PWC Canadian Banks 2015

Canadian
Banks 2015
A new era begins
Perspectives on the
Canadian banking industry
www.pwc.com/ca/canadianbanks
Contents
02 A new era begins

8 Victor G. Dodig, CIBC

12 David I. McKay, RBC
18 Monique F. Leroux, Desjardins Group
20 Snapshot of the Big Six

21 BMO
23 Scotiabank
25 CIBC
27 NBC
29 RBC
31 TD
33 Appendices
42 Financial Services publications
44 Financial Services leadership team
Preface
The 2015 edition of our report on the Canadian banking sector comes at a time of transition.
New leaders have taken charge at four of the Big Six banks in recent months, and they do so
at a time when the banking industry worldwide faces significant new challenges.
Canadas banks find themselves in a rapidly changing world. New technologies and
competitors are poised to disrupt the industry. Customer expectations are evolving
and rising. Data analytics offers a wealth of opportunity. Regulatory requirements and
reforms continue to grow and evolve, and are an important aspect of doing business
today. And an economy that has only just escaped from under the shadow of the
financial crisis now struggles to find its footing once more.
How will Canadian banks, which earned plaudits for their caution and stability amid
the turmoil of recent years, respond to this sea of change and challenge? How will
they use data analytics and turn it into a competitive advantage? And how will their
strategies and operational resilience compare with those of their global peers? What is
certain, however, is that Canadas banks will take on these challenges from a position of
strength, having achieved another year of solid revenue growth.
This year, we feature our conversations with leaders from CIBC, RBC and Desjardins
about their leadership style and perspectives during this time of change. In the pages
that follow, youll also discover how Canadas banks performed against their global
counterparts in 2014and learn more about the developments and trends that will
shape 2015 and beyond.
Diane Kazarian
Bill McFarland
National Financial Services Leader
CEO and Senior Partner
Perspectives on the Canadian banking industry
A new era begins

Perspectives on the Canadian
banking industry
We may look back at 2015 as the beginning of a new era for Canadas banking sector.
New CEOs have taken the helm at CIBC, RBC, Scotiabank and TD. We have a new federal
finance minister, a new Bank of Canada governor and new leaders at both the Office of the
Superintendent of Financial Institutions (OSFI) and the Canada Mortgage and Housing
Corporation (CMHC). How will their experiences and responses shape the way Canadas
banks respond to a rapidly changing world of continued re-regulation and increasing
customer expectations?
Canadian Banks 2015
A new era begins
These new leaders have taken charge at a time when

Canadian banks delivered another year of solid
performance in 2014. Yet theyre also taking over at a
point when the business of banking faces several major
challenges. New competitors and new technologies
threaten to disrupt the industry. Evolving consumer
behaviours and expectations are pressuring banks to
change how they engage with and serve their customers.
Data analytics has emerged as a powerful tool that can help
banks transform vast amounts of data into business insight
and better decisions. All of this is taking place against a
backdrop of a sputtering economy, continued consumer
debt burdens, falling Canadian dollar and commodity
prices, and further margin pressure.
A new era begins
Canadian banks
in a global context
Canadian banks1
Efficiency
57.9%
ROE
16.8%
US banks3
Efficiency
70.8%
ROE
7.0%
Canadian banks bolstered their sound global position, with strong return
on equity (ROE) levels and total shareholder again in 2014. However,
the ROE gap is closing and global peers are catching up in this regard.
In particular, core earnings growth combined with an improvement in
credit losses contributed to a 6.9% increase in pre-tax earnings for the
largest Australian banks. This compared to an overall flat pre-tax earnings
growth for the Canadian Big Six.
ROE for US banks continues to lag behind. Despite better growth from
an improving US economy, legal and operational costs from regulatory
demands continue to be a drag on pre-tax earnings, which grew at 1.3%
for top US institutions. Five-year average for total shareholder return
continues to show improvement and growth compared to Canadian and
Australian banks, which while still healthy, saw declines in these averages.
Productivity and efficiency, reflected through earnings per full-time
employee equivalent (FTE), remained flat for Canadian banks. This has
been driven by a combination of modest and slowing revenue growth,
and continued challenges with the overall cost structure of the industry.
This has been further exacerbated by increasing costs related to regulation
and compliance. Australia continues to demonstrate higher productivity
performance, nearly twice that of the Canadian banks, as a result of a
number of factors, including lower headcounts, a smaller branch network
and differences in business mix.
Australian banks2
Efficiency
45.9%
Canadian Banks 2015
ROE
15.6%
A new era begins
Figure 1: Canadian banks compared with global banks
Canadian banks1
Key metrics
Net income
before tax
($millions)
FTE (absolute
numbers)4
Net income
before tax/FTE
($ millions)
5 year TSR
(Reuters)5
BMO
BNS
CIBC
NBC
Australian banks2
RBC
TD
Canadian
banks
average
ANZ
CBA
NAB
US banks3
WESTPAC
Australian
banks
average
BofA
CITI
JPMC
WELLS
US
banks
average
5,236
9,300
3,914
1,833
11,710
9,075
10,308
11,997
7,955
10,740
6,855
14,364
29,792
33,915
46,778
86,932
44,424
17,056
73,498
81,137
50,328
44,329
42,853
33,586
223,715
241,000
241,459
264,500
0.11
0.11
0.09
0.11
0.16
0.11
0.11
0.20
0.27
0.19
0.32
0.25
0.03
0.06
0.12
0.13
0.09
13.0% 10.13%
12.96%
14.97%
11.53%
14.94%
12.92%
15.96%
18.54%
14.18%
15.31%
16.00%
3.97%
10.41%
10.86%
17.70%
10.73%
Notes
1.
2.
3.
4.
5.
Canadian banks values are in CA$ and include The Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), The Bank of Nova Scotia (BNS), National Bank of Canada (NBC), Royal Bank of Canada (RBC) and Toronto-Dominion Bank (TD).
Australian banks values are in AU$ and include Australia and New Zealand Banking Group Limited (ANZ), Commonwealth Bank (CBA), National Australia Bank (NAB), and Westpac Bank (WESTPAC).
US banks values are in US$ and include Bank of America (BofA), JPMorgan Chase & Co. (JPMC) and Wells Fargo (WELLS). Data for US Banks are unaudited due to Dec 31st year-ends and so audited information is not yet available.
Full-time employees.
5 year Total Return Analysis is the annualized return on dividends reinvested in security.
A new era begins
The big picture:

Canadian banks 2014 performance
Canadas Big Six banks began 2014 amid widespread concern about
downward pressures on growth and return on equity. They responded in
characteristic fashion, posting another year of solid revenue and returns.
The Big Six banks average consolidated revenue rose to CA$20.5 billion2
in 2014, up from CA$18.9 billion the previous year. Return on equity
remained a very respectable 16.8%, though this figure continued the
gentle decline weve observed and predicted in recent years.
Bank productivity changed little last year. The Big Six banks overall
efficiency was 57.9% in 2014, up from 57.7% the prior year. RBC and
Scotiabank once more posted the lowest efficiency ratios among their peers.
Banks results are still being driven by a benign credit environment and
the ongoing strength of retail banking in Canada. Consumer spending and
appetite for credit has tapered but has still been surprisingly strong, and to the
banks benefit. However, bank leaders acknowledge that these conditions are
poised to change, and banks are issuing statements to lay the groundwork for
how theyll respond if the business environment is challenged.
Canadian Banks 2015
A new era begins
Figure 2: 2014 at a glance Key metrics as at or the year ended October 31
BMO
Total market return
Market capitalization ($ billions)

Net income ($ millions)
Efficiency ratio
Earnings per share
Gross impaired loans ($ millions)
Consolidated revenue2 ($ millions)
BNS
CIBC
NBC
RBC
TD
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
16.8%
28.0%
5.0%
12.9%
21.3%
7.4%
20.4%
17.7%
9.5%
20.6%
21.6%
12.8%
18.3%
27.4%
21.8%
19.8%
21.7%
11.8%
53.0
46.8
38.4
84.0
76.6
64.3
40.8
35.4
31.8
17.3
14.7
12.4
115.4
100.9
82.3
102.4
87.9
74.4
4,333
4,248
4,189
7,298
6,697
6,466
3,215
3,400
3,339
1,538
1,554
1,634
9,004
8,429
7,539
7,883
6,662
6,471
65.3%
63.3%
63.5%
52.6%
53.5%
52.0%
63.7%
59.6%
57.5%
58.6%
58.6%
59.3%
51.8%
52.6%
51.5%
55.1%
55.2%
54.8%
6.44
6.27
6.18
5.69
5.19
5.31
7.87
8.24
7.86
4.36
4.34
4.70
6.03
5.60
4.98
4.15
3.46
3.40
2,048
2,544
2,976
4,200
3,701
3,582
1,434
1,547
1,867
486
395
387
1,977
2,201
2,250
2,731
2,962
2,518
16,718
16,263
16,130
23,604
21,343
19,701
13,376
12,783
12,549
5,464
5,163
5,313
34,108
30,867
29,772
29,961
27,262
25,546
Total non-interest expenses ($ millions)
10,921
10,297
10,238
12,601
11,587
10,403
8,525
7,614
7,215
3,423
3,165
3,173
17,661
16,227
15,160
16,496
15,042
13,998
Employee headcount
46,778
45,631
46,272
86,932
83,874
81,497
44,424
43,039
42,595
17,056
16,675
16,636
73,498
74,247
74,377
81,137
78,748
78,397
Total capital ratio
14.3%
13.7%
14.9%
13.9%
13.5%
16.7%
15.5%
14.6%
17.3%
15.1%
15.0%
15.9%
13.4%
14.0%
15.1%
13.4%
14.2%
15.7%
Notes
1. Calculated by change in share price plus dividends.
2. Consolidated revenue is net of insurance policyholder benefits, claims and acquisition expense.
Note: Other than the impact of stock splits, prior years data is consistent with prior year annual reports.
A new era begins
CEO perspectives: CIBC

Victor Dodig was named CEO of CIBC in September
2014. Prior to his appointment, Victor served as CIBCs
Wealth Management group head and held executive
vice president roles in the banks wealth management
and retail banking groups. Before joining CIBC in 2005,
Victor was managing director and CEO in Canada for
UBS Global Asset Management.
In his new role, Victor is keenly aware of the forces
and playersthat threaten to disrupt the banking
sector. We pay particularly close attention to some
of the innovative technology players and what theyre
doing to disrupt or participate in our industry, he says.
You ignore them at your peril.
Responding to these disruptors demands that banks not
only defend, but go on offense as well. You play offense
by embracing some of these new technologies and
new entrants to the market, and by looking at it from a
customer lens, says Victor.
Victor sees customer demands and expectations as
the primary driver of much of the change taking place
in banking. Staying on top of those expectations is
key. Our job is to think about the banking experience
from a clients point of view. Whichever channel they
use, we have to have a fundamental understanding of
their relationship with CIBCespecially when that
relationship crosses channels.
While some may worry that rising regulatory costs
may hinder banks efforts to invest in improving their
customer experience, Victor feels theres little point
Victor G. Dodig
President and CEO, CIBC
Canadian Banks 2015
in complaining. You cant trade off regulatory spend

for client experience, he says. Regulatory spend is
foundational. Its where we are in our cycle, a reaction
to the post-financial crisis world.
From his perspective, the regulatory environment and
the costs that go along with it actually helps banks make
better decisions. You tackle the regulatory piece and
then you pick the most important, highest-impact client
pieces you can in order to build the business.
Even as CIBC works to deliver a better experience to its
customers and stay on top of competitors old and new,
Victor is clear that ultimately, its the results that matter.
The results are the most important thing in the end,
he says. We can evolve our culture and strengthen it,
which were doing. We can get out there and engage
with our customers, which were doing. But if we dont
deliver the results, it will all be just an exercise.
Victor is leading CIBC forwardand in the process,
putting his stamp on the banks style of leadership.
Today, to create the right working environment and
attract the right talent, we need a leadership style thats
authentic and empowers people, he believes.
He describes his own style as a first among equals
approach. I think the overall role of the CEO is to
develop, enhance and protect a companys culture. I like
to get good, smart people around the table and present
them with a problem. It helps you reach consensus
around a direction or two that everyone can agree on.
A new era begins
Commodity prices
causeconcerns
Is banking ready for the

comingdisruption?
The recent dropoff in commodity pricesoil prices in particularcould

create some challenges for banks in the months to come. Sustained
low commodity prices will dampen direct corporate lending and
underwriting activity, as the energy sector cuts back on spending and
shelves acquisition and development plans. However, lower energy prices
and continued pressure on the Canadian dollar could spark activity
in other sectors such as manufacturing and exports, opening up longdormant opportunities for banks.
In Canada and around the world, banks will soon find themselves facing
an unprecedented level of disruption. New market entrants, from retailers
to telecoms to technology firms, are poised to move into the traditional
banking space and seize profitable opportunities. Payments will likely
be the first major battleground, with Apple, Google and Amazon already
making waves with their mobile payment offerings and TransferWise,
Ripple and Paypal in the wires and remittance domain. Elsewhere,
crowdsourced fundraising companies like Kickstarter, and peer-to-peer
lending companies like Funding Circle, are enabling a new generation of
entrepreneurs to get their businesses off the ground without having to
involve a bank. These new market entrants are able to bring the power of
innovation to bear on very specific areas of traditional bankingand in
doing so are discovering ways to shunt traditional banks aside.
Retail banking is also likely to see shifting fortunes owing to commodity

price changes. Albertas anticipated flat-to-negative growth is expected
to curtail consumer spending and spark a decline in housing sales, which
will doubtlessly impact bank results. Yet at the same time, lower gas prices
will put more money in consumers wallets, so banks may benefit from
increased spending in some parts of the country.
Keeping an eye on interest rates

Years of extremely low interest rates have proven a boon for banks lending
portfolioslending volumes compensating for low returns. In spite of
recent surprise moves by the Bank of Canada, this very stable lending
environment may soon come to an end. Theres an expectation that the
US will raise interest rates towards the end of 2015. Canada is generally
expected to follow the US lead. Like most macroeconomic factors, an
interest rate increase, should it come to pass, will prove a double-edged
sword: lending volumes may fall off, but the returns will improve as
margins tend to expand when interest rates are on the move.
You ignore these disruptors [digital

technologies] at your peril. You try to
understand everything from a client
point of view and because we know
clients are using multiple channels, you
need to understand their touch points as
you build that relationship with them.
Victor Dodig
President and CEO, CIBC
A new era begins
This wave of disruption will change banking, but it wont usurp it. We
believe it will provide banks with an opportunity to validate and articulate
their current value propositionor push forward with their own disruption.
Self-disruption could enable a bank to achieve superior cost reduction by
working with partners or platforms that deliver better service and value.
Non-core competencies such as back-office processing or IT application
maintenance might be better managed by a third-party or placed in the
cloud. Disruption could accelerate bank efforts to become part of a larger,
cross-industry business ecosystem, or found their own.
Banks embracing a new vision

for customer experience
Banking customers behaviours and expectations have changed
significantly in recent years, influenced heavily by their experiences with
retailers and the service sector. Customers want to bank when, where
and how they want. They want their banking to be smooth and hasslefree. And they want their banks to tailor offers and advice to their unique
needs, life events and goals. Canadian banks are well aware of these shifts
in their customers attitudes, and theyre responding.
In the past year, weve seen all of the major banks take concrete steps
towards improving the customer experience. Banks have enhanced
their mobile banking capabilities and improved their online banking
experience. As customers flock to self-service banking for most daily
needs, banks are reconfiguring their branch network to better suit their
new role as a place where customers go for advice, not transactions.
While their customers may be impatient for their banks to deliver a
retail-like experience, the reality is that Canadas banks face numerous
challenges in doing so.
Banks are large, highly complex organizations, and the changes required
to deliver a superior customer experience can have a far-reaching impact
that must be carefully managed. In addition, banks remain encumbered by
legacy IT systems that in some cases date back to the 90s, or even the 80s;
these older systems are unable to support the cutting-edge technology
demanded by todays customer experience tools. Changing these old
systems is costlyand in some cases, quite risky.
10
Canadian Banks 2015
A new era begins
Because of these challenges, banks are increasingly turning to fintech

companies and others to develop the tools and technologies needed to
deliver a better customer experience. TD has partnered with Moven, a
mobile-phone based banking and budgeting app, to provide its customers
with a convenient means to track payments and spending. RBC has joined
forces with Bionym to pilot the use of the Nymi fitness band to authenticate
card purchases using the customers heartbeat. Scotiabanks Tangerine
online banking division is exploring a voice-controlled interface to let users
bank by speaking. These examples all illustrate how banks are partnering
with others who can innovate more quickly and nimbly than they can. We
expect to see more of this in the years to come.
While banks are right to invest in improving the customer experience
they provide, its important that they do so with a degree of scepticism,
if not outright caution. Customer expectations and behaviours continue
to evolve, and this makes it difficult to pinpoint exactly what they really
expect from their bank. Mobile payments are hot, but how many customers
will actually use mobile payment technology thats no more convenient
that a debit card?
Ultimately, what customers expect from their banks hasnt changed: They
expect their bank to keep their moneyand their personal and financial
informationsafe and secure. Any innovation, whether to improve the
customer experience or not, must in the end support that core purpose.
40%
More than 40% of banking CEOs see joint

ventures, strategic alliances and informal
collaborations as an opportunity to strengthen
innovation and gain access to new customers
and new/emerging technologies.
18th Annual Global CEO Survey: Banking & Capital markets industry summary, PwC
If you focus on your customer and treat your customers as if theyre going
to be with you for the next 50 years, you make decisions for the long term.
The rest will play out.
David I. McKay
President and Chief Executive Officer, RBC
Perspectives on the Canadian banking industry 11
A new era begins
CEO perspectives: RBC

David McKay was appointed RBCs new CEO in
August 2014. He brings to his new role over 25 years
of experience in increasingly senior roles with the
bank. Before his appointment as CEO, David was
RBCs Personal & Commercial Banking group head,
overseeing banking businesses in Canada, the US and
the Caribbean.
The complexity of managing an organization,
particularly a regulated institution like a bank, is
growing exponentially, David remarks. And having
a vision of where youre going become all the more
important as youve got these crosswinds coming at
youtechnology, crosswinds, regulatory crosswinds,
new competitors.
Hes quick to identify technology as the key driver
behind many of challenges he and his fellow CEOs face.
CEOs will be challengedin every business, not just
bankingby the role technology plays in changing
business models. Any CEO, going forward, has to be in
tune with how technology is transforming their business
model and their customers. Its critical.
Looking ahead, David sees banks facing competitive
pressure on all fronts. Our role as a financial
intermediary is being challenged, he says. We move
money, we store money, and we lend money. Those
are the most basic components of being a bank. And
ineach of these areas, were being challenged.
David I. McKay
President and CEO, RBC
12
Canadian Banks 2015
While Apple, Google and PayPal are the biggest names

looking to seize an opportunity to muscle into banks
traditional territory, David notes that they are by no
means the only ones. Tremendous amounts of capital
financial and humanis being poured into the effort to
disrupt the banking sector.
Its absolutely staggering, he says. You only have to
spend a couple of days in San Jose and Palo Alto to see
how many smart people are working on reinventing
the money-moving business, and how much money is
flowing into that effort.
How should banks respond? We have to innovate
continually, says David. Its going to require us to do
different things and create different value propositions.
And we have to think completely differently about
how we build our products and services. For him, that
means simplifying products and services to better suit a
busy, mobile customer base.
Banks will also need to rethink their place in the
customer value chain, he says. Its no longer enough
to be at the end of the chain. Its not enough to say,
Im going to be the payment function. We have to be
part of the overall customer value equation. We have to
demonstrate that we know them very well and then we
can create relative value through that journey.
At the end of the day, banks are in a battle for
relevancy with todays connected, demanding
consumers. Whoever is the most relevant to the
customer and can create a value equation that wows
them is going to win, he says.
A new era begins
Coming to grips with

dataanalytics
Canadas banks are well aware of the potential of data analyticshow
it offers a way to uncover valuable new insights from the vast wealth of
customer data banks already possess and add to each day. Realizing that
potential will be a long-term project, however.
There are already signs of progress. Were encouraged to see that the major
banks have appointed chief data officers (CDOs). Were especially pleased
to see that these new CDOs are reporting into chief marketing officers
or other major business functions, or even the CEO directly. This will
send the entire organization the message that data analytics is a business
imperative, not an IT project.
These CDOs are charged with taking on the heroic task of transforming
billions of pieces of customer data into usable, valuable business
intelligence. Banks are investing in better analytics capabilities and data
labs, and in recruiting talented expertise to their teams. Yet significant
challenges remain. Customer data is stored across the banks organizations
in a vast range of formats, from databases to spreadsheets to electronic
notes jotted down in an advisors files. And while finding the data is a
major undertaking, ensuring that data is accurate, manageable and
consistent and in a format usable by analytics tools is perhaps an even
larger one. While the work is starting, it will be some time before banks
can capitalize on the full power of data analytics.
We expect to see banks continue to focus on improving how they segment
their markets, building an ever-finer picture of their customer base based
on behaviours and preferences rather than age, income and other standard
demographics. This improved segmentation can in turn be used to deliver
more tailored advice and offerings to highly targeted customer groups and
improve the overall customer experience.
The regulatory environment:

Banks shift attention to
compliance efficiency
Canadas banks appear to have come to terms with their regulatory
burden. After years of enduring an ever-risingand ever more costly
tide of regulatory requirements, Canadian banks have moved on. Rather
than focusing on how to simply meet the needs of their regulators, banks
are now concentrating on how to comply with regulatory requirements as
efficiently as possible.
In the near term, we expect banks will re-examine their compliance
processes and procedures and identify opportunities to simplify and
streamline them. The impact of this effort may well be felt throughout the
organizationfrom how compliance-related data is stored to what and
how it is collected in the first place. The effort will most likely enable banks
to reduce the not inconsiderable costs theyve incurred in building up their
compliance functions in recent years.
A new era begins
Banks rethink leadership

Its well known that the Canadian banking industry is held in high regard
by our global counterparts, partly due to its strong leadership and stability
during the financial crisis. As new leaders are taking the helm at several
major banks, they arent just looking at growth for their enterprises. They
want good growth, thats real, inclusive, responsible and lasting.
To achieve this, CEOs are rethinking what leadership means to their
organizations. Leaders as they see it will need to be forward looking, agile
and adopt a broad mindset. Theyll need to seek diverse perspectives and be
comfortable collaborating across boundaries and with a new ecosystem of
partners to drive innovation and growth.
Because of this, individual leadership is giving way to collaborative leadership.
Canadian banks are looking at leadership as an organizational competency
and competitive differentiator. They need no longer discover leadersthey
can cultivate them in a manner that integrates with the overall business and
talent strategies.
Were also seeing banks establish centres of excellence designed to support
the growth of their leadership bench and processes such as high potential
identification, development and succession planning. However, if these
investments are to pay off, Canadian banks will need to ensure they sustain
leadership development effort over the long term and career progressions
must be carefully managed and monitored to provide the next generation of
leaders with the experiences required to meet tomorrows challenges.
Finally with the acceleration of new technologies, non-traditional
competitors and changing consumer behaviours, a radical reshaping of
the relationship between banks and their customers is underway. Its all
happening at lightspeedand banks are quickly gearing their leadership
for the challenge and driving organization-wide behaviour that strengthens
trust; ensures business is done in the right way and develops a corporate
purpose that takes total contribution to customers, employees, shareholders
and society into account.
14
Canadian Banks 2015
Canadian banks ready

themselves for a rapidly
changing world
In our view, Canadas banks are in a position of strength. As new leaders
establish themselves in their roles, were confident that the countrys
banking sector will build on its traditional resilience to adapt and overcome
the challenges of the years ahead. Banking, and the banking industry itself,
is poised to undergo a remarkable period of transformation. And were
confident that Canadas banks will continue to maintain their position as
highly respected leaders.
A new era begins
Steady as we grow
As has been a recurring theme in the last two years of our annual
publication, Canadian banks have continued to endure ROE pressure.
Overall, the mean ROE of the Big Six banks decreased from 15.00% to
14.81% in fiscal 2014 (Figure 3). Maintenance of the ROE has remained
a core focus as capital adequacy requirements continue to evolve with
resulting pressure on profitability.
Figure 3: Factors affecting Canadian banks ROE
2.81%
-0.04%
15.00%
1.44%
-2.50%
14.81%
-0.54%
Capital adequacy requirements relating to Basel III continued to have a

negative impact. Relative to Basel II, Basel III places greater emphasis
on common equity, increasing the level of common equity deductions.
On January 1, 2014, the Big Six banks began phasing in the capital
requirements for credit value adjustments for counterparty risk.
To accommodate capital reforms, the Big Six banks increased their
retained earnings by nearly 15%, and aggregate book equity by 9.9%,
while asset growth was 8.7%. Book equity growth outpacing asset
growth indicates that banks are continuing to increase capital levels to
ensure compliance with the phase-in implications of Common Equity
Tier1 (CET1) (Figure 4).
Figure 4: Deeper analysis into the capital impact
-1.35%
4,706
247
224,387
AOCI
Noncontrolling
interest in
subs
Book
equity
2014
15,574
ROE
2013
Capital
impact
Net
interest
income
Noninterest
income
Provisions Operating Provisions

for credit
costs for income
losses
taxes
ROE
2014
204,356
-249
Book
equity
2013
Capital
stocks
Retained
earnings
1. Return on equity has been calculated by dividing net income after tax by book equity as reported in the banks annual reports
A new era begins
Through 2014 the low interest rate environment persisted, and yet the
banks managed this successfully. With the average net interest margins
decreasing from 1.95% in 2013 to 1.91% in 2014, the banks continued
to feel the impact of margin contraction (Figure 5). However, through
2014, the trend of last three years continued with banks effectively pricing
key balance sheet items like deposits and loans to calibrate spreads at
an effective marginal rate, and offsetting the negative ROE impact of
incremental capital.
Figure 5: Deeper analysis into the net interest income

4.50%
5 year Government of Canada bond rate
4.20%
4.00%
Average net interest margin for Big Six banks
3.50%
3.31%
3.00%
2.29%
2.50%
2.00%
1.50%
1.72%
1.89%
2.04%
2.51%
2.01%
2.22%
2.00%
1.95%
1.91%
1.55%
1.64%
2013
2014
2.04%
1.38%
1.00%
0.50%
0.00%
2007
2008
Source: Bloomberg and Bank of Canada
16
Canadian Banks 2015
2009
2010
2011
2012
In 2014, non-interest income increased by just over 13% year over year,
which resulted in over a 2.8% ROE increase, primarily credited to fee
based revenue growth. Notable growth areas included investment
banking, wealth and mutual fund management and insurance, each of
which grew by approximately 20% in aggregate across the Big Six banks.
Although trading income accounts for only 4% of the weighted average
for non-interest income, its important to note that trading revenues were
down by nearly 20% year over year.
The growth in non-interest income was more than eroded by higher
operating costs, provisions for credit losses and provisions for income
taxes. In aggregate, non-interest expenses grew by nearly 9%, primarily
related to variable compensation increases. Just over 70% of operating
costs are tied to salaries and employee benefits, which overall saw a 8%
increase from 2013 to 2014. From a productivity perspective, efficiency
ratios increased by 20bps from 57.65% in 2013 to 57.85% in 2014,
indicating a slight downward trend.
A new era begins
International banking operations continue to struggle with productivity,

deteriorating by nearly 50bps. Aside from the aforementioned variable
compensation increases, the worsening in Canadian banking productivity
can also be attributed to heavy investments in technology, operations
and regulatory reform. Gains in productivity from these investments
and business growth partially offset the increases in compensation and
investments to support expansion. Professional services also increased by
5%, likely to support increased transformational change, including efforts
to support regulatory programs.
Marketing costs increased by 11% in 2014, indicating the banks continued
focus on market share preservation and growth through marketing
campaigns and brand awareness.
As a percent of ROE, changes to provisions for credit losses were
negligible. With the continued downward pressure on the price of oil and
gas, we expect to see negative implications within the sector into 2015.
Duress along the oil and gas supply chain and supporting industries may
emerge, which could have a trickledown effect onto the Big Six banks
provisions for credit losses in the latter half of 2015.
A new era begins
CEO perspectives: Desjardins Group

Monique F. Leroux has seen a lot since being named chair
of the board, president and CEO of Desjardins Group,
Canadas largest cooperative financial group, in 2008.
Having led Desjardins through the aftermath of the
financial crisis, shes now ready to take on the challenges
of a rapidly changing financial services sector.
Monique is keenly interested in how rapidly advancing
technology is changing the world of bankingeven
as it threatens to disrupt it. Its a big challenge, she
remarks, but it also creates opportunities.
She makes sure her team stays vigilant about
new developments in order to identify potential
opportunities for Desjardins. Its important to me
that we integrate the knowledge of this evolution and
make sure we understand the challenges to our current
business model, she says. We regularly talk about
these innovations, these disruptive forces, and the
opportunities they create to better serve our members
and clients. What could happen? What can we do
differently to improve our agility?
Monique F. Leroux
Chair of the Board, President and
Chief Executive Officer of Desjardins Group
18
Canadian Banks 2015
Monique stresses the importance of getting an outside

perspective on whats happening in the banking sector.
We regularly speak with other organizations in other
sectors, because they have great input and observations,
she says. It brings a lot of value for us, because these
different views can help us define our strategy.
Desjardins is already hard at work to introduce new

offerings in the mobile and payments areas, as well as
improve how they engage with their customers. Were
in a transition mode, to a certain extent, remarks
Monique. The digital economy is bringing a major shift
to financial services. My view is that in less than five
years, the financial services industry wont be the same
as it is today. That puts a lot of pressure on us and the
other financial institutions to adjust, adapt and change.
At the same time, Monique says, Desjardins is also
searching for ways to better manage the regulatory
agenda. We are committed to customer service, but
we need to do that while respecting our numerous
compliance requirements. The key question for us is,
how can we do that in a way thats simpler for our
people, our customers and our members? she says. In
that context, it is a challenge to have non-traditional
competitors not facing the same regulatory burden as
we do. Maintaining a level-playing field is a key issue
regulators around the world should address.
With financial services changing so rapidly, its never
been more important for CEOs to act as leaders, not
just the chief decision makers. Think, talk, and take
time with people and customersthats the most
important thing. You can have the best strategy in the
world, but if youre not able to bring the organization
together and create an environment where your people
can develop their capabilities and take on leadership
themselves, well, maybe youre not as successful as you
think, says Monique.
A new era begins
Cooperatives: Taking a different

path to banking sector success
Desjardins may compete with the Big Six banks in the key battlegrounds in Canada,
but theres a key factor that sets it apart: Its a cooperative financial group.
Desjardins Group is the largest financial cooperative in Canada and fifth in the
world. What sets co-operatives, or co-ops, apart from their counterparts is their
underlying purpose: Desjardins and other co-ops operate for the benefit of their
members and communities, not stockholders. These members, who are also
customers, have a word when it comes to the co-ops strategy and use of surplus
earnings. In many cases, these earnings are re-invested in local communities.
In the view of Desjardins president and CEO Monique F. Leroux, co-ops offer an
alternative to the traditional banking business model, and one that potentially
brings competitive advantages. Co-ops can more easily engage in coopetition
she believesfor instance, joining together to develop innovations to benefit
their members without worrying how it will affect shares on the stock market.
Many are advocating for long-term capitalism and for a greater role of
businesses in society. In fact, the co-operative business model, with its values
and governance structure, is well positioned to lead this journey.
Snapshot of
the Big Six
When compared to other banks globally,
Canadian banks remain well regarded.
For the seventh time in the past seven years
the World Economic Forum has ranked
Canadas banks the soundest in the world.1
1. Canadian banks hold steady in top place according to World Economic Forum ranking: 7th year in a row. Canadian Bankers
Association. September 3, 2014. http://www.cba.ca/en/media-room/65-news-releases/715-canadian-banks-hold-steady-intop-place-according-to-world-economic-forum-ranking-7th-year-in-a-row. Retrieved January 22, 2015.
20
Canadian Banks 2015
Snapshot of the Big Six
BMO highlights
BMO is Canadas fourth largest bank in terms of
market capitalization. BMOs net income grew 3.3% to
CA$4,333million in 2014 compared to CA$4,195 in 2013
(5% to CA$4,453 million on an adjusted basis). This was
largely due to Canadian Personal and Commercial (P&C)
banking which had over CA$2 billion in earnings and
operating leverage of 2%. Return on equity (ROE) fell from
14.9% to 14.0% in 2014. Annual dividends were CA$3.08
per share in 2014 up 4.76% from CA$2.94 per share in 2013.
BMOs Basel III Common Equity Tier 1 (CET1) ratio went up
to 10.1% from 9.9% in 2013.1 During the year, BMOs largest
acquisition was F&C Asset Management Plc in line with plans
to expand its Wealth Management business.
Net income for Canadian P&C operations was up 11.1% to CA$2,014 million
compared to CA$1,812 million in 2013. Higher revenue and lower provisions
for credit losses (PCL), partially offset by higher expenses, were the main
reasons behind the favourable increase. Revenue was up CA$107 million
or 7% year over year driven by higher balance and fee volumes across most
products. There was a CA$32 million decline in PCL in the commercial
portfolio in 2014. Expenses increased by CA$47million or 6% as a result of
continued investments and higher variable compensation consistent with
annual business growth. In the personal banking segment, loan growth was
up 4% in 2014 and deposit growth increased by 10% yearover year. From a
commercial banking perspective, loan growth increased by 8% in 2014 and
deposit growth increased by 7% yearoveryear.
2014
BANK OF MONTREAL
CA$4,333
million
CA$3.08
per share
14.0%
3.3%
4.8%
-0.9%
Net
income
Dividends
ROE
CA$4,195
million
CA$2.94
per share
14.9%
2013
1. As reported in Bank of Montreals annual report.
US Banking P&C growth was strong at 48% year over year, increasing to
CA$180 million from CA$114 million in 2013. Current loans grew by 9%
in 2014 and acceptances grew by 2% year over year. This was largely due
to core Commercial and Industrial (C&I) loan portfolio growth which
increased by CA$4.8 billion or 21% from 2013 to CA$28.5 billion. The
decrease in PCL of 55% from CA$96 million in 2013 to CA$43 million in
2014 also contributed to the increase in US P&C income in 2014. However,
there were margin pressures (year over year decline by nine basis points)
and reduced loan spreads in 2014 which will pose some challenges to
overcome in this segment in 2015.
Net income from capital markets of CA$191 million in 2014 decreased

by CA$26 million or 12% from CA$217 million in 2013. There were
higher revenues from Investment and Corporate banking (increase of 9%
yearover year). However this was more than offset by higher expenses
(up 9% year over year) and lower loan recoveries (net recoveries of
CA$7million in Q4 2014 compared to CA$17 million in Q4 2013).
Therewas a funding valuation adjustment of CA$39 million in 2014
thatcontributed to lower revenues in trading products in 2014.
Assets under management and administration grew by CA$242 billion or
44% from a year ago to CA$794 billion, with the acquired F&C business
contributing CA$150 billion to the increase. Excluding F&C, assets under
management and administration grew by 17% in 2014. Net income in
the traditional Wealth Management segment was down 45% from prior
year. There was a large securities gain of CA$121 million in 2013 and
CA$23 million legal charge in Q4 that were non-recurring. Adjusting for
these items wealth management earnings were up 25%. Main drivers of
the increase in wealth management were stronger market appreciation,
a strengthening US dollar and in increase in client assets. Within the
Insurance segment, adjusted net income increased from CA$69 million
to CA$117 millionan increase of 70% in the year. Beneficial changes to
actuarial reserves in 2014 were a driving factor for the increase.
BMO is likely to focus on improving growth in their capital markets
business given the results in 2014. Another key area of focus will be
controlling expenses, given the 7% increase in non-interest expenses from
2013 (CA$10,921 million vs CA$10,226 million in 2013). The Canadian
P&C business has performed well due to loan growth and stabilizing
margins which should continue into 2015. The completed acquisition of
F&C Asset Management should help deliver strong results in the Wealth
Management business. BMO will need to have continued focus on its US
market in order to meet margin and competitive pressures in the future.
1
22
Canadian Banks 2015
BMO 2014 Financial Results
Scotiabank highlights
Scotiabank is Canadas third largest bank by total assets
and market capitalization. It reported a net income of
CA$7,298million in 2014 compared with a net income of
CA$6,610 million in 2013. Diluted earnings per share were
CA$5.66, compared to CA$5.11 in 2013. Annual dividends
were up CA$2.56 in 2014 compared to CA$2.39 in 2013
which is a year over year increase of 7.1%. Return on equity
(ROE) was 16.1% in 2014 compared to 16.6% in 2013, a
decrease of 0.5%.1 Scotiabanks Common Equity Tier 1
(CET1) ratio of 10.8% is the highest among its competitors.
The strong capital ratio provides Scotiabank with the flexibility to grow
both organically and invest in selective acquisitions for the bank which are
key areas of CEO Brian Porters long-term vision for the bank. Scotiabanks
sale of the majority of its stake in CI Financial Inc for gross proceeds of
CA$2,275 million in 2014 contributed to its strong capital position.
Canadian Banking adjusted net income growth was relatively consistent
year over year. Net income from this segment was CA$2,188 million in
2014 compared to CA$2,151 in 2013. Loan growth was up 3% in the
year from CA$272 million in 2013 to CA$280 million in 2014. However,
adjusted provision credit losses (PCL) were up to CA$661 million in 2014
versus CA$478 million in 2013 (an increase of 38%). When Brian Porter
took over as CEO of Scotiabank, one of his priorities was growth through
selective acquisitions. In May 2014, Scotiabank signed a deal to purchase
20% in Canadian Tire Financial Services as part of a strategic partnership
between the two companies. The main drivers behind this partnership
were to attract new customers and further build customer loyalty.
2014
SCOTIABANK
CA$7,298
million
CA$2.56
per share
16.1%
10.4%
7.1%
-0.5%
Net
income
Dividends
ROE
CA$6,610
million
CA$2.39
per share
16.6%
2013
1. As reported in Scotiabanks annual report.
There were various challenges faced by Scotiabank in its International

Banking segment. Economic recovery in numerous markets (primarily the
Caribbean and Latin America) was slower than anticipated, which created
pressures on revenues. On a year over year (adjusted) basis, International
Banking earnings declined by 16%. This was despite a relatively strong
Q4 which saw International Banking earn CA$265 million. There was
also an increase in loans of 8% and deposits were up 12% year over year.
However, even excluding a much weakened Caribbean market and the
CA$83million of PCL incurred in that region, earnings growth was still
down 2% year over year.
Excluding the sale of CI Financial and the restructuring charges, net
income from Global Wealth and Insurance was up 20% year over year.
The factors contributing to the increase were largely due to the increase
in assets under administration and assets under management up 13%
and 14% respectively from 2013. The restructuring charges (which
occurred in Q4) cost CA$451 million (pre-tax). The bank announced on
November 4, 2014 that it had planned to cut 1,500 jobs and close 120
branches worldwide (none in Canada) in an effort to increase efficiency
in its operations.
In 2014 there were higher PCL, which were CA$512 million for the year
compared to CA$321 million in 2013an increase of 78% in the year. The
main drivers behind the increase in PCL were losses in Canadian banking
which increased by CA$32 million and in international retail where losses
increased by CA$48 million over 2013.
CEO Brian Porter has emphasized that growth in the international
markets, particularly the Latin American region, will be one of the keys
to success. The four markets they are focusing on growing within Latin
America are Peru, Columbia, Mexico and Chile. Before being named CEO,
Porter headed Scotiabanks International banking operations. In his first
public address as CEO, he stated that real shareholder value is not created
in a single quarter. A longer-term vision is required to create shareholder
value and the large restructuring costs incurred in the year may emphasize
this point. These initiatives focus more on reinvesting in the higher growth
areas of the international business. By taking steps to improve efficiencies
in 2014, Scotiabank hopes to create more opportunities for strategic
acquisitions and growth opportunities in 2015.
As Canadas largest international bank, growth in the international market
will be vital to creating long-term success for Scotiabank.
Global banking and markets was relatively consistent year over year as this
segment generated a net income of CA$1,459 million in 2014 compared
to CA$1,455 million in 2013. There were stronger results in investment
banking and equities. However this was negated by weaker results in fixed
income and the securities lending business in Canada and Europe.
1. Scotiabank 2014 Financial Results
24
Canadian Banks 2015
CIBC highlights
For the year ended October 31, 2014, CIBC saw a decline
in reported net income of approximately 4.0%, bringing
this figure from CA$3,350 million in 2013 down to
CA$3,215million in 2014, mainly due to an increase in
noninterest expenses. It has seen an increase in revenue
and net incomes of the business units and an increase due
to the sale of their Aerogold VISA credit card portfolio to
TD. In 2014, return on equity (ROE) was 18.3% (20.9% on
an adjusted basis). Dividends paid totalled CA$3.94 per
share, up from CA$3.80 in 2013 (increase of 3.7%). The
reported dividend payout ratio also saw an increase from
46.8% in 2013 to 50% in 2014.
The Retail and Banking Business saw an increase in both revenue and net
income between 2013 and 2014. Revenue increased from CA$8.1 billion in
2013 to CA$8.3 billion in 2014an overall increase of 2.5%. Contributing
to revenue growth within this business unit is a 5% growth in personal
banking revenues due to higher fees and volume growth across products.
In contrast, business banking revenue was consistent with 2013 levels (as
volume growth was offset with narrower spreads). Net income increased
from CA$2.4 billion to CA$2.5 billion, representing an increase of 4.2%
between 2013 and 2014. This increase in net income is primarily due to
a lower provision for credit losses and higher revenue, which were only
partially offset by non-interest expenses.
2014
CIBC
CA$3,215
million
CA$3.94
per share
18.3%
-4.0%
3.7%
-3.1%
Net
income
Dividends
ROE
CA$3,350
million
CA$3.80
per share
21.4%
2013
1. As reported in CIBCs annual report.
Overall, the Wealth Management business saw an increase in revenue from

CA$1.8 billion in 2013 to CA$2.2 billion in 2014, representing an overall
percentage increase of 22%. The increase in revenue can be attributed to
increases in retail brokerage revenue, private wealth management revenue
and asset management revenue of 12%, 125% and 12% respectively from
2013. The key driver of the 125% increase in private wealth management
was the acquisition of Atlantic Trust on December 31, 2013 as well as
growth in client balances which brought revenue from CA$122 million in
2013 to CA$275 million in 2014. Net income also increased by 22% from
CA$385 million in 2013 to CA$471 million in 2014. The main driver of net
income was the increase all the revenue streams (retail brokerage, asset
management and private wealth management), which were partially offset
by higher non-interest expenses.
Between 2013 and 2014, the Wholesale Banking business saw an increase
in net income from CA$699 million in 2013 to CA$895 million in 2014,
representing an increase of 28%. The main drivers of this increase were
higher revenues and lower non-interest expenses. Overall, revenue in
this business increased by 8% since 2013, resulting in movement of
total revenue from CA$2,240 million in 2013 to CA$ 2,424 in 2014.
This 8% increase was driven by the revenue increases in Corporate and
Investment Banking and Other revenue, contrasted by a decrease in
Capital Markets Revenue. Corporate and Investment Banking revenues
were met with a 22% increase from 2013 figures as result of an increase
in corporate banking, US real estate finance and equity issuance revenue.
Other revenue increased by 98% from 2013 figures, mainly as a result of
a gain on the sale of an equity investment and an offsetting impairment
of an equity position. Counteracting these increases is a 6% drop in
Capital Markets revenue due to the charge relating to incorporating
Funding Valuation Adjustments (FVA) into the valuation of uncollaterized
derivatives and lower debt underwriting activity.
The 2015 outlook is for marginally stronger global growth, with
Canadas growth rate in the range of 2.5% to 3.0%. Equity markets are
expected to slow down, but this could be counteracted by increasing
pools of household savings which would increase demand for wealth
management. Its expected that Wholesale Banking will reap the benefits
of higher demand for corporate financing. Retail and Business Banking
may see improvements in mortgage credit, but this will in part depend
on whether house price inflation eases on potential increasing mortgage
rates. A more competitive exchange rate in favor of business capital
spending is expected to push the demand for business credit upwards.
26
Canadian Banks 2015
NBC highlights
At year end on October 31, 2014, NBC saw an increase of 1.7%
in net income, bringing net income from CA$1,512million in
2013 to CA$1,538 million in 2014. Excluding specified items
for both years, net income increased from CA$1,423million in
2013 to CA$1,593in 2014a 11.9% growth. The main driver
of this increase was an increase in total revenues, which was
partially counteracted by increases in non-interest expense
and the provisions for credit losses.
Diluted earnings per share for 2014 rose CA$0.01 from CA$4.31 to
CA$4.32 between 2013 and 2014. Excluding specified items, diluted
earnings per share were CA$4.48 in 2014, which is 10.9% up from the
2013 value of CA$4.04. Return on Equity (ROE), excluding specified
items, decreased from 20.1% in 2013 to 17.9% in 2014. Diluted earnings
per share, including specified items was CA$4.31 in 2013 and increased to
CA$4.32in 2014. ROE, including specified items, decreased from 20.1%
in the prior year to 17.9% in 2014. The dividend payout ratio, excluding
specified items, was 42% in both 2013 and 2014. For 2014, this 42% ratio
translated into CA$616 million in dividends to common shareholders.
Including specified items, this same payout ratio increased from 39% in
2013 to 43% in 2014.
2014
NATIONAL BANK OF CANADA
CA$1,538
million
CA$1.88
per share
17.9%
1.7%
10.6%
-2.2%
Net
income
Dividends
ROE
CA$1,512
million
CA$1.70
per share
20.1%
2013
1. As reported in National Bank of Canadas annual report.
The Wealth Management segment showed an increase of 37% in net income

(excluding specified items), moving the 2013 balance of CA$225 million to
CA$308 million in 2014. This favorable movement was primarily driven by
growth in assets under administration and assets under management, and
benefits achieved from the recent transactions within this segment. Total
revenues for this segment (excluding specified items) showed a 16% increase
from 2013, which translates into a movement from CA$1,150 million in
2013 to CA$1,332 million in 2014. A large part of this revenue growth is the
result of the acquisition of TD Waterhouse Institutional Services in Q1. There
was also a 9% increase in non-interest expense between 2013 and 2014,
excluding specified items, in this segment.
In the Personal and Commercial segment, there was a 6% growth in
net income from CA$661 million in 2013 to CA$698 million in 2014. In
addition, total revenues within this segment increased by 4%. The largest
driver of this increase is the growth in net interest income as a result of
higher personal and commercial loan and deposit volume.
Within the Financial Markets segment, there was an increase of 13% in
net income from 2013, bringing the 2014 balance to CA$600 million.
Excluding specified items, the 2014 net income is CA$609 million, which
is an increase of 15% from CA$533 million in 2013. This segment has seen
a large swing in total revenues with an overall increase of CA$149 million,
bringing 2014 total revenue to CA$1,527 million.
28
Canadian Banks 2015
A key source of the banks sustained revenue growth is their ongoing

strong presence in Quebec. NBC has put forward that to further accelerate
and support long-term growth it will need to focus on diversification,
which includes targeting new niches across Canada. Diversification should
help increase revenues and earnings contributions generated by the
Personal, Commercial and Wealth Management segments. Although the
bank itself has not detailed any acquisitions or strategic partnerships in
the near future, theyve made reference to the fact that theyre in a good
position to take on acquisitions and strategic partnerships.
On an international level, NBC intends to pursue the strategy of building
targeted niches. Some areas of focus include large financial centers such
as Hong Kong, New York, London and Paris. Another means of achieving
long term growth for NBC is to pursue international investments. The bank
has already demonstrated their commitment to this strategy with their
30% interest acquisition in Advanced Bank of Asian Limited in Cambodia.
Its expected that the bank will continue to undertake such international
investments in the future.
RBC highlights
Fiscal 2014 saw the introduction of a new Chair of the Board of
Directors and a new President and CEO. Kathleen Taylor was
appointed Chair of the Board of Directors on January 1,2014,
replacing David OBrien, and Dave McKay, succeeded Gordon
Nixon as President and CEO on August1,2014. During
fiscal 2014 RBC achieved all of their financial performance
objectives. Net income increased by 7.9% (CA$662 million)
from 2013 to a record CA$9,004million.
Strong operating results delivered value to shareholders as return on equity
was 19% in 2014, beating the desired 18% benchmark. Diluted earnings
per share grew 9% to CA$6.00 in 2014, also beating the desired growth
benchmark of 7%. Common Equity Tier 1 ratio (CET1) increased 30 bps
to 9.9% in 2014. The dividend payout ratio was 47%, meeting the desired
benchmark of 40-50%, and dividends increased twice during the year to
CA$2.84 per share in 2014, representing dividend growth of 12.3%. The
stock price responded accordingly increasing 14.3% from a CA$70.02 at
October31,2013 to a closing price of CA$80.01 at October 31, 2014.
2014
ROYAL BANK OF CANADA
CA$9,004
million
CA$2.84
per share
19.0%
7.9%
12.3%
-0.7%
Net
income
Dividends
ROE
CA$8,342
million
CA$2.53
per share
19.7%
2013
4. As reported by the bank in their annual report.
1. As reported in Royal Bank of Canadas annual report.
Personal and Commercial banking delivered strong results as net income

increased 2% to CA$4,475 million in 2014. Excluding the CA$100 million
loss related to the divestment of RBC Jamaica and a one-time charge of
CA$40 million (related to post-employment benefits and restructuring
charges in the Caribbean), net income increased 5% in 2014. In Canada
average loans and acceptances increased CA$14 billion or 4%, due to strong
growth in residential mortgages, business loans and personal loans. Average
deposits increased CA$16 billion or 6%, reflecting growth in both personal
and business deposits. This was further bolstered by growth in the US
and Caribbean. In the Caribbean and US sub segment, average loans and
acceptances increased CA$300 million or 4% due to strong loan growth in
the US and average deposits increased CA$1 billion or 8% due to increased
liquidity in the Caribbean. Results were hampered by an increase in the
provision for credit losses of CA$108 million reflecting additional provisions
in the Caribbean of CA$50 million and higher provisions in the Canadian
small business portfolio. RBC anticipates further volume growth in the future.
Wealth Management saw growth in average fee-based client assets
through capital appreciation and net sales, on the back of strong
economic performance in Canada and the US, and positive market
conditions. Client assets surpassed CA$1.1 trillion and net income
increased 22% to CA$1,083million in 2014. In the Canadian Wealth
Management business, assets under administration increased 14%,
compared to 6% in the US and internationally. In Global Asset
Management, assets under management increased 14% globally. Noninterest expense increased 14% from 2013 driven by higher variable
compensation, and increased staffing and infrastructure investments.
The provision for credit losses decreased 63% or CA$32 million, driven
primarily by lower provisions on select accounts.
RBC expects additional growth in average fee-based client assets.
30
Canadian Banks 2015
Capital Markets maintained its market leadership position in Canada.

Strong equity markets and ongoing favorable monetary policies led
net income to increase 21% to CA$2,055 million in 2014. Corporate
and investment banking net income increased 14% to CA$423 million
reflecting strong growth in equity origination and strong growth in
the lending portfolio. Global markets net income increased 13% to
CA$438million driven by strong market conditions and increased client
activity, which were partially offset by the exiting of certain proprietary
trading strategies to comply with the Volcker Rule. Provisions for credit
losses decreased 77% or CA$144million, as a result of reductions in
provisions on certain accounts. RBC anticipates continued growth
withinCapital Markets going forward.
Insurance rebounded in 2014 as the global insurance industry
showed signs of stabilization and net income increased 31% to
CA$781 million. Excluding the one-time charge incurred in the prior
year of CA$160million that resulted from new tax legislation, net
income increased 10%. Specifically, premiums and deposits were
up CA$240million or 5%, reflecting growth in both Canadian and
International Insurance. Improvement in the Insurance segment can
be attributed to product and pricing actions taken in recent years, the
migration to lower cost proprietary distribution channels, conservative
investment practices and diversified product lines. Continued growth is
anticipated as a result of the product and pricing actions taken.
Despite a highly competitive environment, downward margin pressure
and compression spread, Investor and Treasury Services net income
increased 30% to CA$441 million in 2014. Excluding the one-time charge
incurred in the prior year of CA$44 million, net income increased 19%.
Growth in earning was largely due to continuing benefits from efficiency
management activities and higher growth in client deposits, coupled
with the full integration of RBC Dexia. Further growth in transaction
volume is expected going forward.
TD highlights
Fiscal 2014 began with the introduction of a new CEO,
Bharat Masrani, as the former CEO, Ed Clark, retired.
Reported net income increased 18.7% or CA$1,243million
from 2013 to a record CA$7,883 million in 2014.
2014
Strong operating results delivered value to shareholders as adjusted

return on common equity increased to 15.9% in 2014, compared to 15.3%
in 2013. Adjusted diluted earnings per share grew 15.1% to CA$4.27 in
2014, from CA$3.71 in 2013. Cash dividends declared and paid in 2014 of
CA$1.84per common share was up 14% from CA$1.62 in 2013. The stock
price responded accordingly increasing 16% from a CA$47.82 to a closing
price of CA$55.47 at October 31, 2014. TD also maintained a robust CET1
ratio of 9.4%.
Significant acquisition and disposals in fiscal 2014 include:
Acquisition of certain CIBC Aeroplan Credit Card Accounts
On December 27, 2013 TD acquired approximately 50% of CIBCs
existing Aeroplan credit card portfolio, which included approximately
540,000 cardholders accounts with an outstanding balance of
CA$3.3billion at a price of par plus CA$50 million for total cash
consideration of CA$3.3 billion. At the date of acquisition, the fair
value of the credit card receivables acquired was CA$3.2billion and
the fair value of the intangible asset for the purchased credit card
relationships was CA$146 million.
Disposal of TD Waterhouse Institutional Services
On November 12, 2013 TD sold TD Waterhouse Institutional Services
to a subsidiary of National Bank of Canada for CA$250 million. A pretax gain of CA$244 million was recognized as a result of the sale, after
settlement of the price adjustment mechanisms.
TD
CA$7,883
million
CA$1.84
per share
15.4%
18.7%
13.6%
1.2%
Net
income
Dividends
ROE
CA$6,640
million
CA$1.62
per share
14.2%
2013
1. As reported in TDs annual report.
Canadian Retail Banking showed strong results in 2014 as net income

increased 15% or CA$665 million to CA$5,234 million in 2014, or 17%
increase in net income on an adjusted basis to CA$5,490 million. The
provision for credit losses increased 2% to CA$946 million in 2014; however,
the annualized provision for credit losses as a present of credit volume
decreased 1 bps to 0.29% in 2014 and net impaired loans decreased 5%
to CA$834 million. Improvements in credit performance related primarily
to lower bankruptcies, off-set by the addition of Aeroplan. Non-interest
expense increased 9% to CA$8,438 million in 2014 due to higher employeerelated costs and higher variable compensation. TD expects modest growth
across all of their businesses.
Within Canadian Personal and Business Banking, net income increased
8% or CA$275 million to CA$3,929 million in 2014, reflecting robust
lending volume growth in both personal banking and commercial banking
businesses. Lending volume grew CA$12.4 billion (5%), which included
growth in real estate lending volume of CA$7.9 billion (4%) and growth
in auto lending volume of CA$1 billion (7%). Average personal deposit
volumes increased CA$3.8 billion (3%). Business loans acceptances
volume grew CA$5.3 billion (12%) and business deposit volumes
increased CA$5 billion (7%).
Wealth and Insurance earnings rebounded in 2014 and net income
increased 43% or CA$390 million to CA$1,305 million. Strong results
reflected growth in assets under administration of CA$8 billion (3%) from
client acquisition and market appreciation, which was partially off-set by
the sale of TD Waterhouse Institutional Services. Insurance claims and
expenses decreased 7% from 2013 further bolstering results.
32
Canadian Banks 2015
US Retail Banking gained profitable market share in both loans and

deposits, while maintaining strong credit quality. Net income increased
13% or US$223 million to US$1,938 million in 2014 on strong earnings
from the US Retail Bank of US$1,657 which increased 5%. Average loan
volumes increased US$10 billion (10%), including a 9% increase in
personal loans and an 11% increase in business loans. Average deposit
volumes increased US$13 billion (7%) driven by a 7% increase in
personal deposits, an 8% increase in business deposits, and a 6% increase
in TD Ameritrade deposits. The contribution from TD Ameritrade of
US$281million was up 17% from prior year primarily due to higher
asset-based and transaction-based revenue. The provision for credit
losses decreased 19% to US$621 million in 2014, driven by broad-based
improvements in credit quality. Non-interest expense increased 5% to
US$4,907 in 2014 as a result of the full-year impact of acquisitions, and
further investments to support business growth.
Favorable market conditions led net income in Wholesale Banking to
improve in 2014, increasing 25% or CA$163 million to CA$813 million.
The increase was driven by higher earnings and lower provision for credit
losses. Revenue increased 11% or CA$270 million in 2014 as capital
markets revenue grew on improved trading related revenue, robust equity
and debt underwriting, and stronger mergers and acquisitions activity.
Provision for credit losses was CA$11 million, compared to CA$15 million
in 2013. Non-interest expense increased 3% or CA$47 in 2014, driven by
higher variable compensation.
Appendices
34
Shareholder value summary
36
Regulatory capital
38
Balance sheet highlights
40
Income statement highlights
Appendix 1: Shareholder value summary

in millions of Canadian dollars
BMO
2014
Change
BNS
2013
2012
2014
Change
CIBC
2013
2012
2014
Change
2013
2012
Stock performance
Common share price as at October 31
81.73
12.5%
72.62
59.02
69.02
8.9%
63.39
54.25
102.89
16.0%
88.70
78.56
Book value of outstanding common shares
48.19
10.3%
43.70
40.23
36.95
10.1%
33.56
29.77
44.30
6.8%
41.47
37.52
Trading premium above book value
33.54
16.0%
28.92
18.79
32.07
7.5%
29.83
24.48
58.59
24.0%
47.23
41.04
1.66
1.47
1.87
1.89
1.82
2.32
2.14
2.09
4,248
4,189
7,298
6,697
6,466
3,215
3,400
3,339
Market price to book value
1.70
Earnings
Net income attributable to common shareholders
4,333
2.0%
9.0%
-5.4%
Basic earnings per share as reported
6.44
2.7%
6.27
6.18
5.69
9.6%
5.19
5.31
7.87
4.5%
8.24
7.86
Price / earnings ratio
12.7
9.6%
11.6
9.6
12.1
-0.7%
12.2
10.2
13.1
21.5%
10.8
10.0
13.0%
13.8%
14.5%
15.2%
15.2%
18.2%
17.3%
19.2%
20.5%
Return on assets
0.7%
0.8%
0.8%
0.9%
0.9%
1.0%
0.8%
0.9%
0.8%
Return on risk-weighted assets2
1.9%
2.0%
2.0%
2.3%
2.3%
2.6%
2.3%
2.5%
2.9%
16.8%
28.0%
5.0%
12.9%
21.3%
7.4%
20.4%
17.7%
9.5%
Returns
Return on basic equity 1
Total market return3

Dividends
Dividend paid
3.08
4.8%
2.94
2.80
2.56
7.1%
2.39
2.19
3.94
3.7%
3.80
3.64
Dividend yield4
3.8%
-6.9%
4.0%
4.7%
3.7%
-1.6%
3.8%
4.0%
3.8%
-10.6%
4.3%
4.6%
48.0%
2.0%
47.0%
45.0%
45.0%
-2.3%
46.0%
41.0%
50.0%
8.6%
46.0%
46.0%
Dividend payout ratio5
Shares outstanding at end of year (millions)
649
0.8%
644
651
1,217
0.7%
1,209
1,184
397
-0.5%
399
404
Market capitalization at October 31 (billions)
53.0
13.4%
46.8
38.4
84.0
9.6%
76.6
64.3
40.8
15.4%
35.4
31.8
11.49
13.68
9.59
9.71
10.39
10.16
11.26
12.37
Total assets per dollar of market capitalization
11.10
Notes
1. Return on equity has been calculated as net income divided by average total equity (opening total equity and ending total equity for FY2014).
2. Return on risk weighted assets has been calculated as net income divided by risk weighted assets.
3. Total market return has been calculated as [change in share price + dividends paid] divided by opening share price and does not include the assumed rate of return on the investment of dividends.
4. Dividend yield has been calculated as dividends paid divided by the common share price at the fiscal year end.
5. Dividend payout ratio has been calculated as dividends paid divided by earnings per share.
Note: Other than the impact of stock splits, prior years data is consistent with annual reports as previously reported in prior years.
34
Canadian Banks 2015
Appendix 1: Shareholder value summary

NBC
2014
Change
RBC
2013
2012
2014
Change
TD
2013
2012
2014
Change
2013
2012
Stock performance
Common share price as at October 31
52.68
16.4%
45.24
38.59
80.01
14.3%
70.02
56.94
55.47
16.0%
47.82
40.62
Book value of outstanding common shares
25.76
12.5%
22.90
20.02
33.71
10.6%
30.49
27.30
28.43
11.1%
25.60
24.09
Trading premium above book value
26.92
20.5%
22.34
18.57
46.30
17.1%
39.53
29.64
27.04
21.7%
22.22
16.53
1.98
1.93
2.37
2.30
2.09
1.95
1.87
1.69
6,471
Market price to book value
2.04
Earnings
1,538
-1.0%
1,554
1,634
9,004
6.8%
8,429
7,539
7,883
18.3%
6,662
Basic earnings per share as reported
Net income attributable to common shareholders
4.36
0.5%
4.34
4.70
6.03
7.7%
5.60
4.98
4.15
19.9%
3.46
3.40
Price / earnings ratio
12.1
15.9%
10.4
8.2
13.3
6.1%
12.5
11.4
13.4
-3.3%
13.8
11.9
Returns
15.6%
17.9%
19.7%
17.2%
17.5%
19.3%
14.6%
13.2%
14.3%
Return on assets
0.7%
0.8%
0.9%
1.0%
1.0%
0.9%
0.8%
0.8%
0.8%
Return on risk-weighted assets2
2.3%
2.5%
2.9%
2.4%
2.6%
2.7%
2.4%
2.3%
2.6%
20.6%
21.6%
12.8%
18.3%
27.4%
21.8%
19.8%
21.7%
11.8%
Return on basic equity 1
Total market return
Dividends
Dividend paid
1.88
10.6%
1.70
1.54
2.84
12.3%
2.53
2.28
1.84
13.6%
1.62
1.45
Dividend yield4
3.6%
-5.0%
3.8%
4.0%
3.5%
-1.8%
3.6%
4.0%
3.3%
-2.1%
3.4%
3.6%
43.1%
10.1%
39.2%
32.8%
47.1%
4.2%
45.2%
45.8%
44.3%
-5.3%
46.8%
42.6%
Dividend payout ratio5
Shares outstanding at end of year (millions)
329
1.0%
326
323
1,442
0.1%
1,441
1,445
1,846
0.4%
1,839
1,832
Market capitalization at October 31 (billions)
17.3
17.6%
14.7
12.4
115.4
14.3%
100.9
82.3
102.4
16.5%
87.9
74.4
12.76
14.29
8.15
8.53
10.03
9.23
9.81
10.90
Total assets per dollar of market capitalization
11.84
Notes
1. Return on equity has been calculated as net income divided by average total equity (opening total equity and ending total equity for FY2014).
2. Return on risk weighted assets has been calculated as net income divided by risk weighted assets.
3. Total market return has been calculated as [change in share price + dividends paid] divided by opening share price and does not include the assumed rate of return on the investment of dividends.
4. Dividend yield has been calculated as dividends paid divided by the common share price at the fiscal year end.
5. Dividend payout ratio has been calculated as dividends paid divided by earnings per share.
Appendix 2: Regulatory capital1

BMO
BNS
CIBC
2014
Change
2013
2012
2014
Change
2013
2012
2014
Change
2013
2012
26,602
8.1%
24,599
25,896
38,073
19.3%
31,914
34,436
17,300
8.9%
15,888
15,940
5,325
8.7%
4,901
4,773
5,519
-20.3%
6,927
7,757
4,689
15.1%
4,073
3,984
31,927
8.2%
29,500
30,669
43,592
12.2%
38,841
42,193
21,989
10.2%
19,961
19,924
185,387
179,289
171,955
261,887
240,900
210,000
118,492
115,101
93,360
9,002
9,154
7,598
17,251
15,400
13,800
4,046
3,460
3,033
27,703
26,651
25,677
33,300
31,900
29,500
17,320
18,186
18,836
CVA adjustment2
839
n/a
n/a
1,976
n/a
n/a
1,881
n/a
n/a
215,094
205,230
314,414
288,200
253,300
141,739
136,747
115,229
Tier 1 capital
Total Tier 1 capital
Tier 2 capital
Total regulatory capital
Risk-weighted assets
Credit risk
Market risk
Operational risk
Total capital risk-weighted assets
222,931
3.6%
9.1%
3.7%
Risk-weighted capital ratio

Tier 1
12.0%
11.4%
12.6%
12.1%
11.1%
13.6%
12.2%
11.6%
13.8%
Total capital ratio
14.3%
13.7%
14.9%
13.9%
13.5%
16.7%
15.5%
14.6%
17.3%
Assets to capital multiple

Total assets to risk-weighted assets
16.1
3.2%
15.6
15.2
17.1
0.0%
17.1
15.0
17.7
-1.7%
18.0
17.4
264.1%
5.7%
-0.7%
0.5%
249.8%
256.0%
256.2%
258.1%
263.7%
292.7%
291.3%
341.4%
Total general allowance
1,542
1,485
1,460
2,856
2,712
2,508
1,398
1,438
1,441
Total general allowance as a percentage of risk adjusted assets
0.7%
0.7%
0.7%
0.9%
0.9%
1.0%
1.0%
1.1%
1.3%
Notes
1. Regulatory capital and risk weighted assets are calculated under Basel III guidelines for 2014 and 2013 and Basel II guidelines for 2012.
2. For NBC and TD, the CVA adjustment dollar amount is not disclosed separately in the annual report; therefore, it has been calculated as the difference between the total capital risk-weighted assets and the CET1 risk-weighted assets per the annual report.
3. BNS discloses the operational risk in the billions ($); the credit risk, market risk and CVA adjustment are disclosed in millions ($). Therefore, the total capital risk-weighted assets above is off by $35 million from the annual report.
36
Canadian Banks 2015
Appendix 2: Regulatory capital1 continued

NBC
RBC
TD
2014
Change
2013
2012
2014
Change
2013
2012
2014
Change
2013
2012
7,983
14.0%
7,002
6,710
42,202
13.5%
37,196
36,807
35,999
14.1%
31,546
30,989
1,885
-13.7%
2,184
2,148
7,818
4.0%
7,520
5,540
8,256
-9.7%
9,144
7,606
Total regulatory capital
9,868
7.4%
9,186
8,858
50,020
11.9%
44,716
42,347
44,255
8.8%
40,690
38,595
Tier 1 capital
Tier 2 capital
Risk-weighted assets
Credit risk
52,782
49,451
45,181
282,871
232,641
209,559
275,925
239,552
201,280
Market risk
3,317
3,382
2,631
38,460
42,184
30,109
14,376
11,734
12,033
8,719
8,418
8,057
47,263
44,156
40,941
38,092
35,069
32,562
CVA adjustment2
641
n/a
n/a
3,456
n/a
n/a
2,188
n/a
n/a
61,251
55,869
372,050
318,981
280,609
330,581
286,355
245,875
Operational risk
Total capital risk-weighted assets
65,459
6.9%
16.6%
15.4%
Risk-weighted capital ratio

Tier 1
12.3%
11.4%
12.0%
11.4%
11.7%
13.1%
10.9%
11.0%
12.6%
Total capital ratio
15.1%
15.0%
15.9%
13.4%
14.0%
15.1%
13.4%
14.2%
15.7%
Assets to capital multiple

Total assets to risk-weighted assets
Total general allowance
Total general allowance as a percentage of risk adjusted assets
19.0
3.3%
18.4
18.3
17.0
2.4%
16.6
16.7
19.1
4.9%
18.2
18.0
313.8%
2.1%
-6.3%
-5.1%
307.3%
318.4%
252.8%
269.9%
294.0%
285.8%
301.2%
329.9%
366
388
390
1,871
1,810
1,790
3,028
2,507
2,260
0.6%
0.6%
0.7%
0.5%
0.6%
0.6%
0.9%
0.9%
0.9%
Notes
1. Regulatory capital and risk weighted assets are calculated under Basel III guidelines for 2014 and 2013 and Basel II guidelines for 2012.
2. For NBC and TD, the CVA adjustment dollar amount is not disclosed separately in the annual report; therefore, it has been calculated as the difference between the total capital risk-weighted assets and the CET1 risk-weighted assets per the annual report.
3. BNS discloses the operational risk in the billions ($); the credit risk, market risk and CVA adjustment are disclosed in millions ($). Therefore, the total capital risk-weighted assets above is off by $35 million from the annual report.
Appendix 3: Balance sheet highlights

BMO
BNS
CIBC
2014
Change
2013
2012
2014
Change
2013
2012
2014
Change
2013
2012
34,496
5.8%
32,601
26,282
64,016
2.9%
62,218
67,191
13,547
112.4%
6,379
4,727
46,966
-11.5%
53,067
56,382
38,662
12.7%
34,303
33,361
12,228
-55.7%
27,627
24,700
85,022
11,331
13.1%
67.7%
75,159
6,755
70,109
1,833
113,248
111
17.4%
4.7%
96,489
106
87,596
197
47,061
3,642
6.8%
-1.7%
44,068
3,704
40,330
3,615
6.1%
34.6%
167,582
39,799
154,606
44,238
216,037
93,866
11.9%
13.7%
193,116
82,533
188,345
47,354
76,478
33,407
-6.5%
32.0%
81,778
25,311
73,372
25,163
Assets
Cash resources (including deposits with banks)
Securities
Available-for-sale (including loan substitutes)
Held-for-trading
Other
177,815
53,555
Total cash resources and securities

Securities purchased under resale agreements
Loans
Residential mortgages
101,013
1.7%
99,328
87,870
212,648
1.3%
209,865
175,630
157,526
4.4%
150,938
150,056
Personal and credit card loans

Business and government loans
Allowance for credit losses
72,115
120,766
-1,734
0.8%
19.0%
4.1%
71,510
101,450
-1,665
69,250
93,175
-1,706
84,204
131,098
-3,641
10.8%
9.7%
11.2%
76,008
119,550
-3,273
68,277
123,828
-2,969
47,087
56,075
-1,660
-4.3%
16.3%
-2.2%
49,213
48,201
-1,698
50,476
43,624
-1,860
Total loans
Customers' liability under acceptances
Derivatives
Other assets
292,160
10,878
32,655
21,596
8.0%
28.4%
7.9%
5.0%
270,623
8,472
30,259
20,564
248,589
8,019
48,071
21,926
424,309
9,876
33,439
28,139
5.5%
-6.4%
36.5%
402,150
10,556
24,503
30,930
327,573
8,932
30,327
28,320
259,028
9,212
20,680
16,098
5.0%
-5.2%
3.7%
7.5%
246,654
9,720
19,947
14,979
242,296
10,436
27,039
15,079
Total assets
Liabilities
Deposits
Individuals
588,659
9.6%
537,299
525,449
805,666
743,788
668,044
414,903
4.1%
398,389
393,385
135,706
8.2%
125,432
121,230
175,163
2.4%
171,048
138,051
130,085
4.0%
125,034
118,153
Business and government

Banks
239,139
18,243
8.3%
-11.4%
220,798
20,591
185,182
17,290
342,367
36,487
9.6%
10.5%
312,487
33,019
295,588
29,970
148,793
7,732
11.8%
38.3%
133,100
5,592
125,055
4,723
Total deposits
Other
Acceptances
393,088
7.2%
366,821
323,702
554,017
7.3%
516,554
463,609
286,610
8.7%
263,726
247,931
Securities short sales

Securities repos
Derivatives
Other liabilities
Subordinated debt
Preferred share liability
Trust securities
Total liabilities and debt
Shareholders equity
Preferred share capital
Common share capital
Contributed surplus
Retained earnings
Accumulated other comprehensive income (loss)
Non-controlling interests
Total equity
Total liabilities and shareholders' equity
10,878
28.4%
8,472
8,019
9,876
-6.4%
10,556
8,932
9,212
-5.2%
9,721
10,481
27,348
39,695
33,657
43,676
4,913
21.8%
37.4%
5.3%
2.1%
22.9%
22,446
28,884
31,974
42,762
3,996
23,439
39,737
48,736
47,171
4,093
27,050
88,953
36,438
35,250
4,871
8.3%
14.8%
24.6%
8.3%
-16.6%
24,977
77,508
29,255
32,546
5,841
18,622
56,949
35,299
33,111
10,143
12,999
9,862
21,841
50,618
13,327
4,887
19,724
62,709
4,228
13,035
6,631
27,091
64,677
4,823
553,255
-100.0%
463
462
626,665
1,678
495,359
697,237
1,638
505,818
8.5%
-100.0%
9.4%
756,455
4,978
396,120
-2.5%
101.8%
10.7%
-19.3%
17.7%
4.3%
379,960
376,347
3,040
34.2%
2,265
2,465
2,934
-28.2%
4,084
4,384
1,031
-39.6%
1,706
1,706
12,357
304
17,237
1,375
2.9%
-3.5%
13.2%
128.4%
12,003
315
15,224
602
11,957
213
13,540
480
15,231
4.9%
14,516
13,139
28,609
1,125
12.2%
106.4%
25,508
545
22,144
-31
7,782
75
9,626
105
0.4%
-8.5%
14.6%
-66.0%
7,753
82
8,402
309
7,769
85
7,042
264
1,091
35,404
588,659
1.8%
12.5%
9.6%
1,072
31,481
537,299
1,435
30,090
525,449
1,312
49,211
805,666
-30.9%
5.7%
8.3%
1,898
46,551
743,788
1,743
41,379
668,044
164
18,783
414,903
-7.3%
1.9%
4.1%
177
18,429
398,389
172
17,038
393,385
38
Canadian Banks 2015
-9.0%
8.3%
Appendix 3: Balance sheet highlights

NBC
Assets
Cash resources (including deposits with banks)
Securities
Available-for-sale (including loan substitutes)
Held-for-trading
Other
RBC
TD
2014
Change
2013
2012
2014
Change
2013
2012
2014
Change
2013
2012
8,086
124.9%
3,596
3,249
25,820
3.6%
24,931
22,872
46,554
43.5%
32,436
25,128
9,753
0.1%
9,744
10,374
47,768
23.4%
38,695
40,828
63,008
-20.8%
79,541
98,576
43,200
-1.8%
44,000
44,524
5.1%
144,023
61,039
24,525
6.5%
14.3%
57,340
21,449
58,147
15,529
151,380
675
31.6%
8.4%
15.4%
513
208,162
117,517
120,783
383
101,173
61,722
-0.7%
69.1%
101,928
36,493
94,531
6,173
184,866
112,257
272,457
75,031
8.8%
16.7%
250,398
64,283
224,408
69,198
Total cash resources and securities

Securities purchased under resale agreements
Loans
Residential mortgages
39,300
7.5%
36,573
33,538
219,257
4.8%
209,238
198,324
198,912
7.0%
185,820
172,172
Personal and credit card loans

Business and government loans
Allowance for credit losses
29,996
28,551
-604
7.2%
17.0%
4.5%
27,989
24,400
-578
26,529
23,182
-577
110,945
107,021
-1,994
2.3%
15.2%
1.8%
108,453
92,934
-1,959
100,358
81,559
-1,997
148,981
134,044
-3,028
5.4%
11.2%
6.1%
141,414
120,543
-2,855
133,285
106,035
-2,644
Total loans
Customers' liability under acceptances
Derivatives
Other assets
97,243
8,926
7,092
6,604
10.0%
-0.3%
20.1%
7.0%
88,384
8,954
5,904
6,173
82,672
8,250
6,696
6,609
435,229
11,462
87,402
45,234
6.5%
15.2%
16.8%
8.5%
408,666
9,953
74,822
41,699
378,244
9,385
91,293
49,055
478,909
13,080
55,363
49,902
7.6%
104.4%
11.9%
6.0%
444,922
6,399
49,461
47,069
408,848
7,223
60,919
40,510
205,429
9.2%
188,204
177,903
940,550
9.3%
860,819
825,100
944,742
9.5%
862,532
811,106
Total assets
Liabilities
Deposits
Individuals
Business and government
Banks
Total deposits
Other
Acceptances
225,643
135,580
44,963
5.4%
42,652
43,905
209,217
7.7%
194,297
179,502
343,240
7.3%
319,749
291,759
67,364
7,556
18.4%
220.7%
56,878
2,356
46,223
3,121
386,660
18,223
10.3%
34.6%
350,640
13,543
312,882
15,835
241,705
15,771
18.9%
-23.2%
203,204
20,523
181,038
14,957
119,883
17.7%
101,886
93,249
614,100
10.0%
558,480
508,219
600,716
10.5%
543,476
487,754
8,926
-0.3%
8,954
8,250
11,462
15.2%
9,953
9,385
13,080
104.4%
6,399
7,223
Securities short sales

Securities repos
Derivatives
Other liabilities
Subordinated debt
18,167
16,780
5,721
23,569
1,881
-3.9%
-15.0%
17.8%
5.9%
-22.5%
18,909
19,746
4,858
22,264
2,426
18,124
19,539
5,600
22,431
2,470
50,345
64,331
88,982
48,968
7,859
6.8%
6.5%
15.9%
-0.9%
5.6%
47,128
60,416
76,745
49,419
7,443
40,756
64,032
96,761
51,404
7,615
39,465
45,587
50,776
131,102
7,785
-5.7%
32.5%
2.6%
4.7%
-2.5%
41,829
34,414
49,471
125,221
7,982
33,435
38,816
64,997
116,313
11,318
Preferred share liability

Trust securities
194,927
8.9%
179,043
169,663
886,047
-100.0%
900
900
-100.0%
-100.0%
27
1,740
26
2,224
9.3%
810,484
779,072
888,511
9.6%
810,559
762,106
Total liabilities and debt

Shareholders equity
Preferred share capital
Common share capital
Contributed surplus
Retained earnings
Accumulated other comprehensive income (loss)
Non-controlling interests
Total equity
Total liabilities and shareholders' equity
1,223
80.6%
677
762
4,075
-11.4%
4,601
4,814
2,199
-35.2%
3,393
3,394
2,293
52
5,850
289
6.2%
-10.3%
16.2%
35.0%
2,160
58
5,034
214
2,054
58
4,091
255
14,582
1.1%
14,418
14,353
31,615
2,418
11.7%
100.3%
28,314
1,207
24,270
830
19,757
205
27,585
4,936
3.1%
20.6%
12.3%
55.9%
19,171
170
24,565
3,166
18,525
196
21,763
3,645
795
10,502
205,429
-21.9%
14.6%
9.2%
1,018
9,161
188,204
1,020
8,240
177,903
1,813
54,503
940,550
8.3%
9.3%
1,795
50,335
860,819
1,761
46,028
825,100
1,549
56,231
944,742
8.2%
9.5%
1,508
51,973
862,532
1,477
49,000
811,106
Appendix 4: Income statement highlights

BMO
2014
Interest and dividend income
Loans
Securities
Deposits with banks
Total interest income
Interest expense
Deposits
BNS
Change
2013
2012
2014
10,777
0.3%
10,746
11,141
1,994
270
-7.0%
10.7%
2,143
244
2,265
239
13,041
-0.7%
13,133
CIBC
Change
2013
2012
2014
Change
2013
2012
18,176
4.7%
17,358
15,608
9,504
-3.0%
9,795
10,020
1,101
263
-7.1%
-5.7%
1,185
279
1,261
285
1,948
25
-1.5%
-34.2%
1,978
38
2,013
42
13,645
19,540
3.8%
18,822
17,154
11,477
-2.8%
11,811
12,075
2,865
8.8%
2,633
2,578
6,173
-1.7%
6,282
5,947
3,337
-5.8%
3,541
3,630
Subordinated debt
Other1
150
1,565
3.4%
-13.5%
145
1,810
165
2,094
204
858
-39.8%
2.8%
339
835
381
823
178
503
-7.8%
-19.1%
193
622
208
743
Total interest expense

Net interest income
Provision for credit losses
4,580
8,461
561
-0.2%
-1.0%
-4.8%
4,588
8,545
589
4,837
8,808
765
7,235
12,305
1,703
-3.0%
8.3%
31.4%
7,456
11,366
1,296
7,151
10,003
1,252
4,018
7,459
937
-7.8%
0.1%
-16.4%
4,356
7,455
1,121
4,581
7,494
1,291
Net interest income after provision for credit losses

Other income
Capital market fees
7,900
-0.7%
7,956
8,043
10,602
5.3%
10,070
8,751
6,522
3.0%
6,334
6,203
1,678
0.5%
1,670
1,588
712
41.6%
503
493
852
6.4%
801
840
Card service fees

Foreign exchange other than trading
Insurance income (net)
Investment management fees
AFS/investment securities gains (losses)
Lending fees
Mutual fund revenues
Securitization revenues
Service charges
Trading income (loss)
Other revenues
462
179
503
1,246
162
680
1,073
-36.2%
708
153
335
725
152
641
647
933
14.3%
816
768
420
474
383
741
1,014
1,468
4.0%
5.8%
4.9%
97.6%
7.5%
14.7%
404
448
365
375
943
1,280
365
388
324
185
897
1,125
414
43
369
677
201
478
1,236
-30.9%
4.1%
13.0%
71.6%
-43.2%
-4.9%
34.3%
724
172
445
726
285
715
799
-2.3%
3.1%
42.8%
-5.2%
3.5%
21.9%
599
44
358
474
212
462
1,014
619
91
335
424
232
418
880
1,002
949
323
9.4%
11.8%
-22.5%
916
849
417
929
1,025
419
1,183
1,114
2,857
5.4%
-14.3%
18.0%
1,122
1,300
2,421
1,083
1,316
2,754
848
-191
990
2.9%
-678.8%
95.3%
824
33
507
775
-115
556
Total other income

Non-interest expenses
Employee compensation and benefits
8,257
7.0%
7,718
7,322
11,299
13.3%
9,977
9,698
5,917
11.1%
5,328
5,055
6,242
7.1%
5,827
5,628
6,743
6.8%
6,313
5,749
4,636
9.0%
4,253
4,044
Premises and equipment costs

Other expenses
1,908
2,771
1.7%
6.9%
1,877
2,593
1,916
2,694
1,936
6.7%
1,815
1,607
10,238
3,990
5,127
7,215
4,043
704
-20.0%
2.0%
1,129
4,248
938
4,189
1,763
6,697
7,614
4,048
648
903
4,333
13.6%
9.0%
8,525
3,914
699
12.0%
-3.3%
2,002
3,047
10,403
8,046
1,580
1,719
1,452
10,297
5,127
5,377
3,459
11,587
8,460
1,752
1,609
6.1%
4.9%
-2.6%
13.4%
8.8%
9.9%
10.5%
21.4%
10,921
5,377
5,236
3,922
12,601
9,300
1,936
1,953
6,466
3,215
3,400
3,339
Total other expenses

Income (loss) before income taxes
Provision for (recovery of) income taxes
Discontinued operations
Equity in net income of an investment in associate, net of income taxes
Net income (loss)
Notes
1. Includes interest on preferred share liabilities, trust securities and other liabilities.
2. For the other income balances for TD, the detailed breakdown was obtained from the MD&A
40
Canadian Banks 2015
7,298
7.9%
-5.4%
Appendix 4: Income statement highlights continued

NBC
RBC
TD
2014
Change
2013
2012
2014
Change
2013
2012
2014
Change
2013
2012
Interest and dividend income

Loans
3,393
4.5%
3,247
3,037
16,979
3.8%
16,357
15,972
19,758
6.7%
18,514
17,951
Securities
Deposits with banks
1,174
29
2.7%
45.0%
1,143
20
1,073
17
4,964
76
5.2%
4.1%
4,720
73
4,819
61
4,086
84
1.8%
-5.6%
4,013
89
4,199
88
Total interest income

Interest expense
Deposits
4,596
4.2%
4,410
4,127
22,019
4.1%
21,150
20,852
23,928
5.8%
22,616
22,238
1,231
22.7%
1,003
805
5,873
4.1%
5,642
6,017
4,313
0.1%
4,310
4,670
76
745
-25.5%
-13.0%
102
856
87
897
246
1,784
-26.8%
-7.1%
336
1,921
360
1,977
412
1,619
-7.8%
-9.1%
447
1,781
612
1,930
Total interest expense

Net interest income
Provision for credit losses
2,052
2,544
208
4.6%
3.9%
14.9%
1,961
2,449
181
1,789
2,338
180
7,903
14,116
1,164
0.1%
6.5%
-6.1%
7,899
13,251
1,239
8,354
12,498
1,301
6,344
17,584
1,557
-3.0%
9.4%
-4.5%
6,538
16,078
1,631
7,212
15,026
1,795
Net interest income after provision for credit losses

Other income
Capital market fees
2,336
3.0%
2,268
2,158
12,952
7.8%
12,012
11,197
16,027
10.9%
14,447
13,231
721
13.4%
636
661
3,188
9.7%
2,906
2,647
1,578
15.7%
1,364
1,383
134
89
108
10.7%
113
94
111
689
-28.7%
967
920
1,552
15.4%
-1.1%
-8.5%
121
90
118
103
386
639
25.6%
-1.3%
19.9%
82
391
533
123
369
480
827
1,384
3,355
192
1,080
2,621
10.6%
22.8%
33.5%
2.1%
-1.1%
2.5%
748
1,127
2,514
188
1,092
2,557
1,050
413
173
845
1,355
-100.0%
54.9%
26.7%
-43.1%
7.6%
18.8%
1,039
187
1,113
241
373
745
997
234
106
400
-0.4%
-43.0%
24.2%
235
186
322
229
233
562
1,494
742
847
4.0%
-14.4%
97.4%
1,437
867
429
655
1,276
2,074
120
848
2,088
-1
1,376
1,298
352
1,345
222
678
326
304
785
1,141
2,152
-349
775
15.5%
24.2%
103.4%
1,863
-281
381
1,775
-41
284
Total other income

Non-interest expenses
Employee compensation and benefits
2,920
7.6%
2,714
2,975
16,419
10.7%
14,832
13,653
9,544
17.4%
8,128
8,096
2,051
10.4%
1,858
1,953
11,031
8.3%
10,190
9,287
8,451
10.9%
7,622
7,241
Premises and equipment costs

Other expenses
222
1,150
-6.3%
7.5%
237
1,070
205
1,015
2,477
4.0%
2,381
2,190
3,165
1,817
263
3,173
1,960
326
9.7%
20.5%
1,634
2,188
8,429
13,998
7,329
1,092
1,554
23.7%
6.8%
15,042
7,533
1,143
-1.0%
2,706
9,004
16,496
9,075
1,512
1,538
3,683
15,160
9,690
2,100
-51
2,199
4,558
8.2%
0.9%
12.2%
3,656
16,227
10,617
2,303
5,117
3,423
1,833
295
13.6%
8.8%
10.3%
2.4%
11.1%
Total other expenses

Income (loss) before income taxes
Provision for (recovery of) income taxes
Discontinued operations
4,153
17,661
11,710
2,359
5,686
272
6,662
234
6,471
Subordinated debt
Other1
Card service fees

Foreign exchange other than trading
Insurance income (net)
Investment management fees
AFS/investment securities gains (losses)
Lending fees
Mutual fund revenues
Securitization revenues
Service charges
Trading income (loss)
Other revenues
Equity in net income of an investment in associate, net of income taxes

Net income (loss)
-526
7,539
320
7,883
32.3%
18.3%
Notes
1. Includes interest on preferred share liabilities, trust securities and other liabilities.
2. For the other income balances for TD, the detailed breakdown was obtained from the MD&A
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42
Canadian Banks 2015
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the customer at the heart of everything
you do that can help you stay relevant and
differentiated.
The question is: Are you prepared?
Are you customer centric?

A closer look at whats trending in
retail banking
Keeping pace with the rapid changes in
technology and customer preferences
can be difficult. A global scan of leading
customer experience practices reveals
that retail banks and non-traditional
players are offering better customer
experience, not only by enabling
technology, but also by empowering
theiremployees. Weve identified 11
global trends in customer experience.
www.pwc.com/financialservices
www.pwc.com/ca/banking
May 2014
Most financial services businesses are organised and run for a marketplace
that is fast disappearing. How can you make sure your business is equipped
to compete?
Banking Banana Skins 2014

The Canadian results
Our Banking Banana Skins 2014 survey sheds light on perceived banking
risks globally. Weve explored the Canadian responses and studied them
against the global averages. Interestingly, Canadian banking executives
felt the most prepared to deal with these risks compared to their global
counterpartsa testament to the relative strength of the Canadian banks.
Big movers (up)

Criminality
Interest rates
Shadow banking
Social media
Big movers (down)

Management
incentives
Corporate
governance
Profitability and
capital availability
Regulation is the
toprated risk
Criminality and
technology risks rank high
Compared to 2012, where the macroeconomic environment proved to

be the top concern, regulation has
been ranked the 2014 primary risk in
both the world and in Canada. With
regulatory requirements increasing
exponentially since the economic
crisis, its no surprise that concerns
about the number of regulatory
requirements, cost of compliance
and balancing the cost of running a
business, position regulation as the
highest risk to the industry.
Canadians noted criminality as a

higher risk than world rankings.
However, this risk is closely associated
with the increasing threat of illegal
cyber activity which is also covered in
technology risk. These results are not
to say that Canadians are more prone
to criminality as a risk to the financial
industry, but that theres a high level
of awareness and overall increased
sensitivity to cyber security.
Many respondents felt regulatory

change had gone too far. One
Canadian bank director referred to it as
a gotcha attitude against banks. The
longer term impact of these regulatory
changes is yet to be seen. Some feel
the changes favour larger banks that
can better absorb the significant
costs. Increased regulations for banks
increases the risk of non-banking
entities providing similar services
while sidestepping the regulatory
matrix. Thats why shadow banking
also emerges within Canadian banking
executives top 10 risk factors.
Equipped for the future:

Re-inventing your organisation
The future shape

of banking
Time for reformation of
banking and banks?
Retail Banking 2020

Evolution or Revolution?
July 2014
Technology risk is also driven by

the expansion of mobile banking,
new payment technologies and the
increased data requirements arising
from the regulatory environment.
Some of the banks older systems may
not be able to analyze large volumes
of data in an efficient manner creating
risk in process.
CSFI
Powerful forces are reshaping the banking industry. Customer expectations, technological
capabilities, regulatory requirements, demographics and economics are together creating an
imperative to change. Banks need to get ahead of these challenges and retool to win in the next era.
Banks must not only execute on todays imperatives, but also radically innovate and transform
themselves for the future.
Centre for the Study of

Financial Innovation
www.pwc.com/banking
Banking Banana Skins 2014

The Canadian Results
Retail Banking 2020

Evolution or Revolution?
Banking Banana Skins is a unique report

that provides insight into the changing
risk factors facing the global banking
industry, as seen by a wide range of
bankers, banking regulators and close
observers of the banking scene around
the world. It is produced by the Centre
for the Study of Financial Innovation
(CSFI) in association with PwC. It includes
insights from over 650 responses from 59
countries. In Canada this year, there were
45 respondents: 28 bankers, 11 observers
and six risk managers.
Powerful forces are reshaping the

banking industry, creating an imperative
for change. Banks need to choose what
posture they want to adopt - to lead the
change, to follow fast, or to manage for
the present.
Weve explored the Canadian responses

and studied them against the global
averages. Interestingly, Canadian banking
executives felt the most prepared to deal
with these risks compared to their global
counterparts a testament to the relative
strength of the Canadian banks.
www.pwc.com/fsfutureorg
Future shape of banking

Time for reformation of banking
and banks?
This publication outlines four key areas
banks need to address in order to remain
relevant, as we argue that the future of
banking will look very different to what
we see today and that while the need for
banking services remains traditional
banks need to sharpen their strategic focus
and regulators and regulation will also
need to adapt.... adding up to a paradigm
shift in the banking landscape.
Equipped for the future

Re-inventing your organization
Most financial services businesses are
organized and run for a marketplace that is
fast disappearing. How can you make sure
your business is equipped to compete?
Customer expectations are defined by
the digital experience, brand value is
determined by conversing on social media
and customers are open to switching
providers if they believe they can get
something better elsewhere. A much more
urgent and radical organizational change
than many FS businesses are undertaking
is likely to be needed to reflect these rapid
shifts in the market.
This report deep dives into the forces
driving change and proposes five main
building blocks for the new organizational
paradigm drawing on the insights of
PwCs sector experts.
Financial Services leadership team

PwC Canada
Financial Services
Banking and Capital Markets
Diane Kazarian
416 365 8228
diane.a.kazarian@ca.pwc.com
Global Assurance
Rahoul Chowdry
416 815 5059
rahoul.x.chowdry@ca.pwc.com
National Assurance
Canadian Banks 2015
John MacKinlay
416 815 5117
john.mackinlay@ca.pwc.com
Deals
David Planques
416 815 5275
david.planques@ca.pwc.com
Tax Services
Editors
Sana Hussain
Jill Lising
Contributors
Michelle Bissada, SheenaBunbury,
JeffButchereit, AdamCobb, KarenForward,
BryanLee, JordanNiskanen, SasanParhizgari,
Rida Sheikh, NaveliThomas, HovikTumasyan,
KimVanderAerschot, YairWeisblum,
JonathanWillis, Mary Wilson-Smith,
DanielleZanardo.
Jason Swales
416 815 5212
jason.a.swales@ca.pwc.com
Publication design
Wendy Strandt
Asset Management
Montral
Raj Kothari
416 869 8678
rajendra.kothari@ca.pwc.com
Andrew Paterson
514 205 5264
andrew.paterson@ca.pwc.com
If you would like to receive additional copies of this

publication, please email
financial.services@ca.pwc.com
Insurance
Calgary
Chris Couture
416 687 8232
chris.o.couture@ca.pwc.com
Michael Godwin
403 509 7322
michael.j.godwin@ca.pwc.com
Private Equity
Vancouver
Dominic Ricketts
416 687 8408
dominic.ricketts@ca.pwc.com
Paul Challinor
604 806 7218
paul.challinor@ca.pwc.com
Ryan Leopold
416 869 2594
ryan.e.leopold@ca.pwc.com
44
Consulting
This publication can be viewed on our website at

Customer expectations are growing. Are you harnessing

innovation and data to respond to those changing needs? Our
Financial Services team can help you find the right balance
between navigating a changing risk and regulatory environment,
while staying focused on what your customers want.
Were focused on building deeper relationships. So well
start by getting to know your issues in more detail. What you
tell us will shape how we use our 1,335 dedicated Canadian
Financial Services professionals backed by their 36,500 global
counterpartsand their connections, contacts and expertise
tohelp create the value youre looking for.
Basis of preparation
The data, charts and figures included in this publication are based on the banks 2014 annual reports and supplementary financial information, including press releases, which are available on the banks websites. Certain statistics or ratios included in this publication may differ
from those disclosed by the banks, as banks may apply other computational formulas, sources of input or calculate ratios differently. If specific data was not readily available in the banks annual reports or supplementary information, assumptions have been made to provide
reasonable comparative numbers. To ensure that the findings in this analysis are as objective as possible, and that meaningful, relevant and reasonable comparisons have been made, all items have been calculated consistently for each of the banks.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty
(express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty
of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
2015 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. 4523-01 0215

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Canadian

8 Victor G. Dodig, CIBC

20 Snapshot of the Big Six

National Financial Services Leader

CEO and Senior Partner

Perspectives on the Canadian banking industry

A new era begins

Canadian Banks 2015

A new era begins

These new leaders have taken charge at a time when

Perspectives on the Canadian banking industry

A new era begins

Canadian Banks 2015

A new era begins

Figure 1: Canadian banks compared with global banks

Perspectives on the Canadian banking industry

A new era begins

The big picture:

Canadian Banks 2015

A new era begins

Figure 2: 2014 at a glance Key metrics as at or the year ended October 31

Total market return

Market capitalization ($ billions)

Total non-interest expenses ($ millions)

Total capital ratio

Perspectives on the Canadian banking industry

A new era begins

CEO perspectives: CIBC

Canadian Banks 2015

in complaining. You cant trade off regulatory spend

A new era begins

Is banking ready for the

The recent dropoff in commodity pricesoil prices in particularcould

Retail banking is also likely to see shifting fortunes owing to commodity

Keeping an eye on interest rates

You ignore these disruptors [digital

A new era begins

Banks embracing a new vision

Canadian Banks 2015

A new era begins

Because of these challenges, banks are increasingly turning to fintech

More than 40% of banking CEOs see joint

Perspectives on the Canadian banking industry 11

A new era begins

CEO perspectives: RBC

Canadian Banks 2015

While Apple, Google and PayPal are the biggest names

A new era begins

Coming to grips with

The regulatory environment:

A new era begins

Banks rethink leadership

Canadian Banks 2015

Canadian banks ready

A new era begins

Capital adequacy requirements relating to Basel III continued to have a

Provisions Operating Provisions

Perspectives on the Canadian banking industry 15

A new era begins

Figure 5: Deeper analysis into the net interest income

5 year Government of Canada bond rate

Average net interest margin for Big Six banks

Source: Bloomberg and Bank of Canada