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MD&A
BMO’s total encumbered assets and unencumbered liquid assets are summarized in the table below. See Note 30 on page 178 of the financial
statements for further information on pledged assets.
Liquid Assets
As at October 31, 2014
As at October 31,
2013
(Canadian $ in millions)
Carrying
value/on-
balance sheet
assets (1)
Other cash and
securities received
Total gross
assets (2)
Encumbered
assets
Net unencumbered
assets (3)
Net unencumbered
assets (3)
Cash and cash equivalents 28,386 – 28,386 1,637 26,749 24,878
Deposits with other banks 6,110 – 6,110 – 6,110 6,518
Securities and securities borrowed or purchased under resale
agreements
Sovereigns / Central banks / Multilateral development
banks 92,626 15,805 108,431 66,661 41,770 51,249
Mortgage-backed securities and collateralized
mortgage obligations 17,127 1,444 18,571 2,525 16,046 10,543
Corporate debt 19,584 6,321 25,905 1,879 24,026 19,008
Corporate equity 67,537 15,665 83,202 41,602 41,600 37,020
Total securities and securities borrowed or purchased
under resale agreements 196,874 39,235 236,109 112,667 123,442 117,820
NHA mortgage-backed securities (reported as loans
at amortized cost) (4) 17,852 – 17,852 3,172 14,680 11,425
Total liquid assets 249,222 39,235 288,457 117,476 170,981 160,641
Other eligible assets at central banks (not included above) (5) 109,812 – 109,812 1,008 108,804 102,178
Undrawn credit lines granted by central banks –––– ––
Total liquid assets and other sources 359,034 39,235 398,269 118,484 279,785 262,819
(1) The carrying values outlined in this table are consistent with the carrying values in BMO’s balance sheet as at October 31, 2014.
(2) Gross assets include on-balance sheet and off-balance sheet assets.
(3) Net unencumbered liquid assets are defined as on-balance sheet assets, such as BMO-owned cash and securities and securities borrowed or purchased under resale agreements, plus other off-
balance sheet eligible collateral received, less encumbered assets.
(4) Under IFRS, NHA mortgage-backed securities that include mortgages owned by BMO as the underlying collateral are classified as loans. Unencumbered NHA mortgage-backed securities have liquidity
value and are included as liquid assets under BMO’s liquidity and funding management framework. This amount is shown as a separate line item, NHA mortgage-backed securities.
(5) Represents loans currently lodged at central banks that could potentially be used to access central bank funding. Loans available for pledging as collateral do not include other sources of additional
liquidity that may be realized from the loan portfolio, including incremental securitization, covered bond issuances and Federal Home Loan Bank (FHLB) advances.
BMO Financial Group 197th Annual Report 2014 97