Fair Value Measurements	12 Months Ended
Fair Value Measurements	Oct. 31, 2025
Fair Value Measurements [Abstract]
Fair Value Measurements	NOTE 5: FAIR VALUE MEASUREMENTS Certain assets and liabilities, primarily financial instruments, are carried on the balance sheet at their fair value on a recurring basis. These financial instruments include trading loans and securities, non-trading financial assets at FVTPL, financial assets and liabilities designated at FVTPL, financial assets at FVOCI, derivatives, certain securities purchased under reverse repurchase agreements, trading deposits, securitization liabilities at fair value, obligations related to securities sold short, and certain obligations related to securities sold under repurchase agreements. All other financial assets and financial liabilities are carried at amortized cost. (a) VALUATION GOVERNANCE Valuation processes are guided by policies and procedures that are approved by senior management and subject matter experts. Senior Executive oversight over the valuation process is provided through various valuation committees. Further, the Bank has a number of additional controls in place, including an independent price verification process to ensure the accuracy of fair value measurements reported in the financial statements. The sources used for independent pricing comply with the standards set out in the approved valuation-related policies, which include consideration of the reliability, relevancy, and timeliness of data. (b) METHODS AND ASSUMPTIONS The Bank calculates fair value for measurement and disclosure purposes based on the following methods of valuation and assumptions: Government and Government-Related Securities The fair value of Canadian government debt securities is determined by quoted prices in active markets, reference to recent transaction prices, or third-party vendor prices. In cases where external and independent prices are not readily available, alternate techniques based on the risk metrics and unique characteristics of the security are utilized. The fair value of Canadian residential mortgage-backed securities (MBS) is based on third-party vendor prices, reference to recent transaction prices, or valuation techniques that utilize observable inputs such as benchmark government bond prices, government bond yield curves, quoted yield spreads and prepayment rate assumptions related to the underlying collateral. The fair value of U.S. government and agency debt securities is determined by reference to recent transaction prices, broker quotes, or third-party vendor prices. For U.S. agency MBS pricing, brokers or third-party vendors may use a pool-specific valuation model to value these securities, using observable market inputs. The fair value of other Organisation for Economic Co-operation and Development (OECD) government-guaranteed debt is based on broker quotes and third- party vendor prices, or where external and independent prices are not readily available, alternate techniques based on the risk metrics and unique characteristics of the security are utilized. Other Debt Securities The fair value of corporate and other debt securities is based on broker quotes, third-party vendor prices, or alternate techniques utilizing the risk metrics and unique characteristics of the security. Asset-backed securities are primarily fair valued using third-party vendor prices, including those generated by issue-specific valuation models using observable market inputs. Equity Securities The fair value of equity securities is based on quoted prices in active markets, where available. Where quoted prices in active markets are not readily available, such as for private equity securities, or where there is a wide bid-ask spread, fair value is determined based on quoted market prices for similar securities or through valuation techniques, including discounted cash flow analysis, multiples of earnings before taxes, depreciation and amortization, and other relevant valuation techniques. If there are trading restrictions on the equity security held, a valuation adjustment is recognized against available prices to reflect the nature of the restriction. However, restrictions that are not part of the security held and represent a separate contractual arrangement that has been entered into by the Bank and a third party do not impact the fair value of the original instrument. The cost of Federal Reserve stock and Federal Home Loan Bank (FHLB) stock approximates fair value. Retained Interests Retained interests are classified as trading securities and are initially recognized at their relative fair market value. Subsequently, the fair value of retained interests recognized by the Bank is determined by estimating the present value of future expected cash flows. Differences between the actual cash flows and the Bank’s estimate of future cash flows are recognized in income. These assumptions are subject to periodic review and may change due to significant changes in the economic environment. Loans The estimated fair value of loans carried at amortized cost reflects changes in market price that have occurred since the loans were originated or purchased. Estimated fair value is determined by discounting the expected future cash flows related to these loans at current market interest rates for loans with similar credit risks. Changes in interest rates have minimal impact on the fair value of floating-rate loans since they reprice to the market frequently, and therefore their carrying value approximates their fair value. The fair value of loans is not adjusted for the value of any credit protection the Bank has purchased to mitigate credit risk. The fair value of loans carried at FVTPL, which includes trading loans and non-trading loans at FVTPL, is determined using observable market prices, where available. Where the Bank is a market maker for loans traded in the secondary market, fair value is determined using executed prices, or prices for comparable trades. For those loans where the Bank is not a market maker, the Bank obtains broker quotes from other reputable dealers, or uses valuation techniques to determine fair value. The fair value of loans carried at FVOCI is assumed to approximate amortized cost as they are generally floating rate performing loans that are short term in nature. Commodities The fair value of commodities is based on quoted prices in active markets, where available. The Bank also transacts commodity derivative contracts which can be traded on an exchange or in OTC markets. Derivative Financial Instruments The fair value of exchange-traded derivative financial instruments is based on quoted market prices. The fair value of OTC derivative financial instruments is estimated using well established valuation techniques, such as discounted cash flow techniques, the Black-Scholes model, and Monte Carlo simulation. The valuation models incorporate inputs that are observable in the market or can be derived from observable market data. Prices derived by using models are recognized net of valuation adjustments. The inputs used in the valuation models depend on the type of derivative and the nature of the underlying instrument and are specific to the instrument being valued. Inputs can include, but are not limited to, interest rate yield curves, foreign exchange rates, dividend yield projections, commodity spot and forward prices, recovery rates, volatilities, spot prices, and correlation. A credit valuation adjustment (CVA) is recognized against the model value of OTC derivatives to account for the uncertainty that the counterparty in a derivative transaction may not be able to fulfil its obligations under the transaction to the Bank. In determining CVA, the Bank takes into account master netting agreements and collateral, and considers the creditworthiness of the counterparty, using market observed or proxy credit spreads, in assessing potential future amounts owed to the Bank. The fair value of a derivative is partly a function of collateralization. The Bank uses relevant overnight borrowing curves to discount the cash flows for collateralized derivatives as most collateral is posted in cash and can be funded at the overnight rate. A funding valuation adjustment (FVA) is recognized against the model value of OTC derivatives to recognize the market implied unsecured funding costs and benefits considered in the pricing and fair value determination. Some of the key drivers of FVA include the market implied funding spread and the expected average exposure by counterparty. The Bank will continue to monitor industry practice on valuation adjustments and may refine the methodology as market practices evolve. Deposits The estimated fair value of term deposits is determined by discounting the expected future cash flows using interest rates currently offered for deposits with similar terms. For deposits with no defined maturities, the Bank considers fair value to equal carrying value, which is equivalent to the amount payable on the balance sheet date. For trading deposits and deposits designated at FVTPL, which is included in financial liabilities designated at FVTPL, fair value is determined using discounted cash flow valuation techniques which maximize the use of observable market inputs such as benchmark yield curves and foreign exchange rates. The Bank considers the impact of its own creditworthiness in the valuation of these deposits by reference to observable market inputs. Securitization Liabilities The fair value of securitization liabilities is based on quoted market prices or quoted market prices for similar financial instruments, where available. Where quoted prices are not available, fair value is determined using valuation techniques, which maximize the use of observable inputs, such as Canada Mortgage Bond (CMB) curves and MBS curves. Obligations Related to Securities Sold Short The fair value of these obligations is based on the fair value of the underlying securities, which can include equity or debt securities. As these obligations are fully collateralized, the method used to determine fair value would be the same as that of the relevant underlying equity or debt securities. Securities Purchased Under Reverse Repurchase Agreements and Obligations Related to Securities Sold Under Repurchase Agreements Commodities and certain bonds and equities purchased or sold with an agreement to sell or repurchase them at a later date at a fixed price are carried at fair value. The fair value of these agreements is based on valuation techniques such as discounted cash flow models which maximize the use of observable market inputs such as interest rate swap curves and commodity forward prices. Subordinated Notes and Debentures The fair value of subordinated notes and debentures are based on quoted market prices. Portfolio Exception IFRS 13, Fair Value Measurement provides a measurement exception that allows an entity to determine the fair value of a group of financial assets and liabilities with offsetting risks based on the sale or transfer of its net exposure to a particular risk or risks. The Bank manages certain financial assets and financial liabilities, such as derivative assets and derivative liabilities, on the basis of net exposure to a particular risk, or risks; and uses mid-market prices as a basis for establishing fair values for the offsetting risk positions and applies the most representative price within the bid-ask spread to the net open position, as appropriate. Refer to Note 2 for further details on the use of the portfolio exception to establish fair value. (c) FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE The carrying value and fair value of financial assets and liabilities not carried at fair value are disclosed in the table below. For these instruments, fair values are calculated for disclosure purposes only, using the valuation techniques used by the Bank. In addition, the Bank has determined that the carrying value of certain financial assets and liabilities approximates their fair value, which include: cash and due from banks, interest-bearing deposits with banks, amounts receivable from brokers, dealers, and clients, other assets, amounts payable to brokers, dealers, and clients, and other liabilities. Substantially all securities purchased under reverse repurchase agreements and obligations related to securities sold under repurchase agreements are measured at amortized cost where the carrying value approximates their fair value. Financial Assets and Liabilities not carried at Fair Value 1 (millions of Canadian dollars) As at October 31, 2025 October 31, 2024 Carrying Fair Carrying Fair value value value value FINANCIAL ASSETS Debt securities at amortized cost, net of allowance for credit losses Government and government-related securities $ 183,593 $ 182,478 $ 206,815 $ 202,667 Other debt securities 56,846 56,679 64,800 63,509 Total debt securities at amortized cost, net of allowance for credit losses 240,439 239,157 271,615 266,176 Total loans, net of allowance for loan losses 953,012 956,424 949,549 949,227 Total financial assets not carried at fair value $ 1,193,451 $ 1,195,581 $ 1,221,164 $ 1,215,403 FINANCIAL LIABILITIES Deposits $ 1,267,104 $ 1,267,466 $ 1,268,680 $ 1,266,562 Securitization liabilities at amortized cost 14,841 14,805 12,365 12,123 Subordinated notes and debentures 10,733 10,929 11,473 11,628 Total financial liabilities not carried at fair value $ 1,292,678 $ 1,293,200 $ 1,292,518 $ 1,290,313 1 This table excludes financial assets and liabilities where the carrying value approximates their fair value. (d) FAIR VALUE HIERARCHY IFRS requires disclosure of a three-level hierarchy for fair value measurements based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 : Fair value is based on quoted market prices for identical assets or liabilities that are traded in an active exchange market or highly liquid and actively traded in OTC markets. Level 2 : Fair value is based on observable inputs other than Level 1 prices, such as quoted market prices for similar (but not identical) assets or liabilities in active markets, quoted market prices for identical assets or liabilities in markets that are not active, and other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using valuation techniques with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3 : Fair value is based on non-observable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial instruments classified within Level 3 of the fair value hierarchy are initially recognized at their transaction price, which is considered the best estimate of fair value. After initial measurement, the fair value of Level 3 assets and liabilities is determined using valuation models, discounted cash flow methodologies, or similar techniques. Fair Value Hierarchy for Assets and Liabilities not carried at Fair Value The following table presents the levels within the fair value hierarchy for each of the financial assets and liabilities not carried at fair value as at October 31, 2025 and October 31, 2024, but for which fair value is disclosed. Fair Value Hierarchy for Assets and Liabilities not carried at Fair Value 1 (millions of Canadian dollars) As at October 31, 2025 October 31, 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total ASSETS Debt securities at amortized cost, net of allowance for credit losses Government and government-related securities $ – $ 182,478 $ – $ 182,478 $ – $ 202,667 $ – $ 202,667 Other debt securities – 56,679 – 56,679 – 63,509 – 63,509 Total debt securities at amortized cost, net of allowance for credit losses – 239,157 – 239,157 – 266,176 – 266,176 Total loans, net of allowance for loan losses – 280,842 675,582 956,424 – 285,070 664,157 949,227 Total assets with fair value disclosures $ – $ 519,999 $ 675,582 $ 1,195,581 $ – $ 551,246 $ 664,157 $ 1,215,403 LIABILITIES Deposits $ – $ 1,267,466 $ – $ 1,267,466 $ – $ 1,266,562 $ – $ 1,266,562 Securitization liabilities at amortized cost – 14,805 – 14,805 – 12,123 – 12,123 Subordinated notes and debentures – 10,929 – 10,929 – 11,628 – 11,628 Total liabilities with fair value disclosures $ – $ 1,293,200 $ – $ 1,293,200 $ – $ 1,290,313 $ – $ 1,290,313 1 This table excludes financial assets and liabilities where the carrying value approximates their fair value. The following table presents the levels within the fair value hierarchy for each of the assets and liabilities measured at fair value on a recurring basis as at October 31, 2025 and October 31, 2024. Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value on a Recurring Basis (millions of Canadian dollars) As at October 31, 2025 October 31, 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total FINANCIAL ASSETS AND COMMODITIES Trading loans, securities, and other 1 Government and government-related securities Canadian government debt Federal $ 4,892 $ 3,875 $ – $ 8,767 $ 691 $ 9,551 $ – $ 10,242 Provinces – 4,537 – 4,537 – 6,398 – 6,398 U.S. federal, state, municipal governments, and agencies debt 2,973 20,811 – 23,784 – 18,861 – 18,861 Other OECD government-guaranteed debt 283 5,818 – 6,101 – 9,722 – 9,722 Mortgage-backed securities – 768 – 768 – 1,352 – 1,352 Other debt securities Canadian issuers – 6,695 67 6,762 – 6,611 12 6,623 Other issuers – 16,508 – 16,508 – 15,845 14 15,859 Equity securities 87,713 171 25 87,909 68,682 34 12 68,728 Trading loans – 30,032 – 30,032 – 23,518 – 23,518 Commodities 33,446 1,521 – 34,967 13,504 962 – 14,466 Retained interests – 1 – 1 – 1 – 1 129,307 90,737 92 220,136 82,877 92,855 38 175,770 Non-trading financial assets at fair value through profit or loss Securities 465 5,019 1,567 7,051 391 1,188 1,233 2,812 Loans – 344 – 344 – 3,057 – 3,057 465 5,363 1,567 7,395 391 4,245 1,233 5,869 Derivatives Interest rate contracts 6 10,990 8 11,004 2 15,440 – 15,442 Foreign exchange contracts 30 53,576 3 53,609 47 51,001 13 51,061 Credit contracts – 44 – 44 – 6 – 6 Equity contracts 162 12,534 – 12,696 64 6,167 – 6,231 Commodity and other contracts 752 4,867 – 5,619 548 4,756 17 5,321 950 82,011 11 82,972 661 77,370 30 78,061 Financial assets designated at fair value through profit or loss Securities 1 – 6,986 – 6,986 – 6,417 – 6,417 – 6,986 – 6,986 – 6,417 – 6,417 Financial assets at fair value through other comprehensive income Government and government-related securities Canadian government debt Federal 100 15,791 – 15,891 – 18,139 – 18,139 Provinces – 21,080 – 21,080 – 21,270 – 21,270 U.S. federal, state, municipal governments, and agencies debt 851 53,641 – 54,492 – 35,197 – 35,197 Other OECD government-guaranteed debt – 7,875 – 7,875 – 1,679 – 1,679 Mortgage-backed securities – 1,896 – 1,896 – 2,137 – 2,137 Other debt securities Asset-backed securities – 8,709 – 8,709 – 1,384 – 1,384 Corporate and other debt – 13,091 – 13,091 – 9,439 7 9,446 Equity securities 1,136 – 1,911 3,047 1,058 2 3,355 4,415 Loans – 288 – 288 – 230 – 230 2,087 122,371 1,911 126,369 1,058 89,477 3,362 93,897 Securities purchased under reverse repurchase agreements – 7,574 – 7,574 – 10,488 – 10,488 FINANCIAL LIABILITIES Trading deposits – 37,609 273 37,882 – 29,907 505 30,412 Derivatives Interest rate contracts 6 9,572 76 9,654 3 13,283 158 13,444 Foreign exchange contracts 24 42,496 5 42,525 30 40,936 12 40,978 Credit contracts – 440 – 440 – 403 – 403 Equity contracts – 19,528 155 19,683 – 7,974 24 7,998 Commodity and other contracts 806 6,193 55 7,054 673 4,845 27 5,545 836 78,229 291 79,356 706 67,441 221 68,368 Securitization liabilities at fair value – 25,283 – 25,283 – 20,319 – 20,319 Financial liabilities designated at fair value through profit or loss – 197,633 2 197,635 – 207,890 24 207,914 Obligations related to securities sold short 1 15,342 28,453 – 43,795 1,783 37,732 – 39,515 Obligations related to securities sold under repurchase agreements – 11,557 – 11,557 – 9,736 – 9,736 1 Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions). (e) TRANSFERS BETWEEN FAIR VALUE HIERARCHY LEVELS FOR ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS The Bank’s policy is to record transfers of assets and liabilities between the different levels of the fair value hierarchy using the fair values as at the end of each reporting period. Assets and liabilities are transferred between Level 1 and Level 2 depending on whether there is sufficient frequency and volume in an active market. During the year ended October 31, 2025, the Bank transferred $ 810 million of trading loans, securities, and other, and $ 561 million of obligations related to securities sold short from Level 2 to Level 1. During the year ended October 31, 2025, there were no significant transfers from Level 1 to Level 2. There were no significant transfers between Level 1 and Level 2 during the year ended October 31, 2024. Movements of Level 3 instruments Significant transfers into and out of Level 3 occur mainly due to the following reasons: ● Transfers from Level 3 to Level 2 occur when techniques used for valuing the instrument incorporate significant observable market inputs or broker-dealer quotes which were previously not observable. ● Transfers from Level 2 to Level 3 occur when an instrument’s fair value, which was previously determined using valuation techniques with significant observable market inputs, is now determined using valuation techniques with significant unobservable inputs. Due to the unobservable nature of the inputs used to value Level 3 financial instruments, there may be uncertainty about the valuation of these instruments. The fair value of Level 3 instruments may be drawn from a range of reasonably possible alternatives. In determining the appropriate levels for these unobservable inputs, parameters are chosen so that they are consistent with prevailing market evidence and management judgment. There were no significant transfers between Level 2 and Level 3 during the years ended October 31, 2025 and October 31, 2024. There were no other significant changes to the unobservable inputs and sensitivities for assets and liabilities classified as Level 3 during the years ended October 31, 2025 and October 31, 2024. (f) RECONCILIATION OF CHANGES IN FAIR VALUE FOR LEVEL 3 ASSETS AND LIABILITIES The following tables set out changes in fair value of all assets and liabilities measured at fair value using significant Level 3 unobservable inputs for the years ended October 31, 2025 and October 31, 2024. Reconciliation of Changes in Fair Value for Level 3 Assets and Liabilities (millions of Canadian dollars) Change in unrealized Fair Total realized and Fair gains value as at unrealized gains (losses) Movements 1 Transfers value as at (losses) on November 1 Included Included Purchases/ Sales/ Into Out of October 31 instruments 2024 in income 2 in OCI 3,4 Issuances Settlements Level 3 Level 3 2025 still held 5 FINANCIAL ASSETS Trading loans, securities, and other Government and government-related securities $ – $ – $ – $ – $ – $ – $ – $ – $ – Other debt securities 26 (1) – – (26) 70 (2) 67 (2) Equity securities 12 1 – 21 (9) – – 25 – 38 – – 21 (35) 70 (2) 92 (2) Non-trading financial assets at fair value through profit or loss Securities 1,233 33 – 385 (74) – (10) 1,567 (5) 1,233 33 – 385 (74) – (10) 1,567 (5) Financial assets at fair value through other comprehensive income Other debt securities 7 – – – (7) – – – – Equity securities 3,355 3 15 13 (1,472) – (3) 1,911 13 $ 3,362 $ 3 $ 15 $ 13 $ (1,479) $ – $ (3) $ 1,911 $ 13 FINANCIAL LIABILITIES Trading deposits 6 $ (505) $ 33 $ – $ (191) $ 350 $ – $ 40 $ (273) $ 32 Derivatives 7 Interest rate contracts (158) 80 – – 10 – – (68) 83 Foreign exchange contracts 1 (18) – – 4 8 3 (2) (3) Equity contracts (24) (108) – – (24) (2) 3 (155) (108) Commodity and other contracts (10) (45) – – – – – (55) (48) (191) (91) – – (10) 6 6 (280) (76) Financial liabilities designated at fair value through profit or loss (24) 10 – (24) 36 – – (2) 1 Change in unrealized Fair Total realized and Fair gains value as at unrealized gains (losses) Movements 1 Transfers value as at (losses) on November 1 Included Included Purchases/ Sales/ Into Out of October 31 instruments 2023 in income 2 in OCI 3,4 Issuances Settlements Level 3 Level 3 2024 still held 5 FINANCIAL ASSETS Trading loans, securities, and other Government and government-related securities $ 67 $ – $ – $ – $ (67) $ – $ – $ – $ – Other debt securities 65 1 – 91 (88) 33 (76) 26 – Equity securities 10 (1) – 11 (8) – – 12 – 142 – – 102 (163) 33 (76) 38 – Non-trading financial assets at fair value through profit or loss Securities 980 98 – 232 (76) – (1) 1,233 80 980 98 – 232 (76) – (1) 1,233 80 Financial assets at fair value through other comprehensive income Other debt securities 27 – (3) 3 (20) – – 7 – Equity securities 2,377 – (7) 1,171 (205) 19 – 3,355 3 $ 2,404 $ – $ (10) $ 1,174 $ (225) $ 19 $ – $ 3,362 $ 3 FINANCIAL LIABILITIES Trading deposits 6 $ (985) $ (13) $ – $ (122) $ 540 $ – $ 75 $ (505) $ (6) Derivatives 7 Interest rate contracts (126) (70) – – 38 – – (158) (34) Foreign exchange contracts (6) 14 – – 2 (14) 5 1 4 Equity contracts (21) (5) – – (2) 3 1 (24) (6) Commodity and other contracts (1) (5) – – (4) – – (10) (9) (154) (66) – – 34 (11) 6 (191) (45) Financial liabilities designated at fair value through profit or loss (22) 127 – (260) 131 – – (24) 127 1 Includes foreign exchange. 2 Gains/losses on financial assets and liabilities are recognized within Non-interest income on the Consolidated Statement of Income. 3 Other comprehensive income. 4 Includes realized gains/losses transferred to retained earnings on disposal of equities designated at FVOCI. Refer to Note 7 for further details. 5 Changes in unrealized gains/losses on financial assets at FVOCI are recognized in AOCI. 6 Issuances and repurchases of trading deposits are reported on a gross basis. 7 Consists of derivative assets of $ 11 million (October 31, 2024/November 1, 2024 – $ 30 million; November 1, 2023 – $ 22 million) and derivative liabilities of $ 291 million (October 31, 2024/November 1, 2024 – $ 221 million; November 1, 2023 – $ 176 million), which have been netted in this table for presentation purposes only. (g) VALUATION OF ASSETS AND LIABILITIES CLASSIFIED AS LEVEL 3 Significant unobservable inputs in Level 3 positions The following section discusses the significant unobservable inputs for Level 3 positions and assesses the potential effect that a change in each unobservable input may have on the fair value measurement. Price Equivalent Certain financial instruments, mainly debt and equity securities, are valued using price equivalents when market prices are not available, with fair value measured by comparison with observable pricing data from instruments with similar characteristics. For debt securities, the price equivalent is expressed in ‘basis points’, and represents a percentage of the par amount. For equity securities, the price equivalent is based on a percentage of a proxy price. There may be wide ranges depending on the liquidity of the securities. New issuances of debt and equity securities are priced at 100% of the issue price. Correlation The movements of inputs are not necessarily independent from other inputs. Such relationships, where material to the fair value of a given instrument, are captured via correlation inputs into the pricing models. The Bank includes correlation between the asset class, as well as across asset classes. For example, price correlation is the relationship between prices of equity securities in equity basket derivatives, and quanto correlation is the relationship between instruments which settle in one currency and the underlying securities which are denominated in another currency. Implied Volatility Implied volatility is the value of the volatility of the underlying instrument which, when input in an option pricing model, such as Black-Scholes, will return a theoretical value equal to the current market price of the option. Implied volatility is a forward-looking and subjective measure, and differs from historical volatility because the latter is calculated from known past returns of a security. Funding Ratio The funding ratio is a significant unobservable input required to value loan commitments issued by the Bank. The funding ratio represents an estimate of the percentage of commitments that are ultimately funded by the Bank. The funding ratio is based on a number of factors such as observed historical funding percentages within the various lending channels and the future economic outlook, considering factors including, but not limited to, competitive pricing and fixed/variable mortgage rate gap. An increase/decrease in the funding ratio will increase/decrease loan commitment liability values in relationship to prevailing interest rates. Earnings Multiple, Discount Rate, and Liquidity Discount Earnings multiple, discount rate, and liquidity discount are significant inputs used when valuing certain equity securities. Earnings multiples are selected based on comparable entities and a higher multiple will result in a higher fair value. Discount rates are applied to cash flow forecasts to reflect time value of money and the risks associated with the cash flows. A higher discount rate will result in a lower fair value. Liquidity discounts may be applied as a result of the difference in liquidity between the comparable entity and the equity securities being valued. Inflation Rate Swap Curve Inflation rate swap contracts valuation reflects spread between interest rate curves and the inflation rates. The inflation rates are not observable and are determined using proxy inputs such as inflation indices (e.g., Consumer Price Index). Net Asset Value The fair value of certain private funds is based on the net asset value determined by the fund managers based on valuation methodologies, as there are no observable prices for these instruments. Valuation techniques and inputs used in the fair value measurement of Level 3 assets and liabilities The following table presents the Bank’s assets and liabilities recognized at fair value and classified as Level 3, together with the valuation techniques used to measure fair value, the significant inputs used in the valuation technique that are considered unobservable, and a range of values for those unobservable inputs. The range of values represents the highest and lowest inputs used in calculating the fair value. Valuation Techniques and Inputs Used in the Fair Value Measurement of Level 3 Assets and Liabilities As at October 31, 2025 October 31, 2024 Significant Valuation unobservable Lower Upper Lower Upper technique inputs (Level 3) range range range range Unit Other debt securities Market comparable Bond price equivalent – 108 – 102 points Equity securities 1 Market comparable New issue price 100 100 100 100 % Non-trading financial assets at fair value through profit or loss Market comparable New issue price 100 100 100 100 % Discounted cash flow Discount rates 11 11 9 9 % EBITDA multiple Earnings multiple n/a 2 n/a – 20.0 times Price-based Net Asset Value 3 n/a n/a n/a n/a Derivatives Interest rate contracts Discounted cash flow Inflation rate swap curve n/a n/a 2 2 % Option model Funding ratio n/a n/a 75 75 % Swaption Model Currency-specific volatility 46 277 56 319 % Foreign exchange contracts Option model Currency-specific volatility 3 26 5 26 % Equity contracts Option model Price correlation 29 81 16 67 % Dividend yield – 8 2 7 % Equity volatility 12 111 13 27 % Commodity and other contracts Option model Quanto correlation (67) (47) (67) (47) % Market comparable Price equivalent 90 95 n/a n/a points Trading deposits Swaption model Currency-specific volatility 46 277 53 319 % Financial liabilities designated at fair value through profit or loss Option model Funding ratio 56 66 2 70 % 1 Equity securities exclude the fair value of Federal Reserve stock and FHLB stock of $ 1.7 billion (October 31, 2024 – $ 3.2 billion) which are redeemable by the issuer at cost which approximates fair value. These securities cannot be traded in the market, hence, these securities have not been subjected to the sensitivity analysis. 2 Not applicable. 3 The following table summarizes the potential effect of using reasonably possible alternative assumptions for financial assets and financial liabilities held, that are classified in Level 3 of the fair value hierarchy as at October 31, 2025 and October 31, 2024. For trading securities, non-trading securities at FVTPL and equity securities at FVOCI, the sensitivity was calculated based on an upward and downward shock of the fair value reported. For interest rate derivatives, the Bank performed a sensitivity analysis on the mortgage spreads and unobservable inflation curve. For equity derivatives, the sensitivity was calculated based on an upward and downward shock of fair value. For financial liabilities designated at FVTPL, the sensitivity was calculated based on an upward and downward shock of the funding ratio. Sensitivity Analysis of Level 3 Financial Assets and Liabilities (millions of Canadian dollars) As at October 31, 2025 October 31, 2024 Impact to net assets Impact to net assets Decrease in Increase in Decrease in Increase in fair value fair value fair value fair value FINANCIAL ASSETS Trading loans, securities, and other Securities $ 5 $ 1 $ 3 $ 1 Non-trading financial assets at fair value through profit or loss Securities 189 63 155 39 Financial assets at fair value through other comprehensive income Equity securities 31 11 30 12 FINANCIAL LIABILITIES Trading deposits – – – – Derivatives Interest rate contracts 35 18 28 17 Equity contracts 2 1 1 – 37 19 29 17 Financial liabilities designated at fair value through profit or loss – – 2 4 Total $ 262 $ 94 $ 219 $ 73 For the years ended October 31, 2025 and 2024, the aggregate difference yet to be recognized in net income due to the difference between the transaction price and the amount determined using valuation techniques with significant non-observable inputs at initial recognition were immaterial. (h) FINANCIAL INSTRUMENTS DESIGNATED AT FAIR VALUE Securities Designated at Fair Value through Profit or Loss Certain securities supporting insurance contract liabilities within the Bank’s insurance underwriting subsidiaries have been designated at FVTPL to eliminate or significantly reduce an accounting mismatch. Insurance contract liabilities are measured using a discount factor and changes in the discount factor are recognized on the Consolidated Statement of Income. The unrealized gains or losses on securities designated at FVTPL are recognized on the Consolidated Statement of Income in the same period as gains or losses resulting from changes to the discount rate used to value the insurance contract liabilities. In addition, certain debt securities have been designated at FVTPL as they are economically hedged with derivatives and the designation eliminates or significantly reduces an accounting mismatch. Financial Liabilities Designated at Fair Value through Profit or Loss Certain deposits have been designated at FVTPL to reduce an accounting mismatch from related economic hedges, and are included in Financial liabilities designated at FVTPL on the Consolidated Balance Sheet. In addition, certain obligations related to securities sold under repurchase agreements have been designated at FVTPL as the instruments are part of a portfolio that is managed on a fair value basis and have been included in Obligations related to securities sold under repurchase agreements on the Consolidated Balance Sheet. The fair value of obligations related to securities sold under repurchase agreements designated at FVTPL was $ 8,738 million as at October 31, 2025 (October 31, 2024 – $ 9,736 million). For financial liabilities designated at FVTPL, the estimated amount that the Bank would be contractually required to pay at maturity, which is based on notional amounts, was $ 1,708 million less than its fair value as at October 31, 2025 (October 31, 2024 – $ 2,744 million).