REG - Nat Bank of Canada - Press Release Q4 2024
04/12/2024 16:15
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RNS Number : 8355O National Bank of Canada 04 December 2024
Regulatory Announcement
Q4 2024 Results
National Bank of Canada (the "Bank") announces publication of its Fourth
Quarter 2024 Release. The Fourth Quarter Results have been uploaded to the
National Storage Mechanism and will shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) and are available on
the Bank's website at
https://www.nbc.ca/about-us/investors/quarterly-results.html
(https://www.nbc.ca/about-us/investors/quarterly-results.html)
To view the full PDF of this Fourth Quarter 2024 Release, please click on
the following link:
http://www.rns-pdf.londonstockexchange.com/rns/8355O_1-2024-12-4.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8355O_1-2024-12-4.pdf)
National Bank reports its 2024 fourth quarter
and annual results and raises its quarterly dividend by 4 cents
to $1.14 per share
The financial information reported in this document is based on the unaudited
interim condensed Consolidated Financial Statements for the fourth quarter of
fiscal 2024 and on the audited annual Consolidated Financial Statements for
the year ended October 31, 2024 and is prepared in accordance with
International Financial Reporting Standards (IFRS® Accounting Standards) as
issued by the International Accounting Standards Board (IASB), unless
otherwise indicated. IFRS Accounting Standards represent Canadian generally
accepted accounting principles (GAAP). All amounts are presented in Canadian
dollars.
MONTREAL, December 4, 2024 - For the fourth quarter of 2024, National Bank is
reporting net income of $955 million, up 27% from $751 million in the fourth
quarter of 2023. Diluted earnings per share stood at $2.66 in the fourth
quarter of 2024 compared to $2.09 in the corresponding quarter in 2023. These
increases were driven by good performance in all of the business segments.
Excluding specified items((1)) recorded during the fourth quarters of 2024 and
2023, adjusted net income((1)) totalled $928 million compared to $850 million
in the corresponding quarter of 2023. Adjusted diluted earnings((1)) per share
stood at $2.58 compared to $2.39 in the fourth quarter of 2023, up 8%.
For fiscal 2024, the Bank's net income totalled $3,816 million, up 16% from
$3,289 million in fiscal 2023. Diluted earnings per share stood at $10.68 for
fiscal 2024 versus $9.24 in fiscal 2023. These increases were driven by good
performance in all of the business segments owing to revenue growth, partly
offset by increases in non-interest expenses, provisions for credit losses,
and income taxes. Excluding specified items((1)), adjusted net income((1))
totalled $3,716 million for fiscal 2024, up 10% from $3,363 million in fiscal
2023, and adjusted diluted earnings per share((1)) stood at $10.39, up 10%
from $9.46 in fiscal 2023.
"Through disciplined execution, strong organic growth and resilient credit
performance, we met all of our medium-term financial objectives in 2024," said
Laurent Ferreira, President and Chief Executive Officer of National Bank of
Canada. "Looking ahead to 2025 in what will remain a complex environment, we
will continue to leverage our diversified business model and disciplined
approach to credit, capital and costs as we pursue our growth path."
Highlights
(millions of Canadian dollars) Quarter ended October 31 Year ended October 31
2024 2023((2)) % Change 2024 2023((2)) % Change
Net income 955 751 27 3,816 3,289 16
Diluted earnings per share (dollars) $ 2.66 $ 2.09 27 $ 10.68 $ 9.24 16
Income before provisions for credit losses and income taxes 1,352 963 40 5,346 4,305 24
Return on common shareholders' equity((3)) 16.4 % 14.1 % 17.2 % 16.3 %
Dividend payout ratio((3)) 40.1 % 42.7 % 40.1 % 42.7 %
Operating results - Adjusted((1))
Net income - Adjusted 928 850 9 3,716 3,363 10
Diluted earnings per share - Adjusted (dollars) $ 2.58 $ 2.39 8 $ 10.39 $ 9.46 10
Income before provisions for credit losses and income taxes - Adjusted 1,408 1,264 11 5,592 4,954 13
As at As at
October 31, October 31, 2023
2024
CET1 capital ratio under Basel III((4)) 13.7 % 13.5 %
Leverage ratio under Basel III((4)) 4.4 % 4.4 %
(1) See the Financial Reporting Method section on pages 2 to 6 for
additional information on non-GAAP financial measures.
(2) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
(3) For additional information on the composition of these
measures, see the Glossary section on pages 130 to 133 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
(4) For additional information on capital management measures, see
the Financial Reporting Method section on pages 14 to 20 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
Financial Reporting Method
The Bank's Consolidated Financial Statements are prepared in accordance with
IFRS Accounting Standards, as issued by the IASB. The financial statements
also comply with section 308(4) of the Bank Act (Canada), which states that,
except as otherwise specified by the Office of the Superintendent of Financial
Institutions (Canada) (OSFI), the Consolidated Financial Statements are to be
prepared in accordance with IFRS Accounting Standards, which represent
Canadian GAAP. None of the OSFI accounting requirements are exceptions to IFRS
Accounting Standards.
The presentation of segment disclosures is consistent with the presentation
adopted by the Bank for the fiscal year beginning November 1, 2023. This
presentation reflects the retrospective application of accounting policy
changes arising from the adoption of IFRS 17- Insurance Contracts (IFRS 17).
For additional information, see Note 2 to the audited annual Consolidated
Financial Statements of the Bank's 2024 Annual Report, which is available on
the Bank's website at nbc.ca or the SEDAR+ website at sedarplus.ca. The
figures for the 2023 quarters and fiscal year have been adjusted to reflect
these accounting policy changes.
Non-GAAP and Other Financial Measures
The Bank uses a number of financial measures when assessing its results and
measuring overall performance. Some of these financial measures are not
calculated in accordance with GAAP. Regulation 52-112 Respecting Non-GAAP and
Other Financial Measures Disclosure (Regulation 52-112) prescribes disclosure
requirements that apply to the following measures used by the Bank:
· non-GAAP financial measures;
· non-GAAP ratios;
· supplementary financial measures;
· capital management measures.
Non-GAAP Financial Measures
The Bank uses non-GAAP financial measures that do not have standardized
meanings under GAAP and that therefore may not be comparable to similar
measures used by other companies. Presenting non-GAAP financial measures helps
readers to better understand how management analyzes results, shows the
impacts of specified items on the results of the reported periods, and allows
readers to better assess results without the specified items if they consider
such items not to be reflective of the underlying performance of the Bank's
operations. In addition, the Bank uses the taxable equivalent basis to
calculate net interest income, non-interest income, and income taxes. This
calculation method consists in grossing up certain revenues taxed at lower
rates (notably dividends) by the income tax to a level that would make it
comparable to revenues from taxable sources in Canada. An equivalent amount is
added to income taxes. This adjustment is necessary in order to perform a
uniform comparison of the return on different assets, regardless of their tax
treatment. However, in light of the enacted legislation with respect to
Canadian dividends, the Bank did not recognize an income tax deduction, nor
did it or use the taxable equivalent basis method to adjust revenues related
to affected dividends received after January 1, 2024 (for additional
information see the Income Taxes section).
The key non-GAAP financial measures used by the Bank to analyze its results
are described below, and a quantitative reconciliation of these measures is
presented in the tables in the Reconciliation of Non-GAAP Financial Measures
section on pages 3 to 6. It should be noted that, for the quarter and the year
ended October 31, 2024, after the agreement to acquire Canadian Western Bank
(CWB) was concluded, several acquisition-related items have been excluded from
results since, in the opinion of the management, such items are not reflective
of the underlying performance of the Bank's operations. For the quarter ended
October 31, 2024, the following items, net of income taxes, have been excluded
from results: amortization of the subscription receipt issuance costs of $7
million ($10 million for fiscal 2024); a gain of $39 million ($125 million for
fiscal 2024) resulting from the remeasurement at fair value of the CWB common
shares already held by the Bank; the impact of managing fair value changes,
representing a gain of $3 million (a loss of $2 million for fiscal 2024); and
acquisition and integration charges of $8 million ($13 million for fiscal
2024). For additional information on the CWB transaction, see the CWB
Transaction section of this Press Release and Notes 14 and 16 to the audited
annual Consolidated Financial Statements included in the Bank's 2024 Annual
Report, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
For the quarter ended October 31, 2023, the following items were excluded
from results: impairment losses on intangible assets and premises and
equipment of $62 million net of income taxes, litigation expenses of $26
million net of income taxes, and provisions for contracts of $11 million net
of income taxes. Also, for the year ended October 31, 2023, the following
items were excluded from results: a gain on the fair value remeasurement of an
equity interest of $67 million net of income taxes, an expense of $18 million
net of income taxes related to the retroactive impact of changes to the Excise
Tax Act, and a $24 million income tax expense related to the Canadian
government's 2022 tax measures. For additional information on these tax
measures, see the Income taxes section of this Press Release.
For additional information on non-GAAP financial measures, non-GAAP ratios,
supplementary financial measures, and capital management measures, see the
Financial Reporting Method section and the Glossary section, on pages 14 to 20
and 130 to 133, respectively, of the Bank's 2024 Annual Report, which is
available on the Bank's website at nbc.ca or the SEDAR+ website at
sedarplus.ca.
Reconciliation of Non-GAAP Financial Measures
Presentation of Results - Adjusted
(millions of Canadian dollars) Quarter ended October 31
2024 2023((1))
Personal and Commercial Wealth Management Financial Markets USSF&I Other
Total Total
Operating results
Net interest income 934 213 (662) 358 (59) 784 735
Non-interest income 256 514 1,390 20 (20) 2,160 1,825
Total revenues 1,190 727 728 378 (79) 2,944 2,560
Non-interest expenses 644 427 301 116 104 1,592 1,597
Income before provisions for credit losses and income taxes 546 300 427 262 (183) 1,352 963
Provisions for credit losses 96 (1) 4 63 − 162 115
Income before income taxes (recovery) 450 301 423 199 (183) 1,190 848
Income taxes (recovery) 123 82 117 42 (129) 235 97
Net income 327 219 306 157 (54) 955 751
Items that have an impact on results
Net interest income
Taxable equivalent((2)) − − − − (13) (13) (90)
Amortization of the subscription receipt issuance costs((3)) − − − − (9) (9) −
Impact on net interest income − − − − (22) (22) (90)
Non-interest income
Taxable equivalent((2)) − − − − (81) (81) (75)
Gain on the fair value remeasurement of an equity interest((4)) − − − − 54 54 −
Management of the fair value changes related to the CWB acquisition((5)) − − − − 4 4 −
Impact on non-interest income − − − − (23) (23) (75)
Non-interest expenses
CWB acquisition and integration charges((6)) − − − − 11 11 −
Impairment losses on intangible assets and premises and equipment((7)) − − − − − − 86
Litigation expenses((8)) − − − − − − 35
Provision for contracts((9)) − − − − − − 15
Impact on non-interest expenses − − − − 11 11 136
Income taxes
Taxable equivalent((2)) − − − − (94) (94) (165)
Income taxes on the amortization of the subscription receipt issuance − − − − (2) (2) −
costs((3))
Income taxes on the gain on the fair value remeasurement − − − − 15 15 −
of an equity interest((4))
Income taxes on management of the fair value changes related to the − − − − 1 1 −
CWB acquisition((5))
Income taxes on the CWB acquisition and integration charges((6)) − − − − (3) (3) −
Income taxes on impairment losses on intangible assets and premises − − − − − − (24)
and equipment((7))
Income taxes on litigation expenses((8)) − − − − − − (9)
Income taxes on provisions for contracts((9)) − − − − − − (4)
Impact on income taxes − − − − (83) (83) (202)
Impact on net income − − − − 27 27 (99)
Operating results - Adjusted
Net interest income - Adjusted 934 213 (662) 358 (37) 806 825
Non-interest income - Adjusted 256 514 1,390 20 3 2,183 1,900
Total revenues - Adjusted 1,190 727 728 378 (34) 2,989 2,725
Non-interest expenses - Adjusted 644 427 301 116 93 1,581 1,461
Income before provisions for credit losses and income taxes - Adjusted 546 300 427 262 (127) 1,408 1,264
Provisions for credit losses 96 (1) 4 63 − 162 115
Income before income taxes (recovery) - Adjusted 450 301 423 199 (127) 1,246 1,149
Income taxes (recovery) - Adjusted 123 82 117 42 (46) 318 299
Net income - Adjusted 327 219 306 157 (81) 928 850
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
(2) In light of the enacted legislation with respect to Canadian
dividends, the Bank did not recognize an income tax deduction or use the
taxable equivalent basis method to adjust revenues related to affected
dividends received after January 1, 2024 (for additional information see the
Income Taxes section).
(3) During the quarter ended October 31, 2024, the Bank recorded
an amount of $9 million ($7 million net of income taxes) to reflect the
amortization of the issuance costs of the subscription receipts issued as part
of the agreement to acquire CWB.
(4) During the quarter ended October 31, 2024, the Bank recorded a
gain of $54 million ($39 million net of income taxes) upon the remeasurement
at fair value of the interest already held in CWB.
(5) During the quarter ended October 31, 2024, the Bank recorded a
mark-to-market gain of $4 million ($3 million net of income taxes) on interest
rate swaps used to manage the fair value changes of CWB's assets and
liabilities that result in volatility of goodwill and capital on closing of
the transaction.
(6) During the quarter ended October 31, 2024, the Bank recorded
acquisition and integration charges of $11 million ($8 million net of income
taxes) related to the CWB transaction.
(7) During the quarter ended October 31, 2023, the Bank had
recorded $75 million in intangible asset impairment losses ($54 million net of
income taxes) on technology development for which the Bank has decided to
cease its use or development (broken down into the business segments as
follows: Personal and Commercial ($59 million, $42 million net of income
taxes), Wealth Management ($8 million, $6 million net of income taxes),
Financial Markets ($7 million, $5 million net of income taxes), and the Other
heading of segment disclosures ($1 million)), and it recorded $11 million in
impairment losses on premises and equipment ($8 million net of income taxes)
related to right-of-use assets under the Other heading of segment disclosures.
(8) During the quarter ended October 31, 2023, the Bank had
recorded $35 million in litigation expenses ($26 million net of income taxes)
in the Wealth Management segment to resolve litigations and other disputes
arising from various ongoing or potential claims against the Bank.
(9) During the quarter ended October 31, 2023, the Bank had
recorded $15 million in charges ($11 million net of income taxes) for contract
termination penalties and for provisions for onerous contracts (broken down in
the business segments as follows: Personal and Commercial ($9 million, $7
million net of income taxes) and the Other heading of segment disclosures ($6
million, $4 million net of income taxes)).
(millions of Canadian dollars) Year ended October 31
2024 2023((1))
Personal and Commercial Wealth Management Financial Markets USSF&I Other
Total Total
Operating results
Net interest income 3,587 833 (2,449) 1,303 (335) 2,939 3,586
Non-interest income 1,086 1,953 5,479 112 (169) 8,461 6,472
Total revenues 4,673 2,786 3,030 1,415 (504) 11,400 10,058
Non-interest expenses 2,486 1,633 1,246 439 250 6,054 5,753
Income before provisions for credit losses and income taxes 2,187 1,153 1,784 976 (754) 5,346 4,305
Provisions for credit losses 335 (1) 54 182 (1) 569 397
Income before income taxes (recovery) 1,852 1,154 1,730 794 (753) 4,777 3,908
Income taxes (recovery) 509 317 476 166 (507) 961 619
Net income 1,343 837 1,254 628 (246) 3,816 3,289
Items that have an impact on results
Net interest income
Taxable equivalent((2)) − − − − (79) (79) (332)
Amortization of the subscription receipt issuance costs((3)) − − − − (14) (14) −
Impact on net interest income − − − − (93) (93) (332)
Non-interest income
Taxable equivalent((2)) − − − − (306) (306) (247)
Gain on the fair value remeasurement of equity interests((4)(5)) − − − − 174 174 91
Management of the fair value changes related to the CWB acquisition((6)) − − − − (3) (3) −
Impact on non-interest income − − − − (135) (135) (156)
Non-interest expenses
CWB acquisition and integration charges((7)) − − − − 18 18 −
Impairment losses on intangible assets and premises and equipment((8)) − − − − − − 86
Litigation expenses((9)) − − − − − − 35
Expense related to changes to the Excise Tax Act((10)) − − − − − − 25
Provision for contracts((11)) − − − − − − 15
Impact on non-interest expenses − − − − 18 18 161
Income taxes
Taxable equivalent((2)) − − − − (385) (385) (579)
Income taxes on the amortization of the subscription receipt issuance − − − − (4) (4) −
costs((3))
Income taxes on the gain on the fair value remeasurement − − − − 49 49 24
of equity interests((4)(5))
Income taxes on management of the fair value changes related to the − − − − (1) (1) −
CWB acquisition((6))
Income taxes on the CWB acquisition and integration charges((7)) − − − − (5) (5) −
Income taxes on impairment losses on intangible assets and premises − − − − − − (24)
and equipment((8))
Income taxes on litigation expenses((9)) − − − − − − (9)
Income taxes on the expense related to changes to the Excise Tax Act((10)) − − − − − − (7)
Income taxes on provisions for contracts((11)) − − − − − − (4)
Income taxes related to the Canadian government's 2022 tax − − − − − − 24
measures((12))
Impact on income taxes − − − − (346) (346) (575)
Impact on net income − − − − 100 100 (74)
Operating results - Adjusted
Net interest income - Adjusted 3,587 833 (2,449) 1,303 (242) 3,032 3,918
Non-interest income - Adjusted 1,086 1,953 5,479 112 (34) 8,596 6,628
Total revenues - Adjusted 4,673 2,786 3,030 1,415 (276) 11,628 10,546
Non-interest expenses - Adjusted 2,486 1,633 1,246 439 232 6,036 5,592
Income before provisions for credit losses and income taxes - Adjusted 2,187 1,153 1,784 976 (508) 5,592 4,954
Provisions for credit losses 335 (1) 54 182 (1) 569 397
Income before income taxes (recovery) - Adjusted 1,852 1,154 1,730 794 (507) 5,023 4,557
Income taxes (recovery) - Adjusted 509 317 476 166 (161) 1,307 1,194
Net income - Adjusted 1,343 837 1,254 628 (346) 3,716 3,363
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
(2) In light of the enacted legislation with respect to Canadian
dividends, the Bank did not recognize an income tax deduction or use the
taxable equivalent basis method to adjust revenues related to affected
dividends received after January 1, 2024.
(3) During the year ended October 31, 2024, the Bank recorded an
amount of $14 million ($10 million net of income taxes) to reflect the
amortization of the issuance costs of the subscription receipts issued as part
of the agreement to acquire CWB.
(4) During the year ended October 31, 2024, the Bank recorded a
gain of $174 million ($125 million net of income taxes) upon the remeasurement
at fair value of the interest already held in CWB.
(5) During the year ended October 31, 2023, the Bank had concluded
that it had lost significant influence over TMX Group Limited (TMX) and
therefore ceased using the equity method to account for this investment. The
Bank had designated its investment in TMX as a financial asset measured at
fair value through other comprehensive income in an amount of $191 million.
Upon the fair value measurement, a gain of $91 million ($67 million net of
income taxes) had been recorded in the Other heading of segment disclosures.
(6) During the year ended October 31, 2024, the Bank recorded a
mark-to-market loss of $3 million ($2 million net of income taxes) on interest
rate swaps used to manage the fair value changes of CWB's assets and
liabilities that result in volatility of goodwill and capital on closing of
the transaction.
(7) During the year ended October 31, 2024, the Bank recorded
acquisition and integration charges of $18 million ($13 million net of income
taxes) related to the CWB transaction.
(8) During the year ended October 31, 2023, the Bank had recorded
$75 million in intangible asset impairment losses ($54 million net of income
taxes) on technology development for which the Bank had decided to cease its
use or development, (broken down into the business segments as follows:
Personal and Commercial ($59 million, $42 million net of income taxes), Wealth
Management ($8 million, $6 million net of income taxes), Financial Markets ($7
million, $5 million net of income taxes), and the Other heading of segment
disclosures ($1 million)) and it recorded $11 million in impairment losses on
premises and equipment ($8 million net of income taxes) related to
right-of-use assets in the Other heading of segment disclosures.
(9) For the year ended October 31, 2023, the Bank had recorded $35
million in litigation expenses ($26 million net of income taxes) in the Wealth
Management segment to resolve litigations and other disputes arising from
various ongoing or potential claims against the Bank.
(10) During the year ended October 31, 2023, the Bank had recorded a $25
million expense ($18 million net of income taxes), in the Other heading of
segment disclosures, to reflect the retroactive impact of changes to the
Excise Tax Act, indicating that payment card clearing services provided by a
payment card network operator are subject to the goods and services tax (GST)
and the harmonized sales tax (HST).
(11) During the year ended October 31, 2023, the Bank had recorded $15
million in charges ($11 million net of income taxes) for contract termination
penalties and for provisions for onerous contracts (broken down in the
business segments as follows: Personal and Commercial ($9 million, $7 million
net of income taxes) and the Other heading of segment disclosures ($6 million,
$4 million net of income taxes)).
(12) During the year ended October 31, 2023, the Bank had recorded, in
the Other heading of segment disclosures, a $32 million tax expense with
respect to the Canada Recovery Dividend, i.e., a one-time, 15% tax on the
fiscal 2021 and 2020 average taxable income above $1 billion as well as an $8
million tax recovery related to the 1.5% increase in the statutory tax rate,
which included the impact related to current and deferred taxes for fiscal
2022.
Presentation of Basic and Diluted Earnings Per Share - Adjusted
(Canadian dollars) Quarter ended October 31 Year ended October 31
2024 2023((1)) 2024 2023((1))
Basic earnings per share $ 2.69 $ 2.11 $ 10.78 $ 9.33
Amortization of the subscription receipt issuance costs((2)) 0.02 − 0.03 −
Gain on the fair value remeasurement of equity interests((3)(4)) (0.11) − (0.36) (0.20)
Management of the fair value changes related to the CWB acquisition((5)) (0.01) − − −
CWB acquisition and integration charges((6)) 0.02 − 0.04 −
Impairment losses on intangible assets and premises and equipment((7)) − 0.19 − 0.19
Litigation expenses((8)) − 0.08 − 0.08
Expense related to changes to the Excise Tax Act((9)) − − − 0.05
Provision for contracts((10)) − 0.03 − 0.03
Income taxes related to the Canadian government's 2022 tax measures((11)) − − − 0.07
Basic earnings per share - Adjusted $ 2.61 $ 2.41 $ 10.49 $ 9.55
Diluted earnings per share $ 2.66 $ 2.09 $ 10.68 $ 9.24
Amortization of the subscription receipt issuance costs((2)) 0.02 − 0.03 −
Gain on the fair value remeasurement of equity interests((3)(4)) (0.11) − (0.36) (0.20)
Management of the fair value changes related to the CWB acquisition((5)) (0.01) − − −
CWB acquisition and integration charges((6)) 0.02 − 0.04 −
Impairment losses on intangible assets and premises and equipment((7)) − 0.19 − 0.19
Litigation expenses((8)) − 0.08 − 0.08
Expense related to changes to the Excise Tax Act((9)) − − − 0.05
Provision for contracts((10)) − 0.03 − 0.03
Income taxes related to the Canadian government's 2022 tax measures((11)) − − − 0.07
Diluted earnings per share - Adjusted $ 2.58 $ 2.39 $ 10.39 $ 9.46
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
(2) During the quarter ended October 31, 2024, the Bank recorded
an amount of $9 million ($7 million net of income taxes) to reflect the
amortization of the issuance costs of the subscription receipts issued as part
of the agreement to acquire CWB. For the year ended October 31, 2024, this
amount was $14 million ($10 million net of income taxes).
(3) During the quarter ended October 31, 2024, the Bank recorded
a gain of $54 million ($39 million net of income taxes) upon the remeasurement
at fair value of the interest already held in CWB. For the year ended October
31, 2024, this gain amounted to $174 million ($125 million net of income
taxes).
(4) During the year ended October 31, 2023, the Bank had concluded
that it had lost significant influence over TMX Group Limited (TMX) and
therefore ceased using the equity method to account for this investment. The
Bank had designated its investment in TMX as a financial asset measured at
fair value through other comprehensive income in an amount of $191 million.
Upon the fair value measurement, a gain of $91 million ($67 million net of
income taxes) had been recorded.
(5) During the quarter ended October 31, 2024, the Bank recorded a
mark-to-market gain of $4 million ($3 million net of income taxes) on interest
rate swaps used to manage the fair value changes of CWB's assets and
liabilities that result in volatility on goodwill and closing capital of the
transaction. For the year ended October 31, 2024, a mark-to-market loss of $3
million ($2 million net of income taxes) was recorded.
(6) During the quarter ended October 31, 2024, the Bank recorded
acquisition and integration charges of $11 million ($8 million net of income
taxes) related to the CWB transaction. For the year ended October 31, 2024,
these charges were $18 million ($13 million net of income taxes).
(7) During the quarter and year ended October 31, 2023, the Bank
had recorded $75 million in intangible asset impairment losses ($54 million
net of income taxes) on technology development for which the Bank had decided
to cease its use or development, and it recorded $11 million in premises and
equipment impairment losses ($8 million net of income taxes) related to
right‑of‑use assets.
(8) During the quarter and year ended October 31, 2023, the Bank
had recorded $35 million in litigation expenses ($26 million net of income
taxes) to resolve litigations and other disputes arising from ongoing or
potential claims against the Bank.
(9) During the year ended October 31, 2023, the Bank had recorded
a $25 million expense ($18 million net of income taxes) to reflect the
retroactive impact of changes to the Excise Tax Act, indicating that payment
card clearing services rendered by a payment card network operator are subject
to the goods and services tax (GST) and the harmonized sales tax (HST).
(10) During the quarter and year ended October 31, 2023, the Bank had
recorded $15 million in charges ($11 million net of income taxes) for contract
termination penalties and for provisions for onerous contracts.
(11) During the year ended October 31, 2023, the Bank had recorded a $32
million tax expense with respect to the Canada Recovery Dividend, i.e., a
one-time, 15% tax on the fiscal 2021 and 2020 average taxable income above $1
billion as well as an $8 million tax recovery related to the 1.5% increase in
the statutory tax rate, which included the impact related to current and
deferred taxes for fiscal 2022.
Highlights
(millions of Canadian dollars, except per share amounts) Quarter ended October 31 Year ended October 31
2024 2023((1)) % Change 2024 2023((1)) % Change
Operating results
Total revenues 2,944 2,560 15 11,400 10,058 13
Income before provisions for credit losses and 1,352 963 40 5,346 4,305 24
income taxes
Net income 955 751 27 3,816 3,289 16
Return on common shareholders' equity((2)) 16.4 % 14.1 % 17.2 % 16.3 %
Operating leverage((2)) 15.3 % (8.9) % 8.1 % (5.8) %
Efficiency ratio((2)) 54.1 % 62.4 % 53.1 % 57.2 %
Earnings per share
Basic $ 2.69 $ 2.11 27 $ 10.78 $ 9.33 16
Diluted $ 2.66 $ 2.09 27 $ 10.68 $ 9.24 16
Operating results - Adjusted((3))
Total revenues - Adjusted((3)) 2,989 2,725 10 11,628 10,546 10
Income before provisions for credit losses 1,408 1,264 11 5,592 4,954 13
and income taxes - Adjusted((3))
Net income - Adjusted((3)) 928 850 9 3,716 3,363 10
Return on common shareholders' equity - Adjusted((4)) 15.9 % 16.0 % 16.7 % 16.6 %
Operating leverage - Adjusted((4)) 1.5 % 3.7 % 2.4 % (0.7) %
Efficiency ratio - Adjusted((4)) 52.9 % 53.6 % 51.9 % 53.0 %
Diluted earnings per share - Adjusted((3)) $ 2.58 $ 2.39 8 $ 10.39 $ 9.46 10
Common share information
Dividends declared $ 1.10 $ 1.02 8 $ 4.32 $ 3.98 9
Book value((2)) $ 65.74 $ 60.40 $ 65.74 $ 60.40
Share price
High $ 134.23 $ 103.58 $ 134.23 $ 103.58
Low $ 111.98 $ 84.97 $ 86.50 $ 84.97
Close $ 132.80 $ 86.22 $ 132.80 $ 86.22
Number of common shares (thousands) 340,744 338,285 340,744 338,285
Market capitalization 45,251 29,167 45,251 29,167
(millions of Canadian dollars) As at As at % Change
October 31, October 31,
2024 2023((1))
Balance sheet and off-balance-sheet
Total assets 462,226 423,477 9
Loans and acceptances, net of allowances 243,032 225,443 8
Deposits 333,545 288,173 16
Equity attributable to common shareholders 22,400 20,432 10
Assets under administration((2)) 766,082 652,631 17
Assets under management((2)) 155,900 120,858 29
Regulatory ratios under Basel III((5))
Capital ratios
Common Equity Tier 1 (CET1) 13.7 % 13.5 %
Tier 1 15.9 % 16.0 %
Total 17.0 % 16.8 % ( )
Leverage ratio 4.4 % 4.4 % ( )
TLAC ratio((5)) 31.2 % 29.2 % ( )
TLAC leverage ratio((5)) 8.6 % 8.0 % ( )
Liquidity coverage ratio (LCR)((5)) 150 % 155 % ( )
Net stable funding ratio (NSFR)((5)) 122 % 118 %
Other information ( )
Number of employees - Worldwide (full-time equivalent) 29,196 28,916 1
Number of branches in Canada 368 368 −
Number of banking machines in Canada 940 944 −
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
(2) For additional information on composition of these measures,
see the Glossary section on pages 130 to 133 of the Bank's 2024 Annual Report,
which is available on the Bank's website at nbc.ca or the SEDAR+ website at
sedarplus.ca.
(3) See the Financial Reporting Method section on pages 2 to 6 for
additional information on non-GAAP financial measures.
(4) For additional information on non-GAAP ratios, see the
Financial Reporting Method section on pages 14 to 20 of the Bank's 2024 Annual
Report, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
(5) For additional information on capital management measures, see
the Financial Reporting Method section on pages 14 to 20 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
Financial Analysis
This Press Release should be read in conjunction with the 2024 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 or SEDAR+ website at sedarplus.ca.
Total Revenues
For the fourth quarter of 2024, the Bank's total revenues amounted to $2,944
million, up $384 million or 15% compared to the corresponding quarter in 2023.
In the Personal and Commercial segment, total revenues rose 6% due to growth
in personal and commercial loans and deposits, which more than offset the
impact of lower net interest margin, as well as increases in insurance
revenues, credit card revenues, revenues from derivative financial instruments
and internal commission revenues related to the distribution of Wealth
Management products. These increases were offset by lower revenues from
bankers' acceptances resulting from the transition of this product to loans
referencing the Canadian Overnight Repo Rate Average (CORRA). In the Wealth
Management segment, total revenues grew 14%, mainly attributable to increases
in fee-based revenues, notably revenues from investment management and trust
service fees as well as mutual fund revenues. This growth was also due to an
increase in net interest income and securities brokerage commissions, which
was driven by an increase in client activity. In the Financial Markets
segment, total revenues on a taxable equivalent basis were down 1% in the
fourth quarter of 2024 compared to the fourth quarter of 2023 due to a
decrease in global markets revenues and corporate and investment banking
revenues. In the USSF&I segment, total revenues were up 21% compared to
the fourth quarter of 2023 as a result of revenue growth at ABA Bank stemming
from business growth as well as an increase in Credigy's revenues. In
addition, in the fourth quarter of 2024, a gain of $54 million was recorded
under gains on non-trading securities of the Other heading of segment
disclosures following a remeasurement at fair value of the Bank's interest in
CWB. Adjusted total revenues amounted to $2,989 million in the quarter ended
October 31, 2024, up 10% compared to $2,725 million in the corresponding
quarter in 2023.
For the year ended October 31, 2024, the Bank's total revenues amounted to
$11,400 million, up $1,342 million or 13% from $10,058 million in fiscal 2023.
In the Personal and Commercial segment, total revenues rose $269 million or
6%, mainly driven by growth in net interest income arising from growth in
loans and deposits, offset by a decrease in net interest margin, as well as an
increase in insurance revenues, credit card revenues, revenues from merger and
acquisition activity, and internal commission revenues related to the
distribution of Wealth Management products. These increases were partly offset
by a decrease in revenues from bankers' acceptances. In the Wealth Management
segment, total revenues grew 11%, mainly due to higher fee-based revenues,
notably revenues from investment management and trust service fees as well as
investment fund revenues as a result of growth in assets under administration
and management. The growth was also attributable to the rise in net interest
income and securities brokerage commissions, which was driven by an increase
in client activity. In the Financial Markets segment, total revenues on a
taxable equivalent basis rose $374 million or 14% compared to fiscal 2023 as
a result of growth in global markets revenues as well as corporate and
investment banking revenues. In the USSF&I segment, total revenues rose
17% compared to the prior year, which was driven by revenue growth at ABA Bank
stemming from business growth, revenue growth at Credigy as well as dividend
income recorded in fiscal 2024 related to an investment in a financial group.
For fiscal 2024, a gain of $174 million was recorded under gains on
non-trading securities in the Other heading of segment disclosures following a
remeasurement at fair value of the Bank's interest in CWB, while a $91 million
gain had been recorded in fiscal 2023 under other revenues following a
remeasurement at fair value of the Bank's interest in TMX. Adjusted total
revenues amounted to $11,628 million in the year ended October 31, 2024, up
10% compared to $10,546 million in fiscal 2023.
Non-Interest Expenses
For the fourth quarter of 2024, non-interest expenses stood at $1,592 million,
down $5 million from the corresponding quarter in 2023. For the fourth
quarter of 2024, compensation and employee benefits were up due to salary
growth as well as higher variable compensation related to revenue growth.
Occupancy expenses, including depreciation expense, were down compared to the
corresponding quarter in 2023 as a result of impairment losses on premises and
equipment recorded in the fourth quarter of 2023, offset in part by higher
expenses related to the Bank's new head office building and the expansion of
the banking network at the ABA Bank subsidiary. The decrease in technology
expenses, including depreciation expense, is attributable to impairment losses
on intangible assets recorded in the fourth quarter of 2023, despite
significant investments made to support the Bank's technological evolution and
business development plan in the fourth quarter of 2024. Communications
expenses were stable compared to the corresponding quarter in 2023, while
professional fees also rose, notably due to the increase in the external
management fees in the Wealth Management segment and expenses of $11 million
related to the acquisition and integration of CWB recorded during the fourth
quarter of 2024. The decrease in other expenses is partly explained by
litigation expenses of $35 million and provisions for contracts of
$15 million recorded in the fourth quarter of 2023. Adjusted non-interest
expenses stood at $1,581 million in the fourth quarter of 2024, up 8% from
$1,461 million in the fourth quarter of 2023.
For the year ended October 31, 2024, non-interest expenses totalled $6,054
million, up 5% compared to the prior year. This increase was essentially due
to the same reasons provided above for the quarter, except for occupancy
expenses, which are up compared to fiscal 2023 due to higher expenses related
to the Bank's new head office building and the expansion of the banking
network at the ABA Bank subsidiary. In addition, other expenses included a $25
million expense related to changes to the Excise Tax Act in fiscal 2023.
Adjusted non-interest expenses stood at $6,036 million for the year ended
October 31, 2024, an 8% increase from $5,592 million in fiscal 2023.
Provisions for Credit Losses
For the fourth quarter of 2024, the Bank recorded provisions for credit losses
of $162 million compared to $115 million in the corresponding quarter in 2023.
Provisions for credit losses on impaired loans excluding purchased or
originated credit-impaired (POCI) loans((1)), rose $57 million compared to the
fourth quarter of 2023. This increase came from Personal Banking (including
credit card receivables), in an environment characterized by a normalization
of credit performance, Commercial Banking as well as the Credigy and ABA Bank
subsidiaries. Provisions for credit losses on non-impaired loans decreased by
$38 million compared to the corresponding quarter in 2023, mainly due to the
more favourable impact of updated macroeconomic scenarios and a more
significant deterioration in credit risk in the fourth quarter of 2023. These
decreases were offset by the impact of recalibrating certain risk parameters.
Furthermore, provisions for credit losses on POCI loans rose $28 million,
mainly due to the favourable remeasurement of certain Credigy portfolios
during the fourth quarter of 2023 as well as higher credit loss recoveries in
the fourth quarter of 2023 following repayments of POCI loans in Commercial
Banking.
For the year ended October 31, 2024, the Bank's provisions for credit losses
totalled $569 million compared to $397 million in fiscal 2023. The increase
came from higher provisions for credit losses on impaired loans excluding POCI
loans((1)) in Personal Banking (including credit card receivables), in an
environment characterized by a normalization of credit performance, Commercial
Banking, the Financial Markets segment, as well as the Credigy and ABA Bank
subsidiaries. Furthermore, provisions for credit losses on non-impaired loans
were down, mainly due to the more favourable impact of revised macroeconomic
outlooks during fiscal 2024 and a more significant deterioration in credit
risk in fiscal 2023. These elements were offset by the impacts of
recalibrating certain risk parameters and the growth in loan portfolios.
Furthermore, provisions for credit losses on POCI loans were up due to the
favourable remeasurement of certain Credigy portfolios in fiscal 2023, partly
offset by higher credit loss recoveries in fiscal 2024 following repayments of
POCI loans in Commercial Banking.
Income Taxes
For the fourth quarter of 2024, income taxes stood at $235 million compared to
$97 million in the corresponding quarter in 2023. The 2024 fourth-quarter
effective income tax rate was 20% compared to 11% in the corresponding quarter
in 2023. This is mainly explained by a lower level and proportion of
tax-exempt income in the fourth quarter of 2024, which reflects the denial of
the deduction in respect of dividends covered by Bill C-59 since January 1,
2024.
For the year ended October 31, 2024, the effective income tax rate stood at
20% compared to 16% for fiscal 2023. The change in effective income tax rate
was due to the same reason as that mentioned for the quarter, partly offset by
the impact of the Canadian government's 2022 tax measures recorded in the
first quarter of 2023, namely the Canada Recovery Dividend and the additional
1.5% tax on banks and life insurers.
(1) For additional information on the composition of these
measures, see the Glossary section on pages 130 to 133 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
Results by Segment
The Bank carries out its activities in four business segments: Personal and
Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance
and International, which mainly comprises the activities of the Credigy Ltd.
(Credigy) and Advanced Bank of Asia Limited (ABA Bank) subsidiaries. Other
operating activities, certain specified items, Treasury activities, and the
operations of the Flinks Technology Inc. (Flinks) subsidiary are grouped in
the Other heading of segment disclosures. Each business segment is
distinguished by services offered, type of clientele, and marketing strategy.
Personal and Commercial
(millions of Canadian dollars) Quarter ended October 31 Year ended October 31
2024 2023((1)) % Change 2024 2023((1)) % Change
Operating results
Net interest income 934 857 9 3,587 3,321 8
Non-interest income 256 261 (2) 1,086 1,083 −
Total revenues 1,190 1,118 6 4,673 4,404 6
Non-interest expenses 644 680 (5) 2,486 2,462 1
Income before provisions for credit losses and income taxes 546 438 25 2,187 1,942 13
Provisions for credit losses 96 65 48 335 238 41
Income before income taxes 450 373 21 1,852 1,704 9
Income taxes 123 102 21 509 468 9
Net income 327 271 21 1,343 1,236 9
Less: Specified items after income taxes((2)) − (49) − (49)
Net income - Adjusted((2)) 327 320 2 1,343 1,285 5
Net interest margin((3)) 2.30 % 2.36 % 2.33 % 2.35 %
Average interest-bearing assets((3)) 161,738 144,321 12 153,980 141,458 9
Average assets((4)) 163,186 151,625 8 158,917 148,511 7
Average loans and acceptances((4)) 161,565 150,847 7 157,286 147,716 6
Net impaired loans((3)) 505 285 77 505 285 77
Net impaired loans as a % of total loans and acceptances((3)) 0.3 % 0.2 % 0.3 % 0.2 %
Average deposits((4)) 91,706 87,873 4 90,382 85,955 5
Efficiency ratio((3)) 54.1 % 60.8 % 53.2 % 55.9 %
Efficiency ratio - Adjusted((5)) 54.1 % 54.7 % 53.2 % 54.4 %
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
(2) See the Financial Reporting Method section on pages 2 to 6 for
additional information on non-GAAP financial measures. During the quarter and
year ended October 31, 2023, the segment recorded, under Non-interest
expenses, $59 million in intangible asset impairment losses ($42 million net
of income taxes) on technology development as well as charges of $9 million
($7 million net of income taxes) for contract termination penalties.
(3) For additional information on the composition of these
measures, see the Glossary section on pages 130 to 133 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
(4) Represents an average of the daily balances for the period.
(5) For additional information on non-GAAP ratios, see the
Financial Reporting Method section on pages 14 to 20 of the Bank's 2024 Annual
Report, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
In the Personal and Commercial segment, net income totalled $327 million in
the fourth quarter of 2024, up 21% from $271 million in the corresponding
quarter in 2023. Furthermore, adjusted net income was up 2% compared to
$320 million in the fourth quarter of 2023, which excluded the specified
items recorded in the fourth quarter of 2023. The 9% increase in net interest
income in the fourth quarter of 2024 was driven by growth in personal and
commercial loans and deposits, which more than offset the impact of the
decrease in net interest margin to 2.30% compared to 2.36% in the fourth
quarter of 2023. In addition, non-interest income declined by $5 million or 2%
compared to the corresponding quarter in 2023 notably due to the transition
from bankers' acceptances to CORRA loans.
Personal Banking's total revenues increased by $50 million compared to the
fourth quarter of 2023. This increase was driven by higher net interest
income, attributable to growth in loans and deposits, as well as increases in
insurance revenues, credit card revenues and internal commission revenues
related to the distribution of Wealth Management products. Commercial
Banking's total revenues grew $22 million compared to the corresponding
quarter in 2023, mainly due to an increase in net interest income that was
driven by loan and deposit growth, partly offset by lower net interest margin
on loans. This increase was offset by lower revenues from bankers'
acceptances.
For the fourth quarter of 2024, non-interest expenses stood at $644 million, a
5% decrease compared to the corresponding quarter in 2023. This decrease was
mainly due to specified items totalling $68 million recorded in the fourth
quarter of 2023, offset by higher compensation and employee benefits resulting
from salary increases and greater investments made as part of the segment's
technological evolution. The efficiency ratio of 54.1% in the fourth quarter
of 2024 improved by 6.7 percentage points compared to the fourth quarter of
2023. Excluding the specified items for the fourth quarter of 2023, the
segment's adjusted non-interest expenses were up 5% compared to $612 million
in the corresponding period in 2023, and the adjusted efficiency ratio
improved by 0.6 percentage point compared to 54.7% in the fourth quarter of
2023.
The segment recorded provisions for credit losses of $96 million compared to
$65 million in the fourth quarter of 2023. The increase in provisions for
credit losses on impaired loans in Personal Banking (including credit card
receivables), which reflects a normalization of credit performance, and on
impaired loans in Commercial Banking was partly offset by a decrease in
provisions for credit losses on non-impaired loans. In addition, the segment
recorded lower credit loss recoveries in the fourth quarter of 2024 following
repayments of POCI loans in Commercial Banking.
For fiscal 2024, Personal and Commercial's net income totalled $1,343 million,
up 9% from $1,236 million in 2023, as a result of the $269 million or 6%
growth in total revenues, partly offset by the increase in provisions for
credit losses. Furthermore, adjusted net income was up 5% compared to
$1,285 million in 2023, which excluded the specified items recorded in fiscal
2023. Income before provisions for credit losses and income taxes amounted to
$2,187 million in fiscal 2024, up 13% from fiscal 2023. The increase in
Personal Banking's total revenues was mainly attributable to loan and deposit
growth, higher loan and deposit margin, and an increase in insurance revenues,
credit card revenues, and internal commission revenues related to the
distribution of Wealth Management products. In addition, the rise in
Commercial Banking's total revenues was driven by growth in loans and
deposits, partly offset by a lower loan margin and a decrease in revenues from
bankers' acceptances.
For fiscal 2024, non-interest expenses stood at $2,486 million, a 1% increase
compared to the prior year, mainly due to higher compensation and employee
benefits resulting from salary increases and greater investments made as part
of the segment's technological evolution. These increases were offset by
specified items totalling $68 million recorded in fiscal 2023. The efficiency
ratio of 53.2% improved by 2.7 percentage points compared to October 31,
2023. Excluding the 2023 specified items, the segment's adjusted non-interest
expenses were up 4% compared to $2,394 million in 2023, and the adjusted
efficiency ratio improved by 1.2 percentage points compared to 54.4% in 2023.
In the Personal and Commercial segment, provisions for credit losses rose
$97 million compared to fiscal 2023 and amounted to $335 million in 2024.
This increase was mainly due to higher provisions for credit losses on
impaired loans in Personal Banking (including credit card receivables) and
Commercial Banking. In addition, provisions for credit losses on non-impaired
loans were down compared to fiscal 2023 and higher credit loss recoveries were
recorded in fiscal 2024 as a result of repayments of POCI loans in Commercial
Banking.
Wealth Management
(millions of Canadian dollars) Quarter ended October 31 Year ended October 31
2024 2023 % Change 2024 2023 % Change
Operating results
Net interest income 213 188 13 833 778 7
Fee-based revenues 425 371 15 1,603 1,432 12
Transaction-based and other revenues 89 79 13 350 311 13
Total revenues 727 638 14 2,786 2,521 11
Non-interest expenses 427 423 1 1,633 1,534 6
Income before provisions for credit losses and income taxes 300 215 40 1,153 987 17
Provisions for credit losses (1) 1 (1) 2
Income before income taxes 301 214 41 1,154 985 17
Income taxes 82 59 39 317 271 17
Net income 219 155 41 837 714 17
Less: Specified items after income taxes((1)) − (32) − (32)
Net income - Adjusted((1)) 219 187 17 837 746 12
Average assets((2)) 9,839 8,494 16 9,249 8,560 8
Average loans and acceptances((2)) 8,690 7,523 16 8,204 7,582 8
Net impaired loans((3)) 11 8 38 11 8 38
Average deposits((2)) 43,008 40,280 7 42,361 40,216 5
Assets under administration((3)) 766,082 652,631 17 766,082 652,631 17
Assets under management((3)) 155,900 120,858 29 155,900 120,858 29
Efficiency ratio((3)) 58.7 % 66.3 % 58.6 % 60.8 %
Efficiency ratio - Adjusted((4)) 58.7 % 59.6 % 58.6 % 59.1 %
(1) See the Financial Reporting Method section on pages 2 to 6 for
additional information on non-GAAP financial measures. During the quarter and
year ended October 31, 2023, the segment recorded, in the Non-interest
expenses item, $8 million in intangible asset impairment losses ($6 million
net of income taxes) on technology development as well as $35 million in
litigation expenses ($26 million net of income taxes) to resolve litigations
and other disputes on various ongoing or potential claims against the Bank.
(2) Represents an average of the daily balances for the period.
(3) For additional information on the composition of these
measures, see the Glossary section on pages 130 to 133 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
(4) For additional information on non-GAAP ratios, see the
Financial Reporting Method section on pages 14 to 20 of the Bank's 2024 Annual
Report, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
In the Wealth Management segment, net income totalled $219 million in the
fourth quarter of 2024, a 41% increase from $155 million in the corresponding
quarter in 2023. Adjusted net income was $219 million in the fourth quarter
of 2024, up 17% compared to $187 million in the fourth quarter of 2023. The
segment's total revenues amounted to $727 million, up $89 million or 14% from
$638 million in the fourth quarter of 2023. The 13% increase in net interest
income compared to the corresponding quarter in 2023 is explained by higher
loan and deposit volumes. The 15% increase in fee-based revenues was due to
the rise in stock markets compared to the corresponding quarter in 2023 and
positive net inflows for the various solutions. Transaction and other revenues
rose 13% compared to the corresponding quarter in 2023 due to increased client
activity.
Non-interest expenses stood at $427 million in the fourth quarter of 2024, a
1% increase from $423 million in the fourth quarter of 2023. This increase was
due to higher variable compensation and external management fees in line with
revenue growth, as well as higher technology expenses related to the segment's
initiatives. Non-interest expenses included specified items of $43 million in
the fourth quarter of 2023. At 58.7% in the fourth quarter of 2024, the
efficiency ratio improved from 66.3% in the corresponding quarter in 2023.
Adjusted non-interest expenses of $427 million were up 12% compared to
$380 million in the fourth quarter of 2023. The adjusted efficiency ratio
improved by 0.9 percentage point compared to 59.6% in the fourth quarter of
2023. Wealth Management recorded credit loss recoveries of $1 million in the
fourth quarter of 2024, while it had recorded provisions for credit losses of
$1 million in the fourth quarter of 2023.
In the Wealth Management segment, net income totalled $837 million in fiscal
2024, up 17% from $714 million in fiscal 2023. This increase is attributable
to growth in the segment's total revenues, partly offset by higher
non-interest expenses. Adjusted net income of $837 million in fiscal 2024 was
up 12% compared to $746 million in fiscal 2023. The segment's total revenues
amounted to $2,786 million in fiscal 2024, up 11% from $2,521 million in
fiscal 2023. Net interest income increased by 7% mainly due to higher loan and
deposit volumes. Fee-based revenues rose 12% compared to 2023 as a result of
growth in assets under administration and assets under management caused by
the rise in stock markets as well as positive net inflows for the various
solutions. In addition, transaction and other revenues were up 13% compared to
fiscal 2023 due to increased client activity during fiscal 2024. Non-interest
expenses stood at $1,633 million in fiscal 2024 compared to $1,534 million in
fiscal 2023, a 6% increase that was due to higher variable compensation and
external management fees in line with revenue growth, as well as higher
technology investments related to the segment's initiatives. These increases
were partly offset by the impact of the specified items of $43 million
recorded in fiscal 2023. At 58.6% in fiscal 2024, the efficiency ratio
improved from 60.8% in fiscal 2023. Adjusted non-interest expenses of
$1,633 million were up 10% compared to $1,491 million in fiscal 2023. The
adjusted efficiency ratio of 58.6% improved by 0.5 percentage point compared
to 59.1% in fiscal 2023. Wealth Management recorded credit loss recoveries of
$1 million in fiscal 2024, while it had recorded provisions for credit losses
of $2 million in fiscal 2023.
Financial Markets
(taxable equivalent basis)((1))
(millions of Canadian dollars) Quarter ended October 31 Year ended October 31
2024 2023 % Change 2024 2023 % Change
Operating results
Global markets
Equities 283 319 (11) 1,018 904 13
Interest rate and credit 111 84 32 573 417 37
Commodities and foreign exchange 39 32 22 198 173 14
433 435 − 1,789 1,494 20
Corporate and investment banking 295 300 (2) 1,241 1,162 7
Total revenues((1)) 728 735 (1) 3,030 2,656 14
Non-interest expenses 301 319 (6) 1,246 1,161 7
Income before provisions for credit losses and income taxes 427 416 3 1,784 1,495 19
Provisions for credit losses 4 24 (83) 54 39 38
Income before income taxes 423 392 8 1,730 1,456 19
Income taxes((1)) 117 108 8 476 401 19
Net income 306 284 8 1,254 1,055 19
Less: Specified items after income taxes((2)) − (5) − (5)
Net income - Ajusted((2)) 306 289 6 1,254 1,060 18
Average assets((3)) 200,888 193,484 4 195,881 180,837 8
Average loans and acceptances((3)) (Corporate Banking only) 31,749 30,254 5 31,887 29,027 10
Net impaired loans((4)) 78 30 78 30
Net impaired loans as a % of total loans and acceptances((4)) 0.2 % 0.1 % 0.2 % 0.1 %
Average deposits((3)) 70,646 59,406 19 65,930 57,459 15
Efficiency ratio((4)) 41.3 % 43.4 % 41.1 % 43.7 %
Efficiency ratio - Adjusted((5)) 41.3 % 42.4 % 41.1 % 43.4 %
(1) The Total revenues and Income taxes items of the Financial
Markets segment are presented on a taxable equivalent basis. Taxable
equivalent basis is a calculation method that consists in grossing up certain
revenues taxed at lower rates by the income tax to a level that would make it
comparable to revenues from taxable sources in Canada. For the quarter ended
October 31, 2024, Total revenues were grossed up by $91 million ($162
million in 2023) and an equivalent amount was recognized in Income taxes. For
the year ended October 31, 2024, Total revenues were grossed up by $376
million ($571 million in 2023) and an equivalent amount was recognized in
Income taxes. The effect of these adjustments has been reversed under the
Other heading of segment results. In light of the enacted legislation with
respect to Canadian dividends, the Bank did not recognize an income tax
deduction or use the taxable equivalent basis method to adjust revenues
related to affected dividends received after January 1, 2024 (for additional
information, see the Income Taxes section of this Press Release).
(2) See the Financial Reporting Method section on pages 2 to 6 for
additional information on non-GAAP financial measures. During the quarter and
year ended October 31, 2023, the segment recorded, in the Non-interest
expenses item, $7 million in intangible asset impairment losses ($5 million
net of income taxes) on technology development.
(3) Represents an average of the daily balances for the period.
(4) For additional information on the composition of these
measures, see the Glossary section on pages 130 to 133 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
(5) For additional information on non-GAAP ratios, see the
Financial Reporting Method section on pages 14 to 20 of the Bank's 2024 Annual
Report, which is available on the Bank's website at nbc.ca or the SEDAR+
website at sedarplus.ca.
In the Financial Markets segment, net income totalled $306 million in the
fourth quarter of 2024, up 8% from $284 million in the corresponding quarter
in 2023. Furthermore, adjusted net income was up 6% compared to $289 million
in the fourth quarter of 2023, which excluded impairment losses on intangible
assets. Total revenues on a taxable equivalent basis amounted to $728 million,
down $7 million or 1% from $735 million in the fourth quarter of 2023. Global
markets revenues were down $2 million due to an 11% decrease in equities
revenues, partly offset by a 32% increase in interest rate and credit products
revenues and a 22% increase in commodities and foreign exchange revenues.
Corporate and investment banking revenues for the fourth quarter of 2024
decreased 2% compared to the corresponding quarter in 2023 due to lower
revenues from merger and acquisition activity, partly offset by higher banking
service revenues.
Non-interest expenses stood at $301 million in the fourth quarter of 2024, a
6% decrease compared to the fourth quarter of 2023. This decrease was
attributable to lower compensation and employee benefits, notably caused by
variable compensation. Technology investment expenses, professional fees and
other expenses related to the segment's business growth were up compared to
the fourth quarter of 2023. The efficiency ratio of 41.3% in the fourth
quarter of 2024 improved by 2.1 percentage points from 43.4% in the fourth
quarter of 2023. In the quarter ended October 31, 2024, the segment recorded
provisions for credit losses of $4 million compared to $24 million in the
corresponding quarter in 2023. This decrease is essentially explained by lower
provisions for credit losses on non-impaired loans mainly due to the
favourable impact of updated macroeconomic scenarios.
For fiscal 2024, the segment's net income totalled $1,254 million, up 19%
compared to 2023. Total revenues on a taxable equivalent basis amounted to
$3,030 million in 2024, an increase of $374 million or 14% compared to
fiscal 2023. Global markets revenues were up 20%, driven by increases in all
revenue types, including a 13% increase in equities revenues, a 37% increase
in interest rate and credit products revenues, and a 14% increase in
commodities and foreign exchange revenues. In addition, corporate and
investment banking revenues were up 7% compared to fiscal 2023 as a result of
growth in banking service revenues and revenues from capital markets activity,
partly offset by lower revenues from merger and acquisition activity.
For fiscal 2024, non-interest expenses rose 7% compared to the prior year.
This increase was due to higher compensation and employee benefits, notably
variable compensation resulting from revenue growth, as well as higher
technology investment expenses and other expenses related to the segment's
business growth. The efficiency ratio of 41.1% in fiscal 2024 improved by 2.6
percentage points from 43.7% in fiscal 2023. Financial Markets recorded
provisions for credit losses of $54 million in fiscal 2024 compared to $39
million in 2023. This growth was mainly due to a $31 million increase in
provisions for credit losses on impaired loans, offset by a $16 million
decrease in provisions for credit losses on non-impaired loans, mainly due to
the impact of updated macroeconomic scenarios.
U.S. Specialty Finance and International (USSF&I)
(millions of Canadian dollars) Quarter ended October 31 Year ended October 31
2024 2023 % Change 2024 2023 % Change
Total revenues
Credigy 144 126 14 544 483 13
ABA Bank 234 187 25 860 726 18
International − − 11 −
378 313 21 1,415 1,209 17
Non-interest expenses
Credigy 36 38 (5) 144 140 3
ABA Bank 79 68 16 293 260 13
International 1 − 2 2
116 106 9 439 402 9
Income before provisions for credit losses and income taxes 262 207 27 976 807 21
Provisions for credit losses
Credigy 33 10 113 81 40
ABA Bank 29 13 68 32
International 1 − 1 −
63 23 182 113 61
Income before income taxes 199 184 8 794 694 14
Income taxes
Credigy 16 17 (6) 60 55 9
ABA Bank 27 22 23 105 91 15
International (1) − 1 −
42 39 8 166 146 14
Net income
Credigy 59 61 (3) 227 207 10
ABA Bank 99 84 18 394 343 15
International (1) − 7 (2)
157 145 8 628 548 15
Average assets((1)) 29,053 24,258 20 27,669 23,007 20
Average loans and receivables((1)) 22,343 19,729 13 21,733 18,789 16
Purchased or originated credit-impaired (POCI) loans 365 511 (29) 365 511 (29)
Net impaired loans excluding POCI loans((2)) 550 283 94 550 283 94
Average deposits((1)) 13,745 11,399 21 12,987 10,692 21
Efficiency ratio((2)) 30.7 % 33.9 % 31.0 % 33.3 %
(1) Represents an average of the daily balances for the period.
(2) For additional information on the composition of these
measures, see the Glossary section on pages 130 to 133 of the Bank's 2024
Annual Report, which is available on the Bank's website at nbc.ca or the
SEDAR+ website at sedarplus.ca.
In the USSF&I segment, net income totalled $157 million in the fourth
quarter of 2024, up 8% from $145 million in the corresponding quarter in 2023,
essentially attributable to ABA Bank. The growth in the segment's total
revenues was dampened by rising non-interest expenses and higher provisions
for credit losses. For fiscal 2024, the segment posted net income of
$628 million compared to $548 million in fiscal 2023, a 15% increase
attributable to the activities of the Credigy and ABA Bank subsidiaries as
well as to dividend income recorded in fiscal 2024 related to an investment in
a financial group.
Credigy
For the fourth quarter of 2024, Credigy reported net income of $59 million,
down $2 million compared to the corresponding quarter in 2023. The subsidiary
posted income before provisions for credit losses and income taxes totalling
$108 million in the fourth quarter of 2024, up 23% compared to 2023. Total
revenues amounted to $144 million in the fourth quarter of 2024 compared to
$126 million in the fourth quarter of 2023, an increase that was driven by
growth in loan volumes, while non-interest income decreased. Non-interest
expenses stood at $36 million in the fourth quarter of 2024, a $2 million
decrease compared to the corresponding quarter in 2023. Provisions for credit
losses rose $23 million compared to the fourth quarter of 2023, mainly due to
higher provisions for credit losses on POCI loans attributable to the
favourable remeasurement of certain portfolios during the fourth quarter of
2023. Provisions for credit losses on impaired loans also increased, owing to
normal maturation of loan portfolios, while provisions for credit losses on
non-impaired loans decreased.
For fiscal 2024, Credigy reported net income of $227 million, up 10% from
fiscal 2023. The subsidiary posted income before provisions for credit losses
and income taxes totalling $400 million in fiscal 2024, up 17% from fiscal
2023. Total revenues amounted to $544 million in fiscal 2024, up 13% from
$483 million in fiscal 2023. This increase was driven by growth in loan
volumes and non-interest income arising primarily from the fair value
remeasurement of certain portfolios and a realized gain in fiscal 2024 from
the disposal of a loan portfolio, partly offset by revenues recognized as a
result of a credit facility prepaid in fiscal 2023. Non-interest expenses for
fiscal 2024 were up $4 million compared to 2023, owing primarily to
compensation and employee benefits. The subsidiary reported a $32 million
increase in provisions for credit losses compared to prior year, which was due
to the same reasons provided above for the quarter.
ABA Bank
For the fourth quarter of 2024, ABA Bank recorded net income totalling $99
million, up $15 million or 18% from the corresponding quarter in 2023. Total
revenues rose 25%, mainly attributable to sustained growth in assets.
Non-interest expenses for the fourth quarter of 2024 stood at $79 million, an
$11 million or 16% increase compared to the fourth quarter of 2023
attributable to higher compensation and employee benefits, as well as higher
occupancy expenses driven by business growth and opening of new branches. The
subsidiary reported provisions for credit losses totalling $29 million in the
fourth quarter of 2024, up $16 million compared to the fourth quarter of 2023,
owing to higher provisions for credit losses on impaired loans.
For fiscal 2024, ABA Bank recorded net income totalling $394 million, up $51
million or 15% from fiscal 2023 owing to higher total revenues, partly offset
by higher non-interest expenses and provisions for credit losses. The
subsidiary posted income before provisions for credit losses and income taxes
amounting to $567 million in fiscal 2024, up 22% from fiscal 2023. The 18%
year-over-year increase in the subsidiary's total revenues stemmed from
business expansion at the subsidiary, driven mainly by sustained asset growth.
ABA Bank reported non-interest expenses totalling $293 million, up 13% from a
year earlier, due to the same reasons provided above for the fourth quarter,
as well as to the increase of technology expenses. The subsidiary reported
provisions for credit losses totalling $68 million in fiscal 2024, up $36
million from fiscal 2023, owing to higher provisions for credit losses on
impaired loans, partly offset by lower provisions for credit losses on
non-impaired loans.
Other
(millions of Canadian dollars) Quarter ended October 31 Year ended October 31
2024 2023 2024 2023
Operating results
Net interest income((1)) (59) (161) (335) (591)
Non-interest income((1)) (20) (83) (169) (141)
Total revenues (79) (244) (504) (732)
Non-interest expenses 104 69 250 194
Income before provisions for credit losses and income taxes (183) (313) (754) (926)
Provisions for credit losses − 2 (1) 5
Income before income taxes (183) (315) (753) (931)
Income taxes (recovery)((1)) (129) (211) (507) (667)
Net loss (54) (104) (246) (264)
Non-controlling interests − − (1) (2)
Net loss attributable to the Bank's shareholders and holders of (54) (104) (245) (262)
other equity instruments
Less: Specified items after income taxes((2)) 27 (13) 100 12
Net loss - Adjusted((2)) (81) (91) (346) (276)
Average assets((3)) 66,829 64,134 65,546 69,731
(1) For the quarter ended October 31, 2024, Net interest income
was reduced by $13 million ($90 million in 2023), Non-interest income was
reduced by $81 million ($75 million in 2023), and an equivalent amount was
recorded in Income taxes (recovery). For the year ended October 31, 2024, Net
interest income was reduced by $79 million ($332 million in 2023),
Non-interest income was reduced by $306 million ($247 million in 2023), and an
equivalent amount was recorded in Income taxes (recovery). These adjustments
include a reversal of the taxable equivalent of the Financial Markets segment
and the Other heading. Taxable equivalent basis is a calculation method that
consists in grossing up certain revenues taxed at lower rates by the income
tax to a level that would make it comparable to revenues from taxable sources
in Canada. In light of the enacted legislation with respect to Canadian
dividends, the Bank did not recognize an income tax deduction, nor did it use
the taxable equivalent basis method to adjust revenues related to affected
dividends received after January 1, 2024 (for additional information, see the
Income Taxes section of this Press Release).
(2) See the Financial Reporting Method section on pages 2 to 6 for
additional information on non-GAAP financial measures. During the quarter and
year ended October 31, 2024, after the agreement to acquire CWB was
concluded, the Bank recorded several items related to this acquisition, in
particular the amortization of the subscription receipt issuance costs of
$7 million net of income taxes ($10 million net of income taxes for fiscal
2024), a gain of $39 million net of income taxes ($125 million net of income
taxes for fiscal 2024) resulting from the remeasurement at fair value of the
CWB common shares already held by the Bank, the impact of managing fair value
changes, which is a gain of $3 million net of income taxes (loss of
$2 million net of income taxes for fiscal 2024), and acquisition and
integration expenses of $8 million net of income taxes ($13 million net of
income taxes for fiscal 2024). During the quarter and year ended October 31,
2023, the Bank had recorded impairment losses of $9 million net of income
taxes on premises and equipment and intangible assets and expenses of
$4 million net of income taxes related to penalties on onerous contracts.
During the year ended October 31, 2023, the bank recorded a gain of $67
million net of income taxes on the fair value measurement of an equity
interest, an expense of $18 million net of income taxes related to the
retroactive impact of changes to the Excise Tax Act and a $24 million income
tax expense related to the Canadian government's 2022 tax measures.
(3) Represents an average of the daily balances for the period.
For the Other heading of segment results, a net loss of $54 million was posted
in the fourth quarter of 2024 compared to a net loss of $104 million in the
corresponding quarter in 2023. The change in net loss resulted in part from a
higher contribution from Treasury activities resulting from higher gains on
investments in the fourth quarter of 2024, principally attributable to the
gain on the remeasurement at fair value of the CWB common shares already held
by the Bank ($39 million net of income taxes). These items were partly offset
by an increase in non-interest expenses compared to the fourth quarter of
2023. This increase is due in part to higher compensation and employee
benefits and higher professional fees, in particular the CWB acquisition and
integration charges. The specified items recorded in the fourth quarter of
2024, related to the agreement to acquire CWB, had a favourable impact of $27
million on net loss compared to the unfavourable impact of $13 million of the
specified items recorded in the corresponding quarter in 2023. The adjusted
net loss stood at $81 million in the quarter ended October 31, 2024 compared
to $91 million in the corresponding quarter in 2023.
For fiscal 2024, net loss stood at $246 million compared to a net loss of $264
million in fiscal 2023. The change in net loss is due to the same reasons
provided above for the quarter. In addition, the fiscal 2024 specified items
related to the CWB acquisition agreement had a $100 million favourable impact
on the net loss compared to a $12 million favourable impact for the fiscal
2023 specified items. The adjusted net loss stood at $346 million for fiscal
2024 compared to $276 million for fiscal 2023.
Consolidated Balance Sheet
Consolidated Balance Sheet Summary
(millions of Canadian dollars) As at October 31, 2024 As at October 31, 2023((1)) % Change
Assets
Cash and deposits with financial institutions 31,549 35,234 (10)
Securities 145,165 121,818 19
Securities purchased under reverse repurchase agreements and securities 16,265 11,260 44
borrowed
Loans and acceptances, net of allowances 243,032 225,443 8
Other 26,215 29,722 (12)
462,226 423,477 9
Liabilities and equity
Deposits 333,545 288,173 16
Other 101,873 110,972 (8)
Subordinated debt 1,258 748 68
Equity attributable to the Bank's shareholders and holders of other equity 25,550 23,582 8
instruments
Non-controlling interests − 2 (100)
462,226 423,477 9
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
Assets
As at October 31, 2024, the Bank had total assets of $462.2 billion, up $38.7
billion or 9% from $423.5 billion at the end of the previous fiscal year. Cash
and deposits with financial institutions as at October 31, 2024, stood at
$31.5 billion, down $3.7 billion compared with the Consolidated Balance Sheet
as at October 31, 2023, owing primarily to a decline in deposits with
regulated financial institutions, including the U.S. Federal Reserve, partly
offset by growth in deposits with the Bank of Canada.
Securities have risen $23.4 billion since October 31, 2023, owing to a $15.9
billion or 16% increase in securities at fair value through profit or loss
driven mainly by equity securities, offset by declines in securities issued or
guaranteed by the Canadian government and securities issued or guaranteed by
the U.S. Treasury, other U.S. agencies and other foreign governments.
Securities other than those measured at fair value through profit or loss were
up $7.5 billion. Securities purchased under reverse repurchase agreements and
securities borrowed increased by $5.0 billion since October 31, 2023, driven
primarily by the Financial Markets segment and Treasury activities.
As at October 31, 2024, loans and acceptances, net of allowances for credit
losses, totalled $243.0 billion, up $17.6 billion or 8% since October 31,
2023. The following table provides a breakdown of the main loan and acceptance
portfolios.
(millions of Canadian dollars) As at October 31, 2024 As at October 31, 2023
Loans and acceptances
Residential mortgage and home equity lines of credit 124,431 116,444
Personal 17,461 16,761
Credit card 2,761 2,603
Business and government 99,720 90,819
244,373 226,627
Allowances for credit losses (1,341) (1,184)
243,032 225,443
Residential mortgages (including home equity lines of credit) amounted to
$124.4 billion, up $8.0 billion or 7% since October 31, 2023. This growth was
mainly driven by sustained demand for mortgage credit in the Personal and
Commercial segment, as well as by business activities in the Financial Markets
segment and at Credigy and ABA Bank. Personal loans totalled $17.5 billion at
the end of fiscal 2024, up $0.7 billion from $16.8 billion as at October 31,
2023. This increase was fuelled mainly by Personal Banking business growth.
Credit card receivables amounted to $2.8 billion, up $0.2 billion since
October 31, 2023. As at October 31, 2024, business and government loans and
acceptances totalled $99.7 billion, up $8.9 billion or 10% since October 31,
2023. The increase stemmed primarily from business growth in Commercial
Banking and the Wealth Management and Financial Markets segments, as well as
at ABA Bank and Credigy.
Impaired loans include all loans classified in Stage 3 of the expected credit
loss model and POCI loans. As at October 31, 2024, gross impaired loans stood
at $2,043 million compared to $1,584 million as at October 31, 2023. Net
impaired loans totalled $1,629 million as at October 31, 2024 compared to
$1,276 million as at October 31, 2023. Net impaired loans excluding POCI
loans rose $538 million to $1,144 million from $606 million as at October 31,
2023. This increase resulted primarily from rises in net impaired loans in the
loan portfolios of Personal and Commercial Banking, Financial Markets, Credigy
(excluding POCI loans) and ABA Bank. Net POCI loans fell to $485 million as at
October 31, 2024 from $670 million as at October 31, 2023, owing to maturities
of certain loan portfolios and loan repayments.
As at October 31, 2024, other assets totalled $26.2 billion, down $3.5 billion
from $29.7 billion as at October 31, 2023, resulting mainly from a $5.2
billion decline in derivative financial instruments related to Financial
Markets business activities. This decrease was offset by a $1.4 billion
increase in other assets, particularly amounts due from clients, dealers and
brokers, as well as receivables, prepaid expenses and other items.
Liabilities
As at October 31, 2024, the Bank had total liabilities of $436.7 billion
compared to $399.9 billion as at October 31, 2023.
As at October 31, 2024, deposits stood at $333.5 billion, up $45.3 billion or
16% since the previous fiscal year-end. Personal deposits amounted to
$95.2 billion as at October 31, 2024, up $7.3 billion since October 31, 2023.
This increase was driven by business growth in Personal Banking, in the
Financial Markets segment, and at ABA Bank.
Business and government deposits totalled $232.7 billion as at October 31,
2024, up $35.4 billion from $197.3 billion as at October 31, 2023. This
increase stemmed from Financial Markets and Treasury funding activities,
including $5.8 billion in deposits subject to bank recapitalization (bail-in)
conversion regulations, as well as business activities in Commercial Banking,
the Wealth Management segment and at ABA Bank, and $1.0 billion related to the
investment agreements for subscription receipts issued as part of the
agreement to acquire CWB. Deposits from deposit-taking institutions totalled
$5.6 billion, up $2.6 billion since the previous fiscal year-end.
As at October 31, 2024, other liabilities stood at $101.9 billion, down $9.1
billion since October 31, 2023, resulting primarily from a decrease of
$6.6 billion in acceptances, owing to the transition from bankers'
acceptances to CORRA loans, $4.1 billion in derivative financial instruments,
and $2.8 billion in obligations related to securities sold short. These
decreases were offset by a $3.4 billion increase in liabilities related to
transferred receivables and a $1.3 billion increase in other liabilities,
particularly accounts payable and accrued expenses, and interest and dividends
payable.
Subordinated debt has risen since October 31, 2023 as a result of the February
5, 2024 issuance of $500 million in medium-term notes.
Equity
As at October 31, 2024, equity attributable to the Bank's shareholders and
holders of other equity instruments totalled $25.6 billion, up $2.0 billion
from $23.6 billion as at October 31, 2023. This increase stemmed from net
income net of dividends and the common share issuances under the Stock Option
Plan. The increases were partially offset by the net fair value change
attributable to credit risk on financial liabilities designated at fair value
through profit or loss and by the net change in gains (losses) on cash flow
hedges.
CWB Transaction
On June 11, 2024, the Bank entered into an agreement to acquire all of the
issued and outstanding common shares of Canadian Western Bank (CWB) by way of
a share exchange valuing CWB at approximately $5.0 billion. Each CWB common
share, other than those held by the Bank, will be exchanged for 0.450 of a
common share of National Bank. CWB is a diversified financial services
institution based in Edmonton, Alberta. This transaction will enable the Bank
to accelerate its growth across Canada. The business combination brings
together two complementary Canadian banks with growing businesses, thereby
enhancing customer service by offering a full range of products and services
nationwide, with a regionally focused service model.
The transaction is subject to the satisfaction of customary closing
conditions, including regulatory approvals, and is expected to close in 2025.
The results of the acquired business will be consolidated from the date of
closing.
Between the announcement and closing of the transaction, the Bank is exposed
to changes in the fair value of the assets and liabilities of CWB due to
changes in market interest rates. Increases in interest rates will impact the
fair value of net assets on closing of the transaction, increasing the amount
of goodwill and reducing capital ratios. In order to manage the volatility of
goodwill and capital on closing of the transaction, the Bank entered into
interest rate swaps to economically hedge its exposure. Mark-to-market changes
have been recognized in Non-interest income - Trading revenues (losses) in the
Consolidated Statement of Income.
Income Taxes
Notice of Assessment
In April 2024, the Bank was reassessed by the Canada Revenue Agency (CRA) for
additional income tax and interest of approximately $110 million (including
estimated provincial tax and interest) in respect of certain Canadian
dividends received by the Bank during the 2019 taxation year.
In prior fiscal years, the Bank had been reassessed for additional income tax
and interest of approximately $965 million (including provincial tax and
interest) in respect of certain Canadian dividends received by the Bank during
the 2012-2018 taxation years.
In the reassessments, the CRA alleges that the dividends were received as part
of a "dividend rental arrangement".
In October 2023, the Bank filed a notice of appeal with the Tax Court of
Canada, and the matter is now in litigation. The CRA may issue reassessments
to the Bank for taxation years subsequent to 2019 in regard to certain
activities similar to those that were the subject of the above-mentioned
reassessments. The Bank remains confident that its tax position was
appropriate and intends to vigorously defend its position. As a result, no
amount has been recognized in the Consolidated Financial Statements as at
October 31, 2024.
Canadian Government's 2022 Tax Measures
On November 4, 2022, the Government of Canada introduced Bill C-32, An Act to
implement certain provisions of the fall economic statement tabled in
Parliament on November 3, 2022 and certain provisions of the budget tabled in
Parliament on April 7, 2022 to implement tax measures applicable to certain
entities of banking and life insurer groups, as presented in its April 7, 2022
budget. These tax measures included the Canada Recovery Dividend (CRD), which
is a one-time, 15% tax on the fiscal 2021 and 2020 average taxable income
above $1 billion, as well as a 1.5% increase in the statutory tax rate. On
December 15, 2022, Bill C-32, received royal assent. Given that these tax
measures had been enacted as at January 31, 2023, a $32 million tax expense
for the CRD and an $8 million tax recovery for the tax rate increase,
including the impact related to current and deferred taxes for fiscal 2022,
were recognized in the Consolidated Financial Statements for the year ended
October 31, 2023.
Other Tax Measures
On November 30, 2023, the Government of Canada introduced Bill C-59, An Act to
implement certain provisions of the fall economic statement tabled in
Parliament on November 21, 2023 and certain provisions of the budget tabled in
Parliament on March 28, 2023 to implement tax measures applicable to the Bank.
The measures include the denial of the deduction in respect of dividends
received after 2023 on shares that are mark-to-market property for tax
purposes (except for dividends received on "taxable preferred shares" as
defined in the Income Tax Act), as well as the application of a 2% tax on the
net value of equity repurchases occurring as of January 1, 2024. On June 20,
2024, Bill C-59 received royal assent, and these tax measures were enacted at
the financial reporting date. The Consolidated Financial Statements reflect
the denial of the deduction in respect of dividends contemplated by Bill C-59
as of January 1, 2024.
On May 2, 2024, the Government of Canada introduced Bill C-69, An Act to
implement certain provisions of the budget tabled in Parliament on April 16,
2024. The bill includes the Pillar 2 rules (global minimum tax) published by
the Organisation for Economic Co-operation and Development (OECD) that will
apply to fiscal years beginning on or after December 31, 2023 (November 1,
2024 for the Bank). On June 20, 2024, Bill C-69 received royal assent. To
date, the Pillar 2 rules have been included in a bill or enacted in certain
jurisdictions where the Bank operates. The Pillar 2 rules do not apply to this
fiscal year. The Bank is still assessing its income tax exposure arising from
these rules but estimates that the impact on its effective income tax rate
would be an increase of approximately 1% to 2%. During the years ended October
31, 2024 and 2023, the Bank applied the exception to the recognition and
disclosure of information of deferred tax assets and liabilities arising from
the Pillar 2 rules in the jurisdictions where they have been included in a
bill or enacted.
Capital Management
As at October 31, 2024, the Bank's CET1, Tier 1, and Total capital ratios
were, respectively, 13.7%, 15.9% and 17.0%, compared to ratios of,
respectively, 13.5%, 16.0% and 16.8% as at October 31, 2023. The CET1 capital
ratio increased since October 31, 2023, essentially due to the contribution
from net income net of dividends and to common share issuances under the Stock
Option Plan. These factors were partly offset by the organic growth in RWA and
by the impact of implementing OSFI's revised market risk framework. The Tier 1
capital ratio was more negatively affected by the RWA growth and is down
compared to October 31, 2023. The increase of the Total capital ratio is
explained by the $500 million issuance of medium-term notes during fiscal
2024.
As at October 31, 2024, the leverage ratio was 4.4%, stable compared to
October 31, 2023, as growth in total exposure was offset by growth in Tier 1
capital.
As at October 31, 2024, the Bank's TLAC ratio and TLAC leverage ratio were,
respectively, 31.2% and 8.6%, compared with 29.2% and 8.0%, respectively, as
at October 31, 2023. The increases in both the TLAC and TLAC leverage ratios
are primarily explained by the net issuance of instruments that met the TLAC
eligibility criteria during the year.
During the quarter and the year ended October 31, 2024, the Bank was in
compliance with all of OSFI's regulatory capital, leverage, and TLAC
requirements.
Regulatory Capital((1)), Leverage Ratio((1)) and TLAC((2))
(millions of Canadian dollars) As at October 31, 2024 As at October 31, 2023
Capital
CET1 19,321 16,920
Tier 1 22,470 20,068
Total 24,001 21,056
Risk-weighted assets 140,975 125,592
Total exposure 511,160 456,478
Capital ratios
CET1 13.7 % 13.5 %
Tier 1 15.9 % 16.0 %
Total 17.0 % 16.8 %
Leverage ratio 4.4 % 4.4 %
Available TLAC 44,040 36,732
TLAC ratio 31.2 % 29.2 %
TLAC leverage ratio 8.6 % 8.0 %
(1) Capital, risk-weighted assets, total exposure, the capital
ratios, and the leverage ratio are calculated in accordance with the Basel III
rules, as set out in OSFI's Capital Adequacy Requirements Guideline and
Leverage Requirements Guideline.
(2) Available TLAC, the TLAC ratio, and the TLAC leverage ratio
are calculated in accordance with OSFI's Total Loss Absorbing Capacity
Guideline.
Dividends
On December 3, 2024, the Board of Directors declared regular dividends on the
various series of first preferred shares and a dividend of $1.14 per common
share, up 4 cents or 4%, payable on February 1, 2025 to shareholders of record
on December 30, 2024.
Consolidated Balance Sheets
(unaudited) (millions of Canadian dollars)
As at October 31, 2024 As at October 31, 2023((1))
Assets
Cash and deposits with financial institutions 31,549 35,234
Securities
At fair value through profit or loss 115,935 99,994
At fair value through other comprehensive income 14,622 9,242
At amortized cost 14,608 12,582
145,165 121,818
Securities purchased under reverse repurchase agreements
and securities borrowed 16,265 11,260
Loans
Residential mortgage 95,009 86,847
Personal 46,883 46,358
Credit card 2,761 2,603
Business and government 99,720 84,192
244,373 220,000
Customers' liability under acceptances − 6,627
Allowances for credit losses (1,341) (1,184)
243,032 225,443
Other
Derivative financial instruments 12,309 17,516
Investments in associates and joint ventures 40 49
Premises and equipment 1,868 1,592
Goodwill 1,522 1,521
Intangible assets 1,233 1,256
Other assets 9,243 7,788
26,215 29,722
462,226 423,477
Liabilities and equity
Deposits 333,545 288,173
Other
Acceptances − 6,627
Obligations related to securities sold short 10,873 13,660
Obligations related to securities sold under repurchase agreements
and securities loaned 38,177 38,347
Derivative financial instruments 15,760 19,888
Liabilities related to transferred receivables 28,377 25,034
Other liabilities 8,686 7,416
101,873 110,972
Subordinated debt 1,258 748
Equity
Equity attributable to the Bank's shareholders and holders of
other equity instruments
Preferred shares and other equity instruments 3,150 3,150
Common shares 3,463 3,294
Contributed surplus 85 68
Retained earnings 18,633 16,650
Accumulated other comprehensive income 219 420
25,550 23,582
Non-controlling interests − 2
25,550 23,584
462,226 423,477
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
Consolidated Statements of Income
(unaudited) (millions of Canadian dollars)
Quarter ended October 31 Year ended October 31
2024 ( ) 2023((1)) 2024 2023((1))
Interest income
Loans 4,039 3,481 15,581 12,676
Securities at fair value through profit or loss 475 500 1,834 1,681
Securities at fair value through other comprehensive income 162 73 541 279
Securities at amortized cost 130 115 468 473
Deposits with financial institutions 352 433 1,547 1,668
5,158 4,602 19,971 16,777
Interest expense
Deposits 3,371 2,957 13,198 10,015
Liabilities related to transferred receivables 206 168 752 633
Subordinated debt 18 11 62 47
Other 779 731 3,020 2,496
4,374 3,867 17,032 13,191
Net interest income((2)) 784 735 2,939 3,586
Non-interest income
Underwriting and advisory fees 91 101 419 378
Securities brokerage commissions 48 42 194 174
Mutual fund revenues 169 146 638 578
Investment management and trust service fees 302 262 1,141 1,005
Credit fees 76 157 460 574
Card revenues 55 49 212 202
Deposit and payment service charges 75 77 294 300
Trading revenues (losses) 1,115 864 4,299 2,677
Gains (losses) on non-trading securities, net 102 21 318 70
Insurance revenues, net 20 17 73 59
Foreign exchange revenues, other than trading 60 53 225 183
Share in the net income of associates and joint ventures 2 2 8 11
Other 45 34 180 261
2,160 1,825 8,461 6,472
Total revenues 2,944 2,560 11,400 10,058
Non-interest expenses
Compensation and employee benefits 954 887 3,725 3,425
Occupancy 96 101 366 350
Technology 274 329 1,046 1,078
Communications 15 15 56 58
Professional fees 102 69 316 256
Other 151 196 545 586
1,592 1,597 6,054 5,753
Income before provisions for credit losses and income taxes 1,352 963 5,346 4,305
Provisions for credit losses 162 115 569 397
Income before income taxes 1,190 848 4,777 3,908
Income taxes 235 97 961 619
Net income 955 751 3,816 3,289
Net income attributable to
Preferred shareholders and holders of other equity instruments 40 35 154 141
Common shareholders 915 716 3,663 3,150
Bank shareholders and holders of other equity instruments 955 751 3,817 3,291
Non-controlling interests − − (1) (2)
955 751 3,816 3,289
Earnings per share (dollars)
Basic 2.69 2.11 10.78 9.33
Diluted 2.66 2.09 10.68 9.24
Dividends per common share (dollars) 1.10 1.02 4.32 3.98
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
(2) Net interest income includes dividend income. For additional
information, see Note 1 to the audited annual Consolidated Financial
Statements for the year ended October 31, 2024.
Consolidated Statements of Comprehensive Income
(unaudited) (millions of Canadian dollars)
Quarter ended October 31 Year ended October 31
2024 2023((1)) 2024 2023((1))
Net income 955 751 3,816 3,289
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 89 363 80 155
in foreign operations
Impact of hedging net foreign currency translation gains (losses) (37) (111) (67) (52)
52 252 13 103
Net change in debt securities at fair value through other comprehensive income
Net unrealized gains (losses) on debt securities at fair value through other 12 (52) 68 (87)
comprehensive income
Net (gains) losses on debt securities at fair value through other
comprehensive
income reclassified to net income (35) 25 (59) 85
Change in allowances for credit losses on debt securities at fair value
through
other comprehensive income reclassified to net income − − − 1
(23) (27) 9 (1)
Net change in cash flow hedges
Net gains (losses) on derivative financial instruments designated as cash flow (44) (35) (100) 90
hedges
Net (gains) losses on designated derivative financial instruments reclassified (32) (7) (123) 25
to net income
(76) (42) (223) 115
Share in the other comprehensive income of associates and joint ventures − − − 1
Items that will not be subsequently reclassified to net income
Remeasurements of pension plans and other post-employment benefit plans (68) (44) 83 (140)
Net gains (losses) on equity securities designated at fair value through 5 40 43 45
other comprehensive income
Net fair value change attributable to the credit risk on financial liabilities
designated at fair value through profit or loss (80) 72 (350) (163)
(143) 68 (224) (258)
Total other comprehensive income, net of income taxes (190) 251 (425) (40)
Comprehensive income 765 1,002 3,391 3,249
Comprehensive income attributable to
Bank shareholders and holders of other equity instruments 765 1,002 3,392 3,251
Non-controlling interests − − (1) (2)
765 1,002 3,391 3,249
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
Consolidated Statements of Comprehensive Income (cont.)
(unaudited) (millions of Canadian dollars)
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
2024 2023 2024 2023
Items that may be subsequently reclassified to net income
Net foreign currency translation adjustments
Net unrealized foreign currency translation gains (losses) on investments (1) (10) − (3)
in foreign operations
Impact of hedging net foreign currency translation gains (losses) (10) (27) (23) (14)
(11) (37) (23) (17)
Net change in debt securities at fair value through other comprehensive income
Net unrealized gains (losses) on debt securities at fair value through other 6 (19) 27 (33)
comprehensive income
Net (gains) losses on debt securities at fair value through other
comprehensive income
reclassified to net income (15) 10 (24) 33
Change in allowances for credit losses on debt securities at fair value
through
other comprehensive income reclassified to net income − − − −
(9) (9) 3 −
Net change in cash flow hedges
Net gains (losses) on derivative financial instruments designated as cash flow (17) (13) (39) 35
hedges
Net (gains) losses on designated derivative financial instruments reclassified (12) (4) (47) 9
to net income
(29) (17) (86) 44
Share in the other comprehensive income of associates and joint ventures − − − −
Items that will not be subsequently reclassified to net income
Remeasurements of pension plans and other post-employment benefit plans (26) (16) 32 (43)
Net gains (losses) on equity securities designated at fair value through 1 6 16 8
other comprehensive income
Net fair value change attributable to the credit risk on financial liabilities
designated at fair value through profit or loss (31) 28 (135) (63)
(56) 18 (87) (98)
(105) (45) (193) (71)
Consolidated Statements of Changes in Equity
(unaudited) (millions of Canadian dollars)
Year ended October 31
2024 2023((1))
Preferred shares and other equity instruments at beginning and at end 3,150 3,150
Common shares at beginning 3,294 3,196
Issuances of common shares pursuant to the Stock Option Plan 146 95
Impact of shares purchased or sold for trading 23 3
Common shares at end 3,463 3,294
Contributed surplus at beginning 68 56
Stock option expense 17 18
Stock options exercised (16) (10)
Other 16 4
Contributed surplus at end 85 68
Retained earnings at beginning 16,650 15,140
Impact of IFRS 17 adoption on November 1, 2022 − (48)
Net income attributable to the Bank's shareholders and holders of other equity 3,817 3,291
instruments
Dividends on preferred shares and distributions on other equity instruments (175) (163)
Dividends on common shares (1,468) (1,344)
Remeasurements of pension plans and other post-employment benefit plans 83 (140)
Net gains (losses) on equity securities designated at fair value through other 43 45
comprehensive income
Net fair value change attributable to the credit risk on financial liabilities
designated at fair value through profit or loss (350) (163)
Impact of a financial liability resulting from put options written to 18 10
non-controlling interests
Other 15 22
Retained earnings at end 18,633 16,650
Accumulated other comprehensive income at beginning 420 202
Net foreign currency translation adjustments 13 103
Net change in unrealized gains (losses) on debt securities at fair value 9 (1)
through other comprehensive income
Net change in gains (losses) on instruments designated as cash flow hedges (223) 115
Share in the other comprehensive income of associates and joint ventures − 1
Accumulated other comprehensive income at end 219 420
Equity attributable to the Bank's shareholders and holders of other equity 25,550 23,582
instruments
Non-controlling interests at beginning 2 2
Net income attributable to non-controlling interests (1) (2)
Other (1) 2
Non-controlling interests at end − 2
Equity 25,550 23,584
Accumulated Other Comprehensive Income
As at October 31, As at October 31, 2023
2024
Accumulated other comprehensive income
Net foreign currency translation adjustments 320 307
Net unrealized gains (losses) on debt securities at fair value through other (26) (35)
comprehensive income
Net gains (losses) on instruments designated as cash flow hedges (77) 146
Share in the other comprehensive income of associates and joint ventures 2 2
219 420
(1) Certain amounts have been adjusted to reflect accounting
policy changes arising from the adoption of IFRS 17.
Segment Disclosures
(unaudited) (millions of Canadian dollars)
The Bank carries out its activities in four business segments, which are
defined below. For presentation purposes, other activities are grouped in the
Other heading. Each reportable segment is distinguished by services offered,
type of clientele, and marketing strategy. The presentation of segment
disclosures is consistent with the presentation adopted by the Bank for the
fiscal year beginning November 1, 2023. This presentation reflects the
retrospective application of accounting policy changes arising from the
adoption of IFRS 17 Accounting Standard. The figures for the 2023 quarters
have been adjusted to reflect these accounting policy changes.
Personal and Commercial
The Personal and Commercial segment encompasses the banking, financing, and
investing services offered to individuals, advisors, 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 corporate banking and investment
banking and financial solutions for large and mid-size corporations, public
sector organizations, and institutional investors.
U.S. Specialty Finance and International (USSF&I)
The USSF&I segment encompasses the specialty finance expertise provided by
the Credigy subsidiary; the activities of the ABA Bank subsidiary, which
offers financial products and services to individuals and businesses in
Cambodia; and the activities of targeted investments in certain emerging
markets.
Other
This heading encompasses treasury activities; liquidity management; Bank
funding; asset/liability management activities; the activities of the Flinks
subsidiary, a fintech company specialized in financial data aggregation and
distribution; certain specified items; and the unallocated portion of
corporate units.
Results by Business Segment
Quarter ended October 31((1))
Personal and Wealth Financial USSF&I Other Total
Commercial Management Markets
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Net interest income((2)(3)) 934 857 213 188 (662) (440) 358 291 (59) (161) 784 735
Non-interest income((2)(4)) 256 261 514 450 1,390 1,175 20 22 (20) (83) 2,160 1,825
Total revenues 1,190 1,118 727 638 728 735 378 313 (79) (244) 2,944 2,560
Non-interest expenses((5)(6)(7)(8)) 644 680 427 423 301 319 116 106 104 69 1,592 1,597
Income before provisions for credit 546 438 300 215 427 416 262 207 (183) (313) 1,352 963
losses and income taxes
Provisions for credit losses 96 65 (1) 1 4 24 63 23 − 2 162 115
Income before income taxes (recovery) 450 373 301 214 423 392 199 184 (183) (315) 1,190 848
Income taxes (recovery)((2)) 123 102 82 59 117 108 42 39 (129) (211) 235 97
Net income 327 271 219 155 306 284 157 145 (54) (104) 955 751
Non-controlling interests − − − − − − − − − − − −
Net income attributable
to the Bank's shareholders and holders of other equity instruments 327 271 219 155 306 284 157 145 (54) (104) 955 751
Average assets((9)) 163,186 151,625 9,839 8,494 200,888 193,484 29,053 24,258 66,829 64,134 469,795 441,995
Total assets 165,204 154,627 10,411 8,666 193,012 178,784 30,202 25,308 63,397 56,092 462,226 423,477
Year ended October 31((1))
Personal and Wealth Financial USSF&I Other Total
Commercial Management Markets
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Net interest income((3)(10)) 3,587 3,321 833 778 (2,449) (1,054) 1,303 1,132 (335) (591) 2,939 3,586
Non-interest income((4)(10)(11)) 1,086 1,083 1,953 1,743 5,479 3,710 112 77 (169) (141) 8,461 6,472
Total revenues 4,673 4,404 2,786 2,521 3,030 2,656 1,415 1,209 (504) (732) 11,400 10,058
Non-interest expenses((5)(6)(7)(8)(12)) 2,486 2,462 1,633 1,534 1,246 1,161 439 402 250 194 6,054 5,753
Income before provisions for credit 2,187 1,942 1,153 987 1,784 1,495 976 807 (754) (926) 5,346 4,305
losses and income taxes
Provisions for credit losses 335 238 (1) 2 54 39 182 113 (1) 5 569 397
Income before income taxes (recovery) 1,852 1,704 1,154 985 1,730 1,456 794 694 (753) (931) 4,777 3,908
Income taxes (recovery)((10)(13)) 509 468 317 271 476 401 166 146 (507) (667) 961 619
Net income 1,343 1,236 837 714 1,254 1,055 628 548 (246) (264) 3,816 3,289
Non-controlling interests − − − − − − − − (1) (2) (1) (2)
Net income attributable
to the Bank's shareholders and 1,343 1,236 837 714 1,254 1,055 628 548 (245) (262) 3,817 3,291
holders of other equity instruments
Average assets((9)) 158,917 148,511 9,249 8,560 195,881 180,837 27,669 23,007 65,546 69,731 457,262 430,646
Total assets 165,204 154,627 10,411 8,666 193,012 178,784 30,202 25,308 63,397 56,092 462,226 423,477
(1) Certain comparative figures have been adjusted to reflect
accounting policy changes arising from the adoption of IFRS 17.
(2) The Net interest income, Non-interest income, and Income taxes
(recovery) items of the business segments are presented on a taxable
equivalent basis. Taxable equivalent basis is a calculation method that
consists in grossing up certain revenues taxed at lower rates by the income
tax to a level that would make it comparable to revenues from taxable sources
in Canada. During the quarter ended October 31, 2024, for the business
segments as a whole, Net interest income was grossed up by $13 million ($90
million in 2023), Non-interest income was grossed up by $81 million
($75 million in 2023), and an equivalent amount was recognized in Income
taxes (recovery). The effect of these adjustments is reversed under the Other
heading. In light of the enacted legislation with respect to Canadian
dividends, the Bank did not recognize an income tax deduction, nor did it use
the taxable equivalent basis method to adjust revenues related to affected
dividends received after January 1, 2024.
(3) During the quarter ended October 31, 2024, the Bank recorded
an amount of $9 million in the Other heading to reflect the amortization of
the issuance costs of the subscription receipts issued as part of the
agreement to acquire CWB. For the year ended October 31, 2024, this amount was
$14 million.
(4) During the quarter ended October 31, 2024, the Bank recorded
a gain of $54 million upon the remeasurement at fair value of the interest
already held in CWB. For the year ended October 31, 2024, this gain amounted
to $174 million. Also, during the quarter ended October 31, 2024, the Bank
recorded a mark-to-market gain of $4 million on interest rate swaps used to
manage the fair value changes of CWB's assets and liabilities that result in
volatility of goodwill and capital on closing of the transaction. For the year
ended October 31, 2024, this management of fair value resulted in a loss of $3
million. All of these items were recorded in the Other heading.
(5) During the quarter ended October 31, 2024, the Bank
recorded, in the Other heading, acquisition and integration charges of
$11 million related to the CWB transaction. For the year ended October 31,
2024, these charges were $18 million.
(6) During the quarter and year ended October 31, 2023, the Bank
had recorded $75 million in intangible asset impairment losses, on technology
development, allocated to the various business segments: $59 million in the
Personal and Commercial segment, $8 million in the Wealth Management segment,
$7 million in the Financial Markets segment and $1 million for the Other
heading. Also, in the Other heading, it recorded $11 million in impairment
losses on premises and equipment related to right-of-use assets.
(7) During the quarter and year ended October 31, 2023, the Bank
had recorded $35 million in litigation expenses to resolve litigations and
other disputes arising from various ongoing or potential claims against the
Bank, in the Wealth Management segment.
(8) During the quarter and year ended October 31, 2023, the Bank
had recorded $15 million in charges for contract termination penalties ($9
million in the Personal and Commercial segment) and for provisions for onerous
contracts ($6 million in the Other heading).
(9) Represents the average of the daily balances for the period,
which is also the basis on which segment assets are reported in the business
segments.
(10) During the year ended October 31, 2024, for all business segments,
Net interest income was grossed up by $79 million ($332 million in 2023),
Non-interest income was grossed up by $306 million ($247 million in 2023),
and an equivalent amount was recognized in Income taxes (recovery). The effect
of these adjustments is reversed under the Other heading.
(11) During the year ended October 31, 2023, the Bank had concluded
that it had lost significant influence over TMX Group Limited (TMX) and
therefore ceased using the equity method to account for this investment. The
Bank had designated its investment in TMX as being a financial asset measured
at fair value through other comprehensive income in an amount of
$191 million. Upon the measurement at fair value, a gain of $91 million had
been recorded.
(12) During the year ended October 31, 2023, the Bank had recorded in
the Other heading an expense of $25 million related to the retroactive impact
of the changes to the Excise Tax Act, indicating that payment card clearing
services rendered by a payment card network operator are subject to the goods
and services tax (GST) and the harmonized sales tax (HST).
(13) During the year ended October 31, 2023, the Bank had recorded in
the Other heading a $32 million tax expense with respect to the Canada
Recovery Dividend, i.e., a one-time, 15% tax on the fiscal 2021 and 2020
average taxable income above $1 billion as well as an $8 million tax recovery
related to a 1.5% increase in the statutory tax rate, which included the
impact related to current and deferred taxes for fiscal 2022.
Caution Regarding Forward Looking Statements
Certain statements in this document are forward-looking statements. These
statements are made in accordance with applicable securities legislation in
Canada and the United States. The forward-looking statements in this document
may include, but are not limited to, statements in the messages from
management, as well as other statements about the economy, market changes, the
Bank's objectives, outlook, and priorities for fiscal 2025 and beyond, the
strategies or actions that the Bank will take to achieve them, expectations
for the Bank's financial condition and operations, the regulatory environment
in which it operates, its environmental, social, and governance targets and
commitments, the anticipated acquisition of Canadian Western Bank (CWB) and
the impacts and benefits of this transaction, and certain risks to which the
Bank is exposed. The Bank may also make forward-looking statements in other
documents and regulatory filings, as well as orally. These forward-looking
statements are typically identified by verbs or words such as "outlook",
"believe", "foresee", "forecast", "anticipate", "estimate", "project",
"expect", "intend" and "plan", the use of future or conditional forms, notably
verbs such as "will", "may", "should", "could" or "would", as well as similar
terms and expressions.
These forward-looking statements are intended to assist the security holders
of the Bank in understanding the Bank's financial position and results of
operations as at the dates indicated and for the periods then ended, as well
as the Bank's vision, strategic objectives, and performance targets, and may
not be appropriate for other purposes. These forward-looking statements are
based on current expectations, estimates, assumptions and intentions that the
Bank deems reasonable as at the date thereof and are subject to inherent
uncertainty and risks, many of which are beyond the Bank's control. There is a
strong possibility that the Bank's express or implied predictions, forecasts,
projections, expectations, or conclusions will not prove to be accurate, that
its assumptions will not be confirmed, and that its vision, strategic
objectives, and performance targets will not be achieved. The Bank cautions
investors that these forward-looking statements are not guarantees of future
performance and that actual events or results may differ materially from these
statements due to a number of factors. Therefore, the Bank recommends that
readers not place undue reliance on these forward-looking statements, as a
number of factors could cause actual results to differ materially from the
expectations, estimates, or intentions expressed in these forward-looking
statements. Investors and others who rely on the Bank's forward-looking
statements should carefully consider the factors listed below as well as other
uncertainties and potential events 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.
Assumptions about the performance of the Canadian and U.S. economies in 2025
and how that performance will affect the Bank's business are among the factors
considered in setting the Bank's strategic priorities and objectives,
including allowances for credit losses. These assumptions appear in the
2024 Annual Report in the Economic Review and Outlook section and, for each
business segment, in the Economic and Market Review sections, and may be
updated in the quarterly reports to shareholders filed thereafter.
The forward-looking statements made in this document are based on a number of
assumptions and their future outcome is subject to a variety of risk factors,
many of which are beyond the Bank's control and the impacts of which are
difficult to predict. These risk factors include, among others, risks and
uncertainties related to the expected regulatory processes and outcomes in
connection with the proposed acquisition of CWB (the proposed transaction),
such as the possibility that the proposed transaction may fail to materialize
or may not materialize within the time periods anticipated, the failure to
obtain the required approvals in a timely manner or at all, the Bank's ability
to successfully integrate CWB upon completion of the proposed transaction, the
potential failure to realize the anticipated synergies and benefits from the
proposed transaction, and potential undisclosed costs or liability associated
with the proposed transaction; the general economic environment and business
and financial market conditions in Canada, the United States, and the other
countries where the Bank operates; exchange rate and interest rate
fluctuations; inflation; global supply chain disruptions; higher funding costs
and greater market volatility; changes to fiscal, monetary, and other public
policies; regulatory oversight and changes to regulations that affect the
Bank's business; geopolitical and sociopolitical uncertainty; climate change,
including physical risks and risks related to the transition to a low-carbon
economy; the Bank's ability to meet stakeholder expectations on environmental
and social issues, the need for active and continued stakeholder engagement;
the availability of comprehensive and high-quality information from customers
and other third parties, including greenhouse gas emissions; the ability of
the Bank to develop indicators to effectively monitor our progress; the
development and deployment of new technologies and sustainable products; the
ability of the Bank to identify climate-related opportunities as well as to
assess and manage climate-related risks; significant changes in consumer
behaviour; the housing situation, real estate market, and household
indebtedness in Canada; the Bank's ability to achieve its key short-term
priorities and long-term strategies; the timely development and launch of new
products and services; the ability of the Bank to recruit and retain key
personnel; technological innovation, including open banking and the use of
artificial intelligence; heightened competition from established companies and
from competitors offering non-traditional services; model risk; changes in the
performance and creditworthiness of the Bank's clients and counterparties; the
Bank's exposure to significant regulatory issues or litigation; changes made
to the accounting policies used by the Bank to report its financial position,
including the uncertainty related to assumptions and significant accounting
estimates; changes to tax legislation in the countries where the Bank
operates; changes to capital and liquidity guidelines as well as to the
instructions related to the presentation and interpretation thereof; changes
to the credit ratings assigned to the Bank by financial and extra-financial
rating agencies; potential disruptions to key suppliers of goods and services
to the Bank; third-party risk, including failure by third parties to fulfil
their obligations to the Bank; the potential impacts of disruptions to the
Bank's information technology systems due to cyberattacks and theft or
disclosure of data, including personal information and identity theft; the
risk of fraudulent activity; and possible impacts of major events on the
economy, market conditions, or the Bank's outlook, including international
conflicts, natural disasters, public health crises, and the measures taken in
response to these events; and the ability of the Bank to anticipate and
successfully manage risks arising from all of the foregoing factors.
The foregoing list of risk factors is not exhaustive, and the forward-looking
statements made in this document are also subject to credit risk, market risk,
liquidity and funding risk, operational risk, regulatory compliance risk,
reputation risk, strategic risk, and social and environmental risk as well as
certain emerging risks or risks deemed significant. Additional information
about these factors is provided in the Risk Management section of the 2024
Annual Report and may be updated in the quarterly reports to shareholders
filed thereafter.
Information for Shareholders and Investors
Disclosure of Fourth Quarter 2024 Results
Conference Call
· A conference call for analysts and institutional
investors will be held on Wednesday, December 4, 2024 at 11:00 a.m. ET.
· Access by telephone in listen-only mode: 1-800-806-5484
or 416-340-2217. The access code is 8438144#.
· A recording of the conference call can be heard until
February 28, 2025 by dialing 1-800-408-3053 or 905-694-9451. The access code
is 8808810#.
Webcast
· The conference call will be webcast live at
nbc.ca/investorrelations
(https://www.nbc.ca/en/about-us/investors/investor-relations.html) .
· 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
(https://www.nbc.ca/en/about-us/investors/investor-relations.html) .
· The Press Release, the Supplementary Financial
Information, the Supplementary Regulatory Capital and Pillar 3 Disclosure, and
a slide presentation will be available on the Investor Relations page of
National Bank's website on the morning of the day of the conference call.
· The 2024 Annual Report (which includes the audited annual
Consolidated 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, 2025 will be available on February 26, 2025 (subject to approval
by the Bank's Board of Directors).
For more information
· Marianne Ratté, Vice-President - Investor Relations,
1-866-517-5455
· Debby Cordeiro, Senior Vice-President - Communication,
Public Affairs and ESG, 514-412-0538
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. END FR TIBJTMTIMBAIRecent news on Canadian Western Bank
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