TD Bank 2010 Annual Report Download - page 41

TD BANK GROUP ANNUAL REPORT 2010 MANAGEMENT’S DISCUSSION AND ANALYSIS 39
SELECTED CONSOLIDATED BALANCE SHEET ITEMS
TABLE 22
GROUP FINANCIAL CONDITION
Balance Sheet Review
AT A GLANCE OVERVIEW
•
Total assets were $620 billion as at October 31, 2010, an increase
of $62 billion, or 11%, compared with October 31, 2009.
(millions of Canadian dollars) 2010 2009
Securities $ 171,612 $ 148,823
Securities purchased under
reverse repurchase agreements 50,658 32,948
Loans (net of allowance for loan losses) 270,020 253,128
Deposits 429,971 391,034
FACTORS AFFECTING ASSETS AND LIABILITIES
Total assets were $620 billion as at October 31, 2010, an increase of
$62 billion, or 11%, compared with October 31, 2009. The increase
reflected a $23 billion increase in securities, an $18 billion increase in
securities purchased under reverse repurchase agreements, a $17 billion
increase in loans (net of allowance for loan losses) and a $5 billion
increase in other assets.
Securities increased by $23 billion largely due to growth in available-
for-sale securities in U.S. Personal and Commercial Banking driven by
the investment of TD Ameritrade deposits. The translation effect of the
stronger Canadian dollar caused the value of securities in U.S. Personal
and Commercial Banking to decrease by $4 billion.
Securities purchased under reverse repurchase agreements
increased by $18 billion largely due to an increase in Wholesale Banking.
Loans (net of allowance for loan losses) increased $17 billion, or
7%, primarily driven by volume growth in the Canadian Personal and
Commercial Banking and U.S. Personal and Commercial Banking
segments. The increase in Canadian Personal and Commercial Banking
loans was due to increases in consumer instalment and other personal
loans, residential mortgages, and business and government loans.
U.S. Personal and Commercial Banking loans increased primarily due
to business and government loans and residential mortgages. The
FDIC-assisted transactions and the acquisition of The South Financial
Group, Inc. added $8 billion to total loans. The translation effect of the
stronger Canadian dollar caused the value of loans (net of allowance
for loan losses) in U.S. Personal and Commercial Banking to decrease
by $4 billion.
Other assets increased by $5 billion primarily due to an increase in
the market value of derivatives and other assets in Wholesale Banking.
Total liabilities were $577 billion as at October 31, 2010, an increase
of $59 billion, or 11%, compared with October 31, 2009. The net
increase was primarily due to a $39 billion increase in deposits and
a $21 billion increase in other liabilities. The translation effect of the
stronger Canadian dollar caused the value of liabilities in U.S. Personal
and Commercial Banking to decrease by $11 billion.
Deposits increased $39 billion, or 10%, primarily due to a $26 billion
increase in personal deposits, primarily driven by volume increases in
the Canadian Personal and Commercial Banking and U.S. Personal and
Commercial Banking segments, and $18 billion increase in business
and government deposits, and higher TD Ameritrade insured deposit
accounts, partially offset by a $12 billion decrease in trading deposits
in the Wholesale Banking segment. The FDIC-assisted transactions and
the acquisition of The South Financial Group added $11 billion to total
deposits. The translation effect of the stronger Canadian dollar caused
the value of the deposits in U.S. Personal and Commercial Banking to
decrease by $9 billion.
Other liabilities increased $21 billion, or 18%, primarily due to a
$15 billion increase in obligations related to securities sold short and
under repurchase agreements and a $6 billion increase in the market
value of derivatives, driven by Wholesale Banking.
Shareholders’ equity increased by $4 billion primarily due to retained
earnings growth and higher common share capital due to new
share issuances.
U.S. GAAP
See the Reconciliation of Canadian and U.S. Generally Accepted
Accounting Principles contained in the Bank’s annual report on Form
40-F for fiscal 2010 filed with the SEC and available on the Bank’s
website at http://www.td.com/investor/index.jsp and at the SEC’s
website (http://www.sec.gov).
Total assets under U.S. GAAP were $577 billion as at October 31,
2010, $43 billion lower than under Canadian GAAP. The difference
was primarily due to the netting of derivative balances which is permit-
ted under U.S. GAAP where there is a legal right to offset. Under
Canadian GAAP the netting of derivative balances is only permitted
where there is a legal right to offset and there is an intention to settle
the contracts simultaneously. Other differences include accounting for
non-cash collateral which requires certain non-cash collateral received
in securities lending transactions to be recognized as an asset, and a
corresponding liability recorded for the obligation to return the collat-
eral. Under Canadian GAAP, non-cash collateral received as part of
a security lending transaction is not recognized in the Consolidated
Balance Sheet. Total liabilities under U.S. GAAP were $533 billion as
at October 31, 2010, $43 billion lower than under Canadian GAAP.
The difference was due primarily to the netting of derivative balances
under U.S. GAAP as described above. Other differences include
accounting for non-cash collateral received in securities lending
transactions also as described above and certain preferred shares
recognized as liabilities under Canadian GAAP were reclassified to
equity under U.S. GAAP.