TD Bank 2014 Annual Report Download - page 48

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS46
Residential Home equity
mortgages lines of credit4 Total
October 31, 2014
Canada
Atlantic provinces 73% 62% 71%
British Columbia5 68 59 65
Ontario5 69 61 67
Prairies5 72 63 70
Quebec 71 62 70
Total Canada 70 61 68
United States 70 65 68
Total 70% 62% 68%
October 31, 2013
Canada
Atlantic provinces 72% 62% 70%
British Columbia5 67 58 65
Ontario5 68 61 66
Prairies5 71 63 69
Quebec 71 63 70
Total Canada 69 61 67
United States 67 66 67
Total 69% 62% 67%
1 Geographic location based on the address of the property mortgaged.
2 Excludes loans classified as trading as the Bank intends to sell the loans immedi-
ately or in the near term, and loans designated at fair value through profit or loss
for which no allowance is recorded.
3 Based on house price at origination.
4 Home equity lines of credit loan-to-value includes first position collateral mortgage
if applicable.
5
The territories are included as follows: Yukon is included in British Columbia; Nunavut
is included in Ontario; and Northwest Territories is included in the Prairies region.
UNINSURED AVERAGE LOAN-TO-VALUE: NEWLY ORIGINATED AND NEWLY ACQUIRED1,2,3
TABLE 30
IMPAIRED LOANS
A loan is considered impaired when there is objective evidence that
there has been a deterioration of credit quality to the extent that the
Bank no longer has reasonable assurance as to the timely collection of
the full amount of principal and interest. Excluding debt securities clas-
sified as loans, Federal Deposit Insurance Corporation (FDIC) covered
loans, and other acquired credit-impaired loans, gross impaired loans
increased $39 million, or 1% compared to 2013. Gross impaired loan
formations increased year over year by $67 million.
In Canada, net impaired loans decreased by $82 million, or 9% in
2014 due to continued credit quality improvement in the retail bank-
ing portfolios. Residential mortgages, consumer instalment and other
personal loans, and credit cards, contributed impaired loans net of
counterparty-specific and individually insignificant allowances of
$779 million, a decrease of $36 million, or 4%, compared to 2013.
Business and government loans generated $54 million in net impaired
loans, a decrease of $46 million, or 46%, compared to 2013. Business
and government impaired loans were distributed across industry sectors.
In the U.S., net impaired loans increased by $83 million, or 6% in
2014. Residential mortgages, consumer instalment and other personal
loans, and credit cards, contributed net impaired loans of $789 million,
an increase of $160 million, or 25%, compared to 2013, due primarily
to volume growth in real estate secured lending, indirect auto and
Target. Business and government loans contributed $622 million in net
impaired loans, a decrease of $77 million, or 11%, compared to 2013.
Business and government impaired loans were concentrated in the real
estate sector, as real estate is the largest sector of U.S. business loans.
Geographically, 37% of total impaired loans net of counterparty-
specific and individually insignificant allowances were contributed by
Canada and 63% by the U.S. Net impaired loans in Canada were
concentrated in Ontario, which represented 16% of total net impaired
loans, down from 18% in 2013. U.S. net impaired loans were concen-
trated in New England and New Jersey, representing 19% and 15%,
respectively, of net impaired loans, compared with 19% and 13%,
respectively, in 2013.
(millions of Canadian dollars) 2014 2013 2012
Personal, business and government loans2,3
Impaired loans at beginning of period $ 2,692 $ 2,518 $ 2,493
Classified as impaired during the period 4,613 4,546 4,312
Transferred to not impaired during the period (1,352) (1,431) (1,255)
Net repayments (1,157) (1,080) (1,034)
Disposals of loans (7) (5) (28)
Amounts written-off (2,178) (1,914) (1,969)
Recoveries of loans and advances previously written-off – – –
Foreign exchange and other movements 120 58 (1)
Impaired loans at end of year $ 2,731 $ 2,692 $ 2,518
1 Certain comparative amounts have been restated to conform with the presentation
adopted in the current year.
2 Excludes FDIC covered loans and other acquired credit-impaired loans.
For additional information refer to the “Exposure to Acquired Credit-Impaired
Loans” discussion and table in this section of the document and Note 8 to the
Consolidated Financial Statements.
3 Excludes debt securities classified as loans. For additional information refer to
the “Exposure to Non-Agency Collateralized Mortgage Obligations” section of this
document and Note 8 to the Consolidated Financial Statements.
CHANGES IN GROSS IMPAIRED LOANS AND ACCEPTANCES1
TABLE 31