1987-139 - Laserfiche WebLink

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El operating perfounance for the nine months ended July 31, 1987 reflects the Bank's decision to increase its prudential reserves against loans to borrowers in 34 countries designated by the SUPerintendent of Financial Institutions (the "Superintendent"). Mis decision followed an extensive analysis of the Bank's portfolio arcs discussions with the superintendent. The Superintendent's issued guidelines permit banks to better reflect the lower econw= value of loans to the 34 countries. The Bails established a special provision for losses on trans -border claims (Special provision) of $475 million. This raises the prudential reserves against lows to these countries to $1.04 billion or 40 per cent. Further, the Bank has significantly reduced its overall exposure to developing countries through the disposition of #411 million of lcaas in the first nine months of the fiscal year. The Special provision represents a charge against earnings and resulted in a loss of $325 million for the third quarter and $93 million for the year to date. However, underlying earnings applicable to�camwn shares fore the a 1 for the provysarner and the year to date were exceptionally strong. third quarter restated net income grew to $124 million frau $96 million a year ago. For the nine month period, earnings were $359 million, compared to $284 million for the same period a year ago. The strong underlying earnings were a major consideration in the recent increase in the quarterly common share dividend from 21 to 23 cents. As a result of the strong underlying earnings and $100 million carman share issue early in the fiscal year, shareholders equity and appropriations for contingencies increased $21 million to reach $3,316 million during the nine months ended July 31, 1987. At July 31, owcon shareholders' equity and appropriations for contingencies equalled 5.40 per cent of total assets, near the level of 5.58 per cent at October 31, 1986. The Bank continues to have one of the highest c moron equity to total assets ratios of the major North American banks. At July 31, 1987 total assets were $53.6 billion canpared to $51.4 trillion at October 31, 1986. Strang growth in mortgages and lows to individuals was partially offset by a decline in offshore loans. Return on assets, before the cocouparredial pto 00.76 peracent95 per cent for the firstthe nine ninemonths omonths fisccaldJuly 1986. 31, 1987, Net non -accrual loans at July 31 were $928 million, down $324 million since October 31, 1986. A decline in nal -accrual loans to North American borrowers and the Special provision, which had the effect of reducing non -accrual loans, were partially offset by the classification of Brazil as non -accrual in the second quarter. More than one half of the remaining non -accrual loans are in the energy sector. Excluding the Special provision, the Bank est-imates its Loan loss experience for 1987 at $100 million, compared to $448 million in 1986, which included $59 million relating to sovereign risk loans. The ens lri current rentWeste171 Canada. tes reflects continued i.rprovement in the quality of NLv federal and provincial regulations allow Canadian banks entry into new areas of investment and securities activity. In response to these changes, two Barlk subsidiaries have been formed. Since July 30, Toronto Dominion Securities Inc. has participated in several underwritings. careen Line Investor Services Inc. has purchased seats on the Toronto, Montreal, Alberta and Vancouver swcx exchanges and is the largest discount broker in Canada. A-8