National Bank reports its results for the fourth quarter and year-end of 2015 and raises its quarterly dividend by 4% to 54 cents per share


The financial information reported herein is based on the unaudited interim condensed consolidated financial statements for the fourth quarter of fiscal 2015 and on the audited annual consolidated financial statements for the year ended October 31, 2015 and has been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). All amounts are presented in Canadian dollars.

MONTREAL, Dec. 2, 2015 /CNW Telbec/ - For the fourth quarter of 2015, National Bank is reporting net income of $347 million, up 5% from $330 million in the same quarter of 2014. Diluted earnings per share stood at $0.95 in the fourth quarter of 2015, up 4% from $0.91 in the same quarter of 2014.

Excluding specified items, fourth-quarter net income totalled $417 million, up 2% from $407 million in the same quarter of 2014, and fourth-quarter diluted earnings per share stood at $1.16, a 2% increase from $1.14 in the same quarter of 2014. The specified items are described on page 2.

For fiscal 2015, the Bank's net income totalled $1,619 million, an increase of 5% from $1,538 million in fiscal 2014. The fiscal 2015 diluted earnings per share stood at $4.51 versus $4.32 in fiscal 2014. Excluding specified items, the 2015 net income was $1,682 million, up 6% from $1,593 million in 2014, and the 2015 diluted earnings per share stood at $4.70, up 5% from $4.48 in 2014.

"In 2015, National Bank achieved strong financial results in a context of a slowing Canadian economy," said Louis Vachon, President and Chief Executive Officer. "Faced with significant changes in the financial services industry, the Bank continues to proactively deploy many initiatives that will ensure its long-term success. We also plan on making continued investments to our technology platforms in order to deliver even better services to customers," added Mr. Vachon.

 

 

 







Highlights











(millions of Canadian dollars) 

Quarter ended October 31


Year ended October 31




2015




2014



% Change



2015




2014



% Change






















Net income 


347




330



5



1,619




1,538



5

Diluted earnings per share (dollars) 

$

0.95



$

0.91



4


$

4.51



$

4.32



4

Return on common shareholders' equity


13.6

%



14.3

%





16.9

%



17.9

%



Dividend payout ratio 


45

%



43

%





45

%



43

%























Excluding specified items(1)




















Net income 


417




407



2



1,682




1,593



6

Diluted earnings per share (dollars) 

$

1.16



$

1.14



2


$

4.70



$

4.48



5

Return on common shareholders' equity  


16.6

%



17.9

%





17.6

%



18.5

%



Dividend payout ratio 


43

%



42

%





43

%



42

%



































As at October 31,

 2015



As at October 31,

 2014



CET1 capital ratio under Basel III 












9.9

%



9.2

%



Leverage ratio under Basel III 












3.7

%



n.a.






n.a.

Not applicable

(1)

See the Financial Reporting Method section on page 2.

 

FINANCIAL REPORTING METHOD

The Bank's unaudited interim condensed consolidated financial statements have been prepared in accordance with IFRS, as issued by the IASB and set out in the CPA Canada Handbook. The Bank also uses non-IFRS financial measures when assessing its results and measuring Bank-wide performance. Presenting such information 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 assess results without the specified items if they consider such items to not be reflective of ordinary operations. Securities regulators require companies to caution readers that net income and other measures adjusted using non-IFRS criteria are not standard under IFRS and cannot be easily compared with similar measures used by other companies.

 

Financial Information








(millions of Canadian dollars, except per share
amounts) 

Quarter ended October 31



Year ended October 31



2015




2014


% Change



2015




2014


% Change



















Net income excluding specified items  



















Personal and Commercial  


187




174


7



725




683


6


Wealth Management  


76




80


(5)



327




310


5


Financial Markets  


162




151


7



718




611


18


Other  


(8)




2





(88)




(11)



Net income excluding specified items  


417




407


2



1,682




1,593


6


Items related to holding restructured notes(1)


(2)




(3)





50




54




Acquisition-related items(2)


(6)




(10)





(27)




(45)




Restructuring charge(3)


(62)








(62)







Gain on disposal of Fiera Capital shares(4)









25







Share of current tax asset write-down of an associate(5)









(16)







Impairment losses on intangible assets(6)





(45)





(33)




(45)




Funding valuation adjustment(7)





(9)








(9)




Litigation provisions(8)





(10)








(10)



Net income  


347




330


5



1,619




1,538


5



















Diluted earnings per share excluding specified items 

$

1.16



$

1.14


2


$

4.70



$

4.48


5


Items related to holding restructured notes(1)


(0.01)




(0.01)





0.15




0.16




Acquisition-related items(2)


(0.01)




(0.03)





(0.08)




(0.13)




Restructuring charge(3)


(0.19)








(0.19)







Gain on disposal of Fiera Capital shares(4)









0.08







Share of current tax asset write-down of an associate(5)









(0.05)






Impairment losses on intangible assets(6)





(0.14)





(0.10)




(0.14)




Funding valuation adjustment(7)





(0.02)








(0.02)




Litigation provisions(8)





(0.03)








(0.03)



Diluted earnings per share 

$

0.95



$

0.91


4


$

4.51



$

4.32


4


Return on common shareholders' equity 



















Including specified items  


13.6

%



14.3

%




16.9

%



17.9

%



Excluding specified items  


16.6

%



17.9

%




17.6

%



18.5

%




(1)

During the quarter ended October 31, 2015, the Bank recorded $6 million in financing costs ($5 million net of income taxes) related to holding restructured notes (2014: $4 million, $3 million net of income taxes). In addition, the Bank recorded $4 million in revenues ($3 million net of income taxes) primarily to reflect a rise in the fair value of those notes (2014: nil). During the year ended October 31, 2015, the Bank recorded $20 million in financing costs ($16 million net of incomes taxes) related to holding restructured notes (2014: $18 million, $13 million net of income taxes), $53 million in revenues ($39 million net of income taxes) to reflect capital repayments and a rise in the fair value of these notes (2014: $92 million, $67 million net of income taxes) and a gain of $37 million ($27 million net of income taxes) upon the disposal of the restructured notes of the MAV III conduits (2014: nil).

(2)

During the quarter ended October 31, 2015, the Bank recorded $7 million in charges ($6 million net of income taxes) related to the Wealth Management acquisitions (2014: $14 million, $10 million net of income taxes). These charges consisted mostly of retention bonuses and also included the Bank's share in the integration costs incurred by Fiera Capital Corporation (Fiera Capital) as well as the Bank's share in the charges related to its interest in TMX. For the year ended October 31, 2015, these charges amounted to $34 million ($27 million net of income taxes) compared to $60 million ($45 million net of income taxes) for fiscal 2014.

(3)

During the quarter ended October 31, 2015, the Bank recorded an $86 million restructuring charge ($62 million, net of income taxes). This consisted of severance pay charges, professional fees, onerous contracts, and write-offs of premises and equipment (2014: nil).

(4)

During the year ended October 31, 2015, a gain, net of underwriting fees, of $29 million ($25 million net of income taxes) was recorded upon a disposal of shares held in Fiera Capital through one of the Bank's subsidiaries. On the transaction date, the Bank's ownership percentage in Fiera Capital was reduced to 22%.

(5)

During the year ended October 31, 2015, a loss of $18 million ($16 million net of income taxes) was recorded following a write-down of an associate's current tax asset.

(6)

During the year ended October 31, 2015, intangible asset impairment losses on internal technology developments of $46 million ($33 million net of income taxes) were recorded (2014: $62 million, $45 million net of income taxes).

(7)

During the quarter ended October 31, 2014, the Bank had recorded $13 million in charges ($9 million net of income taxes) to reflect the funding valuation adjustment (FVA).

(8)

During the quarter ended October 31, 2014, $14 million ($10 million net of income taxes) in litigation provisions had been recorded.

 

HIGHLIGHTS












(millions of Canadian dollars, except
per share amounts ) 


Quarter ended October 31



Year ended October 31



2015




2014



% Change



2015




2014


% Change




















Operating results



















Total revenues 


1,405




1,364



3



5,746




5,464


5

Net income 


347




330



5



1,619




1,538


5

Net income attributable to the Bank's shareholders  


328




312



5



1,549




1,469


5

Return on common shareholders' equity


13.6

%



14.3

%





16.9

%



17.9

%


Earnings per share 




















Basic 

$

0.96



$

0.92



4


$

4.56



$

4.36


5


Diluted 


0.95




0.91



4



4.51




4.32


4




















Excluding specified items(1)



















Operating results 



















(taxable equivalent basis) (2)



















Total revenues 


1,473




1,440



2



5,982




5,638


6

Net income 


417




407



2



1,682




1,593


6

Net income attributable to the Bank's shareholders


398




389



2



1,612




1,524


6

Return on common shareholders' equity


16.6

%



17.9

%





17.6

%



18.5

%


Efficiency ratio


59.0

%



58.4

%





58.6

%



58.6

%


Earnings per share




















Basic

$

1.17



$

1.15



2


$

4.75



$

4.53


5


Diluted


1.16




1.14



2



4.70




4.48


5




















Common share information



















Dividends declared

$

0.52



$

0.48





$

2.04



$

1.88



Book value












28.26




25.76



Share price




















High


46.33




53.88






55.06




53.88




Low


40.75




48.16






40.75




41.60




Close


43.31




52.68






43.31




52.68



Number of common shares (thousands)


337,236




329,297






337,236




329,297



Market capitalization


14,606




17,347






14,606




17,347






















(millions of Canadian dollars)












As at October 31,
2015




As at October 31,
2014


% Change

Balance sheet and off-balance-sheet



















Total assets












216,090




205,429


5

Loans and acceptances












115,238




106,169


9

Impaired loans, net of total allowances












(112)




(118)




As a % of average loans and acceptances












(0.1)

%



(0.1)

%


Deposits












128,830




119,883


7

Equity attributable to common shareholders












9,531




8,484


12

Assets under administration and under management












358,139




345,332


4

Earnings coverage












10.49




8.98



Asset coverage












6.78




5.24



Regulatory ratios under Basel III



















Capital ratios(3)




















Common Equity Tier 1 (CET1)












9.9

%



9.2

%



Tier 1(4)












12.5

%



12.3

%



Total(4)(5)












14.0

%



15.1

%


Leverage ratio(3)












3.7

%



n.a.



Liquidity coverage ratio (LCR)












131

%



n.a



Other information



















Number of employees












19,764




19,955


(1)

Number of branches in Canada












452




452


Number of banking machines












930




935


(1)

 

n.a

Not applicable

(1)

See the Financial Reporting Method section on page 2.

(2)

For additional information, see the Segment Disclosures section on page 15.

(3)

The ratios are calculated using the "all-in" methodology.

(4)

The ratios as at October 31, 2015 include the redemption of the Series 20 preferred shares on November 15, 2015, and the ratios as at October 31, 2014 include the redemption of the Series 16 preferred shares on November 15, 2014.

(5)

The ratio as at October 31, 2015 includes the November 2, 2015 redemption of $500 million in notes.

 

FINANCIAL ANALYSIS

This press release should be read in conjunction with the 2015 Annual Report (which includes the audited annual consolidated financial statements and MD&A) available on the Bank's website at nbc.ca. Additional information about the Bank, including the Annual Information Form, can be obtained from the Bank's website at nbc.ca and SEDAR's website at sedar.com.

Consolidated Results

Total Revenues 
For the fourth quarter of 2015, the Bank's total revenues amounted to $1,405 million, up $41 million from the same quarter in 2014. Excluding the specified items related to holding restructured notes, the Wealth Management acquisition-related items, and the charges recorded in the fourth quarter of 2014 to reflect the funding valuation adjustment (FVA), total revenues on a taxable equivalent basis amounted to $1,473 million, up 2% from $1,440 million in the fourth quarter of 2014. Growth in net interest income came mainly from higher personal and commercial loan and deposit volumes, tempered by lower deposit margins, as well as from an increase in the net interest income of the Financial Markets segment. Fourth-quarter non-interest income was down $21 million, particularly due to lower underwriting and advisory fees and securities brokerage commissions as business migrated towards fee-based services, to weakness in the stock markets, and to losses on available-for-sale securities recorded during the fourth quarter of 2015. As for fourth-quarter mutual fund revenues, trust service revenues, credit fees, trading revenues and other revenues, they all posted year-over-year increases.

For fiscal 2015, total revenues amounted to $5,746 million, up 5% from $5,464 million in fiscal 2014. Excluding the specified items related to holding restructured notes, to the gain on the disposal of Fiera Capital shares, to the Wealth Management acquisitions, to the share of a current tax asset write-down of an associate in the Financial Markets segment, and to the charges recorded during the fourth quarter of 2014 to reflect the FVA, total revenues on a taxable equivalent basis amounted to $5,982 million for fiscal 2015, up 6% from $5,638 million in 2014. The increase came mainly from 7% growth in net interest income, driven by the same factors mentioned above for the quarter, and from higher trading activity revenues in the Financial Markets segment. Fiscal 2015 non-interest income rose by $151 million, mainly due to year-over-year increases in mutual fund revenues, trust service revenues, credit fees and trading revenues, partly offset by year-over-year decreases in brokerage commission revenues, card revenues and gains on available-for-sale securities.

Provisions for Credit Losses 
For the fourth quarter of 2015, the Bank recorded $61 million in provisions for credit losses, $4 million more than in the same quarter of 2014 as higher provisions for credit card losses were recorded. For fiscal 2015, the Bank recorded $228 million in provisions for credit losses, $20 million more than in fiscal 2014, as there were higher provisions for credit losses on commercial loans and consumer loans.

As at October 31, 2015, gross impaired loans totalled $457 million, a $29 million decrease since October 31, 2014 that came from the commercial loan portfolio following several write-offs at the beginning of the fiscal year. This decrease was partly offset by a greater number of impaired loans in both the personal loans portfolio and in the Wealth Management loans portfolio. Impaired loans represented 5.9% of the tangible capital adjusted for allowances as at October 31, 2015, down 1.2 percentage points from 7.1% as at October 31, 2014. As at October 31, 2015, allowances for credit losses exceeded gross impaired loans by $112 million compared to $118 million as at October 31, 2014.

Non-Interest Expenses
For the fourth quarter of 2015, non-interest expenses stood at $960 million, up $31 million or 3% from the same quarter of 2014. This increase was partly due to a fiscal 2015 restructuring charge of $86 million consisting of severance pay charges, professional fees, onerous contracts, and write-offs of premises and equipment, whereas in the fourth quarter of 2014, an intangible asset impairment loss of $62 million and litigation provisions of $14 million had been recognized. Excluding the specified items, fourth-quarter non-interest expenses stood at $869 million, a $28 million increase that was mainly attributable to increases in compensation and employee benefit expenses, professional fees, and the compensatory tax on salaries, partly offset by lower business development expenses.

For the year ended October 31, 2015, non-interest expenses stood at $3,665 million, a $242 million year-over-year increase that was partly due to the fiscal 2015 restructuring charge of $86 million. Excluding the specified items for 2015 and 2014, non-interest expenses increased by $202 million or 6% year over year given higher expenses for compensation and employee benefits, the compensatory tax on salaries, and technology investment.

Income Taxes 
For the fourth quarter of 2015, income taxes stood at $37 million compared to $48 million in the same quarter of 2014. The fourth-quarter effective income tax rate was 10% versus 13% in the same quarter of 2014.

For fiscal 2015, the effective tax rate was 13% versus 16% in fiscal 2014. The decrease came from higher tax-exempt dividend income and from a gain on the disposal of Fiera Capital shares recorded in 2015.

Results by Segment

The Bank carries out its activities in three business segments. For presentation purposes, other operating activities as well as Corporate Treasury activities are grouped in the Other heading. Each reportable 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


2015



2014



% Change


2015



2014



% Change


















Operating results excluding specified items(1)
















Net interest income

464



436



6


1,786



1,699



5

Non-interest income

253



254




1,030



990



4

Total revenues

717



690



4


2,816



2,689



5

Non-interest expenses

402



395



2


1,599



1,548



3

Contribution  

315



295



7


1,217



1,141



7

Provisions for credit losses

60



56



7


225



205



10

Income before income taxes

255



239



7


992



936



6

Income taxes  

68



65



5


267



253



6

Net income excluding specified items

187



174



7


725



683



6

Specified items after income taxes(1)

(35)







(35)






Net income

152



174



(13)


690



683



1

Net interest margin(2)

2.20

%


2.21

%




2.19

%


2.24

%



Average interest-bearing assets

83,487



78,227



7


81,399



75,963



7

Average assets  

89,056



83,658



6


86,945



81,516



7

Average loans and acceptances

88,644



83,248



6


86,552



81,129



7

Net impaired loans  

249



246



1


249



246



1

Net impaired loans as a % of average loans and acceptances

0.3

%


0.3

%




0.3

%


0.3

%



Average deposits

45,730



43,995



4


44,597



43,022



4

Efficiency ratio excluding specified items(1)

56.1

%


57.2

%




56.8

%


57.6

%




















(1)

See the Financial Reporting Method section on page 2.

(2)

Net interest margin is calculated by dividing net interest income by average interest-bearing assets.

 

In the Personal and Commercial segment, net income totalled $152 million for the quarter ended October 31, 2015, down 13% from $174 million in the fourth quarter of 2014. Excluding the restructuring charge recorded in the fourth quarter of 2015, net income totalled $187 million, up 7% year over year. The segment's total revenues increased by $27 million, mainly because of growth in net interest income, which rose $28 million in the fourth quarter of 2015. The higher net interest income came mainly from growth in personal and commercial loan and deposit volumes, tempered by a narrowing of the net interest margin, which was 2.20% in the fourth quarter of 2015 versus 2.21% in the same quarter of 2014, a decrease resulting mainly from deposit margins.

Personal Banking's total revenues increased by $20 million, mainly due to higher loan volume, particularly mortgage loans and home equity lines of credit. Growth in non-interest income came essentially from higher bank fees and internal commission revenues generated by the distribution of Wealth Management products. Commercial Banking's total revenues increased by $7 million, mainly due to growth in loan and deposit volumes and credit fees related to bankers' acceptances. The increase was partly offset by smaller deposit margins.

Fourth-quarter non-interest expenses in the Personal and Commercial segment were up $55 million or 14% from the fourth quarter of 2014, mainly because of a $48 million restructuring charge as well as compensation and operations support charges. Excluding the restructuring charge, which consisted of severance pay and professional fees, the 2015 non-interest expenses stood at $402 million, up 2% from the same quarter of 2014. At 56.1%, the efficiency ratio for the fourth quarter of 2015 improved by 1.1 percentage points when compared to the same quarter last year. The segment's fourth-quarter provisions for credit losses stood at $60 million, $4 million more than in the same quarter of 2014, as there were higher provisions for credit losses in Personal Banking.

For fiscal 2015, the Personal and Commercial segment recorded net income of $690 million, up $7 million or 1% from $683 million in fiscal 2014. Excluding the specified item related to the restructuring charge, the segment's net income totalled $725 million, up 6% year over year. The segment's total revenues posted 5% growth, with Personal Banking's total revenues rising $84 million, mainly due to higher volumes of mortgage loans and home equity lines of credit, and Commercial Banking's total revenues rising 4%, partly due to growth in loan and deposit volumes and increases in loan transaction revenues, revenues from acceptances, and revenues from foreign exchange transactions. In 2015, the segment's non-interest expenses stood at $1,647 million, a 6% year-over-year increase that was mainly due to the 2015 restructuring charge in addition to employee compensation, and operations support charges. Excluding the restructuring charge, the 2015 non-interest expenses stood at $1,599 million, up 3% year over year. The segment's contribution increased 7% year over year. In addition, at 56.8%, the 2015 efficiency ratio improved from 57.6% in 2014. The segment's 2015 provisions for credit losses were $20 million higher than in 2014. This change came from higher provisions for credit losses on commercial loans.

 

 

Wealth Management







(millions of Canadian dollars)  

 Quarter ended October 31


Year ended October 31


2015



2014



% Change


2015



2014



% Change

















Operating results excluding specified items(1)
















Net interest income   

81



79



3


323



312



4

Fee-based revenues  

195



178



10


760



664



14

Transaction-based and other revenues  

64



82



(22)


308



354



(13)

Total revenues   

340



339




1,391



1,330



5

Non-interest expenses   

237



230



3


947



909



4

Contribution  

103



109



(6)


444



421



5

Provisions for credit losses  

1



1




3



3



Income before income taxes   

102



108



(6)


441



418



6

Income taxes   

26



28



(7)


114



108



6

Net income excluding specified items   

76



80



(5)


327



310



5

Specified items after income taxes(1)

(7)



(10)





(1)



(38)




Net income   

69



70



(1)


326



272



20

Average assets   

10,623



10,146



5


10,329



10,400



(1)

Average loans and acceptances 

9,026



8,448



7


8,717



8,287



5

Net impaired loans 

5



2





5



2




Average deposits 

24,901



24,153



3


24,490



24,250



1

Efficiency ratio excluding specified items(1)

69.7

%


67.8

%




68.1

%


68.3

%



















(1)

See the Financial Reporting Method section on page 2.

 

In the Wealth Management segment, the 2015 fourth-quarter net income totalled $69 million, essentially unchanged from the same quarter of 2014. Excluding specified items, which include acquisition-related items and the restructuring charge, the segment's net income totalled $76 million in the fourth quarter of 2015, down 5% from $80 million in the same quarter of 2014. At $340 million, the segment's fourth-quarter total revenues, excluding specified items, remained essentially unchanged from the same quarter of 2014. Fee-based revenues were up $17 million year over year due to growth in assets under administration and assets under management, whereas brokerage commission revenues on share and bond transactions as well as revenues from new issuances decreased by $18 million.  

Excluding the specified items related to the acquisitions in recent years and the restructuring charge, non-interest expenses stood at $237 million in the fourth quarter of 2015, a 3% year-over-year increase that came mainly from higher operations support charges. The efficiency ratio stood at 69.7% for the fourth quarter of 2015 versus 67.8% in the same quarter of 2014.

For fiscal 2015, the Wealth Management segment's net income totalled $326 million, up 20% from $272 million in fiscal 2014. This growth came essentially from an increase in total revenues driven by higher fee-based revenues and by a $25 million gain, net of income taxes, realized in 2015 following a disposal of shares of Fiera Capital Corporation (Fiera Capital). Excluding specified items, which include—all net of income taxes—a $25 million gain on the disposal of Fiera Capital shares, a $2 million restructuring charge, and $24 million in charges related to the acquisitions of recent years (2014: $38 million), Wealth Management's fiscal 2015 net income totalled $327 million, up $17 million or 5% from $310 million in fiscal 2014. Excluding the gain on the disposal of Fiera Capital shares realized in 2015, the segment's 2015 total revenues amounted to $1,391 million, up 5% from $1,330 million in 2014. These revenue changes were driven by the same factors provided for the quarter. In addition, there was an increase in net interest income that was partly due to higher volumes and improved margins in banking activity among high-net-worth individuals. Excluding specified items, non-interest expenses stood at $947 million in 2015, up 4% from $909 million in 2014. This increase came mainly from the higher variable compensation and external management fees resulting from growth in the segment's business volume as well as from higher salaries, employee benefits and operations support charges. At 68.1%, the segment's 2015 efficiency ratio improved from 68.3% in 2014.

  

Financial Markets
































(taxable equivalent basis)(1)

















(millions of Canadian dollars)  


 Quarter ended October 31


Year ended October 31



2015



2014



% Change


2015



2014



% Change


















Operating results excluding specified items(2)

















Trading activity revenues 


















Equities 


97



77



26


450



333



35


Fixed-income 


63



34



85


237



218



9


Commodities and foreign exchange 


35



27



30


147



83



77



195



138



41


834



634



32

Financial market fees 


57



80



(29)


286



301



(5)

Gains (losses) on available-for-sale securities, net 


(10)



15





1



27




Banking services 


79



67



18


286



250



14

Other 


83



80



4


313



315



(1)

Total revenues 


404



380



6


1,720



1,527



13

Non-interest expenses 


184



173



6


739



690



7

Contribution 


220



207



6


981



837



17

Provisions for credit losses













Income before income taxes    


220



207



6


981



837



17

Income taxes  


58



56



4


263



226



16

Net income excluding specified items 


162



151



7


718



611



18

Specified items after income taxes(2)


(5)



(9)





(21)



(9)




Net income    


157



142



11


697



602



16

Non-controlling interests  


5



4





13



14




Net income attributable to the Bank's shareholders 


152



138



10


684



588



16

Average assets  


88,447



89,366



(1)


88,616



86,198



3

Average loans and acceptances (Corporate Banking only)  


10,985



8,481



30


10,057



8,070



25

Average deposits 


12,562



12,713



(1)


12,494



11,109



12

Efficiency ratio excluding specified items(2)


45.5

%


45.5

%




43.0

%


45.2

%





(1)

For additional information, see the Segment Disclosures section on page 15.

(2)

See the Financial Reporting Method section on page 2.

 

In the Financial Markets segment, net income totalled $157 million in the fourth quarter of 2015, up $15 million from $142 million in the same quarter of 2014. On a taxable equivalent basis, the segment's fourth-quarter total revenues amounted to $404 million versus $367 million in the same quarter last year, a 10% year-over-year increase that was mainly due to higher trading activity revenues. Excluding the specified item recorded during the fourth quarter of 2014 to reflect the FVA, the segment's total revenues on a taxable equivalent basis were $404 million compared to $380 million in the same quarter of 2014. The growth in trading activity revenues was driven by all revenue categories. In addition, banking service revenues grew by 18%, particularly due to more robust credit activity. Financial market fees were down 29% from the fourth quarter of 2014, when the segment had experienced greater market activity for new equity issuances. In addition, losses on available-for-sale securities were recorded in the fourth quarter of 2015, whereas gains had been recorded in the same quarter of 2014. The segment's other revenues grew 4% year over year, mainly due to an increase in the revenues from the Credigy Ltd. subsidiary.

At $191 million, non-interest expenses in the fourth quarter of 2015 were up $18 million year over year, particularly due to the 2015 restructuring charge of $7 million. Excluding that charge, non-interest expenses in the fourth quarter of 2015 stood at $184 million, a 6% year-over-year increase from $173 million, primarily resulting from charges related to the Credigy Ltd. subsidiary. At 45.5%, the efficiency ratio was unchanged from the same quarter of 2014. The segment's provisions for credit losses were nil in both the fourth quarters of 2015 and 2014. 

For fiscal 2015, the segment's net income totalled $697 million, up $95 million or 16% from fiscal 2014. Excluding specified items, including a share of an associate's current tax asset write-down and the restructuring charge recognized in fiscal 2015, as well as a charge recorded in 2014 to reflect the FVA, the segment's net income totalled $718 million for fiscal 2015, up 18% from fiscal 2014. On a taxable equivalent basis, the fiscal 2015 total revenues amounted to $1,720 million versus $1,527 million last year, a $193 million year-over-year increase that came mainly from higher trading activity revenues, which were driven primarily by equity securities and commodities and foreign exchange contracts, as well as from higher banking service revenues. Furthermore, financial market fees decreased 5% from fiscal 2014. Net gains on available-for-sale securities decreased year over year, as higher impairment losses were recorded in 2015. Lastly, the segment's other revenues remained relatively stable year over year. The gains on investments realized in fiscal 2015, which were higher than those of 2014, were partly offset by lower revenues from the Credigy Ltd. subsidiary. Despite sustained business growth at Credigy Ltd., its revenues were down as gains on a disposal of portfolios had been realized in fiscal 2014.

Excluding the restructuring charge recognized during fiscal 2015, non-interest expenses were up 7% from fiscal 2014, particularly due to higher variable compensation associated with revenue growth, and to higher expenses at the Credigy Ltd. subsidiary. Nevertheless, at 43.0%, the efficiency ratio improved from 45.2% in 2014. The segment did not record any provisions for credit losses for the years ended October 31, 2015 and 2014.

 

 

Other
















(taxable equivalent basis)(1)








(millions of Canadian dollars)  

Quarter ended October 31


Year ended October 31


2015


2014


2015


2014









Operating results excluding specified items(2)








Net interest income

(28)


(24)


(131)


(54)

Non-interest income

40


55


186


146

Total revenues

12


31


55


92

Non-interest expenses

46


43


220


156

Income before income taxes 

(34)


(12)


(165)


(64)

Income taxes

(26)


(14)


(77)


(53)

Net income excluding specified items

(8)


2


(88)


(11)

Specified items after income taxes(2)

(23)


(58)


(6)


(8)

Net income

(31)


(56)


(94)


(19)

Non-controlling interests

14


14


57


55

Net income attributable to the Bank's shareholders

(45)


(70)


(151)


(74)

Average assets

40,487


29,102


37,039


28,566



(1)

For additional information, see the Segment Disclosures section on page 15.

(2)

See the Financial Reporting Method section on page 2.

 

For the Other heading of segment results, there was a net loss of $31 million in the fourth quarter of 2015 compared to a net loss of $56 million in the same quarter of 2014. This change was primarily due to the fact that a higher amount of specified items had been recorded in the fourth quarter of 2014 than in the same quarter of 2015. Moreover, the net contribution from treasury activities during the fourth quarter of 2014 was higher than in the same period of 2015. Excluding specified items, there was a net loss of $8 million this fourth quarter versus net income of $2 million in the fourth quarter of 2014. In addition to the above-mentioned item, this decrease came mainly from higher compensation and employee benefit expenses, from the compensatory tax on salaries, and from business development expenses.

For the year ended October 31, 2015, there was a net loss of $94 million versus a net loss of $19 million in fiscal 2014, owing to the same factors provided for the quarter. Excluding specified items, there was a net loss of $88 million for the year ended October 31, 2015 versus a net loss of $11 million for fiscal 2014. This loss came from compensation and employee benefits, the compensatory tax on salaries and business development expenses. The fiscal 2015 specified items, net of income taxes, consisted of revenues related to holding restructured notes, net of the financing cost related to holding these notes and including a $50 million gain on the disposal of the restructured notes of the MAV III conduits (2014: $54 million), $33 million in impairment losses on intangible assets (2014: $45 million), a $20 million restructuring charge (2014: nil) and $3 million in charges related to the Bank's interest in TMX Group Ltd. (2014: $7 million). In addition, in fiscal 2014, the specified items net of income taxes had included $10 million in litigation provisions.

Consolidated Balance Sheet

Assets
As at October 31, 2015, the Bank had total assets of $216.1 billion compared to $205.4 billion as at October 31, 2014, a $10.7 billion or 5% increase. Cash and deposits with financial institutions decreased by $0.5 billion due to a decrease in liquidities at the New York branch. Securities increased by $3.0 billion since October 31, 2014, essentially due to securities issued or guaranteed by Canada and the provinces, whereas securities purchased under reverse repurchase agreements and securities borrowed decreased by $6.8 billion since October 31, 2014.

As at October 31, 2015, loans and acceptances increased by $9.0 billion or 8% since October 31, 2014 owing to growth in mortgage lending (including home equity lines of credit) and in loans to businesses. The following table provides a breakdown of the main loan and acceptance portfolios.

 

(millions of Canadian dollars)

As at October 31, 2015

As at October 31, 2014





Loans and acceptances




Consumer


29,864

28,007

Residential mortgage


43,520

39,300

Credit card receivable


2,069

1,989

Business and government


40,354

37,477



115,807

106,773

 

 

Consumer loans increased by 7%, primarily due to home equity lines of credit and personal loans. Rising 11%, residential mortgages also grew since October 31, 2014. Loans and acceptances to businesses increased by $2.9 billion or 8% since October 31, 2014, mainly because of corporate financing.

As at October 31, 2015, derivative financial instruments totalled $10.8 billion, an increase of $3.7 billion since October 31, 2014. This increase should be examined along with the derivative financial instruments presented in liabilities, which, at $7.8 billion, were up $2.1 billion, resulting in a net increase of $1.6 billion since October 31, 2014. Premises and equipment increased by $1.4 billion since October 31, 2014, following the acquisition of assets leased under operating leases.

Liabilities
As at October 31, 2015, the Bank had total liabilities of $204.7 billion compared to $194.9 billion as at October 31, 2014.

As at October 31, 2015, the Bank's total deposit liability was $128.8 billion versus $119.9 billion as at October 31, 2014, an increase of $8.9 billion or 7%. The following table provides a breakdown of total personal savings.

 

(millions of Canadian dollars)

As at October 31, 2015

As at October 31, 2014

Balance sheet



Deposits

45,981

44,963

Off-balance-sheet



Full-service brokerage

105,395

104,525

Mutual funds

25,783

18,938

Other

636

3,988


131,814

127,451

Total personal savings

177,795

172,414

 

 

At $46.0 billion as at October 31, 2015, personal deposits increased by $1.0 billion or 2% since October 31, 2014. Personal savings included in assets under administration and under management also increased, rising $4.3 billion or 3% due to excellent net inflows in the various distribution networks.

At $74.4 billion, business and government deposits rose $7.0 billion since October 31, 2014. This increase was partly due to covered bond issuances of US$750 million and of 1.0 billion euros during the year ended October 31, 2015. At $8.4 billion, deposits from deposit-taking institutions increased $0.8 billion since October 31, 2014, mainly due to deposits from other Canadian financial institutions. Other funding activities have also increased since October 31, 2014, essentially due to liabilities related to transferred receivables.

Equity
As at October 31, 2015, the Bank's equity amounted to $11.4 billion, up $0.9 billion since October 31, 2014. This increase was due to higher retained earnings and a $300 million common share issuance, partly offset by a $200 million redemption of preferred shares.

As at November 27, 2015, there were 336,895,011 common shares and 16,577,737 stock options outstanding. For additional information on share capital, see Note 18 to the audited annual consolidated financial statements for the year ended October 31, 2015.

Maple Financial Group Inc.

The Bank holds a 24.9% equity interest in Maple Financial Group Inc., a privately owned Canadian company that operates in Canada, Germany, the United Kingdom and the United States. The company is active in equity, fixed income and associated derivative financial instrument markets in these locations to provide structured financial solutions for the needs of its customers and market-neutral trading for its own account.

Maple Bank GmbH, an indirectly wholly owned subsidiary of the company, is subject to an investigation by German prosecutors regarding alleged tax irregularities for taxation years 2006 to 2010. Given the seriousness of the reported allegations and the actions that may be taken by German regulatory authorities, the Bank recognizes that there is uncertainty as to the valuation of its investment.

At this time, the Bank does not have sufficient information to be used in valuing its investment. As at October 31, 2015, the carrying value of the investment was $160 million ($138 million net of income taxes). Should this investment be fully written off, diluted earnings per share would be reduced by $0.41 and Common Equity Tier 1 regulatory capital under Basel III would be reduced by 13 basis points.

Events After the Consolidated Balance Sheet Date

Redemption of Subordinated Debt
On November 2, 2015, the Bank redeemed $500 million in notes maturing in November 2020 at a price equal to their nominal value plus accrued interest.

Redemption of Preferred Shares
On November 16, 2015, which was the first business day after the November 15, 2015 redemption date, the Bank completed the redemption of all the issued and outstanding Non-Cumulative Fixed-Rate Series 20 First Preferred Shares. Pursuant to the share conditions, the redemption price was $25.50 per share plus the periodic dividend declared and unpaid.  The Bank redeemed 6,900,000 Series 20 preferred shares for a total amount of $176 million, which reduced Preferred share capital by $173 million and Retained earnings by $3 million.

Capital Management

Regulatory Ratios
As at October 31, 2015, the Bank's CET1, Tier 1 and Total capital ratios were, respectively, 9.9%, 12.5% and 14.0%, i.e., above the regulatory requirements, compared to ratios of, respectively, 9.2%, 12.3% and 15.1% a year earlier. The increase in the CET1 capital ratio stems essentially from net income, net of dividends, and from a common share issuance for gross proceeds of $300 million, partly offset by an increase in risk-weighted assets. The increase in the Tier 1 capital ratio stems essentially from the above-mentioned factors and from the redemption of the Series 20 preferred shares on November 15, 2015. In addition, the decrease in the Total capital ratio stems mainly from the redemptions of medium-term notes for a total amount of $850 million. Lastly, as at October 31, 2015, the leverage ratio stood at 3.7%. This ratio was not in effect as at October 31, 2014.

 

Regulatory Capital and Ratios Under Basel III(1)







As at October 31

2015



2014








Capital







CET1

6,801



5,985



Tier 1(2)

8,626



7,983



Total(2)(3)

9,678



9,868








Risk-weighted assets







CET1 capital

68,835



64,818



Tier 1 capital

69,094



65,074



Total capital

69,316



65,459








Total exposure

234,957



n.a.








Capital ratios







CET1

9.9

%


9.2

%


Tier 1(2)

12.5

%


12.3

%


Total(2)(3)

14.0

%


15.1

%







Leverage ratio

3.7

%


n.a.




n.a.

Not applicable

(1)

Figures are presented on an "all-in" basis.

(2)

Figures as at October 31, 2015 include the redemption of the Series 20 preferred shares on November 15, 2015, and the figures as at October 31, 2014 include the redemption of the Series 16 preferred shares on November 15, 2014.

(3)

Figures as at October 31, 2015 include the November 2, 2015 redemption of $500 million in notes.

 

Dividends
On December 1, 2015, the Board of Directors declared regular dividends on the various series of first preferred shares and a dividend of 54 cents per common share, up 2 cents or 4%, payable on February 1, 2016 to shareholders of record on December 21, 2015.

 

 


CONSOLIDATED BALANCE SHEETS

(unaudited) (millions of Canadian dollars)




As at October 31, 2015

As at October 31, 2014

Assets



Cash and deposits with financial institutions

7,567

8,086

Securities



At fair value through profit or loss

41,997

43,200

Available-for-sale

14,043

9,753


56,040

52,953

Securities purchased under reverse repurchase agreements and securities borrowed

17,702

24,525

Loans



Residential mortgage

43,520

39,300

Personal and credit card

31,933

29,996

Business and government

30,954

28,551


106,407

97,847

Customers' liability under acceptances

9,400

8,926

Allowances for credit losses

(569)

(604)


115,238

106,169

Other



Derivative financial instruments

10,842

7,092

Due from clients, dealers and brokers

415

861

Purchased receivables

1,438

790

Investments in associates and joint ventures

831

697

Premises and equipment

1,817

380

Goodwill

1,277

1,272

Intangible assets

1,059

998

Other assets

1,864

1,606


19,543

13,696


216,090

205,429

Liabilities and equity



Deposits



Personal

45,981

44,963

Business and government

74,441

67,364

Deposit-taking institutions

8,408

7,556


128,830

119,883

Other



Acceptances

9,400

8,926

Obligations related to securities sold short

17,333

18,167

Obligations related to securities sold under repurchase agreements

and securities loaned

13,779

16,780

Derivative financial instruments

7,756

5,721

Due to clients, dealers and brokers

1,871

1,996

Liabilities related to transferred receivables

19,770

17,079

Other liabilities

4,474

4,494


74,383

73,163

Subordinated debt

1,522

1,881

Equity 



Equity attributable to the Bank's shareholders



Preferred shares

1,023

1,223

Common shares

2,614

2,293

Contributed surplus

67

52

Retained earnings

6,705

5,850

Accumulated other comprehensive income

145

289


10,554

9,707

Non-controlling interests

801

795


11,355

10,502


216,090

205,429

 

CONSOLIDATED STATEMENTS OF INCOME



(unaudited) (millions of Canadian dollars)







 Quarter ended October 31

Year ended October 31


2015

2014

2015

2014

Interest income   





Loans 

877

870

3,531

3,393

Securities at fair value through profit or loss 

174

198

695

970

Available-for-sale securities  

77

65

286

204

Deposits with financial institutions   

10

9

30

29


1,138

1,142

4,542

4,596

Interest expense  





Deposits  

324

335

1,329

1,231

Liabilities related to transferred receivables

107

103

420

398

Subordinated debt 

14

19

59

76

Other  

7

44

91

347


452

501

1,899

2,052

Net interest income  

686

641

2,643

2,544






Non-interest income 





Underwriting and advisory fees  

83

104

387

388

Securities brokerage commissions  

59

78

273

333

Mutual fund revenues 

82

67

320

251

Trust service revenues 

115

106

446

388

Credit fees 

104

97

409

386

Card revenues  

28

35

128

134

Deposit and payment service charges  

63

59

238

234

Trading revenues (losses) 

30

(20)

209

106

Gains (losses) on available-for-sale securities, net

(10)

43

82

103

Insurance revenues, net 

26

26

107

108

Foreign exchange revenues, other than trading 

21

23

88

89

Share in the net income of associates and joint ventures   

9

10

26

44

Other  

109

95

390

356


719

723

3,103

2,920

Total revenues

1,405

1,364

5,746

5,464

Provisions for credit losses 

61

57

228

208


1,344

1,307

5,518

5,256

Non-interest expenses 





Compensation and employee benefits  

517

511

2,160

2,049

Occupancy  

52

54

223

222

Technology  

125

187

534

513

Communications 

16

17

69

68

Professional fees  

65

61

233

227

Restructuring charge 

86

86

Other  

99

99

360

344


960

929

3,665

3,423

Income before income taxes

384

378

1,853

1,833

Income taxes

37

48

234

295

Net income 

347

330

1,619

1,538






Net income attributable to 





Preferred shareholders 

11

10

45

40

Common shareholders 

317

302

1,504

1,429

Bank shareholders 

328

312

1,549

1,469

Non-controlling interests

19

18

70

69


347

330

1,619

1,538






Earnings per share (dollars)






Basic

0.96

0.92

4.56

4.36


Diluted

0.95

0.91

4.51

4.32

Dividends per common share (dollars) 

0.52

0.48

2.04

1.88

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



(unaudited) (millions of Canadian dollars)







Quarter ended October 31


Year ended October 31


2015

2014


2015

2014

Net income

347

330


1,619

1,538







Other comprehensive income, net of income taxes







Items that may be subsequently reclassified to net income








Net foreign currency translation adjustments









Net unrealized foreign currency translation gains (losses) on investments in foreign operations

(10)

1


114

47




Impact of hedging net foreign currency translation gains (losses)

7

(6)


(107)

(44)





(3)

(5)


7

3



Net change in available-for-sale securities









Net unrealized gains (losses) on available-for-sale securities

(121)

(8)


(75)

85




Net (gains) losses on available-for-sale securities reclassified to net income

3

(33)


(81)

(89)





(118)

(41)


(156)

(4)



Net change in cash flow hedges









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

31

36


14

87




Net (gains) losses on designated derivative financial instruments reclassified to net income

(2)

(2)


(11)

(11)





29

34


3

76



Share in the other comprehensive income of associates and joint ventures

2


4


Item that will not be subsequently reclassified to net income
















Remeasurements of pension plans and other post-employment benefit plans

67

53


61

23

Total other comprehensive income, net of income taxes

(23)

41


(81)

98

Comprehensive income

324

371


1,538

1,636

Comprehensive income attributable to







Bank shareholders

306

354


1,466

1,567


Non-controlling interests

18

17


72

69





324

371


1,538

1,636










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





2015

2014


2015

2014

Net foreign currency translation adjustments







Net unrealized foreign currency translation gains (losses) on investments in foreign operations

(1)

1


5

3


Impact of hedging net foreign currency translation gains (losses)

2

2


(18)

(8)


1

3


(13)

(5)

Net change in available-for-sale securities







Net unrealized gains (losses) on available-for-sale securities

(47)

(6)


(28)

29


Net (gains) losses on available-for-sale securities reclassified to net income

(10)


(31)

(32)


(47)

(16)


(59)

(3)

Net change in cash flow hedges







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

11

13


4

32


Net (gains) losses on designated derivative financial instruments reclassified to net income

(1)

(1)


(4)

(4)





10

12


28

Remeasurements of pension plans and other post-employment benefit plans

26

21


23

10





(10)

20


(49)

30

 

 

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



(unaudited) (millions of Canadian dollars)








Year ended October 31


2015

2014

Preferred shares at beginning

1,223

677

Issuance of Series 30 and 32 preferred shares

650

Redemption of Series 16, 24 and 26 preferred shares for cancellation

(200)

(104)

Preferred shares at end

1,023

1,223

Common shares at beginning

2,293

2,160

Issuances of common shares




Stock Option Plan

39

102


Public offering

300

Impact of shares purchased or sold for trading

(18)

31

Common shares at end

2,614

2,293

Contributed surplus at beginning

52

58

Stock option expense

20

15

Stock options exercised

(5)

(13)

Other

(8)

Contributed surplus at end

67

52

Retained earnings at beginning

5,850

5,055

Net income attributable to the Bank's shareholders

1,549

1,469

Dividends




Preferred shares

(45)

(40)


Common shares

(672)

(616)

Share issuance expenses

(9)

(14)

Remeasurements of pension plans and other post-employment benefit plans

61

23

Impact of a financial liability resulting from a put option written to a non-controlling interest

(29)

(27)

Retained earnings at end

6,705

5,850

Accumulated other comprehensive income at beginning

289

214

Net foreign currency translation adjustments

7

3

Net change in unrealized gains (losses) on available-for-sale securities

(156)

(4)

Net change in gains (losses) on cash flow hedges

1

76

Share in the other comprehensive income of associates and joint ventures

4

Accumulated other comprehensive income at end

145

289

Equity attributable to the Bank's shareholders

10,554

9,707

Non-controlling interests at beginning

795

789

Net income attributable to non-controlling interests

70

69

Other comprehensive income attributable to non-controlling interests

2

Distributions to non-controlling interests

(66)

(63)

Non-controlling interests at end

801

795

Equity

11,355

10,502




ACCUMULATED OTHER COMPREHENSIVE INCOME







As at October 31, 2015

As at October 31, 2014

Accumulated other comprehensive income



Net foreign currency translation adjustments

4

(3)

Net unrealized gains (losses) on available-for-sale securities

12

168

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

124

123

Share in the other comprehensive income of associates and joint ventures

5

1


145

289

 

 

SEGMENT DISCLOSURES






(unaudited) (millions of Canadian dollars)






















Quarter ended October 31



Personal and
Commercial


Wealth
Management


Financial
Markets


Other


Total


2015

2014

2015

2014

2015

2014

2015

2014

2015

2014












Net interest income(1)

464

436

81

79

239

211

(98)

(85)

686

641

Non-interest income 

253

254

258

258

165

156

43

55

719

723

Total revenues 

717

690

339

337

404

367

(55)

(30)

1,405

1,364

Non-interest expenses 

450

395

245

242

191

173

74

119

960

929

Contribution 

267

295

94

95

213

194

(129)

(149)

445

435

Provisions for credit losses 

60

56

1

1

61

57

Income before income taxes (recovery)  

207

239

93

94

213

194

(129)

(149)

384

378

Income taxes (recovery)(1)

55

65

24

24

56

52

(98)

(93)

37

48

Net income 

152

174

69

70

157

142

(31)

(56)

347

330

Non-controlling interests 

5

4

14

14

19

18

Net income attributable

to the Bank's shareholders

152

174

69

70

152

138

(45)

(70)

328

312












Average assets  

89,056

83,658

10,623

10,146

88,447

89,366

40,487

29,102

228,613

212,272











































Year ended October 31



Personal and
Commercial


Wealth

Management


Financial

Markets


Other


Total


2015

2014

2015

2014

2015

2014

2015

2014

2015

2014












Net interest income(2)

1,786

1,699

323

312

996

824

(462)

(291)

2,643

2,544

Non-interest income

1,030

990

1,095

1,011

706

690

272

229

3,103

2,920

Total revenues

2,816

2,689

1,418

1,323

1,702

1,514

(190)

(62)

5,746

5,464

Non-interest expenses

1,647

1,548

978

953

746

690

294

232

3,665

3,423

Contribution

1,169

1,141

440

370

956

824

(484)

(294)

2,081

2,041

Provisions for credit losses

225

205

3

3

228

208

Income before income taxes (recovery)

944

936

437

367

956

824

(484)

(294)

1,853

1,833

Income taxes (recovery)(2)

254

253

111

95

259

222

(390)

(275)

234

295

Net income

690

683

326

272

697

602

(94)

(19)

1,619

1,538

Non-controlling interests

13

14

57

55

70

69

Net income attributable to the Bank's shareholders 

690

683

326

272

684

588

(151)

(74)

1,549

1,469












Average assets

86,945

81,516

10,329

10,400

88,616

86,198

37,039

28,566

222,929

206,680

 

(1)

Net interest income and income taxes (recovery) of the business segments are presented on a taxable equivalent basis. Taxable equivalent basis is a calculation method that consists in grossing up certain tax-exempt income by the amount of income tax that would have been otherwise payable. For the business segments as a whole, Net interest income was grossed up by $64 million ($57 million in 2014). An equivalent amount was added to Income taxes (recovery). The impact of these adjustments is reversed under the Other heading.

(2)

For the year ended October 31, 2015, Net interest income was grossed up by $311 million ($219 million in 2014). An equivalent amount was added to Income taxes (recovery). The impact of these adjustments is reversed under the Other heading.

 

Personal and Commercial 
The Personal and Commercial segment encompasses the banking, financing, and investing services offered to individuals and businesses as well as insurance operations.

Wealth Management
The Wealth Management segment comprises investment solutions, trust services, banking services, lending services and other wealth management solutions offered through internal and third-party distribution networks.

Financial Markets
The Financial Markets segment encompasses banking services, investment banking services and financial solutions for institutional clients. The segment is also active in proprietary trading and investment activities for the Bank.

Other
This heading encompasses Treasury activities, including the Bank's asset and liability management, liquidity management and funding operations, certain non-recurring items and the unallocated portion of corporate services.

INFORMATION FOR SHAREHOLDERS AND INVESTORS

Disclosure of Fourth Quarter 2015 Results

 

Conference Call

  • A conference call for analysts and institutional investors will be held on Wednesday, December 2, 2015 at 1:00 p.m. EST.
  • Access by telephone in listen-only mode: 1-866-862-3930 or 416-340-2217. The access code is 1937377#.
  • A recording of the conference call can be heard until December 30, 2015 by dialing 1-800-408-3053 or 905-694-9451. The access code is 4796186#.

Webcast

  • The conference call will be webcast live at nbc.ca/investorrelations.
  • A recording of the webcast will also be available on National Bank's website after the call.

Financial Documents

  • The Press release (which includes the quarterly consolidated financial statements) is available at all times on National Bank's website at nbc.ca/investorrelations.
  • The Press release, the Supplementary Financial Information, the Supplementary Regulatory Capital Disclosure, and a slide presentation will be available on the Investor Relations page of National Bank's website shortly before the start of the conference call.
  • The 2015 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, 2016 will be available on February 23, 2016 (subject to approval by the Bank's Board of Directors).

 

Caution Regarding Forward-Looking Statements
From time to time, the Bank makes written and oral forward-looking statements, such as those contained in the Outlook for National Bank and the Major Economic Trends sections of the 2015 Annual Report, in other filings with Canadian securities regulators, and in other communications, for the purpose of describing the economic environment in which the Bank will operate during fiscal 2016 and the objectives it hopes to achieve for that period. These forward-looking statements are made in accordance with current securities legislation in Canada and the United States. They include, among others, statements with respect to the economy—particularly the Canadian and U.S. economies—market changes, observations regarding the Bank's objectives and its strategies for achieving them, Bank-projected financial returns and certain risks faced by the Bank. These forward-looking statements are typically identified by future or conditional verbs or words such as "outlook," "believe," "anticipate," "estimate," "project," "expect," "intend," "plan," and similar terms and expressions.

By their very nature, such forward-looking statements require assumptions to be made and involve inherent risks and uncertainties, both general and specific. Assumptions about the performance of the Canadian and U.S. economies in 2016 and how that will affect the Bank's business are among the main factors considered in setting the Bank's strategic priorities and objectives and in determining its financial targets, including provisions for credit losses. In determining its expectations for economic growth, both broadly and in the financial services sector in particular, the Bank primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies.

There is a strong possibility that express or implied projections contained in these forward-looking statements will not materialize or will not be accurate. The Bank recommends that readers not place undue reliance on these statements, as a number of factors, many of which are beyond the Bank's control, could cause actual future results, conditions, actions or events to differ significantly from the targets, expectations, estimates or intentions expressed in the forward-looking statements. These factors include credit risk, market risk, liquidity and funding risk, operational risk, regulatory compliance risk, reputation risk, strategic risk and environmental risk (all of which are described in more detail in the Risk Management section beginning on page 55 of the 2015 Annual Report), general economic environment and financial market conditions in Canada, the United States and certain other countries in which the Bank conducts business, including regulatory changes affecting the Bank's business, capital and liquidity; changes in the accounting policies the Bank uses to report its financial condition, including uncertainties associated with assumptions and critical accounting estimates; tax laws in the countries in which the Bank operates, primarily Canada and the United States (including the U.S. Foreign Account Tax Compliance Act  (FATCA)); changes to capital and liquidity guidelines and to the manner in which they are to be presented and interpreted; changes to the credit ratings assigned to the Bank; and potential disruptions to the Bank's information technology systems, including evolving cyber attack risk.

The foregoing list of risk factors is not exhaustive. Additional information about these factors can be found in the Risk Management section of the 2015 Annual Report. Investors and others who rely on the Bank's forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time, by it or on its behalf.

The forward-looking information contained in this document is presented for the purpose of interpreting the information contained herein and may not be appropriate for other purposes.

 


SOURCE National Bank of Canada



For further information: Ghislain Parent, Chief Financial Officer and Executive Vice-President, Finance and Treasury, 514-394-6807; Jean Dagenais, Senior Vice-President, Finance, 514-394-6233; Claude Breton, Vice-President, Public Affairs and Investor Relations, 514-394-8644; Hélène Baril, Senior Director, Investor Relations, 514-394-0296

RELATED LINKS
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