TD Bank 2014 Annual Report Download - page 161

TD BANK GROUP ANNUAL REPORT 2014 FINANCIAL RESULTS 159
LOANS, IMPAIRED LOANS, AND ALLOWANCE FOR CREDIT LOSSES
NOTE 8
The following table presents the Bank’s loans, impaired loans, and
related allowances for credit losses.
Loans, Impaired Loans, and Allowance for Credit Losses
(millions of Canadian dollars) As at
October 31, 2014
Gross Loans
Allowance for loan losses1
Neither Individually Incurred Total
past due Past due Counter- insignificant but not allowance
nor but not party impaired identified for loan Net
impaired impaired Impaired Total specific loans credit losses losses loans
Residential mortgages2,3,4 $ 195,466 $ 2,242 $ 752 $ 198,460 $ – $ 22 $ 48 $ 70 $ 198,390
Consumer instalment and other personal5 116,971 5,406 853 123,230 – 110 577 687 122,543
Credit card 23,576 1,694 294 25,564 – 199 801 1,000 24,564
Business and government2,3,4 128,242 1,201 832 130,275 134 22 746 902 129,373
$ 464,255 $ 10,543 $ 2,731 $ 477,529 $ 134 $ 353 $ 2,172 $ 2,659 $ 474,870
Debt securities classified as loans 2,695 213 – 59 272 2,423
Acquired credit-impaired loans 1,713 8 89 – 97 1,616
Total $ 481,937 $ 355 $ 442 $ 2,231 $ 3,028 $ 478,909
October 31, 2013
Residential mortgages2,3,4 $ 182,169 $ 2,459 $ 706 $ 185,334 $ – $ 22 $ 65 $ 87 $ 185,247
Consumer instalment and other personal5 112,528 5,648 737 118,913 – 118 541 659 118,254
Credit card 20,620 1,299 269 22,188 – 128 714 842 21,346
Business and government2,3,4 112,779 1,354 980 115,113 151 30 698 879 114,234
$ 428,096 $ 10,760 $ 2,692 $ 441,548 $ 151 $ 298 $ 2,018 $ 2,467 $ 439,081
Debt securities classified as loans 3,744 173 – 98 271 3,473
Acquired credit-impaired loans 2,485 24 93 – 117 2,368
Total $ 447,777 $ 348 $ 391 $ 2,116 $ 2,855 $ 444,922
1
Excludes allowance for off-balance sheet positions.
2
Excludes trading loans with a fair value of $10 billion as at October 31, 2014
(October 31, 2013 – $10 billion) and amortized cost of $10 billion as at
October 31, 2014 (October 31, 2013 – $10 billion), and loans designated
at fair value through profit or loss of $5 million as at October 31, 2014
(October 31, 2013 – $9 million). No allowance is recorded for trading loans
or loans designated at fair value through profit or loss.
3
Includes insured mortgages of $131 billion as at October 31, 2014
(October 31, 2013 – $130 billion).
4
As at October 31, 2014, impaired loans with a balance of $435 million did not
have a related allowance for loan losses (October 31, 2013 – $497 million).
An allowance was not required for these loans as the balance relates to loans
that are insured or loans where the realizable value of the collateral exceeded
the loan amount.
5
Includes Canadian government-insured real estate personal loans of $24 billion
as at October 31, 2014 (October 31, 2013 – $27 billion).
RENEGOTIATED LOANS
In cases where a borrower experiences financial difficulties, the Bank
may grant certain concessionary modifications to the terms and
conditions of a loan. Modifications may include payment deferrals,
extension of amortization periods, rate reductions, principal forgive-
ness, debt consolidation, forbearance, and other modifications
intended to minimize the economic loss and to avoid foreclosure or
repossession of collateral. The Bank has policies in place to determine
the appropriate remediation strategy based on the individual borrower.
If the modified loan’s estimated realizable value, discounted at the
original loan’s effective interest rate, has decreased as a result of the
modification, additional impairment is recorded. Once modified, if a
loan was classified as impaired prior to the modification, the loan is
generally assessed for impairment consistent with the Bank’s existing
policies for impairment.
FORECLOSED ASSETS
Foreclosed assets are repossessed non-financial assets where the Bank
gains title, ownership or possession of individual properties, such as
real estate properties, which are managed for sale in an orderly
manner with the proceeds used to reduce or repay any outstanding
debt. The Bank does not generally occupy foreclosed properties for its
business use. The Bank predominantly relies on third-party appraisals
to determine the carrying value of foreclosed assets. Foreclosed
assets held for sale were $180 million as at October 31, 2014
(October 31, 2013 – $233 million) and were recorded in Other assets
on the Consolidated Balance Sheet.