allocations. These changes were made in the
first quarter and the allocations did not have an impact on the
Bank's consolidated results. |
Q4 2012 v Q4 2011
Canadian Banking reported net income of $481 million in the fourth quarter, an increase
of $62 million or 15% from the same
period last year, mainly driven by strong asset and deposit
growth. Return on economic equity increased to 37.7% from
35.2% last year.
Average assets rose by $16 billion
or 7% from the same quarter last year. This was due primarily
to growth of $11 billion or 8% in
residential mortgages and $3 billion
or 6% in personal loans. There was also growth in commercial
and small business lending. Average deposits increased by
$7 billion or 5%, with strong growth
in each of retail, small business and commercial banking.
Retail Banking experienced solid growth in chequing accounts of
$1 billion or 7% and savings deposits
of $2 billion or 7%. There was
also growth of $4 billion or 14% in
small business and commercial banking business operating
accounts.
Total revenues increased by $89
million or 6% from the fourth quarter last year, with growth
in both net interest income and net fee and commissions
revenues.
Net interest income of $1,229
million was up $84 million or
7% from the fourth quarter last year. This was driven by
strong volume growth in both assets and deposits. Net
interest margin was relatively unchanged as higher spreads on fixed
rate mortgages were offset by narrower spreads on personal deposits
reflecting a competitive pricing environment.
Net fee and commission revenues increased $13 million or 4% from the same quarter last year
due to higher commercial banking fees and transaction-driven card
revenues and deposit fees in retail banking, as a result of
significant new account growth.
The provision for credit losses was $132
million this quarter, down from $135
million in the same quarter last year, with lower provisions
in retail partially offset by higher commercial banking
provisions.
Operating expenses were up $23
million or 3%. Staffing decreased from the same
quarter last year reflecting the impact of operational efficiency
initiatives and the divesture of the leasing business, partly
offset by an increase in personnel to support business growth and
new initiatives. Operating leverage was a positive 3.1% year
over year.
Q4 2012 v Q3 2012
Quarter over quarter, net income decreased $40 million or 8%. Excluding the $32 million after-tax gain on the sale of a
non-strategic leasing business, net income decreased $8 million or 2% reflecting an increase in
operating expenses and higher provisions for credit losses, partly
offset by higher net interest income as a result of continued
strong asset growth. Return on economic equity was 37.7%
versus 41.7% last quarter.
Average assets rose $5 billion or
2%, mainly from solid growth in retail mortgages. Average
deposits grew $1 billion or 1% mainly
in savings in retail and business operating accounts in commercial
banking.
Total revenue decreased $19
million or 1% quarter over quarter.
Net interest income increased $32
million or 3% mainly from strong asset growth.
Other operating income decreased $45
million as the previous quarter included a pre-tax
$44 million gain on sale of the
leasing business.
The provision for credit losses was $132
million in Canadian Banking, up $14
million from the previous quarter due to higher commercial
provisions.
Operating expenses rose $27
million or 3% compared to last quarter mainly from
investments in business initiatives and seasonally higher
costs.
International Banking
|
|
For the three months ended |
For the year ended |
|
(Unaudited) ($ millions) |
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
|
(Taxable equivalent
basis)(1) |
|
|
2012 |
|
|
2012 |
|
|
2011 |
(2) |
|
2012 |
|
|
2011 |
(2) |
Business segment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
1,153 |
|
$ |
1,175 |
|
$ |
941 |
|
$ |
4,468 |
|
$ |
3,579 |
|
Net fee and commission revenues |
|
|
352 |
|
|
320 |
|
|
294 |
|
|
1,299 |
|
|
1,076 |
|
Net income from investments in associated
corporations |
|
|
103 |
|
|
104 |
|
|
100 |
|
|
384 |
|
|
378 |
|
Other operating income |
|
|
84 |
|
|
93 |
|
|
100 |
|
|
347 |
|
|
356 |
|
Provision for credit losses |
|
|
176 |
|
|
168 |
|
|
158 |
|
|
613 |
|
|
509 |
|
Operating expenses |
|
|
979 |
|
|
937 |
|
|
820 |
|
|
3,687 |
|
|
3,038 |
|
Provision for income taxes |
|
|
84 |
|
|
145 |
|
|
86 |
|
|
464 |
|
|
375 |
|
Net income |
|
$ |
453 |
|
$ |
442 |
|
$ |
371 |
|
$ |
1,734 |
|
$ |
1,467 |
|
Net income attributable to non-controlling interests |
|
$ |
52 |
|
$ |
50 |
|
$ |
9 |
|
$ |
169 |
|
$ |
59 |
|
Net income attributable to equity holders of the Bank |
|
$ |
401 |
|
$ |
392 |
|
$ |
362 |
|
$ |
1,565 |
|
$ |
1,408 |
|
Other measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on economic equity(1) |
|
|
12.4 |
% |
|
11.7 |
% |
|
13.3 |
% |
|
12.3 |
% |
|
13.2 |
% |
Average assets ($ billions) |
|
$ |
111 |
|
$ |
112 |
|
$ |
98 |
|
$ |
109 |
|
$ |
93 |
|
Average liabilities ($ billions) |
|
$ |
73 |
|
$ |
72 |
|
$ |
62 |
|
$ |
70 |
|
$ |
59 |
(1) |
Refer to Non-GAAP measures section of this press release for
a discussion of these measures.
|
(2) |
Prior period amounts have been restated as the
Bank implemented changes in its methodology for certain business
line allocations relating to fund transfer pricing, revenue and
cost sharing agreements between Canadian and International Banking
and Global Wealth Management, tax normalization and Global
Transaction Banking allocations. These changes were made in the
first quarter and the allocations did not have an impact on the
Bank's consolidated results. |
Q4 2012 v Q4 2011
International Banking reported a strong fourth quarter with net
income of $453 million. This
was an increase of $82 million or 22%
year-over-year notwithstanding $27
million of negative goodwill from an acquisition in the
fourth quarter last year. The increase was driven by strong
broad-based asset and deposit growth and the contribution from
acquisitions, particularly Banco Colpatria in Colombia. Return on economic equity was
12.4% versus 13.3% in the same quarter last year.
Average assets were $111 billion
this quarter, up $13 billion or 13%
from the same quarter last year. The increase was driven by
strong diversified loan growth in retail and commercial lending in
Latin America and from recent
acquisitions.
Total revenue was $1,692 million
this quarter, up 18%, with strong growth in both net interest
income and net fee and commission revenues.
Net interest income at $1,153
million increased $212 million
or 23%, driven by strong loan and deposit growth, the positive
impact of acquisitions, and increased margins in Peru and Asia
partly offset by lower margins in Chile and Mexico.
Net fee and commission revenues of $352
million increased 20% largely from the acquisition of Banco
Colpatria and higher retail fees in Mexico.
Income from our investments in associated corporations rose 3%
to $103 million with a higher
contribution from the Bank of Xi'an in China.
Other operating income at $84
million declined by $16
million due primarily to $27
million of negative goodwill last year.
The provision for credit losses was $176
million this quarter, compared to $158 million in the same quarter last year.
The increase was due mainly to higher retail provisions in
Latin America as a result of
recent acquisitions, partially offset by lower provisions in
commercial portfolios. Excluding the impact of acquisitions, a
modest increase in retail provisions in Latin America, from asset growth and softening
credit conditions, was offset by lower provisions in the
Caribbean. While commercial
provisions remain low relative to the size of the portfolio, they
increased compared to the same quarter last year in Latin America as a result of asset growth. A
net benefit of $20 million is
included in the current period's provision for credit losses, due
to the net amortization of the credit mark on acquired loans in
Colpatria in excess of actual losses, in line with the maturity of
the acquired portfolio.
Operating expenses of $979 million
increased $159 million, or 19% year
over year, largely attributable to acquisitions. Other
contributors were higher remuneration and premises costs, largely
in Latin America, as a result of
general inflationary increases and to support growth.
The productivity ratio was 57.9% versus 57.1% for the same
quarter last year.
The effective tax rate decreased to 15.6% from 18.8% in the same
quarter last year mainly due to the increase in deferred tax assets
in Chile as a result of changes in
tax rates and recoveries in Mexico.
Q4 2012 v Q3 2012
Net income increased to $453
million, up $11 million or 2%
compared to last quarter. The quarter benefited from solid
retail asset growth in Latin
America and the impact of lower taxes in Chile and Mexico. Partly offsetting were
seasonally higher expenses and the negative impact of foreign
currency translation.
Return on economic equity was 12.4% versus 11.7% last
quarter.
Average assets of $111 billion
this quarter, were up $1 billion
quarter-over-quarter excluding the negative impact of foreign
currency translation of $1.8
billion. Underlying retail loan growth was 5%, with
broad based growth in all markets in Latin America. Commercial loan growth was
1% excluding foreign currency translation, as good growth in
Latin America was offset by
declines in Asia.
Revenues at $1,692 million were in
line with last quarter with higher non-interest revenue being
offset by lower net interest income.
Net interest income of $1,153
million decreased 2% compared to last quarter largely as a
result of the negative impact of foreign exchange translation and
lower margins in Chile due to
lower inflation rates. This was partially offset by continued
growth in Mexico, Peru, and the Caribbean and Central America.
Net fee and commission revenues of $352
million increased 10% largely reflecting seasonally higher
retail banking fees in Latin
America.
Other operating income at $84
million was lower than last quarter by $9 million, as lower securities gains were
largely offset by increased foreign exchange trading revenue.
The provision for credit losses was $176
million this quarter, compared to $168 million last quarter. The increase was due
primarily to higher retail and commercial provisions in the
Caribbean and Central America, partially offset by lower
provisions in Latin America,
mostly related to the acquisition in Colombia. A net benefit of $20 million is included in the current period's
provision for credit losses, due to the net amortization of the
credit mark on acquired loans in Banco Colpatria in excess of
actual losses, in line with the maturity of the acquired
portfolio. Excluding the impact of recent acquisitions,
commercial and retail provisions increased $19 million and $9
million respectively. Continued economic softness in the
Caribbean is negatively impacting
both portfolios.
Operating expenses rose $42
million or 4% to $979 million,
primarily in Latin America,
reflecting seasonal increases related to advertising campaigns, and
business development.
The productivity ratio was 57.9% versus 55.4% last quarter.
The effective tax rate decreased to 15.6% from 24.7% in the last
quarter due to the increase in deferred tax assets in Chile as a result of changes in tax rates, and
tax recoveries in Mexico.
Global Wealth Management
|
|
For the three months ended |
For the year ended |
|
(Unaudited) ($ millions) |
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
|
(Taxable equivalent basis)(1) |
|
|
2012 |
|
|
2012 |
|
|
2011 |
(2) |
|
2012 |
|
|
2011 |
(2) |
Business segment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
125 |
|
$ |
128 |
|
$ |
121 |
|
$ |
502 |
|
$ |
444 |
|
Net fee and commission revenues |
|
|
646 |
|
|
610 |
|
|
586 |
|
|
2,469 |
|
|
2,205 |
|
Net income from investments in associated corporations |
|
|
53 |
|
|
50 |
|
|
48 |
|
|
210 |
|
|
212 |
|
Other operating income |
|
|
99 |
|
|
98 |
|
|
83 |
|
|
392 |
|
|
576 |
|
Provision for credit losses |
|
|
2 |
|
|
1 |
|
|
1 |
|
|
3 |
|
|
2 |
|
Operating expenses |
|
|
538 |
|
|
509 |
|
|
513 |
|
|
2,067 |
|
|
1,900 |
|
Provision for income taxes |
|
|
83 |
|
|
92 |
|
|
62 |
|
|
333 |
|
|
280 |
|
Net income |
|
$ |
300 |
|
$ |
284 |
|
$ |
262 |
|
$ |
1,170 |
|
$ |
1,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interests |
|
$ |
6 |
|
$ |
6 |
|
$ |
8 |
|
$ |
25 |
|
$ |
29 |
|
Net income attributable to equity holders of the Bank |
|
$ |
294 |
|
$ |
278 |
|
$ |
254 |
|
$ |
1,145 |
|
$ |
1,226 |
|
Other measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on economic equity(1) |
|
|
15.1 |
% |
|
14.1 |
% |
|
12.8 |
% |
|
14.5 |
% |
|
17.6 |
% |
Assets under administration ($
billions)(1) |
|
$ |
283 |
|
$ |
272 |
|
$ |
262 |
|
$ |
283 |
|
$ |
262 |
|
Assets under management ($ billions)(1) |
|
$ |
115 |
|
$ |
109 |
|
$ |
103 |
|
$ |
115 |
|
$ |
103 |
|
Average assets ($ billions) |
|
$ |
14 |
|
$ |
14 |
|
$ |
13 |
|
$ |
14 |
|
$ |
12 |
|
Average liabilities ($ billions) |
|
$ |
16 |
|
$ |
16 |
|
$ |
13 |
|
$ |
16 |
|
$ |
13 |
|
(1) |
Refer to Non-GAAP measures section of this press release for
a discussion of these measures.
|
(2) |
Prior period amounts have been restated as the
Bank implemented changes in its methodology for certain business
line allocations relating to fund transfer pricing, revenue and
cost sharing agreements between Canadian and International Banking
and Global Wealth Management, tax normalization and Global
Transaction Banking allocations. These changes were made in the
first quarter and the allocations did not have an impact on the
Bank's consolidated results. |
Q4 2012 v Q4 2011
Global Wealth Management reported net income of
$300 million this quarter, an
increase of $38 million or 15% from
the same quarter last year. Net income increased due to strong
results from insurance and wealth management driven by higher
assets under management and assets under administration from net
sales and higher financial market levels. Return on equity was
15.1%, compared to 12.8% last year.
Assets under management (AUM) of $115 billion increased $12
billion or 12% from the same quarter last year
notwithstanding challenging financial markets, primarily driven by
positive mutual fund sales and new client acquisition. Assets under
administration (AUA) increased $21
billion or 8% to $283 billion.
AUM and AUA from the Bank's investment in CI Financial are not
included in these figures.
Total revenues increased $85
million or 10% to $923 million
driven by strong growth across the insurance and wealth management
businesses, with the exception of lower online brokerage revenues
due to lower trading volumes. Approximately 84% of total revenue
was attributable to wealth management and 16% to global insurance,
in line with last year.
Net interest income of $125 million increased $4
million or 3% over the same quarter last year, with growth
primarily in average deposits.
Net fee and commission revenues of $646 million increased by $60 million or 10% from strong growth in global
asset management and global insurance. In addition, revenues also
increased in international wealth, full service brokerage and
Canadian private client businesses partially offset by a decline in
online brokerage.
Net income from investments in associated
corporations increased $5 million or
10%.
Other operating income of $99 million increased by $16 million or 19% mainly due to higher global
insurance revenues.
Operating expenses increased by $25 million or 5% from the same quarter last year
due mainly to higher volume-related expenses partially offset by
discretionary expense management. Year-over-year operating leverage
was a very good 5.3%.
Q4 2012 v Q3 2012
Quarter over quarter, net income increased by
$16 million or 6%. Adjusting for the
CI Financial deferred tax charge in the previous quarter, net
income grew by $4 million or 1% due
to higher global asset management, brokerage and global insurance
revenues.
Quarter over quarter, AUM increased by
$6 billion or 6%, due in part, to
higher financial market levels and strong mutual fund sales, while
AUA grew by $11 billion or 4%.
Total revenue increased by $37 million or 4% quarter over quarter, mainly
from revenue growth in global asset management, brokerage and
international wealth businesses. In addition, global insurance
revenues also increased from higher sales.
Net interest income decreased by $3 million or 2% to $125
million this quarter.
Net fee and commission revenues of $646
million increased by $36
million or 6% due to higher fee revenues across all wealth
management businesses and higher revenues in global insurance.
Net income from associated corporations increased by
$3 million or 6%.
Other operating income of $99
million grew by $1 million or
1%.
Operating expenses increased 6% from last
quarter due primarily to seasonality and higher volume-related
expenses, performance-based compensation and expenses to support
business growth.
Global Banking and Markets
|
|
For the three months ended |
For the year ended |
|
(Unaudited) ($ millions) |
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
|
(Taxable equivalent basis)(1) |
|
|
2012 |
|
|
2012 |
|
|
2011 |
(2) |
|
2012 |
|
|
2011 |
(2) |
Business segment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
217 |
|
$ |
202 |
|
$ |
193 |
|
$ |
792 |
|
$ |
768 |
|
Net fee and commission revenue |
|
|
338 |
|
|
289 |
|
|
282 |
|
|
1,246 |
|
|
1,198 |
|
Net income from investments in associated corporations |
|
|
1 |
|
|
- |
|
|
- |
|
|
1 |
|
|
- |
|
Other operating income |
|
|
361 |
|
|
419 |
|
|
194 |
|
|
1,543 |
|
|
1,174 |
|
Provision for credit losses |
|
|
11 |
|
|
15 |
|
|
17 |
|
|
30 |
|
|
33 |
|
Operating expenses |
|
|
390 |
|
|
374 |
|
|
370 |
|
|
1,519 |
|
|
1,482 |
|
Provision for income taxes |
|
|
120 |
|
|
123 |
|
|
39 |
|
|
541 |
|
|
367 |
|
Net income |
|
$ |
396 |
|
$ |
398 |
|
$ |
243 |
|
$ |
1,492 |
|
$ |
1,258 |
|
Net income attributable to non-controlling interests |
|
$ |
1 |
|
$ |
1 |
|
$ |
- |
|
$ |
2 |
|
$ |
- |
|
Net income attributable to equity holders of the Bank |
|
$ |
395 |
|
$ |
397 |
|
$ |
243 |
|
$ |
1,490 |
|
$ |
1,258 |
|
Other measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on economic equity(1) |
|
|
30.1 |
% |
|
29.0 |
% |
|
17.9 |
% |
|
27.9 |
% |
|
21.8 |
% |
Average assets ($ billions) |
|
$ |
232 |
|
$ |
227 |
|
$ |
203 |
|
$ |
219 |
|
$ |
192 |
|
Average liabilities ($ billions) |
|
$ |
174 |
|
$ |
172 |
|
$ |
159 |
|
$ |
165 |
|
$ |
147 |
|
(1) |
Refer to Non-GAAP measures section of this press release for
a discussion of these measures.
|
(2) |
Prior period amounts have been restated as the
Bank implemented changes in its methodology for certain business
line allocations relating to fund transfer pricing, revenue and
cost sharing agreements between Canadian and International Banking
and Global Wealth Management, tax normalization and Global
Transaction Banking allocations. These changes were made in the
first quarter and the allocations did not have an impact on the
Bank's consolidated results. |
Q4 2012 v Q4 2011
Net income for the quarter was $396
million, an increase of $153
million from last year largely reflecting a significant
improvement in revenues across the business platform compared to
the challenging market conditions experienced in 2011. Return on
economic equity was 30.1%, compared with 17.9% in the same period
last year.
Average assets increased $29
billion to $232 billion
compared to the fourth quarter of last year. There were
increases of $12 billion in
securities purchased under resale agreements and $13 billion in securities, mainly from the
continued growth of the fixed income business. Corporate
loans and acceptances also grew by $5
billion, mainly investment grade loans in the U.S. and
Europe.
Total revenues were $917 million,
up $248 million or 37% compared to
the fourth quarter of last year. The improvement was primarily
driven by the fixed income business, as well as stronger revenues
in equities, commodities, corporate lending and investment
banking.
Net interest income rose $24
million year over year. This was driven by slightly higher
spreads in Canada and Europe, as well as increases in corporate
lending volumes of $4 billion, mainly
in the U.S. and Europe.
Net fee and commission revenues increased by $56 million year over year. This was
largely driven by underwriting fees in fixed income, equities and
investment banking. Credit fees also increased in Canadian
lending.
Other operating income of $361
million reflects a significant $167
million improvement from the challenging market conditions
in the fourth quarter last year. Fixed income, equities and
U.S. corporate lending were the main contributors to this strong
result. This was partly offset by somewhat lower results in
the foreign exchange and precious metals businesses.
Global Banking and Markets had provisions for credit losses of
$11 million this quarter, compared to
$17 million in the fourth quarter of
last year. The provisions in the current quarter were primarily
related to higher provisions in the
United States and Canada.
Total non-interest expenses were $390
million or 5% higher than last year. The increase mainly
reflects higher results-driven performance and stock-based
compensation.
The effective tax rate was higher due to a higher level of tax
recoveries in the prior year.
Q4 2012 v Q3 2012
Net income declined $2 million
from the prior quarter to $396
million. Return on economic equity was 30.1%, compared with
29.0% in the previous quarter.
Average Assets increased $5
billion from the prior quarter, primarily due to higher
securities purchased under resale agreements. There was also
growth of $2 billion in corporate
loans and acceptances, offset by lower securities.
Total revenues of $917 million
increased 1% compared to the previous quarter. Improvements in the
U.S., Europe and Canadian lending
businesses, fixed income and investment banking were partly offset
by market driven declines in the other capital markets
businesses.
Net interest income rose 7% to $217
million. This improvement was mainly due to spread increases
in Canada and an increased
contribution from the U.S. multi-seller conduit, combined with
modest volume growth in Europe.
Net fee and commission revenues increased by $49 million from the prior quarter.
Underwriting fees were higher in fixed income, equities and
investment banking. Also acceptances fees were higher in
Canadian lending.
Other operating income of $361
million declined by $58
million from the strong results last quarter. There
were declines in each of the capital markets businesses, due to
lower market activity.
Global Banking and Markets had provisions for credit losses of
$11 million this quarter, compared to
$15 million in the previous quarter,
with lower provisions in the United
States, partially offset by higher provisions in
Canada due to one corporate
account.
Total operating expenses rose 4% to $390
million. The increase was due primarily to higher
stock-based compensation, salaries and professional fees.
Other(1)
|
|
For the three months ended |
For the year ended |
|
(Unaudited) ($ millions) |
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
|
(Taxable equivalent basis)(2) |
|
|
2012 |
|
|
2012 |
|
|
2011 |
(3) |
|
2012 |
|
|
2011 |
(3) |
Business segment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income(4) |
|
$ |
(144) |
|
$ |
(135) |
|
$ |
(71) |
|
$ |
(515) |
|
$ |
(330) |
|
Net fee and commission revenues |
|
|
(78) |
|
|
(31) |
|
|
(36) |
|
|
(217) |
|
|
(170) |
|
Net income from investments in associated
corporations |
|
|
(37) |
|
|
(48) |
|
|
(41) |
|
|
(157) |
|
|
(164) |
|
Other operating income(4) |
|
|
(10) |
|
|
618 |
|
|
(81) |
|
|
650 |
|
|
17 |
|
Provision for credit losses |
|
|
- |
|
|
100 |
|
|
(30) |
|
|
100 |
|
|
(60) |
|
Operating expenses |
|
|
(14) |
|
|
5 |
|
|
(11) |
|
|
(22) |
|
|
(23) |
|
Provision for income taxes(4) |
|
|
(144) |
|
|
(107) |
|
|
(50) |
|
|
(449) |
|
|
(244) |
|
Net income |
|
$ |
(111) |
|
$ |
406 |
|
$ |
(138) |
|
$ |
132 |
|
$ |
(320) |
|
Net income attributable to non-controlling
interests |
|
$ |
7 |
|
$ |
(8) |
|
$ |
14 |
|
$ |
25 |
|
$ |
58 |
|
Capital instrument holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to equity holders of the Bank |
|
$ |
(118) |
|
$ |
414 |
|
$ |
(152) |
|
$ |
107 |
|
$ |
(378) |
|
Other measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets ($ billions) |
|
$ |
89 |
|
$ |
95 |
|
$ |
85 |
|
$ |
93 |
|
$ |
79 |
|
Average liabilities ($ billions) |
|
$ |
222 |
|
$ |
225 |
|
$ |
204 |
|
$ |
222 |
|
$ |
194 |
|
(1) |
Includes all other smaller operating segments and corporate
adjustments, such as the elimination of the tax-exempt income
gross-up reported in net interest income, other operating
income and provision for income taxes and differences in the actual
amount of costs incurred and charged to the operating segments.
|
(2) |
Refer to Non-GAAP measures section of this press release for
a discussion of these measures.
|
(3) |
Prior period amounts have been restated as the
Bank implemented changes in its methodology for certain business
line allocations relating to fund transfer pricing, revenue and
cost sharing agreements between Canadian and International Banking
and Global Wealth Management, and tax normalization. These
changes were made in the first quarter and the allocations did not
have an impact on the Bank's consolidated results. |
(4) |
Includes the elimination of the tax-exempt income gross-up
reported in net interest income and provision for income taxes for
the three months ended October 31, 2012 ($74), July
31, 2012 ($77), October 31, 2011 ($74), and the years ended October
31, 2012 ($288) and October 31, 2011 ($287) to arrive at the
amounts reported in the Consolidated Statement of Income. |
The Other segment includes Group Treasury, smaller operating
segments and other corporate items which are not allocated to a
business line. Due to the nature of activities and consolidated
adjustments reported in the Other segment, the Bank believes that a
comparative period analysis is not relevant.
Net interest income, other operating income, and
the provision for income taxes in each period include the
elimination of tax-exempt income gross-up. This amount is included
in the operating segments, which are reported on a taxable
equivalent basis. The elimination was $74
million in the fourth quarter, compared to $74 million in the same period last year and
$77 million last quarter.
Net income from investments in associated
corporations and the provision for income taxes in each period
include the tax normalization adjustments related to the gross-up
of income from associated companies. This adjustment normalizes the
effective tax rate in the divisions to better present the
contribution of the associated companies to the divisional
results.
In addition to the TEB gross-up and tax
normalization adjustment noted above, the following identifies the
other material items affecting the reported results in each
quarter.
Q4 2012
The net loss of $111
million primarily reflected the impact of asset / liability
management activities and a $20
million after-tax offset to revenues reported in the other
operating segments related to the underwriting of the Bank's common
share issuance during the quarter. The latter had no impact on the
Bank's consolidated results. Partly offsetting were net gains of
$31 million after-tax on investment
securities.
Q3 2012
The net income of $406
million included the after-tax gain of $614 million on sale of Scotia Plaza in
Toronto and an increase in the
collective allowance for credit losses on performing loans of
$74 million after-tax. Adjusting for
these items, the Other segment had a net loss of $134 million primarily from the impact of asset /
liability management activities, net losses of $11 million after-tax on investment securities,
and a redemption cost of $17 million
after-tax on a capital instrument liability which was fully offset
in non-controlling interest.
Q4 2011
The net loss of $138
million mainly reflected the impact of asset / liability
management activities and foreign currency related losses of
$34 million arising from the
conversion to IFRS, which were subsequently hedged later in 2011.
Partly offsetting were net gains of $46
million after-tax on investment securities and a
$22 million after-tax reduction in
the collective allowance for credit losses on performing loans.
Total
|
|
For the three months ended |
For the year ended |
|
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
|
(Unaudited) ($ millions) |
|
|
2012 |
|
|
2012 |
|
|
2011 |
|
|
2012 |
|
|
2011 |
|
Business segment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
2,580 |
|
$ |
2,567 |
|
$ |
2,329 |
|
$ |
10,003 |
|
$ |
9,014 |
|
Net fee and commission revenues |
|
|
1,634 |
|
|
1,563 |
|
|
1,489 |
|
|
6,274 |
|
|
5,727 |
|
Net income from investments in associated
corporations |
|
|
118 |
|
|
111 |
|
|
109 |
|
|
442 |
|
|
433 |
|
Other operating income |
|
|
532 |
|
|
1,271 |
|
|
298 |
|
|
2,982 |
|
|
2,136 |
|
Provision for credit losses |
|
|
321 |
|
|
402 |
|
|
281 |
|
|
1,252 |
|
|
1,076 |
|
Operating expenses |
|
|
2,713 |
|
|
2,618 |
|
|
2,489 |
|
|
10,403 |
|
|
9,481 |
|
Provision for income taxes |
|
|
311 |
|
|
441 |
|
|
298 |
|
|
1,580 |
|
|
1,423 |
|
Net income |
|
$ |
1,519 |
|
$ |
2,051 |
|
$ |
1,157 |
|
$ |
6,466 |
|
$ |
5,330 |
|
Net income attributable to non-controlling
interests |
|
$ |
66 |
|
$ |
50 |
|
$ |
31 |
|
$ |
223 |
|
$ |
149 |
|
Non-controlling interests in
subsidiaires |
|
|
59 |
|
|
58 |
|
|
17 |
|
|
198 |
|
|
91 |
|
Capital instrument equity
holders |
|
|
7 |
|
|
(8) |
|
|
14 |
|
|
25 |
|
|
58 |
|
Net income attributable to equity holders of
the Bank |
|
$ |
1,453 |
|
$ |
2,001 |
|
$ |
1,126 |
|
$ |
6,243 |
|
$ |
5,181 |
|
Other measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity(1) |
|
|
16.4 |
% |
|
24.6 |
% |
|
16.4 |
% |
|
19.7 |
% |
|
20.3 |
% |
Average assets ($ billions) |
|
$ |
678 |
|
$ |
675 |
|
$ |
615 |
|
$ |
660 |
|
$ |
586 |
|
Average liabilities ($ billions) |
|
$ |
638 |
|
$ |
637 |
|
$ |
583 |
|
$ |
623 |
|
$ |
556 |
(1) |
Refer to Non-GAAP measures section of this press release for
a discussion of these measures. |
Quarterly Financial Highlights
|
|
For the three months ended |
|
|
|
Oct. 31 |
|
|
July 31 |
|
|
April 30 |
|
|
Jan. 31 |
|
|
|
Oct. 31 |
|
|
July 31 |
|
|
April 30 |
|
|
Jan. 31 |
|
|
|
2012 |
|
|
2012 |
|
|
2012 |
|
|
2012 |
|
|
|
2011 |
|
|
2011 |
|
|
2011 |
|
|
2011 |
Total revenue ($ millions) |
|
$ |
4,864 |
|
$ |
5,512 |
|
$ |
4,704 |
|
$ |
4,621 |
|
|
$ |
4,225 |
|
$ |
4,298 |
|
$ |
4,639 |
|
$ |
4,148 |
Total revenue (TEB(1)) ($
millions) |
|
|
4,938 |
|
|
5,589 |
|
|
4,773 |
|
|
4,689 |
|
|
|
4,299 |
|
|
4,371 |
|
|
4,708 |
|
|
4,219 |
Net income ($ millions) |
|
|
1,519 |
|
|
2,051 |
|
|
1,460 |
|
|
1,436 |
|
|
|
1,157 |
|
|
1,303 |
|
|
1,621 |
|
|
1,249 |
Basic earnings per share ($) |
|
|
1.20 |
|
|
1.70 |
|
|
1.18 |
|
|
1.23 |
|
|
|
0.99 |
|
|
1.12 |
|
|
1.42 |
|
|
1.11 |
Diluted earnings per share ($) |
|
|
1.18 |
|
|
1.69 |
|
|
1.15 |
|
|
1.20 |
|
|
|
0.97 |
|
|
1.10 |
|
|
1.39 |
|
|
1.08 |
(1) |
Refer to Non-GAAP measures section for a discussion of these
measures. |
Consolidated Statement of Income
|
|
For the three months ended |
For the year ended |
|
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
(Unaudited) ($ millions) |
|
|
2012 |
|
|
2012 |
|
|
2011 |
|
|
2012 |
|
|
2011 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
3,975 |
|
$ |
4,017 |
|
$ |
3,671 |
|
$ |
15,608 |
|
$ |
14,376 |
Securities |
|
|
262 |
|
|
272 |
|
|
255 |
|
|
1,041 |
|
|
986 |
Securities purchased under resale agreements |
|
|
53 |
|
|
60 |
|
|
52 |
|
|
220 |
|
|
220 |
Deposits with banks |
|
|
69 |
|
|
68 |
|
|
76 |
|
|
285 |
|
|
273 |
|
|
|
4,359 |
|
|
4,417 |
|
|
4,054 |
|
|
17,154 |
|
|
15,855 |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,499 |
|
|
1,550 |
|
|
1,404 |
|
|
5,947 |
|
|
5,589 |
Subordinated debentures |
|
|
104 |
|
|
93 |
|
|
93 |
|
|
381 |
|
|
369 |
Capital instruments |
|
|
28 |
|
|
35 |
|
|
33 |
|
|
132 |
|
|
138 |
Other |
|
|
148 |
|
|
172 |
|
|
195 |
|
|
691 |
|
|
745 |
|
|
|
1,779 |
|
|
1,850 |
|
|
1,725 |
|
|
7,151 |
|
|
6,841 |
Net interest income |
|
|
2,580 |
|
|
2,567 |
|
|
2,329 |
|
|
10,003 |
|
|
9,014 |
Fee and commission revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
|
853 |
|
|
815 |
|
|
765 |
|
|
3,215 |
|
|
2,872 |
Wealth management |
|
|
553 |
|
|
535 |
|
|
530 |
|
|
2,170 |
|
|
1,963 |
Underwriting and other advisory |
|
|
131 |
|
|
113 |
|
|
92 |
|
|
493 |
|
|
492 |
Non-trading foreign exchange |
|
|
86 |
|
|
91 |
|
|
94 |
|
|
365 |
|
|
349 |
Other |
|
|
75 |
|
|
75 |
|
|
67 |
|
|
293 |
|
|
267 |
|
|
|
1,698 |
|
|
1,629 |
|
|
1,548 |
|
|
6,536 |
|
|
5,943 |
Fee and commission expenses |
|
|
64 |
|
|
66 |
|
|
59 |
|
|
262 |
|
|
216 |
Net fee and commission revenues |
|
|
1,634 |
|
|
1,563 |
|
|
1,489 |
|
|
6,274 |
|
|
5,727 |
Other operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading revenues |
|
|
319 |
|
|
357 |
|
|
155 |
|
|
1,316 |
|
|
830 |
Net gain on investment securities |
|
|
64 |
|
|
10 |
|
|
64 |
|
|
185 |
|
|
285 |
Net income from investments in associated
corporations |
|
|
118 |
|
|
111 |
|
|
109 |
|
|
442 |
|
|
433 |
Insurance underwriting income, net of
claims |
|
|
99 |
|
|
100 |
|
|
85 |
|
|
388 |
|
|
294 |
Other |
|
|
50 |
|
|
804 |
|
|
(6) |
|
|
1,093 |
|
|
727 |
|
|
|
650 |
|
|
1,382 |
|
|
407 |
|
|
3,424 |
|
|
2,569 |
Total revenue |
|
|
4,864 |
|
|
5,512 |
|
|
4,225 |
|
|
19,701 |
|
|
17,310 |
Provision for credit losses |
|
|
321 |
|
|
402 |
|
|
281 |
|
|
1,252 |
|
|
1,076 |
|
|
|
4,543 |
|
|
5,110 |
|
|
3,944 |
|
|
18,449 |
|
|
16,234 |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
1,402 |
|
|
1,476 |
|
|
1,370 |
|
|
5,749 |
|
|
5,358 |
Premises and technology |
|
|
445 |
|
|
408 |
|
|
392 |
|
|
1,607 |
|
|
1,446 |
Depreciation and amortization |
|
|
119 |
|
|
117 |
|
|
108 |
|
|
450 |
|
|
413 |
Communications |
|
|
98 |
|
|
94 |
|
|
87 |
|
|
373 |
|
|
344 |
Advertising and business development |
|
|
144 |
|
|
104 |
|
|
132 |
|
|
450 |
|
|
427 |
Professional |
|
|
104 |
|
|
81 |
|
|
72 |
|
|
340 |
|
|
262 |
Business and capital taxes |
|
|
68 |
|
|
62 |
|
|
43 |
|
|
248 |
|
|
183 |
Other |
|
|
333 |
|
|
276 |
|
|
285 |
|
|
1,186 |
|
|
1,048 |
|
|
|
2,713 |
|
|
2,618 |
|
|
2,489 |
|
|
10,403 |
|
|
9,481 |
Income before taxes |
|
|
1,830 |
|
|
2,492 |
|
|
1,455 |
|
|
8,046 |
|
|
6,753 |
Income tax expense |
|
|
311 |
|
|
441 |
|
|
298 |
|
|
1,580 |
|
|
1,423 |
Net income |
|
$ |
1,519 |
|
$ |
2,051 |
|
$ |
1,157 |
|
$ |
6,466 |
|
$ |
5,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling
interests |
|
$ |
66 |
|
$ |
50 |
|
$ |
31 |
|
$ |
223 |
|
$ |
149 |
|
Non-controlling interests in subsidiaires |
|
|
59 |
|
|
58 |
|
|
17 |
|
|
198 |
|
|
91 |
|
Capital instrument equity holders |
|
|
7 |
|
|
(8) |
|
|
14 |
|
|
25 |
|
|
58 |
Net income attributable to equity
holders of the Bank |
|
|
1,453 |
|
|
2,001 |
|
|
1,126 |
|
|
6,243 |
|
|
5,181 |
|
Preferred shareholders |
|
|
55 |
|
|
55 |
|
|
55 |
|
|
220 |
|
|
216 |
|
Common shareholders |
|
$ |
1,398 |
|
$ |
1,946 |
|
$ |
1,071 |
|
$ |
6,023 |
|
$ |
4,965 |
Earnings per common share (in
dollars)(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.20 |
|
$ |
1.70 |
|
$ |
0.99 |
|
$ |
5.31 |
|
$ |
4.63 |
|
Diluted |
|
$ |
1.18 |
|
$ |
1.69 |
|
$ |
0.97 |
|
$ |
5.22 |
|
$ |
4.53 |
(1) |
The calculation of earnings per share is based on full
dollar and share amounts. |
See Basis of Preparation below. |
Consolidated Statement of Financial Position
|
As at |
|
|
October 31 |
|
July 31 |
|
October 31 |
(Unaudited) ($ millions) |
|
2012 |
|
2012 |
|
2011 |
Assets |
|
|
|
|
|
|
Cash and deposits with banks |
$ |
54,804 |
$ |
62,438 |
$ |
45,222 |
Precious metals |
|
12,387 |
|
9,177 |
|
9,249 |
Trading assets |
|
|
|
|
|
|
|
Securities |
|
74,639 |
|
81,641 |
|
62,192 |
|
Loans |
|
12,857 |
|
12,139 |
|
13,607 |
|
Other |
|
100 |
|
17 |
|
- |
|
|
87,596 |
|
93,797 |
|
75,799 |
Financial assets designated at fair value through
profit or loss |
|
197 |
|
257 |
|
375 |
Securities purchased under resale agreements |
|
47,354 |
|
46,632 |
|
34,582 |
Derivative financial instruments |
|
30,327 |
|
33,853 |
|
37,322 |
Investment securities |
|
33,361 |
|
30,381 |
|
30,176 |
Loans |
|
|
|
|
|
|
|
Residential mortgages |
|
175,630 |
|
171,888 |
|
161,685 |
|
Personal and credit cards |
|
68,277 |
|
67,174 |
|
63,317 |
|
Business and government |
|
123,828 |
|
120,358 |
|
105,260 |
|
|
367,735 |
|
359,420 |
|
330,262 |
|
Allowance for credit losses |
|
2,969 |
|
2,862 |
|
2,689 |
|
|
364,766 |
|
356,558 |
|
327,573 |
Other |
|
|
|
|
|
|
Customers' liability under acceptances |
|
8,932 |
|
8,635 |
|
8,172 |
Property and equipment |
|
2,260 |
|
2,145 |
|
2,504 |
Investments in associates |
|
4,760 |
|
4,656 |
|
4,434 |
Goodwill and other intangible assets |
|
8,692 |
|
8,708 |
|
7,639 |
Deferred tax assets |
|
1,936 |
|
2,065 |
|
2,214 |
Other assets |
|
10,672 |
|
10,668 |
|
9,162 |
|
|
37,252 |
|
36,877 |
|
34,125 |
Total assets |
$ |
668,044 |
$ |
669,970 |
$ |
594,423 |
Liabilities |
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
Personal |
$ |
138,051 |
$ |
137,657 |
$ |
133,025 |
|
Business and government |
|
295,588 |
|
294,943 |
|
266,965 |
|
Banks |
|
29,970 |
|
28,422 |
|
21,345 |
|
|
463,609 |
|
461,022 |
|
421,335 |
Other |
|
|
|
|
|
|
Acceptances |
|
8,932 |
|
8,635 |
|
8,172 |
Obligations related to securities sold
short |
|
18,622 |
|
20,780 |
|
15,450 |
Derivative financial instruments |
|
35,299 |
|
38,250 |
|
40,236 |
Obligations related to securities sold under
repurchase agreements |
|
56,949 |
|
62,509 |
|
38,216 |
Subordinated debentures |
|
10,143 |
|
6,899 |
|
6,923 |
Capital instruments |
|
1,358 |
|
1,342 |
|
2,003 |
Other liabilities |
|
31,753 |
|
32,047 |
|
29,848 |
|
|
163,056 |
|
170,462 |
|
140,848 |
Total liabilities |
|
626,665 |
|
631,484 |
|
562,183 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Common equity |
|
|
|
|
|
|
|
Common shares |
|
13,139 |
|
11,163 |
|
8,336 |
|
Retained earnings |
|
21,978 |
|
21,253 |
|
18,421 |
|
Accumulated other comprehensive income (loss) |
|
(31) |
|
(141) |
|
(497) |
|
Other reserves |
|
166 |
|
139 |
|
96 |
Total common equity |
|
35,252 |
|
32,414 |
|
26,356 |
Preferred shares |
|
4,384 |
|
4,384 |
|
4,384 |
Total equity attributable to equity holders of the
Bank |
|
39,636 |
|
36,798 |
|
30,740 |
Non-controlling interests |
|
|
|
|
|
|
|
Non-controlling interests in subsidiaires |
|
966 |
|
918 |
|
626 |
|
Capital instrument equity holders |
|
777 |
|
770 |
|
874 |
Total equity |
|
41,379 |
|
38,486 |
|
32,240 |
Total liabilities and equity |
$ |
668,044 |
$ |
669,970 |
$ |
594,423 |
See Basis of Preparation below. |
Consolidated Statement of Changes in Equity
|
|
|
|
|
|
|
Accumulated other
comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) ($ millions) |
|
Common
shares |
|
|
Retained
earnings(1) |
|
|
Currency
translation
reserve |
|
|
Available-
for-sale
reserve |
|
|
Cash flow
hedging
reserve |
|
|
Share from
associates |
|
|
Other
reserves (2) |
|
|
Total
common
equity |
|
|
Preferred
shares |
|
|
Total common
and preferred
equity |
|
|
Non-controlling
interests in
subsidiaries |
|
|
Capital
Instrument
equity holders |
|
|
Total |
Balance as at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 1, 2011 |
$ |
8,336 |
|
$ |
18,421 |
|
$ |
(697) |
|
$ |
441 |
|
$ |
(251) |
|
$ |
10 |
|
$ |
96 |
|
$ |
26,356 |
|
$ |
4,384 |
|
$ |
30,740 |
|
$ |
626 |
|
$ |
874 |
|
$ |
32,240 |
Net income |
|
- |
|
|
6,023 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
6,023 |
|
|
220 |
|
|
6,243 |
|
|
198 |
|
|
25 |
|
|
6,466 |
Other comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income (loss) |
|
- |
|
|
- |
|
|
169 |
|
|
156 |
|
|
116 |
|
|
25 |
|
|
- |
|
|
466 |
|
|
- |
|
|
466 |
|
|
(25) |
|
|
- |
|
|
441 |
Total
comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income |
$ |
- |
|
$ |
6,023 |
|
$ |
169 |
|
$ |
156 |
|
$ |
116 |
|
$ |
25 |
|
$ |
- |
|
$ |
6,489 |
|
$ |
220 |
|
$ |
6,709 |
|
$ |
173 |
|
$ |
25 |
|
$ |
6,907 |
Shares issued |
|
4,803 |
|
|
8 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(26) |
|
|
4,785 |
|
|
- |
|
|
4,785 |
|
|
- |
|
|
- |
|
|
4,785 |
Common dividends paid |
|
- |
|
|
(2,493) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(2,493) |
|
|
- |
|
|
(2,493) |
|
|
- |
|
|
- |
|
|
(2,493) |
Preferred dividends
paid |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(220) |
|
|
(220) |
|
|
- |
|
|
- |
|
|
(220) |
Distributions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
non-contolling interests |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(44) |
|
|
(115) |
|
|
(159) |
Share-based
payments |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
38 |
|
|
38 |
|
|
- |
|
|
38 |
|
|
- |
|
|
- |
|
|
38 |
Other |
|
- |
|
|
19 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
58 |
(3) |
|
77 |
|
|
- |
|
|
77 |
|
|
211 |
(4) |
|
(7) |
|
|
281 |
Balance as at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2012 |
$ |
13,139 |
|
$ |
21,978 |
|
$ |
(528) |
|
$ |
597 |
|
$ |
(135) |
|
$ |
35 |
|
$ |
166 |
|
$ |
35,252 |
|
$ |
4,384 |
|
$ |
39,636 |
|
$ |
966 |
|
$ |
777 |
|
$ |
41,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 1, 2010 |
$ |
5,750 |
|
$ |
15,684 |
|
$ |
- |
|
$ |
616 |
|
$ |
(357) |
|
$ |
10 |
|
$ |
25 |
|
$ |
21,728 |
|
$ |
3,975 |
|
$ |
25,703 |
|
$ |
559 |
|
$ |
956 |
|
$ |
27,218 |
Net income |
|
- |
|
|
4,965 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
4,965 |
|
|
216 |
|
|
5,181 |
|
|
91 |
|
|
58 |
|
|
5,330 |
Other comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income (loss) |
|
- |
|
|
- |
|
|
(697) |
|
|
(175) |
|
|
106 |
|
|
- |
|
|
- |
|
|
(766) |
|
|
- |
|
|
(766) |
|
|
5 |
|
|
- |
|
|
(761) |
Total comprehensive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income |
$ |
- |
|
$ |
4,965 |
|
$ |
(697) |
|
$ |
(175) |
|
$ |
106 |
|
$ |
- |
|
$ |
- |
|
$ |
4,199 |
|
$ |
216 |
|
$ |
4,415 |
|
$ |
96 |
|
$ |
58 |
|
$ |
4,569 |
Shares issued |
|
2,586 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(11) |
|
|
2,575 |
|
|
409 |
|
|
2,984 |
|
|
- |
|
|
- |
|
|
2,984 |
Common dividends paid |
|
- |
|
|
(2,200) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(2,200) |
|
|
- |
|
|
(2,200) |
|
|
- |
|
|
- |
|
|
(2,200) |
Preferred dividends paid |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(216) |
|
|
(216) |
|
|
- |
|
|
- |
|
|
(216) |
Distributions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
non-contolling interests |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(41) |
|
|
(140) |
|
|
(181) |
Share-based payments |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
46 |
|
|
46 |
|
|
- |
|
|
46 |
|
|
- |
|
|
- |
|
|
46 |
Other |
|
- |
|
|
(28) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
36 |
|
|
8 |
|
|
- |
|
|
8 |
|
|
12 |
(4) |
|
- |
|
|
20 |
Balance as at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31, 2011 |
$ |
8,336 |
|
$ |
18,421 |
|
$ |
(697) |
|
$ |
441 |
|
$ |
(251) |
|
$ |
10 |
|
$ |
96 |
|
$ |
26,356 |
|
$ |
4,384 |
|
$ |
30,740 |
|
$ |
626 |
|
$ |
874 |
|
$ |
32,240 |
(1) |
Includes undistributed retained
earnings of $38 (2011 - $34) related to a foreign associated
corporation, which is subject to local regulatory restrictions.
|
(2) |
Represents amounts on account of
share-based payments.
|
(3) |
Includes impact of Tandem SARs voluntarily
renounced by certain employees while retaining their corresponding
option for shares.
|
(4) |
Includes changes to non-controlling interests
arising from business combinations and divestures.
|
See Basis of Preparation below. |
Consolidated Statement of Comprehensive Income
|
|
For
the three months ended |
For the
year ended |
|
|
|
October 31 |
|
|
July 31 |
|
|
October 31 |
|
|
October 31 |
|
|
October 31 |
(Unaudited) ($ millions) |
|
2012 |
|
|
2012 |
|
|
2011 |
|
|
2012 |
|
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
1,519 |
|
$ |
2,051 |
|
$ |
1,157 |
|
$ |
6,466 |
|
$ |
5,330 |
Other comprehensive
income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in unrealized foreign
currency translation gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized foreign
currency translation gains (losses) |
|
(19) |
|
|
279 |
|
|
474 |
|
|
85 |
|
|
(726) |
|
Net gains (losses) on
hedges of net investments in foreign operations |
|
(26) |
|
|
(27) |
|
|
(301) |
|
|
(33) |
|
|
47 |
|
Income tax expense
(benefit) |
|
(69) |
|
|
(33) |
|
|
(83) |
|
|
(97) |
|
|
18 |
|
|
|
24 |
|
|
285 |
|
|
256 |
|
|
149 |
|
|
(697) |
|
Net change in
unrealized gains (losses) on investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on
investment securities |
|
110 |
|
|
93 |
|
|
(151) |
|
|
331 |
|
|
(107) |
|
Reclassifciation of
net (gains) losses to net income |
|
(42) |
|
|
(99) |
|
|
(110) |
|
|
(176) |
|
|
(112) |
|
Income tax expense
(benefit) |
|
5 |
|
|
(22) |
|
|
(66) |
|
|
4 |
|
|
(50) |
|
|
|
63 |
|
|
16 |
|
|
(195) |
|
|
151 |
|
|
(169) |
|
Net changes in gains
(losses) on derivative instruments designated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as cash flow hedges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) on
derivative instruments designated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as cash flow hedges |
|
2 |
|
|
(50) |
|
|
(9) |
|
|
32 |
|
|
91 |
|
Reclassification of net (gains) losses
to net income |
|
12 |
|
|
37 |
|
|
24 |
|
|
124 |
|
|
57 |
|
Income tax expense
(benefit) |
|
4 |
|
|
(8) |
|
|
3 |
|
|
40 |
|
|
43 |
|
|
|
10 |
|
|
(5) |
|
|
12 |
|
|
116 |
|
|
105 |
|
Other comprehensive
income from investments in associates |
|
2 |
|
|
7 |
|
|
- |
|
|
25 |
|
|
- |
Other comprehensive
income (loss) |
|
99 |
|
|
303 |
|
|
73 |
|
|
441 |
|
|
(761) |
Comprehensive
income |
$ |
1,618 |
|
$ |
2,354 |
|
$ |
1,230 |
|
$ |
6,907 |
|
$ |
4,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable to non-controlling interests |
$ |
55 |
|
$ |
49 |
|
$ |
53 |
|
$ |
198 |
|
$ |
154 |
|
Non-controlling interests in
subsidiaries |
|
48 |
|
|
57 |
|
|
39 |
|
|
173 |
|
|
96 |
|
Capital instrument
equity holders |
|
7 |
|
|
(8) |
|
|
14 |
|
|
25 |
|
|
58 |
Comprehensive income
attributable to equity holders of the Bank |
|
1,563 |
|
|
2,305 |
|
|
1,177 |
|
|
6,709 |
|
|
4,415 |
|
Preferred
shareholders |
|
55 |
|
|
55 |
|
|
55 |
|
|
220 |
|
|
216 |
|
Common shareholders |
$ |
1,508 |
|
$ |
2,250 |
|
$ |
1,122 |
|
$ |
6,489 |
|
$ |
4,199 |
All items presented in other comprehensive income
will be reclassified to the Consolidated Statement of Income in
subsequent periods. |
See Basis of Preparation below |
Consolidated Statement of Cash Flows
|
|
For the three months
ended |
For the year
ended |
Sources (uses) of cash flows |
|
|
October
31 |
|
October 31 |
|
|
October
31 |
|
October 31 |
(Unaudited) ($ millions) |
|
|
2012 |
|
2011 |
|
|
2012 |
|
2011 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,519 |
$ |
1,157 |
|
$ |
6,466 |
$ |
5,330 |
Adjustment for: |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
(2,580) |
|
(2,329) |
|
|
(10,003) |
|
(9,014) |
|
Depreciation and amortization |
|
|
119 |
|
108 |
|
|
450 |
|
413 |
|
Acquisition-related gains |
|
|
- |
|
- |
|
|
- |
|
(286) |
|
Provisions for credit losses |
|
|
321 |
|
281 |
|
|
1,252 |
|
1,076 |
|
Equity-settled share-based payment expenses |
|
|
7 |
|
6 |
|
|
38 |
|
46 |
|
Net gain on investment securities |
|
|
(64) |
|
(64) |
|
|
(185) |
|
(285) |
|
Net income from investments in associated corporations |
|
|
(118) |
|
(109) |
|
|
(442) |
|
(433) |
|
Gain on sale of property and equipment |
|
|
(5) |
|
3 |
|
|
(864) |
|
(5) |
|
Provision for income taxes |
|
|
311 |
|
298 |
|
|
1,580 |
|
1,423 |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Trading assets |
|
|
6,355 |
|
12,253 |
|
|
(11,976) |
|
(2,758) |
|
Securities purchased under resale agreements |
|
|
(540) |
|
(4,309) |
|
|
(13,322) |
|
(7,462) |
|
Loans |
|
|
(9,063) |
|
(7,791) |
|
|
(33,351) |
|
(22,250) |
|
Deposits |
|
|
3,140 |
|
(285) |
|
|
36,878 |
|
38,997 |
|
Obligations related to securities sold
short |
|
|
(2,350) |
|
(6,764) |
|
|
3,560 |
|
(5,939) |
|
Obligations related to assets sold under
repurchase agreements |
|
|
(5,663) |
|
(309) |
|
|
18,936 |
|
6,206 |
|
Net derivative financial instruments |
|
|
464 |
|
(915) |
|
|
2,206 |
|
(1,422) |
|
Other, net |
|
|
(3,399) |
|
3,778 |
|
|
(2,070) |
|
1,393 |
Dividends received |
|
|
257 |
|
219 |
|
|
1,026 |
|
1,583 |
Interest received |
|
|
4,012 |
|
4,338 |
|
|
16,224 |
|
17,535 |
Interest paid |
|
|
(1,557) |
|
(2,228) |
|
|
(7,293) |
|
(10,139) |
Income tax paid |
|
|
(251) |
|
(78) |
|
|
(1,041) |
|
(1,304) |
Net cash from/(used in) operating activities |
|
|
(9,085) |
|
(2,740) |
|
|
8,069 |
|
12,705 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits with banks |
|
|
7,640 |
|
5,694 |
|
|
(8,475) |
|
(4,174) |
Purchase of investment securities |
|
|
(12,144) |
|
(8,972) |
|
|
(34,856) |
|
(30,440) |
Proceeds from sale and maturity of investment
securities |
|
|
9,338 |
|
8,112 |
|
|
31,780 |
|
31,889 |
Acquisition/sale of subsidiaries,
associated corporations or business units, net of cash
acquired |
|
|
4 |
|
(133) |
|
|
(458) |
|
(544) |
Proceeds from disposal of real estate assets |
|
|
- |
|
- |
|
|
1,407 |
|
- |
Other property and equipment, net
of disposals |
|
|
(181) |
|
(143) |
|
|
(434) |
|
(371) |
Other, net |
|
|
(53) |
|
(209) |
|
|
(298) |
|
(4,167) |
Net cash from/(used in) investing
activities |
|
|
4,604 |
|
4,349 |
|
|
(11,334) |
|
(7,807) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
Proceeds from issue of subordinated
debentures |
|
|
3,250 |
|
- |
|
|
3,250 |
|
- |
Redemption of subordinated debentures |
|
|
- |
|
- |
|
|
(20) |
|
- |
Redemption of capital instruments |
|
|
- |
|
- |
|
|
(750) |
|
(500) |
Proceeds from common shares issued |
|
|
1,966 |
|
201 |
|
|
4,200 |
|
736 |
Cash dividends paid |
|
|
(727) |
|
(619) |
|
|
(2,713) |
|
(2,416) |
Distributions to non-controlling interests |
|
|
(11) |
|
(9) |
|
|
(159) |
|
(181) |
Other, net |
|
|
55 |
|
(591) |
|
|
287 |
|
(1,914) |
Net cash from/(used in) financing activities |
|
|
4,533 |
|
(1,018) |
|
|
4,095 |
|
(4,275) |
Effect of exchange rate changes on
cash and cash equivalents |
|
|
3 |
|
57 |
|
|
(88) |
|
(59) |
Net change in cash and cash equivalents |
|
|
55 |
|
648 |
|
|
742 |
|
564 |
Cash and cash equivalents at beginning of
period(1) |
|
|
4,981 |
|
3,646 |
|
|
4,294 |
|
3,730 |
Cash and cash equivalents at end of
period(1) |
|
$ |
5,036 |
$ |
4,294 |
|
$ |
5,036 |
$ |
4,294 |
(1) |
Represents cash and non-interest bearing
deposits with banks. |
Basis of preparation
These unaudited consolidated financial statements were prepared
in accordance with IFRS as issued by IASB and accounting
requirements of OSFI in accordance with Section 308 of the Bank
Act, except for certain required disclosures. Therefore, these
unaudited consolidated financial statements should be read in
conjunction with the Bank's audited consolidated financial
statements for the year ended October 31,
2012, which will be available today at www.scotiabank.com.
With the Canadian Accounting Standards Board adopting International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) effective January 1, 2011, IFRS replaced CGAAP as the
financial reporting framework for all publicly accountable
enterprises including the Bank. As these are the Bank's first
consolidated financial statements that have been presented under
IFRS, they were prepared in accordance with IFRS 1, First-time
Adoption of International Financial Reporting Standards.
Shareholder and investor information
Direct deposit service
Shareholders may have dividends deposited directly into accounts
held at financial institutions which are members of the Canadian
Payments Association. To arrange direct deposit service, please
write to the transfer agent.
Dividend and Share Purchase Plan
Scotiabank's dividend reinvestment and share purchase plan allows
common and preferred shareholders to purchase additional common
shares by reinvesting their cash dividend without incurring
brokerage or administrative fees.
As well, eligible shareholders may invest up to $20,000 each fiscal year to purchase additional
common shares of the Bank. Debenture holders may apply interest on
fully registered Bank subordinated debentures to purchase
additional common shares. All administrative costs of the plan are
paid by the Bank.
For more information on participation in the plan, please
contact the transfer agent.
Dividend dates for 2013
Record and payment dates for common and preferred shares, subject
to approval by the Board of Directors.
Record Date |
|
Payment Date |
|
|
|
January 2 |
|
January 29 |
April 2 |
|
April 26 |
July 2
|
|
July 29 |
October 1 |
|
October 29 |
Annual Meeting date for fiscal 2012
Shareholders are invited to attend the 181st Annual Meeting of
Holders of Common Shares, to be held on April 9, 2013, at the World Trade and Convention
Centre, 1800 Argyle Street, Halifax, Nova
Scotia, beginning at 10:00
a.m. (local time). The record date for determining
shareholders entitled to receive notice of and to vote at the
meeting will be the close of business on February 12, 2013.
Duplicated communication
If your shareholdings are registered under more than one name or
address, multiple mailings will result. To eliminate this
duplication, please write to the transfer agent to combine the
accounts.
Website
For information relating to Scotiabank and its services, visit us
at our website: www.scotiabank.com.
Conference call and Web broadcast
The quarterly results conference call will take place on
Friday December 7, 2012 at
2:00 pm EDT and is expected to last
approximately one hour. Interested parties are invited to access
the call live, in listen-only mode, by telephone, toll-free, at
416-644-3414 or 1-800-814-4859 (please call five to 15 minutes in
advance). In addition, an audio webcast, with accompanying slide
presentation, may be accessed via the Investor Relations page of
www.scotiabank.com. Following discussion of the results by
Scotiabank executives, there will be a question and answer
session.
A telephone replay of the conference call will be available from
December 7, 2012, to December 22 , 2012, by calling 416-640-1917 or
1-877-289-8525 and entering the identification code 4487936#. The
archived audio webcast will be available on the Bank's website for
three months.
Contact information
Investors:
Financial analysts, portfolio managers and other investors
requiring financial information, please contact Investor Relations,
Finance Department:
Scotiabank
Scotia Plaza, 44 King Street West
Toronto, Ontario, Canada M5H
1H1
Telephone: (416) 775-0798
Fax: (416) 866-7867
E-mail: investor.relations@scotiabank.com
Media:
For other information and for media enquiries, please contact the
Public, Corporate and Government Affairs Department at the above
address.
Telephone: (416) 933-1344
Fax: (416) 866-4988
E-mail: corporate.communications@scotiabank.com
Shareholders:
For enquiries related to changes in share registration or address,
dividend information, lost share certificates, estate transfers, or
to advise of duplicate mailings, please contact the Bank's transfer
agent:
Computershare Trust Company of Canada
100 University Avenue, 9th Floor
Toronto, Ontario, Canada M5J
2Y1
Telephone: 1-877-982-8767
Fax: 1-888-453-0330
E-mail: service@computershare.com
Co-Transfer Agent (U.S.A.)
Computershare Trust Company N.A.
250 Royall Street
Canton, MA 02021 U.S.A.
Telephone: 1-800-962-4284
For other shareholder enquiries, please contact the Finance
Department:
Scotiabank
Scotia Plaza, 44 King Street West
Toronto, Ontario, Canada
M5H 1H1
Telephone: (416) 866-4790
Fax: (416) 866-4048
E-mail: corporate.secretary@scotiabank.com
Rapport trimestriel disponible en français
Le Rapport annuel et les états financiers de la Banque sont publiés
en français et en anglais et distribués aux actionnaires dans la
version de leur choix. Si vous préférez que la documentation vous
concernant vous soit adressée en français, veuillez en informer
Relations publiques, Affaires de la société et Affaires
gouvernementales, La Banque de Nouvelle-Écosse, Scotia Plaza, 44,
rue King Ouest, Toronto
(Ontario), Canada M5H 1H1, en joignant, si possible,
l'étiquette d'adresse, afin que nous puissions prendre note du
changement.
The Bank of Nova Scotia is
incorporated in Canada with
limited liability.
SOURCE Scotiabank