Bank of Montreal 2014 Annual Report Download - page 52

MD&A
Securities Borrowed or Purchased Under Resale Agreements
Securities borrowed or purchased under resale agreements increased
$13.8 billion to $53.6 billion, in line with the increase in securities lent
or sold under repurchase agreements. Both increases were driven by
client activities.
Loans and Acceptances
(Canadian $ in millions)
As at October 31 2014 2013 2012 2011 2010
Residential mortgages 101,013 96,392 84,211 81,075 48,715
Consumer instalment and
other personal 64,143 63,640 61,436 59,445 51,159
Credit cards 7,972 7,870 7,814 8,038 3,308
Businesses and
governments 120,766 104,585 94,072 84,883 68,338
Customers’ liability under
acceptances 10,878 8,472 8,019 7,227 7,001
Gross loans and
acceptances 304,772 280,959 255,552 240,668 178,521
Allowance for credit
losses (1,734) (1,665) (1,706) (1,783) (1,878)
Net loans and acceptances 303,038 279,294 253,846 238,885 176,643
Net loans and acceptances increased $23.7 billion to $303.0 billion,
including a $7.1 billion increase due to the stronger U.S. dollar. The
increase was primarily due to an increase in loans to businesses and
governments across most operating groups and an increase in resi-
dential mortgages primarily in Canadian P&C.
Table 7 on page 112 provides a comparative summary of loans by
geographic location and product. Table 9 on page 113 provides a com-
parative summary of net loans in Canada by province and industry. Loan
quality is discussed on pages 86 and 87 and further details on loans are
provided in Notes 4, 5 and 8 to the financial statements, starting on
page 136.
Other Assets
Other assets increased $4.7 billion to $54.3 billion, primarily reflecting a
$2.4 billion increase in derivative financial instrument assets, largely due
to an increase in the fair value of foreign exchange contracts, partially
offset by a decrease in the fair value of interest rate contracts. The
balance of other assets, which includes premises and equipment,
goodwill and intangible assets, current and deferred tax assets, accounts
receivable and prepaid expenses, increased $2.3 billion, primarily due to
increases in goodwill and intangible assets associated with the acquis-
ition of F&C. Derivative instruments are detailed in Note 10 on page 146
of the financial statements.
Deposits
(Canadian $ in millions)
As at October 31 2014 2013 2012 2011 2010
Banks 18,243 20,591 18,102 20,877 19,435
Businesses and
governments 239,139 222,346 188,103 159,209 130,773
Individuals 135,706 125,432 119,030 122,287 99,043
393,088 368,369 325,235 302,373 249,251
Deposits increased $24.7 billion to $393.1 billion, including an increase
of $14.3 billion due to the stronger U.S. dollar. The increase was largely
driven by a $10.3 billion increase in deposits by individuals, primarily in
Canada, and a $16.8 billion increase in deposits by businesses and
governments, reflecting higher levels of wholesale and customer
deposits; while deposits by banks decreased $2.3 billion. Further details
on the composition of deposits are provided in Note 15 on page 156 of
the financial statements and in the Liquidity and Funding Risk section on
page 95.
Other Liabilities
Other liabilities increased $21.8 billion to $155.3 billion, primarily driven
by an increase of $10.8 billion in securities lent or sold under repurchase
agreements related to client-driven activities, an increase of $4.9 billion
in securities sold but not yet purchased, an increase of $2.4 billion in
acceptances and an increase of $1.7 billion in derivatives. Further details
on the composition of other liabilities are provided in Note 16 on
page 157 of the financial statements.
Subordinated Debt
Subordinated debt increased $0.9 billion. Further details on the composi-
tion of subordinated debt are provided in Note 17 on page 158 of the
financial statements.
Shareholders’ Equity
(Canadian $ in millions)
As at October 31 2014 2013 2012 2011 2010
Share capital
Preferred shares 3,040 2,265 2,465 2,861 2,571
Common shares 12,357 12,003 11,957 11,332 6,927
Contributed surplus 304 315 213 113 92
Retained earnings 17,237 15,087 13,456 11,381 12,848
Accumulated other
comprehensive
income (loss) 1,375 437 17 666 (558)
34,313 30,107 28,108 26,353 21,880
Shareholders’ equity increased $4.2 billion to $34.3 billion, reflecting
growth in retained earnings, accumulated other comprehensive income
and share capital. The share capital increase is driven by the issuance of
preferred shares, as well as the issuance of common shares under the
Shareholder Dividend Reinvestment and Share Purchase Plan (DRIP) and
Stock Option Plan. BMO’s DRIP is described in the Enterprise-Wide Capital
Management section that follows. Our Consolidated Statement of
Changes in Equity on page 126 provides a summary of items that
increase or reduce shareholders’ equity, while Note 20 on page 161 of
the financial statements provides details on the components of and
changes in share capital. Details of our enterprise-wide capital
management practices and strategies can be found on the following
page.
All 2010 data is based on CGAAP in this section. 2011 has not been restated to reflect the new IFRS
standards adopted in 2014.
BMO Financial Group 197th Annual Report 2014 63