-
Record results for fiscal 2014
-
Quarterly dividend increases 4% to 50 cents per share
The unaudited financial information presented herein is based on the
unaudited interim condensed consolidated financial statements for the
fourth quarter of fiscal 2014 and on the audited annual consolidated
financial statements for the year ended October 31, 2014 and has been
prepared in accordance with International Financial Reporting Standards
(IFRS), as issued by the International Accounting Standards Board
(IASB) and set out in the CPA Canada Handbook. All amounts are
presented in Canadian dollars.
MONTREAL, Dec. 5, 2014 /CNW Telbec/ - Excluding specified items, National Bank posted record net income of
$1,593 million in 2014, up 12% from $1,423 million in 2013, and its
2014 diluted earnings per share stood at $4.48 versus $4.04 in 2013.
The specified items are described on page 2. For the year ended
October 31, 2014, net income totalled $1,538 million, up 2% from
$1,512 million in 2013, and diluted earnings per share stood at $4.32,
remaining stable versus $4.31 in 2013.
Excluding specified items, the Bank's 2014 fourth-quarter net income
totalled $407 million, up 15% from $353 million in the fourth quarter
of 2013, and its diluted earnings per share stood at $1.14 for the
quarter ended October 31, 2014, up 14% from $1.00 in the same quarter
of 2013. Fourth-quarter net income totalled $330 million, up 3% from
$320 million in the same quarter of 2013, and fourth-quarter diluted
earnings per share stood at $0.91 compared to $0.90 in the same quarter
of fiscal 2013.
"National Bank delivered excellent fourth-quarter results and had a
record year in 2014, posting solid growth across all its business
segments. In the fourth quarter of this year, the Wealth Management and
Financial Markets segments were especially impressive, achieving
year-over-year earnings growth of more than 20%," said Louis Vachon,
President and Chief Executive Officer. "As shown by our 2014 results,
our sustained investment in employee training, risk management and
improvements to technology platforms and processes will continue to
drive our future success," added Mr. Vachon.
Highlights Excluding Specified Items(1):
-
Record net income of $1,593 million for 2014, up 12% from $1,423 million
last year;
-
Diluted earnings per share of $4.48 for 2014, up 11% from $4.04 in 2013;
-
Fourth-quarter net income of $407 million, up 15% from $353 million in
the same quarter of 2013;
-
Fourth-quarter diluted earnings per share of $1.14, up 14% from $1.00 in
the same quarter of 2013;
-
Return on equity of 17.9% for the fourth quarter of 2014.
Highlights:
-
Net income of $1,538 million for 2014, up 2% from $1,512 million last
year;
-
Diluted earnings per share of $4.32 for 2014 versus $4.31 in 2013;
-
Fourth-quarter net income of $330 million, up 3% from $320 million in
the same quarter of 2013;
-
Fourth-quarter diluted earnings per share of $0.91 compared to $0.90 in
the same quarter of 2013;
-
Return on equity of 14.3% for the fourth quarter of 2014;
-
As at October 31, 2014, the Common Equity Tier 1 (CET1) capital ratio
under Basel III was 9.2% versus 8.7% as at October 31, 2013.
|
Financial Indicators
|
|
|
|
Results
excluding
specified
items(1)
|
|
Results
Q4 2014
|
|
Results
excluding
specified
items(1)
|
|
Results
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth in diluted earnings per share
|
|
14
|
%
|
|
1
|
%
|
|
11
|
%
|
|
-
|
%
|
|
Return on common shareholders' equity
|
|
17.9
|
%
|
|
14.3
|
%
|
|
18.5
|
%
|
|
17.9
|
%
|
|
Dividend payout ratio
|
|
42
|
%
|
|
43
|
%
|
|
42
|
%
|
|
43
|
%
|
|
CET1 capital ratio under Basel III
|
|
|
|
|
9.2
|
%
|
|
|
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the Financial Reporting Method section on page 2.
|
|
FINANCIAL REPORTING METHOD
|
|
(millions of Canadian dollars, except per share amounts)
|
|
|
|
When assessing its results, the Bank uses certain measures that do not
comply with IFRS, as issued by the IASB and set out in the CPA Canada
Handbook. Securities regulators require companies to caution readers
that net income and other measures adjusted using non-IFRS criteria are
not standard under IFRS and cannot be easily compared with similar
measures used by other companies.
|
|
Financial Information
|
|
|
Quarter ended October 31
|
Year ended October 31
|
|
|
|
|
2014
|
|
|
|
2013(1)
|
|
|
%
Change
|
|
|
2014
|
|
|
|
2013(1)
|
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding specified items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal and Commercial
|
|
|
178
|
|
|
|
166
|
|
|
7
|
|
|
698
|
|
|
|
661
|
|
|
6
|
|
|
Wealth Management
|
|
|
80
|
|
|
|
62
|
|
|
29
|
|
|
308
|
|
|
|
225
|
|
|
37
|
|
|
Financial Markets
|
|
|
150
|
|
|
|
124
|
|
|
21
|
|
|
609
|
|
|
|
533
|
|
|
14
|
|
|
Other
|
|
|
(1)
|
|
|
|
1
|
|
|
|
|
|
(22)
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income excluding specified items
|
|
|
407
|
|
|
|
353
|
|
|
15
|
|
|
1,593
|
|
|
|
1,423
|
|
|
12
|
|
|
Items related to holding restructured notes(2)
|
|
|
(3)
|
|
|
|
(2)
|
|
|
|
|
|
54
|
|
|
|
104
|
|
|
|
|
|
Acquisition-related items(3)
|
|
|
(10)
|
|
|
|
(10)
|
|
|
|
|
|
(45)
|
|
|
|
(28)
|
|
|
|
|
|
Funding valuation adjustment(4)
|
|
|
(9)
|
|
|
|
-
|
|
|
|
|
|
(9)
|
|
|
|
-
|
|
|
|
|
|
Litigation provisions(5)
|
|
|
(10)
|
|
|
|
-
|
|
|
|
|
|
(10)
|
|
|
|
-
|
|
|
|
|
|
Impairment losses on intangible assets(6)
|
|
|
(45)
|
|
|
|
-
|
|
|
|
|
|
(45)
|
|
|
|
(29)
|
|
|
|
|
|
Severance pay(7)
|
|
|
-
|
|
|
|
(9)
|
|
|
|
|
|
-
|
|
|
|
(9)
|
|
|
|
|
|
Vacant premises(8)
|
|
|
-
|
|
|
|
(12)
|
|
|
|
|
|
-
|
|
|
|
(12)
|
|
|
|
|
|
Item related to employee benefits(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
26
|
|
|
|
|
|
Reversal of provisions for income tax contingencies(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
37
|
|
|
|
|
Net income
|
|
|
330
|
|
|
|
320
|
|
|
3
|
|
|
1,538
|
|
|
|
1,512
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share excluding specified items(11)
|
|
$
|
1.14
|
|
|
$
|
1.00
|
|
|
14
|
|
$
|
4.48
|
|
|
$
|
4.04
|
|
|
11
|
|
|
Items related to holding restructured notes(2)
|
|
|
(0.01)
|
|
|
|
-
|
|
|
|
|
|
0.16
|
|
|
|
0.33
|
|
|
|
|
|
Acquisition-related items(3)
|
|
|
(0.03)
|
|
|
|
(0.03)
|
|
|
|
|
|
(0.13)
|
|
|
|
(0.09)
|
|
|
|
|
|
Funding valuation adjustment(4)
|
|
|
(0.02)
|
|
|
|
-
|
|
|
|
|
|
(0.02)
|
|
|
|
-
|
|
|
|
|
|
Litigation provisions(5)
|
|
|
(0.03)
|
|
|
|
-
|
|
|
|
|
|
(0.03)
|
|
|
|
-
|
|
|
|
|
|
Impairment losses on intangible assets(6)
|
|
|
(0.14)
|
|
|
|
-
|
|
|
|
|
|
(0.14)
|
|
|
|
(0.09)
|
|
|
|
|
|
Severance pay(7)
|
|
|
-
|
|
|
|
(0.03)
|
|
|
|
|
|
-
|
|
|
|
(0.03)
|
|
|
|
|
|
Vacant premises(8)
|
|
|
-
|
|
|
|
(0.04)
|
|
|
|
|
|
-
|
|
|
|
(0.04)
|
|
|
|
|
|
Item related to employee benefits(9)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
0.08
|
|
|
|
|
|
Reversal of provisions for income tax contingencies(10)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
0.11
|
|
|
|
|
Diluted earnings per share(11)
|
|
$
|
0.91
|
|
|
$
|
0.90
|
|
|
1
|
|
$
|
4.32
|
|
|
$
|
4.31
|
|
|
−
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on common shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Including specified items
|
|
|
14.3
|
%
|
|
|
15.8
|
%
|
|
|
|
|
17.9
|
%
|
|
|
20.1
|
%
|
|
|
|
|
Excluding specified items
|
|
|
17.9
|
%
|
|
|
17.6
|
%
|
|
|
|
|
18.5
|
%
|
|
|
18.9
|
%
|
|
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
(2)
|
During the quarter ended October 31, 2014, the Bank recorded $4 million
in financing costs ($3 million net of income taxes) related to holding
restructured notes (2013: $3 million, $2 million net of income taxes).
During the year ended October 31, 2014, the Bank recorded $18 million
in financing costs ($13 million net of income taxes) related to holding
restructured notes (2013: $9 million, $7 million net of income taxes)
as well as $92 million in revenues ($67 million net of income taxes) to
reflect a rise in the fair value of the notes (2013: $151 million,
$111 million net of income taxes).
|
|
(3)
|
During the quarter ended October 31, 2014, the Bank recorded $14 million
in charges ($10 million net of income taxes) related to the Wealth
Management acquisitions (2013: $14 million, $10 million net of income
taxes). These charges consisted mostly of retention bonuses and
integration charges; they also include the Bank's share in the
integration costs incurred by Fiera and its share in the integration
costs, impairment losses and intangible asset amortization related to
the Bank's interest in TMX. For the year ended October 31, 2014, these
charges stood at $60 million ($45 million net of income taxes) and, for
the same period in 2013, they stood at $39 million ($28 million net of
income taxes).
|
|
(4)
|
During the quarter ended October 31, 2014, the Bank recorded $13 million
in charges ($9 million net of income taxes) to reflect the funding
valuation adjustment (FVA), which is an adjustment to the fair value
determination of OTC derivatives that are uncollateralized (including
not fully collateralized) and that includes market implied funding
costs and benefits.
|
|
(5)
|
During the quarter ended October 31, 2014, the Bank recorded $14 million
in litigation provisions ($10 million net of income taxes).
|
|
(6)
|
During the quarter ended October 31, 2014, the Bank recorded $62 million
($45 million net of income taxes) in intangible asset impairment losses
on technology developments (2013: $39 million, $29 million net of
income taxes).
|
|
(7)
|
During the year ended October 31, 2013, the Bank recorded $12 million in
severance pay ($9 million net of income taxes) related to the
optimization of certain activities.
|
|
(8)
|
During the quarter ended October 31, 2013, the Bank recorded $16 million
in charges ($12 million net of income taxes) related to vacant
premises.
|
|
(9)
|
During the year ended October 31, 2013, the Bank recorded a $35 million
decrease in past service costs ($26 million net of income taxes) to
reflect changes to the provisions of its pension plans and other
post-retirement plans subsequent to changes in accounting standards.
|
|
(10)
|
During the year ended October 31, 2013, the Bank reversed $37 million in
tax provisions following a revaluation of contingent income tax
liabilities.
|
|
(11)
|
Reflecting the stock dividend paid on February 13, 2014. See Note 18 to
the audited annual consolidated financial statements for the year ended
October 31, 2014.
|
|
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended October 31
|
|
|
|
|
|
|
Year ended October 31
|
|
|
|
|
2014
|
|
|
|
2013(1)
|
|
|
% Change
|
|
|
2014
|
|
|
|
2013(1)
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
1,364
|
|
|
$
|
1,251
|
|
|
9
|
|
$
|
5,464
|
|
|
$
|
5,151
|
|
|
6
|
|
Net income
|
|
|
330
|
|
|
|
320
|
|
|
3
|
|
|
1,538
|
|
|
|
1,512
|
|
|
2
|
|
Net income attributable to the Bank's shareholders
|
|
|
312
|
|
|
|
304
|
|
|
3
|
|
|
1,469
|
|
|
|
1,449
|
|
|
1
|
|
Return on common shareholders' equity
|
|
|
14.3
|
%
|
|
|
15.8
|
%
|
|
|
|
|
17.9
|
%
|
|
|
20.1
|
%
|
|
|
|
Earnings per share(2) (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.92
|
|
|
$
|
0.91
|
|
|
1
|
|
$
|
4.36
|
|
|
$
|
4.34
|
|
|
-
|
|
|
Diluted
|
|
|
0.91
|
|
|
|
0.90
|
|
|
1
|
|
|
4.32
|
|
|
|
4.31
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXCLUDING SPECIFIED ITEMS(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
1,383
|
|
|
$
|
1,260
|
|
|
10
|
|
$
|
5,419
|
|
|
$
|
5,021
|
|
|
8
|
|
Net income
|
|
|
407
|
|
|
|
353
|
|
|
15
|
|
|
1,593
|
|
|
|
1,423
|
|
|
12
|
|
Net income attributable to the Bank's shareholders
|
|
|
389
|
|
|
|
337
|
|
|
15
|
|
|
1,524
|
|
|
|
1,360
|
|
|
12
|
|
Return on common shareholders' equity
|
|
|
17.9
|
%
|
|
|
17.6
|
%
|
|
|
|
|
18.5
|
%
|
|
|
18.9
|
%
|
|
|
|
Efficiency ratio(4)
|
|
|
58.4
|
%
|
|
|
60.7
|
%
|
|
|
|
|
58.6
|
%
|
|
|
60.2
|
%
|
|
|
|
Earnings per share(2) (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.15
|
|
|
$
|
1.01
|
|
|
14
|
|
$
|
4.53
|
|
|
$
|
4.07
|
|
|
11
|
|
|
Diluted
|
|
|
1.14
|
|
|
|
1.00
|
|
|
14
|
|
|
4.48
|
|
|
|
4.04
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share(2) (dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
|
|
$
|
0.48
|
|
|
$
|
0.44
|
|
|
|
|
$
|
1.88
|
|
|
$
|
1.70
|
|
|
|
|
Book value
|
|
|
|
|
|
|
|
|
|
|
|
|
25.76
|
|
|
|
22.97
|
|
|
|
|
Share price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
53.88
|
|
|
|
45.24
|
|
|
|
|
|
53.88
|
|
|
|
45.24
|
|
|
|
|
|
Low
|
|
|
48.16
|
|
|
|
38.86
|
|
|
|
|
|
41.60
|
|
|
|
36.18
|
|
|
|
|
|
Close
|
|
|
52.68
|
|
|
|
45.24
|
|
|
|
|
|
52.68
|
|
|
|
45.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
October 31,
2014
|
|
|
As at
October 31,
2013(1)
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
$
|
205,429
|
|
|
$
|
188,219
|
|
|
9
|
|
Loans and acceptances
|
|
|
|
|
|
|
|
|
|
|
|
|
106,169
|
|
|
|
97,338
|
|
|
9
|
|
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
119,883
|
|
|
|
102,111
|
|
|
17
|
|
Equity attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
8,484
|
|
|
|
7,487
|
|
|
13
|
|
Capital ratios under Basel III(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (CET1)
|
|
|
|
|
|
|
|
|
|
|
|
|
9.2
|
%
|
|
|
8.7
|
%
|
|
|
|
|
Tier 1(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
12.3
|
%
|
|
|
11.4
|
%
|
|
|
|
|
Total(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
15.1
|
%
|
|
|
15.0
|
%
|
|
|
|
Impaired loans, net of total allowances
|
|
|
|
|
|
|
|
|
|
|
|
|
(118)
|
|
|
|
(183)
|
|
|
|
|
|
As a % of average loans and acceptances
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.1)
|
%
|
|
|
(0.2)
|
%
|
|
|
|
Assets under administration and under management
|
|
|
|
|
|
|
|
|
|
|
|
|
338,305
|
|
|
|
258,010
|
|
|
31
|
|
Total personal savings
|
|
|
|
|
|
|
|
|
|
|
|
|
172,414
|
|
|
|
157,515
|
|
|
9
|
|
Earnings coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
8.98
|
|
|
|
8.72
|
|
|
|
|
Asset coverage
|
|
|
|
|
|
|
|
|
|
|
|
|
5.24
|
|
|
|
3.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of employees
|
|
|
|
|
|
|
|
|
|
|
|
|
19,955
|
|
|
|
19,691
|
|
|
1
|
|
Number of branches in Canada
|
|
|
|
|
|
|
|
|
|
|
|
|
452
|
|
|
|
453
|
|
|
-
|
|
Number of banking machines
|
|
|
|
|
|
|
|
|
|
|
|
|
935
|
|
|
|
937
|
|
|
-
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
(2)
|
Reflecting the stock dividend paid on February 13, 2014. See Note 18 to
the audited annual consolidated financial statements for the year ended
October 31, 2014.
|
|
(3)
|
See the Financial Reporting Method section on page 2.
|
|
(4)
|
The efficiency ratio is presented on a taxable equivalent basis. For
additional information, see the Segment Disclosures section on page 15.
|
|
(5)
|
The ratios are calculated using the "all-in" methodology, and the
October 31, 2013 ratios have not been adjusted to reflect changes in
accounting standards.
|
|
(6)
|
The ratios as at October 31, 2014 include the redemption of the Series
16 preferred shares on November 15, 2014.
|
FINANCIAL ANALYSIS
The figures for the year ended October 31, 2013 have been adjusted to
reflect accounting standard changes that took effect on November 1,
2013 and were applied retrospectively. This press release should be
read in conjunction with the 2014 Annual Report (which includes the
audited annual consolidated financial statements and MD&A) available on
the Bank's website at nbc.ca. Additional information about the Bank, including the Annual Information Form, can be obtained from the Bank's website at nbc.ca and SEDAR's website at sedar.com.
Consolidated Results
Total Revenues
For the fourth quarter of 2014, the Bank's total revenues amounted to
$1,364 million, a $113 million or 9% year-over-year increase. Excluding
the specified items related to holding restructured notes, related to
the Wealth Management acquisitions and related to the funding valuation
adjustment applied to certain derivative financial instruments, total
revenues grew 10%. Net interest income was up, driven by higher
personal and commercial loans and deposits, by greater brokerage
business volume and by the net interest income from trading activities.
And non-interest income increased by 11%, mainly due to business growth
in the Wealth Management segment (including the acquisition of TD
Waterhouse Institutional Services (TDWIS) completed during the quarter
ended January 31, 2014) as well as to financial market fees and gains
on available-for-sale securities.
For fiscal 2014, total revenues amounted to $5,464 million versus
$5,151 million in 2013, a 6% increase driven partly by 4% growth in net
interest income owing to higher loans and deposits. Excluding specified
items, non-interest income rose $282 million or 11%, mainly due to
revenue growth related to Wealth Management's activities; to solid
performance by the Financial Markets segment, including the revenues
from the Credigy Ltd. subsidiary; and to gains on the disposal of
securities by the Treasury and Insurance sectors. The non-interest
income growth was tempered by lower credits fees and insurance
revenues.
Provisions for Credit Losses
For the fourth quarter of 2014, the Bank recorded $57 million in
provisions for credit losses, $9 million more than in the same quarter
of 2013, mainly because of losses on business loans.
For fiscal 2014, the Bank recorded $208 million in provisions for credit
losses, $27 million more than in 2013, mostly because higher provisions
for credit losses on personal and commercial loans were taken in 2014,
particularly for consumer loans and loans to businesses. Provisions for
credit losses on corporate banking loans were nil in 2014, whereas
substantial recoveries had been recorded in 2013.
As at October 31, 2014, gross impaired loans totalled $486 million, a
$91 million increase from October 31, 2013, mainly attributable to the
addition of a few loans in the Personal and Commercial segment.
Impaired loans represented 7.1% of the tangible capital adjusted for
allowances as at October 31, 2014 compared to 6.5% as at October 31,
2013. As at October 31, 2014, the allowances for credit losses exceeded
gross impaired loans by $118 million versus $183 million as at
October 31, 2013.
Non-Interest Expenses
For the fourth quarter of 2014, non-interest expenses stood at
$929 million, up $102 million from the same quarter of 2013. Excluding
the specified items recorded during the quarter ended October 31, 2014,
which totalled $88 million versus $36 million in the same quarter of
2013, non-interest expenses stood at $841 million, a 6% year-over-year
increase stemming essentially from higher compensation and employee
benefits, particularly variable compensation, related to revenue growth
across all segments as well as to the TDWIS acquisition.
For fiscal 2014, non-interest expenses rose $217 million or 7% year over
year. Excluding the specified items recorded for fiscal years 2014 and
2013, non-interest expenses were up $156 million or 5%. This increase
came mainly from business growth that led to higher variable
compensation, from the TDWIS acquisition and from the promotion of
banking services.
Income Taxes
For the fourth quarter of 2014, income taxes stood at $48 million
compared to $56 million in the same quarter of 2013. The fourth-quarter
effective income tax rate was 13% versus 15% in the same quarter of
2013. This variance came from a higher amount of tax-exempt income from
securities in the fourth quarter of 2014.
For the year ended October 31, 2014, the effective income tax rate was
16% compared to 14% in 2013, as a $37 million reversal of provisions
for income tax contingencies had been recorded in fiscal 2013.
Results by Segment
The Bank carries out its activities in three business segments. For
presentation purposes, other operating activities are grouped in the Other heading. Each segment is distinguished by service offered, type of
clientele and marketing strategy.
|
Personal and Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars)
|
|
Quarter ended October 31
|
|
|
Year ended October 31
|
|
|
|
2014
|
|
|
2013(1)
|
|
|
% Change
|
|
2014
|
|
|
2013(1)
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
436
|
|
|
410
|
|
|
6
|
|
1,699
|
|
|
1,615
|
|
|
5
|
|
Non-interest income
|
|
254
|
|
|
248
|
|
|
2
|
|
994
|
|
|
977
|
|
|
2
|
|
Total revenues
|
|
690
|
|
|
658
|
|
|
5
|
|
2,693
|
|
|
2,592
|
|
|
4
|
|
Non-interest expenses
|
|
390
|
|
|
382
|
|
|
2
|
|
1,532
|
|
|
1,497
|
|
|
2
|
|
Contribution
|
|
300
|
|
|
276
|
|
|
9
|
|
1,161
|
|
|
1,095
|
|
|
6
|
|
Provisions for credit losses
|
|
56
|
|
|
50
|
|
|
12
|
|
205
|
|
|
192
|
|
|
7
|
|
Income before income taxes
|
|
244
|
|
|
226
|
|
|
8
|
|
956
|
|
|
903
|
|
|
6
|
|
Income taxes
|
|
66
|
|
|
60
|
|
|
10
|
|
258
|
|
|
242
|
|
|
7
|
|
Net income
|
|
178
|
|
|
166
|
|
|
7
|
|
698
|
|
|
661
|
|
|
6
|
|
Net interest margin
|
|
2.21
|
%
|
|
2.24
|
%
|
|
|
|
2.24
|
%
|
|
2.28
|
%
|
|
|
|
Average interest-bearing assets
|
|
78,227
|
|
|
72,686
|
|
|
8
|
|
75,963
|
|
|
70,718
|
|
|
7
|
|
Average assets
|
|
83,659
|
|
|
78,696
|
|
|
6
|
|
81,516
|
|
|
76,696
|
|
|
6
|
|
Average deposits
|
|
43,995
|
|
|
41,667
|
|
|
6
|
|
43,022
|
|
|
40,294
|
|
|
7
|
|
Average loans and acceptances
|
|
83,248
|
|
|
78,332
|
|
|
6
|
|
81,129
|
|
|
76,344
|
|
|
6
|
|
Net impaired loans
|
|
246
|
|
|
181
|
|
|
36
|
|
246
|
|
|
181
|
|
|
36
|
|
Net impaired loans as a % of average loans and acceptances
|
|
0.3
|
%
|
|
0.2
|
%
|
|
|
|
0.3
|
%
|
|
0.2
|
%
|
|
|
|
Efficiency ratio
|
|
56.5
|
%
|
|
58.1
|
%
|
|
|
|
56.9
|
%
|
|
57.8
|
%
|
|
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
In the Personal and Commercial segment, net income totalled $178 million
in the fourth quarter of 2014, up 7% from $166 million in the fourth
quarter of 2013. Fourth-quarter total revenues increased by $32 million
year over year owing to higher net interest income, which rose
$26 million, and to higher non-interest income, which rose $6 million.
The higher net interest income came from growth in personal and
commercial loan and deposit volumes, tempered by a narrowing of the net
interest margin, which was 2.21% in the fourth quarter of 2014 versus
2.24% in the same quarter of 2013, mainly because of smaller deposit
margins.
Personal Banking's total revenues rose $22 million, mainly due to higher
loan volume, particularly mortgage loans and home equity lines of
credit, to internal commission revenues generated by the distribution
of Wealth Management products and to credit card revenues. Commercial
Banking's total revenues rose $10 million owing mainly to growth in
loan and deposit volumes. This increase was partly offset by smaller
net interest margins on deposits and a decrease in credit fees on
bankers' acceptances.
The segment's fourth-quarter non-interest expenses increased by
$8 million or 2% year over year, mainly due to employee compensation.
At 56.5%, the efficiency ratio for the fourth quarter of 2014 improved
by 1.6 percentage points compared to the same quarter of 2013.
The segment's fourth-quarter provisions for credit losses were
$56 million, $6 million more than in the same quarter of 2013. This
slight increase came mainly from higher provisions for credit losses on
commercial loans.
For fiscal 2014, the Personal and Commercial segment posted net income
of $698 million, up $37 million or 6% from $661 million in 2013. The
segment's total revenues grew 4% year over year. Personal Banking's
total revenues rose 5% for the same reasons as those provided for the
quarter, and a 3% increase in Commercial Banking's total revenues came
mainly from growth in loan and deposit volumes, partly offset by lower
credit fees on bankers' acceptances as clients moved towards credit
products. The segment's contribution rose $66 million or 6% and its
provisions for credit losses were $13 million higher than in 2013,
particularly because of the growth in both personal and commercial loan
volume. At 56.9% in 2014, the efficiency ratio improved by 0.9
percentage points when compared to fiscal 2013.
|
Wealth Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars)
|
Quarter ended October 31
|
|
Year ended October 31
|
|
|
2014
|
|
|
2013(1)
|
|
|
% Change
|
|
2014
|
|
|
2013(1)
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results excluding specified items(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
80
|
|
|
70
|
|
|
14
|
|
315
|
|
|
272
|
|
|
16
|
|
Fee-based revenues
|
178
|
|
|
143
|
|
|
24
|
|
663
|
|
|
559
|
|
|
19
|
|
Transaction-based and other revenues
|
82
|
|
|
78
|
|
|
5
|
|
354
|
|
|
319
|
|
|
11
|
|
Total revenues
|
340
|
|
|
291
|
|
|
17
|
|
1,332
|
|
|
1,150
|
|
|
16
|
|
Non-interest expenses
|
231
|
|
|
207
|
|
|
12
|
|
913
|
|
|
841
|
|
|
9
|
|
Contribution
|
109
|
|
|
84
|
|
|
30
|
|
419
|
|
|
309
|
|
|
36
|
|
Provisions for credit losses
|
1
|
|
|
1
|
|
|
−
|
|
3
|
|
|
3
|
|
|
−
|
|
Income before income taxes
|
108
|
|
|
83
|
|
|
30
|
|
416
|
|
|
306
|
|
|
36
|
|
Income taxes
|
28
|
|
|
21
|
|
|
33
|
|
108
|
|
|
81
|
|
|
33
|
|
Net income excluding specified items
|
80
|
|
|
62
|
|
|
29
|
|
308
|
|
|
225
|
|
|
37
|
|
Specified items after income taxes(2)
|
(10)
|
|
|
(7)
|
|
|
|
|
(38)
|
|
|
(24)
|
|
|
|
|
Net income
|
70
|
|
|
55
|
|
|
27
|
|
270
|
|
|
201
|
|
|
34
|
|
Average assets
|
10,146
|
|
|
9,166
|
|
|
11
|
|
10,400
|
|
|
9,080
|
|
|
15
|
|
Average deposits
|
24,153
|
|
|
22,111
|
|
|
9
|
|
24,225
|
|
|
21,477
|
|
|
13
|
|
Average loans and acceptances
|
8,448
|
|
|
7,997
|
|
|
6
|
|
8,287
|
|
|
7,862
|
|
|
5
|
|
Net impaired loans
|
2
|
|
|
2
|
|
|
|
|
2
|
|
|
2
|
|
|
|
|
Efficiency ratio excluding specified items(2)
|
67.9
|
%
|
|
71.1
|
%
|
|
|
|
68.5
|
%
|
|
73.1
|
%
|
|
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
(2)
|
See the Financial Reporting Method section on page 2.
|
In the Wealth Management segment, net income excluding specified items
totalled $80 million in the fourth quarter of 2014 versus $62 million
in the same quarter of 2013, a strong 29% increase that came mainly
from favourable synergies generated by the segment's recent
transactions and from growth in assets under administration and under
management. Excluding specified items, the segment's total revenues
amounted to $340 million in 2014, rising 17% from $291 million in 2013.
Accounting for 27% of this revenue growth was the acquisition of TD
Waterhouse Institutional Services (TDWIS) completed in the first
quarter of 2014, while all of the segment's other businesses made solid
gains, particularly National Bank Financial Wealth Management and
Private Wealth 1859.
Excluding specified items, all relating to the acquisitions of recent
years, fourth-quarter non-interest expenses stood at $231 million
compared to $207 million in the same quarter of 2013, a 12% increase
that came mainly from the higher variable compensation associated with
growth in the segment's business activity as well as from the TDWIS
acquisition. At 67.9%, the efficiency ratio for the fourth quarter of
2014 improved by 3.2 percentage points compared to the same quarter of
2013.
For fiscal 2014, Wealth Management's net income excluding specified
items totalled $308 million, up 37% from $225 million in 2013. The
segment's 2014 total revenues amounted to $1,332 million compared to
$1,150 million in 2013, and non-interest expenses stood at $913 million
versus $841 million last year. These revenue and non-interest expense
changes were driven by the same factors provided for the fourth
quarter. At 68.5%, the efficiency ratio improved by 4.6 percentage
points when compared to the same period of 2013.
|
Financial Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(taxable equivalent basis)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars)
|
|
Quarter ended October 31
|
|
Year ended October 31
|
|
|
|
2014
|
|
|
2013(2)
|
|
|
% Change
|
|
2014
|
|
|
2013(2)
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating results excluding specified items(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading activity revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equities
|
|
77
|
|
|
78
|
|
|
(1)
|
|
333
|
|
|
288
|
|
|
16
|
|
|
Fixed-income
|
|
34
|
|
|
49
|
|
|
(31)
|
|
218
|
|
|
237
|
|
|
(8)
|
|
|
Commodities and foreign exchange
|
|
27
|
|
|
19
|
|
|
42
|
|
83
|
|
|
88
|
|
|
(6)
|
|
|
|
138
|
|
|
146
|
|
|
(5)
|
|
634
|
|
|
613
|
|
|
3
|
|
Financial market fees
|
|
80
|
|
|
60
|
|
|
33
|
|
301
|
|
|
257
|
|
|
17
|
|
Gains on available-for-sale securities, net
|
|
15
|
|
|
2
|
|
|
|
|
27
|
|
|
26
|
|
|
4
|
|
Banking services
|
|
67
|
|
|
61
|
|
|
10
|
|
250
|
|
|
234
|
|
|
7
|
|
Other
|
|
80
|
|
|
62
|
|
|
29
|
|
315
|
|
|
248
|
|
|
27
|
|
Total revenues
|
|
380
|
|
|
331
|
|
|
15
|
|
1,527
|
|
|
1,378
|
|
|
11
|
|
Non-interest expenses
|
|
174
|
|
|
164
|
|
|
6
|
|
692
|
|
|
664
|
|
|
4
|
|
Contribution
|
|
206
|
|
|
167
|
|
|
23
|
|
835
|
|
|
714
|
|
|
17
|
|
Provisions for (recoveries of) credit losses
|
|
-
|
|
|
(2)
|
|
|
|
|
-
|
|
|
(14)
|
|
|
|
|
Income before income taxes
|
|
206
|
|
|
169
|
|
|
22
|
|
835
|
|
|
728
|
|
|
15
|
|
Income taxes
|
|
56
|
|
|
45
|
|
|
24
|
|
226
|
|
|
195
|
|
|
16
|
|
Net income excluding specified items
|
|
150
|
|
|
124
|
|
|
21
|
|
609
|
|
|
533
|
|
|
14
|
|
Specified items(1)
|
|
(9)
|
|
|
-
|
|
|
|
|
(9)
|
|
|
-
|
|
|
|
|
Net income
|
|
141
|
|
|
124
|
|
|
14
|
|
600
|
|
|
533
|
|
|
13
|
|
Non-controlling interests
|
|
4
|
|
|
2
|
|
|
|
|
14
|
|
|
8
|
|
|
|
|
Net income attributable to the Bank's shareholders
|
|
137
|
|
|
122
|
|
|
12
|
|
586
|
|
|
525
|
|
|
12
|
|
Average assets
|
|
89,366
|
|
|
88,685
|
|
|
1
|
|
86,198
|
|
|
87,063
|
|
|
(1)
|
|
Average deposits
|
|
12,713
|
|
|
7,690
|
|
|
65
|
|
11,109
|
|
|
6,541
|
|
|
70
|
|
Average loans and acceptances (Corporate only)
|
|
8,481
|
|
|
7,252
|
|
|
17
|
|
8,070
|
|
|
7,081
|
|
|
14
|
|
Efficiency ratio excluding specified items(3)
|
|
45.8
|
%
|
|
49.5
|
%
|
|
|
|
45.3
|
%
|
|
48.2
|
%
|
|
|
|
(1)
|
For additional information, see the Segment Disclosures section on page
15.
|
|
(2)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
(3)
|
See the Financial Reporting Method section on page 2.
|
In the Financial Markets segment, net income excluding specified items
totalled $150 million for the fourth quarter of 2014, up $26 million
from $124 million in the same quarter of 2013. On a taxable equivalent
basis, the segment's total revenues amounted to $380 million versus
$331 million in the fourth quarter of 2013 owing mainly to financial
market fees and other revenues. Trading activity revenues posted
year-over-year declines in equities and fixed-income business, whereas
commodities and foreign exchange business activity was up 42%.
Financial market fees were up owing to greater equity issuances in the
markets. The segment's fourth-quarter Other revenues grew 29% year over
year due to revenues from Credigy Ltd. and to a disposal of portfolios
from this subsidiary.
At $174 million for the fourth quarter of 2014, non-interest expenses
were up $10 million year over year, particularly because of the higher
variable compensation associated with revenue growth. Provisions for
credit losses were nil in the fourth quarter of 2014, whereas
$2 million in recoveries had been recorded in the same quarter of 2013.
For fiscal 2014, the segment's net income excluding specified items
totalled $609 million, up $76 million or 14% from 2013. On a taxable
equivalent basis, total revenues amounted to $1,527 million versus
$1,378 million in 2013, a $149 million year-over-year increase that was
partly due to growth in trading activity revenues, in particular client
business in equities. Financial market fees were up thanks to revenues
from new issuances. The increase in Other revenues stems from a
disposal of an investment and from sustained growth by Credigy Ltd.
The fiscal 2014 non-interest expenses increased year over year mainly
due to the higher variable compensation associated with revenue growth.
The segment did not record any provisions for credit losses for fiscal
2014, whereas $14 million in recoveries of credit losses had been
recorded in 2013.
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars)
|
|
Quarter ended October 31
|
|
Year ended October 31
|
|
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
|
|
|
|
|
|
|
|
|
|
Operating results excluding specified items(2)
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
(82)
|
|
(41)
|
|
(276)
|
|
(225)
|
|
Non-interest income
|
|
55
|
|
21
|
|
143
|
|
126
|
|
Total revenues
|
|
(27)
|
|
(20)
|
|
(133)
|
|
(99)
|
|
Non-interest expenses
|
|
46
|
|
38
|
|
166
|
|
145
|
|
Provisions for credit losses
|
|
-
|
|
(1)
|
|
-
|
|
-
|
|
Income before income taxes
|
|
(73)
|
|
(57)
|
|
(299)
|
|
(244)
|
|
Income taxes
|
|
(72)
|
|
(58)
|
|
(277)
|
|
(248)
|
|
Net income excluding specified items
|
|
(1)
|
|
1
|
|
(22)
|
|
4
|
|
Specified items after income taxes(2)
|
|
(58)
|
|
(26)
|
|
(8)
|
|
113
|
|
Net income
|
|
(59)
|
|
(25)
|
|
(30)
|
|
117
|
|
Non-controlling interests
|
|
14
|
|
14
|
|
55
|
|
55
|
|
Net income attributable to the Bank's shareholders
|
|
(73)
|
|
(39)
|
|
(85)
|
|
62
|
|
Average assets
|
|
29,101
|
|
20,454
|
|
28,566
|
|
20,670
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
(2)
|
See the Financial Reporting Method section on page 2.
|
For the fourth quarter of 2014, the Other heading of segment results posted a $59 million net loss compared to a
$25 million net loss in the same quarter of 2013. Excluding specified
items, it posted a $1 million net loss as opposed to net income of
$1 million in the fourth quarter of 2013. Higher revenues from Treasury
were offset by charges related to the promotion of the Bank's brand
image.
For fiscal 2014, the Other heading of segment results posted a net loss of $30 million as opposed
to net income of $117 million in 2013. Excluding specified items, it
posted a net loss of $22 million in 2014 as opposed to net income of
$4 million in 2013. The year-over-year decline in the 2014 net income
was mainly due to lower net revenues from Treasury, to the variable
compensation associated with the Bank's sound performance, to
technology initiatives and to the promotion of the brand image. The
2014 specified items, net of income taxes, consisted of $54 million
($104 million in 2013) in revenues related to holding restructured
notes, net of the financing costs of holding these notes, $45 million
($29 million in 2013) in intangible asset impairment losses,
$10 million in litigation provisions, and $7 million ($4 million in
2013) in charges related to the Bank's interest in TMX Group Ltd. For
fiscal 2013, the specified items, net of income taxes, had included a
$26 million reduction in pension plan and other post-employment plan
expense, $21 million in charges related to severance pay and vacant
premises, and a $37 million reversal of provisions for income tax
contingencies.
Consolidated Balance Sheet
Assets
As at October 31, 2014, the Bank had total assets of $205.4 billion
compared to $188.2 billion as at October 31, 2013, a $17.2 billion or
9% increase. Cash and deposits with financial institutions increased by
$4.5 billion. Loans totalled $97.8 billion, up 10% from $89.0 billion
as at October 31, 2013 and securities purchased under reverse
repurchase agreements and securities borrowed rose $3.1 billion as a
result of business activities in the Financial Markets segment.
Loans and acceptances
As at October 31, 2014, loans and acceptances increased since
October 31, 2013 owing to growth across all credit business, except for
customers' liabilities under acceptances, which remained stable as
clients moved towards loan products. The following table provides a
breakdown of the main loan and acceptance portfolios.
|
(millions of Canadian dollars)
|
|
As at October 31, 2014
|
|
As at October 31, 2013
|
|
|
|
|
|
|
|
Loans and acceptances
|
|
|
|
|
|
Consumer loans
|
|
28,007
|
|
26,064
|
|
Residential mortgages
|
|
39,300
|
|
36,573
|
|
Credit card receivables
|
|
1,989
|
|
1,925
|
|
Business and government
|
|
37,477
|
|
33,354
|
|
|
|
106,773
|
|
97,916
|
As at October 31, 2014, loans and acceptances totalled $106.8 billion,
an $8.9 billion or 9% increase since October 31, 2013. Compared to a
year ago, consumer loans were up 7%, due primarily to home equity lines
of credit and personal loans, and residential mortgages also rose 7%.
Loans and acceptances to business and government increased by 12% since
October 31, 2013, mainly due to corporate and government financing
activities and to loans to companies in the energy sector.
Liabilities
As at October 31, 2014, the Bank had total liabilities of $194.9 billion
compared to $179.3 billion as at October 31, 2013.
As at October 31, 2014, the Bank's deposit liability stood at
$119.9 billion, rising $17.8 billion or 17% from $102.1 billion as at
October 31, 2013. The following table provides a breakdown of total
personal savings.
|
(millions of Canadian dollars)
|
|
As at October 31, 2014
|
|
As at October 31, 2013
|
|
|
|
|
|
|
|
Balance sheet
|
|
|
|
|
|
Deposits
|
|
44,963
|
|
42,652
|
|
|
|
|
|
|
|
Off-balance-sheet
|
|
|
|
|
|
Full-service brokerage
|
|
104,525
|
|
94,550
|
|
Mutual funds
|
|
18,938
|
|
16,633
|
|
Other
|
|
3,988
|
|
3,680
|
|
|
|
127,451
|
|
114,863
|
|
Total
|
|
172,414
|
|
157,515
|
At $45.0 billion as at October 31, 2014, personal deposits were up
$2.3 billion since October 31, 2013 owing essentially to Bank
initiatives undertaken to grow this type of deposit. Since the
beginning of the fiscal year, personal savings included in assets under
administration and under management grew 11% due to acquisition-driven
business growth and a rise in stock markets.
Since October 31, 2013, business and government deposits grew
$10.3 billion or 18% due to covered bond issuances totalling
2.0 billion euros and to an increase in the cash levels of businesses.
At $7.6 billion, deposits from deposit-taking institutions rose
$5.2 billion since October 31, 2013, mainly attributable to U.S.
government financial institutions. Other financing activities remained
relatively stable since October 31, 2013, essentially because the
decrease in securities sold under repurchase agreements and securities
loaned was offset by an increase in liabilities related to transferred
receivables.
Equity
As at October 31, 2014, the Bank's equity was $10.5 billion, up
$1.5 billion from $9.0 billion as at October 31, 2013. The increase in
equity came mainly from net income attributable to the Bank's
shareholders, net of dividends, from a net preferred share issuance and
from a $102 million issuance of common shares related to stock options
exercised under the stock option plan.
As at November 28, 2014, there were 328,690,507 common shares and
14,658,469 stock options outstanding. For additional information on
share capital, see Note 18 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
Events After the Balance Sheet Date
Redemption of Subordinated Debt
On October 30, 2014, the Bank announced its intention to redeem, on
December 22, 2014, $350 million of notes maturing in December 2019.
Redemption of Preferred Shares
On November 15, 2014, the Bank completed the redemption of all the
issued and outstanding non-cumulative Series 16 First Preferred Shares.
Pursuant to the share conditions, the redemption price was $25.00 per
share plus the periodic dividend declared and unpaid. The Bank redeemed
8,000,000 Series 16 preferred shares for a total amount of
$200 million.
CAPITAL MANAGEMENT
The Bank's capital management policy sets out the principles and
practices that the Bank incorporates into its capital management
strategy and the basic criteria it adopts to ensure that it has
sufficient capital at all times and is prudently managing such capital
to satisfy any future capital requirements. The Bank has maintained
adequate capital ratios through internal capital generation, balance
sheet management and issuances and repurchases of shares and
subordinated debt securities. For additional information on the capital
management framework, see the Capital Management section on pages 54 to
60 of the Bank's 2014 Annual Report.
Other disclosure requirements pursuant to Pillar 3 of the Basel Accord
as well as a set of recommendations defined by the Enhanced Disclosure
Task Force (EDTF) are presented in the Supplementary Regulatory Capital Disclosure report published quarterly and available on the Bank's website at nbc.ca. Furthermore, a complete list of capital instruments and their main
features is also available on the Bank's website under Investor Relations > Capital and Debt Information > Main Features of
Regulatory Capital Instruments.
The CET1 capital ratio, determined using the "all-in" methodology, was
9.2% as at October 31, 2014 versus 8.7% as at October 31, 2013. The
increase in the CET1 capital ratio was essentially due to net income,
net of dividends, and to the issuance of common shares related mainly
to exercised stock options, partly offset by the impacts of the TDWIS
acquisition and of the coming into force of the credit valuation
adjustment (CVA) charge. The Tier 1 and the total capital ratios
determined using the "all-in" methodology were, respectively, 12.3% and
15.1% as at October 31, 2014 versus ratios of 11.4% and 15.0% as at
October 31, 2013. The increase in the Tier 1 ratio stems essentially
from the above-mentioned factors, a net preferred share issuance and
the phase-out of non-qualifying capital instruments, including the
redemption of Series 16 preferred shares on November 15, 2014.
The assets-to-capital multiple was 19.0 as at October 31, 2014 versus
18.4 as at October 31, 2013. As of January 2015, this ratio will be
replaced by the new Basel III leverage ratio.
CET1 RWA increased by $3.5 billion to total $64.8 billion as at
October 31, 2014 compared to $61.3 billion as at October 31, 2013. This
increase was mainly due to the coming into force of the CVA charge in
2014 and to organic growth.
|
Regulatory Capital and Capital Ratios Under Basel III(1)
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars)
|
|
As at October 31, 2014
|
|
|
As at October 31, 2013
|
|
|
|
|
|
|
|
|
|
|
Regulatory Capital
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (CET1)
|
|
5,985
|
|
|
5,350
|
|
|
|
Tier 1(2)
|
|
7,983
|
|
|
7,002
|
|
|
|
Total(2)
|
|
9,868
|
|
|
9,186
|
|
|
|
|
|
|
|
|
|
|
Risk-weighted assets(3)
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (CET1) capital
|
|
64,818
|
|
|
61,251
|
|
|
|
Tier 1 capital
|
|
65,074
|
|
|
n.a.
|
|
|
|
Total capital
|
|
65,459
|
|
|
n.a.
|
|
|
|
|
|
|
|
|
|
|
Capital ratios
|
|
|
|
|
|
|
|
|
Common Equity Tier 1 (CET1)
|
|
9.2
|
%
|
|
8.7
|
%
|
|
|
Tier 1(2)
|
|
12.3
|
%
|
|
11.4
|
%
|
|
|
Total(2)
|
|
15.1
|
%
|
|
15.0
|
%
|
|
Assets-to-capital multiple
|
|
19.0
|
|
|
18.4
|
|
|
n.a. not applicable
|
|
(1)
|
Figures are presented on an "all-in" basis except for the
assets-to-capital multiple, which is presented in accordance with the
transitional requirements for Basel III, and the October 31, 2013
figures have not been adjusted to reflect changes in accounting
standards.
|
|
(2)
|
Figures as at October 31, 2014 include the redemption of the Series 16
preferred shares on November 15, 2014.
|
|
(3)
|
The CVA charge, with its three levels based on chosen ratio, was not
included in the RWA calculation as at October 31, 2013.
|
Dividend
On December 4, 2014, the Board of Directors declared regular dividends
on the various series of first preferred shares and a dividend of 50
cents per common share, up 2 cents or 4%, payable on February 1, 2015
to shareholders of record on December 29, 2014.
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
(unaudited) (millions of Canadian dollars)
|
|
|
|
|
|
|
|
As at October 31, 2014
|
|
As at October 31, 2013(1)
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and deposits with financial institutions
|
|
8,086
|
|
3,596
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
At fair value through profit or loss
|
|
43,200
|
|
44,000
|
|
Available-for-sale
|
|
9,753
|
|
9,744
|
|
|
|
52,953
|
|
53,744
|
|
|
|
|
|
|
|
Securities purchased under reverse repurchase agreements and securities
borrowed
|
|
24,525
|
|
21,449
|
|
|
|
|
|
|
|
Loans
|
|
|
|
|
|
Residential mortgage
|
|
39,300
|
|
36,573
|
|
Personal and credit card
|
|
29,996
|
|
27,989
|
|
Business and government
|
|
28,551
|
|
24,400
|
|
|
|
97,847
|
|
88,962
|
|
Customers' liability under acceptances
|
|
8,926
|
|
8,954
|
|
Allowances for credit losses
|
|
(604)
|
|
(578)
|
|
|
|
106,169
|
|
97,338
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Derivative financial instruments
|
|
7,092
|
|
5,904
|
|
Due from clients, dealers and brokers
|
|
861
|
|
1,101
|
|
Investments in associates and joint ventures
|
|
697
|
|
684
|
|
Premises and equipment
|
|
380
|
|
404
|
|
Goodwill
|
|
1,272
|
|
1,064
|
|
Intangible assets
|
|
998
|
|
898
|
|
Other assets
|
|
2,396
|
|
2,037
|
|
|
|
13,696
|
|
12,092
|
|
|
|
205,429
|
|
188,219
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
Personal
|
|
44,963
|
|
42,652
|
|
Business and government
|
|
67,364
|
|
57,103
|
|
Deposit-taking institutions
|
|
7,556
|
|
2,356
|
|
|
|
119,883
|
|
102,111
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Acceptances
|
|
8,926
|
|
8,954
|
|
Obligations related to securities sold short
|
|
18,167
|
|
18,909
|
|
Obligations related to securities sold under repurchase agreements and
securities loaned
|
|
16,780
|
|
19,746
|
|
Derivative financial instruments
|
|
5,721
|
|
4,858
|
|
Due to clients, dealers and brokers
|
|
1,996
|
|
2,442
|
|
Liabilities related to transferred receivables
|
|
17,079
|
|
15,323
|
|
Other liabilities
|
|
4,494
|
|
4,497
|
|
|
|
73,163
|
|
74,729
|
|
|
|
|
|
|
|
Subordinated debt
|
|
1,881
|
|
2,426
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Equity attributable to the Bank's shareholders
|
|
|
|
|
|
Preferred shares
|
|
1,223
|
|
677
|
|
Common shares
|
|
2,293
|
|
2,160
|
|
Contributed surplus
|
|
52
|
|
58
|
|
Retained earnings
|
|
5,850
|
|
5,055
|
|
Accumulated other comprehensive income
|
|
289
|
|
214
|
|
|
|
9,707
|
|
8,164
|
|
Non-controlling interests
|
|
795
|
|
789
|
|
|
|
10,502
|
|
8,953
|
|
|
|
205,429
|
|
188,219
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
(unaudited) (millions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended October 31
|
|
Year ended October 31
|
|
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
|
|
Loans
|
|
870
|
|
830
|
|
3,393
|
|
3,247
|
|
Securities at fair value through profit or loss
|
|
198
|
|
200
|
|
970
|
|
942
|
|
Available-for-sale securities
|
|
65
|
|
51
|
|
204
|
|
201
|
|
Deposits with financial institutions
|
|
9
|
|
6
|
|
29
|
|
20
|
|
|
|
1,142
|
|
1,087
|
|
4,596
|
|
4,410
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
335
|
|
270
|
|
1,231
|
|
1,015
|
|
Liabilities related to transferred receivables
|
|
103
|
|
98
|
|
398
|
|
408
|
|
Subordinated debt
|
|
19
|
|
25
|
|
76
|
|
102
|
|
Other
|
|
44
|
|
102
|
|
347
|
|
448
|
|
|
|
501
|
|
495
|
|
2,052
|
|
1,973
|
|
Net interest income
|
|
641
|
|
592
|
|
2,544
|
|
2,437
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income
|
|
|
|
|
|
|
|
|
|
Underwriting and advisory fees
|
|
104
|
|
69
|
|
388
|
|
301
|
|
Securities brokerage commissions
|
|
78
|
|
80
|
|
333
|
|
335
|
|
Mutual fund revenues
|
|
67
|
|
56
|
|
251
|
|
219
|
|
Trust service revenues
|
|
106
|
|
81
|
|
388
|
|
314
|
|
Credit fees
|
|
97
|
|
92
|
|
386
|
|
391
|
|
Card revenues
|
|
35
|
|
31
|
|
134
|
|
121
|
|
Deposit and payment service charges
|
|
59
|
|
61
|
|
234
|
|
235
|
|
Trading revenues (losses)
|
|
(20)
|
|
38
|
|
106
|
|
186
|
|
Gains (losses) on available-for-sale securities, net
|
|
43
|
|
12
|
|
103
|
|
82
|
|
Insurance revenues, net
|
|
26
|
|
27
|
|
108
|
|
118
|
|
Foreign exchange revenues, other than trading
|
|
23
|
|
22
|
|
89
|
|
90
|
|
Share in the net income of associates and joint ventures
|
|
10
|
|
5
|
|
44
|
|
26
|
|
Other
|
|
95
|
|
85
|
|
356
|
|
296
|
|
|
|
723
|
|
659
|
|
2,920
|
|
2,714
|
|
Total revenues
|
|
1,364
|
|
1,251
|
|
5,464
|
|
5,151
|
|
Provisions for credit losses
|
|
57
|
|
48
|
|
208
|
|
181
|
|
|
|
1,307
|
|
1,203
|
|
5,256
|
|
4,970
|
|
Non-interest expenses
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits
|
|
512
|
|
484
|
|
2,051
|
|
1,899
|
|
Occupancy
|
|
54
|
|
71
|
|
222
|
|
237
|
|
Technology
|
|
187
|
|
109
|
|
513
|
|
458
|
|
Communications
|
|
17
|
|
17
|
|
68
|
|
68
|
|
Professional fees
|
|
61
|
|
58
|
|
227
|
|
221
|
|
Other
|
|
98
|
|
88
|
|
342
|
|
323
|
|
|
|
929
|
|
827
|
|
3,423
|
|
3,206
|
|
Income before income taxes
|
|
378
|
|
376
|
|
1,833
|
|
1,764
|
|
Income taxes
|
|
48
|
|
56
|
|
295
|
|
252
|
|
Net income
|
|
330
|
|
320
|
|
1,538
|
|
1,512
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
|
|
|
|
|
|
|
|
|
|
Preferred shareholders
|
|
10
|
|
8
|
|
40
|
|
40
|
|
Common shareholders
|
|
302
|
|
296
|
|
1,429
|
|
1,409
|
|
Bank shareholders
|
|
312
|
|
304
|
|
1,469
|
|
1,449
|
|
Non-controlling interests
|
|
18
|
|
16
|
|
69
|
|
63
|
|
|
|
330
|
|
320
|
|
1,538
|
|
1,512
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share(2) (dollars)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.92
|
|
0.91
|
|
4.36
|
|
4.34
|
|
|
Diluted
|
|
0.91
|
|
0.90
|
|
4.32
|
|
4.31
|
|
Dividends per common share(2) (dollars)
|
|
0.48
|
|
0.44
|
|
1.88
|
|
1.70
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
(2)
|
Reflecting the stock dividend paid on February 13, 2014. See Note 18 to
the audited annual consolidated financial statements for the year ended
October 31, 2014.
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
(unaudited) (millions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended October 31
|
|
Year ended October 3
|
|
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
330
|
|
320
|
|
1,538
|
|
1,512
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of income taxes
|
|
|
|
|
|
|
|
|
|
|
Items that may be subsequently reclassified to net income
|
|
|
|
|
|
|
|
|
|
|
|
Net foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized foreign currency translation gains (losses) on
investments in foreign operations
|
|
1
|
|
24
|
|
47
|
|
51
|
|
|
|
|
Impact of hedging net foreign currency translation gains (losses)
|
|
(6)
|
|
(19)
|
|
(44)
|
|
(45)
|
|
|
|
(5)
|
|
5
|
|
3
|
|
6
|
|
|
|
Net change in available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on available-for-sale securities
|
|
(8)
|
|
20
|
|
85
|
|
49
|
|
|
|
|
Net (gains) losses on available-for-sale securities reclassified to net
income
|
|
(33)
|
|
(9)
|
|
(89)
|
|
(41)
|
|
|
|
(41)
|
|
11
|
|
(4)
|
|
8
|
|
|
|
Net change in cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) on derivative financial instruments designated as
cash flow hedges
|
|
36
|
|
(2)
|
|
87
|
|
(26)
|
|
|
|
|
Net (gains) losses on designated derivative financial instruments
reclassified to net income
|
|
(2)
|
|
(4)
|
|
(11)
|
|
(28)
|
|
|
|
34
|
|
(6)
|
|
76
|
|
(54)
|
|
|
Item that will not be subsequently reclassified to net income
|
|
|
|
|
|
|
|
|
|
|
|
Revaluations of pension plans and other post-employment benefit plans
|
|
53
|
|
(52)
|
|
23
|
|
104
|
|
|
Share in the other comprehensive income of associates and joint ventures
|
|
-
|
|
(1)
|
|
-
|
|
(1)
|
|
Total other comprehensive income, net of income taxes
|
|
41
|
|
(43)
|
|
98
|
|
63
|
|
Comprehensive income
|
|
371
|
|
277
|
|
1,636
|
|
1,575
|
|
Comprehensive income attributable to
|
|
|
|
|
|
|
|
|
|
|
Bank shareholders
|
|
354
|
|
261
|
|
1,567
|
|
1,512
|
|
|
Non-controlling interests
|
|
17
|
|
16
|
|
69
|
|
63
|
|
|
|
371
|
|
277
|
|
1,636
|
|
1,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAXES - OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
The following table presents the income tax expense or recovery for each
component of other comprehensive income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended October 31
|
|
Year ended October 31
|
|
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
Net foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
Net unrealized foreign currency translation gains (losses) on
investments in foreign operations
|
|
1
|
|
1
|
|
3
|
|
2
|
|
|
Impact of hedging net foreign currency translation gains (losses)
|
|
2
|
|
(5)
|
|
(8)
|
|
(11)
|
|
|
|
3
|
|
(4)
|
|
(5)
|
|
(9)
|
|
Net change in available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on available-for-sale securities
|
|
(6)
|
|
6
|
|
29
|
|
20
|
|
|
Net (gains) losses on available-for-sale securities reclassified to net
income
|
|
(10)
|
|
(3)
|
|
(32)
|
|
(17)
|
|
|
|
(16)
|
|
3
|
|
(3)
|
|
3
|
|
Net change in cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) on derivative financial instruments designated as
cash flow hedges
|
|
13
|
|
(1)
|
|
32
|
|
(10)
|
|
|
Net (gains) losses on designated derivative financial instruments
reclassified to net income
|
|
(1)
|
|
(1)
|
|
(4)
|
|
(10)
|
|
|
|
12
|
|
(2)
|
|
28
|
|
(20)
|
|
Revaluations of pension plans and other post-employment benefit plans
|
|
21
|
|
(17)
|
|
10
|
|
40
|
|
|
|
20
|
|
(20)
|
|
30
|
|
14
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|
(unaudited) (millions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
Year ended October 31
|
|
|
|
2014
|
|
2013(1)
|
|
|
|
|
|
|
|
Preferred shares at beginning
|
|
677
|
|
762
|
|
Issuance of Series 28, 30 and 32 preferred shares
|
|
650
|
|
200
|
|
Redemption of Series 15, 21, 24 and 26 preferred shares for cancellation
|
|
(104)
|
|
(285)
|
|
Preferred shares at end
|
|
1,223
|
|
677
|
|
|
|
|
|
|
|
Common shares at beginning
|
|
2,160
|
|
2,054
|
|
Issuances of common shares
|
|
|
|
|
|
|
Stock Option Plan
|
|
102
|
|
107
|
|
Impact of shares purchased or sold for trading
|
|
31
|
|
(1)
|
|
Common shares at end
|
|
2,293
|
|
2,160
|
|
|
|
|
|
|
|
Contributed surplus at beginning
|
|
58
|
|
58
|
|
Stock option expense
|
|
15
|
|
16
|
|
Stock options exercised
|
|
(13)
|
|
(13)
|
|
Other
|
|
(8)
|
|
(3)
|
|
Contributed surplus at end
|
|
52
|
|
58
|
|
|
|
|
|
|
|
Retained earnings at beginning
|
|
5,055
|
|
4,091
|
|
Net income attributable to the Bank's shareholders
|
|
1,469
|
|
1,449
|
|
Dividends
|
|
|
|
|
|
|
Preferred shares
|
|
(40)
|
|
(40)
|
|
|
Common shares
|
|
(616)
|
|
(552)
|
|
Share issuance expenses
|
|
(14)
|
|
(4)
|
|
Revaluations of pension plans and other post-employment benefit plans
|
|
23
|
|
104
|
|
Impact of a financial liability resulting from a put option written to a
non-controlling interest
|
|
(27)
|
|
-
|
|
Other
|
|
-
|
|
7
|
|
Retained earnings at end
|
|
5,850
|
|
5,055
|
|
|
|
|
|
|
|
Accumulated other comprehensive income at beginning
|
|
214
|
|
255
|
|
Net foreign currency translation adjustments
|
|
3
|
|
6
|
|
Net change in unrealized gains (losses) on available-for-sale securities
|
|
(4)
|
|
8
|
|
Net change in gains (losses) on cash flow hedges
|
|
76
|
|
(54)
|
|
Share in the other comprehensive income of associates and joint ventures
|
|
-
|
|
(1)
|
|
Accumulated other comprehensive income at end
|
|
289
|
|
214
|
|
|
|
|
|
|
|
Equity attributable to the Bank's shareholders
|
|
9,707
|
|
8,164
|
|
|
|
|
|
|
|
Non-controlling interests at beginning
|
|
789
|
|
791
|
|
Net income attributable to non-controlling interests
|
|
69
|
|
63
|
|
Distributions to non-controlling interests
|
|
(63)
|
|
(65)
|
|
Non-controlling interests at end
|
|
795
|
|
789
|
|
|
|
|
|
|
|
Equity
|
|
10,502
|
|
8,953
|
|
|
|
|
|
|
|
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
As at October 31, 2014
|
|
As at October 31, 2013
|
|
|
|
|
|
|
|
Accumulated other comprehensive income
|
|
|
|
|
|
Net foreign currency translation adjustments
|
|
(3)
|
|
(6)
|
|
Net unrealized gains (losses) on available-for-sale securities
|
|
168
|
|
172
|
|
Net gains (losses) on instruments designated as cash flow hedges
|
|
123
|
|
47
|
|
Share in the other comprehensive income of associates and joint ventures
|
|
1
|
|
1
|
|
|
|
289
|
|
214
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
SEGMENT DISCLOSURES
|
|
(unaudited) (millions of Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended October 31
|
|
|
Personal and Commercial
|
|
Wealth Management
|
|
Financial Markets
|
|
Other
|
|
Total
|
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income(2)
|
436
|
|
410
|
|
80
|
|
70
|
|
211
|
|
156
|
|
(86)
|
|
(44)
|
|
641
|
|
592
|
|
Non-interest income
|
254
|
|
248
|
|
258
|
|
220
|
|
156
|
|
175
|
|
55
|
|
16
|
|
723
|
|
659
|
|
Total revenues
|
690
|
|
658
|
|
338
|
|
290
|
|
367
|
|
331
|
|
(31)
|
|
(28)
|
|
1,364
|
|
1,251
|
|
Non-interest expenses
|
390
|
|
382
|
|
243
|
|
215
|
|
174
|
|
164
|
|
122
|
|
66
|
|
929
|
|
827
|
|
Contribution
|
300
|
|
276
|
|
95
|
|
75
|
|
193
|
|
167
|
|
(153)
|
|
(94)
|
|
435
|
|
424
|
|
Provisions for credit losses
|
56
|
|
50
|
|
1
|
|
1
|
|
-
|
|
(2)
|
|
-
|
|
(1)
|
|
57
|
|
48
|
|
Income before income taxes (recovery)
|
244
|
|
226
|
|
94
|
|
74
|
|
193
|
|
169
|
|
(153)
|
|
(93)
|
|
378
|
|
376
|
|
Income taxes (recovery)(2)
|
66
|
|
60
|
|
24
|
|
19
|
|
52
|
|
45
|
|
(94)
|
|
(68)
|
|
48
|
|
56
|
|
Net income
|
178
|
|
166
|
|
70
|
|
55
|
|
141
|
|
124
|
|
(59)
|
|
(25)
|
|
330
|
|
320
|
|
Non-controlling interests
|
-
|
|
-
|
|
-
|
|
-
|
|
4
|
|
2
|
|
14
|
|
14
|
|
18
|
|
16
|
|
Net income attributable to the Bank's shareholders
|
178
|
|
166
|
|
70
|
|
55
|
|
137
|
|
122
|
|
(73)
|
|
(39)
|
|
312
|
|
304
|
|
Average assets
|
83,659
|
|
78,696
|
|
10,146
|
|
9,166
|
|
89,366
|
|
88,685
|
|
29,101
|
|
20,454
|
|
212,272
|
|
197,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended October 31
|
|
|
Personal and Commercial
|
|
Wealth Management
|
|
Financial Markets
|
|
Other
|
|
Total
|
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
2014
|
|
2013(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income(3)
|
1,699
|
|
1,615
|
|
315
|
|
272
|
|
824
|
|
784
|
|
(294)
|
|
(234)
|
|
2,544
|
|
2,437
|
|
Non-interest income
|
994
|
|
977
|
|
1,010
|
|
872
|
|
690
|
|
594
|
|
226
|
|
271
|
|
2,920
|
|
2,714
|
|
Total revenues
|
2,693
|
|
2,592
|
|
1,325
|
|
1,144
|
|
1,514
|
|
1,378
|
|
(68)
|
|
37
|
|
5,464
|
|
5,151
|
|
Non-interest expenses
|
1,532
|
|
1,497
|
|
957
|
|
868
|
|
692
|
|
664
|
|
242
|
|
177
|
|
3,423
|
|
3,206
|
|
Contribution
|
1,161
|
|
1,095
|
|
368
|
|
276
|
|
822
|
|
714
|
|
(310)
|
|
(140)
|
|
2,041
|
|
1,945
|
|
Provisions for credit losses
|
205
|
|
192
|
|
3
|
|
3
|
|
-
|
|
(14)
|
|
-
|
|
-
|
|
208
|
|
181
|
|
Income before income taxes (recovery)
|
956
|
|
903
|
|
365
|
|
273
|
|
822
|
|
728
|
|
(310)
|
|
(140)
|
|
1,833
|
|
1,764
|
|
Income taxes (recovery)(3)
|
258
|
|
242
|
|
95
|
|
72
|
|
222
|
|
195
|
|
(280)
|
|
(257)
|
|
295
|
|
252
|
|
Net income
|
698
|
|
661
|
|
270
|
|
201
|
|
600
|
|
533
|
|
(30)
|
|
117
|
|
1,538
|
|
1,512
|
|
Non-controlling interests
|
-
|
|
-
|
|
-
|
|
-
|
|
14
|
|
8
|
|
55
|
|
55
|
|
69
|
|
63
|
|
Net income attributable to the Bank's shareholders
|
698
|
|
661
|
|
270
|
|
201
|
|
586
|
|
525
|
|
(85)
|
|
62
|
|
1,469
|
|
1,449
|
|
Average assets
|
81,516
|
|
76,696
|
|
10,400
|
|
9,080
|
|
86,198
|
|
87,063
|
|
28,566
|
|
20,670
|
|
206,680
|
|
193,509
|
|
(1)
|
Certain amounts have been adjusted to reflect changes in accounting
standards. See Note 2 to the audited annual consolidated financial
statements for the year ended October 31, 2014.
|
|
(2)
|
Net interest income and income taxes (recovery) of the business segments
are presented on a taxable equivalent basis. Taxable equivalent basis
is a calculation method that consists in grossing up certain tax-exempt
income by the amount of income tax that would have been otherwise
payable. For the business segments as a whole, Net interest income was grossed up by $57 million for the quarter ended October 31, 2014
($43 million in 2013). An equivalent amount was added to Income taxes (recovery). The effect of these adjustments is reversed under the Other heading.
|
|
(3)
|
For the year ended October 31, 2014, Net interest income was grossed up by $219 million ($209 million in 2013). An equivalent
amount was added to Income taxes (recovery). The effect of these adjustments is reversed under the Other heading.
|
Personal and Commercial
The Personal and Commercial segment encompasses the banking, financing,
and investing services offered to individuals and businesses as well as
insurance operations.
Wealth Management
The Wealth Management segment comprises investment solutions, trust
services, banking services, lending services and other wealth
management solutions offered through internal and third-party
distribution networks.
Financial Markets
The Financial Markets segment encompasses banking services, investment
banking services and financial solutions for institutional clients. The
segment is also active in proprietary trading and investment activities
for the Bank.
Other
This heading encompasses Treasury activities, including the Bank's
assets and liability management, liquidity management and funding
operations, certain non-recurring items and the unallocated portion of
corporate services.
INFORMATION FOR SHAREHOLDERS AND INVESTORS
Disclosure of the fourth quarter 2014 results
Conference Call
-
A conference call for analysts and institutional investors will be held
on Friday, December 5, 2014 at 11:00 a.m. EST.
-
Access by telephone in listen-only mode: 1-866-862-3930 or
416-695-7806. The access code is 3390539#.
-
A recording of the conference call can be heard until December 14, 2014
by dialing 1-800-408-3053 or 905-694-9451. The access code is 5955220#.
Webcast
-
The conference call will be webcast live at nbc.ca/investorrelations.
-
A recording of the webcast will also be available on National Bank's
website after the call.
Financial Documents
-
The Press Release (which includes the quarterly consolidated financial statements) is
available at all times on National Bank's website at nbc.ca/investorrelations.
-
The Press Release, the Supplementary Financial Information, the Supplementary Regulatory Capital Disclosure, and a slide presentation will be available on the Investor Relations
page of National Bank's website shortly before the start of the
conference call.
-
The 2014 Annual Report (which includes the audited annual financial statements and
management's discussion and analysis) will also be available on
National Bank's website.
-
The Report to Shareholders for the first quarter ended January 31, 2015 will be available on
February 25, 2015 (subject to approval by the Bank's Board of
Directors).
Caution Regarding Forward-Looking Statements
From time to time, the Bank makes written and oral forward-looking
statements, such as those contained in the Major Economic Trends and
the Outlook for National Bank sections of the 2014 Annual Report, in
other filings with Canadian securities regulators, and in other
communications, for the purpose of describing the economic environment
in which the Bank will operate during fiscal 2015 and the objectives it
hopes to achieve for that period. These forward-looking statements are
made in accordance with current securities legislation in Canada and
the United States. They include, among others, statements with respect
to the economy—particularly the Canadian and U.S. economies—market
changes, observations regarding the Bank's objectives and its
strategies for achieving them, Bank-projected financial returns and
certain risks faced by the Bank. These forward-looking statements are
typically identified by future or conditional verbs or words such as
"outlook," "believe," "anticipate," "estimate," "project," "expect,"
"intend," "plan," and similar terms and expressions.
By their very nature, such forward-looking statements require
assumptions to be made and involve inherent risks and uncertainties,
both general and specific. Assumptions about the performance of the
Canadian and U.S. economies in 2015 and how that will affect the Bank's
business are among the main factors considered in setting the Bank's
strategic priorities and objectives and in determining its financial
targets, including provisions for credit losses. In determining its
expectations for economic growth, both broadly and in the financial
services sector in particular, the Bank primarily considers historical
economic data provided by the Canadian and U.S. governments and their
agencies.
There is a strong possibility that express or implied projections
contained in these forward-looking statements will not materialize or
will not be accurate. The Bank recommends that readers not place undue
reliance on these statements, as a number of factors, many of which are
beyond the Bank's control, could cause actual future results,
conditions, actions or events to differ significantly from the targets,
expectations, estimates or intentions expressed in the forward-looking
statements. These factors include strategic risk, credit risk, market
risk, liquidity risk, operational risk, regulatory risk, reputation
risk, and environmental risk (all of which are described in more detail
in the Risk Management section beginning on page 61 of the 2014 Annual
Report), general economic environment and financial market conditions
in Canada, the United States and certain other countries in which the
Bank conducts business, including regulatory changes affecting the
Bank's business, capital and liquidity; the situation with respect to
the restructured notes of the master asset vehicle (MAV) conduits, in
particular the realizable value of underlying assets; changes in the
accounting policies the Bank uses to report its financial condition,
including uncertainties associated with assumptions and critical
accounting estimates; tax laws in the countries in which the Bank
operates, primarily Canada and the United States (including the U.S. Foreign Account Tax Compliance Act (FATCA)); changes to capital and liquidity guidelines and to the manner
in which they are to be presented and interpreted; changes to the
credit ratings assigned to the Bank; and potential disruptions to the
Bank's information technology systems, including evolving cyber attack
risk.
The foregoing list of risk factors is not exhaustive. Additional
information about these factors can be found in the Risk Management and
Other Risk Factors sections of the 2014 Annual Report. Investors and
others who rely on the Bank's forward-looking statements should
carefully consider the above factors as well as the uncertainties they
represent and the risk they entail. Except as required by law, the Bank
does not undertake to update any forward-looking statements, whether
written or oral, that may be made from time to time, by it or on its
behalf.
The forward-looking information contained in this document is presented
for the purpose of interpreting the information contained herein and
may not be appropriate for other purposes.
SOURCE National Bank of Canada
