TD Bank 2014 Annual Report Download - page 44

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS42
(millions of Canadian dollars, except as noted) As at Percentage of total
October 31 October 31 October 31 October 31 October 31 October 31
2014 2013 2012 2014 2013 2012
Counterparty-
specific and
individually
Gross insignificant Net Net Net
loans allowances loans loans loans
Canada
Residential mortgages $ 175,125 $ 13 $ 175,112 $ 164,375 $ 154,233 35.4% 36.3% 36.9%
Consumer instalment and other personal
HELOC 59,568 19 59,549 61,561 64,732 12.0 13.6 15.5
Indirect Auto 16,475 22 16,453 14,641 13,942 3.3 3.2 3.3
Other 16,116 43 16,073 15,141 14,525 3.3 3.3 3.5
Credit card 17,927 105 17,822 15,173 14,165 3.6 3.3 3.4
Total personal 285,211 202 285,009 270,891 261,597 57.6 59.7 62.6
Real estate
Residential 14,604 12 14,592 13,673 12,462 3.0 3.0 3.0
Non-residential 9,768 2 9,766 8,151 7,250 2.0 1.8 1.7
Total real estate 24,372 14 24,358 21,824 19,712 5.0 4.8 4.7
Agriculture 4,587 1 4,586 3,914 3,237 0.9 0.9 0.8
Automotive 3,288 – 3,288 2,325 1,444 0.7 0.5 0.3
Financial 7,616 – 7,616 8,811 6,416 1.5 1.9 1.5
Food, beverage, and tobacco 1,642 1 1,641 1,248 1,073 0.3 0.3 0.3
Forestry 379 – 379 423 378 0.1 0.1 0.1
Government, public sector entities,
and education 4,494 2 4,492 4,469 4,784 0.9 1.0 1.1
Health and social services 4,300 2 4,298 3,685 3,327 0.9 0.8 0.8
Industrial construction and
trade contractors 1,894 6 1,888 1,594 1,489 0.4 0.4 0.4
Metals and mining 1,147 1 1,146 866 770 0.2 0.2 0.2
Pipelines, oil, and gas 2,695 5 2,690 2,187 2,235 0.5 0.5 0.5
Power and utilities 1,594 – 1,594 1,506 1,184 0.3 0.3 0.3
Professional and other services 3,497 26 3,471 2,669 2,403 0.7 0.6 0.5
Retail sector 2,212 11 2,201 2,118 1,959 0.5 0.5 0.5
Sundry manufacturing and wholesale 1,821 10 1,811 1,816 1,644 0.4 0.4 0.4
Telecommunications, cable, and media 946 1 945 1,028 1,004 0.2 0.2 0.2
Transportation 1,072 2 1,070 770 715 0.2 0.2 0.2
Other 4,258 – 4,258 2,938 1,934 0.9 0.6 0.5
Total business and government 71,814 82 71,732 64,191 55,708 14.6 14.2 13.3
Total Canada $ 357,025 $ 284 $ 356,741 $ 335,082 $ 317,305 72.2% 73.9% 75.9%
LOANS AND ACCEPTANCES, NET OF COUNTERPARTY-SPECIFIC AND INDIVIDUALLY INSIGNIFICANT
ALLOWANCES BY INDUSTRY SECTOR1
TABLE 25
1 Primarily based on the geographic location of the customer’s address.
CONCENTRATION OF CREDIT RISK
The Bank’s loan portfolio continued to be dominated by Canadian
and U.S. residential mortgages, consumer instalment and other
personal loans, and credit cards, representing 70% of total loans net
of counterparty-specific and individually insignificant allowances, down
from 72% in 2013. During the year, these portfolios increased by
$21 billion, or 6%, and totalled $347 billion at year end. Residential
mortgages represented 40% of the portfolio in 2014, down from 41%
in 2013. Consumer instalment and other personal loans, and credit
cards were 30% of total loans net of counterparty-specific and individ-
ually insignificant allowances in 2014, down from 31% in 2013.
The Bank’s business and government credit exposure was 29% of
total loans net of counterparty-specific and individually insignificant
allowances, up from 27% in 2013. The largest business and govern-
ment sector concentrations in Canada were the real estate and
financial sectors, which comprised 5% and 2%, respectively. Real
estate was the leading U.S. sector of concentration and represented
4% of net loans, up marginally from 2013.
Geographically, the credit portfolio remained concentrated in
Canada. In 2014, the percentage of loans held in Canada was 72%,
down from 74% in 2013. The largest Canadian exposure was in
Ontario, which represented 41% of total loans net of counterparty-
specific and individually insignificant allowance for loan losses for
2014, down from 42% in 2013.
The balance of the credit portfolio was predominantly in the U.S.,
which represented 27% of the portfolio, up from 24% in 2013
primarily due to volume growth in residential mortgages, consumer
indirect auto, business and government loans. Exposures to debt
securities classified as loans, acquired credit-impaired loans, and other
geographic regions were limited. The largest U.S. exposures by state
were in New England and New Jersey which represented 7% and
5% of total loans net of counterparty-specific and individually
insignificant allowances, respectively, compared with 7% and 4%,
respectively, in 2013.