Bank of Montreal 2013 Annual Report Download - page 128

best estimate of losses that have been incurred, but not yet identified, Provision for Credit Losses
on an individual basis, within the pools of loans. Historical loss Changes in the value of our loan portfolio due to credit-related losses or
experience is also reviewed to determine loss factors. Qualitative factors recoveries of amounts previously provided for or written off are included in
are based on current observable data such as current macroeconomic the provision for credit losses in our Consolidated Statement of Income.
and business conditions, portfolio-specific considerations, model risk
factors, and the level of non-performing loans (impaired loans) for
which a specific allowance has not yet been assessed.
Loans, including customers’ liability under acceptances and allowance for credit losses, by category are as follows:
Credit card, consumer
instalment and other Business and Customers’ liability
(Canadian $ in millions) Residential mortgages personal loans government loans under acceptances Total
2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011
Gross loan balances at end of
year 99,328 87,870 81,075 71,510 69,250 67,483 101,450 90,402 84,883 8,472 8,019 7,227 280,760 255,541 240,668
Specific allowance at
beginning of year
Specific provisions for credit
losses
Recoveries
76
129
24
74
132
60
52
109
8
62
620
152
59
743
156
47
667
133
338
(150)
596
426
(113)
630
481
360
100
–
–
–
–
–
–
10
(10)
–
476
599
772
559
762
846
590
1,126
241
Write-offs
Foreign exchange and other (104)
(26) (173) (17) (92) (3) (752) (11) (883) (13) (784) (4) (443) (26) (538) (67) (454) (61) – – – – – – (1,299) (63) (1,594) (97) (1,330) (68)
Specific allowance at end of
year 99 76 74 71 62 59 315 338 426 – – – 485 476 559
Collective allowance at
beginning of year
Collective provision for credit
losses
Foreign exchange and other
47
40
1
36
11
–
23
13
–
624
(4)
2
565
59
–
477
88
–
759
(35)
32
817
(63)
5
839
(5)
(17)
30
(11)
–
34
(4)
–
44
(10)
–
1,460
(10)
35
1,452
3
5
1,383
86
(17)
Collective allowance at end
of year 88 47 36 622 624 565 756 759 817 19 30 34 1,485 1,460 1,452
Total allowance 187 123 110 693 686 624 1,071 1,097 1,243 19 30 34 1,970 1,936 2,011
Comprised of: Loans 167 113 108 693 686 624 786 877 1,017 19 30 34 1,665 1,706 1,783
Other credit
instruments
(1) 20 10 2 – – – 285 220 226 – – – 305 230 228
Net loan balances at end of
year 99,161 87,757 80,967 70,817 68,564 66,859 100,664 89,525 83,866 8,453 7,989 7,193 279,095 253,835 238,885
(1) The total specific and collective allowances related to other credit instruments are included Certain comparative figures have been reclassified to conform with the current year’s
in other liabilities. presentation.
Included in loans as at October 31, 2013 are $81,069 million ($72,904 million in 2012 and
$72,211 million in 2011) of loans denominated in U.S. dollars and $947 million ($622 million
in 2012 and $723 million in 2011) of loans denominated in other foreign currencies.
Loans, including customers’ liability under acceptances and allowance for credit losses, by geographic region are as follows:
Specific Collective
(Canadian $ in millions) Gross amount allowance (2) allowance (3) Net amount
2013 2012 2013 2012 2013 2012 2013 2012
By geographic region (1):
Canada 204,706 186,830 244 263 726 660 203,736 185,907
United States 68,702 63,969 196 166 495 599 68,011 63,204
Other countries 7,352 4,742 4 18 – – 7,348 4,724
Total 280,760 255,541 444 447 1,221 1,259 279,095 253,835
(1) Geographic region is based upon the country of ultimate risk. (3) Excludes collective allowance of $264 million for other credit instruments ($201 million in
(2) Excludes specific allowance of $41 million for other credit instruments ($29 million in 2012), 2012), which is included in other liabilities.
which is included in other liabilities. Certain comparative figures have been reclassified to conform with the current year’s
presentation.
Impaired loans, including the related allowances, are as follows:
(Canadian $ in millions) Gross impaired amount Specific allowance (3) Net of specific allowance
2013 2012 2013 2012 2013 2012
Residential mortgages 595 583 79 66 516 517
Consumer instalment and other personal loans 455 401 71 62 384 339
Business and government loans 1,494 1,992 294 319 1,200 1,673
Total (1) 2,544 2,976 444 447 2,100 2,529
By geographic region (2):
Canada 754 886 244 263 510 623
United States 1,783 2,047 196 166 1,587 1,881
Other countries 7 43 4 18 3 25
Total 2,544 2,976 444 447 2,100 2,529
(1) Excludes purchased credit impaired loans. Fully secured loans with past due amounts between 90 and 180 days that we have not classified as
(2) Geographic region is based upon the country of ultimate risk. impaired totalled $256 million and $546 million as at October 31, 2013 and 2012, respectively.
(3) Excludes specific allowance of $41 million for other credit instruments ($29 million in 2012),
which is included in other liabilities.
BMO Financial Group 196th Annual Report 2013 139
Notes