Bank of Montreal 2013 Annual Report Download - page 148

The following table presents the average deposit balances and average rates of interest paid during 2013 and 2012:
Average balances Average rate paid (%)
(Canadian $ in millions) 2013 2012 2013 2012
Deposits Booked in Canada
Demand deposits – interest bearing 16,050 15,292 0.47 0.44
Demand deposits – non-interest bearing 24,365 23,343 – –
Payable after notice 71,820 60,116 0.68 0.61
Payable on a fixed date 98,631 92,314 1.56 1.65
Total deposits booked in Canada 210,866 191,065 1.00 1.02
Deposits Booked in the United States and Other Countries
Banks located in the United States and other countries 9,308 9,213 0.71 0.58
Governments and institutions in the United States and other countries 9,283 8,381 0.42 0.35
Other demand deposits 9,305 7,546 0.03 0.02
Other deposits payable after notice or on a fixed date 117,446 105,212 0.36 0.51
Total deposits booked in the United States and other countries 145,342 130,352 0.37 0.48
Total average deposits 356,208 321,417 0.74 0.80
As at October 31, 2013 and 2012, deposits by foreign depositors in our Canadian bank offices amounted to $26,561 million and $24,639 million, respectively.
A portion of our structured note liabilities have been designated at fair The change in fair value related to changes in our credit spread that
value through profit or loss and are accounted for at fair value, which has been recognized since the notes were designated at fair value
better aligns the accounting result with the way the portfolio is through profit or loss to October 31, 2013 was an unrealized loss of
managed. The change in fair value of these structured notes was approximately $52 million. We may enter into positions to manage the
recorded as an increase in non-interest revenue, trading revenues of $5 exposure to changes in our credit spread.
million for the year ended October 31, 2013 (increase of $19 million in The fair value and amount due at contractual maturity of these
2012). This includes a decrease of $53 million attributable to changes in notes as at October 31, 2013 were $5,928 million and $6,028 million,
our credit spread (decrease of $20 million in 2012). We hold derivatives respectively ($4,301 million and $4,284 million, respectively, in 2012).
and other financial instrument contracts to partially hedge changes in
the fair value of these structured notes.
Note 16: Other Liabilities
(Canadian $ in millions) 2013 2012
Acceptances 8,472 8,019
Securities sold but not yet purchased 22,446 23,439
Securities lent or sold under repurchase agreements 28,884 39,737
59,802 71,195
Acceptances
Acceptances represent a form of negotiable short-term debt that is
issued by our customers and which we guarantee for a fee. We have an
offsetting claim, equal to the amount of the acceptances, against our
customers. The amount due under acceptances is recorded as a liability
and our corresponding claim is recorded as a loan in our Consolidated
Balance Sheet.
Securities Lending and Borrowing
Securities lending and borrowing transactions are generally
collateralized by securities or cash. Cash advanced or received as
collateral is recorded in other assets or other liabilities, respectively. The
transfer of the securities to counterparties is only reflected in our
Consolidated Balance Sheet if the risks and rewards of ownership have
also been transferred. Securities borrowed are not recognized in our
Consolidated Balance Sheet unless they are then sold to third parties, in
which case the obligation to return the securities is recorded in
Securities sold but not yet purchased.
Securities Sold but not yet Purchased
Securities sold but not yet purchased represent our obligations to deliver
securities that we did not own at the time of sale. These obligations are
recorded at their market value. Adjustments to the market value as at
the balance sheet date and gains and losses on the settlement of these
obligations are recorded in trading revenues in our Consolidated
Statement of Income.
Securities Lent or Sold Under Repurchase Agreements
Securities lent or sold under repurchase agreements represent short-
term funding transactions in which we sell securities that we own and
simultaneously commit to repurchase the same securities at a specified
price on a specified date in the future. The obligation to repurchase
these securities is recorded at the amount owing. The interest expense
related to these liabilities is recorded on the accrual basis.
Other Liabilities
The components of the other liabilities balance as at October 31, 2013
and 2012 were as follows:
(Canadian $ in millions) 2013 2012
Securitization and SPE liabilities 22,362 25,481
Accounts payable, accrued expenses and other
items 7,915 8,924
Accrued interest payable 857 977
Liabilities of subsidiaries, other than deposits 3,857 4,116
Insurance-related liabilities 6,115 6,040
Pension liability (Note 23) 52 43
Other employee future benefits liability (Note 23) 1,054 1,015
Total 42,212 46,596
Certain comparative figures have been reclassified to conform with the current year’s presentation.
Liabilities related to the notes issued by our credit protection vehicle and
our structured investment vehicles have been designated at fair value
through profit or loss and are accounted for at fair value. This eliminates
a measurement inconsistency that would otherwise arise from
measuring these note liabilities and offsetting changes in the fair value
of the related investments and derivatives on a different basis. The fair
value of these note liabilities as at October 31, 2013 of $511 million
($946 million in 2012) is recorded in other liabilities in our Consolidated
Balance Sheet. The change in fair value of these note liabilities resulted
BMO Financial Group 196th Annual Report 2013 159
Notes