TD Bank 2009 Annual Report Download - page 52

TD BANK FINANCIAL GROUP ANNUAL REPORT 2009 MANAGEMENT’S DISCUSSION AND ANALYSIS48
GROUP FINANCIAL CONDITION
Balance Sheet Review
AT A GLANCE OVERVIEW
•
Total assets were $557 billion as at October 31, 2009, a decrease
of $6 billion, or 1%, compared with October 31, 2008.
Other declined by $38 billion primarily due to a decrease in the market
value of derivatives in Wholesale Banking resulting from movements
in interest rates and cross currency swaps, and volatility in currency
and
interest rate markets.
Total liabilities of the Bank were $518 billion as at October 31, 2009,
a decrease of $13 billion, or 2%, compared with October 31, 2008.
The net decrease was largely due to a $26 billion decrease in the market
value of Wholesale Banking derivatives, partially offset by an increase
in deposits. The translation effect of the weaker Canadian dollar caused
the value of liabilities in U.S. Personal and Commercial Banking to
increase by $2 billion.
Deposits were $391 billion, an increase of $15 billion, or 4%, primarily
due to a $31 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 which were
offset by decreases in business and government and trading deposits
in Wholesale Banking. The translation effect of the weaker Canadian
dollar caused the value of the deposits in U.S. Personal and Commercial
Banking to increase by $2 billion.
Other liabilities decreased $28 billion, or 18%, primarily due to
a decrease in the market value of derivatives in Wholesale Banking
resulting from movements in interest rates and cross currency swaps
and volatility in currency and interest rate markets.
Common shares and preferred shares in total increased $3.6 billion,
due to new share issuances of $2.1 billion and $1.5 billion, respectively.
U.S. GAAP
See the Reconciliation of Canadian and U.S. Generally Accepted
Accounting Principles contained in the Bank’s 2009 Annual Report on
Form 40-F 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 $518 billion as at October 31,
2009, $39 billion lower than under Canadian GAAP. The difference
was primarily due to the netting of derivative balances which is
permitted 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 inten-
tion 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 collateral. 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 $478 billion as at October 31, 2009, $39 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 and capital trust securities recognized as liabilities
under Canadian GAAP were reclassified to equity and non-controlling
interest in subsidiaries respectively under U.S. GAAP.
SELECTED CONSOLIDATED BALANCE SHEET ITEMS
TABLE 22
(millions of Canadian dollars) 2009 2008
Securities $ 148,823 $ 144,125
Securities purchased under
reverse repurchase agreements 32,948 42,425
Loans (net of allowance for loan losses) 253,128 219,624
Deposits 391,034 375,694
FACTORS AFFECTING ASSETS AND LIABILITIES
Year-over-year comparison – October 31, 2009 vs. October 31, 2008
Total assets of the Bank were $557 billion as at October 31, 2009,
a decrease of $6 billion, or 1%, compared with October 31, 2008. The
decrease reflected a lower market value of derivatives and decreased
securities purchased under reverse purchase agreements, partially offset
by an increase in loans (net of allowance for loan losses).
Securities increased by $5 billion largely due to growth in available-
for-sale securities in U.S. Personal and Commercial Banking driven
by the reinvestment of balances previously invested in securities
purchased under reverse repurchase agreements and the reinvestment
of TD Bank USA deposits, partially offset by the reclassification of
certain debt securities as loans. The translation effect of the weaker
Canadian dollar caused the value of securities in U.S. Personal and
Commercial Banking to increase by $1 billion.
Securities purchased under resale agreements decreased by
$9 billion largely due to the reinvestment of balances into available-for-
sale securities in U.S. Personal and Commercial Banking.
Loans (net of allowance for loan losses) were $253 billion, an
increase of $34 billion, or 15%, primarily driven by volume growth in
the Canadian Personal and Commercial Banking and U.S. Personal
and Commercial Banking segments. Increases in consumer instalment
and other personal loans, business and government loans in Canadian
Personal and Commercial Banking, and residential mortgages in U.S.
Personal and Commercial Banking drove the loan volume growth in
2009. In addition, a further $11 billion increase relates to the reclas-
sification of debt securities as loans. The translation effect of the
weaker Canadian dollar caused the value of loans (net of allowance
for loan losses) in U.S. Personal and Commercial Banking to increase
by $1 billion.