Loans, Impaired Loans and Allowance for Credit Losses | 13 Loans, Impaired Loans and Allowance for Credit Losses (a) Loans at amortized cost 2023 2022 As at October 31 ($ millions) Gross loans Allowance Net Gross loans Allowance Net Residential mortgages $ 344,182 $ 1,084 $ 343,098 $ 349,279 $ 899 $ 348,380 Personal loans 104,170 2,414 101,756 99,431 2,137 97,294 Credit cards 17,109 1,237 15,872 14,518 1,083 13,435 Business and government 291,822 1,637 290,185 287,107 1,229 285,878 Total $ 757,283 $ 6,372 $ 750,911 $ 750,335 $ 5,348 $ 744,987 (b) Loans and acceptances outstanding by geography ( 1) As at October 31 ($ millions) 2023 2022 Canada: Residential mortgages $ 290,253 $ 302,486 Personal loans 80,732 78,427 Credit cards 8,216 6,970 Business and government 114,991 105,277 494,192 493,160 United States: Personal loans 4,408 2,830 Business and government 61,342 66,680 65,750 69,510 Mexico: Residential mortgages 16,556 13,080 Personal loans 2,200 2,556 Credit cards 808 675 Business and government 26,466 23,744 46,030 40,055 Chile: Residential mortgages 21,499 19,441 Personal loans 5,081 4,766 Credit cards 3,654 2,921 Business and government 22,383 24,197 52,617 51,325 Peru: Residential mortgages 4,102 3,719 Personal loans 5,424 5,025 Credit cards 1,049 942 Business and government 12,004 12,819 22,579 22,505 Colombia: Residential mortgages 2,390 1,910 Personal loans 2,349 2,115 Credit cards 1,684 1,443 Business and government 6,327 5,541 12,750 11,009 Other International: Residential mortgages 9,382 8,643 Personal loans 3,976 3,712 Credit cards 1,698 1,568 Business and government 48,309 48,848 63,365 62,771 Total loans 757,283 750,335 Acceptances (2) 18,628 19,494 Total loans and acceptances (3) 775,911 769,829 Allowance for credit losses (6,462 ) (5,379 ) Total loans and acceptances net of allowance for credit losses $ 769,449 $ 764,450 (1) Geographic segmentation is based on the location of the property for residential mortgages; otherwise, the residence of the borrower. (2) 0.6% of acceptances reside outside Canada (October 31, 2022 – 0.4%). (3) Loans and acceptances denominated in U . . (c) Loan maturities As at October 31, 2023 Remaining term to maturity Rate sensitivity ($ millions) Within One to Five to Over No specific Total Floating Fixed rate Non-rate Total Residential mortgages $ 47,610 $ 254,546 $ 15,830 $ 23,946 $ 2,250 $ 344,182 $ 98,606 $ 242,589 $ 2,987 $ 344,182 Personal loans 18,279 37,875 5,593 1,189 41,234 104,170 44,913 58,002 1,255 104,170 Credit cards – – – – 17,109 17,109 – 17,109 – 17,109 Business and government 149,625 131,039 5,493 339 5,326 291,822 177,428 112,583 1,811 291,822 Total $ 215,514 $ 423,460 $ 26,916 $ 25,474 $ 65,919 $ 757,283 $ 320,947 $ 430,283 $ 6,053 $ 757,283 Allowance for credit losses – – – – (6,372 ) (6,372 ) – – (6,372 ) (6,372 ) Total loans net of allowance for credit losses $ 215,514 $ 423,460 $ 26,916 $ 25,474 $ 59,547 $ 750,911 $ 320,947 $ 430,283 $ (319 ) $ 750,911 As at October 31, 2022 Remaining term to maturity Rate sensitivity ($ millions) Within One to Five to Over No specific Total Floating Fixed rate Non-rate Total Residential mortgages $ 41,557 $ 269,576 $ 13,011 $ 24,487 $ 648 $ 349,279 $ 114,060 $ 232,519 $ 2,700 $ 349,279 Personal loans 15,772 37,279 5,328 1,282 39,770 99,431 41,883 56,707 841 99,431 Credit cards – – – – 14,518 14,518 – 14,518 – 14,518 Business and government 148,094 128,114 5,334 386 5,179 287,107 166,236 119,361 1,510 287,107 Total $ 205,423 $ 434,969 $ 23,673 $ 26,155 $ 60,115 $ 750,335 $ 322,179 $ 423,105 $ 5,051 $ 750,335 Allowance for credit losses – – – – (5,348 ) (5,348 ) – – (5,348 ) (5,348 ) Total loans net of allowance for credit losses $ 205,423 $ 434,969 $ 23,673 $ 26,155 $ 54,767 $ 744,987 $ 322,179 $ 423,105 $ (297 ) $ 744,987 (d) Impaired loans (1) 2023 2022 As at October 31 ($ millions) Gross (1) Allowance Net Gross (1) Allowance Net Residential mortgages $ 1,864 $ 498 $ 1,366 $ 1,386 $ 406 $ 980 Personal loans 1,176 664 512 848 551 297 Credit cards – – – – – – Business and government 2,686 719 1,967 2,552 678 1,874 Total $ 5,726 $ 1,881 $ 3,845 $ 4,786 $ 1,635 $ 3,151 By geography: Canada $ 1,564 $ 514 $ 1,050 $ 1,054 $ 440 $ 614 United States – – – – – – Mexico 1,183 372 811 1,020 294 726 Peru 691 372 319 761 352 409 Chile 1,098 264 834 740 202 538 Colombia 356 97 259 301 67 234 Other International 834 262 572 910 280 630 Total $ 5,726 $ 1,881 $ 3,845 $ 4,786 $ 1,635 $ 3,151 (1) Interest income recognized on impaired loans during the year ended October 31, 2023 was $57 (2022 – $44). (e) Allowance for credit losses (i) Key inputs and assumptions The Bank’s allowance for credit losses is measured using a three-stage approach based on the extent of credit deterioration since origination. The calculation of the Bank’s allowance for credit losses is an output of a set of complex models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. Some of the key drivers include the following: • Changes in risk ratings of the borrower or instrument reflecting changes in their credit quality; • Changes in the volumes of transactions; • Changes in the forward-looking macroeconomic environment reflected in the variables used in the models such as GDP growth, unemployment rates, commodity prices, interest rates and house price indices, which are closely related with credit losses in the relevant portfolio; • Changes in macroeconomic scenarios and the probability weights assigned to each scenario; and • Borrower migration between the three stages. The Bank determines its allowance for credit losses using four probability-weighted forward-looking scenarios (base case, optimistic, pessimistic and very pessimistic). The Bank considers both internal and external sources of information and data to achieve unbiased projections and forecasts in determining the allowance for credit losses. The Bank prepares the scenarios using forecasts generated by Scotiabank Economics (SE). The forecasts are generated using models whose outputs are modified by SE as necessary to formulate a ‘base case’ view of the most probable future direction of economic developments. The development of the base case and alternative scenarios is overseen by a governance committee that consists of internal stakeholders from across the Bank. The final base case and alternative scenarios reflect significant review and oversight, and incorporate judgment both in the determination of the scenarios’ forecasts and the probability weights that are assigned to them. (ii) Key macroeconomic variables The inputs and models used for calculating expected credit losses may not always capture all characteristics of the market at the date of the financial statements. Qualitative adjustments or overlays may be made for certain portfolios or geographies as temporary adjustments in circumstances where, in the Bank’s view, the inputs, assumptions, and/or modelling techniques do not capture all relevant risk factors, including the emergence of economic or geopolitical events up to the date of financial statements. The Bank has applied expert credit judgement in the determination of the allowance for credit losses to capture, as described above, all relevant risk factors up to the end of the reporting period. The Bank considered both quantitative and qualitative information in the assessment of significant increase in credit risk. The Bank’s models are calibrated to consider past performance and macroeconomic forward-looking variables as inputs. The Bank has generated a forward-looking base case scenario and three alternate forward-looking scenarios (one optimistic and two pessimistic) as key inputs into the expected credit loss provisioning models. Over the last year, both the Canadian and U.S. economies proved resilient in the face of monetary tightening, driven largely by resilient labour markets, strong consumption and pent-up The optimistic scenario features somewhat stronger economic activity relative to the base case. The pessimistic scenario is based on the recent banking sector turmoil in the U.S. and Europe, and features deteriorating private sector financial conditions and confidence. These are reducing economic activity and inflation worldwide from the base case scenario, requiring central banks to reduce their monetary policy rates to mitigate the decline in economic activity and prevent inflation from falling below targeted ranges. Lastly, the very pessimistic scenario features a strong stagflationary impulse that leads to a protracted period of financial market uncertainty. This results in higher inflation, requiring central banks to raise their policy rate to higher levels than in the base case in order to bring inflation under control, which is dampening economic activity. In light of mounting risks in the global economy, including heightened geopolitical tensions, sovereign yield volatility, and weather-related events, the Bank increased the weight of the pessimistic scenarios in calculating the allowance for credit losses on performing loans compared to the prior year, to capture the elevated downside risk to the outlook. The following tables show certain key macroeconomic variables used to calculate the modelled estimate for the allowance for credit losses. Further changes in these variables up to the date of the financial statements is incorporated through expert credit judgment. For the base case, optimistic and pessimistic scenarios, the projections are provided for the next 12 months and for the remaining forecast period, which represents a medium-term view . Base Case Scenario Alternative Scenario – Optimistic Alternative Scenario – Pessimistic Alternative Scenario – Very October 31, 2023 Next Remaining Next Remaining Next Remaining Next Remaining Canada Real GDP growth, y/y % change 0.7 2.9 1.3 4.2 -2.2 3.5 -4.3 3.9 Consumer price index, y/y % 2.8 2.0 2.8 2.5 1.8 1.6 6.4 2.2 Unemployment rate, average % 6.0 5.7 5.7 4.2 7.6 6.3 9.7 6.6 Bank of Canada overnight rate target, average % 4.8 2.6 4.8 3.5 3.6 1.4 5.8 3.3 HPI – Housing Price Index, y/y % change -1.9 1.4 -1.4 2.9 -5.5 2.2 -6.8 1.5 USD/CAD exchange rate, average 1.27 1.24 1.27 1.22 1.41 1.26 1.47 1.28 U.S. Real GDP growth, y/y % change 1.0 1.9 1.5 2.7 -2.0 2.7 -3.8 3.0 Consumer price index, y/y % 3.2 2.2 3.5 2.6 1.9 1.8 7.0 2.5 Target federal funds rate, upper limit, average % 5.3 2.5 5.4 3.4 4.2 0.8 6.3 3.1 Unemployment rate, average % 4.1 4.5 3.9 4.1 5.6 5.0 7.2 5.2 Mexico Real GDP growth, y/y % change 1.7 2.2 2.6 3.3 -0.2 2.7 -2.8 3.2 Unemployment rate, average % 3.7 3.9 3.6 3.2 4.7 4.1 6.8 4.9 Chile Real GDP growth, y/y % change 1.3 2.9 2.8 4.6 -0.9 3.5 -3.1 4.1 Unemployment rate, average % 8.5 7.0 8.2 6.3 9.6 7.3 11.3 7.6 Peru Real GDP growth, y/y % change 1.9 2.7 2.7 3.9 0.8 3.1 -1.4 3.6 Unemployment rate, average % 6.9 7.0 6.2 5.1 8.3 7.3 11.6 8.8 Colombia Real GDP growth, y/y % change 2.4 3.0 3.7 4.3 1.4 3.4 -0.9 3.9 Unemployment rate, average % 9.2 9.9 8.6 7.9 11.1 10.3 15.6 12.3 Caribbean Real GDP growth, y/y % change 3.8 3.8 4.5 4.9 2.8 4.2 0.5 4.7 Global WTI oil price, average USD/bbl 78 66 84 82 68 63 62 61 Copper price, average USD/lb 3.97 5.01 4.11 5.65 3.70 4.89 3.56 4.83 Global GDP, y/y % change 2.75 2.45 3.62 3.48 0.10 3.10 -1.48 3.45 Base Case Scenario Alternative Scenario – Optimistic Alternative Scenario – Pessimistic Alternative Scenario – Very October 31, 2022 Next Remaining Next Remaining Next Remaining Next Remaining Canada Real GDP growth, y/y % change 1.2 2.1 2.4 3.1 -4.8 3.7 -5.9 2.6 Consumer price index, y/y % 4.9 2.1 5.2 2.6 9.3 2.3 12.5 9.5 Unemployment rate, average % 5.7 6.0 5.1 4.7 9.7 6.9 10.2 8.6 Bank of Canada overnight rate target, average % 3.8 2.7 4.2 4.1 5.1 3.2 5.1 3.7 HPI – Housing Price Index, y/y % change -12.3 -0.3 -9.7 1.6 -17.6 -0.3 -20.0 -1.3 USD/CAD exchange rate, average 1.27 1.24 1.26 1.23 1.28 1.24 1.28 1.25 U.S. Real GDP growth, y/y % change 0.6 2.1 1.3 3.0 -5.1 3.7 -6.5 3.3 Consumer price index, y/y % 5.4 2.4 5.8 2.8 10.0 2.6 13.2 10.1 Target federal funds rate, upper limit, average % 3.5 2.7 4.7 4.5 4.8 3.3 4.8 3.7 Unemployment rate, average % 4.3 5.0 4.2 4.6 7.9 5.7 8.3 6.7 Mexico Real GDP growth, y/y % change 1.4 2.6 1.9 3.5 -4.0 4.0 -5.1 2.5 Unemployment rate, average % 3.8 3.9 3.7 3.2 7.2 4.8 7.6 6.4 Chile Real GDP growth, y/y % change -2.0 2.4 -0.8 3.6 -7.3 3.9 -8.4 2.9 Unemployment rate, average % 8.6 7.6 8.0 6.5 12.2 8.3 12.9 9.0 Peru Real GDP growth, y/y % change 2.5 2.7 3.7 3.8 -1.0 4.1 -3.3 3.5 Unemployment rate, average % 7.0 6.9 6.0 4.7 10.3 7.6 11.4 9.2 Colombia Real GDP growth, y/y % change 3.9 2.6 6.5 3.6 0.4 4.0 -2.0 3.4 Unemployment rate, average % 10.7 9.9 9.0 6.7 14.0 10.7 15.1 12.3 Caribbean Real GDP growth, y/y % change 4.4 4.0 5.0 4.9 0.5 5.2 -1.0 3.8 Global WTI oil price, average USD/bbl 89 79 95 96 116 83 125 116 Copper price, average USD/lb 3.25 3.49 3.39 3.95 3.66 3.54 3.78 3.78 Global GDP, y/y % change 2.02 2.83 2.96 3.83 -3.05 4.23 -4.14 3.79 (iii) Sensitivity Relative to the base case scenario, the weighting of these multiple scenarios increased the reported allowance for credit losses for financial assets in Stage 1 and Stage 2 to $4,719 million (2022 – $ million). If the Bank was to only use the very pessimistic scenario for the measurement of allowance for credit losses for such assets, the allowance for credit losses on performing financial instruments would be million (2022 – million) higher than the reported allowance for credit losses as at October 31, 2023, excluding the consideration of changes in qualitative overlays or expert credit judgement. Actual results will differ as this does not consider the migration of exposures or incorporate changes that would occur in the portfolio due to risk mitigation actions and other factors. Under our current probability-weighted scenarios, if all of our performing financial assets were in Stage 1, reflecting a 12 month expected loss period, the allowance for credit losses would be $553 million (2022 – $521 million) lower than the reported allowance for credit losses on performing financial assets. (iv) Allowance for credit losses ($ millions) Balance as at November 1, 2022 Provision for (1) Net write-offs Other, including Balance as at October 31, 2023 Residential mortgages $ 899 $ 212 $ (66 ) $ 39 $ 1,084 Personal loans 2,137 1,377 (1,180 ) 80 2,414 Credit cards 1,083 1,017 (916 ) 53 1,237 Business and government 1,368 825 (290 ) (27 ) 1,876 $ 5,487 $ 3,431 $ (2,452 ) $ 145 $ 6,611 Presented as: Allowance for credit losses on loans $ 5,348 $ 6,372 Allowance for credit losses on acceptances 31 90 Allowance for credit losses on off-balance 108 149 (1) Excludes amounts associated with other assets of $(9). The provision for credit losses, net of these amounts, is $3,422. ($ millions) Balance as at November 1, 2021 Provision for Net write-offs Other, including Balance as at October 31, 2022 Residential mortgages $ 802 $ 85 $ (45 ) $ 57 $ 899 Personal loans 2,341 615 (863 ) 44 2,137 Credit cards 1,211 469 (612 ) 15 1,083 Business and government 1,374 213 (206 ) (13 ) 1,368 $ 5,728 $ 1,382 $ (1,726 ) $ 103 $ 5,487 Presented as: Allowance for credit losses on loans $ 5,626 $ 5,348 Allowance for credit losses on acceptances 37 31 Allowance for credit losses on off-balance 65 108 Allowance for credit losses on loans As at October 31, 2023 ($ millions) Stage 1 Stage 2 Stage 3 Total Residential mortgages $ 265 $ 321 $ 498 $ 1,084 Personal loans 647 1,103 664 2,414 Credit cards 414 823 – 1,237 Business and government 535 383 719 1,637 Total (1) $ 1,861 $ 2,630 $ 1,881 $ 6,372 (1) Excludes allowance for credit losses for other financial assets including acceptances, investment securities, deposits with banks, off-balance 257 As at October 31, 2022 ($ millions) Stage 1 Stage 2 Stage 3 Total Residential mortgages $ 197 $ 296 $ 406 $ 899 Personal loans 665 921 551 2,137 Credit cards 436 647 – 1,083 Business and government 255 296 678 1,229 Total (1) $ 1,553 $ 2,160 $ 1,635 $ 5,348 (1) Excludes allowance for credit losses for other financial assets including acceptances, investment securities, deposits with banks, off-balance The following table presents the changes to the allowance for credit losses on loans. As at October 31, 2023 As at October 31, 2022 ($ millions) Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Residential mortgages Balance at beginning of the year $ 197 $ 296 $ 406 $ 899 $ 152 $ 276 $ 374 $ 802 Provision for credit losses Remeasurement (1) (125 ) 74 253 202 (54 ) 43 80 69 Newly originated or purchased financial assets 35 – – 35 34 – – 34 Derecognition of financial assets and maturities (9 ) (16 ) – (25 ) (5 ) (13 ) – (18 ) Changes in models and methodologies – – – – – – – – Transfer to (from): Stage 1 183 (138 ) (45 ) – 65 (52 ) (13 ) – Stage 2 (35 ) 149 (114 ) – (9 ) 46 (37 ) – Stage 3 – (62 ) 62 – – (19 ) 19 – Gross write-offs – – (97 ) (97 ) – – (73 ) (73 ) Recoveries – – 31 31 – – 28 28 Foreign exchange and other movements (6) 19 18 2 39 14 15 28 57 Balance at end of year (2) $ 265 $ 321 $ 498 $ 1,084 $ 197 $ 296 $ 406 $ 899 Personal loans Balance at beginning of the year $ 665 $ 921 $ 551 $ 2,137 $ 644 $ 1,071 $ 626 $ 2,341 Provision for credit losses Remeasurement (1) (727 ) 1,027 964 1,264 (579 ) 441 609 471 Newly originated or purchased financial assets 376 – – 376 338 – – 338 Derecognition of financial assets and maturities (91 ) (172 ) – (263 ) (76 ) (118 ) – (194 ) Changes in models and methodologies – – – – – – – – Transfer to (from): Stage 1 618 (603 ) (15 ) – 467 (457 ) (10 ) – Stage 2 (212 ) 297 (85 ) – (133 ) 192 (59 ) – Stage 3 (10 ) (392 ) 402 – (5 ) (221 ) 226 – Gross write-offs – – (1,417 ) (1,417 ) – – (1,116 ) (1,116 ) Recoveries – – 237 237 – – 253 253 Foreign exchange and other movements (6) 28 25 27 80 9 13 22 44 Balance at end of year (2) $ 647 $ 1,103 $ 664 $ 2,414 $ 665 $ 921 $ 551 $ 2,137 Credit cards Balance at beginning of the year $ 436 $ 647 $ – $ 1,083 $ 352 $ 859 $ – $ 1,211 Provision for credit losses Remeasurement (1) (300 ) 614 653 967 (176 ) 141 449 414 Newly originated or purchased financial assets 188 – – 188 146 – – 146 Derecognition of financial assets and maturities (65 ) (73 ) – (138 ) (51 ) (40 ) – (91 ) Changes in models and methodologies – – – – – – – – Transfer to (from): Stage 1 273 (273 ) – – 240 (240 ) – – Stage 2 (140 ) 140 – – (77 ) 77 – – Stage 3 – (255 ) 255 – – (152 ) 152 – Gross write-offs – – (1,113 ) (1,113 ) – – (791 ) (791 ) Recoveries – – 197 197 – – 179 179 Foreign exchange and other movements (6) 22 23 8 53 2 2 11 15 Balance at end of year (2) $ 414 $ 823 $ – $ 1,237 $ 436 $ 647 $ – $ 1,083 Total retail loans Balance at beginning of the year $ 1,298 $ 1,864 $ 957 $ 4,119 $ 1,148 $ 2,206 $ 1,000 $ 4,354 Provision for credit losses – – – – – – – – Remeasurement (1) (1,152 ) 1,715 1,870 2,433 (809 ) 625 1,138 954 Newly originated or purchased financial assets 599 – – 599 518 – – 518 Derecognition of financial assets and maturities (165 ) (261 ) – (426 ) (132 ) (171 ) – (303 ) Changes in models and methodologies – – – – – – – – Transfer to (from): – – – – – – – – Stage 1 1,074 (1,014 ) (60 ) – 772 (749 ) (23 ) – Stage 2 (387 ) 586 (199 ) – (219 ) 315 (96 ) – Stage 3 (10 ) (709 ) 719 – (5 ) (392 ) 397 – Gross write-offs – – (2,627 ) (2,627 ) – – (1,980 ) (1,980 ) Recoveries – – 465 465 – – 460 460 Foreign exchange and other movements (6) 69 66 37 172 25 30 61 116 Balance at end of year (2) $ 1,326 $ 2,247 $ 1,162 $ 4,735 $ 1,298 $ 1,864 $ 957 $ 4,119 Business and government Balance at beginning of the year $ 322 $ 320 $ 695 $ 1,337 $ 212 $ 470 $ 655 $ 1,337 Provision for credit losses Remeasurement (1) 168 172 427 767 (79 ) (36 ) 302 187 Newly originated or purchased financial assets 467 – – 467 310 – – 310 Derecognition of financial assets and maturities (391 ) (50 ) (31 ) (472 ) (255 ) (89 ) (30 ) (374 ) Changes in models and methodologies – – – – 30 57 – 87 Transfer to (from): Stage 1 108 (108 ) – – 118 (118 ) – – Stage 2 (52 ) 63 (11 ) – (27 ) 29 (2 ) – Stage 3 – (8 ) 8 – – (8 ) 8 – Gross write-offs – – (355 ) (355 ) – – (318 ) (318 ) Recoveries – – 65 65 – – 112 112 Foreign exchange and other movements 13 14 (50 ) (23 ) 13 15 (32 ) (4 ) Balance at end of period including off-balance (2) $ 635 $ 403 $ 748 $ 1,786 $ 322 $ 320 $ 695 $ 1,337 Less: Allowance for credits losses on off-balance (2)(3) 100 20 29 149 67 24 17 108 Balance at end of year (2) $ 535 $ 383 $ 719 $ 1,637 $ 255 $ 296 $ 678 $ 1,229 (1) Includes credit risk changes as a result of significant increases in credit risk, changes in credit risk that did not result in a transfer between stages, changes in model inputs and assumptions and changes due to drawdowns of undrawn commitments. (2) Interest income on impaired loans for residential mortgages, personal loans, credit cards, and business and government loans totaled $378 (2022 – $274). (3) Allowance for credit losses on off-balance (4) Allowance for credit losses on acceptances are recorded against the financial asset in the Consolidated Statement of Financial Position. (5) During the year ended October 31, 2023, the contractual terms of certain financial assets were modified where the modification did not result in derecognition. The carrying value of such loans that were modified in Stage 2 and Stage 3 was $2,096 and $798 (6) Divestitures are included in the foreign exchange and other movements. (f) Carrying value of exposures by risk rating Residential mortgages As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 (1) Total Stage 1 Stage 2 Stage 3 (1) Total Very low $ 202,322 $ 957 $ – $ 203,279 $ 208,526 $ 635 $ – $ 209,161 Low 88,909 877 – 89,786 90,745 1,172 – 91,917 Medium 19,758 1,385 – 21,143 18,399 1,032 – 19,431 High 3,424 3,428 – 6,852 2,759 2,680 – 5,439 Very high 63 2,242 – 2,305 53 1,429 – 1,482 Loans not graded (2) 17,792 1,161 – 18,953 19,276 1,187 – 20,463 Default – – 1,864 1,864 – – 1,386 1,386 Total 332,268 10,050 1,864 344,182 339,758 8,135 1,386 349,279 Allowance for credit losses 265 321 498 1,084 197 296 406 899 Carrying value $ 332,003 $ 9,729 $ 1,366 $ 343,098 $ 339,561 $ 7,839 $ 980 $ 348,380 (1) Stage 3 includes purchased or originated credit-impaired loans. (2) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. Personal loans As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 (1) Total Stage 1 Stage 2 Stage 3 (1) Total Very low $ 29,849 $ 211 $ – $ 30,060 $ 30,098 $ 285 $ – $ 30,383 Low 27,594 558 – 28,152 27,284 685 – 27,969 Medium 8,725 599 – 9,324 8,789 1,464 – 10,253 High 8,369 3,529 – 11,898 7,059 2,275 – 9,334 Very high 125 2,177 – 2,302 81 1,655 – 1,736 Loans not graded (2) 19,427 1,831 – 21,258 17,371 1,537 – 18,908 Default – – 1,176 1,176 – – 848 848 Total 94,089 8,905 1,176 104,170 90,682 7,901 848 99,431 Allowance for credit losses 647 1,103 664 2,414 665 921 551 2,137 Carrying value $ 93,442 $ 7,802 $ 512 $ 101,756 $ 90,017 $ 6,980 $ 297 $ 97,294 (1) Stage 3 includes purchased or originated credit-impaired loans. (2) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. Credit cards As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Very low $ 1,989 $ 42 $ – $ 2,031 $ 1,813 $ 47 $ – $ 1,860 Low 3,329 89 – 3,418 2,756 159 – 2,915 Medium 4,262 116 – 4,378 3,434 190 – 3,624 High 3,239 1,310 – 4,549 3,042 998 – 4,040 Very high 38 820 – 858 36 587 – 623 Loans not graded (1) 1,290 585 – 1,875 997 459 – 1,456 Default – – – – – – – – Total 14,147 2,962 – 17,109 12,078 2,440 – 14,518 Allowance for credit losses 414 823 – 1,237 436 647 – 1,083 Carrying value $ 13,733 $ 2,139 $ – $ 15,872 $ 11,642 $ 1,793 $ – $ 13,435 (1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. Undrawn loan As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Very low $ 104,488 $ 3 $ – $ 104,491 $ 98,973 $ 6 $ – $ 98,979 Low 20,037 1 – 20,038 19,196 9 – 19,205 Medium 8,518 11 – 8,529 7,880 44 – 7,924 High 3,814 421 – 4,235 3,700 307 – 4,007 Very high 68 296 – 364 34 354 – 388 Loans not graded (1) 9,522 1,894 – 11,416 8,316 1,667 – 9,983 Default – – – – – – – – Carrying value $ 146,447 $ 2,626 $ – $ 149,073 $ 138,099 $ 2,387 $ – $ 140,486 (1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. Total retail loans As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 (1) Total Stage 1 Stage 2 Stage 3 (1) Total Very low $ 338,648 $ 1,213 $ – $ 339,861 $ 339,410 $ 973 $ – $ 340,383 Low 139,869 1,525 – 141,394 139,981 2,025 – 142,006 Medium 41,263 2,111 – 43,374 38,502 2,730 – 41,232 High 18,846 8,688 – 27,534 16,560 6,260 – 22,820 Very high 294 5,535 – 5,829 204 4,025 – 4,229 Loans not graded (2) 48,031 5,471 – 53,502 45,960 4,850 – 50,810 Default – – 3,040 3,040 – – 2,234 2,234 Total 586,951 24,543 3,040 614,534 580,617 20,863 2,234 603,714 Allowance for credit losses 1,326 2,247 1,162 4,735 1,298 1,864 957 4,119 Carrying value $ 585,625 $ 22,296 $ 1,878 $ 609,799 $ 579,319 $ 18,999 $ 1,277 $ 599,595 (1) Stage 3 includes purchased or originated credit-impaired loans. (2) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. Business and government loans As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 (1) Total Stage 1 Stage 2 Stage 3 (1) Total Investment grade $ 160,148 $ 1,205 $ – $ 161,353 $ 162,696 $ 1,775 $ – $ 164,471 Non-Investment 114,192 7,705 – 121,897 105,251 9,563 – 114,814 Watch list 28 3,340 – 3,368 22 2,890 – 2,912 Loans not graded (2) 2,500 18 – 2,518 2,346 12 – 2,358 Default – – 2,686 2,686 – – 2,552 2,552 Total 276,868 12,268 2,686 291,822 270,315 14,240 2,552 287,107 Allowance for credit losses 535 383 719 1,637 255 296 678 1,229 Carrying value $ 276,333 $ 11,885 $ 1,967 $ 290,185 $ 270,060 $ 13,944 $ 1,874 $ 285,878 (1) Stage 3 includes purchased or originated credit-impaired loans. (2) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. Undrawn loan commitments – As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 (1) Total Stage 1 Stage 2 Stage 3 (1) Total Investment grade $ 240,044 $ 1,673 $ – $ 241,717 $ 222,734 $ 1,502 $ – $ 224,236 Non-investment 62,634 5,288 – 67,922 62,827 4,534 – 67,361 Watch list 1 1,103 – 1,104 4 604 – 608 Loans not graded (2) 5,205 – – 5,205 4,573 – – 4,573 Default – – 109 109 – – 139 139 Total 307,884 8,064 109 316,057 290,138 6,640 139 296,917 Allowance for credit losses 100 20 29 149 67 24 17 108 Carrying value $ 307,784 $ 8,044 $ 80 $ 315,908 $ 290,071 $ 6,616 $ 122 $ 296,809 (1) Stage 3 includes purchased or originated credit-impaired loans. (2) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. Total non-retail As at October 31, 2023 As at October 31, 2022 Category of PD grades ($ millions) Stage 1 Stage 2 Stage 3 (1) Total Stage 1 Stage 2 Stage 3 (1) Total Investment grade $ 400,192 $ 2,878 $ – $ 403,070 $ 385,430 $ 3,277 $ – $ 388,707 Non-investment 176,826 12,993 – 189,819 168,078 14,097 – 182,175 Watch list 29 4,443 – 4,472 26 3,494 – 3,520 Loans not graded (2) 7,705 18 – 7,723 6,919 12 – 6,931 Default – – 2,795 2,795 – – 2,691 2,691 Total 584,752 20,332 2,795 607,879 560,453 20,880 2,691 584,024 Allowance for credit losses 635 403 748 1,786 322 320 695 1,337 Carrying value $ 584,117 $ 19,929 $ 2,047 $ 606,093 $ 560,131 $ 20,560 $ 1,996 $ 582,687 (1) Stage 3 includes purchased or originated credit-impaired loans. (2) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category. (g) Loans past due but not impaired (1) A loan is considered past due when a counterparty has not made a payment by the contractual due date. The following table presents the carrying value of loans that are contractually past due but not classified as impaired because they are either less than 90 days past due or 2023 (2) 2022 (2) As at October 31 ($ millions) 31 – 60 61 – 90 91 days (3) Total 31 – 60 61 – 90 91 days (3) Total Residential mortgages $ 1,329 $ 617 $ – $ 1,946 $ 1,015 $ 482 $ – $ 1,497 Personal loans 648 360 – 1,008 505 254 – 759 Credit cards 238 157 345 740 173 113 249 535 Business and government 159 57 – 216 122 47 – 169 Total $ 2,374 $ 1,191 $ 345 $ 3,910 $ 1,815 $ 896 $ 249 $ 2,960 (1) Loans past due 30 days or less are not presented in this analysis as they are not administratively considered past due. (2) For loans where payment deferrals were granted, deferred payments are not considered past due and such loans are not aged further during the deferral period. Regular aging of the loans resumes, after the end of the deferral period. (3) All loans that are over 90 days past due are considered impaired with the exception of credit card receivables which are considered impaired when 180 days past due. (h) Purchased credit-impaired loans Certain financial assets including loans are credit-impaired on initial recognition either through acquisition or origination. The following table provides details of such assets: As at October 31 ($ millions) 2023 2022 Unpaid principal balance (1) $ 307 $ 309 Credit related fair value adjustments (87 ) (70 ) Carrying value 220 239 Stage 3 allowance (1 ) (2 ) Carrying value net of related allowance $ 219 $ 237 (1) Represents principal amount owed net of write-offs. |