TD Bank 2014 Annual Report Download - page 59

TD BANK GROUP ANNUAL REPORT 2014 MANAGEMENT’S DISCUSSION AND ANALYSIS 57
(millions of Canadian dollars, except as noted) 2014 2013
Common Equity Tier 1 Capital (CET1)
Common shares plus related contributed surplus $ 19,961 $ 19,341
Retained earnings 27,585 24,565
Accumulated other comprehensive income 4,936 3,166
Common Equity Tier 1 Capital before regulatory adjustments 52,482 47,072
Common Equity Tier 1 Capital regulatory adjustments
Goodwill (net of related tax liability) (16,709) (13,280)
Intangibles (net of related tax liability) (2,355) (2,097)
Deferred tax assets excluding those arising from temporary differences (485) (519)
Cash flow hedge reserve (711) (1,005)
Shortfall of provisions to expected losses (91) (116)
Gains and losses due to changes in own credit risk on fair valued liabilities (98) (89)
Defined benefit pension fund net assets (net of related tax liability) (15) (389)
Investment in own shares (7) (183)
Significant investments in the common stock of banking, financial, and insurance entities that are outside
the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold) (1,046) (3,572)
Total regulatory adjustments to Common Equity Tier 1 Capital (21,517) (21,250)
Common Equity Tier 1 Capital 30,965 25,822
Additional Tier 1 Capital instruments
Directly issued qualifying Additional Tier 1 instruments plus stock surplus 1,001 –
Directly issued capital instruments subject to phase out from Additional Tier 1 3,941 5,524
Additional Tier 1 instruments issued by subsidiaries and held by third parties subject to phase out 444 552
Additional Tier 1 Capital instruments before regulatory adjustments 5,386 6,076
Additional Tier 1 Capital instruments regulatory adjustments
Significant investments in the capital of banking, financial, and insurance entities that are outside
the scope of regulatory consolidation, net of eligible short positions (352) (352)
Total regulatory adjustments to Additional Tier 1 Capital (352) (352)
Additional Tier 1 Capital 5,034 5,724
Tier 1 Capital 35,999 31,546
Tier 2 Capital instruments and provisions
Directly issued capital instruments subject to phase out from Tier 2 6,773 7,564
Tier 2 instruments issued by subsidiaries and held by third parties subject to phase out 237 297
Collective allowances 1,416 1,472
Tier 2 Capital before regulatory adjustments 8,426 9,333
Tier 2 regulatory adjustments
Investment in own Tier 2 instruments – (19)
Significant investments in the capital of banking, financial, and insurance entities that are outside
consolidation, net of eligible short positions (170) (170)
Total regulatory adjustments to Tier 2 Capital (170) (189)
Tier 2 Capital 8,256 9,144
Total Capital 44,255 40,690
Risk-weighted assets3
Common Equity Tier 1 Capital $ 328,393 $ 286,355
Tier 1 Capital 329,268 286,355
Total Capital 330,581 286,355
Capital Ratios and Multiples4
Common Equity Tier 1 Capital (as percentage of CET1 Capital risk-weighted assets) 9.4% 9.0%
Tier 1 Capital (as percentage of Tier 1 Capital risk-weighted assets) 10.9 11.0
Total Capital (as percentage of Total Capital risk-weighted assets) 13.4 14.2
Asset-to-capital multiple 19.1 18.2
GROUP FINANCIAL CONDITION
Capital Position
CAPITAL STRUCTURE AND RATIOS – BASEL III1,2
TABLE 43
1 Capital position calculated using the “all-in” methodology.
2 Prior to 2014, the amounts have not been adjusted to reflect the impact of the
New IFRS Standards and Amendments.
3 Effective the third quarter of 2014, each capital ratio has its own RWA measure
due to the OSFI prescribed scalar for inclusion of the CVA. Effective the third
quarter of 2014, the scalars for inclusion of CVA for CET1, Tier 1, and Total Capital
RWA are 57%, 65%, and 77% respectively.
4 The “all-in” basis of regulatory reporting includes all of the regulatory adjustments
that will be required by 2019, except the asset-to-capital multiple which is calcu-
lated under “transitional” basis.