Bank of Montreal 2012 Annual Report Download - page 62

MD&A
Financial Condition Review
Summary Balance Sheet ($ millions)
As at October 31 2012 2011 2010 2009 2008
Assets
Cash and interest bearing
deposits with banks 26,282 25,656 20,554 13,295 21,105
Securities 128,324 122,115 123,399 110,813 100,138
Securities borrowed or
purchased under resale
agreements 44,238 37,970 28,102 36,006 28,033
Net loans and
acceptances 256,608 238,885 176,643 167,829 186,962
Other assets 69,997 75,949 62,942 60,515 79,812
525,449 500,575 411,640 388,458 416,050
As at October 31 2012 2011 2010 2009 2008
Liabilities and
Shareholders’ Equity
Deposits 323,702 302,373 249,251 236,156 257,670
Other liabilities 167,102 164,197 135,933 126,719 134,761
Subordinated debt 4,093 5,348 3,776 4,236 4,315
Capital trust securities 462 821 800 1,150 1,150
Preferred share liability ––––250
Shareholders’ equity 28,655 26,353 21,880 20,197 17,904
Non-controlling interest in
subsidiaries (1) 1,435 1,483 – – –
525,449 500,575 411,640 388,458 416,050
(1) Included in other liabilities under CGAAP.
Overview
Total assets increased $24.9 billion from the prior year to $525.5 billion
at October 31, 2012. The increase was comprised of net loans and
acceptances of $17.7 billion, securities borrowed or purchased under
resale agreements of $6.3 billion, securities of $6.2 billion and cash and
interest bearing deposits with banks of $0.6 billion. All remaining assets
decreased by a total of $5.9 billion.
Liabilities and shareholders’ equity increased $24.9 billion. The
increase was comprised of deposits of $21.3 billion, other liabilities of
$2.9 billion and shareholders’ equity of $2.3 billion, partially offset by
decreases of $1.3 billion in subordinated debt and $0.4 billion in capital
trust securities.
Cash and Interest Bearing Deposits with Banks
Cash and interest bearing deposits with banks increased $0.6 billion to
$26.3 billion in 2012, primarily reflecting an increase in balances held
with the U.S. Federal Reserve due to U.S. deposit growth.
Securities ($ millions)
As at October 31 2012 2011 2010 2009 2008
Trading 70,109 69,925 71,710 59,071 66,032
Available-for-sale 56,382 51,426 50,543 50,257 32,115
Held-to-maturity 875 ––––
Other 958 764 1,146 1,485 1,991
128,324 122,115 123,399 110,813 100,138
Securities increased $6.2 billion to $128.3 billion primarily due to an
increase in available-for-sale securities, which include supplemental
liquid assets held to support contingent liquidity requirements. Further
details on the composition of securities are provided in Note 3 on
page 127 of the financial statements.
Securities Borrowed or Purchased Under Resale
Agreements
Securities borrowed or purchased under resale agreements increased
$6.3 billion to $44.2 billion, mainly due to client-driven activities.
Loans and Acceptances ($ millions)
As at October 31 2012 2011 2010 2009 2008
Residential mortgages 87,870 81,075 48,715 45,524 49,343
Consumer instalment and
other personal 61,436 59,445 51,159 45,824 43,737
Credit cards 7,814 8,038 3,308 2,574 2,120
Businesses and
governments 93,175 84,883 68,338 68,169 84,151
Customers’ liability under
acceptances 8,019 7,227 7,001 7,640 9,358
Gross loans and
acceptances 258,314 240,668 178,521 169,731 188,709
Allowance for credit losses (1,706) (1,783) (1,878) (1,902) (1,747)
Net loans and acceptances 256,608 238,885 176,643 167,829 186,962
Net loans and acceptances increased $17.7 billion to $256.6 billion,
primarily due to an $8.3 billion increase in loans to businesses and
governments across most operating groups and a $6.8 billion increase in
residential mortgages in P&C Canada. The remaining $2.6 billion increase
includes an increase in consumer instalment and other personal loans,
primarily due to growth in auto loans and home equity loans, and an
increase in acceptances.
Table 11 on page 108 provides a comparative summary of loans by
geographic location and product. Table 13 on page 109 provides a
comparative summary of net loans in Canada by province and industry.
Loan quality is discussed on page 40 and 41 and further details on loans
are provided in Notes 4, 5 and 8 to the financial statements, starting on
page 131.
Other Assets
Other assets decreased $5.9 billion to $70.0 billion due to a $7.0 billion
decrease in derivative financial instrument assets, primarily U.S. equity
derivatives. The balance of other assets, which includes accounts receiv-
able, prepaid expenses, tax receivable and pension assets, increased
$1.1 billion. Derivative instruments are detailed in Note 10 on page 140
of the financial statements.
Deposits ($ millions)
As at October 31 2012 2011 2010 2009 2008
Banks 17,290 20,877 19,435 22,973 30,346
Businesses and
governments 185,182 159,209 130,773 113,738 136,111
Individuals 121,230 122,287 99,043 99,445 91,213
323,702 302,373 249,251 236,156 257,670
Deposits increased $21.3 billion to $323.7 billion. The increase was
largely driven by a $26.0 billion increase in deposits by businesses and
governments, which grew in both the United States and Canada.
Deposits by banks decreased $3.6 billion primarily due to lower whole-
sale deposits, while deposits by individuals decreased $1.1 billion
primarily in the United States, partially offset by increases in Canada.
Further details on the composition of deposits are provided in Note 15
on page 151 of the financial statements and in the Liquidity and Funding
Risk section on page 86.
Other Liabilities
Other liabilities increased $2.9 billion to $167.1 billion, primarily driven
by a $7.7 billion increase in securities lent or sold under repurchase
agreements related to client-driven activities. There was growth of
$3.2 billion in securities sold but not yet purchased due to increased
hedging requirements in BMO Capital Markets, largely offset by lower
asset-backed commercial paper due to the wind-up of two of BMO’s
mortgage securitization vehicles and decreases in derivative financial
instrument liabilities. Further details on the composition of other
liabilities are provided in Note 16 on page 152 of the financial state-
ments.
Subordinated Debt
Subordinated debt decreased $1.3 billion, reflecting the redemption of
Series D Medium-Term Notes, Tranche 2 in June 2012. Further details on
the composition of subordinated debt are provided in Note 17 on
page 153 of the financial statements.
All 2010 and prior data based on CGAAP in this section.
BMO Financial Group 195th Annual Report 2012 59