TD Bank 2006 Annual Report Download - page 53

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TD BANK FINANCIAL GROUP ANNUAL REPORT 2006 Management’s Discussion and Analysis 49
(millions of Canadian dollars, Percentage of total
except percentage amounts) 2006 2005 2004 2006 2005 2004
Canada
Atlantic $15 $11 $ 11 3.7% 20.0% (2.8)%
Québec 24 29 15 5.9 52.7 (3.9)
Ontario 299 227 238 73.1 412.7 (61.6)
Prairies 34 36 38 8.3 65.5 (9.8)
British Columbia 39 29379.5 52.7 (9.7)
Total Canada 411 332 339100.5 603.6 (87.8)
United States 51 (205) 39 12.4 (372.7) (10.1)
Other International
United Kingdom (1) (13) (43) (.2) (23.7) 11.1
Australia (4) –9(1.0) – (2.3)
Asia –(7) (2)–(12.7) .5
Total Other International (5) (20) (36)(1.2) (36.4) 9.3
General provision (48) (52) (67) (11.7) (94.5) 17.4
Sectoral provision (net of transfer to specifics) – –(661) ––171.2
Total $409 $ 55 $(386) 100.0% 100.0% 100.0%
Provision for credit losses as a % of net average loans2
Canada
Residential mortgages (.01)% .02% .01%
Personal .66 .64 .73
Business and other .14 (.01) .12
Total Canada .32 .27 .29
United States .17 (.98) .50
Other International (.22) (.94) (1.30)
General provision (.03) (.04) (.05)
Sectoral provision –– (.52)
Total .25% .04% (.30)%
1Based on geographic location of unit responsible for recording revenue.
2Includes customers’ liability under acceptances.
PROVISION FOR CREDIT LOSSES BY LOCATION1
TABLE 29
(millions of Canadian dollars) 2006 2005 2004
New provisions1$604 $352 $ 459
Reversal of sectoral provision –– (505)
Reversal of general provision
TD Bank (60) (35) (67)
TD Banknorth (6) (17) –
Recoveries
Sectoral (7) (229) (150)
Specific (122) (16) (123)
Total provision for (recovery of)
credit losses $409 $55 $(386)
1Total new provisions include specific provisions for credit losses related
to VFC and credit card and overdraft loans, $18 million and $28 million
respectively.
PROVISION FOR CREDIT LOSSES
TABLE 28
Total new provisions were $604 million in 2006, compared
with $352 million in 2005. Total provision for credit losses as
a percentage of net average loans was .25% in fiscal 2006,
compared to .04% in 2005 and (.30) % in 2004.
PROVISION FOR CREDIT LOSSES
The provision for credit losses is the amount charged to the spe-
cific and general allowances for credit losses during the year to
bring the total allowance to a level that management considers
adequate to absorb all probable credit-related losses in the
Bank's loan portfolio. The net provision for the year is reduced
by any recoveries from impaired loans.
The Bank recorded provisions for credit losses of $409 million
in 2006, compared with provisions of $55 million in 2005 and
a reversal of credit losses of $386 million in 2004. Table 28
provides a summary of provisions charged to the Consolidated
Statement of Income.