TD Bank 2012 Annual Report Download - page 160

TD BANK GROUP ANNUAL REPORT 2012 FINANCIAL RESULTS158
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL, THEIR
CLOSE FAMILY MEMBERS AND THEIR RELATED ENTITIES
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the
Bank, directly or indirectly. The Bank considers certain of its officers
and directors and their affiliates to be key management personnel. The
Bank makes loans to its key management personnel, their close family
members and their related entities on market terms and conditions
with the exception of banking products and services for key manage-
ment personnel, which are subject to approved policy guidelines that
govern all employees.
Loans to Key Management Personnel, their Close Family
Members and their Related Entities
(millions of Canadian dollars) October 31 October 31
2012 2011
Personal loans, including mortgages $ 6 $ 12
Business loans 201 195
Total $ 207 $ 207
COMPENSATION
The remuneration of key management personnel for the years ended
October 31, 2012 and October 31, 2011 was as follows.
Compensation
(millions of Canadian dollars) 2012 2011
Short-term employee benefits $ 23 $ 23
Post-employment benefits 1 2
Share-based payments 32 33
Total $ 56 $ 58
In addition, the Bank offers deferred share and other plans to non-
employee directors, executives and certain other key employees. See
Note 24 for more details.
In the ordinary course of business, the Bank also provides various
banking services to associated and other related corporations on terms
similar to those offered to non-related parties.
TRANSACTIONS WITH SUBSIDIARIES, TD AMERITRADE
AND SYMCOR INC.
Transactions between the Bank and its subsidiaries meet the definition
of related party transactions. If these transactions are eliminated on
consolidation, they are not disclosed as related party transactions.
Transactions between the Bank, TD Ameritrade and Symcor also
qualify as related party transactions. Other than as described below,
during fiscal 2012, there were no significant transactions between
the Bank, TD Ameritrade and Symcor.
Other Transactions with TD Ameritrade and Symcor Inc.
(i) TD AMERITRADE HOLDING CORPORATION
A description of significant transactions of the Bank and its affiliates
with TD Ameritrade is set forth below.
Insured Deposit Account (formerly known as Money Market Deposit
Account) Agreement
The Bank is party to an insured deposit account (IDA) agreement with
TD Ameritrade, pursuant to which the Bank makes available to clients
of TD Ameritrade, IDAs as designated sweep vehicles. TD Ameritrade
provides marketing and support services with respect to the IDA. The
Bank paid fees of $834 million in 2012 (2011 – $762 million) to TD
Ameritrade for the deposit accounts. The fee paid by the Bank is based
on the average insured deposit balance of $60.3 billion in 2012 (2011
– $49.3 billion) with a portion of the fee tied to the actual yield earned
by the Bank on the investments, less the actual interest paid to clients
of TD Ameritrade, with the balance based on an agreed rate of return.
The Bank earns a flat fee of 25 basis points and is reimbursed for the
cost of FDIC insurance premiums.
As at October 31, 2012, amounts receivable from TD Ameritrade
were $129 million (October 31, 2011 – $97 million, November 1,
2010 – $53 million). As at October 31, 2012, amounts payable to
TD Ameritrade were $87 million (October 31, 2011 – $84 million,
November 1, 2010 – $82 million).
(ii) TRANSACTIONS WITH SYMCOR INC.
The Bank has a one-third ownership in Symcor Inc. (Symcor), a Canadian
provider of business process outsourcing services offering a diverse
portfolio of integrated solutions in item processing, statement process-
ing and production, and cash management services. The Bank accounts
for Symcor’s results using the equity method of accounting. During
the year, the Bank paid $128 million (2011 – $139 million) for these
services. As at October 31, 2012, the amount payable to Symcor was
$10 million (October 31, 2011 – $12 million, November 1, 2010 –
$12 million).
The Bank and two other shareholder banks have also provided a
$100 million unsecured loan facility to Symcor which was undrawn as
at October 31, 2012 and October 31, 2011.
PROVISIONS, CONTINGENT LIABILITIES, COMMITMENTS, GUARANTEES, PLEDGED ASSETS, AND COLLATERAL
NOTE 30
PROVISIONS
The following table summarizes the Bank’s provisions as at
October 31, 2012.
Provisions
(millions of Canadian dollars) Asset
Retirement
Litigation Obligations Other Total
Balance as of November 1, 2011 $ 123 $ 67 $ 63 $ 253
Additions 549 7 132 688
Amounts used (377) (9) (97) (483)
Unused amounts reversed (6) – (4) (10)
Foreign currency translation adjustments and other (3) 1 (1) (3)
Balance as of October 31, 2012, before allowance for
credit losses for off-balance sheet instruments $ 286 $ 66 $ 93 $ 445
Add: allowance for credit losses for off-balance sheet instruments1 211
Balance as of October 31, 2012 $ 656
1
Please refer to Note 7, Loans, Impaired Loans and Allowance for Credit Losses for
further details.