Scotiabank reports fourth quarter and 2023 results

Scotiabank's 2023 audited annual consolidated financial statements and accompanying Management's Discussion & Analysis (MD&A) are available at www.scotiabank.com along with the supplementary financial information and regulatory capital disclosure reports, which include 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 ended October 31, 2023 and related notes prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), unless otherwise noted.

 

Additional information related to the Bank, including the Bank's Annual Information Form, can be found on the SEDAR+ website at www.sedarplus.ca and on the EDGAR section of the SEC's website at www.sec.gov.

   

Fiscal 2023 Highlights on a Reported Basis
(versus Fiscal 2022)

Fourth Quarter 2023 Highlights on a Reported Basis
(versus Q4 2022)

 

  • Net income of $7,528 million, compared to $10,174 million
  • Earnings per share (diluted) of $5.78, compared to $8.02
  • Return on equity(1) of 10.4%, compared to 14.8% 

 

  • Net income of $1,385 million, compared to $2,093 million
  • Earnings per share (diluted) of $1.02, compared to $1.63
  • Return on equity of 7.2%, compared to 11.9% 

Fiscal 2023 Highlights on an Adjusted Basis(2)
(versus Fiscal 2022)

Fourth Quarter 2023 Highlights on an Adjusted Basis(2)
(versus Q4 2022)

 

  • Net income of $8,441 million, compared to $10,749 million
  • Earnings per share (diluted) of $6.54, compared to $8.50
  • Return on equity of 11.7%, compared to 15.7% 

 

  • Net income of $1,674 million, compared to $2,615 million
  • Earnings per share (diluted) of $1.26, compared to $2.06
  • Return on equity of 8.9%, compared to 15.0%

Fiscal 2023 Performance versus Medium-Term Financial Objectives

The following table provides a summary of our 2023 performance against our medium-term financial objectives(3):

Medium-Term Objectives

Fiscal 2023 Results

 

Reported

Adjusted(2)

Diluted earnings per share growth of 7%+                                

(27.9) %

(23.1) %

Return on equity of 14%+

10.4 %

11.7 %

Achieve positive operating leverage

Negative 9.0%

Negative 8.3%

Maintain strong capital ratios

CET1 capital ratio(4) of 13.0%               

N/A

TORONTO, Nov. 28, 2023 /CNW/ - Scotiabank reported net income of $7,528 million for the fiscal year 2023, compared with net income of $10,174 million in 2022. Diluted earnings per share (EPS) were $5.78, compared to $8.02 in the previous year. Return on equity was 10.4%, compared to 14.8% in the previous year.

Reported net income for the fourth quarter ended October 31, 2023 was $1,385 million compared to $2,093 million in the same period last year. Diluted EPS were $1.02, compared to $1.63 in the same period a year ago. Return on equity was 7.2% compared to 11.9% a year ago.

This quarter's net income included adjusting items of $289 million after-tax. These consisted of restructuring charges of $258 million related to ongoing efforts to streamline operational processes, costs of $63 million related to the exit of certain real estate premises and service contracts, impairment charges of $273 million related to the write-down of the Bank's investment in associate with Bank of Xi'an Co Ltd. in China, and certain intangible assets and a gain of $319 million related to the sale of the Bank's equity interest in Canadian Tire's Financial Services business (CTFS).

Adjusted net income(2) was $8,441 million for the fiscal year 2023, down from $10,749 million in the previous year, mainly as a result of higher provision for credit losses in fiscal 2023, and adjusted diluted EPS were $6.54 versus $8.50 in the previous year. Adjusted return on equity was 11.7% compared to 15.7% in the previous year.

Adjusted net income(2) for the fourth quarter ended October 31, 2023 was $1,674 million and adjusted diluted EPS were $1.26, compared to $2.06 last year. Adjusted return on equity was 8.9% compared to 15.0% a year ago.

"I am encouraged by the results of our focused efforts on strengthening the Bank's balance sheet as we prepare to manage through heightened macroeconomic uncertainty. Strong capital and liquidity ratios, improving loan to deposit ratios and increased allowance for credit losses coverage ratios, position us well as we enter the next phase of our growth strategy," said Scott Thomson, President and CEO of Scotiabank.

Canadian Banking generated adjusted earnings of $4,022 million in 2023. Strong net interest income from volume growth and margin expansion drove a year-over-year increase in pre-tax pre-provision earnings(5). The Bank built performing allowances given the uncertain macroeconomic operating environment resulting in higher provision for credit losses compared to the prior year.

International Banking delivered $2,516 million of adjusted income after non-controlling interests in 2023, a year-over-year increase of 3%. The business had double-digit revenue growth and continued to show strong cost discipline, delivering positive operating leverage.

Global Wealth Management adjusted earnings were $1,466 million in 2023. Challenging market conditions drove declines in average assets under management, impacting fee income across our Canadian businesses, partly offset by double digit growth in International Wealth Management and continued prudent expense management.

Global Banking and Markets reported earnings of $1,768 million in 2023. Revenue from both Capital Markets and Business Banking increased, despite a challenging capital markets environment, and partly offset the impact of higher provision for credit losses.

The Bank reported an increased Common Equity Tier 1 (CET1) capital ratio(4) of 13.0%, up from 11.5% last year. The Liquidity Coverage Ratio (LCR)(6) was strong at 136%, up from 119% in the prior year.

"I would like to personally thank Scotiabankers globally who came together again this year to deliver the advice and service that our clients have come to expect from us. It is this unwavering commitment of our team to delivering for our clients that gives me great confidence in the future growth potential of the Bank," said Scott Thomson.

_____________________________

(1)

Refer to page 136 of the Management's Discussion & Analysis in the Bank's 2023 Annual Report, available on www.sedarplus.ca, for an explanation of the composition of the measure. Such explanation is incorporated by reference hereto.

(2)

Refer to Non-GAAP Measures section starting on page 21.

(3)

Refer to the Risk Management section in the MD&A in the Bank's 2023 Annual Report for further discussion on the Bank's risk management framework.

(4)

This measure has been disclosed in this document in accordance with OSFI Guideline – Capital Adequacy Requirements (February 2023).

(5)

Pre-tax, pre-provision (PTPP) earnings are calculated as revenue net of non-interest expenses. This is a non-GAAP measure. PTPP earnings do not have a standardized meaning under GAAP and may not be comparable to similar measures disclosed by other financial institutions. The Bank uses PTPP earnings to assess its ability to generate earnings growth excluding the impact of credit losses and income taxes. The Bank believes that certain non-GAAP measures provide readers with a better understanding of how management assesses performance.

(6)

This measure has been disclosed in this document in accordance with OSFI Guideline – Public Disclosure Requirements for Domestic Systemically Important Banks on Liquidity Coverage Ratio (April 2015).

Financial Highlights
 

As at and for the three months ended

As at and for the year ended

 

October 31

July 31

October 31

October 31

October 31

(Unaudited)

2023

2023

2022

2023

2022

Operating results ($ millions)

         

Net interest income

4,672

4,580

4,622

18,287

18,115

Non-interest income

3,636

3,510

3,004

14,020

13,301

Total revenue

8,308

8,090

7,626

32,307

31,416

Provision for credit losses

1,256

819

529

3,422

1,382

Non-interest expenses

5,529

4,562

4,529

19,131

17,102

Income tax expense

138

497

475

2,226

2,758

Net income

1,385

2,212

2,093

7,528

10,174

Net income attributable to common shareholders

1,245

2,086

1,949

6,991

9,656

Operating performance

         

Basic earnings per share ($)

1.03

1.74

1.64

5.84

8.05

Diluted earnings per share ($)

1.02

1.72

1.63

5.78

8.02

Return on equity (%)(1)

7.2

12.1

11.9

10.4

14.8

Return on tangible common equity (%)(2)

9.0

15.1

15.0

13.0

18.6

Productivity ratio (%)(1)

66.5

56.4

59.4

59.2

54.4

Operating leverage (%)(1)

     

(9.0)

(2.4)

Net interest margin (%)(2)

2.16

2.10

2.18

2.12

2.20

Financial position information ($ millions)

         

Cash and deposits with financial institutions

90,312

90,325

65,895

   

Trading assets

117,868

119,301

113,154

   

Loans

750,911

752,205

744,987

   

Total assets

1,410,789

1,396,098

1,349,418

   

Deposits

952,333

957,225

916,181

   

Common equity

68,853

67,982

65,150

   

Preferred shares and other equity instruments

8,075

8,075

8,075

   

Assets under administration(1)

673,550

690,846

641,636

   

Assets under management(1)

316,604

331,340

311,099

   

Capital and liquidity measures

         

Common Equity Tier 1 (CET1) capital ratio (%)(3)

13.0

12.7

11.5

   

Tier 1 capital ratio (%)(3)

14.8

14.6

13.2

   

Total capital ratio (%)(3)

17.2

16.9

15.3

   

Total loss absorbing capacity (TLAC) ratio (%)(4)

30.6

30.5

27.4

   

Leverage ratio (%)(5)

4.2

4.1

4.2

   

TLAC Leverage ratio (%)(4)

8.6

8.7

8.8

   

Risk-weighted assets ($ millions)(3)

440,017

439,814

462,448

   

Liquidity coverage ratio (LCR) (%)(6)

136

133

119

   

Net stable funding ratio (NSFR) (%)(7)

116

114

111

   

Credit quality

         

Net impaired loans ($ millions)

3,845

3,667

3,151

   

Allowance for credit losses ($ millions)(8)

6,629

6,094

5,499

   

Gross impaired loans as a % of loans and acceptances(1)

0.74

0.70

0.62

   

Net impaired loans as a % of loans and acceptances(1)

0.50

0.47

0.41

   

Provision for credit losses as a % of average net loans and acceptances (annualized)(1)(9)

0.65

0.42

0.28

0.44

0.19

Provision for credit losses on impaired loans as a % of average net loans

         

and acceptances (annualized)(1)(9)

0.42

0.38

0.26

0.35

0.24

Net write-offs as a % of average net loans and acceptances (annualized)(1)

0.35

0.34

0.24

0.32

0.24

Adjusted results(2)

         

Adjusted net income ($ millions)

1,674

2,227

2,615

8,441

10,749

Adjusted diluted earnings per share ($)

1.26

1.73

2.06

6.54

8.50

Adjusted return on equity (%)(10)

8.9

12.2

15.0

11.7

15.7

Adjusted return on tangible common equity (%)(10)

11.0

15.1

18.8

14.5

19.6

Adjusted productivity ratio (%)

59.5

56.1

53.7

57.2

52.8

Adjusted operating leverage (%)

     

(8.3)

(1.1)

Common share information

         

Closing share price ($)(TSX)

56.15

66.40

65.85

   

Shares outstanding (millions)

         

Average – Basic

1,206

1,199

1,192

1,197

1,199

Average – Diluted

1,211

1,214

1,199

1,204

1,208

End of period

1,214

1,205

1,191

   

Dividends paid per share ($)

1.06

1.06

1.03

4.18

4.06

Dividend yield (%)(1)

7.0

6.5

5.7

6.5

5.1

Market capitalization ($ millions) (TSX)

68,169

80,034

78,452

   

Book value per common share ($)(1)

56.71

56.40

54.68

   

Market value to book value multiple(1)

1.0

1.2

1.2

   

Price to earnings multiple (trailing 4 quarters)(1)

9.6

10.3

8.2

   

Other information

         

Employees (full-time equivalent)

89,483

91,013

90,979

   

Branches and offices(11)

2,379

2,398

2,439

   

(1)

Refer to page 136 of the Management's Discussion & Analysis in the Bank's 2023 Annual Report, available on www.sedarplus.ca, for an explanation of the composition of the measure. Such explanation is incorporated by reference hereto.

(2)

Refer to Non-GAAP Measures section starting on page 21.

(3)

2023 regulatory capital ratios are based on Revised Basel III requirements as determined in accordance with OSFI Guideline – Capital Adequacy Requirements (February 2023). Prior period regulatory capital ratios were prepared in accordance with OSFI Guideline – Capital Adequacy Requirements (November 2018).

(4)

This measure has been disclosed in this document in accordance with OSFI Guideline – Total Loss Absorbing Capacity (September 2018).

(5)

2023 leverage ratios are based on Revised Basel III requirements as determined in accordance with OSFI Guideline – Leverage Requirements (February 2023). Prior period leverage ratios were prepared in accordance with OSFI Guideline – Leverage Requirements (November 2018).

(6)

This measure has been disclosed in this document in accordance with OSFI Guideline – Public Disclosure Requirements for Domestic Systemically Important Banks on Liquidity Coverage Ratio (April 2015).

(7)

This measure has been disclosed in this document in accordance with OSFI Guideline - Net Stable Funding Ratio Disclosure Requirements (January 2021).

(8)

Includes allowance for credit losses on all financial assets - loans, acceptances, off-balance sheet exposures, debt securities, and deposits with financial institutions.

(9)

Includes provision for credit losses on certain financial assets - loans, acceptances, and off-balance sheet exposures.

(10)

Prior period amounts have been restated to align with current period calculation.

(11)

Q4 2022 amount has been restated to include MD Financial and Jarislowsky Fraser offices.

Impact of Foreign Currency Translation
 

Average exchange rate

% Change

 

October 31

July 31

October 31

 

October 31, 2023

October 31, 2023

For the three months ended

2023

2023

2022

 

vs. July 31, 2023

vs. October 31, 2022

U.S. dollar/Canadian dollar

0.736

0.750

0.752

(1.8)

%

(2.0)

%

Mexican Peso/Canadian dollar

12.850

12.959

15.072

(0.8)

%

(14.7)

%

Peruvian Sol/Canadian dollar

2.766

2.733

2.942

1.2

%

(6.0)

%

Colombian Peso/Canadian dollar

3,017.319

3,190.607

3,381.348

(5.4)

%

(10.8)

%

Chilean Peso/Canadian dollar

655.072

602.809

696.481

8.7

%

(5.9)

%

                     
     

Average exchange rate

% Change

     

October 31

October 31

 

October 31, 2023

For the year ended

   

2023

2022

 

vs. October 31, 2022

U.S. dollar/Canadian dollar

0.742

0.777

(4.5)

%

Mexican Peso/Canadian dollar

13.424

15.799

(15.0)

%

Peruvian Sol/Canadian dollar

2.788

3.002

(7.1)

%

Colombian Peso/Canadian dollar

3,309.943

3,187.149

3.9

%

Chilean Peso/Canadian dollar

624.816

669.905

(6.7)

%

                   
     

For the three months ended

For the year ended

 

October 31, 2023

October 31, 2023

 

October 31, 2023

Impact on net income(1) ($ millions except EPS)

vs. October 31, 2022

vs. July 31, 2023

 

vs. October 31, 2022

Net interest income

$

165

$

(21)

$

665

 

Non-interest income(2)

 

63

 

19

 

60

 

Total revenue

 

228

 

(2)

 

725

 

Non-interest expenses

 

(141)

 

(2)

 

(517)

 

Other items (net of tax)(2)

 

(56)

 

2

 

(158)

 

Net income

$

31

$

(2)

$

50

 

Earnings per share (diluted)

$

0.03

$

$

0.04

 

Impact by business line ($ millions)

             

Canadian Banking

$

$

1

$

3

 

International Banking(2)

 

52

 

18

 

71

 

Global Wealth Management

 

5

 

3

 

23

 

Global Banking and Markets

 

5

 

6

 

62

 

Other(2)

 

(31)

 

(30)

 

(109)

 

Net income

$

31

$

(2)

$

50

 

(1) Includes the impact of all currencies.

(2) Includes the impact of foreign currency hedges.

Group Financial Performance

Net income

Q4 2023 vs Q4 2022

Net income was $1,385 million compared to $2,093 million, a decrease of 34%. This quarter included adjusting items impacting net income of $289 million compared to $522 million in the prior year (refer to Non-GAAP Measures starting on page 21). Adjusted net income was $1,674 million compared to $2,615 million, a decrease of 36%, due mainly to higher provision for credit losses and non-interest expenses and lower non-interest income, partly offset by lower provision for income taxes.

Q4 2023 vs Q3 2023

Net income was $1,385 million compared to $2,212 million, a decrease of 37%. This quarter included adjusting items impacting net income of $289 million compared to $15 million in the prior quarter (refer to Non-GAAP Measures starting on page 21). Adjusted net income was $1,674 million compared to $2,227 million, a decrease of 25%. The decrease was due mainly to higher provision for credit losses and non-interest expenses and lower non-interest income, partly offset by lower provision for income taxes.

Total revenue

Q4 2023 vs Q4 2022

Revenues were $8,308 million compared to $7,626 million, an increase of 9%. Adjusted revenues were $7,941 million compared to $7,987 million, a decrease of 1%.

Net interest income was $4,672 million, an increase of $50 million or 1%, due primarily to loan growth across all business lines, and the positive impact of foreign currency translation, largely offset by a lower contribution from asset/liability management activities related to higher funding costs. Net interest margin was down two basis points to 2.16%, driven primarily by a lower contribution from asset/liability management activities related to higher funding costs, and increased levels of high quality, lower-margin liquid assets. The decrease was partly offset by higher margins in International Banking and Canadian Banking.

Non-interest income was $3,636 million, an increase of $632 million or 21%. Adjusted non-interest income was $3,269 million, down $96 million or 3%. The decrease was due mainly to lower trading revenues, investment gains, and income from associated corporations, partly offset by higher fees and commissions, banking revenues, wealth management revenues, and the positive impact of foreign currency translation.

Q4 2023 vs Q3 2023

Revenues were $8,308 million compared to $8,090 million, an increase of 3%. Adjusted revenues were $7,941 million compared to $8,090 million, a decrease of 2%.

Net interest income increased $92 million or 2% driven by a higher net interest margin, partly offset by lower loan volumes. Net interest margin increased by six basis points, driven by higher margins across all business lines, partly offset by lower contribution from asset/liability management activities.

Non-interest income increased by $126 million or 4%. Adjusted non-interest income was down $241 million or 7%. The decrease was due mainly to lower trading revenues, lower unrealized gains on non-trading derivatives and income from associated corporations, partly offset by higher fees and commissions, higher banking revenues, and the positive impact of foreign currency translation.

Provision for credit losses

Q4 2023 vs Q4 2022

The provision for credit losses was $1,256 million, compared to $529 million, an increase of $727 million. The provision for credit losses ratio increased 37 basis points to 65 basis points.

The provision for credit losses on performing loans was $454 million, compared to $35 million. Retail provisions were $224 million and commercial provisions were $230 million this quarter, mostly in Canadian Banking. The increased provision this quarter was driven primarily by the unfavourable macroeconomic outlook and uncertainty around the impacts of higher interest rates, resulting from policy tightening to address inflation, on certain sectors in the North American non-retail portfolios, and the resulting migration in the Canadian retail portfolios. In addition, retail portfolio growth across markets increased the provision for credit losses. Prior year provisions benefitted from improved credit quality expectations mainly in Canadian retail, and improved credit quality in Global Banking and Markets. The provision for credit losses ratio on performing loans increased 21 basis points to 23 basis points.

The provision for credit losses on impaired loans was $802 million, compared to $494 million, an increase of $308 million due primarily to higher formations in Canadian and International Banking retail portfolios. The provision for credit losses ratio on impaired loans was 42 basis points, an increase of 16 basis points.

Q4 2023 vs Q3 2023

The provision for credit losses was $1,256 million, compared to $819 million, an increase of $437 million or 53%. The provision for credit losses ratio increased 23 basis points to 65 basis points.

The provision for credit losses on performing loans was $454 million, compared to $81 million, an increase of $373 million. The higher provision this quarter was driven primarily by the unfavourable macroeconomic outlook and uncertainty around the impacts of higher interest rates, resulting from policy tightening to address inflation, on certain sectors in the North American non-retail portfolios, and the resulting migration in the Canadian retail portfolios. Higher provisions were mainly in Canadian Banking and Global Banking and Markets. The provision for credit losses ratio on performing loans increased 19 basis points to 23 basis points.

The provision for credit losses on impaired loans was $802 million, compared to $738 million, an increase of $64 million or 9% due primarily to higher retail formations, and higher corporate and commercial provisions. The provision for credit losses ratio on impaired loans was 42 basis points, an increase of four basis points.

Non-interest expenses

Q4 2023 vs Q4 2022

Non-interest expenses were $5,529 million, an increase of 22%. Adjusted non-interest expenses were $4,723 million, an increase of $436 million or 10%, driven by higher personnel costs, technology-related costs, performance-based compensation, business and capital taxes, share-based compensation, advertising and the unfavourable impact of foreign currency translation. This was partly offset by lower professional fees.

The productivity ratio was 66.6% compared to 59.4%. The adjusted productivity ratio was 59.5% compared to 53.7%.

Q4 2023 vs Q3 2023

Non-interest expenses increased by $967 million or 21%. Adjusted non-interest expenses increased by $181 million or 4%. The increase was due to higher technology-related costs, performance-based compensation, professional fees and advertising. Partly offsetting were lower other employee benefits.

The productivity ratio was 66.6% compared to 56.4%. The adjusted productivity ratio was 59.5% compared to 56.1%.

Provision for income taxes  

Q4 2023 vs Q4 2022

The effective tax rate was 9% compared to 18.5% due primarily to proportionally higher tax savings from higher tax-exempt income and higher income from lower tax rate jurisdictions, as well as the benefit of divestitures. This was partly offset by the increase in the Canadian statutory tax rate and lower inflationary adjustments. On an adjusted basis, the effective rate was 14.7% compared to 17.6% due primarily to proportionally higher tax savings from higher tax-exempt income and higher income from lower tax rate jurisdictions, partly offset by the increase in the Canadian statutory tax rate and lower inflationary adjustments.

Q4 2023 vs Q3 2023

The effective tax rate was 9% compared to 18.4% due primarily to proportionally higher tax savings from higher tax-exempt income and higher income from lower tax rate jurisdictions, as well as the benefit of divestitures. This was partly offset by the impairment charge on Bank of Xi'an Co. Ltd. On an adjusted basis, the effective rate was 14.7% compared to 18.4% due primarily to proportionally higher tax savings from higher tax-exempt income and higher income from lower tax rate jurisdictions.

Capital Ratios

The Bank continues to maintain strong, high quality capital levels which position it well for future business growth and opportunities. The CET1 ratio as at October 31, 2023 was 13.0%, an increase of approximately 150 basis points from the prior year. The ratio benefited from the adoption of OSFI's revised Basel III requirements, internal capital generation during the year including lower risk-weighted assets, net share issuances from the Bank's Shareholder Dividend and Share Purchase Plan, and the sale of CTFS, partly offset by the Canada Recovery Dividend tax accrual, the restructuring charges, contract terminations costs and other impairments announced during the fourth quarter.

The Bank's Tier 1 capital ratio was 14.8% as at October 31, 2023, an increase of approximately 160 basis points from the prior year, due primarily to the above noted impacts to the CET1 ratio.

The Bank's Total capital ratio was 17.2% as at October 31, 2023, an increase of approximately 190 basis points from 2022, due primarily to the above noted impacts to the Tier 1 capital ratio, and issuances of $1 billion, JPY 33 billion and JPY 12 billion of NVCC subordinated debentures, partly offset by $352 million in net amortization of NVCC subordinated debentures and other regulatory adjustments.

The TLAC ratio was 30.6% as at October 31, 2023, an increase of approximately 320 basis points from the prior year, primarily from higher available TLAC and lower risk-weighted assets.

The Leverage ratio was 4.2%, in line with the prior year, due primarily to growth in Tier 1 capital, offset by OSFI's discontinuance of the temporary exclusion of central bank reserves from its leverage exposures measure and growth in the Bank's on and off-balance sheet assets.

The TLAC Leverage ratio was 8.6%, a decrease of approximately 20 basis points from 2022, due primarily to OSFI's discontinuance of the temporary exclusion of central bank reserves from its leverage exposures measure and growth in the Bank's on and off-balance sheet assets.

The Bank's capital, leverage and TLAC ratios continue to be in excess of OSFI's minimum capital ratio requirements for 2023. For 2024, the Bank will continue to prudently manage its capital to address increasing regulatory requirements. The estimated CET1 impact from adoption of the higher capital output floor and the implementation of the new Fundamental Review of the Trading Book and Credit Valuation Adjustment Framework requirements in the first quarter of 2024 is approximately -75 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)

2023

 

2023

 

2022

 

2023

 

2022

 

Reported Results

                             

Net interest income

$

2,562

 

$

2,468

 

$

2,363

 

$

9,756

 

$

9,001

 

Non-interest income(2)

 

767

   

748

   

771

   

3,087

   

3,029

 

Total revenue

 

3,329

   

3,216

   

3,134

   

12,843

   

12,030

 

Provision for credit losses

 

700

   

307

   

163

   

1,443

   

209

 

Non-interest expenses

 

1,513

   

1,448

   

1,397

   

5,867

   

5,388

 

Income tax expense

 

306

   

399

   

404

   

1,514

   

1,670

 

Net income

$

810

 

$

1,062

 

$

1,170

 

$

4,019

 

$

4,763

 

Net income attributable to equity holders of the Bank             

$

810

 

$

1,062

 

$

1,170

 

$

4,019

 

$

4,763

 

Other financial data and measures

                             

Return on equity(3)

 

17.0

%

 

22.5

%

 

24.7

%

 

21.3

%

 

26.3

%

Net interest margin(3)

 

2.47

%

 

2.35

%

 

2.26

%

 

2.34

%

 

2.24

%

Average assets ($ billions)

$

447

 

$

450

 

$

446

 

$

450

 

$

430

 

Average liabilities ($ billions)

$

386

 

$

376

 

$

347

 

$

372

 

$

332

 

(1)

Results are presented on a taxable equivalent basis. Refer to Business Line Overview section of the Bank's 2023 Annual Report to Shareholders.

(2)

Includes net income from investments in associated corporations for the three months ended October 31, 2023 - $23 (July 31, 2023 - $8; October 31, 2022 - $23) and for the year ended October 31, 2023 - $71 (October 31, 2022 - $64).

(3)

Refer to Non-GAAP Measures starting on page 21.

   
   

For the three months ended

For the year ended

(Unaudited) ($ millions)

October 31

 

July 31

 

October 31

 

October 31

 

October 31

 

(Taxable equivalent basis)

2023

 

2023

 

2022

 

2023

 

2022

 

Adjusted Results(1)

                             

Net interest income

$

2,562

 

$

2,468

 

$

2,363

 

$

9,756

 

$

9,001

 

Non-interest income

 

767

   

748

   

771

   

3,087

   

3,029

 

Total revenue

 

3,329

   

3,216

   

3,134

   

12,843

   

12,030

 

Provision for credit losses                                                                         

 

700

   

307

   

163

   

1,443

   

209

 

Non-interest expenses(2)

 

1,513

   

1,447

   

1,391

   

5,863

   

5,366

 

Income tax expense

 

306

   

399

   

406

   

1,515

   

1,676

 

Net income

$

810

 

$

1,063

 

$

1,174

 

$

4,022

 

$

4,779

 

(1)

Refer to Non-GAAP Measures starting on page 21 for the reconciliation of reported and adjusted results.

(2)

Includes adjustment for Amortization of acquisition-related intangible assets, excluding software for the three months ended October 31, 2023 – nil (July 31, 2023 – $1; October 31, 2022 – $6) and for the year ended October 31, 2023 – $4 (October 31, 2022 – $22).

Net income

Q4 2023 vs Q4 2022

Net income attributable to equity holders was $810 million, compared to $1,170 million. Adjusted net income attributable to equity holders was $810 million, a decrease of $364 million or 31%. The decline was due primarily to higher provision for credit losses and non-interest expenses, partly offset by higher revenue.

Q4 2023 vs Q3 2023

Net income attributable to equity holders declined $252 million or 24%. The decline was due primarily to higher provision for credit losses and non-interest expenses, partly offset by higher revenue.

Total revenue

Q4 2023 vs Q4 2022

Revenues were $3,329 million, an increase of $195 million or 6%.

Net interest income of $2,562 million increased $199 million or 8% due primarily to strong deposit growth and margin expansion.  The net interest margin increased 21 basis points to 2.47% due primarily to higher loan margins and favourable changes in business mix, partly offset by lower deposit margins.

Non-interest income of $767 million declined $4 million due to lower banking fees, mostly offset by higher insurance revenue.

Q4 2023 vs Q3 2023

Revenues increased $113 million or 4%.

Net interest income increased $94 million or 4% due primarily to solid deposit growth and margin expansion.  The net interest margin increased 12 basis points to 2.47% due primarily to higher loan spreads, and favourable changes in business mix.

Non-interest income increased $19 million or 3%.  The increase was due primarily to higher income from associated corporations, insurance revenues, and foreign exchange fees, partly offset by elevated private equity gains in the prior period.

Provision for credit losses

Q4 2023 vs Q4 2022

The provision for credit losses was $700 million, compared to $163 million, an increase of $537 million. The provision for credit losses ratio increased 48 basis points to 63 basis points.

The provision for credit losses on performing loans was $414 million, compared to $10 million. The provision this period was driven primarily by the impact of the unfavourable macroeconomic outlook and continued uncertainty around the impact of higher interest rates resulting from policy tightening to address inflation, including the related impacts on migration in the retail portfolios and on certain sectors in the non-retail portfolios. The provision for credit losses ratio on performing loans increased 36 basis points to 37 basis points.

Provision for credit losses on impaired loans was $286 million, compared to $153 million, an increase of $133 million or 87% due to higher formations in the retail and commercial portfolios, including auto loans and unsecured lines. The provision for credit losses ratio on impaired loans was 26 basis points, an increase of 12 basis points.

Q4 2023 vs Q3 2023

The provision for credit losses was $700 million, compared to $307 million, an increase of $393 million. The provision for credit losses ratio increased 36 basis points to 63 basis points.

The provision for credit losses on performing loans was $414 million, compared to $49 million. The provision this period was driven primarily by the impact of unfavourable macroeconomic outlook and continued uncertainty around the impact of higher interest rates resulting from policy tightening to address inflation, including the related impacts of migration in the retail portfolios, and on certain sectors in the non-retail portfolios. The provision for credit losses ratio on performing loans increased 33 basis points to 37 basis points.

Provision for credit losses on impaired loans was $286 million, compared to $258 million, an increase of $28 million or 11% due primarily to higher retail formations. The provision for credit losses ratio on impaired loans was 26 basis points, an increase of three basis points.

Non-interest expenses

Q4 2023 vs Q4 2022

Non-interest expenses were $1,513 million, an increase of $116 million or 8%, due primarily to higher personnel costs, including inflationary adjustments, advertising, business development, and technology costs to support business growth.

Q4 2023 vs Q3 2023

Non-interest expenses increased by $65 million or 4%, due primarily to higher personnel, advertising and business development costs to support business growth.

Provision for income taxes

The effective tax rate was 27.4% for the quarter, compared to 25.7% in the prior year and 27.3% in the prior quarter.

Average assets

Q4 2023 vs Q4 2022

Average assets increased $1 billion to $447 billion. The growth included $9 billion or 11% in business loans and acceptances, $2 billion or 3% in personal loans, and $1 billion or 18% in credit card loans, partly offset by a decline of $11 billion or 4% in residential mortgages.

Q4 2023 vs Q3 2023

Average assets decreased $3 billion or 1%. The decline included $6 billion or 2% in residential mortgages, partly offset by growth of $2 billion or 2% in business loans and acceptances.

Average liabilities

Q4 2023 vs Q4 2022

Average liabilities increased $39 billion or 11% to $386 billion. The growth included $22 billion or 11% in personal deposits and $11 billion or 9% in non-personal deposits, primarily in term products.

Q4 2023 vs Q3 2023

Average liabilities increased $10 billion or 3%. The growth included $5 billion or 4% in non-personal deposits and $4 billion or 1% in personal deposits, primarily in term products.

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)

2023

 

2023

 

2022

 

2023

 

2022

 

Reported Results

                             

Net interest income

$

2,137

 

$

2,118

 

$

1,806

 

$

8,161

 

$

6,900

 

Non-interest income(2)

 

662

   

728

   

698

   

2,937

   

2,827

 

Total revenue

 

2,799

   

2,846

   

2,504

   

11,098

   

9,727

 

Provision for credit losses

 

512

   

516

   

355

   

1,868

   

1,230

 

Non-interest expenses

 

1,522

   

1,491

   

1,364

   

5,928

   

5,212

 

Income tax expense

 

171

   

192

   

106

   

704

   

618

 

Net income

$

594

 

$

647

 

$

679

 

$

2,598

 

$

2,667

 

Net income attributable to non-controlling interest in subsidiaries

$

32

 

$

19

 

$

36

 

$

112

 

$

249

 

Net income attributable to equity holders of the Bank

$

562

 

$

628

 

$

643

 

$

2,486

 

$

2,418

 

Other financial data and measures

                             

Return on equity(3)

 

12.4

%

 

13.4

%

 

13.1

%

 

13.1

%

 

12.9

%

Net interest margin(3)

 

4.18

%

 

4.10

%

 

4.08

%

 

4.10

%

 

3.96

%

Average assets ($ billions)

$

238

 

$

241

 

$

217

 

$

237

 

$

207

 

Average liabilities ($ billions)

$

184

 

$

184

 

$

160

 

$

179

 

$

152

 

(1)

Results are presented on a taxable equivalent basis. Refer to Business Line Overview section of the Bank's 2023 Annual Report to Shareholders.

(2)

Includes net income from investments in associated corporations for the three months ended October 31, 2023 - $57 (July 31, 2023 - $62; October 31, 2022 - $51) and for the year ended October 31, 2023 - $251 (October 31, 2022 - $250).

(3)

Refer to Non-GAAP Measures starting on page 21.

       
   

For the three months ended

For the year ended

(Unaudited) ($ millions)

October 31

 

July 31

 

October 31

 

October 31

 

October 31

 

(Taxable equivalent basis)

 

2023

   

2023

   

2022

   

2023

   

2022

 

Adjusted Results(1)

                             

Net interest income

$

2,137

 

$

2,118

 

$

1,806

 

$

8,161

 

$

6,900

 

Non-interest income

 

662

   

728

   

698

   

2,937

   

2,827

 

Total revenue

 

2,799

   

2,846

   

2,504

   

11,098

   

9,727

 

Provision for credit losses

 

512

   

516

   

355

   

1,868

   

1,230

 

Non-interest expenses(2)

 

1,512

   

1,481

   

1,355

   

5,887

   

5,173

 

Income tax expense

 

173

   

195

   

108

   

715

   

629

 

Net income

$

602

 

$

654

 

$

686

 

$

2,628

 

$

2,695

 

Net income attributable to non-controlling interest in subsidiaries                

$

32

 

$

19

 

$

36

 

$

112

 

$

249

 

Net income attributable to equity holders of the Bank

$

570

 

$

635

 

$

650

 

$

2,516

 

$

2,446

 

(1)

Refer to Non-GAAP Measures starting on page 21 for the reconciliation of reported and adjusted results.

(2)

Includes adjustment for Amortization of acquisition-related intangible assets, excluding software for the three months ended October 31, 2023 – $10 (July 31, 2023 – $10; October 31, 2022 – $9) and for the year ended October 31, 2023 – $41 (October 31, 2022 – $39).

Net income

Q4 2023 vs Q4 2022

Net income attributable to equity holders decreased $81 million to $562 million. Adjusted net income attributable to equity holders decreased $80 million to $570 million. The decrease was driven by higher provision for credit losses, lower non-interest income and higher provision for income taxes, partly offset by higher net interest income and the positive impact of foreign currency translation.

Q4 2023 vs Q3 2023

Net income attributable to equity holders decreased by $66 million or 10%. Adjusted net income attributable to equity holders decreased by $65 million or 10%. The decrease was due primarily to lower non-interest income, partly offset by lower provision for income taxes, higher net interest income, the positive impact of foreign currency translation and lower provision for credit losses.

Financial Performance on a Constant Dollar Basis

International Banking business segment results are analyzed on a constant dollar basis which is a non-GAAP measure (refer to Non-GAAP Measures starting on page 21). Under the constant dollar basis, prior period amounts are recalculated using current period average foreign currency rates. The following table presents the reconciliation between reported, adjusted and constant dollar results for International Banking for prior periods. The Bank believes that constant dollar is useful for readers to understand business performance without the impact of foreign currency translation and is used by management to assess the performance of the business segment. The tables below are computed on a basis that is different than the "Impact of foreign currency translation" table on page 4. Ratios are on a reported basis.

The discussion below on the results of operations is on a constant dollar basis.

Reported results on a constant dollar basis

     
   

For the three months ended

For the year ended

(Unaudited) ($ millions)

October 31

 

July 31

 

October 31

 

October 31

 

October 31

 

(Taxable equivalent basis)

 

2023

   

2023

   

2022

   

2023

   

2022

 

Constant dollars – Reported

                             

Net interest income

$

2,137

 

$

2,099

 

$

1,957

 

$

8,161

 

$

7,481

 

Non-interest income

 

662

   

752

   

761

   

2,937

   

2,907

 

Total revenue

 

2,799

   

2,851

   

2,718

   

11,098

   

10,388

 

Provision for credit losses

 

512

   

510

   

386

   

1,868

   

1,325

 

Non-interest expenses

 

1,522

   

1,487

   

1,472

   

5,928

   

5,584

 

Income tax expense

 

171

   

197

   

117

   

704

   

641

 

Net income

$

594

 

$

657

 

$

743

 

$

2,598

 

$

2,838

 

Net income attributable to non-controlling interest in subsidiaries  

$

32

 

$

19

 

$

38

 

$

112

 

$

261

 

Net income attributable to equity holders of the Bank

$

562

 

$

638

 

$

705

 

$

2,486

 

$

2,577

 

Other financial data and measures

                             

Average assets ($ billions)

$

238

 

$

239

 

$

232

 

$

237

 

$

222

 

Average liabilities ($ billions)

$

184

 

$

182

 

$

173

 

$

179

 

$

164

 

 

Adjusted results on a constant dollar basis

     
   

For the three months ended

For the year ended

(Unaudited) ($ millions)

October 31

 

July 31

 

October 31

 

October 31

 

October 31

 

(Taxable equivalent basis)

 

2023

   

2023

   

2022

   

2023

   

2022

 

Constant dollars – Adjusted

                             

Net interest income

$

2,137

 

$

2,099

 

$

1,957

 

$

8,161

 

$

7,481

 

Non-interest income

 

662

   

752

   

761

   

2,937

   

2,907

 

Total revenue

 

2,799

   

2,851

   

2,718

   

11,098

   

10,388

 

Provision for credit losses

 

512

   

510

   

386

   

1,868

   

1,325

 

Non-interest expenses

 

1,512

   

1,477

   

1,462

   

5,887

   

5,542

 

Income tax expense

 

173

   

200

   

119

   

715

   

653

 

Net income

$

602

 

$

664

 

$

751

 

$

2,628

 

$

2,868

 

Net income attributable to non-controlling interest in subsidiaries   

$

32

 

$

19

 

$

38

 

$

112

 

$

261

 

Net income attributable to equity holders of the Bank

$

570

 

$

645

 

$

713

 

$

2,516

 

$

2,607

 

Net income

Q4 2023 vs Q4 2022

Net income attributable to equity holders was $562 million and adjusted net income attributable to equity holders was $570 million, down $143 million or 20%. The result was driven by higher provision for credit losses, lower non-interest income, higher provision for income taxes, and non-interest expenses, partly offset by higher net interest income.

Q4 2023 vs Q3 2023

Net income attributable to equity holders decreased by $76 million or 12%. Adjusted net income attributable to equity holders decreased by $75 million or 12%. The decrease was due primarily to lower non-interest income and higher non-interest expenses, partly offset by higher net interest income and lower provision for income taxes.

Total revenue

Q4 2023 vs Q4 2022

Revenues were $2,799 million, an increase of $81 million or 3%.

Net interest income was $2,137 million, an increase of $180 million or 9%, driven by higher interest income from securities and deposit margins mainly in the Caribbean. Net interest margin increased by 10 basis points to 4.18%, driven by asset repricing outpacing cost of funds, lower inflation and changes in the business mix.

Non-interest income was $662 million a decrease of $99 million or 13%, driven by lower trading revenues and banking fees.

Q4 2023 vs Q3 2023

Revenues decreased by $52 million or 2%.

Net interest income increased by $38 million or 2%, driven by margin expansion. Net interest margin increased by eight basis points to 4.18%, mainly driven by asset repricing outpacing cost of funds, changes in the business mix and higher inflation.

Non-interest income decreased by $90 million or 12% due to lower trading revenues and lower banking fees.

Provision for credit losses

Q4 2023 vs Q4 2022

The provision for credit losses was $512 million compared to $386 million, an increase of $126 million or 33%. The provision for credit losses ratio increased 30 basis points to 119 basis points.

Provision for credit losses on performing loans was $7 million, compared to $37 million. The provision this period was driven by the impact of the continued unfavourable macroeconomic outlook, primarily impacting the commercial portfolio and retail portfolio growth.  This was partly offset by retail credit migration to impaired. 

Provision for credit losses on impaired loans was $505 million, compared to $349 million, an increase of $156 million or 45%. This increase was due primarily to higher retail formations across the Pacific Alliance markets. The provision for credit losses ratio on impaired loans was 118 basis points, an increase of 37 basis points.

Q4 2023 vs Q3 2023

The provision for credit losses was $512 million, compared to $510 million, an increase of $2 million. The provision for credit losses ratio was 119 basis points, an increase of one basis point.

Provision for credit losses on performing loans was $7 million compared to $26 million. The provision this period was driven by the impact of the continued unfavourable macroeconomic outlook primarily impacting the commercial portfolio and retail portfolio growth.  This was partly offset by retail credit migration to impaired.

Provision for credit losses on impaired loans was $505 million compared to $484 million, an increase of $21 million or 4% due partly to higher retail formations, primarily in Mexico and Peru, and higher commercial provisions. The provision for credit losses ratio on impaired loans increased by seven basis points to 118 basis points.

Non-interest expenses

Q4 2023 vs Q4 2022

Non-interest expenses were $1,522 million, an increase of $50 million or 3%. Adjusted non-interest expenses were $1,512 million, an increase of 3%, from inflationary pressures, partly offset by prudent expense management and savings initiatives.

Q4 2023 vs Q3 2023

Non-interest expenses were $1,522 million, an increase of 2%. Adjusted non-interest expenses increased by $35 million or 2% from $1,477 million last quarter, driven mainly by technology expenses to support business growth.

Provision for income taxes

Q4 2023 vs Q4 2022

The effective tax rate was 22.3%, compared to 13.5%. On an adjusted basis the effective tax rate was 22.4%, as compared to 13.6% in the same quarter last year due primarily to lower inflationary adjustments in Chile and Mexico.

Q4 2023 vs Q3 2023

The effective tax rate was 22.3%, compared to 22.9%. On an adjusted basis the effective tax rate was 22.4%, compared to 22.9%, due to lower inflationary adjustments in Mexico.

Average assets

Q4 2023 vs Q4 2022

Average assets were $238 billion, an increase of $6 billion or 3%. Loans grew 2%, primarily in Mexico, Brazil, and Chile. The growth included 7% in residential mortgages, partly offset by a decrease of 1% in business loans.

Q4 2023 vs Q3 2023

Average assets were in line with prior quarter. Total loans decreased by 1%, driven by a 2% decrease in business loans mainly in Chile and Peru. This was partly offset by an increase of 1% in residential mortgages, mainly in Mexico.

Average liabilities

Q4 2023 vs Q4 2022

Average liabilities were $184 billion, an increase of $11 billion or 6%. Total deposits increased by $11 billion or 9%, primarily in Mexico and Brazil. The growth included 12% in non-personal deposits and 3% in personal deposits. Term deposits increased by $12 billion or 21% while non-term deposits decreased by 3%.

Q4 2023 vs Q3 2023

Average liabilities were $184 billion, an increase of $2 billion. Total deposits increased by $3 billion or 3%, primarily in Mexico and Brazil, mainly driven by non-personal deposits which increased by 4%.

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)

 

2023

   

2023

   

2022

   

2023

   

2022

 

Reported Results

                             

Net interest income

$

213

 

$

207

 

$

206

 

$

842

 

$

764

 

Non-interest income

 

1,119

   

1,129

   

1,083

   

4,449

   

4,617

 

Total revenue

 

1,332

   

1,336

   

1,289

   

5,291

   

5,381

 

Provision for credit losses

 

5

   

2

   

1

   

10

   

6

 

Non-interest expenses

 

887

   

843

   

798

   

3,350

   

3,259

 

Income tax expense

 

111

   

123

   

127

   

491

   

551

 

Net income

$

329

 

$

368

 

$

363

 

$

1,440

 

$

1,565

 

Net income attributable to non-controlling interest in subsidiaries

$

2

 

$

2

 

$

2

 

$

9

 

$

9

 

Net income attributable to equity holders of the Bank

$

327

 

$

366

 

$

361

 

$

1,431

 

$

1,556

 

Other financial data and measures

                             

Return on equity(2)

 

13.2

%

 

14.9

%

 

14.8

%

 

14.6

%

 

16.2

%

Assets under administration ($ billions)

$

610

 

$

631

 

$

580

 

$

610

 

$

580

 

Assets under management ($ billions)

$

317

 

$

331

 

$

311

 

$

317

 

$

311

 

(1)

Results are presented on a taxable equivalent basis. Refer to Business Line Overview section of the Bank's 2023 Annual Report to Shareholders.

(2)

Refer to Non-GAAP Measures starting on page 21.

   
   

For the three months ended

For the year ended

(Unaudited) ($ millions)

October 31

 

July 31

 

October 31

 

October 31

 

October 31

 

(Taxable equivalent basis)

 

2023

   

2023

   

2022

   

2023

   

2022

 

Adjusted Results(1)

                             

Net interest income

$

213

 

$

207

 

$

206

 

$

842

 

$

764

 

Non-interest income

 

1,119

   

1,129

   

1,083

   

4,449

   

4,617

 

Total revenue

 

1,332

   

1,336

   

1,289

   

5,291

   

5,381

 

Provision for credit losses

 

5

   

2

   

1

   

10

   

6

 

Non-interest expenses(2)

 

878

   

834

   

789

   

3,314

   

3,223

 

Income tax expense

 

114

   

125

   

129

   

501

   

560

 

Net income

$

335

 

$

375

 

$

370

 

$

1,466

 

$

1,592

 

Net income attributable to non-controlling interest in subsidiaries                

$

2

 

$

2

 

$

2

 

$

9

 

$

9

 

Net income attributable to equity holders of the Bank

$

333

 

$

373

 

$

368

 

$

1,457

 

$

1,583

 

(1)

Refer to Non-GAAP Measures starting on page 21 for the reconciliation of reported and adjusted results.

(2)

Includes adjustment for Amortization of acquisition-related intangible assets, excluding software for the three months ended October 31, 2023 – $9 (July 31, 2023 – $9; October 31, 2022 – $9) and for the year ended October 31, 2023 – $36 (October 31, 2022 – $36).

Net income

Q4 2023 vs Q4 2022

Net income attributable to equity holders was $327 million, compared to $361 million. Adjusted net income attributable to equity holders was $333 million, down $35 million or 10%. The decline was due primarily to higher non-interest expenses, partly offset by strong revenue growth in the international businesses and higher brokerage revenues in Canada. 

Q4 2023 vs Q3 2023

Net income attributable to equity holders decreased $39 million or 11%. Adjusted net income attributable to equity holders decreased $40 million or 11%, due primarily to higher non-interest expenses and lower mutual fund fees.

Total revenue

Q4 2023 vs Q4 2022

Revenues were $1,332 million, an increase of $43 million or 3% due primarily to higher revenues in the international businesses and higher brokerage revenues in Canada. 

Q4 2023 vs Q3 2023

Revenues were down $4 million due primarily to lower mutual fund fees, partly offset by higher net interest income.

Provision for credit losses

Q4 2023 vs Q4 2022

The provision for credit losses was $5 million, an increase of $4 million. The provision for credit losses ratio increased seven basis points to nine basis points, mostly on impaired loans.

Provision for credit losses on performing loans increased by $1 million, while the provision for credit losses on impaired loans increased by $3 million.

Q4 2023 vs Q3 2023

The provision for credit losses was $5 million, an increase of $3 million. The provision for credit losses ratio increased six basis points to nine basis points, mostly on impaired loans.

Provision for credit losses on performing loans increased by $2 million, while provisions for credit losses on impaired loans increased by $1 million.

Non-interest expenses

Q4 2023 vs Q4 2022

Non-interest expenses of $887 million increased by $89 million or 11%, driven largely by higher volume-related expenses and personnel and technology costs to support business growth.

Q4 2023 vs Q3 2023

Non-interest expenses increased by $44 million or 5%, driven largely by higher technology, advertising, and business development expenses to support business growth.

Provision for income taxes

The effective tax rate was 25.4% compared to 25.8% in the prior year and 25.0% in the prior quarter.

Assets under management (AUM) and assets under administration (AUA)

Q4 2023 vs Q4 2022

Assets under management of $317 billion increased $6 billion or 2% driven by market appreciation partly offset by net redemptions. Assets under administration of $610 billion increased $30 billion or 5% due primarily to higher net sales and market appreciation.

Q4 2023 vs Q3 2023

Assets under management decreased $14 billion or 4% due primarily to market depreciation. Assets under administration decreased $21 billion or 3% due primarily to market depreciation, partly offset by higher net sales.

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)

2023

 

2023

 

2022

 

2023

 

2022

 

Reported Results

                             

Net interest income

$

397

 

$

337

 

$

492

 

$

1,572

 

$

1,630

 

Non-interest income

 

957

   

1,006

 

-

862

   

3,980

   

3,542

 

Total revenue

 

1,354

   

1,343

 

-

1,354

   

5,552

   

5,172

 

Provision for credit losses

 

39

   

(6)

 

-

11

   

101

   

(66)

 

Non-interest expenses

 

779

   

758

 

-

696

   

3,062

   

2,674

 

Income tax expense

 

122

   

157

 

-

163

   

621

   

653

 

Net income

$

414

 

$

434

 

$

484

 

$

1,768

 

$

1,911

 

Net income attributable to equity holders of the Bank                       

$

414

 

$

434

 

$

484

 

$

1,768

 

$

1,911

 

Other financial data and measures

                             

Return on equity(2)

 

12.4

%

 

12.9

%

-

13.4

%

 

12.2

%

 

14.3

%

Average assets ($ billions)

$

500

 

$

493

 

$

461

 

$

490

 

$

445

 

Average liabilities ($ billions)

$

471

 

$

450

 

$

430

 

$

455

 

$

414

 

(1)

Results are presented on a taxable equivalent basis. Refer to Business Line Overview section of the Bank's 2023 Annual Report to Shareholders.

(2)

Refer to Non-GAAP Measures starting on page 21.

Net income

Q4 2023 vs Q4 2022

Net income attributable to equity holders was $414 million, a decrease of $70 million or 14%. This was due mainly to higher non-interest expenses, lower net interest income and higher provision for credit losses, partly offset by higher non-interest income.

Q4 2023 vs Q3 2023

Net income attributable to equity holders decreased by $20 million or 5%.  This was due to lower non-interest income, higher provision for credit losses and non-interest expenses, partly offset by higher net interest income and the positive impact of foreign currency translation.

Total revenue

Q4 2023 vs Q4 2022

Revenues were $1,354 million, in line with the prior year as higher non-interest income was offset by lower net interest income.

Net interest income of $397 million decreased $95 million or 19%. This was due mainly to higher trading-related funding costs, and lower corporate lending margins, partly offset by higher deposit margins.

Non-interest income was $957 million, an increase of $95 million or 11%, due mainly to higher fee and commission revenue, partially offset by lower trading-related revenue.

Q4 2023 vs Q3 2023

Revenues increased by $11 million or 1%. 

Net interest income of $397 million increased $60 million or 18%. This was due mainly to higher deposit margins and higher corporate lending margins.

Non-interest income decreased by $49 million or 5%, due mainly to lower trading-related revenues, partly offset by higher fee and commission revenue.

Provision for credit losses

Q4 2023 vs Q4 2022

The provision for credit losses was $39 million compared to $11 million. The provision for credit losses ratio was 11 basis points, an increase of eight basis points.

Provision for credit losses on performing loans was $30 million, compared to a net reversal of $11 million, due to the continued unfavourable macroeconomic outlook including higher interest rates, and on certain sectors in the North American non-retail portfolios.

Provision for credit losses on impaired loans was $9 million, related primarily to one account in the engineering and contracting sector, compared to $22 million in the prior period. The provision for credit losses ratio on impaired loans was three basis points, a decrease of three basis points.

Q4 2023 vs Q3 2023

The provision for credit losses was $39 million, compared to a net reversal of $6 million. The provision for credit losses ratio was 11 basis points, an increase of 13 basis points.

Provision for credit losses on performing loans was $30 million compared to $4 million, an increase of $26 million due to the continued unfavourable macroeconomic outlook including higher interest rates, and on certain sectors in the North American non-retail portfolios.

Provision for credit losses on impaired loans was $9 million, related primarily to one account in the engineering and contracting sector, compared to a net reversal of $10 million in the prior quarter. The provision for credit losses ratio on impaired loans was three basis points, an increase of six basis points.

Non-interest expenses

Q4 2023 vs Q4 2022

Non-interest expenses of $779 million increased by $83 million or 12%. This was due mainly to higher personnel and technology costs to support business growth, and the negative impact of foreign currency translation.

Q4 2023 vs Q3 2023

Non-interest expenses increased $21 million or 3%, due mainly to higher technology costs to support business growth and the negative impact of foreign currency translation.

Provision for income taxes

Q4 2023 vs Q4 2022

The effective tax rate for the quarter decreased to 22.8% from 25.2% in the prior year, due mainly to the change in earnings mix across jurisdictions, partly offset by the increase in the Canadian statutory tax rate.

Q4 2023 vs Q3 2023

The effective tax rate for the quarter was 22.8% compared to 26.5%, due mainly to the change in earnings mix across jurisdictions.

Average assets

Q4 2023 vs Q4 2022

Average assets were $500 billion, an increase of $39 billion or 8%, due mainly to higher securities purchased under resale agreements, trading assets, and the impact of foreign currency translation.

Q4 2023 vs Q3 2023

Average assets increased $7 billion or 1%, due mainly to higher securities purchased under resale agreements and the impact of foreign currency translation.

Average liabilities

Q4 2023 vs Q4 2022

Average liabilities were $471 billion, an increase of $41 billion or 10%, due mainly to higher increases in securities sold under repurchase agreements and the impact of foreign currency translation.

Q4 2023 vs Q3 2023

Average liabilities increased $21 billion or 5%, due mainly to higher securities sold under repurchase agreements, higher deposits and the impact of foreign currency translation.

Other
   

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)

 

2023

   

2023

   

2022

   

2023

   

2022

 

Reported Results

                             

Net interest income

$

(637)

 

$

(550)

 

$

(245)

 

$

(2,044)

 

$

(180)

 

Non-interest income

 

131

   

(101)

   

(410)

   

(433)

   

(714)

 

Total revenue

 

(506)

   

(651)

   

(655)

   

(2,477)

   

(894)

 

Provision for credit losses

 

   

   

(1)

   

   

3

 

Non-interest expenses

 

828

   

22

   

274

   

924

   

569

 

Income tax expense/(benefit)

 

(572)

   

(374)

   

(325)

   

(1,104)

   

(734)

 

Net income (loss)

$

(762)

 

$

(299)

 

$

(603)

 

$

(2,297)

 

$

(732)

 

Net income (loss) attributable to non-controlling interest in subsidiaries

$

(3)

 

$

 

$

 

$

(3)

 

$

 

Net income (loss) attributable to equity holders

$

(759)

 

$

(299)

 

$

(603)

 

$

(2,294)

 

$

(732)

 

Other measures

                             

Average assets ($ billions)

$

191

 

$

184

 

$

175

 

$

185

 

$

167

 

Average liabilities ($ billions)

$

252

 

$

273

 

$

278

 

$

273

 

$

263

 

(1)

Results are presented on a taxable equivalent basis. Refer to Business Line Overview section of the Bank's 2023 Annual Report to Shareholders.

   
   

For the three months ended

For the year ended

(Unaudited) ($ millions)

October 31

 

July 31

 

October 31

 

October 31

 

October 31

 

(Taxable equivalent basis)

 

2023

   

2023

   

2022

   

2023

   

2022

 

Adjusted Results(1)

                             

Net interest income

$

(637)

 

$

(550)

 

$

(245)

 

$

(2,044)

 

$

(180)

 

Non-interest income(2)

 

(236)

   

(101)

   

(49)

   

(800)

   

(353)

 

Total revenue

 

(873)

   

(651)

   

(294)

   

(2,844)

   

(533)

 

Provision for credit losses

 

   

   

(1)

   

   

3

 

Non-interest expenses(3)

 

41

   

22

   

56

   

137

   

351

 

Income tax expense/(benefit)(4)

 

(427)

   

(374)

   

(250)

   

(1,538)

   

(659)

 

Net income (loss)

$

(487)

 

$

(299)

 

$

(99)

 

$

(1,443)

 

$

(228)

 

Net income (loss) attributable to non-controlling interest in subsidiaries

$

 

$

 

$

1

 

$

 

$

1

 

Net income (loss) attributable to equity holders

$

(487)

 

$

(299)

 

$

(100)

 

$

(1,443)

 

$

(229)

 

(1)

Refer to Non-GAAP Measures starting on page 21 for the description of the adjustments.

(2)

Includes adjustment for net (gain)/loss on divestitures and wind-down of operations of $(367) in Q4 2023 and for the year ended October 31, 2023 (Q4 2022 and for the year ended October 31, 2022 – $361).

(3)

Includes adjustments for restructuring charge and severance provisions of $354, consolidation of real estate and contract termination costs of $87 and impairment of non-financial assets of $346 in Q4 2023 and for the year ended October 31, 2023 (Q4 2022 and for the year ended October 31, 2022 - Restructuring charge and severance provisions of $85 and Support costs for the Scene+ loyalty program of $133).   

(4)

Includes adjustment for the Canada Recovery Dividend of $579 for the year ended October 31, 2023 (October 31, 2022 – nil).

The Other segment includes Group Treasury, smaller operating segments and corporate items which are not allocated to a business line. Group Treasury is primarily responsible for Balance Sheet, Liquidity and Interest Rate Risk management, which includes the Bank's wholesale funding activities.

Net interest income, non-interest 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.

Net income from 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.

Q4 2023 vs Q4 2022

Net income attributable to equity holders was a net loss of $759 million, compared to a net loss of $603 million last year. Adjusted net income attributable to equity holders was a net loss of $487 million compared to a net loss of $100 million in the prior year. The higher loss of $387 million was due mainly to lower revenues primarily related to higher funding costs and lower income from hedges, partly offset by higher income from liquid assets, and lower investment gains. The decline in revenue was partly offset by lower provision for income taxes and lower non-interest expenses.

Q4 2023 vs Q3 2023

Net income attributable to equity holders decreased $460 million from the prior quarter. On an adjusted basis, net income attributable to equity holders decreased $188 million due mainly to higher funding costs, lower income from hedges and lower income from associated corporations. This was partly offset by higher income from liquid assets and lower provision for income taxes.

Consolidated Statement of Financial Position

 
   

As at

   

October 31

July 31

October 31

(Unaudited) ($ millions)

 

2023

2023

2022

Assets

             

Cash and deposits with financial institutions

 

$

90,312

$

90,325

$

65,895

Precious metals

   

937

 

1,009

 

543

Trading assets

             

Securities

   

107,612

 

108,310

 

103,547

Loans

   

7,544

 

8,420

 

7,811

Other

   

2,712

 

2,571

 

1,796

     

117,868

 

119,301

 

113,154

Securities purchased under resale agreements and securities borrowed

   

199,325

 

198,358

 

175,313

Derivative financial instruments

   

51,340

 

44,655

 

55,699

Investment securities

   

118,237

 

110,195

 

110,008

Loans

             

Residential mortgages

   

344,182

 

347,707

 

349,279

Personal loans

   

104,170

 

103,733

 

99,431

Credit cards

   

17,109

 

16,607

 

14,518

Business and government

   

291,822

 

290,051

 

287,107

     

757,283

 

758,098

 

750,335

Allowance for credit losses

   

6,372

 

5,893

 

5,348

     

750,911

 

752,205

 

744,987

Other

             

Customers' liability under acceptances, net of allowance

   

18,628

 

20,425

 

19,494

Property and equipment

   

5,642

 

5,685

 

5,700

Investments in associates

   

1,925

 

2,607

 

2,633

Goodwill and other intangible assets

   

17,193

 

17,262

 

16,833

Deferred tax assets

   

3,530

 

3,159

 

1,903

Other assets

   

34,941

 

30,912

 

37,256

     

81,859

 

80,050

 

83,819

Total assets

 

$

1,410,789

$

1,396,098

$

1,349,418

               

Liabilities

             

Deposits

             

Personal

 

$

288,617

$

284,738

$

265,892

Business and government

   

612,267

 

615,431

 

597,617

Financial institutions

   

51,449

 

57,056

 

52,672

     

952,333

 

957,225

 

916,181

Financial instruments designated at fair value through profit or loss

   

26,779

 

28,893

 

22,421

Other

             

Acceptances

   

18,718

 

20,478

 

19,525

Obligations related to securities sold short

   

36,403

 

37,522

 

40,449

Derivative financial instruments

   

58,660

 

50,848

 

65,900

Obligations related to securities sold under repurchase agreements and securities lent

   

160,007

 

147,432

 

139,025

Subordinated debentures

   

9,693

 

9,566

 

8,469

Other liabilities

   

69,529

 

66,416

 

62,699

     

353,010

 

332,262

 

336,067

Total liabilities

   

1,332,122

 

1,318,380

 

1,274,669

               

Equity

             

Common equity

             

Common shares

   

20,109

 

19,627

 

18,707

Retained earnings

   

55,746

 

55,783

 

53,761

Accumulated other comprehensive income (loss)

   

(6,918)

 

(7,340)

 

(7,166)

Other reserves

   

(84)

 

(88)

 

(152)

Total common equity

   

68,853

 

67,982

 

65,150

Preferred shares and other equity instruments

   

8,075

 

8,075

 

8,075

Total equity attributable to equity holders of the Bank

   

76,928

 

76,057

 

73,225

Non-controlling interests in subsidiaries

   

1,739

 

1,661

 

1,524

Total equity

   

78,667

 

77,718

 

74,749

Total liabilities and equity

 

$

1,410,789

$

1,396,098

$

1,349,418

 

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)

 

2023

2023

2022

2023

2022

Revenue

                     

Interest income(1)

                     

Loans

 

$

11,823

$

11,525

$

9,271

$

45,043

$

29,390

Securities

   

1,899

 

1,831

 

1,217

 

6,833

 

2,877

Securities purchased under resale agreements and securities borrowed

   

377

 

397

 

209

 

1,478

 

459

Deposits with financial institutions

   

1,010

 

936

 

421

 

3,470

 

832

     

15,109

 

14,689

 

11,118

 

56,824

 

33,558

Interest expense

                     

Deposits

   

9,726

 

9,438

 

5,722

 

35,650

 

12,794

Subordinated debentures

   

133

 

123

 

93

 

471

 

270

Other

   

578

 

548

 

681

 

2,416

 

2,379

     

10,437

 

10,109

 

6,496

 

38,537

 

15,443

Net interest income

   

4,672

 

4,580

 

4,622

 

18,287

 

18,115

Non-interest income

                     

Card revenues

   

199

 

188

 

195

 

778

 

779

Banking services fees

   

474

 

474

 

456

 

1,879

 

1,770

Credit fees

   

479

 

469

 

451

 

1,861

 

1,647

Mutual funds

   

527

 

541

 

528

 

2,127

 

2,269

Brokerage fees

   

284

 

285

 

264

 

1,117

 

1,125

Investment management and trust

   

259

 

261

 

242

 

1,029

 

999

Underwriting and advisory fees

   

152

 

146

 

136

 

554

 

543

Non-trading foreign exchange

   

239

 

213

 

228

 

911

 

878

Trading revenues

   

197

 

360

 

418

 

1,580

 

1,791

Net gain on sale of investment securities

   

(1)

 

30

 

71

 

129

 

74

Net income from investments in associated corporations

   

18

 

55

 

49

 

153

 

268

Insurance underwriting income, net of claims

   

134

 

113

 

114

 

482

 

433

Other fees and commissions

   

321

 

283

 

206

 

1,072

 

650

Other

   

354

 

92

 

(354)

 

348

 

75

     

3,636

 

3,510

 

3,004

 

14,020

 

13,301

Total revenue

   

8,308

 

8,090

 

7,626

 

32,307

 

31,416

Provision for credit losses

   

1,256

 

819

 

529

 

3,422

 

1,382

     

7,052

 

7,271

 

7,097

 

28,885

 

30,034

Non-interest expenses

                     

Salaries and employee benefits

   

2,452

 

2,379

 

2,187

 

9,596

 

8,836

Premises and technology

   

701

 

661

 

636

 

2,659

 

2,424

Depreciation and amortization

   

590

 

412

 

394

 

1,820

 

1,531

Communications

   

99

 

101

 

90

 

395

 

361

Advertising and business development

   

159

 

142

 

140

 

576

 

480

Professional

   

219

 

199

 

239

 

780

 

826

Business and capital taxes

   

161

 

154

 

134

 

634

 

541

Other

   

1,148

 

514

 

709

 

2,671

 

2,103

     

5,529

 

4,562

 

4,529

 

19,131

 

17,102

Income before taxes

   

1,523

 

2,709

 

2,568

 

9,754

 

12,932

Income tax expense

   

138

 

497

 

475

 

2,226

 

2,758

Net income

 

$

1,385

$

2,212

$

2,093

$

7,528

$

10,174

Net income attributable to non-controlling interests in subsidiaries

   

31

 

21

 

38

 

118

 

258

Net income attributable to equity holders of the Bank

 

$

1,354

$

2,191

$

2,055

$

7,410

$

9,916

Preferred shareholders and other equity instrument holders

   

109

 

105

 

106

 

419

 

260

Common shareholders

 

$

1,245

$

2,086

$

1,949

$

6,991

$

9,656

Earnings per common share (in dollars)

                     

Basic

 

$

1.03

$

1.74

$

1.64

$

5.84

$

8.05

Diluted

   

1.02

 

1.72

 

1.63

 

5.78

 

8.02

Dividends paid per common share (in dollars)

   

1.06

 

1.06

 

1.03

 

4.18

 

4.06

(1)

Includes interest income on financial assets measured at amortized cost and FVOCI, calculated using the effective interest method, of $14,603 for the three months ended October 31, 2023 (July 31, 2023 – $14,127; October 31, 2022 – $10,703) and for the year ended October 31, 2023 – $54,824 (October 31, 2022 – $32,573).

 

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)

2023

2023

2022

2023

2022

Net income

$

1,385

$

2,212

$

2,093

$

7,528

$

10,174

Other comprehensive income (loss)

                   

Items that will be reclassified subsequently to net income

                   

Net change in unrealized foreign currency translation gains (losses):

                   

Net unrealized foreign currency translation gains (losses)

 

675

 

(946)

 

3,106

 

1,345

 

3,703

Net gains (losses) on hedges of net investments in foreign operations

 

(335)

 

298

 

(1,140)

 

(577)

 

(1,655)

Income tax expense (benefit):

                   

Net unrealized foreign currency translation gains (losses)

 

8

 

(14)

 

27

 

2

 

28

Net gains (losses) on hedges of net investments in foreign operations

 

(95)

 

82

 

(299)

 

(176)

 

(434)

   

427

 

(716)

 

2,238

 

942

 

2,454

Net change in fair value due to change in debt instruments measured at fair

                   

value through other comprehensive income:

                   

Net gains (losses) in fair value

 

(851)

 

(559)

 

(2,460)

 

176

 

(4,333)

Reclassification of net (gains) losses to net income

 

496

 

711

 

1,767

 

327

 

2,717

Income tax expense (benefit):

                   

Net gains (losses) in fair value

 

(234)

 

(149)

 

(619)

 

19

 

(1,108)

Reclassification of net (gains) losses to net income

 

137

 

199

 

458

 

106

 

704

   

(258)

 

102

 

(532)

 

378

 

(1,212)

Net change in gains (losses) on derivative instruments designated as cash

                   

flow hedges:

                   

Net gains (losses) on derivative instruments designated as cash flow hedges

 

463

 

(1,601)

 

(1,669)

 

3,763

 

(10,037)

Reclassification of net (gains) losses to net income

 

(151)

 

1,025

 

(937)

 

(3,455)

 

3,880

Income tax expense (benefit):

                   

Net gains (losses) on derivative instruments designated as cash flow hedges

 

61

 

(424)

 

(444)

 

1,034

 

(2,709)

Reclassification of net (gains) losses to net income

 

32

 

257

 

(233)

 

(971)

 

1,089

   

219

 

(409)

 

(1,929)

 

245

 

(4,537)

Other comprehensive income (loss) from investments in associates

 

(11)

 

7

 

(382)

 

(16)

 

(344)

Items that will not be reclassified subsequently to net income

                   

Net change in remeasurement of employee benefit plan asset and liability:

                   

Actuarial gains (losses) on employee benefit plans

 

307

 

245

 

(17)

 

108

 

955

Income tax expense (benefit)

 

58

 

68

 

(1)

 

(6)

 

277

   

249

 

177

 

(16)

 

114

 

678

Net change in fair value due to change in equity instruments designated at fair

                   

value through other comprehensive income:

                   

Net gains (losses) in fair value

 

(125)

 

(181)

 

(160)

 

(253)

 

(106)

Income tax expense (benefit)

 

(36)

 

(32)

 

(46)

 

(73)

 

(32)

   

(89)

 

(149)

 

(114)

 

(180)

 

(74)

Net change in fair value due to change in own credit risk on financial liabilities

                   

designated under the fair value option:

                   

Change in fair value due to change in own credit risk on financial liabilities

                   

designated under the fair value option

 

(61)

 

(1,848)

 

373

 

(1,338)

 

1,958

Income tax expense (benefit)

 

(17)

 

(513)

 

98

 

(353)

 

514

   

(44)

 

(1,335)

 

275

 

(985)

 

1,444

Other comprehensive income (loss) from investments in associates

 

 

 

 

2

 

2

Other comprehensive income (loss)

 

493

 

(2,323)

 

(460)

 

500

 

(1,589)

Comprehensive income (loss)

$

1,878

$

(111)

$

1,633

$

8,028

$

8,585

Comprehensive income (loss) attributable to non-controlling interests

 

102

 

89

 

60

 

327

 

233

Comprehensive income (loss) attributable to equity holders of the Bank

 

1,776

 

(200)

 

1,573

 

7,701

 

8,352

Preferred shareholders and other equity instrument holders

 

109

 

105

 

106

 

419

 

260

Common shareholders

$

1,667

$

(305)

$

1,467

$

7,282

$

8,092

 

Consolidated Statement of Changes in Equity

 
   
           

Accumulated other comprehensive income (loss)

                   
                       

Preferred

Total

Non-

 
     

Foreign

Debt

Equity

Cash

   

Total

shares and

attributable

controlling

 
 

Common

Retained

currency

instruments

instruments

flow

 

Other

common

other equity

to equity

interests in

 

(Unaudited) ($ millions)

shares

earnings(1)

translation

FVOCI

FVOCI

hedges

Other(2)

reserves

equity

instruments

holders

subsidiaries

Total

Balance as at October 31, 2022

$

18,707

$

53,761

$

(2,478)

$

(1,482)

$

216

$

(4,786)

$

1,364

$

(152)

$

65,150

$

8,075

$

73,225

$

1,524

$

74,749

Net income

 

 

6,991

 

 

 

 

 

 

 

6,991

 

419

 

7,410

 

118

 

7,528

Other comprehensive income (loss)  

 

 

 

766

 

378

 

(201)

 

240

 

(892)

 

 

291

 

 

291

 

209

 

500

Total comprehensive income

$

$

6,991

$

766

$

378

$

(201)

$

240

$

(892)

$

$

7,282

$

419

$

7,701

$

327

$

8,028

Shares/instruments issued

 

1,402

 

 

 

 

 

 

 

(3)

 

1,399

 

 

1,399

 

 

1,399

Shares repurchased/redeemed

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends and distributions paid

                                                   

to equity holders

 

 

(5,003)

 

 

 

 

 

 

 

(5,003)

 

(419)

 

(5,422)

 

(101)

 

(5,523)

Share-based payments(3)

 

 

 

 

 

 

 

 

14

 

14

 

 

14

 

 

14

Other

 

 

(3)

 

(43)

 

 

(1)

 

1

 

 

57

 

11

 

 

11

 

(11)

 

Balance as at October 31, 2023

$

20,109

$

55,746

$

(1,755)

$

(1,104)

$

14

$

(4,545)

$

472

$

(84)

$

68,853

$

8,075

$

76,928

$

1,739

$

78,667

                                                     

Balance as at October 31, 2021

$

18,507

$

51,354

$

(4,709)

$

(270)

$

291

$

(214)

$

(431)

$

222

$

64,750

$

6,052

$

70,802

$

2,090

$

72,892

Net income

 

 

9,656

 

 

 

 

 

 

 

9,656

 

260

 

9,916

 

258

 

10,174

Other comprehensive income (loss)

 

 

 

2,411

 

(1,212)

 

(35)

 

(4,523)

 

1,795

 

 

(1,564)

 

 

(1,564)

 

(25)

 

(1,589)

Total comprehensive income

$

$

9,656

$

2,411

$

(1,212)

$

(35)

$

(4,523)

$

1,795

$

$

8,092

$

260

$

8,352

$

233

$

8,585

Shares/instruments issued

 

706

 

 

 

 

 

 

 

(18)

 

688

 

2,523

 

3,211

 

 

3,211

Shares repurchased/redeemed

 

(506)

 

(2,367)

 

 

 

 

 

 

 

(2,873)

 

(500)

 

(3,373)

 

 

(3,373)

Dividends and distributions paid

                                                   

to equity holders

 

 

(4,858)

 

 

 

 

 

 

 

(4,858)

 

(260)

 

(5,118)

 

(115)

 

(5,233)

Share-based payments(3)

 

 

 

 

 

 

 

 

10

 

10

 

 

10

 

 

10

Other

 

 

(24)

 

(180)

 

 

(40)

 

(49)

 

 

(366)

(4)

(659)

 

 

(659)

 

(684)

(4)

(1,343)

Balance as at October 31, 2022

$

18,707

$

53,761

$

(2,478)

$

(1,482)

$

216

$

(4,786)

$

1,364

$

(152)

$

65,150

$

8,075

$

73,225

$

1,524

$

74,749

(1)

Includes undistributed retained earnings of $71 (October 31, 2022 - $67) related to a foreign associated corporation, which is subject to local regulatory restriction.

(2)

Includes Share from associates, Employee benefits and Own credit risk.

(3)

Represents amounts on account of share-based payments (refer to Note 26 of the Consolidated Financial Statements in the 2023 Annual Report to Shareholders).

(4)

Includes changes to non-controlling interests arising from business combinations and related transactions (refer to Note 36 of the Consolidated Financial Statements in the 2023 Annual Report to Shareholders).

 

Consolidated Statement of Cash Flows 

 

(Unaudited) ($ millions)

For the three months ended

For the year ended

 

October 31

October 31

October 31

October 31

Sources (uses) of cash flows

2023

2022

2023

2022

Cash flows from operating activities

               

Net income

$

1,385

$

2,093

$

7,528

$

10,174

Adjustment for:

               

Net interest income

 

(4,672)

 

(4,622)

 

(18,287)

 

(18,115)

Depreciation and amortization

 

590

 

394

 

1,820

 

1,531

Provision for credit losses

 

1,256

 

529

 

3,422

 

1,382

Impairment on investments in associates

 

185

 

 

185

 

Equity-settled share-based payment expense

 

2

 

1

 

14

 

10

Net gain on sale of investment securities

 

1

 

(71)

 

(129)

 

(74)

Net (gain)/loss on divestitures

 

(367)

 

233

 

(367)

 

233

Net income from investments in associated corporations

 

(18)

 

(49)

 

(153)

 

(268)

Income tax expense

 

138

 

475

 

2,226

 

2,758

Changes in operating assets and liabilities:

               

Trading assets

 

3,158

 

8,494

 

(2,689)

 

37,501

Securities purchased under resale agreements and securities borrowed

 

4,834

 

(13,864)

 

(18,966)

 

(41,438)

Loans

 

6,648

 

(19,803)

 

4,414

 

(97,161)

Deposits

 

(24,119)

 

13,825

 

19,478

 

95,905

Obligations related to securities sold short

 

(1,667)

 

(4,700)

 

(4,616)

 

(1,292)

Obligations related to securities sold under repurchase agreements and securities lent

 

7,862

 

5,780

 

15,937

 

10,838

Net derivative financial instruments

 

2,545

 

(1,567)

 

2,080

 

115

Other, net

 

2,139

 

5,876

 

(219)

 

(1,404)

Dividends received

 

308

 

299

 

1,299

 

1,156

Interest received

 

14,853

 

10,437

 

55,617

 

31,931

Interest paid

 

(9,801)

 

(5,385)

 

(34,731)

 

(13,336)

Income tax paid

 

(514)

 

(742)

 

(2,139)

 

(3,503)

Net cash from/(used in) operating activities

 

4,746

 

(2,367)

 

31,724

 

16,943

Cash flows from investing activities

               

Interest-bearing deposits with financial institutions

 

(641)

 

5,962

 

(23,538)

 

25,783

Purchase of investment securities

 

(32,536)

 

(16,593)

 

(100,919)

 

(97,736)

Proceeds from sale and maturity of investment securities

 

26,489

 

16,488

 

94,875

 

63,130

Acquisition/divestiture of subsidiaries, associated corporations or business units,

               

   net of cash acquired

 

895

 

165

 

895

 

(549)

Property and equipment, net of disposals

 

(153)

 

(177)

 

(442)

 

(571)

Other, net

 

(373)

 

(801)

 

(911)

 

(1,350)

Net cash from/(used in) investing activities

 

(6,319)

 

5,044

 

(30,040)

 

(11,293)

Cash flows from financing activities

               

Proceeds from issue of subordinated debentures

 

110

 

 

1,447

 

3,356

Redemption of subordinated debentures

 

(76)

 

(24)

 

(78)

 

(1,276)

Proceeds from preferred shares and other equity instruments issued

 

 

1,023

 

 

2,523

Redemption of preferred shares

 

 

 

 

(500)

Proceeds from common shares issued

 

482

 

5

 

1,402

 

137

Common shares purchased for cancellation

 

 

(128)

 

 

(2,873)

Cash dividends and distributions paid

 

(1,387)

 

(1,333)

 

(5,422)

 

(5,118)

Distributions to non-controlling interests

 

(26)

 

(26)

 

(101)

 

(115)

Payment of lease liabilities

 

(77)

 

(69)

 

(325)

 

(322)

Other, net

 

(15)

 

(778)

 

311

 

(391)

Net cash from/(used in) financing activities

 

(989)

 

(1,330)

 

(2,766)

 

(4,579)

Effect of exchange rate changes on cash and cash equivalents

 

100

 

305

 

190

 

301

Net change in cash and cash equivalents

 

(2,462)

 

1,652

 

(892)

 

1,372

Cash and cash equivalents at beginning of period(1)

 

12,635

 

9,413

 

11,065

 

9,693

Cash and cash equivalents at end of period(1)

$

10,173

$

11,065

$

10,173

$

11,065

(1)

Represents cash and non-interest-bearing deposits with financial institutions (refer to Note 6 of the Consolidated Financial Statements in the 2023 Annual Report to Shareholders).

Non-GAAP Measures

The Bank uses a number of financial measures and ratios to assess its performance, as well as the performance of its operating segments. Some of these financial measures and ratios are presented on a non-GAAP basis and are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), are not defined by GAAP and do not have standardized meanings and therefore might not be comparable to similar financial measures and ratios disclosed by other issuers. The Bank believes that non-GAAP measures and ratios are useful as they provide readers with a better understanding of how management assesses performance. These non-GAAP measures and ratios are used throughout this report and are defined below.

Adjusted results and adjusted diluted earnings per share

The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results. Management considers both reported and adjusted results and measures useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non-interest expenses, income taxes and non-controlling interest. Presenting results on both a reported basis and adjusted basis allows readers to assess the impact of certain items on results for the periods presented, and to better assess results and trends excluding those items that may not be reflective of ongoing business performance.

Reconciliation of reported and adjusted results and diluted earnings per share

 

For the three months ended

For the year ended

 

October 31

July 31

October 31

October 31

October 31

($ millions)

 

2023

 

2023

 

2022

 

2023

 

2022

Reported Results

                   

Net interest income

$

4,672

$

4,580

$

4,622

$

18,287

$

18,115

Non-interest income

 

3,636

 

3,510

 

3,004

 

14,020

 

13,301

Total revenue

 

8,308

 

8,090

 

7,626

 

32,307

 

31,416

Provision for credit losses

 

1,256

 

819

 

529

 

3,422

 

1,382

Non-interest expenses

 

5,529

 

4,562

 

4,529

 

19,131

 

17,102

Income before taxes

 

1,523

 

2,709

 

2,568

 

9,754

 

12,932

Income tax expense

 

138

 

497

 

475

 

2,226

 

2,758

Net income

$

1,385

$

2,212

$

2,093

$

7,528

$

10,174

Net income attributable to non-controlling interests in subsidiaries (NCI)

 

31

 

21

 

38

 

118

 

258

Net income attributable to equity holders

 

1,354

 

2,191

 

2,055

 

7,410

 

9,916

Net income attributable to preferred shareholders and other equity

                   

instrument holders

 

109

 

105

 

106

 

419

 

260

Net income attributable to common shareholders

$

1,245

$

2,086

$

1,949

$

6,991

$

9,656

Diluted earnings per share (in dollars)

$

1.02

$

1.72

$

1.63

$

5.78

$

8.02

Weighted average number of diluted common shares

                   

outstanding (millions)

 

1,211

 

1,214

 

1,199

 

1,204

 

1,208

Adjustments

                   

Adjusting items impacting non-interest income and total revenue (Pre-tax)

                   

Divestitures and wind-down of operations

$

(367)

$

$

361

$

(367)

$

361

Adjusting items impacting non-interest expenses (Pre-tax)

                   

Restructuring charge and severance provisions

 

354

 

 

85

 

354

 

85

Consolidation of real estate and contract termination costs

 

87

 

 

 

87

 

Impairment of non-financial assets

 

346

 

 

 

346

 

Amortization of acquisition-related intangible assets

 

19

 

20

 

24

 

81

 

97

Support costs for the Scene+ loyalty program

 

 

 

133

 

 

133

Total non-interest expense adjusting items (Pre-tax)

 

806

 

20

 

242

 

868

 

315

Total impact of adjusting items on net income before taxes

 

439

 

20

 

603

 

501

 

676

Impact of adjusting items on income tax expense

                   

Divestitures and wind-down of operations

 

48

 

 

(21)

 

48

 

(21)

Restructuring charge and severance provisions

 

(96)

 

 

(19)

 

(96)

 

(19)

Consolidation of real estate and contract termination costs

 

(24)

 

 

 

(24)

 

Impairment of non-financial assets

 

(73)

 

 

 

(73)

 

Canada recovery dividend

 

 

 

 

579

 

Amortization of acquisition-related intangible assets

 

(5)

 

(5)

 

(6)

 

(22)

 

(26)

Support costs for the Scene+ loyalty program

 

 

 

(35)

 

 

(35)

Total impact of adjusting items on income tax expense

 

(150)

 

(5)

 

(81)

 

412

 

(101)

Total impact of adjusting items on net income

$

289

$

15

$

522

$

913

$

575

Impact of adjusting items on NCI

 

(3)

 

 

(1)

 

(3)

 

(1)

Total impact of adjusting items on net income attributable to equity

                   

holders and common shareholders

$

286

$

15

$

521

$

910

$

574

Adjusted Results

                   

Net interest income

$

4,672

$

4,580

$

4,622

$

18,287

$

18,115

Non-interest income

 

3,269

 

3,510

 

3,365

 

13,653

 

13,662

Total revenue

 

7,941

 

8,090

 

7,987

 

31,940

 

31,777

Provision for credit losses

 

1,256

 

819

 

529

 

3,422

 

1,382

Non-interest expenses

 

4,723

 

4,542

 

4,287

 

18,263

 

16,787

Income before taxes

 

1,962

 

2,729

 

3,171

 

10,255

 

13,608

Income tax expense

 

288

 

502

 

556

 

1,814

 

2,859

Net income

$

1,674

$

2,227

$

2,615

$

8,441

$

10,749

Net income attributable to NCI

 

34

 

21

 

39

 

121

 

259

Net income attributable to equity holders

 

1,640

 

2,206

 

2,576

 

8,320

 

10,490

Net income attributable to preferred shareholders and other equity

                   

instrument holders

 

109

 

105

 

106

 

419

 

260

Net income attributable to common shareholders

$

1,531

$

2,101

$

2,470

$

7,901

$

10,230

Diluted earnings per share (in dollars)

$

1.26

$

1.73

$

2.06

$

6.54

$

8.50

Impact of adjustments on diluted earnings per share (in dollars)

$

0.24

$

0.01

$

0.43

$

0.76

$

0.48

Weighted average number of diluted common shares

                   

outstanding (millions)

 

1,211

 

1,214

 

1,199

 

1,204

 

1,208

1. The Bank's Q4 2023 and fiscal 2023 reported results were adjusted for the following items. These amounts were recorded in the Other operating segment.

a) Divestitures and wind-down of operations

The Bank sold its 20% equity interest in Canadian Tire Financial Services (CTFS) to Canadian Tire Corporation. The sale resulted in a net gain of $367 million ($319 million after-tax). For further details, please refer to Note 36 of the Consolidated Financial Statements in the 2023 Annual Report to Shareholders.

b) Restructuring charge and severance provisions

The Bank recorded a restructuring charge and severance provisions of $354 million ($258 million after-tax) related to workforce reductions and changes as a result of the Bank's end-to-end digitization, automation, changes in customers' day-to-day banking preferences, as well as the ongoing efforts to streamline operational processes and optimize distribution channels.

c) Consolidation of real estate and contract termination costs

The Bank recorded costs of $87 million ($63 million after-tax), related to the consolidation and exit of certain real estate premises, as well as service contract termination costs, as part of the Bank's optimization strategy.

d) Impairment of non-financial assets

The Bank recorded impairment charges of $185 million ($159 million after-tax) related to its investment in associate, Bank of Xi'an Co. Ltd. in China whose market value has remained below the Bank's carrying value for a prolonged period. For further details, refer to Note 17 of the Consolidated Financial Statements in the 2023 Annual Report to Shareholders. Impairment of intangible assets, including software, of $161 million ($114 million after-tax) was also recognized.

2. The Q1 2023 and fiscal 2023 reported results were adjusted for the following items. These amounts were recorded in the Other operating segment.

a) Canada Recovery Dividend

The Bank recognized an additional income tax expense of $579 million reflecting the present value of the amount payable for the Canada Recovery Dividend (CRD) in Q1 2023. The CRD is a Canadian federal tax measure which requires the Bank to pay a one-time tax of 15% on taxable income in excess of $1 billion, based on the average taxable income for the 2020 and 2021 taxation years. The CRD is payable in equal amounts over five years; however, the present value of these payments was recognized as a liability in the period enacted.

3. All reported periods were adjusted for:

a) Amortization of acquisition-related intangible assets

These costs relate to the amortization of intangible assets recognized upon the acquisition of businesses, excluding software, and are recorded in the Canadian Banking, International Banking and Global Wealth Management operating segments.

4. Fiscal 2022 reported results were adjusted for the following items. These amounts were recorded in the Other operating segment.

a) Restructuring charge – The Bank recorded a restructuring charge of $85 million ($66 million after-tax) in the prior year related to the realignment of the Global Banking and Markets businesses in Asia Pacific and reductions in technology employees, driven by ongoing technology modernization and digital transformation.

b)  Divestitures and wind-down of operations – The Bank sold investments in associates in Venezuela and Thailand. Additionally, the Bank wound down its operations in India and Malaysia in relation to its realignment of the business in the Asia Pacific region. Collectively, the sale and wind-down of these entities resulted in a net loss of $361 million ($340 million after-tax), of which $315 million ($294 million after-tax) related to the reclassification of cumulative foreign currency translation losses net of hedges, from accumulated other comprehensive income to non-interest income in the Consolidated Statement of Income. For further details on these transactions, please refer to Note 36 of the Consolidated Financial Statements in the 2023 Annual Report to Shareholders.

c)  Support costs for the Scene+ loyalty program – In the prior year, the Bank recorded costs of $133 million ($98 million after-tax) to support the expansion of the Scene+ loyalty program to include Empire Company Limited as a partner.

Impact of Adjustments

   

For the three months ended

For the year ended

   

October 31, 2023

October 31, 2023

October 31, 2022

($ millions)

Pre-tax

After-tax

Pre-tax

After-tax

Pre-tax

After-tax

Divestitures and wind-down of operations

$

(367)

$

(319)

$

(367)

$

(319)

$

361

$

340

Restructuring charge and severance provisions

 

354

 

258

 

354

 

258

 

85

 

66

Consolidation of real estate and contract termination costs

 

87

 

63

 

87

 

63

 

 

Impairment of non-financial assets

                       

Investment in associates

 

185

 

159

 

185

 

159

 

 

Intangible assets including software

 

161

 

114

 

161

 

114

 

 

Canada recovery dividend

 

 

 

 

579

 

 

Amortization of acquisition-related intangible assets

 

19

 

14

 

81

 

59

 

97

 

71

Support costs for the Scene+ loyalty program

 

 

 

 

 

133

 

98

Total

$

439

$

289

$

501

$

913

$

676

$

575

                           

Diluted EPS Impact

   

$

0.24

   

$

0.76

   

$

0.48

CET1 Impact(1)

     

6 bps

     

(6 bps)

     

(2 bps)

(1) Including related impacts on regulatory capital and risk-weighted assets.

Reconciliation of reported and adjusted results by business line 

 

For the three months ended October 31, 2023⁽¹⁾

       

Global

     
 

Canadian

International

Global Wealth

Banking and

     

($ millions)

Banking

Banking

Management

Markets

Other

Total

 

Reported net income (loss)

$

810

$

594

$

329

$

414

$

(762)

$

1,385

Net income attributable to non-controlling interests in

                       

subsidiaries (NCI)

 

 

32

 

2

 

 

(3)

 

31

Reported net income attributable to equity holders

 

810

 

562

 

327

 

414

 

(759)

 

1,354

Reported net income attributable to preferred

                       

shareholders and other equity instrument holders

 

 

1

 

1

 

 

107

 

109

Reported net income attributable to common shareholders

$

810

$

561

$

326

$

414

$

(866)

$

1,245

Adjustments:

                       

Adjusting items impacting non-interest income and

                       

total revenue (Pre-tax)

                       

Divestitures and wind-down of operations

 

 

 

 

 

(367)

 

(367)

Adjusting items impacting non-interest expenses (Pre-tax)

                       

Restructuring charge and severance provisions

 

 

 

 

 

354

 

354

Consolidation of real estate and contract termination costs

 

 

 

 

 

87

 

87

Impairment of non-financial assets

 

 

 

 

 

346

 

346

Amortization of acquisition-related intangible assets

 

 

10

 

9

 

 

 

19

Total non-interest expenses adjustments (Pre-tax)

 

 

10

 

9

 

 

787

 

806

Total impact of adjusting items on net income before taxes

 

 

10

 

9

 

 

420

 

439

Total impact of adjusting items on income tax expense

 

 

(2)

 

(3)

 

 

(145)

 

(150)

Total impact of adjusting items on net income   

 

 

8

 

6

 

 

275

 

289

Impact of adjusting items on NCI

 

 

 

 

 

(3)

 

(3)

Total impact of adjusting items on net income attributable

                       

to equity holders and common shareholders

 

 

8

 

6

 

 

272

 

286

Adjusted net income (loss)

$

810

$

602

$

335

$

414

$

(487)

$

1,674

Adjusted net income attributable to equity holders

$

810

$

570

$

333

$

414

$

(487)

$

1,640

Adjusted net income attributable to common shareholders

$

810

$

569

$

332

$

414

$

(594)

$

1,531

(1) Refer to Business Segment Review section of the Bank's 2023 Annual Report to Shareholders.

 
 
 

For the three months ended July 31, 2023⁽¹⁾

     

Global

Global

     
 

Canadian

International

Wealth

Banking and

     

($ millions)

Banking

Banking

Management

Markets

Other

Total

 

Reported net income (loss)

$

1,062

$

647

$

368

$

434

$

(299)

$

2,212

Net income attributable to non-controlling interests in

                       

subsidiaries (NCI)

 

 

19

 

2

 

 

 

21

Reported net income attributable to equity holders

 

1,062

 

628

 

366

 

434

 

(299)

 

2,191

Reported net income attributable to preferred

                       

shareholders and other equity instrument holders

 

2

 

1

 

 

1

 

101

 

105

Reported net income attributable to common shareholders

$

1,060

$

627

$

366

$

433

$

(400)

$

2,086

Adjustments:

                       

Adjusting items impacting non-interest expenses (Pre-tax)

                       

Amortization of acquisition-related intangible assets

 

1

 

10

 

9

 

 

 

20

Total non-interest expenses adjustments (Pre-tax)

 

1

 

10

 

9

 

 

 

20

Total impact of adjusting items on net income before taxes

 

1

 

10

 

9

 

 

 

20

Total impact of adjusting items on income tax expense

 

 

(3)

 

(2)

 

 

 

(5)

Total impact of adjusting items on net income

 

1

 

7

 

7

 

 

 

15

Total impact of adjusting items on net income attributable

                       

to equity holders and common shareholders

 

1

 

7

 

7

 

 

 

15

Adjusted net income (loss)

$

1,063

$

654

$

375

$

434

$

(299)

$

2,227

Adjusted net income attributable to equity holders

$

1,063

$

635

$

373

$

434

$

(299)

$

2,206

Adjusted net income attributable to common shareholders

$

1,061

$

634

$

373

$

433

$

(400)

$

2,101

(1) Refer to Business Segment Review section of the Bank's 2023 Annual Report to Shareholders.

 
 

For the three months ended October 31, 2022⁽¹⁾

     

Global

Global

   
 

Canadian

International

Wealth

Banking and

   

($ millions)

Banking

Banking

Management

Markets

Other

Total

Reported net income (loss)

$

1,170

$

679

$

363

$

484

$

(603)

$

2,093

Net income attributable to non-controlling interests in

                       

subsidiaries (NCI)

 

 

36

 

2

 

 

 

38

Reported net income attributable to equity holders

 

1,170

 

643

 

361

 

484

 

(603)

 

2,055

Reported net income attributable to preferred

                       

shareholders and other equity instrument holders

 

1

 

1

 

 

 

104

 

106

Reported net income attributable to common shareholders

$

1,169

$

642

$

361

$

484

$

(707)

$

1,949

Adjustments:

                       

Adjusting items impacting non-interest income and

                       

total revenue (Pre-tax)

                       

Divestitures and wind-down of operations

 

 

 

 

 

361

 

361

Adjusting items impacting non-interest expenses (Pre-tax)

                       

Restructuring charge and severance provisions

 

 

 

 

 

85

 

85

Support costs for the Scene+ loyalty program

 

 

 

 

 

133

 

133

Amortization of acquisition-related intangible assets

 

6

 

9

 

9

 

 

 

24

Total non-interest expenses adjustments (Pre-tax)

 

6

 

9

 

9

 

 

218

 

242

Total impact of adjusting items on net income before taxes         

 

6

 

9

 

9

 

 

579

 

603

Total impact of adjusting items on income tax expense

 

(2)

 

(2)

 

(2)

 

 

(75)

 

(81)

Total impact of adjusting items on net income

 

4

 

7

 

7

 

 

504

 

522

Impact of adjusting items on NCI

 

 

 

 

 

(1)

 

(1)

Total impact of adjusting items on net income attributable

                       

to equity holders and common shareholders

 

4

 

7

 

7

 

 

503

 

521

Adjusted net income (loss)

$

1,174

$

686

$

370

$

484

$

(99)

$

2,615

Adjusted net income attributable to equity holders

$

1,174

$

650

$

368

$

484

$

(100)

$

2,576

Adjusted net income attributable to common shareholders

$

1,173

$

649

$

368

$

484

$

(204)

$

2,470

(1) Refer to Business Segment Review section of the Bank's 2023 Annual Report to Shareholders.

 
 

For the year ended October 31, 2023⁽¹⁾

     

Global

Global

   
 

Canadian

International

Wealth

Banking and

   

($ millions)

Banking

Banking

Management

Markets

Other

Total

Reported net income (loss)

$

4,019

$

2,598

$

1,440

$

1,768

$

(2,297)

$

7,528

Net income attributable to non-controlling interests in

                       

subsidiaries (NCI)

 

 

112

 

9

 

 

(3)

 

118

Reported net income attributable to equity holders

 

4,019

 

2,486

 

1,431

 

1,768

 

(2,294)

 

7,410

Reported net income attributable to preferred

                       

shareholders and other equity instrument holders

 

3

 

5

 

3

 

3

 

405

 

419

Reported net income attributable to common shareholders

$

4,016

$

2,481

$

1,428

$

1,765

$

(2,699)

$

6,991

Adjustments:

                       

Adjusting items impacting non-interest income and

                       

total revenue (Pre-tax)

                       

Divestitures and wind-down of operations

 

 

 

 

 

(367)

 

(367)

Adjusting items impacting non-interest expenses (Pre-tax)

                       

Restructuring charge and severance provisions

 

 

 

 

 

354

 

354

Consolidation of real estate and contract termination costs

 

 

 

 

 

87

 

87

Impairment of non-financial assets

 

 

 

 

 

346

 

346

Amortization of acquisition-related intangible assets

 

4

 

41

 

36

 

 

 

81

Total non-interest expenses adjustments (Pre-tax)

 

4

 

41

 

36

 

 

787

 

868

Total impact of adjusting items on net income before taxes

 

4

 

41

 

36

 

 

420

 

501

Impact of adjusting items on income tax expense

                       

Canada recovery dividend

 

 

 

 

 

579

 

579

Impact of other adjusting items on income tax expense

 

(1)

 

(11)

 

(10)

 

 

(145)

 

(167)

Total impact of adjusting items on income tax expense

 

(1)

 

(11)

 

(10)

 

 

434

 

412

Total impact of adjusting items on net income

 

3

 

30

 

26

 

 

854

 

913

Impact of adjusting items on NCI

 

 

 

 

 

(3)

 

(3)

Total impact of adjusting items on net income attributable

                       

to equity holders and common shareholders

 

3

 

30

 

26

 

 

851

 

910

Adjusted net income (loss)

$

4,022

$

2,628

$

1,466

$

1,768

$

(1,443)

$

8,441

Adjusted net income attributable to equity holders

$

4,022

$

2,516

$

1,457

$

1,768

$

(1,443)

$

8,320

Adjusted net income attributable to common shareholders

$

4,019

$

2,511

$

1,454

$

1,765

$

(1,848)

$

7,901

(1) Refer to Business Segment Review section of the Bank's 2023 Annual Report to Shareholders.

 
 
 

For the year ended October 31, 2022⁽¹⁾

     

Global

Global

     
 

Canadian

International

Wealth

Banking and

     

($ millions)

Banking

Banking

Management

Markets

Other

Total

Reported net income (loss)

$

4,763

$

2,667

$

1,565

$

1,911

$

(732)

$

10,174

Net income attributable to non-controlling interests in

                       

subsidiaries (NCI)

 

 

249

 

9

 

 

 

258

Reported net income attributable to equity holders

 

4,763

 

2,418

 

1,556

 

1,911

 

(732)

 

9,916

Reported net income attributable to preferred

                       

shareholders and other equity instrument holders

 

6

 

6

 

3

 

4

 

241

 

260

Reported net income attributable to common shareholders

$

4,757

$

2,412

$

1,553

$

1,907

$

(973)

$

9,656

Adjustments:

                       

Adjusting items impacting non-interest income and

                       

total revenue (Pre-tax)

                       

Divestitures and wind-down of operations

 

 

 

 

 

361

 

361

Adjusting items impacting non-interest expenses (Pre-tax)

                       

Restructuring charge and severance provisions

 

 

 

 

 

85

 

85

Support costs for the Scene+ loyalty program

 

 

 

 

 

133

 

133

Amortization of acquisition-related intangible assets

 

22

 

39

 

36

 

 

 

97

Total non-interest expenses adjustments (Pre-tax)

 

22

 

39

 

36

 

 

218

 

315

Total impact of adjusting items on net income before taxes

 

22

 

39

 

36

 

 

579

 

676

Total impact of adjusting items on income tax expense

 

(6)

 

(11)

 

(9)

 

 

(75)

 

(101)

Total impact of adjusting items on net income

 

16

 

28

 

27

 

 

504

 

575

Impact of adjusting items on NCI

 

 

 

 

 

(1)

 

(1)

Total impact of adjusting items on net income attributable

                       

to equity holders and common shareholders

 

16

 

28

 

27

 

 

503

 

574

Adjusted net income (loss)

$

4,779

$

2,695

$

1,592

$

1,911

$

(228)

$

10,749

Adjusted net income attributable to equity holders

$

4,779

$

2,446

$

1,583

$

1,911

$

(229)

$

10,490

Adjusted net income attributable to common shareholders

$

4,773

$

2,440

$

1,580

$

1,907

$

(470)

$

10,230

 (1) Refer to Business Segment Review section of the Bank's 2023 Annual Report to Shareholders. 

Reconciliation of International Banking's reported, adjusted and constant dollar results

International Banking business segment results are analyzed on a constant dollar basis which is a non-GAAP measure. Under the constant dollar basis, prior period amounts are recalculated using current period average foreign currency rates. The following table presents the reconciliation between reported, adjusted and constant dollar results for International Banking for prior periods. The Bank believes that constant dollar is useful for readers to understand business performance without the impact of foreign currency translation and is used by management to assess the performance of the business segment. 

Reported Results

For the three months ended

For the year ended

($ millions)

July 31, 2023

October 31, 2022

October 31, 2022

   

Foreign

Constant

 

Foreign

Constant

 

Foreign

Constant

(Taxable equivalent basis)

Reported

exchange

dollar

Reported

exchange

dollar

Reported

exchange

dollar

Net interest income

$

2,118

$

19

$

2,099

$

1,806

$

(151)

$

1,957

$

6,900

$

(581)

$

7,481

Non-interest income

 

728

 

(24)

 

752

 

698

 

(63)

 

761

 

2,827

 

(80)

 

2,907

Total revenue

 

2,846

 

(5)

 

2,851

 

2,504

 

(214)

 

2,718

 

9,727

 

(661)

 

10,388

Provision for credit losses

 

516

 

6

 

510

 

355

 

(31)

 

386

 

1,230

 

(95)

 

1,325

Non-interest expenses

 

1,491

 

4

 

1,487

 

1,364

 

(108)

 

1,472

 

5,212

 

(372)

 

5,584

Income tax expense

 

192

 

(5)

 

197

 

106

 

(11)

 

117

 

618

 

(23)

 

641

Net income

$

647

$

(10)

$

657

$

679

$

(64)

$

743

$

2,667

$

(171)

$

2,838

Net income attributable to non-controlling

                                   

interest in subsidiaries (NCI)

$

19

$

$

19

$

36

$

(2)

$

38

$

249

$

(12)

$

261

Net income attributable to equity holders of the Bank

$

628

$

(10)

$

638

$

643

$

(62)

$

705

$

2,418

$

(159)

$

2,577

Other measures

                                   

Average assets ($ billions)

$

241

$

2

$

239

$

217

$

(15)

$

232

$

207

$

(15)

$