40-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 40-F

[Check one]

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

or

☒ ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2018

Commission File Number 002-09048

THE BANK OF NOVA SCOTIA

(Exact name of Registrant as specified in its charter)

CANADA

(Province or other jurisdiction of incorporation or organization)

6029

(Primary Standard Industrial Classification Code Number (if applicable))

Not Applicable

(I.R.S. Employer Identification Number (if applicable))

44 King St. West, Scotia Plaza, 8^th floor,

Toronto, Ontario, Canada M5H 1H1

(416) 866-3672

(Address and telephone number of Registrant’s principal executive offices)

The Bank of Nova Scotia, 250 Vesey Street,

New York, N.Y., U.S.A. 10281

Attention: Hector Becil

(212) 225-5000

(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
Common	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Not applicable

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

Not applicable

(Title of Class)

For annual reports, indicate by check mark the information filed with this Form:

☒ Annual information form                ☒ Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Common Shares	1,227,027,624
Preferred Shares, Series 22	9,376,944
Preferred Shares, Series 23	2,623,056
Preferred Shares, Series 30	6,142,738
Preferred Shares, Series 31	4,457,262
Preferred Shares, Series 32	11,161,422
Preferred Shares, Series 33	5,184,345
Preferred Shares, Series 34 (Non-Viability Contingent Capital)	14,000,000
Preferred Shares, Series 36 (Non-Viability Contingent Capital)	20,000,000
Preferred Shares, Series 38 (Non-Viability Contingent Capital)	20,000,000
Preferred Shares, Series 40 (Non-Viability Contingent Capital)	12,000,000

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒                No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes ☐                No ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

DISCLOSURE CONTROLS AND PROCEDURES

Management’s responsibility for financial information contained in the Annual Report is described on page 140 of Exhibit 99.3, 2018 Consolidated Financial Statements. In addition, the Bank’s Audit and Conduct Review Committee of the Board of Directors has reviewed, and the Board of Directors has reviewed and approved, the 2018 Consolidated Financial Statements and Management’s Discussion and Analysis prior to release. Scotiabank is committed to providing timely, accurate and balanced disclosure of all material information and to providing fair and equal access to such information. The Bank’s disclosure policies and practices are published on its website.

Disclosure Controls and Procedures

The Bank’s disclosure controls and procedures are designed to provide reasonable assurance that information is accumulated and communicated to the Bank’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

As of October 31, 2018, the Bank’s management, with the participation of the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures, as defined under the rules adopted by the United States Securities and Exchange Commission (“SEC”) and the Canadian securities regulatory authorities, and have concluded that the Bank’s disclosure controls and procedures are effective.

Internal control over financial reporting

Management of the Bank is responsible for establishing and maintaining adequate internal control over financial reporting. These controls include policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Bank; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Bank; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Bank’s assets that could have a material effect on the financial statements.

All control systems contain inherent limitations, no matter how well designed. As a result, the Bank’s management acknowledges that its internal control over financial reporting will not prevent or detect all misstatements due to error or fraud. In addition, management’s evaluation of controls can provide only reasonable, not absolute, assurance that all control issues that may result in material misstatements, if any, have been detected.

Management assessed the effectiveness of internal control over financial reporting, using the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 framework, and based on that assessment concluded that internal control over financial reporting was effective as of October 31, 2018.

Changes in internal control over financial reporting

There have been no changes in the Bank’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Bank’s internal control over financial reporting during the year ended October 31, 2018. The Bank adopted IFRS 9, Financial Instruments effective November 1, 2017 and as a result, has updated and modified certain internal controls over financial reporting. Refer to Note 3 of the consolidated financial statements for further information on changes to accounting policies and Note 4 regarding the transition impact on adoption of IFRS 9.

MANAGEMENT’S INTERNAL CONTROL OVER FINANCIAL REPORTING

Management’s Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm are provided in Exhibit 99.4.

AUDIT COMMITTEE FINANCIAL EXPERT

All of the members of the Bank’s Audit and Conduct Review Committee of the Board of Directors (“audit committee”) are financially literate and independent, and one or more members of the audit committee meet the definition of a financial expert. The Bank’s Board of Directors has determined that Thomas C. O’Neill, Una M. Power, L. Scott Thomson and Benita M. Warmbold are audit committee financial experts and are independent, as that term is defined by the New York Stock Exchange’s corporate governance standards applicable to the Bank.

The SEC has indicated that the designation of a person as an audit committee financial expert does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liability imposed on such person as a member of the audit committee and board of directors in the absence of such designation.

CODE OF ETHICS

The Bank has adopted a code of ethics, entitled “Scotiabank Code of Conduct” (the “Code of Conduct”). The Code of Conduct has been in place for many years and applies to all directors, officers and employees of the Bank. A copy of the Code of Conduct was most recently filed as an exhibit to Form 6-K filed with the SEC (EDGAR Company Filings) on November 27, 2018. The Code of Conduct is also available on the Bank’s website at www.scotiabank.com, in the Corporate Governance section, and is available in print to any person, without charge, upon written request to the Secretary of the Bank at the Toronto executive office address shown above. A supplement to the Code of Conduct, the Whistleblower Policy and Procedures, is also posted on the Bank’s website. Amendments to the Code of Conduct and waivers, if any, for directors and executive officers will be disclosed on the Bank’s website. There were no such waivers under the Code of Conduct granted in fiscal 2018.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The disclosure provided in Table 76 “Fees paid to the shareholders’ auditors” on page 128 of Exhibit 99.2, Management’s Discussion and Analysis, is incorporated by reference herein. The nature of these services is as follows:

• Audit services generally relate to the statutory audits and review of financial statements, regulatory required attestation reports, as well as services associated with registration statements, prospectuses, periodic reports and other documents filed with securities regulatory bodies or other documents issued in connection with securities offerings.

• Audit-related services include special attest services not directly linked to the financial statements, review of controls and procedures related to regulatory reporting, audits of employee benefit plans and consultation and training on accounting and financial reporting.

• Tax services outside of the audit scope relate primarily to specified review procedures required by local tax authorities, attestation on tax returns of certain subsidiaries as required by local tax authorities, and review to determine compliance with an agreement with the tax authorities.

• Other non-audit services are primarily for the review and translation of English language financial statements into other languages and other services.

None of the above services were approved pursuant to an exemption under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X from the requirement that the audit committee pre-approve the services. The majority of the hours expended on the audits of the 2018 and 2017 consolidated financial statements were attributable to work performed by the full-time permanent employees of the Bank’s independent auditors, KPMG LLP or its affiliates. The audit committee’s pre-approval policies and procedures, as revised effective March 5, 2007, were attached as Exhibit 7 to

the Form 40-F filed on December 19, 2007 for the fiscal year ended October 31, 2007. The pre-approval policies and procedures have been subsequently approved without any major changes at each annual review.

OFF-BALANCE SHEET ARRANGEMENTS

The disclosure provided under “Off-balance Sheet Arrangements” on pages 67 to 69 and “Structured entities” on pages 68 to 69 of Exhibit 99.2, Management’s Discussion and Analysis, is incorporated by reference herein. Additional information from note 3 on pages 149 to 165, note 7 on pages 169 to 175, note 10 on pages 178 to 185, note 14 on pages 197 to 198, note 15 on pages 198 to 200, note 23 on page 205, note 24 on pages 205 to 209, note 36 on pages 226 to 227 and note 37 on pages 228 to 235 of Exhibit 99.3, 2018 Consolidated Financial Statements, is incorporated by reference into “Off-balance Sheet Arrangements” in Management’s Discussion and Analysis.

CONTRACTUAL OBLIGATIONS

The disclosure provided under “Contractual maturities and obligations” on pages 103 to 105 of Exhibit 99.2, Management’s Discussion and Analysis, is incorporated by reference herein. Additional information from note 7 on pages 169 to 175, note 20 on page 204, note 28 on pages 214 to 218, note 36 on pages 226 to 227 and note 37 on pages 228 to 235 of Exhibit 99.3, 2018 Consolidated Financial Statements, is incorporated by reference into “Contractual Obligations” in Management’s Discussion and Analysis.

IDENTIFICATION OF THE AUDIT COMMITTEE

The Bank’s audit committee is composed of the following directors: Una M. Power (Chair and financial expert), Scott B. Bonham, Charles H. Dallara, Tiff Macklem, Thomas C. O’Neill (financial expert), Michael D. Penner, L. Scott Thomson (financial expert) and Benita Warmbold (financial expert).

SUMMARY OF SIGNIFICANT CORPORATE GOVERNANCE DIFFERENCES

A summary of significant ways corporate governance practices followed by the Bank differ from corporate governance practices required to be followed by U.S. domestic companies under the New York Stock Exchange’s listing standards (disclosure required by Section 303A.11 of the NYSE Listed Company Manual) is available on the Bank’s website at www.scotiabank.com/corporategovernance.

DISCLOSURE PURSUANT TO SECTION 13(r) OF THE EXCHANGE ACT

Pursuant to section 13(r) of the Exchange Act, the Bank is required to disclose whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings related to both the Islamic Republic of Iran (“Iran”) and certain persons listed on the Specially Designated National and Blocked Persons list maintained by the United States Department of Treasury Office of Foreign Assets Control, during the year ended October 31, 2018. Disclosure of these certain activities, transactions or dealings is generally required even if conducted in compliance with applicable law and regulations. The Bank is not aware that it or any of its affiliates have knowingly engaged in any transaction or dealing reportable under section 13(r) of the Exchange Act during the year ended October 31, 2018.

Undertaking

Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

Signatures

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

Registrant:	THE BANK OF NOVA SCOTIA
	By:	/s/ Rajagopal Viswanathan
		Name: Rajagopal Viswanathan
		Title: Executive Vice-President and Chief Financial Officer

Date: November 27, 2018

EXHIBIT INDEX

Exhibit No.	Description
99.1	Annual Information Form dated November 27, 2018
99.2	Management’s Discussion and Analysis (pages 16 through 137 of the 2018 Annual Report)
99.3	2018 Consolidated Financial Statements (pages 139 through 236 of the 2018 Annual Report)
99.4	Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm (page 138 of the 2018 Annual Report)
99.5	Corporate Governance
99.6	Consent of Independent Registered Public Accounting Firm
99.7	Certifications required by Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the U.S. Sarbanes-Oxley Act of 2002
99.8	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002
101	Interactive Data File

EX-99.1

Exhibit 99.1

The Bank of Nova Scotia

ANNUAL

INFORMATION

FORM

NOVEMBER 27, 2018

TABLE OF CONTENTS

	AIF Page No.		MD&A Reference
Distribution Notice		1
Financial Data		1
Forward-looking Statements		1
CORPORATE STRUCTURE		2
Name, Address and Place of Incorporation		2
Intercorporate Relationships		2
GENERAL DEVELOPMENT OF THE BANK’S BUSINESS		2
Three-Year History		2
DESCRIPTION OF THE BANK’S BUSINESS		3
General Summary		3		pp. 38-53
Environmental, Social and Governance Strategies		8
Risk Factors		8		pp. 72-109
DIVIDENDS		8
DESCRIPTION OF THE BANK’S CAPITAL STRUCTURE		9		pp. 55-62
Common Shares		9
Preferred Shares – General		10
Certain Provisions of the Preferred Shares		10
Other Equity Instruments – Subordinated Capital Notes – General		12
Certain Provisions of the Subordinated Capital Notes		12
Constraints on Ownership of the Bank’s Shares		13
Credit Ratings of Securities and Liquidity		13
MARKET FOR SECURITIES OF THE BANK		15
Trading Price and Volume		15
Prior Sales		16
DIRECTORS AND EXECUTIVE OFFICERS OF THE BANK		16
Directors and Board Committees of the Bank		16
Executive Officers of the Bank		17
Cease Trade Orders, Bankruptcies, Penalties or Sanctions		19
Shareholdings of Management		20
LEGAL PROCEEDINGS AND REGULATORY ACTIONS		20
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS		20
TRANSFER AGENT AND REGISTRAR		21
CONFLICTS OF INTEREST		21
EXPERTS		21
THE BANK’S AUDIT AND CONDUCT REVIEW COMMITTEE		21
Shareholders’ Auditors		22		Table 76 on p. 128
ADDITIONAL INFORMATION		23
Schedule A – Principal Subsidiaries		24
Schedule B – Definition of Credit Ratings		26
Schedule C – Audit and Conduct Review Committee Charter		28

INFORMATION IS AT OCTOBER 31, 2018, UNLESS OTHERWISE NOTED.

Distribution Notice

When this Annual Information Form is provided to security holders or other interested parties, it must be accompanied by copies of all the documents (or excerpts thereof) incorporated herein by reference. Portions of this Annual Information Form of The Bank of Nova Scotia (the “Bank”, “Scotiabank”, “we” or “our”) dated November 27, 2018 (the “AIF”), are disclosed in the Management’s Discussion and Analysis for the year ended October 31, 2018 (the “MD&A”). The MD&A is also available on SEDAR at www.sedar.com.

Financial Data

Except as otherwise noted, all information is given at or for the year ended October 31, 2018. Amounts are expressed in Canadian dollars. Financial information is presented in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, unless otherwise noted.

Forward-looking Statements

From time to time, our public communications often include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission (“SEC”), or in other communications. In addition, representatives of the Bank may include forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include, but are not limited to, statements made in this document, the Management’s Discussion and Analysis in the Bank’s 2018 Annual Report under the headings “Outlook” and in other statements regarding the Bank’s objectives, strategies to achieve those objectives, the regulatory environment in which the Bank operates, anticipated financial results, and the outlook for the Bank’s businesses and for the Canadian, U.S. and global economies. Such statements are typically identified by words or phrases such as “believe,” “expect,” “foresee,” “forecast,” “anticipate,” “intend,” “estimate,” “plan,” “goal,” “project,” and similar expressions of future or conditional verbs, such as “will,” “may,” “should,” “would” and “could.”

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved.

We caution readers not to place undue reliance on these statements as a number of risk factors, many of which are beyond our control and effects of which can be difficult to predict, could cause our actual results to differ materially from the expectations, targets, estimates or intentions expressed in such forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; changes in currency and interest rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank and its affiliates; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; changes in laws and regulations or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; changes to our credit ratings; operational and infrastructure risks; reputational risks; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services; our ability to execute our strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; global capital markets activity; the Bank’s ability to attract, develop and retain key executives; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; disruptions in or attacks (including cyber-attacks) on the Bank’s information technology, internet, network access, or other voice or data communications systems or services; increased competition in the geographic and in business areas in which we operate, including through internet and mobile banking and non-traditional competitors; exposure related to significant litigation and regulatory matters; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; and the Bank’s anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank’s business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank’s

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financial results, businesses, financial condition or liquidity. These and other factors may cause the Bank’s actual performance to differ materially from that contemplated by forward-looking statements. The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank’s results, for more information, please see the “Risk Management” section of the Bank’s 2018 Annual Report, as may be updated by quarterly reports.

Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2018 Annual Report under the headings “Outlook”, as updated by quarterly reports. The “Outlook” sections are based on the Bank’s views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the preceding factors, other uncertainties and potential events.

Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank’s shareholders and analysts in understanding the Bank’s financial position, objectives and priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf.

Additional information relating to the Bank can be located on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.

CORPORATE STRUCTURE

Name, Address and Place of Incorporation

The Bank was granted a charter under the laws of the Province of Nova Scotia in 1832 and commenced operations in Halifax, Nova Scotia in that year. Since 1871, the Bank has been a chartered bank under the Bank Act (Canada) (the “Bank Act”). The Bank is a Schedule I bank under the Bank Act and the Bank Act is its charter. The head office of the Bank is located at 1709 Hollis Street, Halifax, Nova Scotia, B3J 1W1 and its’ executive offices are at Scotia Plaza, 44 King Street West, Toronto, Ontario, M5H 1H1. A copy of the Bank’s by-laws is available on www.sedar.com.

Intercorporate Relationships

Each international principal subsidiary of the Bank is incorporated or established and existing under the laws of the jurisdiction in which its principal office is located, with the exceptions of Scotia Holdings (US) Inc. and Scotiabanc Inc., which are incorporated and existing under the laws of the State of Delaware. Each Canadian principal subsidiary of the Bank is incorporated or established and existing under the laws of Canada, with the exception of: 1832 Asset Management L.P., Scotia Capital Inc. and Scotia Securities Inc. which are incorporated or established and existing under the laws of the Province of Ontario.

The Bank’s principal subsidiaries are listed on Schedule A.

GENERAL DEVELOPMENT OF THE BANK’S BUSINESS

Three-Year History

As reported in accordance with IFRS, for the fiscal year ended October 31, 2018, the Bank’s net income attributable to common shareholders was $8,361 million, up from $7,876 million in 2017. The Bank’s net income attributable to common shareholders was $6,987 million in 2016. Earnings per share (on a diluted basis) for the fiscal year ended October 31, 2018 was $6.82, compared to $6.49 in 2017 and $5.77 in 2016. The 2016 results included a restructuring charge of $378 million (pre-tax) that had a $0.23 impact on diluted earnings per share.

Return on equity for the fiscal year ended October 31, 2018 was 14.5%, compared to 14.6% in 2017 and 13.8% in 2016. In fiscal 2018, the Bank’s actual dividend payout ratio was 47.7% compared to 46.6% in 2017 and 49.6% in 2016.

On October 3, 2018, the Bank completed the acquisition of MD Financial Management Inc. (“MD”) from the Canadian Medical Association (“CMA”), for approximately $2.6 billion. MD is Canada’s leading provider of financial services to physicians

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and their families, with more than $49 billion in assets under management and administration. The Bank and the CMA have entered into a 10-year affinity agreement under which the Bank will commit to pay $115 million over the next 10 years to support the advancement of the medical profession and health care in Canada. MD forms part of the Canadian Banking business segment.

On August 14, 2018, the Bank announced that it reached an agreement to acquire Banco Dominicano del Progreso (“Progreso”), a bank with operations in the Dominican Republic. The transaction is not financially material to Scotiabank. Progreso forms part of the International Banking business segment. Subject to regulatory approvals and closing conditions the acquisition is expected to close in fiscal Q1 2019.

On July 6, 2018, the Bank completed the acquisition of 68.2% of Banco Bilbao Vizcaya Argentaria, Chile (“BBVA Chile”) for approximately US$2.2 billion. The Bank consolidated 100% of BBVA Chile’s assets and liabilities and recorded a non-controlling interest of 31.8%. The Bank subsequently merged the operations of BBVA Chile into Scotiabank Chile and reached an agreement with the minority shareholder to remain invested in the merged entity with a 24.2% stake. BBVA Chile forms part of the International Banking business segment and this transaction is consistent with the Bank’s focus on increasing scale in Peru, Mexico, Colombia and Chile.

On June 29, 2018, the Bank’s Colombian subsidiary, Scotiabank Colpatria S.A. (“Scotiabank Colpatria”), completed the acquisition of Citibank’s consumer (retail and credit cards) and small and medium enterprise operations in Colombia. This acquisition forms part of the International Banking business segment.

On May 9, 2018, the Bank’s wholly owned subsidiary, Scotiabank Peru, announced that it reached an agreement to acquire a 51% controlling interest in Banco Cencosud, which offers credit cards and consumer loans in Peru, for approximately $130 million. Under the terms of the agreement, the two companies will also enter into a 15-year partnership to manage the credit card business and provide additional products and services to customers. This acquisition forms part of the International Banking business segment. Subject to regulatory approvals and closing conditions the acquisition is expected to close in fiscal Q1 2019.

On May 1, 2018, the Bank completed the acquisition of Jarislowsky Fraser Limited, an independent investment firm with approximately $40 billion in assets under management on behalf of institutional and high net worth clients, for approximately $980 million. Jarislowsky Fraser Limited forms part of the Canadian Banking business segment.

On August 4, 2017, the Bank completed the disposition of HollisWealth, its’ independent wealth advisory business, to Industrial Alliance Insurance and Financial Services Inc. The agreement was first announced on December 5, 2016. The net assets and gain on sale are not material to the Bank.

On February 1, 2016, the Bank completed the acquisition of Citigroup’s retail and commercial business in Costa Rica and Panama, for approximately US$360 million. This transaction has strengthened our core Central American franchise, including our credit card businesses in Costa Rica and Panama, as well as providing strong revenue growth and product diversification.

On November 16, 2015, the Bank acquired a $1,700 million credit card portfolio and platform from JPMorgan Chase. The acquisition aligned with our strategy of growing our Canadian credit card business and customer base, while expanding our product portfolio to become the first bank in Canada to offer customers Visa, AMEX and MasterCard credit card alternatives.

DESCRIPTION OF THE BANK’S BUSINESS

General Summary

The Bank is Canada’s international bank and a leading financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. We are dedicated to helping our 25 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking and capital markets.

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The Bank’s three business operating segments are: Canadian Banking, International Banking and Global Banking and Markets.

Canadian Banking provides a full suite of financial advice and banking solutions, supported by an excellent customer experience, to over 10 million Retail, Small Business, Commercial Banking, and Wealth Management customers. It serves these customers through its network of 963 branches and more than 3,600 automated banking machines (“ABMs”), as well as internet, mobile and telephone banking and specialized sales teams.

International Banking has a well-established, diversified franchise that serves more than 15 million Retail, Corporate, and Commercial customers across our footprint. These customers are supported by over 58,000 employees, more than 1,800 branches and a network of contact and business support centers.

Global Banking and Markets (“GBM”) conducts the Bank’s wholesale banking and capital markets business with corporate, government and institutional investor clients. GBM is a full-service wholesale bank and investment dealer in Canada and Mexico, and offers a range of products and services in the U.S., Latin America (excluding Mexico), and in select markets in Europe, Asia and Australia.

A more complete description of services provided by each of the Bank’s major business lines is available in the MD&A, on pages 38 to 53 inclusive, and those pages are herein incorporated by reference.

Competition

The Canadian banking system consists of numerous banks and other financial institutions. Certain large Canadian banks are required by law to be widely held because their equity exceeds a threshold of $12 billion. These banks compete nationwide through extensive branch networks, ABMs, telephone, internet and mobile banking offerings. In total, the Canadian system includes 32 domestic banks, 22 foreign banks and more than 300 credit unions and caisses populaires. More broadly, the Canadian financial services industry includes thousands of institutions such as life insurance companies, property and casualty insurers, consumer finance companies, independent investment dealers and independent retail mutual fund management companies.

Scotiabank is Canada’s international bank and a leading financial services provider in the Americas. We are dedicated to helping our 25 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. In providing these services and products, Scotiabank competes with local and international banks and other financial institutions.

Competition is reflected in the range of products and services offered, innovation in features, services, technology and delivery, as well as the various pricing schemes adopted. Canada ranks 7^th in the world in terms of its financial market development, according to the 2017-18 Global Competitiveness survey of the World Economic Forum. Additionally, a greater number of service providers in the Canadian marketplace are offering alternative channels and competition in the payments space. The increased number of new entrants into the financial services sector in recent years has also underscored an enhanced level of competition.

Supervision and Regulation in Canada

As a Canadian Schedule I Bank, the Bank’s activities in Canada are governed by the Bank Act, which is one of four main federal statutes governing the financial services industry in Canada. The other three statutes cover trust and loan companies, insurance companies and co-operative credit associations.

In accordance with the Bank Act, an organization may engage in and carry on the business of banking and such business generally as pertains to the business of banking. The Bank Act grants Canadian chartered banks broad powers of investment in the securities of other corporations and entities, but imposes limits upon substantial investments. Under the Bank Act, generally a bank has a substantial investment in a body corporate when (a) voting rights attached to the voting shares beneficially owned by the bank and by entities controlled by the bank exceed 10% of the voting rights attached to the outstanding voting shares of the body corporate, or (b) the total number of shares of the body corporate that are beneficially owned by the bank and entities controlled by the bank represent more than 25% of the total shareholders’ equity of the body

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corporate. In addition, under the Bank Act, a bank has a substantial investment in an unincorporated entity where the ownership interests in such entity beneficially owned by that bank and by entities controlled by that bank exceed 25% of all ownership interests in such entity. A Canadian chartered bank is permitted to have a substantial investment in entities whose activities are consistent with those of certain prescribed permitted substantial investments. In general, a bank will be permitted to invest in an entity that carries on any financial services activity. Further, a bank may generally invest in entities that carry on commercial activities that are related to the promotion, sale, delivery or distribution of a financial product or service. A bank may also invest in entities that provide professional investment management to closed-end funds and mutual funds, engage in the distribution of mutual funds and provide consulting and agency services for real property or service financial institutions and the bank may have downstream holding companies to hold these investments. In certain cases, the approval of the Minister of Finance (the “Minister”) or the Superintendent of Financial Institutions Canada (the “Superintendent”) is required prior to making the investment and/or the bank is required to control the entity. Canadian chartered banks may offer through their branch network credit or charge-card related insurance, creditors’ disability insurance, creditors’ life insurance, creditors’ loss of employment insurance, creditors’ vehicle inventory insurance, export credit insurance, mortgage insurance and travel insurance. Outside bank branches, a bank may offer insurance only in the limited circumstances prescribed by the Bank Act.

Without Minister approval, no person or group of associated persons may own more than 10% of any class of shares of the Bank. No person may be a major shareholder of a bank if the bank has equity of $12 billion or more (which includes the Bank). A person is a major shareholder of a bank if: (a) the aggregate of shares of any class of voting shares beneficially owned by that person and that are beneficially owned by any entities controlled by that person is more than 20% of that class of voting shares; or (b) the aggregate of shares of any class of non-voting shares beneficially owned by that person and that are beneficially owned by any entities controlled by that person is more than 30% of that class of non-voting shares. Ownership of the Bank’s shares by Canadian or foreign governments is prohibited under the Bank Act. However, in 2009 certain amendments were made to the Bank Act that provide for limited circumstances in which the Canadian federal government may be permitted to acquire shares of a bank, including the Bank, if the Minister and Governor in Council were to conclude that to do so would promote stability in the financial system. While the government holds any shares of a bank, including the Bank, the Minister may impose certain terms and conditions, including conditions on the payment by the Bank of dividends on any of its shares.

The Superintendent is responsible to the Minister for the administration of the Bank Act. The Superintendent is required to make an annual examination of each bank to ensure compliance with the Bank Act and to ensure that each bank is in sound financial condition. The report of the Superintendent’s examination is submitted to the Minister. The Bank is also required to disclose certain financial information. The Bank is subject to regulation by the Canada Deposit Insurance Corporation and the Financial Consumer Agency of Canada, and the activities of the Bank in Canada are subject to various other federal statutory provisions, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act which applies to all of the Bank’s businesses in Canada. The activities of the Bank’s trust subsidiaries and insurance subsidiaries are regulated in Canada under the Trust and Loan Companies Act and the Insurance Companies Act, respectively, and under provincial laws in respect of their activities in the provinces. Certain activities of the Bank and its subsidiaries acting as securities brokers, dealers (including investment and mutual fund dealers), underwriters and advisors (including investment counsel and portfolio managers) are regulated in Canada under provincial securities legislation and, in some cases, by self-regulatory organizations, such as the Investment Industry Regulatory Organization of Canada for broker dealers and the Mutual Fund Dealers Association for mutual fund dealers.

Bank Recapitalization (Bail-In) Regime

On September 23, 2018, the regulations under the Canada Deposit Insurance Corporation Act (Canada) (the “CDIC Act”) and the Bank Act (collectively, the “Bail-In Regulations”) which provides the details of conversion, issuance and compensation regimes for bail-in instruments issued by domestic systemically important banks, including the Bank, came into force. Pursuant to the CDIC Act, in circumstances where the Superintendent of Financial Institutions has determined that the Bank has ceased, or is about to cease, to be viable, the Governor in Council may, upon a recommendation of the Minister of Finance that he or she is of the opinion that it is in the public interest to do so, grant an order directing CDIC to convert all or a portion of certain shares and liabilities of the Bank into common shares of the Bank. For a description of the Canadian bank resolution powers and the consequent risk factors attaching to certain liabilities of the Bank reference is made to the Bank’s website under Regulatory Disclosures for Fixed Income Investors^[1]. The information on our website does not form part of this Annual Information Form.

^[1]  Visit webpage at https://www.scotiabank.com/ca/en/about/investors-shareholders/regulatory-disclosures.html.

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International Supervision and Regulation

Capital adequacy for Canadian banks is regulated by the Office of the Superintendent of Financial Institutions (“OSFI”) and subject to the revised capital adequacy requirements as published by the Basel Committee on Banking Supervisions, commonly referred to as Basel III. Additional information on the regulatory capital of the Bank and developments facing the Bank are described under the headings “Regulatory capital” and “Regulatory capital developments during the year” on pages 55-56 of the MD&A, respectively, and those sections are incorporated herein by reference.

Automatic Exchange of Information

Under the initiative of the Organization for Economic Co-Operation and Development, many countries have committed to automatic exchange of information relating to accounts held by tax residents of signatory countries, using a Common Reporting Standard (“CRS”). Canada’s automatic exchange of financial account information arrangements with jurisdictions, other than the U.S., has been implemented in accordance with the CRS and the implementation of the CRS legislation in Canada was effective July 1, 2017. The Bank meets all obligations imposed under the CRS, in accordance with local laws, in Canada and all applicable jurisdictions in which it operates.

Supervision and Regulation Outside Canada – Key Jurisdictions

United States

The activities of the Bank and its subsidiaries in the U.S. are subject to federal and state supervision, regulation and examination by bank regulatory and other governmental agencies. The Bank is subject to the Bank Holding Company Act of 1956 (“BHCA”) and the International Banking Act of 1978 and associated regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). The Federal Reserve Board and other banking regulators oversee the operation of the Bank’s branches, offices and subsidiaries in the U.S. The SEC, state securities regulators and self-regulatory organizations, such as the Financial Industry Regulatory Authority, regulate its broker-dealer subsidiary and the Commodity Futures Trading Commission (“CFTC”) oversees the Bank’s swaps and commodities trading and clearing businesses.

The Bank is a “financial holding company” under the BHCA. This status allows a broad range of financial activities to be undertaken in the U.S. In addition, the Bank owns a commercial and retail bank in the Commonwealth of Puerto Rico that is subject to various laws and regulation and examination by the Commonwealth of Puerto Rico and federal regulators and is a Federal Deposit Insurance Corporation-insured depository institution. Provisions of the Federal Reserve Act place certain limitations and restrictions on the transactions that the Bank’s U.S. branches, agencies and subsidiary bank can engage in with affiliates of the Bank.

The Bank, as a non-U.S. bank with U.S. operations, is required by the U.S. Bank Secrecy Act as amended by the USA PATRIOT Act of 2001, to take certain steps to prevent, detect and report individuals and entities involved in international money laundering and the financing of terrorism. Failure of a financial institution to comply with these requirements could have serious legal and reputational consequences for the institution.

The Bank is also subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Dodd-Frank Act reforms include heightened consumer protection, revised regulation of over-the-counter derivatives markets, restrictions on proprietary trading and the ownership and sponsorship of private investment funds by banks and their affiliates (referred to as the Volcker Rule), imposition of heightened prudential standards, and broader application of leverage and risk-based capital requirements. The Volcker Rule impacts our global activities as its reach extends to the Bank and each of its subsidiaries and affiliates (subject to certain exceptions and exclusions). The Bank has an enterprise wide compliance program to meet the requirements of the Volcker Rule, which became effective on July 21, 2015.

On February 18, 2014, the Federal Reserve Board approved the final rule to implement the enhanced prudential standards and early remediation requirements of sections 165 and 166 of the Dodd-Frank Act (the “FBO Rule”) for bank holding companies and foreign banking organizations. Regulation YY implements certain provisions of section 165 that require the Federal Reserve Board to establish enhanced prudential standards for bank holding companies and foreign banking organizations with total consolidated assets of $50 billion or more. With respect to foreign banking organizations, the overall

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intent of Section 165 and Regulation YY is to strengthen the regulation of the U.S. operations of foreign banking organizations by requiring home country capital certification consistent with the Basel capital framework, home country capital stress tests comparable to U.S. standards, maintenance of a liquidity buffer for U.S. branches and agencies and establishment of a U.S. risk committee with the appointment of a U.S. Chief Risk Officer. The Bank has a Chief Risk Officer for the U.S., a U.S. Risk Committee and complies with the FBO Rule, which became effective in July 2016. The Bank is not currently required to form a U.S. intermediate holding company under the FBO Rule.

The SEC has taken several steps toward completing its regulatory framework for security-based swap dealers and majority security-based swap participants, as required under the Dodd-Frank Act. The SEC unanimously adopted final rules providing the registration process for security-based swap dealers and majority security-based swap participants, including the detailed forms that registrants will be required to file. The Bank, which is currently registered as a swap dealer with the CFTC, anticipates that it will be required to register as a security-based swap dealer with the SEC.

Mexico

Grupo Financiero Scotiabank Inverlat, S.A. de C.V. is an “affiliate holding company” pursuant to the Law for the Regulation of Financial Groups of Mexico and the Rules for the Establishment of Foreign Affiliate Financial Institutions of Mexico. The governing authority is the Ministry of Finance of Public Credit of Mexico and the supervising and regulatory authorities are the Central Bank of Mexico, the National Banking and Securities Commission and the National Commission for the Protection of the Users of Financial Services.

Peru

Scotiabank Peru S.A.A. is a “banking company” pursuant to the Law of the Banking System, Insurance and Private Pension Funds Administrators and applicable rules for financial groups enacted by the Superintendency of Banking System, Insurance and Private Pension Funds Administrators (“SBS”) and the Superintendency of Securities Market (“SMV”). Beside SBS and SMV, the other governing authorities are the Central Bank of Peru, and the National Institution for the Defense of Competition and Intellectual Property, in charge, among other functions, of the protection of consumers of financial services.

Pursuant to SBS and SMV regulations on ownership and control of supervised companies, Scotiabank Peru S.A.A. also reports on its holding company shareholders, Scotia Peru Holdings S.A. and NW Holdings Ltd.

Chile

Scotiabank Chile S.A. (“Scotiabank Chile”) is a special stock corporation governed by the provisions of the General Banking Act and by the provisions applicable to listed corporations contained in the Corporations Act. It is supervised by the Superintendency of Banks and Financial Institutions (“SBIF”), which is an autonomous institution related to the Chilean Government through the Ministry of Finance. Scotiabank Chile is also governed by the Central Bank of Chile and the National Consumer Service (Sernac), the latter being responsible for, among other functions, consumer protection with regards to financial services, in accordance with the provisions of the Financial Consumer Protection Act. Scotiabank Chile’s subsidiaries are supervised by the SBIF or by the Financial Markets Commission, according to their respective business lines.

Colombia

Scotiabank Colpatria, a subsidiary of the Bank, is a bank incorporated in compliance with the regulations of the Financial Superintendence of Colombia (Superintendencia Financiera de Colombia or “SFC”). The SFC is the supervisor of the national banking, insurance, pension funds, and securities markets under Colombian laws, with the purpose of assuring their stability, efficiency and transparency, as well as maintaining and fostering a sound and balanced development of the financial system as a whole, while protecting the interests of the public in Colombia. The SFC is responsible for inspecting, supervising and controlling Scotiabank Colpatria. Additionally, the SFC promotes, organizes and develops regulations in order to ensure the protection of investors, depositors, shareholders and stakeholders. The SFC is also responsible for financial customer protection.

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United Kingdom

In respect of its London Branch, the Bank is authorized in the United Kingdom by the Prudential Regulation Authority (“PRA”) and subject to regulation by the Financial Conduct Authority (“FCA”) and limited regulation by the PRA. Scotiabank Europe plc, a wholly owned subsidiary of the Bank in the United Kingdom, is authorized by the PRA and regulated by the FCA and the PRA. Scotiabank Europe plc’s prudential supervisor is the PRA and its conduct supervisor is the FCA.

Other Jurisdictions

Outside of the U.S., Mexico, Peru, Chile, Colombia and the United Kingdom, each of the Bank’s branches, agencies and subsidiaries, many of which are banks in their own right, is also subject to the regulatory requirements of the jurisdiction in which it conducts its business.

Certain regulatory developments facing the Bank are described on pages 116 to 117 inclusive of the MD&A and those pages are incorporated herein by reference.

Environmental, Social and Governance Strategies

Each year the Bank publishes its Corporate Social Responsibility (“CSR”) Report, which provides details of the Bank’s CSR framework and progress on social, environmental and governance policies and strategies. This document and additional information can be found in the Corporate Social Responsibility section of the Bank’s website at www.scotiabank.com/csr.

Risk Factors

The risks faced by the Bank are described on pages 72 to 109 inclusive of the MD&A and those pages are incorporated herein by reference.

DIVIDENDS

Restrictions on Dividend Payments

Under the Bank Act, the Bank is prohibited from declaring any dividends on its common shares or preferred shares when the Bank is, or would be placed by such a declaration, in contravention of the capital adequacy, liquidity or any other regulatory directives issued under the Bank Act. In addition, common share dividends cannot be paid unless all dividends to which preferred shareholders are then entitled have been paid or sufficient funds have been set aside to do so. In fiscal 2018, the Bank paid all of the applicable non-cumulative preferred share dividends. The Bank’s preferred shares are entitled to preference over the common shares and over any other shares of the Bank ranking junior to the preferred shares with respect to the payment of dividends.

In the event that applicable cash distributions on any of the Scotiabank Trust Securities (meaning securities issued by Scotiabank Capital Trust and Scotiabank Tier 1 Trust) are not paid on a regular distribution date, the Bank has undertaken not to declare dividends of any kind on its preferred shares or common shares. Similarly, should the Bank fail to declare regular dividends on any of its directly issued and outstanding preferred shares or, if no preferred shares are outstanding, its common shares, cash distributions will also not be made on any of the Scotiabank Trust Securities.

In the event that distributions on the Subordinated Capital Notes (defined below) are not paid in full, the Bank has undertaken not to declare dividends on its common or preferred shares or redeem, purchase or otherwise retire such shares until the month commencing after such distributions have been made in full.

Currently, the limitations above do not restrict the payment of dividends on preferred shares or common shares.

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Dividend Payments

In fiscal 2018, the Bank’s actual common share dividend payout ratio was 47.7%, compared to 46.6% in 2017. The Bank has declared and paid the following dividends on its common shares and preferred shares over the past three completed financial years:

	2018		2017		2016
Common Shares	$	3.280000	$	3.050000	$	2.880000
Series 141		—		—	$	0.562500
Series 152		—		—	$	0.843750
Series 163		—	$	0.328125	$	1.312500
Series 174		—	$	0.700000	$	1.400000
Series 185	$	0.418750	$	0.837500	$	0.837500
Series 195	$	0.374547	$	0.642626	$	0.628938
Series 206	$	0.902500	$	0.902500	$	0.902500
Series 216	$	0.691967	$	0.554501	$	0.541438
Series 227	$	0.957500	$	0.957500	$	0.957500
Series 237	$	0.736967	$	0.600126	$	0.586438
Series 308	$	0.455000	$	0.455000	$	0.455000
Series 318	$	0.516968	$	0.380126	$	0.366438
Series 329	$	0.515752	$	0.515752	$	0.638235
Series 339	$	0.601968	$	0.465159	$	0.334959
Series 3410	$	1.375000	$	1.375000	$	1.184800
Series 3611	$	1.375000	$	1.375000	$	0.852350
Series 3812	$	1.212500	$	1.351175		—
Series 4013		—		—		—

DESCRIPTION OF THE BANK’S CAPITAL STRUCTURE

The following summary of the Bank’s share capital is qualified in its entirety by the Bank’s by-laws and the actual terms and conditions of such securities. For more details on the Bank’s capital structure, see pages 55 to 62 of the MD&A and notes 21 and 24 of the consolidated financial statements for the year ended October 31, 2018. The Bank incorporates those pages and notes by reference.

Common Shares

The authorized common share capital of the Bank consists of an unlimited number of common shares, without nominal or par value, of which 1,227,027,624 common shares were issued and outstanding as at October 31, 2018.

Holders of the Bank’s common shares are entitled to vote at all meetings of the shareholders of the Bank except meetings at which only the holders of preferred shares of the Bank are entitled to vote. Common shareholders are entitled to receive dividends, as and when declared on the common shares.

¹  On April 27, 2016, the Bank redeemed all of its issued and outstanding Preferred Shares, Series 14.

²  On July 27, 2016, the Bank redeemed all of its issued and outstanding Preferred Shares, Series 15.

³  On January 27, 2017, the Bank redeemed all of its issued and outstanding Preferred Shares, Series 16

⁴  On April 26, 2017, the Bank redeemed all of its issued and outstanding Preferred Shares, Series 17

⁵  On April 26, 2018, the Bank redeemed all of its issued and outstanding Preferred Series 18 and 19.

⁶  On October 26, 2018, the Bank redeemed all of its issued and outstanding Preferred Shares, Series 20 and Series 21.

⁷  On January 26, 2014, 2,623,056 shares of Preferred Shares, Series 22 were converted to Preferred Shares, Series 23.

⁸  On April 26, 2015, 4,457,262 shares of Preferred Shares, Series 30 were converted to Preferred Shares, Series 31.

⁹  On February 2, 2016, 5,184,345 shares of Preferred Shares, Series 32 were converted to Preferred Shares, Series 33.

¹⁰  On December 17, 2015, 14,000,000 Preferred Shares, Series 34 were issued.

¹¹  On March 14, 2016, 20,000,000 Preferred Shares, Series 36 were issued.

¹²  On September 16, 2016, 20,000,000 Preferred Shares, Series 38 were issued.

¹³  On October 12, 2018, 12,000,000 Preferred Shares, Series 40 were issued.

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After the payment to the holders of the preferred shares of the amount or amounts to which they may be entitled, the holders of the Bank’s common shares shall be entitled to receive the remaining property of the Bank upon liquidation, dissolution or winding-up thereof.

Preferred Shares – General

The authorized preferred share capital of the Bank consists of an unlimited number of preferred shares without nominal or par value issuable in series. The term “Preferred Shares” shall refer to all authorized preferred shares of the Bank.

As at October 31, 2018, Non-cumulative Preferred Shares, Series 22, 23, 30, 31, 32, 33, 34, 36, 38 and 40 were outstanding. In addition, Non-cumulative Preferred Shares, Series 35, 37, 39 and 41 were authorized but are not currently outstanding.    

The Preferred Shares are entitled to preference over the common shares and over any other shares of the Bank ranking junior to the Preferred Shares with respect to the payment of dividends and upon any distribution of assets in the event of liquidation, dissolution or winding-up of the Bank.

The Bank may not create, without the approval of the holders of Preferred Shares, any other class of shares ranking prior to or on a parity with the Preferred Shares, increase the authorized number of Preferred Shares or amend the provisions attaching to the Preferred Shares.

Any approval to be given by the holders of the Preferred Shares may be given by a resolution carried by the affirmative vote of not less than 66 2/3% of the votes cast at a meeting of holders of Preferred Shares at which a majority of the outstanding Preferred Shares is represented or, if no quorum is present at such meeting, at any adjourned meeting at which no quorum requirements would apply.

Effective January 1, 2013, in accordance with capital adequacy requirements adopted by OSFI, non-common capital instruments issued after January 1, 2013, including Preferred Shares, must include terms providing for the full and permanent conversion of such securities into common shares upon the occurrence of certain trigger events relating to financial viability (the Non-Viability Contingent Capital or “NVCC requirements”) in order to qualify as regulatory capital. Since January 1, 2013, all outstanding capital instruments that do not meet the NVCC requirements are considered non-qualifying capital instruments and are being phased out. Preferred Shares, Series 34, 35, 36, 37, 38, 39, 40 and 41 satisfy the NVCC requirements and were all issued or authorized after January 1, 2013.

Certain Provisions of the Preferred Shares

Dividends

The holders of the Preferred Shares will be entitled to receive either a fixed or floating rate quarterly non-cumulative preferential cash dividend, as and when declared by the Board of Directors of the Bank, subject to the provisions of the Bank Act, on the third last business day of each of January, April, July and October in each year at the rate specified in the terms of each series. If the Board of Directors of the Bank does not declare the dividends, or any part thereof, on a series of Preferred Shares on or before the dividend payment date for a particular quarter, then the entitlement of the holders of such series of Preferred Shares to receive such dividends, or to any part thereof, for such quarter shall be forever extinguished.

The holders of the Preferred Shares, Series 22, 30, 32, 34, 36, 38 and 40 are entitled to receive fixed quarterly, non-cumulative cash dividends, as and when declared by the Board of Directors of the Bank, for the specified initial period as set out in the terms of each series, and thereafter the dividend rate for each series will reset every five years at the rate specified in the terms for such series.

The holders of the Preferred Shares, Series 23, 31, 33, 35, 37, 39 and 41 are entitled to receive floating rate quarterly, non-cumulative cash dividends, as and when declared by the Board of Directors of the Bank. No Preferred Shares, Series 35, 37, 39 or 41 are currently outstanding.

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Redemption

The Preferred Shares currently outstanding will not be redeemable prior to the date specified in the terms for each series. On and after such dates for the Preferred Shares specified in the foregoing sentence and for all other series of Preferred Shares issued and outstanding as at October 31, 2018, subject to the provisions of the Bank Act and to the prior consent of the Superintendent and to certain conditions being met, the Bank may redeem at the time specified in the terms of each series all or any part of an outstanding series of Preferred Shares at the Bank’s option without the consent of the holder, by the payment of an amount in cash for each such share so redeemed as specified in the terms of each series.

Notice of any redemption of any series of Preferred Shares will be given by the Bank at least 30 days and not more than 60 days prior to the date fixed for redemption. If less than all the outstanding Preferred Shares in any series are at any time to be redeemed, the shares to be redeemed will be redeemed pro rata, disregarding fractions.

Rights Upon Dissolution or Winding-Up

In the event of the liquidation, dissolution or winding-up of the Bank, the holders of each series of the Preferred Shares shall be entitled to receive $25.00 per Preferred Share, together with all dividends declared and unpaid to the date of payment before any amount shall be paid or any assets of the Bank distributed to the holders of any shares ranking junior to the Preferred Shares. The holders of each series of the Preferred Shares shall not be entitled to share in any further distribution of the assets of the Bank.

Restrictions on Dividends and Retirement of Shares

So long as any shares of a series of Preferred Shares are outstanding, the Bank will not, without the approval of the holders of the relevant series of Preferred Shares:

(a) declare, pay or set apart for payment any dividends on the common shares of the Bank or any other shares ranking junior to the series of Preferred Shares (other than stock dividends payable in shares ranking junior to the series of Preferred Shares);

(b) redeem, purchase or otherwise retire any common shares or any other shares ranking junior to the series of Preferred Shares (except out of the net cash proceeds of a substantially concurrent issue of shares ranking junior to the series of Preferred Shares);

(c) redeem, purchase or otherwise retire less than all of the series of Preferred Shares; or

(d) except pursuant to any purchase obligation, sinking fund, retraction privilege or mandatory redemption provisions attaching to any series of Preferred Shares of the Bank, redeem, purchase or otherwise retire any other shares ranking on a parity with the series of Preferred Shares;

unless, in each case, all dividends up to and including those payable on the dividend payment date for the last completed period for which dividends shall be payable shall have been declared and paid or set apart for payment in respect of each series of cumulative preferred shares of the Bank then issued and outstanding and on all other cumulative shares ranking on a parity with the preferred shares of the Bank and there shall have been paid or set apart for payment all declared dividends in respect of each series of non-cumulative preferred shares of the Bank (including the series of Preferred Shares) then issued and outstanding and on all other non-cumulative shares ranking on a parity with the Preferred Shares of the Bank.

Purchase for Cancellation

Subject to the provisions of the Bank Act, the prior consent of the Superintendent and certain conditions being met, the Bank may at any time purchase for cancellation any series of Preferred Shares outstanding, in the open market at the lowest price or prices at which in the opinion of the Board of Directors of the Bank such shares are obtainable.

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Issuance of Other Series of Preferred Shares

The Bank may issue other series of preferred shares ranking on parity with the Preferred Shares without the authorization of the holders of the Preferred Shares.

Voting Rights

Subject to the provisions of the Bank Act, the holders of a series of Preferred Shares as such will not be entitled to receive notice of, attend, or vote at, any meeting of the shareholders of the Bank unless and until the first time at which the Board of Directors of the Bank has not declared the whole dividend on such series of Preferred Shares in respect of any quarter. In that event, the holders of such Preferred Shares will be entitled to receive notice of, and to attend, meetings of shareholders at which directors of the Bank are to be elected and will be entitled to one vote for each Preferred Share held. The voting rights of the holders of such series of Preferred Shares shall forthwith cease upon payment by the Bank of the first dividend on the series of Preferred Shares to which the holders are entitled subsequent to the time such voting rights first arose until such time as the Bank may again fail to declare the whole dividend on such series of Preferred Shares in any quarter, in which event such voting rights shall become effective again and so on from time to time.

Other Equity Instruments – Subordinated Capital Notes – General

The Bank currently has outstanding US$1.25 billion 4.650% Fixed to Floating Rate Non-Cumulative Subordinated Additional Tier 1 Capital Notes (NVCC) (“Subordinated Capital Notes”). The Subordinated Capital Notes have been determined to be compound instruments that have both equity and liability features. For more details, see note 24 of the consolidated financial statements for the year ended October 31, 2018.

The Subordinated Capital Notes are direct unsecured obligations of the Bank and, in the event of the Bank’s insolvency or winding-up, will rank subordinate to all of the Bank’s subordinated indebtedness and in right of payment equally with and not prior to indebtedness that ranks equally in right of payment with, or is subordinated to, the Subordinated Capital Notes (other than indebtedness which by its terms ranks subordinate to the Subordinated Capital Notes. The Subordinated Capital Notes will constitute subordinated indebtedness for the purposes of the Bank Act. In the event of the Bank’s insolvency or winding-up, the Subordinated Capital Notes will rank ahead of the Bank’s common shares and Preferred Shares.

The Subordinated Capital Notes includes terms providing for the full and permanent conversion of such securities into common shares of the Bank upon the occurrence of certain trigger events relating to NVCC requirements in order to qualify as regulatory capital.

Certain Provisions of the Subordinated Capital Notes

Distributions and Restrictions on Dividend and Retirement of Shares

Interest on the Subordinated Capital Notes is paid semi-annually in arrears for the initial five years. Thereafter, the interest will reset quarterly and accrue at a floating rate. While interest is payable on a semi-annual basis for the initial five year period, and quarterly thereafter, the Bank may, at its discretion, with prior notice, cancel the payments. If the Bank does not pay the interest in full to the note holders, the Bank will not declare dividends on its common shares or Preferred Shares or redeem or otherwise retire such share until the month commencing after the Bank resumes full interest payments on the Subordinated Capital Notes.

Interest will be due and payable on an interest payment date only if it is not cancelled by the Bank. Any cancelled interest payments will not be cumulative. The Bank has the sole and absolute discretion at all times and for any reason to cancel (in whole or in part), with notice to the holders of the Notes, any interest payment that would otherwise be payable on any interest payment date. As a result, the holder may not receive any interest on any interest payment date or at any other times, and the holder will have no claims whatsoever in respect of that cancelled interest.

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Maturity and Redemption

The Subordinated Capital Notes have no scheduled maturity or redemption date. Accordingly, the Bank is not required to make any repayment of the principal amount of the Subordinated Capital Notes except in the event of bankruptcy or insolvency and provided that the NVCC requirements have not been triggered. The Subordinated Capital Notes are redeemable at par five years after issuance solely at the option of the Bank, or following certain regulatory or tax events, in accordance with their terms. All redemptions are subject to regulatory consent.

Purchase for Cancellation

Subject to regulatory consent, the Bank may at any time and from time to time, repurchase for cancellation any Subordinated Capital Notes in the open market, by tender or by private agreement, in any manner and at any price or at differing prices.

Events of Default

An event of default in respect of the Subordinated Capital Notes will occur only if the Bank becomes bankrupt or insolvent or becomes subject to the provisions of the Winding-up and Restructuring Act (Canada), consents to the institution of bankruptcy or insolvency proceedings against it, resolves to wind-up, liquidate or dissolve, is ordered wound-up or otherwise acknowledges its insolvency. Neither a failure to make a payment on the Subordinated Capital Notes when due (including any interest payment, whether as a result of cancellation or otherwise) nor an NVCC automatic conversion upon the occurrence of a trigger event will constitute an event of default.

Issuance of other Senior or Pari Passu Securities

The terms governing the Subordinated Capital Notes do not limit the Bank’s ability to incur additional indebtedness or issue or repurchase securities, other than the restriction on retirement of shares noted above. The Bank may incur additional indebtedness without the authorization of the holders of the Subordinated Capital Notes.

Voting Rights

Holders of Subordinated Capital Notes are not entitled to any rights of holders of common shares, including any rights of shareholders to receive notice, to attend or to vote at any meeting of the shareholders of the Bank. If the Subordinated Capital Notes are converted into common shares of the Bank under NVCC requirements, holders of the Subordinated Capital Notes will become holders of the Bank’s common shares and will only have rights as holders of common shares.

Constraints on Ownership of the Bank’s Shares

The Bank Act contains restrictions on the issue, transfer, acquisition, beneficial ownership and voting of all shares of a chartered bank. Please refer to the section above entitled “Description of the Bank’s Business – General Summary – Supervision and Regulation in Canada” for a summary of these restrictions.

Credit Ratings of Securities and Liquidity

Credit ratings affect the Bank’s access to capital markets and borrowing costs, as well as the terms on which the Bank can conduct derivative and hedging transactions. The following ratings have been assigned to the Bank’s securities by the rating agencies noted below, which are independent third parties. Credit ratings, including stability or provisional ratings, are not recommendations to purchase, sell or hold a security as they do not comment on market price or suitability for a particular investor. Ratings may not reflect the potential impact of all risks on the value of securities. In addition, real or anticipated changes in the rating assigned to a security will generally affect the market value of that security. Ratings are subject to revision or withdrawal at any time by the rating agency. Each rating listed in the chart below should be evaluated independently of any other rating applicable to the Bank’s debt, Subordinated Additional Tier 1 Capital Notes and Preferred Shares.

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	Moody’s Investor Service (Moody’s)		Standard & Poor’s Ratings Services (S&P)		Fitch Ratings (Fitch)		DBRS Limited (DBRS)
	Rating	Rank(1)	Rating	Rank(1)	Rating	Rank(1)	Rating	Rank(1)
Legacy Senior Debt(2)	Aa2	2 of 9	A+	3 of 10	AA-	2 of 10	AA	2 of 10
Senior Debt(3)	A2	3 of 9	A-	3 of 10	AA-	2 of 10	AA (low)	2 of 10
Short-term deposits/commercial paper	P-1	1 of 4	A-1	1 of 6	F1+	1 of 6	R-1(high)	1 of 10
Subordinated debt	Baa1	4 of 9	A-	3 of 10	A+	3 of 10	A (high)	3 of 10
Subordinated debt (NVCC)(4)	Baa1	4 of 9	BBB+	4 of 10	N/A	N/A	A(low)	3 of 10
Subordinated additional tier 1 capital notes (NVCC)(4)	Baa3	4 of 9	BBB-	3 of 9	N/A	N/A	BBB (high)	4 of 10
Non-cumulative Preferred Shares	Baa3	4 of 9	BBB/P-2(5)	3 of 9 / 2 of 8	N/A	N/A	Pfd-2(high)	2 of 6
Non-cumulative Preferred Shares (NVCC)(4)	Baa3	4 of 9	BBB-/P-2 (low)(5)	3 of 9 / 2 of 8	N/A	N/A	Pfd-2	2 of 6
Outlook	Stable	N/A	Stable	N/A	Stable	N/A	Stable	N/A

⁽¹⁾ Rank, according to each rating agency’s public website, refers to the assigned ratings ranking of all major assignable ratings for each debt of share class, 1 being the highest. Each assignable major rating may be modified further (+/-, high/low, 1/2/3) to show relative standing within the major rating categories.

⁽²⁾ Includes: (a) Senior debt issued prior to September 23, 2018; and (b) Senior debt issued on or after September 23, 2018 which is excluded from the bank recapitalization “bail-in” regime.

⁽³⁾ Subject to conversion under the bank recapitalization “bail-in” regime.

⁽⁴⁾ Non-Viability Contingent Capital (NVCC)

⁽⁵⁾ Canadian Scale

On July 5, 2018, DBRS affirmed the Bank’s respective long-term issuer and short-term instruments rating of AA and R-1 (high), respectively.

On July 16, 2018, Moody’s upgraded the Bank’s long-term ratings by two-notches to Aa2 from A1 and changed the trend to stable from negative (on the Bank’s Long-Term Issuer Ratings, Senior Debt Ratings and Deposit Ratings), following the finalization of Canada’s impending bail-in regime.

On August 27, 2018, S&P affirmed the Bank’s deposits and senior debt and short term-instruments rating of A+ and A-1, respectively.

On September 24, 2018, Moody’s affirmed the P-1 short-term debt ratings of the Bank and maintained the long-term rating of Aa2. Moody’s also downgraded the Issuer Rating of the Bank to align with the provisional rating of bail-in debt (Junior Senior Unsecured program rating) to be issued by the Bank commencing September 23, 2018. Moody’s also maintains the stable outlook on the Issuer Ratings of the Bank.

On October 22, 2018, Fitch affirmed the Bank’s long and short term rating of AA- and F1+, respectively.

The Bank makes payments in the ordinary course to the credit rating agencies for the rating services associated with the assignment of the credit ratings noted above. In addition, the Bank made customary payments in respect of certain other services provided to the Bank by the aforementioned credit rating agencies.

A definition of the categories of each rating as at November 26, 2018 has been obtained from the respective rating agency’s website and is outlined in Schedule B, and a more detailed explanation may be obtained from the applicable rating agency.

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MARKET FOR SECURITIES OF THE BANK

The Bank’s common shares are listed under the stock symbol “BNS” on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”). The Preferred Shares are listed on the TSX under the stock symbols “BNS.PR.R” for the Preferred Shares, Series 22, “BNS.PR.C” for the Preferred Shares, Series 23, “BNS.PR.Y” for the Preferred Shares, Series 30, “BNS.PR.D” for the Preferred Shares, Series 31, “BNS.PR.Z” for the Preferred Shares, Series 32, “BNS.PR.F” for the Preferred Shares, Series 33, “BNS PR.E” for the Preferred Shares, Series 34, “BNS PR.G” for the Preferred Shares, Series 36, “BNS PR.H” for the Preferred Shares, Series 38, “BNS.PR.I” for the Preferred Shares, Series 40. From time to time, the Bank also has deposit notes and other securities listed on the London Stock Exchange, Singapore Stock Exchange, Swiss Stock Exchange, Taipei Exchange and the Tokyo Stock Exchange.

Trading Price and Volume

The following table sets out the price range and trading volume of the Bank’s securities on the TSX (as reported by Bloomberg) for the periods indicated:

	Common Shares		Preferred Shares
			Series 18(1)		Series 19(1)		Series 20(2)		Series 21(2)		Series 22		Series 23		Series 30		Series 31		Series 32		Series 33		Series 34		Series 36		Series 38		Series 40
November 2017
-High Price ($)	$	85.50	$	25.08	$	25.05	$	25.11	$	24.89	$	25.25	$	24.84	$	23.40	$	23.44	$	23.20	$	23.41	$	27.16	$	27.19	$	26.65		—
-Low Price ($)	$	81.25	$	24.96	$	24.83	$	24.92	$	24.61	$	25.05	$	24.65	$	23.13	$	22.88	$	22.77	$	22.89	$	26.76	$	26.75	$	26.22
-Volume (‘000)		54,411		133		165		99		43		325		50		213		525		137		32		256		263		1,070
December 2017
-High Price ($)	$	83.79	$	25.22	$	25.15	$	25.21	$	24.95	$	25.39	$	24.91	$	23.36	$	23.39	$	23.20	$	23.43	$	27.47	$	27.31	$	26.52		—
-Low Price ($)	$	80.79	$	24.97	$	24.91	$	24.93	$	24.51	$	25.09	$	24.77	$	23.12	$	23.16	$	22.88	$	22.89	$	26.77	$	26.84	$	26.12
-Volume (‘000)		56,243		138		222		97		158		336		59		112		52		392		44		252		261		732
January 2018
-High Price ($)	$	83.22	$	25.17	$	25.03	$	25.05	$	24.98	$	25.17	$	25.13	$	23.95	$	23.97	$	23.73	$	23.85	$	26.94	$	27.07	$	26.28		—
-Low Price ($)	$	80.79	$	24.98	$	24.93	$	24.94	$	24.75	$	25.01	$	24.79	$	23.14	$	23.40	$	22.90	$	23.26	$	26.52	$	26.67	$	25.99
-Volume (‘000)		68,806		791		424		1,161		564		506		117		196		513		211		194		417		482		423
February 2018
-High Price ($)	$	81.72	$	25.09	$	25.21	$	25.04	$	24.83	$	25.06	$	24.98	$	23.49	$	23.74	$	23.35	$	23.69	$	26.71	$	26.85	$	26.30		—
-Low Price ($)	$	75.20	$	24.92	$	24.93	$	24.76	$	24.58	$	24.88	$	24.80	$	23.19	$	23.24	$	22.91	$	23.26	$	26.13	$	26.31	$	25.60
-Volume (‘000)		82,018		241		499		832		40		212		27		165		61		580		108		308		220		556
March 2018
-High Price ($)	$	82.71	$	25.17	$	25.15	$	25.15	$	24.87	$	25.08	$	24.95	$	23.45	$	23.66	$	23.26	$	23.38	$	26.59	$	26.75	$	26.22
-Low Price ($)	$	75.27	$	24.96	$	24.94	$	24.93	$	24.70	$	24.84	$	24.44	$	23.20	$	23.39	$	22.81	$	22.94	$	26.30	$	26.44	$	25.84		—
-Volume (‘000)		80,539		166		613		383		91		301		128		296		50		468		54		426		461		1,643
April 2018
-High Price ($)	$	79.73	$	25.07	$	25.00	$	25.12	$	24.95	$	25.19	$	25.08	$	23.91	$	23.96	$	23.39	$	23.62	$	26.44	$	26.53	$	26.10		—
-Low Price ($)	$	76.06	$	24.97	$	24.97	$	24.81	$	24.70	$	24.87	$	24.70	$	23.22	$	23.26	$	22.70	$	22.69	$	26.03	$	26.20	$	25.74
-Volume (‘000)		58,205		221		566		154		53		474		32		192		104		327		56		262		204		328
May 2018
-High Price ($)	$	80.79					$	25.14	$	25.00	$	25.25	$	25.17	$	24.30	$	24.25	$	23.84	$	24.05	$	26.74	$	26.89	$	26.49		—
-Low Price ($)	$	76.67		—		—	$	24.99	$	24.83	$	25.03	$	24.95	$	23.47	$	23.56	$	23.28	$	23.51	$	26.35	$	26.44	$	26.03
-Volume (‘000)		75,853						199		257		389		23		153		218		216		70		528		648		374
June 2018
-High Price ($)	$	77.51					$	25.14	$	25.00	$	25.16	$	25.09	$	23.75	$	23.84	$	23.47	$	23.84	$	26.63	$	26.67	$	26.32		—
-Low Price ($)	$	74.00		—		—	$	24.90	$	24.83	$	24.88	$	24.91	$	23.43	$	23.54	$	23.13	$	23.61	$	26.18	$	26.22	$	25.93
-Volume (‘000)		105,943						93		74		283		29		72		27		181		47		372		235		414
July 2018
-High Price ($)	$	77.18					$	25.10	$	25.00	$	25.14	$	25.12	$	24.14	$	24.15	$	23.79	$	24.07	$	26.40	$	26.44	$	26.24		—
-Low Price ($)	$	73.91		—		—	$	24.82	$	24.88	$	24.94	$	24.96	$	23.50	$	23.75	$	23.18	$	23.51	$	26.16	$	26.01	$	25.86
-Volume (‘000)		58,847						134		58		147		39		85		46		175		310		263		1,486		560
August 2018
-High Price ($)	$	78.60					$	25.12	$	25.08	$	25.23	$	25.22	$	24.16	$	24.33	$	23.93	$	24.19	$	26.47	$	26.52	$	26.21		—
-Low Price ($)	$	75.50		—		—	$	24.97	$	24.94	$	25.06	$	25.03	$	23.84	$	23.94	$	23.66	$	23.91	$	26.29	$	26.35	$	26.03
-Volume (‘000)		76,738						49		28		235		17		156		96		250		123		175		637		314
September 2018
-High Price ($)	$	78.25					$	25.21	$	25.15	$	25.34	$	25.24	$	24.16	$	24.30	$	23.95	$	24.24	$	26.48	$	26.50	$	26.15		—
-Low Price ($)	$	74.62		—		—	$	25.04	$	25.03	$	25.12	$	25.08	$	23.93	$	24.20	$	23.72	$	24.05	$	26.23	$	26.30	$	26.00
-Volume (‘000)		72,576						128		445		101		18		297		164		466		47		183		684		1,262
October, 2018
-High Price ($)	$	77.15					$	25.00	$	25.00	$	25.14	$	25.08	$	24.12	$	24.30	$	23.79	$	24.17	$	26.50	$	26.54	$	26.09	$	25.06
-Low Price ($)	$	69.01		—		—	$	24.97	$	24.80	$	24.85	$	24.96	$	23.73	$	24.06	$	23.01	$	23.90	$	25.78	$	25.88	$	25.58	$	24.51
-Volume (‘000)		92,255						384		1,219		518		74		247		143		549		145		334		363		644		2,741

(1) Redeemed on April 26, 2018.

(2) Redeemed on October 26, 2018.

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Prior Sales

From time to time, the Bank issues principal at risk notes, which are securities issued by the Bank for which the amount payable at maturity is determined by reference to the price, value or level of an underlying interest, including an index, exchange traded fund or a notional basket of equities or other securities. For information about the Bank’s issuance of subordinated indebtedness and other equity instruments since October 31, 2017, see notes 21 and 24 to the Bank’s consolidated financial statements for the year ended October 31, 2018, which is incorporated herein by reference.

DIRECTORS AND EXECUTIVE OFFICERS OF THE BANK

Directors and Board Committees of the Bank

The following table sets out the Bank’s directors as of November 27, 2018. The term of office of each director expires at the close of the Bank’s next annual meeting of shareholders. Information concerning the nominees proposed by management for election as directors at the annual meeting of shareholders will be contained in the Bank’s 2019 Management Proxy Circular.

Name and Place of Residence	Board Committee Memberships	Principal Occupation
Nora A. Aufreiter Toronto, Ontario, Canada (Director since August 25, 2014)	CGC HRC	Corporate Director and a former Senior Partner and leader of McKinsey & Company’s Toronto office
Guillermo E. Babatz Mexico City, Mexico (Director since January 28, 2014)	RC HRC	Managing Partner of Atik Capital, S.C., an advisory firm specializing in structured finance
Scott B. Bonham Atherton, California, U.S.A. (Director since January 25, 2016)	ACRC CGC	Corporate Director and co-founder of Intentional Capital, a privately-held real estate asset management company
Charles H. Dallara, Ph.D. Oak Hill, Virginia, U.S.A. (Director since September 23, 2013)	ACRC RC	Chairman of the Americas, Partner and a member of the board of directors of Partners Group Holding AG, a private market investment and asset management firm
Tiff Macklem, Ph.D. Toronto, Ontario, Canada (Director since June 22, 2015)	ACRC RC – Chair	Dean of the Rotman School of Management at the University of Toronto
Thomas C. O’Neill Toronto, Ontario, Canada (Director since May 26, 2008)	ACRC CGC HRC RC	Chairman of the Board of the Bank and Corporate Director
Eduardo Pacheco Bogota, Colombia (Director since September 25, 2015)	RC	Chief Executive Officer and a Director of Mercantil Colpatria S.A.
Michael D. Penner Westmount, Quebec, Canada (Director since June 26, 2017)	ACRC CGC	Corporate Director
Brian J. Porter Toronto, Ontario, Canada (Director since April 9, 2013)	None	President and Chief Executive Officer of the Bank
Una M. Power Vancouver, British Columbia, Canada (Director since April 12, 2016)	ACRC – Chair HRC	Corporate Director

- 16 -

Name and Place of Residence	Board Committee Memberships	Principal Occupation
Aaron W. Regent Toronto, Ontario, Canada (Director since April 9, 2013)	HRC – Chair RC	Founding Partner of Magris Resources Inc. and Chairman and Chief Executive Officer of Niobec Inc., companies involved with the acquisition, development and operation of mining assets on a global basis
Indira V. Samarasekera, O.C., Ph.D. Vancouver, British Columbia, Canada (Director since May 26, 2008)	CGC HRC	Senior Advisor at Bennett Jones LLP, a law firm, and Corporate Director
Susan L. Segal New York, New York, U.S.A. (Director since December 2, 2011)	CGC – Chair RC	President and Chief Executive Officer of the Americas Society, an organization dedicated to education, debate and dialogue in the Americas and of the Council of the Americas, an international business organization for companies in the western hemisphere
Barbara S. Thomas Belleair, Florida, U.S.A. (Director since September 28, 2004)	CGC HRC	Corporate Director
L. Scott Thomson Vancouver, British Columbia, Canada (Director since April 12, 2016)	ACRC HRC	President and Chief Executive Officer of Finning International Inc., the world’s largest Caterpillar equipment dealer
Benita M. Warmbold Toronto, Ontario, Canada (Director since October 29, 2018)	ACRC HRC	Corporate Director

Notes:

ACRC – Audit and Conduct Review Committee

CGC – Corporate Governance Committee

HRC – Human Resources Committee

RC – Risk Committee

All directors have held the positions, or other executive positions with the same, predecessor or associated firms, set out in this AIF for the past five years with the exception of: Scott B. Bonham, who prior to June 2015 was the co-founder of GGV Capital; Tiff Macklem, who prior to June 2014, was Senior Deputy Governor of the Bank of Canada; Michael D. Penner, who was the President and Chief Executive Officer of Peds Legwear, a clothing manufacturer and distributor until it was sold to Gildan Activewear Inc. in August 2016 and who prior to November 2018, was Chairman of the Board of Directors of Hydro-Québec; Una M. Power, who prior to March 2016, was Chief Financial Officer of Nexen Energy ULC, an energy company; Indira V. Samarasekera, who prior to July 2015, was President and Vice-Chancellor of the University of Alberta; and Benita M. Warmbold, who prior to July 2017, was Senior Managing Director and Chief Financial Officer of the Canada Pension Plan Investment Board.

Brian Porter is non-independent, due to his position as President and Chief Executive Officer. Eduardo Pacheco is also non-independent, due to his business relationships with the Bank and its subsidiary, Scotiabank Colpatria.

Executive Officers of the Bank

The following are the Bank’s executive officers, their titles and places of residence in Canada (except as otherwise noted) as of November 27, 2018:

- 17 -

Name and Principal Occupation	Place of Residence
Brian J. Porter President and Chief Executive Officer	Toronto, Ontario
Rajagopal Viswanathan Executive Vice President and Chief Financial Officer	Oakville, Ontario
Ignacio “Nacho” Deschamps Group Head, International Banking and Digital Transformation	Toronto, Ontario
Dieter W. Jentsch Group Head, Global Banking and Markets	King City, Ontario
Barbara F. Mason Group Head and Chief Human Resources Officer	Toronto, Ontario
James O’Sullivan Group Head, Canadian Banking	Toronto, Ontario
Dan Rees Group Head, Operations	Toronto, Ontario
Michael Zerbs Group Head & Chief Technology Officer	Markham, Ontario
Ian Arellano Executive Vice President and General Counsel	Toronto, Ontario
Paul Baroni Executive Vice President & Chief Auditor	Toronto, Ontario
Andrew H.W. Branion Executive Vice President and Group Treasurer	North York, Ontario
Tracy Bryan Executive Vice President, Contact Centres & Operations	Whitby, Ontario
John Doig Executive Vice President and Chief Marketing Officer	Toronto, Ontario
Charles Emond Executive Vice President, Finance	Candiac, Quebec
Terry K. Fryett Executive Vice President and Chief Credit Officer	Toronto, Ontario
Glen Gowland Executive Vice President, Global Wealth Management	Toronto, Ontario
Michael Henry Executive Vice-President and Chief Data Officer	Mississauga, Ontario
Jake Lawrence Executive Vice President, Global Banking and Markets, U.S.	Toronto, Ontario
Rania Llewellyn Executive Vice President, Global Business Payments	Toronto, Ontario
Daniel Moore Chief Risk Officer	Toronto, Ontario
James Neate Global Head of Corporate & Investment Banking	Mississauga, Ontario
Gillian Riley Executive Vice President, Canadian Commercial Banking	Toronto, Ontario
Shawn Rose Executive Vice President and Chief Digital Officer	Toronto, Ontario
Francisco Sardon de Taboada Executive Vice President and Country Head, Chile	Santiago, Chile
Anya Schnoor Executive Vice-President, Retail Products	Toronto, Ontario
Laurie Stang Executive Vice President, Retail Distribution	Airdrie, Alberta

- 18 -

Name and Principal Occupation	Place of Residence
Maria Theofilaktidis Executive Vice-President, Chief Compliance Officer & Head of Enterprise Risk	Toronto, Ontario
Philip Thomas Executive Vice President & Chief Retail Risk Officer	Cobourg, Ontario
Miguel Uccelli Executive Vice President and Country Head, Peru	San Isidro, Lima, Peru
Ashley Veasey Executive Vice President & Global Chief Information Officer, Business Technology	Toronto, Ontario
Chadwick Westlake Executive Vice President, Enterprise Productivity and Canadian Finance	Mississauga, Ontario
Enrique Zorrilla Fullaondo Executive Vice President and Country Head, Scotiabank Mexico	Huixquilucan, Estado de Mexico, Mexico

All of the executive officers of the Bank have been actively engaged for more than five years in the affairs of the Bank in executive or senior management capacities, except: Ian Arellano, who prior to September 2017, was co-head of Torys LLP’s International Initiative and a senior partner of Torys LLP law firm; Ignacio Deschamps, who prior to June 2015, was Chief Executive Officer of BBVA Bancomer; Shawn Rose, who prior to June 2016, was Group Chief Product Officer at Moneysupermarket (MSM) Group PLC and prior to that, was a Manager at Egy Rose LLC and prior to that, was a Vice-President at Pearson LLC; Michael Zerbs, who prior to May 2014, was Vice-President, Risk Analytics at IBM and prior to that, was the President and Chief Operating Officer at Algorithmics; Chadwick Westlake, who from September to November 2016 was Chief Financial Officer of Royal & Sun Alliance Insurance Company of Canada, Inc.; and Ashley Veasey, who prior to February 2018 was the Group Chief Information Officer and Chief Digital Officer, Barclays Africa Group and prior to that, was Chief Information Officer, Head of Technology & Operations (Hong Kong) for Standard Chartered Bank.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the best of the Bank’s knowledge, the Bank confirms that no director or executive officer of the Bank:

(a) is, as at the date of this AIF or has been within the last 10 years, a director, chief executive officer or chief financial officer of any company that was the subject of a cease trade order or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days that was issued:

(i) while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or

(ii) after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer;

(b) is, as at the date of this AIF, or has been within the last 10 years, a director or executive officer of any company that, while that person was acting in that capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

(c) has, or within 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or executive officer,

- 19 -

except Ms. Thomas who was, until September 2, 2009, a director of Spectrum Brands, Inc., which filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in February 2009 and emerged as a solvent private company on September 2, 2009.

To the best of the Bank’s knowledge, none of the directors or executive officers of the Bank have been subject to (a) any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority or have entered into a settlement agreement with a Canadian securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or a regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Shareholdings of Management

To the knowledge of the Bank, the directors and executive officers of the Bank as a group own, or exercise control or direction over, less than one per cent of the outstanding common shares of the Bank. The Bank’s directors or executive officers own, or exercise control or direction over, less than one percent of the outstanding shares of any of the Bank’s subsidiaries.

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

In the ordinary course of business, the Bank and its subsidiaries are routinely defendants in, or parties to a number of pending and threatened legal actions and regulatory proceedings, including actions brought on behalf of various classes of claimants. In view of the inherent difficulty of predicting the outcome of such matters, the Bank cannot state what the eventual outcome of such matters will be. However, based on current knowledge, management does not believe that liabilities, if any, arising from pending litigation or regulatory proceedings will have a material adverse effect on the Consolidated Statement of Financial Position or results of operations of the Bank.

Legal provisions are established when it becomes probable that the Bank will incur an expense related to a legal action and the amount can be reliably estimated. Such provisions are recorded at the best estimate of the amount required to settle any obligation related to these legal actions as at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Management and internal and external experts are involved in estimating any amounts that may be required. The actual costs of resolving these claims may vary significantly from the amount of the legal provisions. The Bank’s estimate involves significant judgement, given the varying stages of the proceedings, the fact that the Bank’s liability, if any, has yet to be determined and the fact that the underlying matters will change from time to time. As such, there is a possibility that the ultimate resolution of those legal actions may be material to the Bank’s consolidated results of operations for any particular reporting period.

Furthermore, the Bank and its subsidiaries may be subject to penalties or sanctions imposed by regulatory authorities or enter into settlement agreements with regulatory authorities from time to time. As the Bank and its subsidiaries are subject to numerous regulatory authorities around the world, fees, administrative penalties and sanctions may be categorized differently by each regulator. Any such penalties imposed under these categories against the Bank and its subsidiaries, however, are not material, nor would they likely be considered important to a reasonable investor in making an investment decision, and would include penalties such as late filing fees. The Bank and its subsidiaries have not entered into any material settlement agreements with a court relating to securities legislation or with a securities regulatory authority.¹⁴

On November 5, 2015, the Bank and its New York Agency entered a written agreement (the “Agreement”) with the Federal Reserve Bank of New York and the New York State Department of Financial Services relating to the New York Agency’s Bank Secrecy Act/Anti-Money Laundering Program. The Bank has committed significant resources to addressing the findings in the Agreement and continues enhancing its Bank Secrecy Act/anti-money laundering and sanctions program.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

To the best of the Bank’s knowledge, the Bank confirms that there are no directors or executive officers or any associate or affiliate of a director or executive officer with a material interest in any transaction within the three most recently completed financial years or during the current financial year that has materially affected or will materially affect the Bank.

¹⁴  National Instrument 14-101 limits the meaning of “securities legislation” to Canadian provincial and territorial legislation and “securities regulatory authority” to Canadian provincial and territorial securities regulatory authorities.

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TRANSFER AGENT AND REGISTRAR

Computershare Trust Company of Canada is the Bank’s transfer agent and registrar at the following addresses: Computershare Trust Company of Canada, 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1 and Computershare Trust Company N.A., 250 Royall Street, Canton, Massachusetts, 02021, U.S.

CONFLICTS OF INTEREST

To the knowledge of the Bank, no director or executive officer of the Bank has an existing or potential material conflict of interest with the Bank or any of its subsidiaries.

EXPERTS

The Bank’s Shareholders’ Auditors are KPMG LLP, Bay Adelaide Centre, 333 Bay Street, Suite 4600, Toronto, Ontario, M5H 2S5. KPMG LLP is independent of the Bank within the meaning of the Rules of Professional Conduct / Code of Ethics of various Canadian provincial institutes/ordre and within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies and any applicable legislation or regulation.

THE BANK’S AUDIT AND CONDUCT REVIEW COMMITTEE

A copy of the Bank’s Audit and Conduct Review Committee charter is attached to this AIF as Schedule C and can also be found on the Bank’s website at www.scotiabank.com in the Corporate Governance section.

The following directors are members of the Audit and Conduct Review Committee as of November 27, 2018: Una M. Power (Chair and financial expert), Scott B. Bonham, Charles H. Dallara, Tiff Macklem, Thomas C. O’Neill, Michael D. Penner; L. Scott Thomson and Benita Warmbold. All of the members of the Committee are financially literate and independent as defined by Canadian and United States securities law.    The Bank’s Board of Directors has designated each of Thomas C. O’Neill, Una M. Power, L. Scott Thomson and Benita M. Warmbold as an ‘audit committee financial expert’, as that term is defined by United States securities laws.

The education and related experience (as applicable) of each Audit and Conduct Review Committee member is described below.

Una M. Power (Chair) – Ms. Power is corporate director and the former Chief Financial Officer of Nexen Energy ULC, a former publicly-traded energy company that is a wholly-owned subsidiary of CNOOC Limited. During her 24 year career with Nexen, Ms. Power held various executive positions with responsibility for financial and risk management, strategic planning and budgeting, business development, energy marketing and trading, information technology and capital investment. Ms. Power holds a B.Comm. (Honours) from Memorial University and CPA, CA and CFA designations. She has completed executive development programs at Wharton Business School and INSEAD.

Scott B. Bonham – Mr. Bonham is a corporate director and the co-founder of Intentional Capital, a privately held real estate asset management company. Mr. Bonham is also an active board member of the C100, an association that connects Canadian entrepreneurs and companies with its Silicon Valley network. From 2000 to 2015, he was co-founder of GGV Capital, an expansion stage venture capital firm with investments in the U.S. and China. Prior to GGV Capital, he served as Vice President of the Capital Group Companies, where he managed technology investments across several mutual funds from 1996 to 2000. Mr. Bonham has a B.Sc. (in electrical engineering) from Queen’s University and a M.B.A. from Harvard Business School.

Charles H. Dallara – Dr. Dallara is the Chairman of the Americas and a member of the Board of Directors of Partners Group Holding AG, based in New York. He has 42 years of industry experience. Prior to joining Partners Group in 2013, Dr. Dallara was the Managing Director and Chief Executive Officer of the Institute of International Finance Inc., a global association of financial institutions from 1993 to 2013. Previously, he was a Managing Director at J.P. Morgan & Co. In addition, Dr. Dallara has held senior positions in the U.S. Department of the Treasury and with the IMF. He holds a bachelor’s degree in Economics from the University of South Carolina, a M.A., an M.A.L.D. (in Law & Diplomacy) and a Ph.D. from the Fletcher School of Law and Diplomacy at Tufts University.

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Tiff Macklem – Dr. Macklem is Dean of the Rotman School of Management at the University of Toronto. Previously, he served as Senior Deputy Governor and Chief Operating Officer of the Bank of Canada (from July 2010 to May 2014). Prior to his appointment at the Bank of Canada, Dr. Macklem served as Associate Deputy Minister of the federal Department of Finance and Canada’s finance deputy at the G7 and G20. He also served as Chair of the Standing Committee on Standards Implementation of the Financial Stability Board. Dr. Macklem holds a B.A. (Honours) in Economics from Queen’s University, and a M.A. and a Ph.D. in Economics from the University of Western Ontario.

Thomas C. O’Neill – Mr. O’Neill is a Chairman of the Board of the Bank. He is the retired Chair of the Board of PwC Consulting. He was formerly Chief Executive Officer of PwC Consulting, Chief Operating Officer of PricewaterhouseCoopers LLP, Global, Chief Executive Officer of PricewaterhouseCoopers LLP, Canada and Chair of the Board and Chief Executive Officer of Price Waterhouse Canada. He holds a B.Comm. from Queen’s University and is a chartered accountant and a Fellow of the Institute of Chartered Accountants of Ontario (“CPA Ontario”). In September 2013, Mr. O’Neill received the ICAO Award of Outstanding Merit from CPA Ontario, which is CPA Ontario’s highest honour.

Michael D. Penner – Mr. Penner is a corporate director, and the former Chairman of the Board of Directors of Hydro-Québec. He was the President and Chief Executive Officer of Peds Legwear prior to selling his company to Gildan Activewear Inc. in August 2016. Mr. Penner has been active in his community, on the Board of Directors of ICD Quebec and has served as a member of the Board of Directors of Les Grands Ballets Canadiens de Montréal, Selwyn House School, Hofstra University School of Law and McGill University Football. Mr. Penner holds a Bachelor of Arts degree from McGill University and a Juris Doctor from Hofstra University in New York.

L. Scott Thomson – Mr. Thomson is the President and Chief Executive Officer of Finning International Inc., the world’s largest Caterpillar equipment dealer. Prior to joining Finning in 2013, Mr. Thomson was Chief Financial Officer of Talisman Energy Inc. with responsibility for finance, tax, treasury, investor relations, marketing, business development and strategy, planning and performance management from 2008 to 2013. Prior to Talisman, Mr. Thomson held several executive positions with Bell Canada Enterprises from 2003 to 2008 including the role of Executive Vice President, Corporate Development. Prior to Bell, Mr. Thomson was a Vice President at Goldman, Sachs & Co. Mr. Thomson holds a B.A. (in economics and political science) from Queen’s University and a M.B.A. from the University of Chicago.

Benita M. Warmbold – Ms. Warmbold is a corporate director, and the former Senior Managing Director and Chief Financial Officer of Canada Pension Plan (CPP) Investment Board. Over her nine years at CPP Investment Board, Ms. Warmbold was responsible for finance, risk, performance, tax, internal audit, legal, technology, data and investment operations. Prior to joining CPP Investment Board in 2008, Ms. Warmbold held senior leadership positions with Northwater Capital, Canada Development Investment Corporation and KPMG. She is a director of the Canadian Public Accountability Board. Ms. Warmbold holds a B. Comm. (Honours) from Queen’s University and is a chartered professional accountant and a Fellow of CPA Ontario. Ms. Warmbold has been recognized three times as one of “Canada’s Most Powerful Women – Top 100,” and in 2016 was inducted into the WXN Hall of Fame.

Shareholders’ Auditors

Please refer to Table 76 on page 128 of the MD&A, which is incorporated herein by reference, for disclosure relating to the fees paid by the Bank to the Bank’s Shareholders’ Auditors, KPMG LLP in each of the last three fiscal years. The nature of these services is described below:

• Audit services generally relate to the statutory audits and review of financial statements, regulatory required attestation reports, as well as services associated with registration statements, prospectuses, periodic reports and other documents filed with securities regulatory bodies or other documents issued in connection with securities offerings.

• Audit-related services include special attest services not directly linked to the financial statements, review of controls and procedures related to regulatory reporting, audits of employee benefit plans and consultation and training on accounting and financial reporting.

• Tax services outside of the audit scope relate primarily to specified review procedures required by local tax authorities, attestation on tax returns of certain subsidiaries as required by local tax authorities, and review to determine compliance with an agreement with the tax authorities.

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• Other non-audit services are primarily for the review and translation of English language financial statements into other languages and other services.

The Audit and Conduct Review Committee has adopted policies and procedures (the “Policies”) for the pre-approval of services performed by the Bank’s Shareholders’ Auditors. The objective of the Policies is to specify the scope of services permitted to be performed by the Bank’s Shareholders’ Auditors and to ensure the independence of the Bank’s Shareholders’ Auditors is not compromised through engaging them for other services. The Policies state that the Audit and Conduct Review Committee shall pre-approve the following: audit services (all such engagements provided by the Bank’s Shareholders’ Auditors as well as all such engagements provided by any other registered public accounting firm); and other permitted services to be provided by the Bank’s Shareholders’ Auditors (primarily audit and audit-related services). The Bank’s Shareholders’ Auditors shall not be engaged in the provision of tax or other non-audit services, without the pre-approval of the Audit and Conduct Review Committee. The Policies also enumerate pre-approved services including specific audit, audit-related and other limited non-audit services that are consistent with the independence requirements of the U.S. Sarbanes-Oxley Act of 2002, Canadian independence standards for auditors and applicable legal requirements. The Policies are applicable to the Bank, its subsidiaries and entities that are required to be consolidated by the Bank. The Audit and Conduct Review Committee shall review and approve the Policies on at least an annual basis. The Policies do not delegate any of the Audit and Conduct Review Committee’s responsibilities to management of the Bank.

ADDITIONAL INFORMATION

Additional information relating to the Bank may be found on the SEDAR website at www.sedar.com and on the SEC’s website at www.sec.gov. For a description of Canadian bank resolution powers and the consequent risk factors attaching to certain liabilities of the Bank reference is made to https://www.scotiabank.com/ca/en/about/investors-shareholders/regulatory-disclosures.html. Such information may also be found at www.sedar.com and at www.sec.gov/edgar. Information contained in or otherwise accessible through the websites mentioned in this Annual Information Form does not form a part of this Annual Information Form. All references in this Annual Information Form to websites are inactive textual references and are for your information only. Additional information, including directors’ and officers’ compensation, indebtedness and options to purchase securities, principal holders of the Bank’s securities and interests of insiders in material transactions, where applicable, is contained in the Management Proxy Circular. Additional financial information is provided in the Bank’s consolidated financial statements and MD&A for the year ended October 31, 2018. A copy of such documents may be obtained upon request from the Executive Vice-President and General Counsel of the Bank at Scotia Plaza, 44 King Street West, Toronto, Ontario, M5H 1H1.

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Schedule A

Principal subsidiaries⁽¹⁾

The following table presents the major operating subsidiaries the Bank owns, directly or indirectly. All of these subsidiaries are included in the Bank’s consolidated financial statements.

			Carrying value of shares
As at October 31 ($ millions)	Principal office		2018		2017
Canadian
1832 Asset Management L.P.		Toronto, Ontario	$	1,524	$	2,006
BNS Investments Inc.		Toronto, Ontario		13,870		13,551
Montreal Trust Company of Canada		Montreal, Quebec
National Trust Company(2)		Stratford, Ontario		415		449
Roynat Inc.		Calgary, Alberta		432		239
Scotia Capital Inc.		Toronto, Ontario		1,391		1,024
Scotia Dealer Advantage Inc.		Burnaby, British Columbia		592		567
Scotia Life Insurance Company		Toronto, Ontario		219		189
Scotia Mortgage Corporation		Toronto, Ontario		588		615
Scotia Securities Inc.		Toronto, Ontario		40		34
Tangerine Bank		Toronto, Ontario		3,525		3,488
Jarislowsky, Fraser Limited		Montreal, Quebec		947		–
MD Financial Management Inc.		Ottawa, Ontario		2,612		–
International
Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) (51%)(3)		Bogota, Colombia		1,221		1,160
The Bank of Nova Scotia Berhad		Kuala Lumpur, Malaysia		318		303
The Bank of Nova Scotia International Limited		Nassau, Bahamas		19,312		18,223
BNS Asia Limited		Singapore
The Bank of Nova Scotia Trust Company (Bahamas) Limited		Nassau, Bahamas
Grupo BNS de Costa Rica, S.A.		San Jose, Costa Rica
Scotiabank & Trust (Cayman) Ltd.		Grand Cayman, Cayman Islands
Scotiabank (Bahamas) Limited		Nassau, Bahamas
Scotiabank (British Virgin Islands) Limited		Road Town, Tortola, B.V.I.
Scotiabank (Hong Kong) Limited		Hong Kong, China
Scotiabank (Ireland) Designated Activity Company		Dublin, Ireland
Scotiabank (Turks and Caicos) Ltd.		Providenciales, Turks and Caicos Islands
BNS International (Panama) S.A.		Panama City, Panama
Grupo Financiero Scotiabank Inverlat, S.A. de C.V. (97.4%)		Mexico, D.F., Mexico		3,901		3,544
Nova Scotia Inversiones Limitada		Santiago, Chile		5,100		3,325
Scotiabank Chile S.A (75.5%)		Santiago, Chile
Scotia Holdings (US) Inc.(4)		New York, New York
Scotiabanc Inc.		Houston, Texas
Scotia Capital (USA) Inc.(4)(5)		New York, New York
Scotia International Limited		Nassau, Bahamas		635		642
Scotiabank Anguilla Limited		The Valley, Anguilla
Scotiabank Brasil S.A. Banco Multiplo		Sao Paulo, Brazil		386		223
Scotiabank Caribbean Holdings Ltd.		Bridgetown, Barbados		1,847		1,710
Scotia Group Jamaica Limited (71.8%)		Kingston, Jamaica
The Bank of Nova Scotia Jamaica Limited		Kingston, Jamaica
Scotia Investments Jamaica Limited		Kingston, Jamaica
Scotiabank (Belize) Ltd.		Belize City, Belize
Scotiabank Trinidad and Tobago Limited (50.9%)		Port of Spain, Trinidad and Tobago
Scotiabank (Panama) S.A.		Panama City, Panama
Scotiabank Uruguay S.A.		Montevideo, Uruguay		490		496
Scotiabank de Puerto Rico		San Juan, Puerto Rico		1,555		1,395
Scotiabank El Salvador, S.A. (99.4%)		San Salvador, El Salvador		686		659
Scotiabank Europe plc		London, United Kingdom		2,432		2,400
Scotiabank Peru S.A.A. (98.05%)		Lima, Peru		4,877		4,518

(1) The Bank (or immediate parent of an entity) owns 100% of the outstanding voting shares of each subsidiary unless otherwise noted.

(2) Effective October 29, 2018, National Trustco Inc. was dissolved and National Trust Company is held by the Bank.

(3) Effective June 15, 2018, the name was changed to Scotiabank Colpatria S.A.

(4) The carrying value of this subsidiary is included with that of its parent, BNS Investments Inc.

(5) The carrying value of this subsidiary is included with that of its parent, Scotia Holdings (US) Inc.

Subsidiaries may have a different reporting date from that of the Bank of October 31. Dates may differ for a variety of reasons including local reporting requirements or tax laws. In accordance with the Bank’s accounting policies, for the purpose of inclusion in the consolidated financial statements of the Bank, adjustments are made where significant for subsidiaries with different reporting dates.

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Schedule B

Moody’s

Moody’s short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default. The “P-1” rating indicates that an issuer has a superior ability to repay short-term debt obligations.

Moody’s long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default. Obligations rated “Aa” are judged to be of high quality and are subject to very low credit risk. Obligations rated “A” are judged to be upper-medium grade and are subject to low credit risk. Obligations rated “Baa” are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics. The numerical modifiers 1, 2 and 3 indicate that the obligation ranks in the higher end, mid-range or lower end, respectively, of that generic rating category.

Additionally, a *(hyb)* indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firm.

The Moody’s rating outlook is an opinion regarding the likely rating direction over the medium term. The “Stable” outlook indicates a low likelihood of a rating change over the medium term.

S&P

S&P short-term issue credit ratings are generally assigned to those obligations considered short-term in the relevant market. Short-term ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. A short-term obligation rated “A-1” is rated in the highest category and indicates S&P’s view that an obligor’s capacity to meet its financial commitments on these obligations is strong.

S&P long-term issue credit ratings are based, in varying degrees, on S&P Global Ratings’ analysis of the following considerations: likelihood of payment—capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; nature of and provisions of the obligation, and the promise they impute; and protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights. A rating in the “A” category means the obligation is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. An obligation rated in the “BBB” category indicates that the obligation exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the major rating categories.

An S&P Global Ratings preferred share rating on the Canadian scale is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific preferred share obligation issued in the Canadian market relative to preferred shares issued by other issuers in the Canadian market. There is a direct correspondence between the specific ratings assigned on the Canadian preferred share scale and the various rating levels on the global debt rating scale of S&P Global Ratings. The Canadian scale rating is fully determined by the applicable global scale rating, and there are no additional analytical criteria associated with the determination of ratings on the Canadian scale. It is the practice of S&P Global Ratings to present an issuer’s preferred share ratings on both the global rating scale and on the Canadian national scale when listing the ratings for a particular issuer. A reference to “high” or “low” reflects the relative strength within the rating category, and the absence of either a “high” or “low” designation indicates the rating is in the middle of the category.

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An S&P Global Ratings outlook assesses the potential direction of a long-term credit rating over the intermediate term (typically six months to two years). In determining a rating outlook, consideration is given to any changes in economic and/or fundamental business conditions. An outlook is not necessarily a precursor of a rating change or future CreditWatch action. The “Stable” rating outlook means that a rating is not likely to change.

Fitch

A short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated entity and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation. Short-term deposit ratings may be adjusted for loss severity. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as “short term” based on market convention. A rating of “F1+” denotes the highest short-term credit quality, indicating the strongest intrinsic capacity for the timely payment of financial commitments. The added “+” denotes an exceptionally strong credit feature.

Long-term credit ratings are used as a benchmark measure of probability of default and are formally described as an Issuer Default Rating (“IDR”). IDRs opine on an entity’s relative vulnerability to default (including by way of a distressed debt exchange) on financial obligations. A rating of “AA” denotes expectation of very low default risk and indicates very strong capacity for payment of financial commitments; this capacity is not significantly vulnerable to foreseeable events. A rating of “A” denotes expectations of low default risk and the capacity for payment of financial commitments is considered strong; this capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings. Within some of the rating levels, Fitch further differentiates the rankings by adding the modifiers “+” or “-” to denote relative status within major rating categories.

Rating Outlooks indicate the direction a rating is likely to move over a one-to-two year period. They reflect financial or other trends that have not yet reached or been sustained the level that would cause a rating action, but which may do so if such trends continue. The “Stable” rating outlook means that the rating is not likely to change over a one-to-two year period.

DBRS

The DBRS short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner. The R-1 and R-2 rating categories are further denoted by the subcategories “high”, “middle” and “low”. An obligation rated R-1(high) is of the highest credit quality and indicates the capacity for the payment of short-term financial obligations as they fall due is exceptionally high; unlikely to be adversely affected by future events.

The DBRS long-term rating scale provides an opinion on the risk of default. That is, the risk that an issuer will fail to satisfy its financial obligations in accordance with the terms under which the obligations have been issued. Ratings are based on quantitative and qualitative considerations

relevant to the issuer, and the relative ranking of claims. All rating categories other than AAA and D also contain subcategories “(high)” and “(low)”. The absence of either a “(high)” or “(low)” designation indicates the rating is in the middle of the category. Long-term financial obligations rated “AA” are of superior credit quality and capacity for the payment is considered high; credit quality differs from AAA only to a small degree; unlikely to be significantly vulnerable to future events. Long-term financial obligations rated “A” are of good credit quality and capacity for payment is considered substantial, but of lesser credit quality than AA; and may be vulnerable to future events, but qualifying negative factors are considered manageable.

The DBRS preferred share rating scale is used in the Canadian securities market and is meant to give an indication of the risk that a borrower will not fulfill its full obligations in a timely manner, with respect to both dividend and principal commitments. Every DBRS rating is based on quantitative and qualitative considerations relevant to the borrowing entity. This scale may also apply to certain hybrid securities, in which case references to dividend throughout will reflect interest commitments of the hybrid security. Each rating category is denoted by the subcategories “high” and “low”. The absence of either a “high” or “low” designation indicates the rating is in the middle of the category. The “Pfd-2” rating indicates that the preferred shares are of satisfactory credit quality.

Rating trends provide guidance in respect of DBRSs opinion regarding outlook for the rating in question. The “Stable” rating trend represents an indication that there is less likelihood that the rating could change in the future than would be the case if the rating trend was “Negative”.

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Schedule C

CHARTER

AUDIT AND CONDUCT REVIEW COMMITTEE OF THE BOARD OF DIRECTORS OF

THE BANK OF NOVA SCOTIA

The Audit and Conduct Review Committee of the Board of Directors (the “Committee”) has the responsibilities and duties as outlined below:

AUDIT

A. Mandate

1. To perform such duties as may be required by:

• the Bank Act (the “Bank Act”), the regulations thereunder and guidelines of the Office of the Superintendent of Financial Institutions Canada (“OSFI”); and

• other applicable legislation and regulations, including those of the Ontario Securities Commission and the Canadian Securities Administrators, the Toronto Stock Exchange, the New York Stock Exchange (“NYSE”), the Securities and Exchange Commission and the Sarbanes-Oxley Act, 2002,

as more fully described under the heading “Duties” below.

2. To assist the Board of Directors (the “Board”) in fulfilling its oversight responsibilities for:

• the integrity of the Bank’s consolidated financial statements and related quarterly results releases;

• the system of internal control, including internal control over financial reporting and disclosure controls and procedures (“internal controls”);

• the external auditor’s qualifications, independence and performance; and

• the Bank’s finance and internal audit functions.

3. To perform such other duties as may from time to time be assigned to the Committee by the Board.

4. To act as the audit committee for any federally chartered Canadian financial institution beneficially owned by the Bank as determined by the Board.

B. Authority

The Committee has authority to:

• conduct or authorize investigations into any matters within its scope of responsibility;

• retain, as appropriate and at the Bank’s expense, independent counsel, accountants or others to advise the Committee or assist in the conduct of an investigation;

• meet with Bank officers, the external auditor or outside counsel, as necessary;

• determine appropriate funding for independent advisors;

• communicate directly with the internal and external auditors;

• receive all material correspondence between the external auditor and management related to audit and interim review findings; and

• call a meeting of the Board to consider any matter of concern to the Committee.

C. Duties

The Committee shall:

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Financial Information

• review the quarterly and annual consolidated financial statements of the Bank prior to approval by the Board and disclosure to the public, and satisfy itself that the financial statements present fairly the financial position, results of operations and cash flows of the Bank;

• review should include discussion with management and the external auditor of significant issues, including significant accounting policies, regarding the financial results, accounting principles, practices and management estimates and judgments;

• satisfy itself that the Bank’s accounting practices are prudent and appropriate;

• review the quarterly and annual Management’s Discussion & Analysis of Financial Condition and Results of Operations (“MD&A”) prior to review and approval by the Board;

• review any material proposed changes in accounting standards and securities policies or regulation relevant to the Bank’s consolidated financial statements and approve any material changes in accounting policies related to the Bank’s consolidated financial statements;

• review any tax matters material to the financial statements;

• be satisfied that adequate procedures are in place for the review of the Bank’s public disclosure of all consolidated financial statements, related quarterly results press releases and financial information extracted or derived from the Bank’s consolidated financial statements and periodically assess the adequacy of these procedures;

• review material financial press releases prior to public disclosure;

• review earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies prior to public disclosure;

• review investments and transactions that could adversely affect the well-being of the Bank brought to its attention by the external auditor or by any officer of the Bank;

• discuss significant financial risk exposures and the steps management of the Bank has taken to monitor, control and report such exposures;

• review the Annual Information Form and Form 40-F; and

• review the process relating to and the certifications of the Chief Executive Officer and the Chief Financial Officer on the integrity of the Bank’s quarterly and annual consolidated financial statements.

Internal Controls

• require Bank management to implement and maintain appropriate internal control procedures including anti-fraud controls and review, evaluate and approve these procedures, including the Bank’s Internal Control Policy, as part of the Bank’s overall internal control framework;

• receive and review reports from management and internal audit on the design and operating effectiveness of the internal control framework and any significant control breakdowns, including any reports concerning significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the Bank’s ability to record, process, summarize and report financial information, and any fraud involving management or other employees who have a significant role in the Bank’s internal controls;

• as part of this review, the Committee should discuss with management whether any deficiencies identified may be systemic or pervasive;

• receive and review the external auditor’s audit report on the Bank’s internal controls over financial reporting as of the Bank’s year end; and

• require management to establish procedures and review and approve the procedures established for the receipt, retention, treatment and resolution of complaints received by the Bank regarding accounting, internal accounting controls or auditing matters, including confidential, anonymous submissions from employees, as part of the Bank’s Whistleblower Policy and Procedures, and carry out the Committee’s responsibilities under the Bank’s Whistleblower Policy and Procedures, as required.

Finance Function

• oversee the Finance Department, having regard to its independence, by:

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• reviewing and approving the appointment and/or removal of the Chief Financial Officer of the Bank;

• annually reviewing and approving the mandate of the Chief Financial Officer and the charter of the Finance Department;

• annually reviewing and approving the organizational structure of the Finance Department;

• annually reviewing and approving the Finance Department’s resources and budget;

• annually assessing the effectiveness of the Chief Financial Officer and the effectiveness of the Finance Department, and annually approving the performance review of the Chief Financial Officer, taking into consideration any regulatory findings with respect to the finance function;

• conveying its views to the Human Resources Committee on the following matters:

• the assessment of the effectiveness and performance review of the Chief Financial Officer;

• considerations to be factored into the total compensation to be paid to the Chief Financial Officer; and

• succession planning for the role of Chief Financial Officer;

• overseeing that the finance function has unfettered access and a functional reporting line to the Committee;

• periodically requesting independent reviews of the Finance Department, reviewing the results of such reviews and reporting such results to the Board; and

• overseeing that deficiencies identified related to the Finance Department are remedied within an appropriate time frame and reporting to the Board on the progress of necessary corrective actions.

Internal Audit

• review the quarterly and other reports of the Chief Auditor;

• review any matters of significance that arose from non-audit engagements performed by the Audit Department;

• regularly meet with the Chief Auditor with and/or without management, to discuss the effectiveness of the Bank’s internal control, risk management (including anti-money laundering) and governance processes;

• oversee the Audit Department, having regard to its independence, by:

• reviewing and approving the appointment and/or removal of the Chief Auditor;

• annually reviewing and approving the job description of the Chief Auditor and the charter of the Audit Department;

• annually reviewing and approving the organizational structure of the Audit Department;

• annually reviewing and approving the annual audit plan, overall risk assessment methodology, budgets and resources of the Audit Department;

• annually assessing the effectiveness of the Chief Auditor and the Audit Department, taking into consideration the objectivity and independence of the Bank’s internal audit function, and annually approving the performance review of the Chief Auditor, taking into consideration any regulatory findings with respect to the Audit Department;

• conveying its view to the President and Chief Executive Officer and the Human Resources Committee on the following matters:

• the assessment of the effectiveness and performance review of the Chief Auditor;

• considerations to be factored into the total compensation to be paid to the Chief Auditor; and

• succession planning for the role of Chief Auditor;

• periodically reviewing results of the internal Quality Assurance and Improvement Program;

• periodically requesting independent reviews of the Audit Department, reviewing the results of such reviews and reporting such results to the Board;

• overseeing that deficiencies identified related to the Audit Department are remedied within an appropriate time frame and reporting to the Board on the progress of necessary corrective actions; and

• advising the Board of any recommendations for the continuous improvement of the Audit Department;

• ensure the Audit Department has a direct and independent reporting line to the Committee;

• provide for an open avenue of communication between the Audit Department and the Board;

• ensure that the Audit Department’s recommendations are adequately considered and acted on, by providing the Audit Department with the authority to follow-up on observations and recommendations; and

• review and approve the Internal Audit Third Party Risk Management Policy.

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External Auditor

• have responsibility for the oversight of the external auditor who reports directly to the Committee;

• recommend to the Board the retention or termination of the Bank’s external auditor, subject to shareholder ratification;

• review and approve the annual audit plan and letter(s) of engagement, and as part of such review, satisfy itself that the Bank’s audit plan is risk based and covers all relevant activities over a measurable cycle;

• annually review the external auditor’s opinion on the annual financial statements;

• review and evaluate the external auditor’s qualifications, performance and independence, including a review and evaluation of the lead audit partner, taking into consideration the opinions of management and the Bank’s Audit Department in such evaluation and any concerns raised by OSFI or other stakeholders about the external auditor’s independence;

• consistent with the Committee’s annual assessment and periodic comprehensive review of the external auditors, the Committee shall establish a policy that stipulates the criteria for the Bank tendering the contract for the role of the Bank’s external auditor;

• as part of this policy and any review undertaken by the Committee, the Committee should periodically consider whether to put the external auditor contract out for tender, taking into consideration the length of the current external auditor’s tenure and the risks that tenure may pose to the external auditor’s objectivity and independence;

• review the CPAB’s annual public report, along with any notices required to be communicated by the external auditor to the Committee, including those required by CPAB, OSFI and PCAOB;

• review and recommend to the Board the annual fee for the audit of the Bank’s consolidated financial statements;

• as part of this review, the Committee should satisfy itself that the level of audit fees is commensurate with the scope of work undertaken;

• review and pre-approve in accordance with established pre-approval policy, all services to be provided by the external auditor, including audit and audit related services and permitted tax and non-audit services;

• delegate the authority to pre-approve non-audit services to a member of the Committee;

• review external auditor services pre-approved by the delegate of the Committee;

• review annually the total fees paid to the external auditor by required categories;

• at least annually, obtain and review reporting from the external auditor describing:

• the firm’s internal quality-control procedures;

• any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, regarding one or more independent audits carried out by the firm, and any steps taken to deal with any such issues;

• the skill and resources (amount and type) of the firm; and

• an assessment of all relationships between the external auditor and the Bank that pertain to independence;

• review the rotation plan for partners on the engagement;

• meet with the external auditor and with management to discuss the quarterly and the annual consolidated financial statements and the Bank’s disclosure under any MD&A;

• review with management and the external auditor all matters required to be communicated to the Committee under generally accepted auditing standards;

• review with the external auditor any audit problems or difficulties and management’s response;

• discuss with the external auditor the OSFI returns, investments or transactions reviewed by the Committee;

• resolve any disputes between the external auditor and management; and

• review and approve policies for the Bank’s employment of current and former employees or partners of the current or former external auditor.

Other Duties

• receive reports from management on the Bank’s compliance with legal and regulatory requirements;

• review the periodic reports on litigation matters;

• review such returns as specified by OSFI;

- 30 -

• provide for an open avenue of communication between internal audit, the external auditor and the Board;

• annually, review the charter for the Committee and evaluate the Committee’s effectiveness in fulfilling its mandate;

• prepare a committee report for inclusion in the Bank’s management proxy circular; and

• institute and oversee special investigations as needed.

CONDUCT REVIEW

D. Mandate

1. To perform the duties with respect to the Bank’s procedures for ensuring its transactions with its related parties comply with Part XI of the Bank Act and any regulations thereunder as more fully described under the heading “Duties” below.

2. In the event a widely held bank holding company or insurance holding company has a significant interest in any class of shares of the Bank:

• to establish policies for entering into transactions referred to in subsection 495.1(1) of the Bank Act, including transactions with a holding company or any other related party of the Bank that is an entity in which the holding company has a substantial investment; and

• to review certain of the Bank’s transactions that are referred to in subsection 495.3(1) of the Bank Act including any transaction with a widely held insurance or bank holding company or any other related party in which they hold a substantial investment.

3. To perform such duties as are required by the Bank Act to be dealt with by a committee of the Board concerning the monitoring of adherence to procedures for identifying potential conflicts of interest and for resolving such conflicts of interest, for restricting the use of confidential information, for providing disclosure of information to customers and for dealing with customer complaints as required under subsection 455(1) of the Bank Act, and as more fully described under the heading “Duties” below.

4. To assist the Board in fulfilling its oversight responsibilities for:

• setting standards of conduct and ethical behaviour; and

• the oversight of conduct review and conduct risk.

5. To perform such other duties as are required under the Bank Act or by OSFI, or as may from time to time be assigned by the Board.

6. To monitor and fulfill the compliance requirements of the Bank in respect of the Financial Consumer Agency of Canada.

7. To act as the conduct review committee for any federally chartered Canadian financial institution beneficially owned by the Bank as determined by the Board.

E. Duties

1. Establish criteria for determining whether the value of transactions with related parties of the Bank is nominal or immaterial to the Bank;

2. Approve the terms and conditions of:

• loans, other than margin loans, to senior officers of the Bank on terms and conditions more favourable to the senior officers than those offered to the public; and

• loans to spouses of senior officers of the Bank on the security of mortgages of the principal residences of such spouses on terms and conditions more favourable than those offered to the public;

- 31 -

3. Approve the practice of the Bank making financial services, other than loans or guarantees, available to senior officers of the Bank or to spouses, or children who are less than 18 years of age of senior officers of the Bank, on terms and conditions more favourable than those offered to the public, provided the financial services are offered by the Bank to its employees on those favourable terms and conditions;

4. Require Bank management to establish procedures to enable the Bank to verify that its transactions with related parties of the Bank comply with Part XI of the Bank Act and to review those procedures and their effectiveness. These procedures should, among other things, enable management to verify that:

• all related party transactions are on terms and conditions at least as favourable to the Bank as market terms and conditions, other than transactions referred to in clauses 2 and 3 above;

• loans to full-time senior officers, other than margin loans and mortgages on their principal residences, do not exceed the greater of twice their annual salaries and $100,000;

• aggregate loans or guarantees to, and investments in the securities of any related party (subject to certain exceptions) do not exceed 2% of the Bank’s regulatory capital unless the approval of 2/3 of the Board has been obtained; and

• aggregate loans or guarantees to, and investments in the securities of all related parties (subject to certain exceptions) do not exceed 50% of the Bank’s regulatory capital;

5. Review the practices of the Bank to identify any transactions with related parties of the Bank that may have a material effect on the stability or solvency of the Bank;

6. Monitor the procedures established by the Board to resolve conflicts of interest, including techniques for the identification of potential conflict situations, and to restrict the use of confidential information;

7. Monitor the procedures established by the Board to provide disclosure to customers of the Bank of information that is required to be disclosed by the Bank Act, and for dealing with and reporting complaints made by customers of the Bank who have requested or received products or services in Canada and to satisfy itself that these procedures are being adhered to by the Bank;

8. Review the Conduct Risk Summary Framework, prior to review and approval by the Board;

9. Review and, if appropriate, recommend for Board approval the Bank’s Code of Conduct which includes the standards of business conduct and ethical behaviour for employees, officers and directors of the Bank and its subsidiaries and recommend for approval by the Board any exceptions from the Bank’s Code of Conduct , as appropriate;

10. Review reports from Global Compliance on compliance with the Bank’s Code of Conduct and any instances of material deviation therefrom with corrective actions taken;

11. Review the annual letter of certification from the Chief Executive Officer on the Bank’s compliance with the Code of Conduct;

12. Review and, if appropriate, approve the Anti-corruption and Anti-bribery Policy;

13. Monitor the Bank’s exposure to material conduct risk and review the Bank’s conduct risk management practices including its identification, measurement, monitoring and assessment of conduct risk;

14. Review reports to the Committee relating to conduct risk;

15. Review with management the results of their assessment of the Bank’s conduct risk and their plans to remediate any material deficiencies identified; and

16. Monitor the procedures established by the Bank to mitigate conduct risk.

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COMMITTEE OPERATIONS

F. Reporting

After each meeting of the Committee, the Committee is required to report to the Board on matters reviewed by the Committee. The Committee shall also report as required to the Risk Committee on relevant issues.

The Chair of the Committee shall review, for completeness, the Board’s report to OSFI with respect to conduct review matters on the Committee’s activities during the year. This report must be filed within 90 days after the Bank’s financial year-end.

The Committee shall review and assess the adequacy of this Charter on an annual basis and report the results of this review to the Corporate Governance Committee of the Board.

G. Composition

Structure

The Committee shall consist of a minimum of 3 Directors. No member of the Committee may serve on more than three audit committees of public company boards without the consent of the Corporate Governance Committee and the Board.

Each member must be financially literate or become financially literate within a reasonable period of time subsequent to his/her appointment to the Committee. At least one member must be a financial expert. There should also be a reasonable representation of other key competencies on the Committee, as determined by the Corporate Governance Committee.

Independence

The Committee is composed entirely of independent directors as defined in applicable laws, rules and regulations and as determined pursuant to the Director Independence Standards approved by the Board for Committee members.

No member of the Committee may be an officer or employee of the Bank or of any of its subsidiaries or affiliates. No member may be a person who is affiliated with the Bank.

Directors’ fees are the only compensation a member of the Committee may be paid by the Bank.

Appointment of Committee Members

Members of the Committee are appointed or reappointed annually by the Board, upon the recommendation of the Corporate Governance Committee, such appointments to take effect immediately following the annual meeting of the shareholders of the Bank. Members of the Committee shall hold office until their successors are appointed, or until they cease to be Directors of the Bank.

Vacancies

Vacancies may be filled for the remainder of the current term of appointment of members of the Committee by the Board, subject to the requirements under the headings “Structure” and “Independence” above.

Appointment and Qualifications of Committee Chair

The Board shall appoint from the Committee membership, a Chair for the Committee to preside at meetings. In the absence of the Chair, one of the other members of the Committee present shall be chosen by the Committee to preside at that meeting.

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The Chair for the Committee must have all of the qualifications for Committee membership and have accounting or related financial management expertise.

H. Meetings

Calling of Meetings

Meetings of the Committee may be called by the Chair, by any two members of the Committee or the external auditor. Members may participate in meetings in person or by telephone, electronic or other communications facilities.

Written resolutions in lieu of a meeting are permitted, solely in accordance with the Bank Act.

The Committee shall hold an in camera session immediately prior to and/or following the conclusion of the regular agenda matters. The Committee shall also hold in camera sessions, separately at each Committee meeting, with each of the Chief Financial Officer, Chief Auditor and the external auditor. The Committee shall also meet separately, at least quarterly, with management.

To facilitate communication between the Committee and the Risk Committee, the Chair of the Risk Committee shall receive notice of all Committee meetings and may attend Committee meetings by invitation as a non-voting observer.

The Committee may invite any director, officer or employee or any other person to attend meetings to assist the Committee with its deliberations.

Notice of Meetings

Notice of meeting of the Committee shall be sent by prepaid mail, by personal delivery or other means of transmitted or recorded communication or by telephone at least 12 hours before the meeting to each member of the Committee at the member’s address or communication number last recorded with the Corporate Secretary. A Committee member may in any manner waive notice of a meeting of the Committee and attendance at a meeting is a waiver of notice of the meeting, except where a member attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called.

Notice to the Internal Auditor and External Auditor

The Chief Auditor and the external auditor are entitled to receive notice of every meeting of the Committee and, at the expense of the Bank, to attend and be heard at each meeting and to have the opportunity to discuss matters with the independent directors, without the presence of management.

Frequency

The Committee shall meet at least quarterly.

Quorum

The quorum for a meeting of the Committee shall be a majority of its members, subject to a minimum of 2 members.

Secretary and Minutes

The Corporate Secretary or, in the absence of the Corporate Secretary, an Assistant Corporate Secretary of the Bank shall act as Secretary of the Committee.

Minutes of meetings of the Committee shall be recorded and maintained by the Corporate Secretary and subsequently presented to the Committee and to the Board, if required by the Board.

This Charter was last reviewed and approved by the Board on June 26, 2018.

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EX-99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS 

Table of Contents

17	Forward-looking statements
18	Non-GAAP measures
23	Financial highlights
Overview of Performance
24	Financial results: 2018 vs 2017
24	Medium-term objectives
24	Shareholder returns
25	Economic outlook
25	Impact of foreign currency translation
Group Financial Performance
26	Basis of presentation
26	Net income
26	Net interest income
28	Non-interest income
29	Provision for credit losses
31	Non-interest expenses
32	Income taxes
33	Financial results review: 2017 vs 2016
35	Fourth quarter review
37	Trending analysis
Business Line Overview
38	Overview
40	Canadian Banking
44	International Banking
49	Global Banking and Markets
52	Other

Group Financial Condition
54	Statement of financial position
55	Capital management
67	Off-balance sheet arrangements
70	Financial instruments
71	Selected credit instruments – publically known risk items
Risk Management
72	Risk management framework
82	Credit risk
91	Market risk
97	Liquidity risk
106	Other risks
Controls and Accounting Policies
110	Controls and procedures
110	Critical accounting estimates
114	Future accounting developments
116	Regulatory developments
117	Related party transactions
Supplementary Data
119	Geographic information
122	Credit risk
127	Revenues and expenses
129	Selected quarterly information
130	Eleven-year statistical review

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MANAGEMENT’S DISCUSSION AND ANALYSIS

FORWARD LOOKING STATEMENTS

From time to time, our public communications often include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. In addition, representatives of the Bank may include forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include, but are not limited to, statements made in this document, the Management’s Discussion and Analysis in the Bank’s 2018 Annual Report under the headings “Outlook” and in other statements regarding the Bank’s objectives, strategies to achieve those objectives, the regulatory environment in which the Bank operates, anticipated financial results, and the outlook for the Bank’s businesses and for the Canadian, U.S. and global economies. Such statements are typically identified by words or phrases such as “believe,” “expect,” “foresee,” “forecast,” “anticipate,” “intend,” “estimate,” “plan,” “goal,” “project,” and similar expressions of future or conditional verbs, such as “will,” “may,” “should,” “would” and “could.”

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved.

We caution readers not to place undue reliance on these statements as a number of risk factors, many of which are beyond our control and effects of which can be difficult to predict, could cause our actual results to differ materially from the expectations, targets, estimates or intentions expressed in such forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; changes in currency and interest rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank and its affiliates; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; changes in laws and regulations or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; changes to our credit ratings; operational and infrastructure risks; reputational risks; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services; our ability to execute our strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; global capital markets activity; the Bank’s ability to attract, develop and retain key executives; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; disruptions in or attacks (including cyber-attacks) on the Bank’s information technology, internet, network access, or other voice or data communications systems or services; increased competition in the geographic and in business areas in which we operate, including through internet and mobile banking and non-traditional competitors; exposure related to significant litigation and regulatory matters; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; and the Bank’s anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank’s business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank’s financial results, businesses, financial condition or liquidity. These and other factors may cause the Bank’s actual performance to differ materially from that contemplated by forward-looking statements. The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank’s results, for more information, please see the “Risk Management” section of the Bank’s 2018 Annual Report, as may be updated by quarterly reports.

Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2018 Annual Report under the headings “Outlook”, as updated by quarterly reports. The “Outlook” sections are based on the Bank’s views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the preceding factors, other uncertainties and potential events.

Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank’s shareholders and analysts in understanding the Bank’s financial position, objectives and priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf.

Additional information relating to the Bank, including the Bank’s Annual Information Form, can be located on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.

November 27, 2018

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MANAGEMENT’S DISCUSSION & ANALYSIS

The Management’s Discussion and Analysis (MD&A) is provided to enable readers to assess the Bank’s financial condition and results of operations as at and for the year ended October 31, 2018. The MD&A should be read in conjunction with the Bank’s 2018 Consolidated Financial Statements, including the Notes. This MD&A is dated November 27, 2018.

Additional information relating to the Bank, including the Bank’s 2018 Annual Report, are available on the Bank’s website at www.scotiabank.com. As well, the Bank’s 2018 Annual Report and Annual Information Form are available on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.

Non-GAAP Measures

The Bank uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS), are not defined by GAAP and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. The Bank believes that certain non-GAAP measures are useful in assessing ongoing business performance and provide readers with a better understanding of how management assesses performance. These non-GAAP measures are used throughout this report and defined below.

Adjusted results and diluted earnings per share

The following tables present reconciliations of GAAP Reported financial results to Non-GAAP Adjusted financial results. The financial results have been adjusted for the following:

1. Acquisition-related costs – In 2018, the Bank acquired the following: Jarislowsky, Fraser Limited, and MD Financial Management in Canadian Banking; and BBVA Chile and Citibank consumer and small and medium enterprise operations, Colombia in International Banking. Acquisition-related costs are defined below.

• Day 1 provision for credit losses on acquired performing financial instruments, as required by IFRS 9. The standard does not differentiate between originated and purchased performing loans and as such, requires the same accounting treatment for both.

• Integration costs – These include costs that are incurred on the current year’s acquisitions and related to integrating the acquired operations and will not form part of continuing operations once integration is complete.

• Amortization of acquisition-related intangible assets, excluding software, relating to current and past acquisitions.

2. Restructuring charge incurred in 2016.

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T1 Reconciliation of reported and adjusted results and diluted earnings per share

As at October 31 ($ millions)	2018		2017		2016
Reported Results
Net interest income	$	16,191	$	15,035	$	14,292
Non-interest income		12,584		12,120		12,058
Total revenue		28,775		27,155		26,350
Provision for credit losses		2,611		2,249		2,412
Non-interest expenses		15,058		14,630		14,540
Income before taxes		11,106		10,276		9,398
Income tax expense		2,382		2,033		2,030
Net income	$	8,724	$	8,243	$	7,368
Net income attributable to non-controlling interests in subsidiaries (NCI)		176		238		251
Net income attributable to equity holders		8,548		8,005		7,117
Net income attributable to common shareholders		8,361		7,876		6,987
Diluted earnings per share (in dollars)	$	6.82	$	6.49	$	5.77
Adjustments
Acquisition-related costs
Day 1 provision for credit losses on acquired performing financial instruments(1)	$	404	$	–	$	–
Integration costs(2)		101		–		–
Amortization of acquisition-related intangible assets, excluding software(2)		86		82		104
Acquisition-related costs (Pre-tax)		591		82		104
Restructuring charge
Restructuring charge (Pre-tax)(2)		–		–		378
Adjustments (Pre-tax)		591		82		482
Income tax expense		171		22		128
Adjustments (After tax)		420		60		354
Adjustment attributable to NCI		122		–		–
Adjustments (After tax and NCI)	$	298	$	60	$	354
Adjusted Results
Net interest income	$	16,191	$	15,035	$	14,292
Non-interest income		12,584		12,120		12,058
Total revenue		28,775		27,155		26,350
Provision for credit losses		2,207		2,249		2,412
Non-interest expenses		14,871		14,548		14,058
Income before taxes		11,697		10,358		9,880
Income tax expense		2,553		2,055		2,158
Net income	$	9,144	$	8,303	$	7,722
Net income attributable to NCI		298		238		251
Net income attributable to equity holders		8,846		8,065		7,471
Net income attributable to common shareholders		8,659		7,936		7,341
Adjusted diluted earnings per share
Adjusted net income attributable to common shareholders	$	8,659	$	7,936	$	7,341
Dilutive impact of share-based payment options and others		72		59		83
Adjusted net income attributable to common shareholders (diluted)	$	8,731	$	7,995	$	7,424
Weighted average number of basic common shares outstanding (millions)		1,213		1,203		1,204
Dilutive impact of share-based payment options and others (millions)		16		20		22
Adjusted weighted average number of diluted common shares outstanding (millions)		1,229		1,223		1,226
Adjusted diluted earnings per share (in dollars)	$	7.11	$	6.54	$	6.05
Impact of adjustments on diluted earnings per share (in dollars)	$	0.29	$	0.05	$	0.28

(1) Recorded in provision for credit losses.

(2) Recorded in non-interest expenses.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T2 Reconciliation of reported and adjusted results and diluted earnings per share by business line

Canadian Banking⁽¹⁾

As at October 31 ($ millions)	2018		2017		2016
Reported Results
Net interest income	$	7,898	$	7,363	$	7,024
Non-interest income		5,452		5,488		5,164
Total revenue		13,350		12,851		12,188
Provision for credit losses		794		913		832
Non-interest expenses		6,654		6,487		6,324
Income before taxes		5,902		5,451		5,032
Income tax expense		1,538		1,387		1,296
Net income	$	4,364	$	4,064	$	3,736
Net income attributable to non-controlling interests in subsidiaries (NCI)		–		–		–
Net income attributable to equity holders	$	4,364	$	4,064	$	3,736
Adjustments
Acquisition-related costs
Day 1 provision for credit losses on acquired performing financial instruments(2)	$	–	$	–	$	–
Integration costs(3)		31		–		–
Amortization of acquisition-related intangible assets, excluding software(3)		40		35		54
Acquisition-related costs (Pre-tax)		71		35		54
Income tax expense		19		9		15
Adjustments for Acquisition-related costs (After tax)		52		26		39
Adjustment attributable to NCI		–		–		–
Adjustments for Acquisition-related costs (After tax and NCI)	$	52	$	26	$	39
Adjusted Results
Net interest income	$	7,898	$	7,363	$	7,024
Non-interest income		5,452		5,488		5,164
Total revenue		13,350		12,851		12,188
Provision for credit losses		794		913		832
Non-interest expenses		6,583		6,452		6,270
Income before taxes		5,973		5,486		5,086
Income tax expense		1,557		1,396		1,311
Net income	$	4,416	$	4,090	$	3,775
Net income attributable to NCI		–		–		–
Net income attributable to equity holders	$	4,416	$	4,090	$	3,775

(1) Refer to Business Line Overview on page 38.

(2) Recorded in provision for credit losses.

(3) Recorded in non-interest expenses.

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T2 Reconciliation of reported and adjusted results and diluted earnings per share by business line

International Banking⁽¹⁾

As at October 31 ($ millions)	2018		2017		2016
Reported Results
Net interest income	$	7,322	$	6,726	$	6,359
Non-interest income		4,111		3,688		3,482
Total revenue		11,433		10,414		9,841
Provision for credit losses		1,867		1,294		1,281
Non-interest expenses		6,111		5,664		5,523
Income before taxes		3,455		3,456		3,037
Income tax expense		706		828		707
Net income	$	2,749	$	2,628	$	2,330
Net income attributable to non-controlling interests in subsidiaries (NCI)		176		238		251
Net income attributable to equity holders	$	2,573	$	2,390	$	2,079
Adjustments
Acquisition-related costs
Day 1 provision for credit losses on acquired performing financial instruments(2)	$	404	$	–	$	–
Integration costs(3)		70		–		–
Amortization of acquisition-related intangible assets, excluding software(3)		46		47		50
Acquisition-related costs (Pre-tax)		520		47		50
Income tax expense		152		13		13
Adjustments for Acquisition-related costs (After tax)		368		34		37
Adjustment attributable to NCI		122		–		–
Adjustments for Acquisition-related costs (After tax and NCI)	$	246	$	34	$	37
Adjusted Results
Net interest income	$	7,322	$	6,726	$	6,359
Non-interest income		4,111		3,688		3,482
Total revenue		11,433		10,414		9,841
Provision for credit losses		1,463		1,294		1,281
Non-interest expenses		5,995		5,617		5,473
Income before taxes		3,975		3,503		3,087
Income tax expense		858		841		720
Net income	$	3,117	$	2,662	$	2,367
Net income attributable to NCI		298		238		251
Net income attributable to equity holders	$	2,819	$	2,424	$	2,116

(1) Refer to Business Line Overview on page 38.

(2) Recorded in provision for credit losses.

(3) Recorded in non-interest expenses.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T2 Reconciliation of reported and adjusted results and diluted earnings per share by business line

Other⁽¹⁾

As at October 31 ($ millions)	2018			2017			2016
Reported Results
Net interest income	$	(483	)	$	(390	)	$	(384	)
Non-interest income		(53	)		(344	)		273
Total revenue		(536	)		(734	)		(111	)
Provision for credit losses		–			–			50
Non-interest expenses		60			319			653
Income before taxes		(596	)		(1,053	)		(814	)
Income tax expense		(449	)		(786	)		(545	)
Net income	$	(147	)	$	(267	)	$	(269	)
Net income attributable to non-controlling interests in subsidiaries (NCI)		–			–			–
Net income attributable to equity holders	$	(147	)	$	(267	)	$	(269	)
Adjustments
Restructuring charge
Restructuring charge (Pre-tax)(2)	$	–		$	–		$	378
Income tax expense		–			–			100
Adjustments (After tax)		–			–			278
Adjustment attributable to NCI		–			–			–
Adjustments (After tax and NCI)	$	–		$	–		$	278
Adjusted Results
Net interest income	$	(483	)	$	(390	)	$	(384	)
Non-interest income		(53	)		(344	)		273
Total revenue		(536	)		(734	)		(111	)
Provision for credit losses		–			–			50
Non-interest expenses		60			319			275
Income before taxes		(596	)		(1,053	)		(436	)
Income tax expense		(449	)		(786	)		(445	)
Net income	$	(147	)	$	(267	)	$	9
Net income attributable to NCI		–			–			–
Net income attributable to equity holders	$	(147	)	$	(267	)	$	9

(1) Refer to Business Line Overview on page 38.

(2) Recorded in non-interest expenses.

Reconciliation of International Banking’s reported results and constant dollar results

International Banking business segment results are analyzed on a constant dollar basis. Under the constant dollar basis, prior period amounts are recalculated using current period average foreign currency rates. The following table presents the reconciliation between reported and constant dollar results for International Banking for prior periods.

For the year ended October 31 ($ millions)	2017							2016
(Taxable equivalent basis)	Reported		Foreign exchange			Constant dollar		Reported		Foreign exchange			Constant dollar
Net interest income	$	6,726	$	100		$	6,626	$	6,359	$	168		$	6,191
Non-interest income		3,688		35			3,653		3,482		42			3,440
Total revenue		10,414		135			10,279		9,841		210			9,631
Provision for credit losses		1,294		18			1,276		1,281		24			1,257
Non-interest expenses		5,664		70			5,594		5,523		135			5,388
Income tax expense		828		13			815		707		(83	)		790
Net Income	$	2,628	$	34		$	2,594	$	2,330	$	134		$	2,196
Net income attributable to non-controlling interest in subsidiaries	$	238	$	(2	)	$	240	$	251	$	(9	)	$	260
Net income attributable to equity holders of the Bank	$	2,390	$	36		$	2,354	$	2,079	$	143		$	1,936
Other measures
Average assets ($ billions)	$	148	$	3		$	145	$	143	$	4		$	139
Average liabilities ($ billions)	$	115	$	2		$	113	$	109	$	3		$	106

The above table is computed on a basis that is different than the table “Impact of foreign currency translation” in Group Financial Performance on page 25.

Core banking assets

Core banking assets are average earning assets excluding bankers’ acceptances and average trading assets within Global Banking and Markets.

Core banking margin

This ratio represents net interest income divided by average core banking assets.

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T3 Financial highlights

As at and for the years ended October 31	2018(1)		2017			2016
Operating results ($ millions)
Net interest income		16,191		15,035			14,292
Non-interest income		12,584		12,120			12,058
Total revenue		28,775		27,155			26,350
Provision for credit losses		2,611		2,249			2,412
Non-interest expenses		15,058		14,630			14,540
Income tax expense		2,382		2,033			2,030
Net income		8,724		8,243			7,368
Net income attributable to common shareholders		8,361		7,876			6,987
Operating performance
Basic earnings per share ($)		6.90		6.55			5.80
Diluted earnings per share ($)		6.82		6.49			5.77
Return on equity (%)		14.5		14.6			13.8
Productivity ratio (%)		52.3		53.9			55.2
Operating leverage (%)		3.0		2.4			(1.9	)
Core banking margin (%)(2)		2.46		2.46			2.38
Financial position information ($ millions)
Cash and deposits with financial institutions		62,269		59,663			46,344
Trading assets		100,262		98,464			108,561
Loans		551,834		504,369			480,164
Total assets		998,493		915,273			896,266
Deposits		676,534		625,367			611,877
Common equity		61,044		55,454			52,657
Preferred shares and other equity instruments		4,184		4,579			3,594
Assets under administration		516,033		470,198			472,817
Assets under management		282,219		206,675			192,702
Capital and liquidity measures
Common Equity Tier 1 (CET1) capital ratio (%)		11.1		11.5			11.0
Tier 1 capital ratio (%)		12.5		13.1			12.4
Total capital ratio (%)		14.3		14.9			14.6
Leverage ratio (%)		4.5		4.7			4.5
CET1 risk-weighted assets ($ millions)(3)		400,507		376,379			364,048
Liquidity coverage ratio (LCR) (%)		124		125			127
Credit quality
Net impaired loans ($ millions)(4)		3,453		2,243			2,446
Allowance for credit losses ($ millions)(5)		5,154		4,327			4,626
Net impaired loans as a % of loans and acceptances(4)		0.60		0.43			0.49
Provision for credit losses as a % of average net loans and acceptances(6)		0.48		0.45			0.50
Provision for credit losses on impaired loans as a % of average net loans and acceptances(6)		0.43		0.45			0.50
Net write-offs as a % of average net loans and acceptances		0.44		0.50			0.41
Adjusted results(2)
Adjusted net income ($ millions)		9,144		8,303			7,722
Adjusted diluted earnings per share ($)		7.11		6.54			6.05
Adjusted return on equity (%)		14.9		14.7			14.5
Adjusted productivity ratio (%)		51.7		53.6			53.4
Adjusted operating leverage (%)		3.7		(0.2	)		1.0
Adjusted provision for credit losses as a % of average net loans and acceptances(6)		0.41		0.45			0.50
Common share information
Closing share price ($) (TSX)		70.65		83.28			72.08
Shares outstanding (millions)
Average – Basic		1,213		1,203			1,204
Average – Diluted		1,229		1,223			1,226
End of period		1,227		1,199			1,208
Dividends paid per share ($)		3.28		3.05			2.88
Dividend yield (%)(7)		4.2		4.0			4.7
Market capitalization ($ millions) (TSX)		86,690		99,872			87,065
Book value per common share ($)		49.75		46.24			43.59
Market value to book value multiple		1.4		1.8			1.7
Price to earnings multiple (trailing 4 quarters)		10.2		12.7			12.4
Other information
Employees (full-time equivalent)		97,629		88,645			88,901
Branches and offices		3,095		3,003			3,113

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Refer to page 18 for a discussion of Non-GAAP measures.

(3) As at October 31, 2018, credit valuation adjustment (CVA) risk-weighted assets were calculated using scalars of 0.80, 0.83 and 0.86 to compute CET1, Tier 1 and Total Capital ratios, respectively (scalars of 0.72, 0.77, and 0.81 in 2017, scalars 0.64, 0.71, 0.77 in 2016).

(4) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico, prior to 2018.

(5) Includes allowance for credit losses on all financial assets – loans, acceptances, off-balance sheet exposures, debt securities, and deposits with financial institutions.

(6) Includes provision for credit losses on certain financial assets – loans, acceptances, and off-balance sheet exposures.

(7) Based on the average of the high and low common share price for the year.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Overview of Performance

Financial Results: 2018 vs 2017

Net income was $8,724 million, up 6% from $8,243 million last year. Diluted earnings per share (EPS) were $6.82 compared to $6.49, up 5%. Return on equity was 14.5% compared to 14.6%.

Adjusting for the impact of Acquisition-related costs (refer to Non-GAAP Measures), net income was $9,144 million, up 10% from $8,303 million. Net income was positively impacted by increases in net interest income and trading revenues, as well as lower provision for credit losses. Partially offsetting were lower gains on sale of real estate and investment securities, and a higher effective tax rate. Adjusted Diluted EPS were $7.11, up 9%. Adjusted Return on equity was 14.9% compared to 14.7%.

Net interest income was $16,191 million, an increase of $1,156 million or 8% from strong growth in Canadian Banking and International Banking including the 2% impact of acquisitions. This was partly offset by the negative impact of foreign currency translation.

The core banking margin was 2.46%, in line with the prior year. Higher margins in Canadian Banking and Global Banking and Markets were offset by lower margins in International Banking due mainly to acquisitions, and the impact of asset/liability management activities.

Non-interest income was $12,584 million, up $464 million or 4%. The impact of the sale of the HollisWealth business (“Sale of Business”) last year, net of the benefit from current year acquisitions, reduced non-interest income by 1%. The remaining 5% growth was from higher banking and credit card fees, trading revenues, income from associated corporations and the benefit from an additional month of income for certain businesses from the alignment of reporting period with the Bank (“Alignment of reporting period”). This was partly offset by lower gains on the sale of real estate and investment securities.

Provision for credit losses was $2,611 million, an increase of $362 million from last year. Adjusting for Acquisition-related costs, the provision for credit losses decreased $42 million, due primarily to lower provisions in Canadian Banking and Global Banking and Markets, offset by higher provisions in International Banking. The provision for credit losses ratio was 48 basis points, up three basis points from 45 basis points last year. Adjusting for Acquisition-related costs, the provision for credit losses ratio was 41 basis points, four basis points below last year.

Non-interest expenses were $15,058 million, an increase of $428 million or 3%. Adjusting for Acquisition-related costs, non-interest expenses increased 2%. The impact of the acquisitions was more than offset by the benefit from the Sale of Business last year. The remaining increase was due to higher investments in technology and regulatory initiatives and higher business taxes, partly offset by the accounting benefit driven by remeasurement of an employee benefit liability (“benefits remeasurement”), and the positive impact of foreign currency translation.

The productivity ratio was 52.3% compared to 53.9% last year. Adjusting for Acquisition-related costs, the productivity ratio was 51.7%. The benefits remeasurement improved the productivity ratio by 0.7%. Operating leverage was positive 3.0% on a reported basis. Adjusting for Acquisition-related costs, operating leverage was 3.7%. The benefits remeasurement improved the operating leverage by 1.3%.

The provision for income taxes was $2,382 million, an increase of $349 million. The Bank’s overall effective tax rate for the year was 21.5% compared to 19.8% for 2017. The increase in the effective tax rate was due primarily to higher tax-exempt income from client-driven equity trading activities in the prior year, partially offset by lower taxes in certain foreign jurisdictions this year.

The Basel III Common Equity Tier 1 ratio was 11.1% as at October 31, 2018, compared to 11.5% last year, and remained well above the regulatory minimum.

Medium-term financial objectives

	2018 Results
		Reported			Adjusted(1)
Diluted earnings per share growth of 7%+			5	%		9%
Return on equity of 14%+			14.5	%		14.9%
Achieve positive operating leverage			Positive 3.0	%		Positive 3.7%
Maintain strong capital ratios			CET1 capital ratio of 11.1	%		CET1 capital ratio of 11.1%

(1) Refer to non-GAAP measures on page 18.

Shareholder Returns   In fiscal 2018, the total shareholder return on the Bank’s shares was negative 11.6%, compared to the total return of the S&P/TSX Composite Index of negative 3.4%.   The total compound annual shareholder return on the Bank’s shares over the past five years was 6.6%, and 10.4% over the past 10 years. This exceeded the total annual return of the S&P/TSX Composite Index, which was 5.5% over the past five years and 7.6% over the last 10 years.   Dividends were raised twice during the year – a three cent increase effective the second quarter and a further three cent increase effective the fourth quarter. As a result, dividends per share totaled $3.28 for the year, up 8% from $3.05 in 2017. The dividend payout ratio of 47.7% for the year was in line with the Bank’s target payout range of 40-50%. C1  Closing common share price
as at October 31  

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    OVERVIEW OF PERFORMANCE

T4 Shareholder returns

For the years ended October 31	2018			2017		2016
Closing market price per common share ($)		70.65			83.28		72.08
Dividends paid ($ per share)		3.28			3.05		2.88
Dividend yield (%)(1)		4.2			4.0		4.7
Increase (decrease) in share price (%)		(15.2	)		15.5		17.2
Total annual shareholder return (%)(2)		(11.6	)		20.3		22.5

(1) Dividend yield is calculated as the dividend paid divided by the average of the high and low common share price for the year.

(2) Total annual shareholder return assumes reinvestment of quarterly dividends, and therefore may not equal the sum of dividend and share price returns in the table.

C2 Return to common shareholders
Share price appreciation plus dividends reinvested, 2008=100

Economic Outlook

Global growth remains strong but trade policy risks are on the rise. The global economy remains sufficiently robust to deal with reasonably small trade tensions such as the tariffs on steel and aluminum, but a deepening of trade tensions between the United States and China could have significant economic impacts. A rational approach to trade policy is expected to prevail and prevent an escalation of trade tensions.

The Canadian economy remains in good shape with growth expected to accelerate modestly to 2.2% in 2019 from the 2.1% forecast for 2018. The sources of Canadian growth appear to be evolving toward a more sustainable mix with a lighter emphasis on household consumption and real estate, and a greater contribution from investment and trade that could help increase productivity. Canadian interest rates will likely continue to rise, with the Bank of Canada rate expected to reach 2.75% by end 2019.

Over the last year, the U.S. economy has experienced a combination of moderate growth, modest inflation, and gradually rising interest rates. The U.S. economy has been in a favourable period of benign data and policy that have allowed the current eight-and-a-half-year run of uninterrupted growth to become the second longest U.S. expansion in history as of June 2018. The current policy mix in the U.S. clouds expectations beyond 2019. Against this background, the Federal Reserve will continue to normalize its policy settings, with rates likely rising to 3.25% by end 2019.

A key challenge facing emerging markets this year is the transition to a more hawkish stance on the part of the Federal Reserve, amplified in some countries by tensions with the United States. The countries of the Pacific Alliance have been generally insulated from these movements. Growth prospects are improving in many of these countries as economic activity is expected to improve relative to last year. This is most true in Peru, where the rise in commodity prices over the past year and a new government is leading to large increases in growth rates relative to 2017. In Colombia, an increase in oil prices over the past year is providing a positive impulse to business investment, which will be further strengthened as confidence in the new government takes hold. Strengthening business activity will add to already solid household spending. In Chile, GDP growth is expected to moderate somewhat from the strong levels witnessed in 2018 but should still exceed 3%. In Mexico, the economy remains moderately strong, as activity continues to benefit from robust growth in the U.S. and the rest of the world. The political transition is key to Mexican prospects.

Impact of Foreign Currency Translation

The impact of foreign currency translation on net income is shown in the table below.

T5 Impact of foreign currency translation

	2018					2017					2016
For the fiscal years	Average exchange rate		% Change			Average exchange rate		% Change			Average exchange rate		% Change
U.S. Dollar/Canadian Dollar		0.777		1.6	%		0.765		1.4	%		0.754		(6.4	)%
Mexican Peso/Canadian Dollar		14.802		1.3	%		14.608		6.9	%		13.666		10.3	%
Peruvian Sol/Canadian Dollar		2.538		1.0	%		2.513		(1.0	)%		2.539		1.3	%
Colombian Peso/Canadian Dollar		2,272		0.3	%		2,265		(1.8	)%		2,307		10.8	%
Chilean Peso/Canadian Dollar		492.892		(1.4	)%		500.108		(2.8	)%		514.549		0.5	%

Impact on net income(1) ($ millions except EPS)	2018 vs. 2017			2017 vs. 2016			2016 vs. 2015
Net interest income	$	(101	)	$	(112	)	$	(51	)
Non-interest income(2)		(21	)		(65	)		182
Non-interest expenses		85			99			86
Other items (net of tax)		17			18			(34	)
Net income	$	(20	)	$	(60	)	$	183
Earnings per share (diluted)	$	(0.02	)	$	(0.05	)	$	0.15
Impact by business line ($ millions)
Canadian Banking	$	(4	)	$	(4	)	$	14
International Banking(2)		(46	)		(14	)		44
Global Banking and Markets		(12	)		(12	)		65
Other(2)		42			(30	)		60
	$	(20	)	$	(60	)	$	183

(1) Includes impact of all currencies.

(2) Includes the impact of foreign currency hedges.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

GROUP FINANCIAL PERFORMANCE

Basis of Presentation

The Bank adopted International Financial Reporting Standard (IFRS) 9, Financial Instruments effective November 1, 2017. IFRS 9 includes an accounting policy choice to defer the adoption of IFRS 9 hedge accounting and to continue to apply the requirements of IAS 39 hedge accounting. The Bank has exercised this accounting policy choice. The Bank recorded a charge to its opening November 1, 2017 total equity of $610 million, to reflect the impact of the new requirements of impairment and classification and measurement of financial instruments at the adoption date and did not restate comparative periods, as permitted by the standard. Accordingly, the current year 2018 results are based on IFRS 9, while the prior years’ results are based on International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement and therefore, these amounts and related ratios are not comparable. The main impact of impairment under IFRS 9 is on provision for credit losses, and the impact of classification and measurement is on non-interest income. The provision for credit losses on performing loans is stages 1 and 2 under IFRS 9, while provision for credit losses on impaired loans is stage 3. For detailed description of the changes, refer to Notes 3 and 4 in the consolidated financial statements.

Net Income

Net income was $8,724 million, up 6% compared to $8,243 million last year reflecting good revenue growth, prudent expense management and the benefits from acquisitions. Adjusting for the impact of Acquisition-related costs, net income was $9,144 million, up 10% from $8,303 million.

Net Interest Income

Net interest income was $16,191 million, an increase of $1,156 million or 8% from strong growth in core banking assets and the impact of acquisitions. This was partly offset by the negative impact of foreign currency translation.

Net interest income in Canadian Banking was up $535 million or 7% driven by strong asset and deposit growth and expansion in margin. Net interest income increased $596 million or 9% in International Banking due primarily to strong asset growth and the 3% contribution from acquisitions. Net interest income in Global Banking and Markets rose $118 million or 9% driven by higher deposit volumes and higher lending volumes in the U.S.

Core banking assets increased $44 billion to $652 billion. The increase was driven by strong retail and commercial loan growth in International Banking due mainly to acquisitions, growth in residential mortgages, business loans and personal loans in Canadian Banking, as well as higher treasury assets.

The core banking margin was unchanged at 2.46%. Higher margins in Canadian Banking and Global Banking and Markets were offset by lower margins in International Banking due partly to acquisitions and higher volumes of lower margin treasury assets.

Outlook

Net interest income is expected to increase in 2019 driven by growth in core banking assets, the full year impact of the acquisitions made in 2018 and higher net interest margins driven primarily by rising interest rates in Canada.

T6 Net interest income and core banking margin⁽¹⁾

	2018							2017							2016
($ billions, except percentage amounts)	Average balance		Interest		Average rate			Average balance		Interest		Average rate			Average balance		Interest		Average rate
Total average assets and net interest income	$	945.7	$	16.2				$	912.6	$	15.0				$	913.8	$	14.3
Less: trading related businesses in Global Banking and Markets(1)		234.6		0.1					249.2		–					259.4		–
Banking margin on average total assets	$	711.1	$	16.1		2.26	%	$	663.4	$	15.0		2.26	%	$	654.4	$	14.3		2.18	%
Less: non-earning assets and customers’ liability under acceptances		58.7		–					54.6		–					56.6		–
Core banking assets and margin	$	652.4	$	16.1		2.46	%	$	608.8	$	15.0		2.46	%	$	597.8	$	14.3		2.38	%

(1) Most net interest income from Capital Markets trading assets is recorded in trading revenues in non-interest income.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL PERFORMANCE

T7 Average balance sheet⁽¹⁾ and net interest income

	2018								2017								2016
For the fiscal years ($ billions)	Average balance			Interest		Average rate			Average balance			Interest		Average rate			Average balance			Interest		Average rate
Assets
Deposits with financial institutions	$	54.2		$	0.9		1.59	%	$	53.2		$	0.5		0.98	%	$	67.8		$	0.4		0.58	%
Trading assets		101.6			0.2		0.17	%		107.2			0.1		0.13	%		107.2			0.2		0.16	%
Securities purchased under resale agreements and securities borrowed		94.4			0.4		0.47	%		97.0			0.3		0.29	%		99.8			0.1		0.16	%
Investment securities		79.8			1.6		2.01	%		74.8			1.3		1.68	%		67.8			1.1		1.57	%
Loans:
Residential mortgages		244.2			8.3		3.39	%		228.3			7.4		3.23	%		218.6			7.4		3.37	%
Personal loans		92.1			6.0		6.55	%		87.4			5.3		6.08	%		84.4			5.0		5.98	%
Credit cards		15.1			2.8		18.45	%		13.5			2.5		18.73	%		12.4			2.3		18.37	%
Business and government		177.0			7.9		4.45	%		165.0			6.5		3.94	%		161.4			5.5		3.41	%
Allowance for credit losses		(5.0	)							(4.5	)							(4.6	)
Total loans	$	523.4		$	25.0		4.77	%	$	489.7		$	21.7		4.43	%	$	472.2		$	20.2		4.28	%
Total earning assets	$	853.4		$	28.1		3.29	%	$	821.9		$	23.9		2.91	%	$	814.8		$	22.0		2.70	%
Customers’ liability under acceptances		16.3								12.3								11.4
Other assets		76.0								78.4								87.6
Total assets	$	945.7		$	28.1		2.97	%	$	912.6		$	23.9		2.62	%	$	913.8		$	22.0		2.41	%
Liabilities and equity
Deposits:
Personal	$	213.9		$	3.3		1.52	%	$	203.8		$	2.7		1.30	%	$	195.1		$	2.4		1.22	%
Business and government		399.8			6.5		1.64	%		374.7			4.7		1.26	%		384.7			3.9		1.01	%
Financial institutions		42.2			0.7		1.77	%		42.1			0.5		1.23	%		42.8			0.4		1.03	%
Total deposits	$	655.9		$	10.5		1.61	%	$	620.6		$	7.9		1.27	%	$	622.6		$	6.7		1.08	%
Obligations related to securities sold under repurchase agreements and securities lent		96.0			0.3		0.25	%		102.3			0.2		0.21	%		99.1			0.2		0.19	%
Subordinated debentures		5.7			0.2		3.71	%		7.1			0.2		3.19	%		7.5			0.2		3.10	%
Other interest-bearing liabilities		60.1			0.9		1.46	%		58.5			0.6		0.99	%		54.9			0.6		1.04	%
Total interest-bearing liabilities	$	817.7		$	11.9		1.45	%	$	788.5		$	8.9		1.13	%	$	784.1		$	7.7		0.98	%
Other liabilities including acceptances		63.9								65.3								74.4
Equity(2)		64.1								58.8								55.3
Total liabilities and equity	$	945.7		$	11.9		1.26	%	$	912.6		$	8.9		0.97	%	$	913.8		$	7.7		0.84	%
Net interest income				$	16.2							$	15.0							$	14.3

(1) Average of daily balances.

(2) Includes non-controlling interest of $1.9 (2017 – $1.6; 2016 – $1.5).

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Non-Interest Income

T8 Non-interest income

For the fiscal years ($ millions)	2018		2017		2016		2018 versus 2017
Banking
Card revenues	$	1,656	$	1,514	$	1,359		9	%
Deposit and payment services
Deposit services		1,027		989		949		4
Other payment services		339		335		330		1
		1,366		1,324		1,279		3
Credit fees
Commitment and other credit fees		840		846		870		(1	)
Acceptance fees		351		307		284		14
		1,191		1,153		1,154		3
Other		466		472		436		(1	)
	$	4,679	$	4,463	$	4,228		5	%
Banking fee related expenses		678		608		559		12
Total banking	$	4,001	$	3,855	$	3,669		4	%
Wealth management
Mutual funds	$	1,714	$	1,639	$	1,624		5	%
Brokerage fees(1)		895		1,047		1,034		(15	)
Investment management and trust(1)
Investment management and custody		551		453		443		22
Personal and corporate trust		181		179		181		1
		732		632		624		16
Total wealth management	$	3,341	$	3,318	$	3,282		1	%
Underwriting and other advisory		514		598		594		(14	)
Non-trading foreign exchange		622		557		540		12
Trading revenues(1)		1,420		986		1,228		44
Net gain on investment securities		146		380		534		(62	)
Net income from investments in associated corporations		559		407		414		37
Insurance underwriting income, net of claims		686		626		603		10
Other fees and commissions(1)		841		903		732		(7	)
Other(1)		454		490		462		(7	)
Total non-interest income	$	12,584	$	12,120	$	12,058		4	%

(1) Prior year amounts have been reclassified to conform with current period presentation.

C3 Sources of non-interest income

Non-interest income was up $464 million or 4% to $12,584 million. The impact of the Sale of Business last year, net of the benefit from current year acquisitions, reduced non-interest income by 1%. The remaining 5% growth was primarily from higher banking, trading revenues, income from associated corporations and the benefit from Alignment of reporting period. This was partly offset by lower gains on investment securities and real estate.

Banking revenues, net of related expenses, grew $146 million or 4% to $4,001 million largely from strong growth in card revenues both in Canadian Banking and International Banking. Fees from deposit and payment services grew $42 million and Credit fees also increased $38 million, mainly in Canadian Banking. Banking fee related expenses increased $70 million or 12%, due mainly to credit card expenses driven by higher volumes.

Wealth management revenues increased $23 million or 1% due to higher fees from mutual funds and investment management and trust businesses, in part from the acquisitions of Jarislowsky Fraser and MD Financial. Largely offsetting were lower brokerage fees resulting from the impact of the Sale of Business in the prior year.

Underwriting and Other advisory fees declined $84 million or 14% mostly due to lower new issuance activity in the fixed income and equities businesses.

Trading revenues were up $434 million or 44%, due primarily to higher revenues in equities, partly offset by lower revenues in fixed income and commodities businesses.

Insurance underwriting income was up $60 million or 10%, due mainly to the Alignment of reporting period and higher premiums from strong business growth in the Canadian market.

Other income was down $36 million or 7%, due primarily to lower gain on sale of real estate and the impact of the gain on Sale of Business in the previous year.

Outlook

Non-interest income in 2019 is expected to increase due to higher wealth management fees from the 2018 acquisitions, credit card revenues and banking fees. The growth is expected to be partly offset by lower gains on sale of investment securities and real estate.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL PERFORMANCE

T9 Trading revenues

For the fiscal years ($ millions)	2018			2017			2016
By trading products:
Interest rate and credit	$	272		$	474		$	559
Equities		441			(125	)		(20	)
Commodities		231			295			376
Foreign exchange		295			250			262
Other		181			92			51
Total trading revenues	$	1,420		$	986		$	1,228
% of total revenues		4.9	%		3.6	%		4.7	%

Provision for Credit Losses

Provision for credit losses for 2018 is calculated in accordance with IFRS 9, while the provision for credit losses for 2017 was calculated in accordance with IAS 39.

The provision for credit losses was $2,611 million, compared to $2,249 million in 2017. Adjusting for Acquisition-related costs, the provision for credit losses decreased $42 million or 2%.

The provision for credit losses on impaired financial assets increased $106 million relating primarily to retail portfolios in International Banking, mainly in Latin America driven in part by credit mark benefit in the prior year. This was partially offset by lower provisions in Canadian Banking and Global Banking and Markets. Provision for performing loans decreased $148 million due primarily to reversal of the previously recorded provision for the hurricanes in the Caribbean that are no longer required and improvement in credit quality. The provision for credit losses ratio was 48 basis points, an increase of three basis points. Adjusting for Acquisition-related costs, the provision for credit losses ratio was 41 basis points.

Outlook

The quality of the Bank’s credit portfolio is expected to remain strong given its broad global diversification. Provision for credit losses is expected to be higher in 2019 in line with organic growth and the impact of acquisitions. As well, certain improvements in credit quality experienced in 2018 are expected to remain stable and not result in additional recoveries in 2019. Overall, the provision for credit losses ratio in 2019 is expected to be within the Bank’s risk appetite.

T10 Provision for credit losses by business line

	2018
For the fiscal years ($ millions)	Performing (Stage 1 and 2)			Impaired (Stage 3)			Total
Canadian Banking
Retail	$	(13	)	$	759		$	746
Commercial		21			27			48
Total		8			786			794
International Banking
Retail		304			1,363			1,667
Commercial		(24	)		193			169
Total		280			1,556			1,836
Global Banking and Markets		(23	)		(28	)		(51	)
Other		–			–			–
Provision for credit losses on loans, acceptances and off-balance sheet exposures	$	265		$	2,314		$	2,579
International Banking	$	(10	)	$	41		$	31
Global Banking and Markets	$	1		$	–		$	1
Provision for credit losses on debt securities and deposits with banks	$	(9	)	$	41		$	32
Total provision for credit losses	$	256		$	2,355		$	2,611

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T10A Provisions against impaired loans by business line

For the fiscal years ($ millions)	2018(1)			2017			2016
Canadian Banking
Retail	$	759		$	857		$	770
Commercial		27			56			62
	$	786		$	913		$	832
International Banking
Caribbean and Central America	$	321		$	215		$	250
Latin America
Mexico		239			193			224
Peru		349			329			317
Chile		275			145			112
Colombia		358			337			320
Other Latin America		55			75			58
Total Latin America		1,276			1,079			1,031
	$	1,597		$	1,294		$	1,281
Global Banking and Markets
Canada	$	(1	)	$	(6	)	$	43
U.S.		(6	)		(15	)		113
Asia and Europe		(21	)		63			93
	$	(28	)	$	42		$	249
Total	$	2,355		$	2,249		$	2,362

(1) The amounts for 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

T11 Provision for credit losses as a percentage of average net loans and acceptances^(1)(2)(3)

For the fiscal years (%)	2018			2017			2016
Canadian Banking
Retail		0.26	%		0.32	%		0.29	%
Commercial		0.10			0.13			0.15
		0.24			0.29			0.28
International Banking
Retail		2.84			2.09			2.08
Commercial		0.27			0.37			0.52
		1.51			1.21			1.26
Global Banking and Markets		(0.06	)		0.05			0.30
Provisions against impaired loans		0.43			0.45			0.49
Provisions against performing loans		0.05			0.00			0.01
Total		0.48	%		0.45	%		0.50	%

(1) The amounts for 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Includes provision for credit losses on certain financial assets – loans, acceptances, and off-balance sheet exposures.

(3) 2018 includes Day 1 acquisition-related impact in International Banking.

T12 Net write-offs⁽¹⁾ as a percentage of average loans and acceptances⁽²⁾⁽³⁾

For the fiscal years (%)	2018			2017			2016
Canadian Banking
Retail		0.27	%		0.34	%		0.26	%
Commercial		0.09			0.18			0.16
		0.24			0.32			0.24
International Banking
Retail		2.35			2.17			1.90
Commercial		0.23			0.50			0.31
		1.25			1.31			1.06
Global Banking and Markets		0.03			0.11			0.21
Total		0.44	%		0.50	%		0.41	%

(1) Write-offs net of recoveries.

(2) The amounts for 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(3) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acqusition of R-G Premier Bank of Puerto Rico, prior to 2018.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL PERFORMANCE

Non-Interest Expenses

T13 Non-interest expenses and productivity

For the fiscal years ($ millions)	2018			2017			2016			2018 versus 2017
Salaries and employee benefits
Salaries	$	4,454		$	4,220		$	4,071			6	%
Performance-based compensation		1,624			1,599			1,538			2
Share-based payments		192			209			243			(8	)
Other employee benefits		1,185			1,347			1,173			(12	)
	$	7,455		$	7,375		$	7,025			1	%
Premises and technology
Premises
Occupancy		477			444			428			7
Property taxes		98			93			89			5
Other premises costs		437			432			431			1
	$	1,012		$	969		$	948			4	%
Technology	$	1,565		$	1,467		$	1,290			7	%
	$	2,577		$	2,436		$	2,238			6	%
Depreciation and amortization
Depreciation		354			340			325			4
Amortization of intangible assets		494			421			359			17
	$	848		$	761		$	684			11	%
Communications	$	447		$	437		$	442			2	%
Advertising and business development	$	581		$	581		$	617			–	%
Professional	$	881		$	775		$	693			14	%
Business and capital taxes
Business taxes		419			383			356			9
Capital taxes		45			40			47			13
	$	464		$	423		$	403			10	%
Other	$	1,805		$	1,842		$	2,438			(2	)%
Total non-interest expenses	$	15,058		$	14,630		$	14,540			3	%
Productivity ratio		52.3	%		53.9	%		55.2	%

C4 Non-interest expenses
$ millions

C5 Direct and indirect taxes
$ millions

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Non-interest expenses were $15,058 million, an increase of $428 million or 3%. Adjusting for Acquisition-related costs, non-interest expenses increased 2%. The impact of the acquisitions was more than offset by the benefit from the Sale of Business last year.

The remaining increase was due mainly to increased investments in technology, regulatory initiatives and higher business taxes. This was partly offset by the positive impact of foreign currency translation, the impact of the benefits remeasurement and lower share-based payment expenses.

The Bank’s total technology cost, that includes Technology expenses in Table T13 and those included within Salaries, Professional, Amortization of intangible assets and Depreciation, was approximately $3.3 billion, an increase of 9% compared to 2017. This increase reflects the Bank’s continued investment in its digital transformation and technology modernization efforts. The Bank achieved additional savings of approximately $300 million in 2018 arising from cost-reduction initiatives specifically relating to the 2016 restructuring charge, achieving the $750 million 2019 savings commitment more than one year early. The Bank’s strategy to reduce structural costs will continue to focus on productivity gains to meet the Bank’s commitments and thoughtful ongoing technology and regulatory investments.

The productivity ratio was 52.3% compared to 53.9% last year. Adjusting for Acquisition-related costs, the productivity ratio was 51.7%. The benefits remeasurement improved the productivity ratio by 0.7%.

Operating leverage was positive 3.0% on a reported basis. Adjusting for Acquisition-related costs, operating leverage was 3.7%. The benefits remeasurement improved the operating leverage by 1.3%.

Outlook

Non-interest expenses are expected to rise in 2019, due mainly to the impact of acquisitions made in 2018, business growth, and continuing technology and regulatory investments. This growth will be partly offset by further savings from efficiency initiatives.

Income Taxes

The provision for income taxes was $2,382 million, an increase of $349 million. The effective tax rate increased to 21.5% compared to 19.8% due primarily to higher tax-exempt income from client-driven equity trading activities in the prior year partially offset by lower taxes in certain foreign jurisdictions this year.

Outlook

The Bank’s consolidated effective tax rate is expected to be in the range of 21% to 25% in 2019.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL PERFORMANCE

Financial Results Review: 2017 vs. 2016

In order to identify key business trends between 2017 and 2016, commentary and the related financial results are below.

Net income

The Bank had net income of $8,243 million in 2017, up 12% from $7,368 million in 2016. Diluted earnings per share were $6.49 compared to $5.77 in 2016. Return on equity was 14.6% in 2017 compared to 13.8% in 2016.

Adjusting for the impact of the restructuring charge in 2016 of $278 million after tax ($378 million pre-tax), or $0.23 per share⁽¹⁾, net income and diluted earnings per share increased 8%. Return on equity was 14.6% compared to 14.3% in 2016 on an adjusted basis.

Net income was positively impacted by increases in net interest income and banking fees, as well as lower provision for credit losses and a lower effective tax rate. Partially offsetting were lower trading revenues, as well as higher non-interest expenses and the unfavourable impact of foreign currency translation. Lower net gain on investment securities was partly offset by higher gains on sale of real estate. The gain on sale of HollisWealth in 2017, a wealth management business, was lower than the gain on sale of a non-core lease financing business (“gain on sale of businesses”) in 2016 in Canadian Banking.

Net interest income

Net interest income increased $743 million or 5% to $15,035 million in 2017, due primarily to growth in retail and commercial lending in Canadian Banking and International Banking, partly offset by the unfavourable impact of foreign currency translation. The core banking margin improved eight basis points to 2.46%, driven by higher margins in all business lines.

Non-interest income

Non-interest income increased $62 million or 1% to $12,120 million in 2017. Higher banking and credit card revenues were partly offset by lower trading revenues and lower fee and commission revenues due to the sale of HollisWealth business. Lower gain on sale of businesses in Canadian Banking, lower net gain on investment securities and the negative impact of foreign currency translation were partly offset by higher gains on sale of real estate.

Provision for credit losses

Provision for credit losses was $2,249 million, down $163 million from 2016, due primarily to lower provisions related to energy exposures and the impact of the increase in the collective allowance against performing loans of $50 million in 2016. Lower commercial provisions in Canadian Banking and International Banking were partly offset by higher retail provisions. The provision for credit losses ratio improved five basis points to 45 basis points.

Non-interest expenses

Non-interest expenses were $14,630 million in 2017 compared to $14,540 million. Adjusting for the impact of the restructuring charge in 2016, non-interest expenses increased $468 million or 3%, reflecting higher employee costs, including pension and other benefit costs, as well as performance-based compensation and the impact of acquisitions. Increased investments in technology and digital banking also contributed to the year-over-year increase. Partly offsetting were savings from cost-reduction initiatives, the impact from the sale of a wealth management business, and the impact of foreign currency translation.

Income taxes

The provision for income taxes was $2,033 million in line with 2016. The Bank’s effective tax rate for the year was 19.8% compared to 21.6%, due primarily to higher tax-exempt dividends related to client-driven equity trading activities and lower taxes in certain foreign jurisdictions in 2017.

T14 Financial Results Review

For the year ended October 31, 2017 ($ millions)(1)	Canadian Banking		International Banking		Global Banking and Markets		Other(2)			Total
Net interest income	$	7,363	$	6,726	$	1,336	$	(390	)	$	15,035
Non-interest income		5,488		3,688		3,288		(344	)		12,120
Total revenue	$	12,851	$	10,414	$	4,624	$	(734	)	$	27,155
Provision for credit losses		913		1,294		42		–			2,249
Non-interest expenses		6,487		5,664		2,160		319			14,630
Income tax expense		1,387		828		604		(786	)		2,033
Net income	$	4,064	$	2,628	$	1,818		$  (267	)	$	8,243
Net income attributable to non-controlling interests		–		238		–		–			238
Net income attributable to equity holders of the Bank	$	4,064	$	2,390	$	1,818	$	(267	)	$	8,005

(1) Taxable equivalent basis. Refer to Glossary.

(2) Includes all other smaller operating segments, including Group Treasury, and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income, non-interest income and provision for income taxes for the year ended October 31, 2017 – $562 to arrive at the amounts reported in Consolidated Statement of income, and differences in the actual amount of costs incurred and charged to the operating segments.

⁽¹⁾  Refer to Non-GAAP Measures.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

For the year ended October 31, 2016 ($ millions)(1)	Canadian Banking		International Banking		Global Banking and Markets		Other(2)			Total
Net interest income	$	7,024	$	6,359	$	1,293	$	(384	)	$	14,292
Non-interest income		5,164		3,482		3,139		273			12,058
Total revenue	$	12,188	$	9,841	$	4,432	$	(111	)	$	26,350
Provision for credit losses		832		1,281		249		50			2,412
Non-interest expenses		6,324		5,523		2,040		653			14,540
Income tax expense		1,296		707		572		(545	)		2,030
Net income	$	3,736	$	2,330	$	1,571	$	(269	)	$	7,368
Net income attributable to non-controlling interests		–		251		–		–			251
Net income attributable to equity holders of the Bank	$	3,736	$	2,079	$	1,571	$	(269	)	$	7,117

(1) Taxable equivalent basis. Refer to Glossary.

(2) Includes all other smaller operating segments, including Group Treasury, and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income, non-interest income and provision for income taxes for the year ended October 31, 2016 – $299 to arrive at the amounts reported in Consolidated Statement of income, and differences in the actual amount of costs incurred and charged to the operating segments.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL PERFORMANCE

Fourth Quarter Review

T15 Fourth quarter financial results

	For the three months ended
($ millions)	October 31 2018(1)		July 31 2018(1)			October 31 2017
Reported results
Net interest income	$	4,220	$	4,085		$	3,831
Non-interest income		3,228		3,096			2,981
Total revenue	$	7,448	$	7,181		$	6,812
Provision for credit losses		590		943			536
Non-interest expenses		4,064		3,770			3,668
Income tax expense		523		529			538
Net income	$	2,271	$	1,939		$	2,070
Net income attributable to non-controlling interests in subsidiaries	$	92	$	(44	)	$	55
Net income attributable to equity holders of the Bank	$	2,179	$	1,983		$	2,015
Preferred shareholders and other equity instrument holders		65		27			29
Common shareholders	$	2,114	$	1,956		$	1,986

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

T15A Fourth quarter financial results

	For the three months ended
($ millions)	October 31 2018(1)		July 31 2018(1)		October 31 2017
Adjusted results
Net interest income	$	4,220	$	4,085	$	3,831
Non-interest income		3,228		3,096		2,981
Total revenue	$	7,448	$	7,181	$	6,812
Provision for credit losses		590		539		536
Non-interest expenses		3,962		3,721		3,649
Income tax expense		551		662		543
Net income	$	2,345	$	2,259	$	2,084
Net income attributable to non-controlling interests in subsidiaries	$	101	$	69	$	55
Net income attributable to equity holders of the Bank	$	2,244	$	2,190	$	2,029
Preferred shareholders and other equity instrument holders		65		27		29
Common shareholders	$	2,179	$	2,163	$	2,000

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

Transactions impacting results

Acquisition-related costs:

During the fourth quarter, the Bank completed the acquisition of MD Financial. Acquisition-related costs for MD Financial and previous acquisitions of $74 million ($102 million pre-tax), were incurred.

In the third quarter, the Bank completed the acquisitions of Jarislowsky Fraser, BBVA Chile, and the retail operations of Citibank Colombia. Acquisition-related costs of $320 million ($453 million pre-tax) were recorded in the period. These mainly related to the Day 1 provision for credit losses on acquired performing financial instruments as required under IFRS 9 (refer to Non-GAAP Measures for further details).

Net income

Q4 2018 vs Q4 2017

Net income was $2,271 million, an increase of $201 million or 10%. Adjusting for Acquisition-related costs, net income was higher by $261 million or 13%. Asset growth and an improved net interest margin, as well as higher non-interest income and the impact of acquisitions were partly offset by a higher provision for credit losses and increased non-interest expenses.

Q4 2018 vs Q3 2018

Net income was $2,271 million, an increase of $332 million or 17%. Adjusting for Acquisition-related costs, net income was higher by $86 million or 4%. The increase was due primarily to the impact of acquisitions.

Net interest income

Q4 2018 vs Q4 2017

Net interest income was $4,220 million, an increase of $389 million or 10%. Acquisitions contributed to 6% of the increase. The remaining increase was from broad-based lending growth across retail, commercial and corporate segments across our three business lines.

The core banking margin improved three basis points to 2.47%. The change in business mix from the impact of International Banking acquisitions and higher margins in Canadian Banking was partly offset by lower margin in Global Banking and Markets and a lower contribution from asset/liability management activities.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Q4 2018 vs Q3 2018

Net interest income was $4,220 million, an increase of $135 million or 3%. This increase was due primarily to the impact of acquisitions, partially offset by lower contributions from asset/liability management activities, as well as Global Banking and Markets.

The core banking margin of 2.47% was up one basis point. The positive change in asset mix driven by acquisitions and lower volumes of treasury assets were partially offset by lower margins in Global Banking and Markets and Canadian Banking.

Non-interest income

Q4 2018 vs Q4 2017

Non-interest income grew $247 million or 8% to $3,228 million. The impact of acquisitions, net of the gain on sale of HollisWealth (“Sale of Business”) last year, contributed 2% to the growth. The remaining growth was due mainly to higher banking and credit card fees, trading revenues and income from associated corporations including the alignment of the reporting period with the Bank (“Alignment of reporting period”). Partly offsetting were lower gains on the sale of real estate and investment securities.

Q4 2018 vs Q3 2018

Non-interest income increased $132 million or 4%. Acquisitions accounted for approximately 3% of the growth. The remaining growth was primarily due to higher banking and credit card fees, trading revenues and income from associated corporations mostly from the Alignment of reporting period. These were partly offset by lower securities gains, wealth management fees, and the negative impact of foreign currency translation.

Provision for credit losses

Q4 2018 vs Q4 2017

The provision for credit losses was $590 million, an increase of $54 million or 10%, due to higher retail provision in line with acquisition driven growth, partly offset by a decrease in commercial provision.

Provision on impaired financial assets (including loans and debt securities) was $637 million, up $101 million due primarily to higher retail provisions in International Banking. Higher provision relating to Barbados debt restructuring was offset by recoveries in International Banking and Global Banking and Markets. The provision for credit losses ratio on impaired loans remained unchanged at 42 basis points. Reduction in provision for performing loans of $47 million was due primarily to reversal of the provision previously recorded for the hurricanes in the Caribbean that is no longer required, and improvement in credit quality. The provision for credit losses ratio decreased three basis points to 39 basis points.

Q4 2018 vs Q3 2018

The provision for credit losses was $590 million, a decrease of $353 million. Adjusting for Acquisition-related costs, the provision for credit losses increased $51 million or 9%, due to higher retail provision in line with acquisition driven growth, partly offset by decrease in commercial provision.

Provision on impaired financial assets (including loans and debt securities) was up $637 million, an increase of $78 million or 14%, due primarily to higher retail provision in International Banking, which included the full quarter impact of acquisitions. Higher provision relating to Barbados debt restructuring was offset by recoveries in International Banking and Global Banking and Markets. The provision for credit losses ratio on impaired loans was 42 basis points, an increase of one basis point. Reduction in provision for performing loans of $27 million was due primarily to reversal of the provision previously recorded for the hurricanes in the Caribbean that is no longer required, and improvement in credit quality. The provision for credit losses ratio decreased one basis point to 39 basis points.

Non-interest expenses

Q4 2018 vs Q4 2017

Non-interest expenses were $4,064 million, up $396 million or 11%. Adjusting for Acquisition-related costs, non-interest expenses were up $311 million or 9%, of which 6% related to the impact of acquisitions. The remaining 3% increase was due primarily to increased investments in technology and regulatory initiatives, other business growth-related expenses, and the negative impact of foreign currency translation. Partly offsetting were the impact of further savings from cost-reduction initiatives.

The productivity ratio was 54.6% compared to 53.8%. Adjusting for Acquisition-related costs, the productivity ratio was 53.2% compared to 53.6%.

Q4 2018 vs Q3 2018

Non-interest expenses were up $294 million or 8%. Adjusting for Acquisition-related costs, non-interest expenses were up $240 million or 7%, of which 5% related to the impact of acquisitions. The remaining 2% increase was due largely to higher advertising and business development and other expenses supporting the business, partly offset by the positive impact of foreign currency translation.

The productivity ratio was 54.6% compared to 52.5%. Adjusting for Acquisition-related costs, the productivity ratio was 53.2% compared to 51.8%.

Income taxes

Q4 2018 vs Q4 2017

The effective tax rate was 18.7%, or 19.0% adjusting for Acquisition-related costs, this quarter, down from 20.6% due primarily to lower taxes in certain foreign jurisdictions in 2018. The prior year benefitted from higher tax-exempt dividends related to client-driven equity trading activities.

Q4 2018 vs Q3 2018

The effective tax rate decreased to 18.7%, or 19.0% adjusting for Acquisition-related costs, from 21.5%, due primarily to lower taxes in certain foreign jurisdictions.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL PERFORMANCE

Trending Analysis

T16 Quarterly financial highlights

	For the three months ended
($ millions)	October 31 2018(1)		July 31 2018(1)		April 30 2018(1)		January 31 2018(1)		October 31 2017		July 31 2017		April 30 2017		January 31 2017
Reported results
Net interest income	$	4,220	$	4,085	$	3,950	$	3,936	$	3,831	$	3,833	$	3,728	$	3,643
Non-interest income		3,228		3,096		3,108		3,152		2,981		3,061		2,853		3,225
Total revenue	$	7,448	$	7,181	$	7,058	$	7,088	$	6,812	$	6,894	$	6,581	$	6,868
Provision for credit losses		590		943		534		544		536		573		587		553
Non-interest expenses		4,064		3,770		3,726		3,498		3,668		3,672		3,601		3,689
Income tax expense		523		529		621		709		538		546		332		617
Net income	$	2,271	$	1,939	$	2,177	$	2,337	$	2,070	$	2,103	$	2,061	$	2,009
Basic earnings per share ($)		1.72		1.60		1.70		1.88		1.66		1.68		1.63		1.58
Diluted earnings per share ($)		1.71		1.55		1.70		1.86		1.64		1.66		1.62		1.57
Core banking margin (%)(2)		2.47		2.46		2.47		2.46		2.44		2.46		2.54		2.40
Effective tax rate (%)		18.7		21.5		22.2		23.3		20.6		20.6		13.9		23.5
Adjusted results
Adjusted net income	$	2,345	$	2,259	$	2,190	$	2,350	$	2,084	$	2,117	$	2,075	$	2,027
Adjusted diluted earnings per share	$	1.77	$	1.76	$	1.71	$	1.87	$	1.65	$	1.68	$	1.63	$	1.58

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Refer to page 18 for a discussion of non-GAAP measures.

Net income

The Bank recorded strong net income over the past eight quarters. The current quarter’s earnings were reduced by Acquisition-related costs of $74 million ($102 million pre-tax). The prior quarter’s earnings were reduced by Acquisition-related costs $320 million ($453 million pre-tax).

The first quarter of 2018 included an accounting benefit of $150 million ($203 million pre-tax) driven by remeasurement of an employee benefit liability from certain plan modifications.

Net interest income

Net interest income increased over the period, driven by steady growth in retail and commercial loans in both Canadian and International Banking. Net interest margin has remained relatively stable over the period. The margin was 2.47% this quarter, up one basis point from the prior quarter. The second quarter of 2017 was higher than other periods due primarily to business mix changes and Central Bank rate changes in International Banking, as well as higher contributions from asset/liability management activities.

Non-interest income

Non-interest income was higher in the current quarter due primarily to the impact of acquisitions, higher banking and credit card fees, trading revenues and income from associated corporations mostly from the Alignment of reporting period in Thailand. The second quarter of 2018 included an additional month of income from Chile and the Canadian insurance business from the Alignment of reporting period with the Bank. Net gain on investment securities declined this quarter compared to last quarter. Gains on sale of real estate continued at a lower level this quarter compared to 2017. The Sale of Business in the fourth quarter of 2017 resulted in a gain that quarter and also contributed to lower wealth management fees.

Provision for credit losses

Provision for credit losses for 2018 is calculated in accordance with IFRS 9, while the provision for credit losses for 2017 was calculated in accordance with IAS 39. Prior period amounts have not been restated and therefore, the provision for credit losses and related ratios are not directly comparable.

Provision for credit losses has remained stable over the period. Asset quality has remained strong despite increased lending activity.

The provision for credit losses was $590 million this quarter, of which $637 million related to provision on impaired financial assets. In the prior quarter, Acquisition-related costs of $404 million (refer Non-GAAP Measures) were recognized in the provision for credit losses.

Non-interest expenses

Non-interest expenses increased this quarter due to the current year’s acquisitions, as well as the impact of Acquisition-related costs. Non-interest expenses have generally trended upwards over the period, mostly to support business growth and the Bank’s investments in acquisitions, strategic initiatives and in technology, partly offset by structural cost-reduction initiatives. There have also been increases in performance-based compensation. The first quarter of 2018 included a benefits remeasurement of $203 million, reducing that quarter’s expenses.

Income taxes

The effective tax rate was 18.7% this quarter and averaged 20.5% over the period, with a range of 13.9% to 23.5%. In the second quarter of 2017, the tax rate was 13.9% reflecting a higher amount of tax-exempt dividends related to client-driven equity trading activities. Effective tax rates in other quarters were impacted by different levels of income earned in foreign jurisdictions, as well as the variability of tax-exempt dividend income.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

BUSINESS LINE OVERVIEW

Business line results are presented on a taxable equivalent basis, adjusting for the following:

• The Bank analyzes revenue on a taxable equivalent basis (TEB) for business lines. This methodology grosses up tax-exempt income earned on certain securities reported in either net interest income or non-interest income to an equivalent before tax basis. A corresponding increase is made to the provision for income taxes; hence, there is no impact on net income. Management believes that this basis for measurement provides a uniform comparability of net interest income and non-interest income arising from both taxable and non-taxable sources and facilitates a consistent basis of measurement. While other banks also use TEB, their methodology may not be comparable to the Bank’s methodology. A segment’s revenue and provision for income taxes are grossed up by the taxable equivalent amount. The elimination of the TEB gross up is recorded in the Other segment.

• For business line performance assessment and reporting, net income from associated corporations, which is an after-tax number, is adjusted to normalize for income taxes. The tax normalization adjustment grosses up the amount of net income from associated corporations and normalizes the effective tax rate in the business lines to better present the contribution of the associated corporations to the business line results.

• International Banking business segment results are analyzed on a constant dollar basis. Under constant dollar basis, prior period amounts are recalculated using current period average foreign currency rates eliminating the impact of foreign currency translation. The Bank believes that reporting in constant dollar is useful for readers in assessing ongoing business performance.

Below are the results of the Bank’s three business operating segments for 2018.

CANADIAN BANKING

Canadian Banking reported net income attributable to equity holders of $4,364 million in 2018, up 7% from last year. Adjusting for Acquisition-related costs, net income was $4,416 million, up 8%. This reflects the contributions from acquisitions in the current year, partly offset by last year’s gain on sale of HollisWealth (“Sale of Business”) as well as lower gains on sale of real estate.

Solid growth in assets and deposits, along with improving margin driven primarily from the Bank of Canada interest rate increase, higher non-interest income and lower provision for credit losses contributed to strong growth in 2018. This was partly offset by higher non-interest expenses. Return on equity was 22.7%, compared with 22.8% last year. Adjusting for Acquisition-related costs, the return on equity was 23.0%.

INTERNATIONAL BANKING

International Banking reported net income attributable to equity holders of $2,573 million, up $183 million or 8% from last year. Adjusting for Acquisition-related costs, net income attributable to equity holders increased by $395 million or 16% to $2,819 million. Strong results in Latin America, including benefits from acquisitions, and Asia, complemented solid earnings in the Caribbean. The impact of the acquisitions and the benefit of one additional month of earnings, from the Alignment of the reporting period in Chile and Thailand, contributed 3% to the adjusted earnings growth. The remaining increase was driven by strong loan growth in Latin America, higher non-interest income, and lower taxes. This was partly offset by higher provision for credit losses and non-interest expenses, a lower net interest margin and the negative impact of foreign currency translation. Return on equity was 14.4% compared to 14.7% last year. Adjusting for Acquisition-related costs, the return on equity was 15.8%.

GLOBAL BANKING AND MARKETS

Global Banking and Markets reported net income attributable to equity holders of $1,758 million, a decrease of $60 million or 3% from last year. Lower income from capital markets businesses and higher expenses were partly offset by stronger results in corporate lending, as well as lower provision for credit losses. Return on equity was 16.0%, in line with the prior year.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    BUSINESS LINE OVERVIEW

KEY PERFORMANCE INDICATORS FOR ALL BUSINESS LINES

Management uses a number of key metrics to monitor business line performance:
•  Net income	•  Return on equity	•  Productivity ratio	•  Provision for credit losses ratio

T17 Financial performance

For the year ended October 31, 2018 ($millions)	Canadian Banking			International Banking			Global Banking and Markets			Other(1)			Total
Net interest income(2)	$	7,898		$	7,322		$	1,454		$	(483	)	$	16,191
Non-interest income(2)		5,452			4,111			3,074			(53	)		12,584
Total revenue(2)		13,350			11,433			4,528			(536	)		28,775
Provision for credit losses		794			1,867			(50	)		–			2,611
Non-interest expenses		6,654			6,111			2,233			60			15,058
Provision for income taxes(2)		1,538			706			587			(449	)		2,382
Net income	$	4,364		$	2,749		$	1,758		$	(147	)	$	8,724
Net income attributable to non-controlling interests in subsidiaries		–			176			–			–			176
Net income attributable to equity holders of the Bank	$	4,364		$	2,573		$	1,758		$	(147	)	$	8,548
Return on equity(%)(3)		22.7	%		14.4	%		16.0	%		–	%		14.5	%
Total average assets ($ billions)	$	342		$	168		$	321		$	115		$	946
Total average liabilities ($ billions)	$	254		$	131		$	265		$	232		$	882

(1) The Other category represents smaller operating segments, including Group Treasury, and other corporate adjustments that are not allocated to an operating segment. Corporate adjustments include the net residual in matched maturity transfer pricing, the elimination of the tax-exempt income gross-up reported in net interest income, non-interest income and provision for income taxes, and differences in the actual amount of costs incurred and charged to the operating segments.

(2) Taxable equivalent basis. Refer to Glossary.

(3) Refer to Glossary.

For the year ended October 31, 2017 ($millions)	Canadian Banking			International Banking			Global Banking and Markets			Other(1)			Total
Net interest income(2)	$	7,363		$	6,726		$	1,336		$	(390	)	$	15,035
Non-interest income(2)		5,488			3,688			3,288			(344	)		12,120
Total revenue(2)		12,851			10,414			4,624			(734	)		27,155
Provision for credit losses		913			1,294			42			–			2,249
Non-interest expenses		6,487			5,664			2,160			319			14,630
Provision for income taxes(2)		1,387			828			604			(786	)		2,033
Net income	$	4,064		$	2,628		$	1,818		$	(267	)	$	8,243
Net income attributable to non-controlling interests in subsidiaries		–			238			–			–			238
Net income attributable to equity holders of the Bank	$	4,064		$	2,390		$	1,818		$	(267	)	$	8,005
Return on equity(%)(3)		22.8	%		14.7	%		16.0	%		–	%		14.6	%
Total average assets ($ billions)	$	323		$	148		$	336		$	106		$	913
Total average liabilities ($ billions)	$	244		$	115		$	267		$	228		$	854

(1) The Other category represents smaller operating segments, including Group Treasury, and other corporate adjustments that are not allocated to an operating segment. Corporate adjustments include the net residual in matched maturity transfer pricing, the elimination of the tax-exempt income gross-up reported in net interest income, non-interest income and provision for income taxes, and differences in the actual amount of costs incurred and charged to the operating segments.

(2) Taxable equivalent basis. Refer to Glossary.

(3) Refer to Glossary.

For the year ended October 31, 2016 ($millions)	Canadian Banking			International Banking			Global Banking and Markets			Other(1)			Total
Net interest income(2)	$	7,024		$	6,359		$	1,293		$	(384	)	$	14,292
Non-interest income(2)		5,164			3,482			3,139			273			12,058
Total revenue(2)		12,188			9,841			4,432			(111	)		26,350
Provision for credit losses		832			1,281			249			50			2,412
Non-interest expenses		6,324			5,523			2,040			653			14,540
Provision for income taxes(2)		1,296			707			572			(545	)		2,030
Net income	$	3,736		$	2,330		$	1,571		$	(269	)	$	7,368
Net income attributable to non-controlling interests in subsidiaries		–			251			–			–			251
Net income attributable to equity holders of the Bank	$	3,736		$	2,079		$	1,571		$	(269	)	$	7,117
Return on equity(%)(3)		22.0	%		12.8	%		12.6	%		–	%		13.8	%
Total average assets ($ billions)	$	309		$	143		$	351		$	111		$	914
Total average liabilities ($ billions)	$	232		$	109		$	270		$	247		$	858

(1) The Other category represents smaller operating segments, including Group Treasury, and other corporate adjustments that are not allocated to an operating segment. Corporate adjustments include the net residual in matched maturity transfer pricing, the elimination of the tax-exempt income gross-up reported in net interest income, non-interest income and provision for income taxes, and differences in the actual amount of costs incurred and charged to the operating segments.

(2) Taxable equivalent basis. Refer to Glossary.

(3) Refer to Glossary.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Canadian Banking

2018 Achievements

•  Customer Focus - Deliver an excellent customer experience across our businesses and channels.

•   Achieved the highest customer satisfaction among mid-sized banks at Tangerine, for the seventh straight year in the 2018 J.D. Power Canadian Retail Banking Customer Satisfaction Study.

•   Expanded our strategic partnership with Maple Leaf Sports and Entertainment (MLSE), including the renaming of one of North America’s top-ranked sports and entertainment venues to the Scotiabank Arena; further strengthening our relationship as the official sponsor of the Toronto Maple Leafs, leveraging Tangerine to become the exclusive bank of the Toronto Raptors, and forming a key philanthropic partnership with the MLSE Foundation.

•   Continued to see customer satisfaction measures, as determined by the Net Promoter Score (NPS), improve across all major channels – branches, contact centre, and digital – driven by investments and enhancements across all of our key customer journeys.

•   Solid customer growth and progressed toward achieving our goal of adding one million new primary customers over the medium term.

•   Introduced new branch advisor role specializing in investment advice and expanded mobile sales force, which has built strong momentum and focus throughout the year.

•  Structural Cost Transformation - Reduce structural costs to build the capacity to invest in our businesses and technology.

•   Exceeded the 2018 structural cost reduction target and progressed well towards our productivity ratio goal of <49% over the medium term.

•  Digital Transformation - Leverage digital as the foundation of all our activities to improve our operations, enhance the client experience, and drive digital adoption.

•   Mobile has surpassed Online Banking, becoming our leading channel for financial transactions.

•   iTrade ranked highest amongst Big five banks in the Globe and Mail annual ranking of online brokerage, as a result of our enhanced online brokerage client experience across onboarding and servicing.

•  Business Mix Alignment - Optimize our business mix by growing higher margin assets, building core deposits, and earning higher fee income.

•   Acquired Jarislowsky Fraser and MD Financial – increasing our institutional and private client focus, and positioning us as the largest private investment counselor in Canada.

•   Earned five Thomas Reuters Lipper Fund Awards for Dynamic Funds and ScotiaFunds offerings, recognizing strong and consistent risk-adjusted performance relative to peers.

•   Launched four strategic ETF offerings to help better serve our diverse client base.

•   Momentum Visa Infinite ranked #1 cashback credit card, Scene Student Visa ranked #1 student credit card, and Gold American Express ranked #2 for both the travel and rewards credit card categories by MoneySense magazine.

•   Launched Scotia Passport Visa Infinite, a premium travel credit card that offers no currency conversion fees – a first amongst major financial institutions.

•  Leadership and Employee Engagement - Grow and diversify talent and engage employees through a performance-oriented culture.

•   Ranked one of the world’s top 25 workplaces by Great Place to Work, a Fortune partner.

Business Profile

Canadian Banking provides a full suite of financial advice and banking solutions, supported by an excellent customer experience, to over 10 million Retail, Small Business, Commercial Banking, and Wealth Management customers. It serves these customers through its network of 955 branches and more than 3,644 automated banking machines (ABMs), as well as internet, mobile and telephone banking and specialized sales teams. Canadian Banking also provides an alternative self-directed banking solution to over two million Tangerine Bank customers. Canadian Banking is comprised of the following areas:

• Retail and Small Business Banking provides financial advice and solutions and day-to-day banking products, including debit cards, chequing accounts, credit cards, investments, mortgages, loans and related creditor insurance products to individuals and small businesses. Tangerine Bank provides everyday banking products, including chequing and saving accounts, credit cards, investments, mortgages and loans to self-directed customers.

• Commercial Banking delivers advice and a full suite of lending, deposit, cash management and trade finance solutions to medium and large businesses, including automotive dealers and their customers to whom we provide retail automotive financing solutions.

• Wealth Management provides a suite of investment and wealth management advice, services, products and solutions to customers, as well as advisors. The asset management business is focused on developing investment solutions for both retail and institutional investors. The customer facing wealth businesses, including private customer, online brokerage, full-service brokerage, pensions, and institutional customer services, are focused on providing a full suite of wealth management solutions to our customers.

Strategy

Canadian Banking continues to execute on a long-term strategy to deliver a best-in-class customer experience, grow its primary banking relationships, and outperform competitors in earnings growth through customer experience, business mix alignment, operational improvements and digital transformation.

2019 Priorities

• Customer focus: Deliver a leading customer experience and deepen relationships with customers across our businesses and channels.

• Productivity: Reduce structural costs while driving tangible revenue initiatives in order to build the capacity to invest in our businesses and technology.

• Digital transformation: Leverage digital as the foundation of all our activities to improve our operations, enhance the client experience, and drive digital adoption.

• Business mix alignment: Optimize our business mix by growing higher margin assets, building core deposits, and expanding fee based income.

• Leadership and employee engagement: Grow and diversify talent and engage employees through a performance-oriented culture.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    CANADIAN BANKING

T18 Canadian Banking financial performance

($ millions)	2018(1)			2017			2016
Reported results
Net interest income(2)	$	7,898		$	7,363		$	7,024
Non-interest income(2)(3)		5,452			5,488			5,164
Total revenue(2)		13,350			12,851			12,188
Provision for credit losses		794			913			832
Non-interest expenses		6,654			6,487			6,324
Income tax expense		1,538			1,387			1,296
Net income	$	4,364		$	4,064		$	3,736
Net income attributable to non-controlling interests in subsidiaries		–			–			–
Net income attributable to equity holders of the Bank	$	4,364		$	4,064		$	3,736
Key ratios and other financial data
Return on equity(4)		22.7	%		22.8	%		22.0	%
Productivity(2)		49.8	%		50.5	%		51.9	%
Net interest margin(5)		2.44	%		2.40	%		2.38	%
Provision for credit losses - performing (Stages 1 and 2)	$	8			n/a			n/a
Provision for credit losses - impaired (Stage 3)	$	786			n/a			n/a
Provision for credit losses as a percentage of average net loans and acceptances		0.24	%		0.29	%		0.28	%
Provision for credit losses on impaired loans as a percentage of average net loans and acceptances		0.24	%		0.29	%		0.28	%
Net write-offs as a percentage of average net loans and acceptances		0.24	%		0.32	%		0.24	%
Selected Consolidated Statement of Financial Position data (average balances)
Earning assets	$	334,103		$	315,916		$	302,648
Total assets		341,825			322,712			309,232
Deposits		240,855			233,260			224,006
Total liabilities		253,591			243,748			232,498
Other ($ billions)
Assets under administration	$	355		$	315		$	318
Assets under management	$	225		$	155		$	145

(1)  The amounts for the year ended October 31, 2018, have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2)  Taxable equivalent basis (TEB).

(3)  Includes net income from investments in associated corporations of $93 (2017 – $66; 2016 – $78).

(4)  Refer to Glossary.

(5)  Net interest income (TEB) as % of average earning assets excluding bankers acceptances.

T18A Adjusted Canadian Banking financial performance⁽¹⁾

($ millions)	2018		2017		2016
Adjusted results
Net interest income	$	7,898	$	7,363	$	7,024
Non-interest income		5,452		5,488		5,164
Total revenue		13,350		12,851		12,188
Provision for credit losses		794		913		832
Non-interest expenses		6,583		6,452		6,270
Income before taxes		5,973		5,486		5,086
Income tax expense		1,557		1,396		1,311
Net income	$	4,416	$	4,090	$	3,775
Net income attributable to non-controlling interests in subsidiaries (NCI)		–		–		–
Net income attributable to equity holders	$	4,416	$	4,090	$	3,775

(1)  Refer to Non-GAAP Measures for the reconciliation of Reported and Adjusted results.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Financial Performance

Net income

Canadian Banking reported net income attributable to equity holders of $4,364 million in 2018, an increase of $300 million or 7%. Adjusting for Acquisition-related costs, net income was $4,416 million, an increase of $326 million or 8%. Lower gains on sale of real estate and impact from last year’s gains on Sale of Business were partially offset by the current year acquisitions and the Alignment of reporting period, which combined reduced net income growth by 4%.

Strong growth in assets and continued momentum in deposits, along with margin expansion, focus on cost management and lower provisions for credit losses contributed to solid growth in 2018. Return on equity was 22.7%, in line with prior year.

Average assets and liabilities

Average assets grew $19 billion or 6% to $342 billion. The growth included $10 billion or 5% in residential mortgages, $6 billion or 14% in business loans and acceptances, and $3 billion or 4% in personal loans.

Average liabilities increased $10 billion or 4%, including growth of $2 billion or 2% in retail chequing and savings deposits. As well, there was growth of $4 billion or 5% in non-personal deposits.

Assets under management (AUM) and assets under administration (AUA)

AUM of $225 billion increased $70 billion or 45% primarily due to the impact of acquisitions. AUA of $355 billion increased $40 billion or 12% primarily due to the impact of acquisitions.

Revenues

Net interest income increased $535 million or 7% to $7,898 million. The increase was driven by a four basis point increase in the margin to 2.44%, strong growth in assets and continued momentum in deposits. The increase in margin was driven by retail deposits and the impact of interest rate increases by the Bank of Canada.

Non-interest income decreased $36 million or 1%. The impact of last year’s Sale of Business offset by the contributions from current year acquisitions reduced non-interest income by 4%. Lower gains on sale of real estate were only partly offset by the benefit of the Alignment of reporting period, which reduced non-interest income by a further 3%. The remaining increase was driven by strong growth in credit cards, retail and commercial banking, insurance and wealth management businesses.

Retail & Small Business Banking

Total retail and small business banking revenues were $7,748 million, up $400 million or 5%. Net interest income grew $340 million or 6%, primarily driven by an improvement in the margin and solid growth in residential mortgages and continued momentum in deposit growth. Non-interest income increased $60 million or 3%, primarily due to growth in credit card revenues, insurance revenues and the benefit of the Alignment of reporting period, which was partly offset by lower gains on sale of real estate.

Commercial Banking

Total commercial banking revenues increased $183 million or 8% to $2,358 million. Net interest income rose $183 million or 11% due mainly to growth in loans, business operating accounts and GICs, and an improvement in the margin. Non-interest income remained flat due to higher card and acceptance fees, offset by lower securities gains.

Wealth Management

Total wealth management revenues were $3,244 million, a decrease of $84 million or 3% primarily due to the impact of the Sale of Business. Net interest income rose $13 million or 3% mainly due to growth in deposits and loans and improvements in margin. Non-interest income was down $97 million or 3%, due to the gain on Sale of Business and lower revenue as a result. This is offset by the impact of acquisitions of Jarislowsky Fraser and MD Financial, higher fee based brokerage and higher mutual funds revenues.

Non-interest expenses

Non-interest expenses were $6,654 million, up $167 million or 3%. Adjusting for Acquisition-related costs, non-interest expenses were up 2%. The impact of the last year’s Sale of Business offset by the current year acquisitions, increased non-interest expenses by a further 3%. This increase was due primarily to higher investments in technology and regulatory initiatives, partly offset by benefits realized from cost-reduction initiatives. Operating leverage was a positive 1.3% or 1.9% adjusting for Acquisition-related costs.

C6   Total revenue

C7   Total revenue by sub-segment

$ millions

C8   Average loans and acceptances

$ billions

C9   Canadian wealth management asset growth

$ billions, as at October 31

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    CANADIAN BANKING

Provision for credit losses

Provision for credit losses for 2018 is calculated in accordance with IFRS 9, while the provision for credit losses for 2017 was calculated in accordance with IAS 39.

Provision for credit losses was $794 million, compared to $913 million. The provision for credit losses ratio improved to 24 basis points, a decrease of five basis points.

Provision for income taxes

The effective tax rate increased to 26.1%, compared to 25.4% primarily from lower gains on sale of real estate.

Outlook

Canadian Banking’s growth in 2019 is expected to be driven in part by a favourable economic outlook and rising interest rate environment in Canada. Assets are projected to grow across retail and business banking products. Deposits are also expected to grow across retail chequing and savings, and business banking. Margins are expected to strengthen during 2019. Non-interest revenues are expected to grow underpinned by our wealth acquisitions. Integrating MD Financial and Jarislowsky Fraser and driving operational improvements are key priorities for 2019.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

International Banking

2018 Achievements

•  Customer Focus

•   Continued solid primary customer growth in retail and commercial. Retail customer growth maintains its steady trend towards our target of adding one million new primary customers.

•   Customer Pulse, our proprietary customer experience system, implemented across all channels in Pacific Alliance countries and more recently in Jamaica, Trinidad & Tobago and Dominican Republic. Improved customer satisfaction scores across all channels in all countries.

•   Recognized for the second year in a row as the Latin American Bank of the Year by Retail Banker International.

•  Leadership

•   Significant progress in women in leadership, achieving targets for women in Director pool and strong results at the Vice President level.

•   Continued to strengthen our leadership team. Notable hires include new Country Head in Colombia and the new Global Head of Consumer Analytics.

•  Structural Cost Transformation

•   Exceeded the 2018 structural cost reduction target and progressed well towards our adjusted productivity ratio goal of <51% by 2020 to 2022.

•   Delivered positive operating leverage.

•  Digital Transformation

•   Fully operationalized our digital factories in Mexico, Peru, Chile and Colombia, rolling out innovative digital and mobile products, services and applications that meet the needs of our customers.

•   Achieved good progress on digital targets, with solid uplift in digital sales, digital adoption and transaction migration.

•   Continued attracting top digital talent with innovation expertise to the Bank.

•  Business Mix Alignment

•   Acquired attractive assets with high strategic value in Chile and Colombia to grow our franchise and strengthen our long-term competitive position.

•  Strong Risk Culture

•   Continued to strengthen risk management and collections capabilities across our footprint.

Business Profile

International Banking has a strong and diverse franchise with more than 15 million Retail, Corporate and Commercial customers. We have almost 58,000 employees and our customers are served by a network of more than 1,800 branches as well as business support and customer contact centres.

International Banking continues to be an attractive growth opportunity for the Bank with a geographical footprint focused on the Pacific Alliance countries of Mexico, Colombia, Peru and Chile. The Pacific Alliance countries have a combined GDP that is more than double the size of Canada’s, a young population, rising middle class, growing economies and a sound banking environment.

Our franchise is supported by a solid, mature and profitable business in the Caribbean and Central America that we plan to continue to make successful by optimizing operations, prudently reducing costs while delivering increased customer profitability.

Strategy

International Banking continues to execute its strategy that is aligned with the all-Bank strategic priorities of: customer focus, leadership, structural cost transformation, digital transformation, business mix alignment and strong risk culture. Underpinning this strategy is focus on growth in the Pacific Alliance and optimizing operations in Central America and the Caribbean.

2019 Priorities

To build on our success and capitalize on opportunities in our markets, we are focused on executing the following strategic initiatives:

• Customer focus: Leverage our investments in our new customer experience system to keep strengthening our service oriented culture.

• Leadership: Continue attracting and developing exceptional and diverse leadership talent to keep pace with the changing needs of an increasingly competitive global market.

• Structural cost transformation: Prudently continue to deliver cost reductions.

• Digital transformation: Continue accelerating our digital transformation to gain scale and deliver business impact.

• Business mix alignment: Continue achieving profitable growth by increasing core deposits, growing our insurance revenues and integrating strategic acquisitions into our operations.

• Strong risk culture: Improving our risk management practices by strengthening our leadership team and continued investment in technology.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    INTERNATIONAL BANKING

T19 International Banking financial performance

($ millions)	2018(1)			2017			2016
Reported results
Net interest income(2)	$	7,322		$	6,726		$	6,359
Non-interest income(2)(3)(4)(5)		4,111			3,688			3,482
Total revenue(2)		11,433			10,414			9,841
Provision for credit losses(6)		1,867			1,294			1,281
Non-interest expenses		6,111			5,664			5,523
Income tax expense(2)		706			828			707
Net income	$	2,749		$	2,628		$	2,330
Net income attributable to non-controlling interests in subsidiaries		176			238			251
Net income attributable to equity holders of the Bank	$	2,573		$	2,390		$	2,079
Key ratios and other financial data
Return on equity(7)		14.4	%		14.7	%		12.8	%
Productivity(2)		53.5	%		54.4	%		56.1	%
Net interest margin(8)		4.65	%		4.79	%		4.71	%
Provision for credit losses – performing (Stages 1 and 2)	$	270			n/a			n/a
Provision for credit losses – impaired (Stage 3)	$	1,597			n/a			n/a
Provision for credit losses as a percentage of average net loans and acceptances(9)		1.51	%		1.21	%		1.26	%
Provision for credit losses on impaired loans as a percentage of average net loans and acceptances		1.28	%		1.21	%		1.26	%
Net write-offs as a percentage of average net loans and acceptances		1.25	%		1.31	%		1.06	%
Selected Consolidated Statement of Financial Position data (average balances)
Earning assets(10)	$	157,513		$	140,471		$	135,167
Total assets		167,694			147,537			142,582
Deposits		103,629			95,232			87,508
Total liabilities		130,789			114,694			109,302
Other ($ billions)
Assets under administration	$	89		$	88		$	86
Assets under management	$	58		$	53		$	47

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Taxable equivalent basis.

(3) Includes net income from investments in associated corporations of $643 (2017 – $482; 2016 – $473).

(4) Includes BBVA Chile third quarter 2018 before tax earnings of $21. BBVA Chile fourth quarter earnings have been reflected in all P&L lines.

(5) Includes one additional month of earnings relating to Thanachart Bank of $30 (after tax and NCI $22), and Chile of $36 (after tax and NCI $26) for the year ended October 31, 2018.

(6) Includes Day 1 provision for credit losses on acquired performing loans of $404 for the year ended October 31, 2018 (October 31, 2017 – nil).

(7) Refer to Glossary.

(8) Net interest income (TEB) as % of average earning assets excluding bankers acceptances.

(9) Provision for credit losses as a percentage of average net loans and acceptances adjusted for Day 1 PCL was 1.18% in 2018.

(10) Includes bankers’ acceptances.

T19A Adjusted International Banking financial performance⁽¹⁾

($ millions)	2018		2017		2016
Adjusted results
Net interest income	$	7,322	$	6,726	$	6,359
Non-interest income		4,111		3,688		3,482
Total revenue		11,433		10,414		9,841
Provision for credit losses		1,463		1,294		1,281
Non-interest expenses		5,995		5,617		5,473
Income before taxes		3,975		3,503		3,087
Income tax expense		858		841		720
Net income	$	3,117	$	2,662	$	2,367
Net income attributable to non-controlling interests (NCI)		298		238		251
Net income attributable to equity holders	$	2,819	$	2,424	$	2,116

(1) Refer to Non-GAAP measures for reconciliation of Reported and Adjusted results.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Financial Performance

Net income

Net income attributable to equity holders was $2,573 million, an increase of $183 million or 8%. Adjusting for Acquisition-related costs, net income was $2,819 million up $395 million or 16%. Strong results in Latin America, including benefits from acquisitions, and Asia, complemented solid earnings in Caribbean. The impact of the acquisitions and the benefit of one additional month of earnings, from the Alignment of the reporting period in Chile and Thailand, contributed 3% to the adjusted earnings growth. The remaining increase was driven by strong loan growth in Latin America, higher non-interest income, and lower taxes. This was partly offset by higher provision for credit losses and non-interest expenses, a lower net interest margin, and the negative impact of foreign currency translation.

Financial Performance on Constant Dollar Basis

The discussion below on the results of operations is on a constant dollar basis that excludes the impact of foreign currency translation, and is a non-GAAP financial measure (refer to Non-GAAP Measures). The Bank believes that reporting in constant dollars is useful for readers in assessing ongoing business performance. Ratios are on a reported basis.

T20 International Banking financial performance on constant dollar basis

($ millions)	2018(1)		2017		2016
Net interest income(2)	$	7,322	$	6,626	$	6,191
Non-interest income(2)(3)		4,111		3,653		3,440
Total revenue(2)		11,433		10,279		9,631
Provision for credit losses		1,867		1,276		1,257
Non-interest expenses		6,111		5,594		5,388
Income tax expense(2)		706		815		790
Net income on constant dollar basis	$	2,749	$	2,594	$	2,196
Net income attributable to non-controlling interests in subsidiaries on a constant dollar basis		176		240		260
Net income attributable to equity holders of the Bank on a constant dollar basis	$	2,573	$	2,354	$	1,936
Selected Consolidated Statement of Financial Position data (average balances)
Total assets		167,694		145,400		138,548
Total liabilities		130,789		113,267		106,306

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Taxable equivalent basis.

(3) Includes net income from investments in associated corporations of $643 (2017 – $511; 2016 – $498).

C10 Total revenue

C11 Total revenue by region $ millions

C12 Average loans and acceptances $ billions

C13 Average earning assets⁽¹⁾ by region $ billions

(1)   Average earning assets excluding bankers acceptances

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    INTERNATIONAL BANKING

Net income

Net income attributable to equity holders was $2,573 million, an increase of $219 million or 9%. Adjusting for Acquisition-related costs, net income was $2,819 million, up $432 million or 18%. Strong results in Latin America, including the impact of acquisitions, and Asia, complemented solid earnings in Caribbean. The impact of the acquisitions and the benefit of one additional month of earnings, from the Alignment of the reporting period in Chile and Thailand contributed 3% to the adjusted earnings growth. The remaining increase was driven by strong loan growth in Latin America, higher non-interest income, and lower taxes. This was partly offset by higher provision for credit losses and non-interest expenses, and a lower net interest margin.

Average assets and liabilities

Average assets of $168 billion increased $22 billion or 15% driven by strong retail and commercial loan growth, primarily in Latin America, partly due to acquisitions. Commercial loan growth was 16% and retail loan growth was 15%. Average liabilities increased $18 billion or 15% to $131 billion due to strong deposit growth in Pacific Alliance, partly due to acquisitions. Commercial and retail deposits increased 11% and 9% respectively.

Revenues

Total revenues of $11,433 million increased $1,154 million or 11%. Net interest income was $7,322 million, up 10% driven by strong retail and commercial loan growth, including a 3% impact of acquisitions, partly offset by a lower net interest margin. The net interest margin decreased 14 basis points to 4.65% due primarily to the impact of acquisitions and deposit rates. Non-interest income increased $458 million or 13% to $4,111 million. Five percent of the increase is related to the impact of acquisitions and the benefit of Alignment of reporting period. The remaining increase was due primarily to higher banking, wealth management and credit card fees, an increased contribution from associated corporations, and higher trading revenues.

Latin America

Total revenues of $7,861 million increased 14% from last year. Net interest income increased $670 million or 14%, driven by strong asset growth, including a 4% impact of acquisitions, partly offset by a lower net interest margin. The net interest margin decreased 19 basis points to 4.66% due mainly to the impact of acquisitions. Non-interest income increased $287 million or 13%. The impact of acquisitions and the benefit of Alignment of reporting period increased non-interest income by 6%. The remaining 7% increase was due primarily to higher banking, wealth management, credit card fees and trading revenues.

Caribbean and Central America

Total revenues were $2,996 million, up 2% over last year. Net interest income was up $26 million or 1%. Non-interest income was up $44 million or 5% as a result of good growth in banking, wealth management and insurance revenues.

Asia

Total revenues were $576 million, up 28% versus last year, driven by higher contributions from Thanachart Bank, partly due to the benefit of Alignment of reporting period, and Bank of Xi’an.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Non-interest expenses

Non-interest expenses increased $517 million or 9% to $6,111 million. Adjusting for Acquisition-related costs, non-interest expenses were up 8%. Three percent of the increase related to acquisitions. The remaining increase was due primarily to business volume growth, inflation, higher technology costs, partly offset by benefits from cost-reduction initiatives. Operating leverage was a positive 1.9%, or 3.1% adjusting for Acquisition-related costs.

Provision for credit losses

The provision for credit losses was $1,867 million compared to $1,276 million. Adjusting for the Day 1 provision on acquired performing loans of $404 million, the provision for credit losses increased $187 million due primarily to higher retail provision driven by higher volumes, including acquisitions, and the benefit of the credit mark last year, offset by lower commercial provision. The adjusted provision for credit losses ratio was 118 basis points, a decrease of three basis points.

Provision for income taxes

The effective tax rate was 20.4% compared to 24.0% due mainly to higher tax benefits in Mexico and lower taxes in certain foreign jurisdictions.

Outlook

In 2019, International Banking will continue to leverage its diversified footprint – with particular emphasis on the Pacific Alliance – and focus on successfully integrating recent acquisitions in Chile, Peru, Colombia and Dominican Republic.

Growth prospects are improving in many of the Pacific Alliance countries, as economic activity generally is expected to improve relative to last year. This is most true in Peru, where the rise in commodity prices over the past year and a new government are leading to large increases in growth rate relative to 2017. In Colombia, an increase in oil prices over the past year is providing a strong impulse to business investment, which is expected to be further strengthened as confidence in the new government takes hold. Strengthening business activity will add to already solid household spending. In Chile, GDP growth is expected to moderate somewhat from the strong levels witnessed in 2018 but should still exceed 3%. In Mexico, the economy remains moderately strong, as activity continues to benefit from robust growth in the US and the rest of the world. The political transition is key to Mexican prospects.

Margins and credit quality in International Banking are expected to remain stable with the level in the fourth quarter 2018. Expense management and delivery of positive operating leverage remain key business priorities.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GLOBAL BANKING AND MARKETS

Global Banking and Markets

2018 Achievements

In 2018, Scotiabank GBM continued to build its franchise as a leading wholesale bank in Canada, the United States and the Pacific Alliance, with a focused presence in Europe and Asia. In particular, Scotiabank GBM made significant progress on its key priorities:

•  Enhance Customer Focus

•  Strengthened collaborative efforts across the platform to bring the entire Bank’s capabilities to serve clients’ holistic needs.

•  Become Leaders in our Markets

•  Deepened the Bank’s presence in the United States. This key global financial market is an important bridge for trade and investment flows between Canada and the Pacific Alliance.

•  Built out capabilities to provide a more comprehensive and competitive offering across the Pacific Alliance, connected to international markets.

•  Focus on Leadership and Talent

•  Invested in people and strengthened our leadership team with key hires in Investment Banking and Global Capital Markets.

•  Proudly recognized with the 2018 Excellence in Innovation Award by Women in Capital Markets. This award honours companies who have approached gender diversity with an innovative lens and taken bold steps to improve diversity and inclusion.

•  Consistently fostered a workplace culture where people perform at their best, develop to their potential and act in line with the Bank’s values of respect, integrity, passion and accountability.

•  Optimize Effectiveness

•  Deployed industry-leading technologies and agile processes to modernize legacy platforms and create digital solutions that improve automation, drive operational efficiency and provide an excellent customer experience.

•  Continued to invest in Anti-Money Laundering and Anti-Terrorist Financing capabilities for the protection of our clients and our business.

•  Invested in analytics and artificial intelligence to speed up our processes, increase our accuracy and add new intelligence to deliver results for our clients quickly and more efficiently.

•  Became one of 72 global banks to offer clients the ability to track the status of wire transfer payments in real time using the SWIFT Global Payments Innovation (GPI) initiative.

Deal Highlights

•  Acted as Financial Advisor to a consortium of investors led by BC Partners and including Ontario Teachers’ Pension Plan on the C$5.125 billion recapitalization of GFL Environmental, the largest private LBO for a Canadian company.

•  Acted as Mandated Lead Arranger and Bookrunner of AUD $4 billion loan facilities to support the AUD $9.3 billion (US $6.7 billion) acquisition of a 51% equity interest in WestConnex from the New South Wales Government by Sydney Transport Partners (STP) consortium, formed by clients Transurban, CPPIB, Australian Super and ADIA.

•  Financial advisor to, and Joint Bookrunner for, Royal Dutch Shell on its US $3.3 billion sale of shares in Canadian Natural Resources.

•  Administrative Agent and Joint Bookrunner on a US $2.25 billion term loan facility for AT&T.

•  Joint Bookrunner on a US $2 billion debt issuance by Petroleos Mexicanos of January 2029 Notes.

•  Joint Bookrunner for a 2-Tranche US $1.6 billion-equivalent CLP Euroclearable bond transaction by the Republic of Chile.

•  Acted as exclusive M&A Financial Advisor and provided acquisition financing commitment to Actis on its US $1.3 billion acquisition of Intergen Mexico. Acted as Joint Global Coordinator and Bookrunner for new entity, Cometa Energia, S.A. de C.V., on US $860 million senior secured notes.

•  Acted as Financial Advisor to Brookfield Infrastructure on the sale of its 27.8% interest in Transelec to China Southern Power Grid for US $1.3 billion.

•  Bookrunner for C$250 million Thames Water’s inaugural Maple issuance (Europe).

•  Joint Lead Manager on the C$1 billion World Bank Sustainable Development Bond to raise awareness for the significant and long-lasting benefits of investing in the health and nutrition of women, adolescents and children.

•  Lead left Bookrunner on a Brookfield Renewable Partner’s inaugural C$300 million Green Bond due 2029.

•  Provided an enhanced share disposition strategy and acted as the sole equity derivative provider for Metro’s C$232 million disposition of third party shares.

Business Profile

Global Banking and Markets (GBM) conducts Scotiabank’s wholesale banking business with corporate, government and institutional investor clients. GBM is a full-service wholesale bank in priority markets of Canada, the United States and Latin America. GBM also offers a range of products and services in select markets in Europe and Asia-Pacific.

GBM provides clients with: corporate lending; transaction banking (including trade finance and cash management); investment banking (including corporate finance and mergers & acquisitions); fixed income and equity underwriting, sales, trading and research; prime services (prime brokerage and securities lending); foreign exchange sales and trading; commodities derivatives sales and trading; and collateral management.

Strategy

Scotiabank Global Banking and Markets (GBM) will build its franchise as a leading wholesale bank throughout its global footprint by providing corporate clients with lending services, transaction banking, investment banking advice and access to capital markets.

2019 Priorities

• Strategic Approach to Lending: Scotiabank GBM is focused on up-tiering corporate relationships and increasing our lending penetration where we have greater opportunities to win ancillary business.

• Strengthening Investment Banking: Scotiabank GBM will continue its multi-year buildout to expand regional expertise for investment banking and equity capital markets to focus on local and cross-border M&A and advisory deals.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

• Deeper penetration of Pacific Alliance: Scotiabank GBM will meaningfully invest in the Pacific Alliance countries to become a true market leader in local and cross border banking and capital markets capabilities.

T21 Global Banking and Markets financial performance

($ millions)	2018(1)			2017			2016
Net interest income(2)	$	1,454		$	1,336		$	1,293
Non-interest income(2)		3,074			3,288			3,139
Total revenue(2)		4,528			4,624			4,432
Provision for credit losses		(50	)		42			249
Non-interest expenses		2,233			2,160			2,040
Income tax expense(2)		587			604			572
Net income	$	1,758		$	1,818		$	1,571
Net income attributable to non-controlling interests in subsidiaries		–			–			–
Net income attributable to equity holders of the Bank	$	1,758		$	1,818		$	1,571
Key ratios and other financial data
Return on equity(3)		16.0	%		16.0	%		12.6	%
Productivity(2)		49.3	%		46.7	%		46.0	%
Net interest margin(4)(5)		1.83	%		1.75	%		1.67	%
Provision for credit losses – performing (Stages 1 and 2)	$	(22	)		n/a			n/a
Provision for credit losses – impaired (Stage 3)	$	(28	)		n/a			n/a
Provision for credit losses as a percentage of average net loans and acceptances		(0.06	)%		0.05	%		0.30	%
Provision for credit losses on impaired loans as a percentage of average net loans and acceptances		(0.03	)%		0.05	%		0.30	%
Net write-offs as a percentage of average net loans and acceptances		0.03	%		0.11	%		0.21	%
Selected Consolidated Statement of Financial Position data (average balances)
Trading assets	$	98,130		$	103,861		$	103,316
Loans and acceptances		81,838			79,937			81,662
Earning assets		282,997			291,870			298,664
Total assets		320,850			335,599			350,627
Deposits		86,260			77,158			77,261
Total liabilities		264,983			267,377			269,755

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Taxable equivalent basis.

(3) Refer to Glossary.

(4) Business Banking only.

(5) Net interest income (TEB) as % of average earning assets excluding bankers’ acceptances.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GLOBAL BANKING AND MARKETS

Financial Performance

Net income

Global Banking and Markets reported net income attributable to equity holders of $1,758 million, a decrease of $60 million or 3%. Lower revenue in fixed income, equities, and commodities businesses, as well as higher non-interest expenses, were partly offset by significantly lower provision for credit losses and higher lending and deposit revenues.

Average assets and liabilities

Average assets decreased by $15 billion or 5% to $321 billion this year. Adjusting for the impact of foreign currency translation, assets decreased by $14 billion or 4%, mainly due to decreases in trading securities, deposits with banks and securities purchased under resale agreements.

Average liabilities decreased by $2 billion or 1% to $265 billion this year due to decline in securities sold under repurchase agreements and derivative-related liabilities, partly offset by higher deposits.

Net interest income

Net interest income increased by 9% to $1,454 million, mainly driven by higher deposit volumes and higher lending volumes in the U.S. and Canada. The net interest margin was 1.83%, an increase of eight basis points.

Non-interest income

Non-interest income of $3,074 million decreased by $214 million or 7% mainly due to lower trading revenues in fixed income and commodities, as well as lower underwriting fees. This was partly offset by stronger equity trading revenues and higher advisory fees.

Non-interest expense

Non-interest expenses increased by $73 million or 3% to $2,233 million. This was due primarily to higher regulatory and technology investments offset by lower performance-related compensation. Operating leverage was negative 5.5%.

Provision for credit losses

Provision for credit losses for 2018 is calculated in accordance with IFRS 9, while the provision for credit losses for 2017 was calculated in accordance with IAS 39.

The provision for credit losses decreased $92 million mainly due to impaired loan provision reversals in the U.S. and Europe and lower provisions required on performing loans primarily due to improvements in credit quality. The provision for credit losses ratio was negative six basis points, a decrease of 11 basis points.

Provision for income taxes

The effective tax rate was 25.0%, in line with the prior year.

Outlook

By executing its client-focused strategy, leveraging the Bank’s unique footprint, and having strong alignment across its global operations, Global Banking and Markets is expected to grow in line with the Bank’s overall growth profile over the medium to longer term. Global Banking and Markets expects to deliver continued strong growth in deposits, improved corporate lending and investment banking results to absorb required regulatory and technology investments.

C14 Total revenue

C15 Business banking revenue

$ millions

C16 Capital markets revenue by business line

$ millions

C17 Composition of average earning assets

$ billions

C18 Trading day losses

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Other

The Other segment includes Group Treasury, smaller operating segments, business line elimination items and other corporate items which are not allocated to a business line.

Financial Performance

T22 Other financial performance

($ millions)	2018(1)			2017			2016
Net interest income(2)	$	(483	)	$	(390	)	$	(384	)
Non-interest income(2)(3)		(53	)		(344	)		273
Total revenue(2)		(536	)		(734	)		(111	)
Provision for (recovery of) credit losses		–			–			50
Non-interest expenses		60			319			653
Income tax expense(2)		(449	)		(786	)		(545	)
Net income (loss)	$	(147	)	$	(267	)	$	(269	)
Net income (loss) attributable to equity holders	$	(147	)	$	(267	)	$	(269	)

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Includes the net residual in matched maturity transfer pricing and the elimination of the tax-exempt income gross-up reported in net interest income, non-interest income and provision for income taxes in the business segments.

(3) Includes net income from investments in associated corporations of $(177) in 2018; (2017 – $(141); 2016 – $(137)).

Net income

Net interest income, other operating income, and the provision for income taxes in each period include the elimination of tax-exempt income gross-up. This amount is included in the operating segments, which are reported on a taxable equivalent basis. The elimination was $112 million in 2018, compared to $562 million in 2017.

Net income from investments in associated corporations and the provision for income taxes in each period include the tax normalization adjustments related to the gross-up of income from associated corporations. This adjustment normalizes the effective tax rate in the divisions to better present the contribution of the associated corporations to the divisional results.

The Other segment had a net loss attributable to equity holders of $147 million in 2018 compared to $267 million in 2017. This was primarily due to the benefits remeasurement of $150 million ($203 million pre-tax).

Revenues

Revenues increased by $198 million mainly due to lower taxable equivalent basis offsets (eliminated in tax expenses), partly offset by lower net gain on investment securities.

Non-interest expenses

Non-interest expenses were $60 million, compared to $319 million in 2017. Lower expenses were mainly due to the benefits remeasurement in the current year of $203 million.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |     OTHER

Financial Performance of Business Lines: 2017 vs. 2016

Canadian Banking

Canadian Banking’s net income attributable to equity holders was $4,064 million in 2017, an increase of $328 million or 9%. The 2017 gain on sale of HollisWealth, a wealth management business, was lower than last year’s gain on sale of a non-core lease financing business. Strong performance from retail and small business banking, commercial banking and wealth management, as well as the impact of the sale of real estate contributed to the growth. Return on equity was 22.8% up from 22.0% in 2016.

International Banking

Net income attributable to equity holders was $2,390 million, an increase of $311 million or 15%. The increase reflects higher net interest income and fees driven by good loan growth, lower commercial provisions for credit losses and the benefits of cost reduction initiatives. This was partly offset by higher income taxes and the negative impact of foreign currency translation. Return on equity was 14.7%, versus 12.8% in 2016.

Global Banking and Markets

Global Banking and Markets reported net income attributable to equity holders of $1,818 million in 2017, an increase of $247 million or 16% from 2016. Stronger results in the equities business, as well as lower provision for credit losses, were partly offset by higher expenses. Return on equity was 16% versus 12.6% in 2016.

Other

The Other segment had a net loss attributable to equity holders of $267 million in 2017. Adjusting for the restructuring charge of $378 million ($278 million after tax), net income was $9 million in 2016.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

GROUP FINANCIAL CONDITION

T23 Condensed statement of financial position

As at October 31 ($ billions)	2018		2017		2016
Assets
Cash, deposits with financial institutions and precious metals	$	65.5	$	65.4	$	54.8
Trading assets		100.3		98.5		108.6
Securities purchased under resale agreements and securities borrowed		104.0		95.3		92.1
Investment securities		78.4		69.3		72.9
Loans		551.8		504.4		480.2
Other		98.5		82.4		87.7
Total assets	$	998.5	$	915.3	$	896.3
Liabilities
Deposits	$	676.5	$	625.4	$	611.9
Obligations related to securities sold under repurchase agreements and securities lent		101.3		95.8		97.1
Other liabilities		147.3		126.5		121.8
Subordinated debentures		5.7		5.9		7.6
Total liabilities	$	930.8	$	853.6	$	838.4
Equity
Common equity		61.0		55.5		52.7
Preferred shares and other equity instruments		4.2		4.6		3.6
Non-controlling interests in subsidiaries		2.5		1.6		1.6
Total equity	$	67.7	$	61.7	$	57.9
Total liabilities and shareholders’ equity	$	998.5	$	915.3	$	896.3

C19 Loan portfolio
loans & acceptances, $ billions,
as at October 31

C20 Deposits
$ billions, as at October 31

Statement of Financial Position

Assets

The Bank’s total assets as at October 31, 2018 were $998 billion, up $83 billion or 9% from October 31, 2017. This growth was primarily related to the impact of acquisitions, as well as strong organic growth in loans, and increases in investment securities, trading securities, and securities purchased under resale agreements and securities borrowed.

Trading securities increased by $7 billion and securities purchased under resale agreements and securities borrowed increased by $9 billion.

Investment securities increased $9 billion from October 31, 2017 due primarily to higher holdings of U.S. government debt. As at October 31, 2018, the net unrealized loss on debt securities measured at fair value through other comprehensive income of $286 million decreased to a net unrealized loss of $204 million, after the impact of qualifying hedges.

Loans increased $47 billion from October 31, 2017. Residential mortgages increased $16 billion due to the acquisition of BBVA Chile and growth in Canada and Latin America. Personal loans and credit cards were up $9 billion due to the impact of acquisitions and growth in Canada and Latin America. Business and government loans increased $23 billion due to growth in Canada and Latin America and the acquisition of BBVA Chile.

Goodwill and other intangibles were up $6 billion, due primarily to the acquisitions.

Other assets increased $5 billion due mainly to the acquisition of MD Financial Management.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

Liabilities

Total liabilities were $931 billion as at October 31, 2018, up $77 billion or 9% from October 31, 2017.

Total deposits increased $51 billion. Personal deposits grew by $15 billion due primarily to growth in Canada and Latin America and the acquisition of BBVA Chile. Business and government deposits grew by $37 billion due mainly to growth in Canada and Latin America and the acquisition of BBVA Chile.

Obligations related to securities sold under repurchase agreements and securities lent increased by $5 billion. Other liabilities increased $9 billion due mainly to the impact of acquisitions.

Equity

Total shareholders’ equity increased $6,055 million from October 31, 2017. This increase was driven mainly by current year earnings of $8,724 million, the issuance of common shares of $2,708 million mainly for the acquisitions and an increase in non-controlling interests in subsidiaries of $1,091 million. Partly offsetting were dividends paid of $4,172 million, a reduction in other comprehensive income of $804 million, due mainly to a decrease in unrealized foreign currency translation gains on the Bank’s investments in its foreign operations, the cumulative effect of adopting IFRS 9 of $610 million, the repurchase and cancellation of approximately 8 million common shares for $632 million, and the net redemption of preferred shares of $395 million.

Outlook

A strong global economy is expected to support assets and deposits growth across all business lines in 2019. In Canada, increased business investment should lead to expansion in commercial lending with mortgage growth being more moderate. Internationally, continued economic strength in the Pacific Alliance countries should aid in further increases in assets and personal deposits.

Capital Management

Overview

Scotiabank is committed to maintaining a strong capital base to support the risks associated with its diversified businesses. Strong capital levels contribute to financial safety for the Bank’s customers, foster investor confidence and support strong credit ratings. It also allows the Bank to take advantage of growth opportunities as they arise and enhance shareholder returns through increased dividends. The Bank’s capital management framework includes a comprehensive internal capital adequacy assessment process (ICAAP), aimed at ensuring that the Bank’s capital is adequate to meet current and future risks and achieve its strategic objectives. Key components of the Bank’s ICAAP include sound corporate governance; creating a comprehensive risk appetite for the Bank; managing and monitoring capital, both currently and prospectively; and utilizing appropriate financial metrics which relate risk to capital, including internal capital and regulatory capital measures.

Governance and oversight

The Bank has a sound capital management framework to measure, deploy and monitor its available capital and assess its adequacy. Capital is managed in accordance with the Board-approved Capital Management Policy. In addition, the Board reviews and approves the Bank’s annual capital plan. The Asset-Liability Committee and senior executive management provide governance over the capital management process. The Bank’s Finance, Treasury and Global Risk Management groups take a coordinated approach to implementing the Bank’s capital plan.

Risk appetite

The risk appetite framework that establishes enterprise wide risk tolerances in addition to capital targets are detailed in the Risk Management section “Risk Appetite”. The framework encompasses medium-term targets with respect to regulatory capital thresholds, earnings and other risk-based parameters. These targets drive behaviour to work to ensure the Bank achieves the following overall objectives: exceed regulatory and internal capital targets, manage capital levels commensurate with the risk profile of the Bank, maintain strong credit ratings and provide the Bank’s shareholders with acceptable returns.

Regulatory capital

Effective November 1, 2012, Canadian banks are subject to the revised capital adequacy requirements as published by the Basel Committee on Banking Supervision (BCBS) and commonly referred to as Basel III. Basel III builds on the “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” (Basel II). Under Basel III, there are three primary risk-based regulatory capital ratios used to assess capital adequacy: Common Equity Tier 1 (CET1), Tier 1 and Total capital, which are determined by dividing those capital components by risk-weighted assets. Basel III also provides guidance on non-viability contingent capital (NVCC). The guidance stipulates that in order to qualify as regulatory capital, non-common share capital instruments must be convertible into common equity upon a trigger event as defined within the guidance. All non-common share capital instruments issued after December 31, 2012, are required to meet these NVCC requirements to qualify as regulatory capital.

To enable banks to meet the new standards, the BCBS Basel III rules contain transitional arrangements commencing January 1, 2013, through January 1, 2019. Transitional requirements result in a five year phase-in of new deductions and additional components to common equity. Non-qualifying non-common capital instruments are being phased-out over 10 years and the capital conservation buffer is being phased-in over four years. As of January 2019, banks will be required to meet new minimum requirements related to risk-weighted assets of: CET1 ratio of 4.5% plus a capital conservation buffer of 2.5%, collectively 7%, minimum Tier 1 ratio of 8.5%, and Total capital ratio of 10.5%.

The Office of the Superintendent of Financial Institutions, Canada (OSFI) has issued guidelines, reporting requirements and disclosure guidance which are consistent with the Basel III reforms, except for its deferral of the Basel III credit valuation adjustment (CVA) related capital charges, requiring they be phased-in over a five year period, beginning January 2014. In accordance with OSFI’s requirements, during 2018, the scalars for CVA risk-weighted assets of 0.80, 0.83 and 0.86 were used to compute the CET1, Tier 1 and Total capital ratios, respectively (October 31, 2017 – scalars of 0.72, 0.77 and 0.81, respectively). The CVA capital requirements will be fully phased in effective November 1, 2018.

Commencing the first quarter of 2013, OSFI required Canadian deposit-taking institutions to fully implement the 2019 Basel III reforms, without the transitional phase-in provisions for capital deductions (referred to as ‘all-in’) and achieve minimums of 7%, 8.5% and 10.5% for CET1, Tier 1 and Total Capital ratios, respectively. OSFI has also designated the Bank a domestic systemically important bank (D-SIB), increasing its minimum capital ratio requirements by 1% across all tiers of capital effective January 1, 2016, in line with the requirements for global systemically important banks. In addition, an additional Domestic Stability Buffer of 1.5% was implemented in 2018 as a Pillar 2 requirement as noted below.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

In addition to risk-based capital requirements, the Basel III reforms introduced a simpler, non risk-based Leverage ratio requirement to act as a supplementary measure to its risk-based capital requirements. The Leverage ratio is defined as a ratio of Basel III Tier 1 capital to a leverage exposure measure which includes on-balance sheet assets and off-balance sheet commitments, derivatives and securities financing transactions, as defined within the requirements. In January 2014, the BCBS issued revisions to the Basel III Leverage ratio framework. In 2014, OSFI released its Basel III Leverage Ratio Requirements Guideline and Public Disclosure Requirements which outlines the application and disclosure of the Basel III Leverage ratio in Canada and the replacement of the former Assets-to-Capital Multiple (ACM), effective the first quarter of 2015. Institutions are expected to maintain a material operating buffer above the 3% minimum.

Regulatory capital developments during the year

Basel II standardized regulatory capital floor

Since the introduction of Basel II in 2008, OSFI has prescribed a minimum Basel I capital floor for institutions that use the advanced internal ratings-based approach for credit risk. The Basel I capital floor add-on is determined by comparing a capital requirement calculated by reference to Basel I against the Basel III calculation, as specified by OSFI. A shortfall in the Basel III capital requirement as compared with the Basel I floor is added to RWA.

As noted in prior quarters, OSFI replaced the Basel I regulatory capital floor with a capital floor based on the Basel II standardized approach for credit risk, effective the second quarter of 2018. Revised capital floor requirements also include risk-weighted assets for market risk and CVA. Under this new Basel II regulatory capital floor requirement, the Bank does not have a capital floor add-on as at October 31, 2018.

Domestic Stability Buffer

In June 2018, in order to provide increased transparency to the market, OSFI clarified its additional requirement for its Domestic Stability Buffer, currently held by Domestic Systemically Important Banks (D-SIBs) as a Pillar 2 buffer requirement. The Domestic Stability Buffer is not a Pillar 1 buffer. Breaches will not result in banks being subject to automatic constraints on capital distributions. If a D-SIB breaches the buffer (i.e. dips into the buffer when it has not been released), OSFI will require a remediation plan. Supervisory interventions pursuant to OSFI’s Guide to Intervention would occur in cases where a remediation plan is not produced or executed in a timely manner satisfactory to OSFI.

As noted above, OSFI’s minimum Pillar 1 capital ratio requirements, including the D-SIB 1% surcharge, are 8.0%, 9.5% and 11.5% for Common Equity Tier 1, Tier 1 and Total capital ratios, respectively. The Domestic Stability Buffer will range between 0 and 2.5% of a bank’s total risk-weighted assets (RWA). OSFI will undertake a review of the buffer on a semi-annual basis, in June and December, and any changes to the buffer will be made public, along with supporting rationale. In exceptional circumstances, OSFI may make and announce adjustments to the buffer in-between scheduled review dates. The next review will occur in December 2018. OSFI’s Domestic Stability Buffer is presently set at 1.5% of total risk-weighted assets.

Total Loss Absorbing Capacity (TLAC)

In April 2018, OSFI issued its guideline on Total Loss Absorbing Capacity (TLAC), which will apply to Canada’s D-SIBs as part of the Federal Government’s bail-in regime. The standards are intended to address the sufficiency of a systemically important bank’s loss absorbing capacity to support its recapitalization in the event of its failure. Effective November 1, 2021, D-SIBs will be required to maintain a minimum risk-based TLAC ratio and a minimum TLAC leverage ratio. TLAC is defined as the aggregate of Tier 1 capital, Tier 2 capital, and other TLAC instruments that are subject to conversion in whole or in part into common shares under the CDIC Act and meet all of the eligibility criteria under the guidelines. The Bank’s minimum TLAC ratio requirements consist of 21.5% of risk-weighted assets (plus Domestic Stability Buffer requirement) and 6.75% of leverage ratio exposures. OSFI may subsequently vary the minimum TLAC requirements for individual D-SIBs or groups of D-SIBs. Where a D-SIB falls below the minimum TLAC requirements, OSFI may take any measures deemed appropriate, including measures set out in the Bank Act. The Bank does not anticipate any challenges in meeting its TLAC requirements.

OSFI also revised its Capital Adequacy Requirements (CAR) guideline to implement the amendments to Basel III finalized by the BCBS in October 2016 in respect of holdings of Other TLAC instruments issued by global systemically important banks (G-SIBs) that qualify towards their TLAC requirements and instruments ranking pari passu with those instruments. The BCBS regulatory capital treatment in respect of holdings of Other TLAC aims to reduce a significant source of contagion in the banking system. OSFI has determined that it is appropriate to extend the Basel III treatment to holdings of Other TLAC instruments issued by Canadian D-SIBs. The regulatory adjustments relating to holdings of Other TLAC instruments apply from November 1, 2018.

Planning, managing and monitoring capital

Capital is managed and monitored based on planned changes in the Bank’s strategy, identified changes in its operating environment or changes in its risk profile. As part of the Bank’s comprehensive ICAAP, sources and uses of capital are continuously measured and monitored through financial metrics, including regulatory thresholds, and internal capital. These results are used in capital planning and strategic decision-making.

The Bank’s assessment of capital adequacy is in the context of its current position and its expected future risk profile and position relative to its internal targets while considering the potential impact of various stress scenarios. Specific scenarios are selected based on the current economic conditions and business events facing the Bank. In addition, the Bank’s forward looking capital adequacy assessment includes a consideration of the results of more severe multi-risk scenarios within its enterprise-wide stress testing. This testing is used to determine the extent to which severe, but plausible events, impact the Bank’s capital.

The Bank sets internal regulatory capital targets to ensure the Bank’s available capital is sufficient within the context of its risk appetite.

The Bank’s internal target includes an adequate buffer over the regulatory minimum ensuring sufficient flexibility for future capital deployment and in consideration of the Bank’s risk appetite, the volatility of planning assumptions, the results from stress testing and contingency planning.

The Bank has a comprehensive risk management framework to ensure that the risks taken while conducting its business activities are consistent with its risk appetite, its impact on capital relative to internal targets, and that there is an appropriate balance between risk and return. Refer to the Risk Management section for further discussion on the Bank’s risk management framework. In managing the Bank’s capital base, close attention is paid to the cost and availability of the various types of capital, desired leverage, changes in the assets and risk-weighted assets, and the opportunities to profitably deploy capital. The amount of capital required for the business risks being assumed, and to meet regulatory requirements, is balanced against the goal of generating an appropriate return for the Bank’s shareholders.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

Capital generation

Capital is generated internally through net earnings after dividend payments. As well, capital is generated by the issuance of common shares, preferred shares and other equity instruments, and subordinated debentures, net of redemptions.

Capital deployment

The Bank deploys capital to support sustainable, long-term revenue and net income growth. The growth can be through existing businesses by attracting new customers, increasing cross-selling activities to existing customers, adding new products and enhancing sales productivity, or through acquisitions. All major initiatives to deploy capital are subject to rigorous analysis, validation of business case assumptions and evaluation of expected benefits. Key financial criteria include impact on earnings per share, capital ratios, return on invested capital, expected payback period and internal rate of return based on discounted cash flows.

Regulatory capital ratios

The Bank continues to maintain strong, high quality capital levels which position it well for future business growth. The Basel III Common Equity Tier 1 (CET1) ratio as at October 31, 2018 was 11.1%. The CET1 ratio reduced by approximately 40 basis points in 2018 due primarily to the impact of acquisitions that closed during the year, share buybacks and the Bank’s adoption of IFRS 9, partly offset by strong internal capital generation and the benefit from moving to the Basel II regulatory capital floor.

The Bank’s Basel III Tier 1 and Total capital ratios were 12.5% and 14.3%, respectively, as at October 31, 2018, down from 2017 due primarily to the same factors described above impacting the CET1 ratio. In addition, the Leverage ratio declined by approximately 20 basis points in 2018 due primarily to the Bank’s acquisitions and organic asset growth.

The Bank’s capital ratios continue to be well in excess of OSFI’s minimum capital ratio requirements for 2018 (including the 1% D-SIB surcharge and Domestic Stability Buffer requirements) of 9.5%, 11.0% and 13.0% for CET1, Tier 1 and Total Capital, respectively. The Bank was well above the OSFI prescribed minimum Leverage ratio as at October 31, 2018.

Outlook

Looking to 2019, the Bank’s capital position is forecast to improve from strong internal capital generation and divestitures of certain non-core businesses, in support of the Bank’s growth initiatives that enhance shareholder returns.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T24 Regulatory capital⁽¹⁾

	Basel III All-in
As at October 31 ($ millions)	2018			2017			2016
Common Equity Tier 1 capital
Total Common Equity	$	60,727		$	55,454		$	52,657
Qualifying non-controlling interest in common equity of subsidiaries		1,628			636			597
Goodwill and non-qualifying intangibles, net of deferred tax liabilities(2)		(16,428	)		(11,505	)		(11,589	)
Threshold related deductions		(863	)		(271	)		(435	)
Net deferred tax assets (excluding those arising from temporary differences)		(335	)		(417	)		(484	)
Other Common Equity Tier 1 capital deductions(3)		(286	)		(545	)		(757	)
Common Equity Tier 1		44,443			43,352			39,989
Preferred shares(4)		2,624			3,019			3,594
Subordinated additional Tier 1 capital securities (NVCC)		1,560			1,560			–
Capital instrument liabilities – trust securities(4)		1,400			1,400			1,400
Other Tier 1 capital adjustments(5)		160			142			83
Net Tier 1 capital		50,187			49,473			45,066
Tier 2 capital
Subordinated debentures, net of amortization(4)		5,698			5,935			7,633
Allowance for credit losses eligible for inclusion in Tier 2 and excess allowance (re: IRB approach)(6)		1,380			602			528
Qualifying non-controlling interest in Tier 2 capital of subsidiaries		99			103			103
Other Tier 2 capital adjustments		–			–			–
Tier 2 capital		7,177			6,640			8,264
Total regulatory capital		57,364			56,113			53,330
Risk-weighted assets ($ billions)
Credit risk		347.1			315.2			314.8
Market risk		8.4			7.8			10.6
Operational risk		45.0			40.6			38.6
Basel capital floor adjustments(7)		–			12.8			–
CET1 risk-weighted assets(7)(8)	$	400.5		$	376.4		$	364.0
Capital ratios(9)
Common Equity Tier 1		11.1	%		11.5	%		11.0	%
Tier 1		12.5	%		13.1	%		12.4	%
Total		14.3	%		14.9	%		14.6	%
Leverage:
Leverage exposures	$	1,119,099		$	1,052,891		$	1,010,987
Leverage ratio		4.5	%		4.7	%		4.5	%

(1) Regulatory capital ratios are determined in accordance with Basel III rules on an all-in basis.

(2) Reported amounts are based on OSFI’s requirements that goodwill relating to investments in associates be classified as goodwill for regulatory reporting purposes.

(3) Other CET1 capital deductions under Basel III all-in include gains/losses due to changes in own credit risk on fair valued liabilities, pension plan assets and other items.

(4) Non-qualifying Tier 1 and Tier 2 capital instruments are subject to a phase-out period of 10 years.

(5) Other Tier 1 capital adjustments under the all-in approach include eligible non-controlling interests in subsidiaries.

(6) Collective allowances for 2017 and 2016.

(7) Since the introduction of Basel II in 2008, OSFI has prescribed a minimum capital floor for institutions that use the advanced internal ratings-based approach for credit risk. The Basel I capital floor add-on is determined by comparing a capital requirement calculated by reference to Basel I against the Basel III calculation, as specified by OSFI. A shortfall in the Basel III capital requirement as compared with the Basel I floor is added to RWA. OSFI replaced the Basel I regulatory capital floor with a capital floor based on the Basel II standardized approach for credit risk, effective April 30, 2018. Revised capital floor requirements also include risk-weighted assets for market risk and CVA. Under this new Basel II regulatory capital floor requirement, the Bank does not have a capital floor add-on as at October 31, 2018 (Basel I floor add-on: October 31, 2017 - $12.8 billion, October 31, 2016 - nil).

(8) As at October 31, 2018, CVA risk-weighted assets were calculated using scalars of 0.80, 0.83, and 0.86 to compute CET1, Tier 1 and Total capital ratios, respectively, (scalars of 0.72, 0.77, and 0.81 in 2017).

(9) OSFI designated the Bank as a domestic systemically important bank (D-SIB), increasing its minimum capital ratio requirements by 1% for the identified D-SIBs. This 1% surcharge was applicable to all minimum capital ratio requirements for CET1, Tier 1 and Total Capital, by January 1, 2016, in line with the requirements for global systemically important banks.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

T25 Changes in regulatory capital⁽¹⁾

	Basel III All-in
For the fiscal years ($ millions)	2018			2017			2016
Total capital, beginning of year	$	56,113		$	53,330		$	48,230
Changes in Common Equity Tier 1
Net income attributable to common equity holders of the Bank		8,361			7,876			6,987
Dividends paid to equity holders of the bank		(3,985	)		(3,668	)		(3,468	)
Shares issued		2,708			313			391
Shares repurchased/redeemed		(632	)		(1,009	)		(80	)
Gains/losses due to changes in own credit risk on fair valued liabilities		(25	)		185			(2	)
Movements in accumulated other comprehensive income, excluding cash flow hedges		(228	)		(634	)		(472	)
Change in non-controlling interest in common equity of subsidiaries		992			39			40
Change in goodwill and other intangible assets (net of related tax liability)(2)		(4,923	)		84			(571	)
Other changes including regulatory adjustments below:		(1,177	)		177			199
– Deferred tax assets that rely on future profitability (excluding those arising from temporary differences)		82			67			55
– IFRS 9 impact(3)		(564	)		–			–
– Significant investments in the common equity of other financial institutions (amount above 10% threshold)		(306	)		129			61
– Other capital deductions		(359	)		35			126
– Other		(30	)		(54	)		(43	)
Changes in Common Equity Tier 1	$	1,091		$	3,363		$	3,024
Changes in Additional Tier 1 Capital
Issued		300			1,560			1,350
Redeemed		(695	)		(575	)		(690	)
Other changes including regulatory adjustments and phase-out of non-qualifying instruments		18			59			16
Changes in Additional Tier 1 Capital	$	(377	)	$	1,044		$	676
Changes in Tier 2 Capital
Issued		–			–			2,502
Redeemed		(232	)		(1,500	)		(1,035	)
Allowance for credit losses eligible for inclusion in Tier 2 and Excess Allowance under AIRB(4)		778			74			42
Other changes including regulatory adjustments and phase-out of non-qualifying instruments		(9	)		(198	)		(109	)
Changes in Tier 2 Capital	$	537		$	(1,624	)	$	1,400
Total capital generated (used)	$	1,251		$	2,783		$	5,100
Total capital, end of year	$	57,364		$	56,113		$	53,330

(1) Regulatory capital ratios are determined in accordance with Basel III rules on an all-in basis.

(2) Reported amounts are based on OSFI’s requirements that goodwill relating to investments in associates be classified as goodwill for regulatory reporting purposes.

(3) Represents the full transitional impact on retained earnings from the Bank’s adoption of IFRS 9 (Financial Instruments) on November 1, 2017.

(4) Collective allowances for 2017 and 2016.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Regulatory capital components

The Bank’s regulatory capital is divided into three components – Common Equity Tier 1 (CET1), Tier 1 capital and Tier 2 capital, depending on their degree of permanency and loss absorbency. All components of capital provide support for banking operations and protect depositors.

CET1 consists primarily of common shareholders’ equity, a proration of non-controlling interests, and regulatory deductions. These regulatory deductions include goodwill, intangible assets (net of deferred tax liabilities), deferred tax assets that rely on future profitability, defined-benefit pension fund net assets, shortfall of allowance for credit losses to expected losses and significant investments in the common equity of other financial institutions.

Additional Tier 1 capital consists primarily of qualifying non-cumulative preferred shares, qualifying other equity instruments (as described in Note 24), and non-qualifying preferred shares and innovative Tier 1 instruments subject to phase-out. Tier 2 capital consists mainly of qualifying or non-qualifying subordinated debentures subject to phase-out and the eligible allowances for credit losses.

The Bank’s CET1 capital was $44.4 billion as at October 31, 2018, an increase of $1.1 billion from the prior year primarily due to:

• $4.4 billion growth from internal capital generation;

• $2.7 billion from common share issuances in connection with the acquisition of Jarislowsky Fraser and MD Financial Management; and,

• $1.0 billion from higher regulatory capital arising from non-controlling interests, mainly the acquisition of BBVA Chile.

Partly offset by:

• $4.9 billion from higher regulatory capital deductions for goodwill and intangibles, primarily from the acquisitions which closed during the year;

• $0.6 billion from changes in other regulatory capital deductions;

• $0.6 billion decrease from the adoption of IFRS 9;

• $0.6 billion from common share buybacks net of common shares issuances under the Bank’s employee share purchase and stock option plans; and,

• $0.2 billion decrease from movements in Accumulated Other Comprehensive Income, excluding cash flow hedges, primarily from the impact of foreign currency translation, partly offset by gains from employee pensions and benefits plans.

The Bank’s Tier 1 and Total capital were also impacted by the above changes and the planned redemptions of non-NVCC preferred shares for $695 million, partly offset by the $300 million issuance of NVCC preferred shares. The Total capital ratio also benefited from increases in allowance for credit losses, primarily from adoption of IFRS 9.

Dividends

The strong earnings and capital position allowed the Bank to increase its dividends twice in 2018. The annual dividend in 2018 was $3.28, compared to $3.05 in 2017, an increase of 8%. The dividend payout ratio was 47.7% in line with the Bank’s Board approved target dividend payout ratio of 40-50%.

T26 Selected capital management activity

For the fiscal years ($ millions)	2018		2017		2016
Dividends
Common	$	3,985	$	3,668	$	3,468
Preferred and other equity instruments		187		129		130
Common shares issued(1)		2,708		313		391
Common shares repurchased for cancellation under the Normal Course Issuer Bid(2)		632		1,009		80
Preferred shares and other equity instruments issued		300		1,560		1,350
Preferred shares and other equity instruments redeemed		695		575		690
Subordinated debentures issued		–		–		2,502
Maturity, redemption and repurchase of subordinated debentures		232		1,500		1,035

(1) Represents primarily cash received for stock options exercised during the year, common shares issued in connection with acquisitions, and common shares issued pursuant to the Dividend and Share Purchase Plan.

(2) Represents reduction to Common shares and Retained earnings (refer to the Consolidated Statement of Changes in Equity).

C21 CET1 capital
%, as at October 31

C22 Dividend growth

dollars per share

C23 Internally generated capital
$ billions, for years ended October 31

Common shares issued

On May 1, 2018, the Bank issued 11,133,141 common shares at a price of $78.86 per common share in connection with the acquisition of Jarislowsky Fraser. As a result of the issuance, the Bank recorded an increase to equity – common shares of $878 million. Refer to Note 24 in the consolidated financial statements for additional details.

On June 8, 2018, the Bank completed its public offering of 22,655,000 common shares, at a price of $76.15 per common share. As a result of the public offering, the Bank recorded an increase to equity – common shares of $1,696 million, net of transaction costs of $29 million. The Bank used the proceeds from the public offering to partially fund the acquisition of MD Financial Management.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

Normal Course Issuer Bid

On May 29, 2018, the Bank announced that OSFI and the Toronto Stock Exchange (TSX) approved a normal course issuer bid (the “2018 NCIB”) pursuant to which it may repurchase for cancellation up to 24 million of the Bank’s common shares. Purchases under the 2018 NCIB will terminate upon earlier of: (i) the Bank purchasing the maximum number of common shares under the 2018 NCIB, (ii) the Bank providing a notice of termination, or (iii) June 3, 2019. On a quarterly basis, the Bank will notify OSFI prior to making purchases. Under the 2018 NCIB, the Bank has cumulatively repurchased and cancelled approximately 5.98 million common shares at an average price of $75.85 per share.

On May 30, 2017, the Bank announced that OSFI and TSX approved a normal course issuer bid (the “2017 NCIB”) pursuant to which it may repurchase for cancellation up to 24 million of the Bank’s common shares. The 2017 NCIB terminated on June 1, 2018. Under the 2017 NCIB, the Bank cumulatively repurchased and cancelled approximately 6.25 million common shares at an average price of $76.41 per share.

During the year ended October 31, 2018, the Bank repurchased and cancelled approximately 8.23 million common shares (2017 – approximately 14 million) at a volume weighted average price of $76.77 per share (2017 – $72.09) for a total amount of $632 million (2017 – $1,009 million). Approximately 2 million of the common shares purchased were pursuant to a private agreement with an arm’s length third party seller and at a discount to the prevailing market price of the Bank’s common shares on the TSX at the time of the purchases.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Share data and other capital instruments

The Bank’s common and preferred share data, as well as other capital instruments, are shown in T27. Further details, including exchangeability features, are discussed in Note 21 and Note 24 of the consolidated financial statements.

T27 Shares and other instruments

As at October 31, 2018		Amount ($ millions)		Dividends declared per share(1)		Number outstanding (000s)		Conversion features
Common shares(2)	$	18,234	$	3.28		1,227,028		n/a
Preferred shares
Preferred shares Series 18(3)		–		0.418750		–		–
Preferred shares Series 19(3)		–		0.374547		–		–
Preferred shares Series 20(4)		–		0.902500		–		–
Preferred shares Series 21(4)		–		0.691967		–		–
Preferred shares Series 22(5)(6)		234		0.957500		9,377		Series 23
Preferred shares Series 23(5)(7)		66		0.736967		2,623		Series 22
Preferred shares Series 30(5)(8)		154		0.455000		6,143		Series 31
Preferred shares Series 31(5)(9)		111		0.516968		4,457		Series 30
Preferred shares Series 32(5)(10)		279		0.515752		11,162		Series 33
Preferred shares Series 33(5)(11)		130		0.601968		5,184		Series 32
Preferred shares Series 34(5)(12)(13)		350		1.375000		14,000		Series 35
Preferred shares Series 36(5)(12)(14)		500		1.375000		20,000		Series 37
Preferred shares Series 38(5)(12)(15)		500		1.212500		20,000		Series 39
Preferred shares Series 40(5)(12)(16)		300		–		12,000		Series 41
Additional Tier 1 securities	Amount ($ millions)		Distribution(17)		Yield (%)		Number outstanding (000s)
Scotiabank Trust Securities – Series 2006-1 issued by Scotiabank Capital Trust(18a,c,d)	$	750		28.25		5.650		750
Scotiabank Tier 1 Securities – Series 2009-1 issued by Scotiabank Tier 1 Trust(18b,c,d)		650		39.01		7.802		650
Subordinated additional Tier 1 capital securities (NVCC)	US$	1,250	US$	23.25		4.650		1,250
NVCC subordinated debentures					Amount ($ millions)		Interest Rate (%)
Subordinated debentures due March 2027					$	1,250		2.58
Subordinated debentures due December 2025						750		3.37
Subordinated debentures due December 2025					US$	1,250		4.50
Options							Number outstanding (000s)
Outstanding options granted under the Stock Option Plans to purchase common shares(2)(19)								14,140

(1)	Dividends declared as at August 28, 2018.
(2)	Dividends on common shares are paid quarterly, if and when declared. As at November 16, 2018, the number of outstanding common shares and options was 1,227,059 thousand and 14,108 thousand, respectively.
(3)	On April 26, 2018, the Bank redeemed all outstanding Non-cumulative Preferred shares Series 18 and Series 19 and paid a dividend of $0.209375 and $0.181788, respectively, per share.
(4)	On October 26, 2018, the Bank redeemed all outstanding Non-cumulative Preferred shares Series 20 and Series 21 and paid a dividend of $0.225625 and $0.187403, respectively, per share.
(5)	These shares are entitled to non-cumulative preferential cash dividends payable quarterly. These preferred shares have conversion features. Refer to Note 24 of the consolidated financial statements in the Bank’s 2018 Annual Report for further details.
(6)	Subsequent to the initial five-year fixed rate period which ended on January 25, 2014, and resetting every five years thereafter, the dividends, if and when declared, will be determined by the sum of the five-year Government of Canada Yield plus 1.88%, multiplied by $25.00.
(7)	Dividends, if and when declared, are determined by the sum of the three-month Government of Canada Treasury Bill Yield plus 1.88%, multiplied by $25.00, which will be reset quarterly.
(8)	Subsequent to the initial five-year fixed rate period which ended on April 25, 2015, and resetting every five years thereafter, the dividends, if and when declared, will be determined by the sum of the five-year Government of Canada Yield plus 1.00%, multiplied by $25.00.
(9)	Dividends, if and when declared, are determined by the sum of the three-month Government of Canada Treasury Bill Yield plus 1.00%, multiplied by $25.00, which will be reset quarterly.
(10)	Subsequent to the initial five-year fixed rate period which ended on February 1, 2016, and resetting every five years thereafter, the dividends, if and when declared, will be determined by the sum of the five-year Government of Canada Yield plus 1.34%, multiplied by $25.00.
(11)	Dividends, if and when declared, are determined by the sum of the three-month Government of Canada Treasury Bill Yield plus 1.34%, multiplied by $25.00, which will be reset quarterly.
(12)	These preferred shares contain Non-Viability Contingent Capital (NVCC) provisions necessary for the shares to qualify as Tier 1 regulatory capital under Basel III. Refer to Note 24 of the consolidated financial statements in the Bank’s 2018 Annual Report for further details.
(13)	Subsequent to the initial five-year fixed rate period ending on April 25, 2021, and resetting every five years thereafter, the dividends, if and when declared, will be determined by the sum of the five-year Government of Canada Yield plus 4.51%, multiplied by $25.00.
(14)	Subsequent to the initial five-year fixed rate period ending on July 25, 2021, and resetting every five years thereafter, the dividends, if and when declared, will be determined by the sum of the five-year Government of Canada Yield plus 4.72%, multiplied by $25.00.
(15)	Subsequent to the initial five-year fixed rate period ending on January 26, 2022, and resetting every five years thereafter, the dividends, if and when declared, will be determined by the sum of the five-year Government of Canada Yield plus 4.19%, multiplied by $25.00.
(16)	On October 12, 2018, the Bank issued 12 million Non-cumulative 5-Year Rate Reset Preferred Shares Series 40 (NVCC) for $300 million. The initial dividend, if declared, will be payable on January 29, 2019. Subsequent to the initial five-year fixed rate period ending on January 26, 2024, and resetting every five years thereafter, the dividends, if and when declared, will be determined by the sum of the five-year Government of Canada yield plus 2.43%, multiplied by $25.00
(17)	Per face amount of $1,000 or US$1,000, as applicable.
(18)(a)	On September 28, 2006, Scotiabank Capital Trust issued 750,000 Scotiabank Trust Securities – Series 2006-1 (Scotia BaTS II Series 2006-1). The holders of Scotia BaTS II Series 2006-1 are entitled to receive non-cumulative fixed cash distributions payable semi-annually in an amount of $28.25 per security. With regulatory approval, these securities may be redeemed in whole upon the occurrence of certain tax or regulatory capital changes, or in whole or in part on December 30, 2011 and on any distribution date thereafter at the option of Scotiabank Capital Trust. The holder has the right at any time to exchange their security into Non-cumulative Preferred Shares Series S of the Bank. The Series S shares will be entitled to cash dividends payable semi-annually in an amount of $0.4875 per $25.00 share [refer to Note 24 – Restrictions on dividend payments in the Bank’s 2018 Annual Report]. Under the circumstances outlined in 18(c) below, the Scotia BaTS II Series 2006-1 would be automatically exchanged without the consent of the holder, into Non-cumulative Preferred Shares Series T of the Bank. The Series T shares will be entitled to non-cumulative cash dividends payable semi-annually in an amount of $0.625 per $25.00 share. If there is an automatic exchange of the Scotia BaTS II Series 2006-1 into Preferred Shares Series T of the Bank, then the Bank would become the sole beneficiary of the Trust.
(18)(b)	On May 7, 2009, Scotiabank Tier 1 Trust issued 650,000 Scotiabank Tier 1 Securities Series 2009-1 (Scotia BaTS III Series 2009-1). Interest is payable semi-annually in an amount of $39.01 per Scotia BaTS III Series 2009-1 on the last day of June and December until June 30, 2019. After June 30, 2019 and on every fifth anniversary thereafter until June 30, 2104, the interest rate on the Scotia BaTS III Series 2009-1 will be reset at an interest rate per annum equal to the then prevailing 5-year Government of Canada Yield plus 7.05%. On or after June 30, 2014, the Trust may, at its option redeem the Scotia BaTS III Series 2009-1, in whole or in part, subject to regulatory approval. Under the circumstances outlined in 18(c) below, the Scotia BaTS III Series 2009-1, including accrued and unpaid interest thereon, would be exchanged automatically without the consent of the holder, into newly issued Non-cumulative Preferred Shares Series R of the Bank. In addition, in certain circumstances, holders of Scotia BaTS III Series 2009-1 may be required to invest interest paid on the Scotia BaTS III Series 2009-1 in a series of newly-issued preferred shares of the Bank with non-cumulative dividends (each such series is referred to as Bank Deferral Preferred Shares). If there is an automatic exchange of the Scotia BaTS III Series 2009-1 into Preferred Shares Series R of the Bank, then the Bank would become the sole beneficiary of the Trust.
(18)(c)	The Scotia BaTS II Series 2006-1 and Scotia BaTS III Series 2009-1 may be automatically exchanged, without the consent of the holder, into Non-cumulative Preferred Shares of the Bank in the following circumstances: (i) proceedings are commenced for the winding-up of the Bank; (ii) the Superintendent takes control of the Bank or its assets; (iii) the Bank has a Tier 1 Capital ratio of less than 5% or a Total Capital ratio of less than 8%; or (iv) the Superintendent has directed the Bank to increase its capital or provide additional liquidity and the Bank elects such automatic exchange or the Bank fails to comply with such direction.
(18)(d)	No cash distributions will be payable on the Scotia BaTS II Series 2006-1 and Scotia BaTS III Series 2009-1 in the event that the regular dividend is not declared on the Bank’s preferred shares and, if no preferred shares are outstanding, the Bank’s common shares. In such a circumstance the net distributable funds of the Trust will be payable to the Bank as the holder of the residual interest in the Trust. Should the Trust fail to pay the semi-annual distributions on the Scotia BaTS II Series 2006-1 and Scotia BaTS III Series 2009-1 in full, the Bank will not declare dividends, of any kind on any of its preferred or common shares for a specified period of time [refer to Note 24 – Restrictions on dividend payments].
(19)	Included are 3,900 stock options with tandem stock appreciation rights (Tandem SAR) features.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

Credit ratings

Credit ratings are one of the factors that impact the Bank’s access to capital markets and the terms on which it can conduct derivatives, hedging transactions and borrow funds. The credit ratings and outlook that the rating agencies assign to the Bank are based on their own views and methodologies.

The Bank continues to have strong credit ratings⁽¹⁾ and its deposits and legacy senior debt are rated AA by DBRS, Aa2 by Moody’s, AA- by Fitch and A+ by Standard and Poor’s (S&P). All four credit rating agencies have a stable outlook on the Bank.

The rating agencies took various actions around the finalization and implementation of Canada’s bail-in regime in 2018. On April 19, 2018, DBRS changed the Bank’s trend to Stable from Negative (on the Long Term Issuer Ratings, Senior Debt Ratings, and Deposits Ratings) and assigned AA (low) provisional rating to the new Bail-inable Senior Debt to be issued after September 23, 2018, following the finalization of Canada’s impending bail-in regime. On July 16, 2018, Moody’s upgraded the Bank’s long-term ratings by two-notches to Aa2 from A1 and changed the trend to Stable from Negative (on the Bank’s Long-Term Issuer Ratings, Senior Debt Ratings and Deposit Ratings), following the finalization of Canada’s impending bail-in regime. On September 24, 2018, Moody’s aligned the Bank’s Issuer Rating with the A2 provisional rating of bail-inable debt to be issued after September 23, 2018. Canadian banking peers’ ratings were aligned in a similar manner. The Bank’s Legacy Senior Debt Rating and Deposit Rating both remain unchanged at Aa2.

Risk-weighted assets

Regulatory capital requirements are based on OSFI’s target minimum percentage of risk-weighted assets (RWA). RWA represent the Bank’s exposure to credit, market and operational risk and are computed by applying a combination of the OSFI approved Bank’s internal risk models and OSFI prescribed risk weights to on- and off-balance sheet exposures. CET1, Tier 1 and Total Capital RWA were $400.5 billion, $400.7 billion and $400.9 billion, respectively at year end, representing increases from 2017 of approximately $24.1 billion, $24.3 billion and $24.5 billion, respectively.

Increases to CET1, Tier 1 and Total Capital RWA during the year are primarily due to organic growth and the Bank’s acquisitions which closed during the year, partly offset by the elimination of the RWA add-on from the Basel I capital floor and the impacts from foreign currency translation.

CET1 Credit risk-weighted assets

As shown in Table T28, CET1 credit risk-weighted assets increased by approximately $31.9 billion to $347.1 billion due primarily to the following components:

• Higher volumes increased RWA by $13.4 billion;

• Book quality changes, including parameter recalibrations, decreased RWA by $0.5 billion;

• Model updates decreased RWA by $1.0 billion;

• Acquisitions increased RWA by $21.2 billion; and,

• The impact of foreign exchange translation decreased RWA by $1.2 billion.

T28 Flow statement for Basel III All-in credit risk-weighted assets ($ millions)

	2018						2017
Credit risk-weighted assets movement by key driver(1) ($ millions)	Credit risk			Of which counterparty credit risk			Credit risk			Of which counterparty credit risk
CET1 Credit risk-weighted assets as at beginning of year	$	315,159		$	16,494		$	314,822		$	16,432
Book size(2)		13,351			(2,525	)		14,219			797
Book quality(3)		(488	)		(109	)		(5,812	)		(1,209	)
Model updates(4)		(1,037	)		–			(2,248	)		219
Methodology and policy(5)		332			332			1,062			521
Acquisitions and disposals		21,195			2,998			–			–
Foreign exchange movements		(1,249	)		353			(6,884	)		(266	)
Other		(167	)		–			–			–
CET1 Credit risk-weighted assets as at end of year(6)	$	347,096		$	17,543		$	315,159		$	16,494
Tier 1 CVA scalar		173			173			208			208
Tier 1 Credit risk-weighted assets as at end of year(6)		347,269			17,716			315,367			16,702
Total CVA scalar		173			173			166			166
Total Credit risk-weighted assets as at end of year(6)	$	347,442		$	17,889		$	315,533		$	16,868

(1) Includes counterparty credit risk.

(2) Book size is defined as organic changes in book size and composition (including new business and maturing loans).

(3) Book quality is defined as quality of book changes caused by experience such as underlying customer behaviour or demographics, including changes through model calibrations/realignments.

(4) Model updates are defined as model implementation, change in model scope or any change to address model enhancement.

(5) Methodology and policy is defined as methodology changes to the calculations driven by regulatory policy changes, such as new regulation (e.g. Basel III).

(6) As at October 31, 2018, risk-weighted assets were calculated using scalars of 0.80, 0.83, and 0.86 to compute CET1, Tier 1, and Total capital ratios, respectively, (scalars were 0.72, 0.77, and 0.81 in 2017).

⁽¹⁾  Refers to the long term deposit rating and legacy senior debt rating. Senior debt post September 23, 2018 issued under the “bail-in” regime will be notched down by Moody’s(A2), S&P(A-) and DBRS(AA(low)) relative to the legacy senior debt. The Bank has not issued such bail-inable senior debt as of November 26, 2018.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T29 Internal rating scale⁽¹⁾ and mapping to external rating agencies

Equivalent Rating
External Rating – S&P	External Rating – Moody’s	External Rating – DBRS	Grade	IG Code	PD Range(2)
AAA to AA+	Aaa to Aa1	AAA to AA (high)	Investment grade	99-98	0.0000% – 0.0448%
AA to A+	Aa2 to A1	AA to A (high)		95	0.0448% – 0.1304%
A to A-	A2 to A3	A to A (low)		90	0.0552% – 0.1402%
BBB+	Baa1	BBB (high)		87	0.0876% – 0.2187%
BBB	Baa2	BBB		85	0.1251% – 0.3176%
BBB-	Baa3	BBB (low)		83	0.1788% – 0.4610%
BB+	Ba1	BB (high)	Non-Investment grade	80	0.2886% – 0.5134%
BB	Ba2	BB		77	0.4658% – 0.5716%
BB-	Ba3	BB (low)		75	0.5716% – 0.7518%
B+	B1	B (high)		73	0.7518% – 1.4444%
B to B-	B2 to B3	B to B (low)		70	1.4444% – 2.7749%
CCC+	Caa1	–	Watch list	65	2.7749% – 10.1814%
CCC	Caa2	–		60	10.1814% – 19.4452%
CCC- to CC	Caa3 to Ca	–		40	19.4452% – 35.4088%
–	–	–		30	35.4088% – 59.5053%
Default			Default	21	100%

(1) Applies to non-retail portfolio.

(2) PD ranges overlap across IG codes as the Bank utilizes two risk rating systems for its AIRB portfolios, and each risk rating system has its own separate IG to PD mapping.

T30 Non-retail AIRB portfolio exposure by internal rating grade⁽¹⁾

As at October 31 ($ millions)		2018										2017
Grade	IG Code	Exposure at default ($)(3)		RWA ($)(4)		PD (%)(5)(8)		LGD (%)(6)(8)		RW (%)(7)(8)		Exposure at default ($)(3)		RWA ($)(4)		PD (%)(5)(8)		LGD (%)(6)(8)		RW (%)(7)(8)
Investment grade(2)	99-98		86,767		869		0.01		12		1		79,908		930		0.01		11		1
	95		57,856		6,121		0.05		32		11		46,871		5,816		0.05		33		12
	90		60,751		8,834		0.07		34		15		56,472		9,190		0.07		35		16
	87		47,545		11,711		0.10		40		25		44,533		10,229		0.11		38		23
	85		44,191		15,716		0.16		44		36		40,379		13,229		0.16		43		33
	83		42,802		18,982		0.24		44		44		41,488		17,796		0.25		44		43
Non-Investment grade	80		39,614		22,490		0.36		46		57		36,235		18,701		0.35		44		52
	77		26,883		15,253		0.49		42		57		23,045		13,167		0.50		42		57
	75		19,138		13,455		0.75		42		70		20,085		13,703		0.75		43		68
	73		7,520		5,623		1.44		35		75		7,271		5,608		1.44		35		77
	70		2,817		2,190		2.78		31		78		3,758		3,666		2.77		37		98
Watch list	65		1,143		1,888		10.18		41		165		2,167		2,136		10.18		25		99
	60		1,104		1,517		19.48		28		137		761		1,454		19.45		38		191
	40		576		1,164		30.84		38		202		1,311		2,647		30.74		38		202
	30		141		236		59.16		42		167		159		220		58.44		36		138
Default(9)	21		1,178		3,043		100		42		258		1,752		6,298		100		44		359
Total			440,026		129,092		0.61		34		29		406,195		124,790		0.86		34		31
Government guaranteed residential mortgages			82,192		–		–		23		–		91,737		–		–		35		–
Total			522,218		129,092		0.51		32		25		497,932		124,790		0.70		34		25

(1)  Excludes securitization exposures.

(2)  Excludes government guaranteed residential mortgages of $82.2 billion ($91.7 billion in 2017).

(3)  After credit risk mitigation.

(4)  RWA prior to 6% scaling factor.

(5)  PD – Probability of Default.

(6)  LGD – Loss Given Default.

(7)  RW – Risk Weight.

(8)  Exposure at default used as basis for estimated weightings.

(9)  Gross defaulted exposures, before any related allowances.

Credit risk-weighted assets – non-retail

Credit risk measures the risk that a borrower or counterparty will fail to honour its financial or contractual obligations to the Bank. The Bank uses the Advanced Internal Ratings Based (AIRB) approach under Basel III to determine minimum regulatory capital requirements for its domestic, U.S. and European credit portfolios, and certain international non-retail portfolios. The remaining credit portfolios are subject to the Standardized approach, which relies on the external credit ratings (e.g. S&P, Moody’s, DBRS, etc.) of borrowers, if available, to compute regulatory capital for credit risk. For the Bank’s Corporate, Bank and Sovereign AIRB portfolios, the key risk measures used in the quantification of regulatory capital for credit risk include probability of default (PD), loss given default (LGD) and exposure at default (EAD).

• Probability of default (PD) measures the likelihood that a borrower, with an assigned Internal Grade (IG) code, will default within a one-year time horizon. IG codes are a component of the Bank’s risk rating system. Each of the Bank’s internal borrower IG codes is mapped to a PD estimate.

• Loss given default (LGD) measures the severity of loss on a facility in the event of a borrower’s default. The Bank’s internal LGD grades are mapped to ranges of LGD estimates. LGD grades are assigned based on facility characteristics such as seniority, collateral type, collateral coverage and other structural elements. LGD for a defaulted exposure is based on the concept of economic loss and is calculated using the present value of repayments, recoveries and related direct and indirect expenses.

• Exposure at default (EAD) measures the expected exposure on a facility at the time of default.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

All three risk measures are estimated using the Bank’s historical data, as well as available external benchmarks, and are updated on a regular basis. The historical data used for estimating these risk measures exceeds the minimum five-year AIRB requirement for PD estimates and the minimum seven-year AIRB requirement for LGD and EAD estimates. Further analytical adjustments, as required under the Basel III Framework and OSFI’s requirements set out in its Domestic Implementation Notes, including any input floor requirements, are applied to average estimates obtained from historical data. These analytical adjustments incorporate the regulatory requirements pertaining to:

• Long-run estimation of PD, which requires that PD estimates capture average default experience over a reasonable mix of high-default and low-default years of the economic cycle;

• Downturn estimation for LGD, which requires that LGD estimates appropriately reflect conditions observed during periods where credit losses are substantially higher than average; and

• Downturn estimation for EAD, which requires that EAD estimates appropriately reflect conditions observed during periods of economic downturn; and

• The addition of a margin of conservatism, which is related to the likely range of errors based on the identification and quantification of the various sources of uncertainty inherent in historical estimates.

These risk measures are used in the calculation of regulatory capital requirements based on formulas specified by the Basel framework. The credit quality distribution of the Bank’s AIRB non-retail portfolio is shown in Table T30.

The risk measures are subject to a rigorous back-testing framework which uses the Bank’s historical data to ensure that they are appropriately calibrated. Based on results obtained from the back-testing process, risk measures are reviewed, re-calibrated and independently validated on at least an annual basis in order to reflect the implications of new data, technical advances and other relevant information.

• As PD estimates represent long-run parameters, back-testing is performed using historical data spanning at least one full economic cycle. Realized PDs are back-tested using pre-defined confidence intervals, and the results are then aggregated to provide an overall assessment of the appropriateness of each PD estimate;

• The back-testing for LGD and EAD estimates is conducted from both long-run and downturn perspectives, in order to ensure that these estimates are adequately conservative to reflect both long-run and downturn conditions.

Portfolio-level back-testing results, based on a comparison of estimated and realized parameters for the four-quarter period ended at July 31, 2018, are shown in Table T31. During this period the actual experience was materially more favourable than the estimates as reflected within the risk parameters.

T31 Portfolio-level comparison of estimated and actual non-retail percentages

	Estimated(1)		Actual
Average PD		0.89		0.27
Average LGD		40.76		31.16
Average CCF(2)		48.92		10.64

(1) Estimated parameters are based on portfolio averages at Q3/17, whereas actual parameters are based on averages of realized parameters during the subsequent four quarters.

(2) EAD back-testing is performed through Credit Conversion Factor (CCF) back-testing, as EAD is computed using the sum of the drawn exposure and undrawn exposure multiplied by the estimated CCF.

Credit risk-weighted assets – Canadian retail

The AIRB approach is used to determine minimum regulatory capital requirements for the retail credit portfolio. The retail portfolio is comprised of the following Basel-based pools:

• Residential real estate secured exposures consists of conventional and high ratio residential mortgages and all other products opened under the Scotia Total Equity Plan (STEP), such as loans, credit cards and secured lines of credit;

• Qualifying revolving retail exposures consists of all unsecured credit cards and lines of credit;

• Other retail consists of term loans (secured and unsecured), as well as credit cards and lines of credit which are secured by assets other than real estate.

For the AIRB portfolios, the following models and parameters are estimated, subject to parameter input floors as required by OSFI:

• Probability of default (PD) is the likelihood that the facility will default within the next 12 months.

• Loss Given Default (LGD) measures the economic loss as a proportion of the defaulted balance.

• Exposure at Default (EAD) is the portion of expected exposures at time of default.

The data observation period used for PD/EAD/LGD estimates meets the five year minimum. Various statistical techniques including predictive modeling and decision trees were used to develop models. The models assign accounts into homogenous segments using internal and external borrower/facility-level credit experience. Every month, exposures are automatically re-rated based on risk and loss characteristics. PD, LGD and EAD estimates are then assigned to each of these segments incorporating the following regulatory requirements:

• PD incorporates the average long run default experience over an economic cycle. This long run average includes a mix of high and low default years.

• LGD is adjusted to appropriately reflect economic downturn conditions.

• EAD may also be adjusted to reflect downturn conditions when PD and EAD are highly correlated.

• Sources of uncertainty are reviewed regularly to ensure uncertainties are identified, quantified and included in calculations so that all parameter estimates reflect appropriate levels of conservatism.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The table below summarizes the credit quality distribution of the Bank’s AIRB retail portfolio as at October 31, 2018.

T32 Retail AIRB portfolio exposure by PD range⁽¹⁾

As at October 31 ($ millions)		2018										2017
Category	PD Range	Exposure at default ($)(1)		RWA ($)(2)		PD (%)(3)(6)		LGD (%)(4)(6)		RW (%)(5)(6)		Exposure at default ($)(1)		RWA ($)(2)		PD (%)(3)(6)		LGD (%)(4)(6)		RW (%)(5)(6)
Exceptionally low	0.0000% – 0.0499%		12,155		317		0.05		74		3		16,026		476		0.05		66		3
Very low	0.0500% – 0.1999%		89,544		4,605		0.09		29		5		80,507		4,059		0.09		28		5
Low	0.2000% – 0.9999%		107,036		21,654		0.52		33		20		94,081		19,638		0.52		35		21
Medium low	1.0000% – 2.9999%		20,578		11,970		2.04		58		58		17,070		9,919		1.91		57		58
Medium	3.0000% – 9.9999%		7,211		7,701		6.01		69		107		8,583		8,827		5.56		75		103
High	10.0000% – 19.9999%		1,370		1,819		14.68		52		133		889		1,086		17.18		43		122
Extremely high	20.0000% – 99.9999%		1,591		2,728		36.84		58		171		1,453		2,566		36.86		62		177
Default(7)	100%		588		–		100.00		82		–		607		–		100.00		79		–
Total			240,073		50,794		1.19		37		21		219,216		46,571		1.21		38		21

(1) After credit risk mitigation.

(2) RWA prior to 6% scaling factor.

(3) PD – Probability of Default.

(4) LGD – Loss Given Default.

(5) RW – Risk Weight.

(6) Exposure at default used as basis for estimated weightings.

(7) Gross defaulted exposures, before any related allowances.

All AIRB models and parameters are monitored on a quarterly basis and independently validated annually by the Global Risk Management group. These models are tested to ensure rank ordering and back testing of parameters is appropriate. Comparison of estimated and actual loss parameters for the period ended July 31, 2018 is shown in Table T33. During this period the actual experience was materially more favourable than the estimates as reflected within the risk parameters.

T33 Estimated and actual loss parameters⁽¹⁾

($ millions)	Average estimated PD (%)(2)(7)		Actual default rate (%)(2)(5)		Average estimated LGD (%)(3)(7)		Actual LGD (%)(3)(6)		Estimated EAD ($)(4)(7)		Actual EAD ($)(4)(5)
Residential real estate secured
Residential mortgages
Insured mortgages(8)		0.70		0.47		–		–		–		–
Uninsured mortgages		0.51		0.30		18.23		11.78		–		–
Secured lines of credit		0.39		0.26		28.87		17.25		91		83
Qualifying revolving retail exposures		2.00		1.64		79.69		70.04		681		593
Other retail		1.90		1.14		60.77		49.38		7		7

(1) Estimates and actual values are recalculated to align with new models implemented during the period.

(2) Account weighted aggregation.

(3) Default weighted aggregation.

(4) EAD is estimated for revolving products only.

(5) Actual based on accounts not at default as at four quarters prior to reporting date.

(6) Actual LGD calculated based on 24 month recovery period after default and therefore excludes any recoveries received after the 24 month period.

(7) Estimates are based on the four quarters prior to the reporting date.

(8) Actual and estimated LGD for insured mortgages are not shown. Actual LGD includes the insurance benefit, whereas estimated LGD may not.

Credit risk-weighted assets – International retail

International retail credit portfolios follow the Standardized approach and consist of the following components:

• Residential real estate secured lending;

• Qualifying revolving retail exposures consisting of all credit cards and lines of credit;

• Other retail consisting of term loans.

Under the standardized approach, in general, residential real estate secured lending products are risk-weighted 35% and other retail products receive a 75% risk-weight.

Market risk

Market risk is the risk of loss from changes in market prices including interest rates, credit spreads, equity prices, foreign exchange rates, and commodity prices, the correlations between them, and their levels of volatility.

For all material trading portfolios, the Bank applies its internal models to calculate the market risk capital charge. OSFI has approved the Bank’s internal VaR, Stressed VaR, Incremental Risk Charge and Comprehensive Risk Measure models for the determination of market risk capital. The attributes and parameters of these models are described in the Risk Measurement Summary.

For some non-material trading portfolios, the Bank applies the Standardized Approach for calculating market risk capital. The standardized method uses a “building block” approach, with the capital charge for each risk category calculated separately.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

Below are the market risk requirements as at October 31, 2018 and 2017:

T34 Total market risk capital

($ millions)	2018		2017
All-Bank VaR	$	124	$	110
All-Bank stressed VaR		419		300
Incremental risk charge		95		174
Comprehensive risk measure		–		–
Standardized approach		31		43
Total market risk capital	$	669	$	627

(1) Equates to $8,357 million of market risk-weighted assets (2017 – $7,839 million).

T35 Risk-weighted assets movement by key drivers

	Market risk
($ millions)	2018			2017
RWA as at beginning of the year	$	7,839		$	10,571
Movement in risk levels(1)		(554	)		(2,774	)
Model updates(2)		(1,963	)		42
Methodology and policy(3)		–			–
Acquisitions and disposals		3,035			–
RWA as at end of the year	$	8,357		$	7,839

(1) Movement in risk levels are defined as changes in risk due to position changes and market movements. Foreign exchange movements are embedded within Movement in risk levels.

(2) Model updates are defined as updates to the model to reflect recent experience, change in model scope.

(3) Methodology and policy is defined as methodology changes to the calculations driven by regulatory policy changes (eg. Basel III).

Market risk-weighted assets increased by $0.5 billion to $8.4 billion, as shown in Table T36, due primarily to the acquisitions which closed during the year, partly offset by model updates and movements in risk levels.

Operational risk

Operational risk is the risk of loss, whether direct or indirect, to which the Bank is exposed due to external events, human error, or the inadequacy or failure of processes, procedures, systems or controls. The Bank applies a combination of the Standardized Approach and the Advanced Measurement Approach for calculating operational risk capital as per the applicable Basel Standards.

Under the Standardized Approach (TSA), total capital is determined as the sum of capital for each of eight Basel defined business activities. The capital for each activity is the product of the relevant risk factor, as defined by Basel, applied to the gross income of each respective business activity.

In addition, the Bank received approval from OSFI to use the Advanced Measurement Approach (AMA) commencing the first quarter of 2017. Under AMA, regulatory capital measurement more directly reflects the Bank’s operational risk environment through the use of a loss distribution approach model which uses internal loss events, external loss events, scenario analysis and other adjustments to arrive at a final operational risk regulatory capital calculation. Since the Bank’s AMA requirements are floored at TSA requirements, the AMA model continued to have no impact on operational risk-weighted assets in 2018.

Operational risk-weighted assets increased by $4.4 billion during the year to $45.0 billion primarily due to the acquisitions which closed during the year and organic growth in gross income.

Internal capital

The Bank utilizes economic capital methodologies and measures to calculate internal capital. Internal capital is a measure of the unexpected losses inherent in the Bank’s business activities. The calculation of internal capital relies on models that are subject to independent vetting and validation as required by the Bank’s Model Risk Management Policy.

Management assesses its risk profile to determine those risks for which the Bank should attribute internal capital. The major risk categories included in internal capital are:

• Credit risk measurement is based on the Bank’s internal credit risk ratings for derivatives, corporate and commercial loans, and credit scoring for retail loans. It is also based on the Bank’s actual experience with recoveries and takes into account differences in term to maturity, probabilities of default, expected severity of loss in the event of default, and the diversification benefits of certain portfolios.

• Market risk for internal capital incorporates models consistent with the regulatory basis, with some exclusions, and calibrated to a higher 99.95% confidence interval, and models of other market risks, mainly structural interest rate and foreign exchange risks.

• Operational risk for internal capital is mainly based on the Bank’s regulatory capital model using the Advanced Measurement Approach, and calibrated to a higher 99.95% confidence interval.

• Other risks include additional risks for which internal capital is attributed, such as business risk, significant investments, insurance risk and real estate risk.

In addition, the Bank’s measure of internal capital includes a diversification benefit which recognizes that all of the above risks will not occur simultaneously. The Bank also includes the full amount of goodwill and intangible assets in the internal capital amount.

For further discussion on risk management and details on credit, market and operational risks, refer to the Risk Management section.

Off-Balance Sheet Arrangements

In the normal course of business, the Bank enters into contractual arrangements that are either consolidated or not required to be consolidated in its financial statements, but could have a current or future impact on the Bank’s financial performance or financial condition. These arrangements can be classified into the following categories: structured entities, securitizations, guarantees and other commitments.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Structured entities

Structured entities are designed to accomplish certain well-defined objectives and for which voting or similar rights are not the dominant factor in deciding who controls the entity. The Bank may become involved with structured entities either at the formation stage or at a later date. The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Bank’s arrangements with structured entities include:

• Structured entities that are used to provide a wide range of services to customers, such as structured entities established to allow clients to securitize their financial assets while facilitating cost-efficient financing, and to provide certain investment opportunities.

• Structured entities that the Bank sponsors and actively manages (see discussion on other unconsolidated structured entities on page 69).

All structured entities are subject to a rigorous review and approval process in order that all significant risks are properly identified and addressed. The Bank consolidates all structured entities that it controls. For many of the structured entities that are used to provide services to customers, the Bank does not guarantee the performance of the structured entities’ underlying assets, and does not absorb any related losses. For other structured entities, such as securitization and investment vehicles, the Bank may be exposed to credit, market, liquidity or operational risks. The Bank earns fees based on the nature of its association with a structured entity.

Consolidated structured entities

The Bank controls its U.S.-based multi-seller conduit and certain funding and other vehicles, and consolidates these structured entities in the Bank’s consolidated financial statements.

As at October 31, 2018, total assets of consolidated structured entities were $48 billion, compared to $53 billion at the end of 2017. The change was primarily due to the winding up of Scotia Covered Bond Trust during the year. More details of the Bank’s consolidated structured entities are provided in Note 15(a) to the consolidated financial statements.

Unconsolidated structured entities

There are two primary types of association the Bank has with unconsolidated structured entities:

• Canadian multi-seller conduits administered by the Bank, and

• Structured finance entities.

The Bank earned total fees of $28 million in 2018 (October 31, 2017 – $30 million) from certain structured entities in which it had a significant interest at the end of the year but did not consolidate. More information with respect to the Bank’s involvement with these unconsolidated structured entities, including details of liquidity facilities and maximum loss exposure by category is provided below and in Note 15(b) to the consolidated financial statements.

Canadian multi-seller conduits administered by the Bank

The Bank sponsors two Canadian-based multi-seller conduits that are not consolidated. The Bank earned commercial paper issuance fees, program management fees, liquidity fees and other fees from these multi-seller conduits, which totaled $26 million in 2018, compared to $29 million in 2017. These multi-seller conduits purchase high-quality financial assets and finance these assets through the issuance of highly-rated commercial paper.

As further described below, the Bank’s exposure to these off-balance sheet conduits primarily consists of liquidity support and temporary holdings of commercial paper. Although the Bank has power over the relevant activities of the conduits, it has limited exposure to variability in returns, which results in the Bank not consolidating the two Canadian conduits. The Bank has a process to monitor these exposures and significant events impacting the conduits to ensure there is no change in control, which could require the Bank to consolidate the assets and liabilities of the conduits at fair value.

A significant portion of the conduits’ assets have been structured to receive credit enhancements from the sellers, including overcollateralization protection and cash reserve accounts. Each asset purchased by the conduits is supported by a backstop liquidity facility provided by the Bank in the form of a liquidity asset purchase agreement (LAPA). The primary purpose of the backstop liquidity facility is to provide an alternative source of financing in the event the conduits are unable to access the commercial paper market. Under the terms of the LAPA, in most cases, the Bank is not obliged to purchase defaulted assets.

The Bank’s primary exposure to the Canadian-based conduits is the liquidity support provided, with total liquidity facilities of $4 billion as at October 31, 2018 (October 31, 2017 – $5 billion). The year-over-year decrease was due to normal business operations. As at October 31, 2018, total commercial paper outstanding for the Canadian-based conduits was $3.2 billion (October 31, 2017 – $3.1 billion) and the Bank held 0.1% of the total commercial paper issued by these conduits. Table T36 presents a summary of assets purchased and held by the Bank’s two Canadian multi-seller conduits as at October 31, 2018 and 2017, by underlying exposure.

All of the funded assets have at least an equivalent rating of AA– or higher based on the Bank’s internal rating program. Assets held in these conduits were investment grade as at October 31, 2018. Approximately 72% of the funded assets have final maturities falling within three years, and the weighted-average repayment period, based on cash flows, approximates 1.2 years.

T36 Assets held by Bank-sponsored Canadian-based multi-seller conduits

	2018						2017
As at October 31 ($ millions)	Funded assets(1)		Unfunded commitments		Total exposure(2)		Funded assets(1)		Unfunded commitments		Total exposure(2)
Auto loans/leases	$	2,375	$	361	$	2,736	$	2,447	$	464	$	2,911
Trade receivables		469		312		781		161		649		810
Canadian residential mortgages		372		154		526		519		756		1,275
Total(3)	$	3,216	$	827	$	4,043	$	3,127	$	1,869	$	4,996

(1) Funded assets are reflected at original cost, which approximates estimated fair value.

(2) Exposure to the Bank is through global-style liquidity facilities.

(3) These assets are substantially sourced from Canada.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

Structured finance entities

The Bank has interests in structured finance entities used to assist corporate clients in accessing cost-efficient financing through their securitization structures. The Bank’s maximum exposure to loss from structured finance entities was $2,032 million as at October 31, 2018, (October 31, 2017 – $1,827 million). The change was primarily due to new structures entered into during the year.

Other unconsolidated structured entities

The Bank sponsors unconsolidated structured entities including mutual funds, in which it has insignificant or no interest at the reporting date. The Bank is a sponsor when it is significantly involved in the design and formation at inception of the structured entity, and the Bank’s name is used by the structured entity to create an awareness of the instruments being backed by the Bank’s reputation and obligation. The Bank also considers other factors, such as its continuing involvement and obligations to determine if, in substance, the Bank is a sponsor. For the year ended October 31, 2018, the Bank earned $2,121 million income from its involvement with the unconsolidated Bank-sponsored structured entities, a majority of which is from Bank-sponsored mutual funds (for the year ended October 31, 2017 – $2,021 million).

Securitizations

The Bank securitizes fully insured residential mortgage loans, Bank originated and others, through the creation of mortgage backed securities that are sold to Canada Housing Trust (CHT) and/or third party investors. The sale of such mortgages does not qualify for derecognition with the exception of social housing mortgage pools. The outstanding amount of off-balance sheet securitized social housing pools was $1,101 million as at October 31, 2018, compared to $1,264 million last year. The transferred mortgages sold to CHT and/or third party investors continue to be recognized on balance sheet along with the proceeds from sale treated as secured borrowings. More details have been provided in Note 14 in the consolidated financial statements.

The Bank securitizes a portion of its Canadian lines of credit and credit card receivables (receivables) through two Bank-sponsored structured entities. The receivables are comprised of unsecured personal lines of credit, securitized through Halifax Receivables Trust (Halifax) (formerly Hollis Receivables Term Trust II), and personal and small business credit card receivables, securitized through Trillium Credit Card Trust II (Trillium). Halifax and Trillium issue Class A notes to third-party investors and subordinated notes to the Bank, and the proceeds of such issuances are used to purchase co-ownership interests in the respective receivables originated by the Bank. The sale of such co-ownership interests does not qualify for derecognition and therefore the receivables continue to be recognized on the Bank’s Consolidated Statement of Financial Position. Recourse of the note holders is limited to the purchased co-ownership interests. During the year, no receivables were securitized through Halifax (2017 – nil) and $1,678 million of receivables were securitized through Trillium (2017 – nil). As at October 31, 2018, the outstanding subordinated notes issued by Halifax of $205 million (2017 – $205 million) and Trillium of $134 million (2017 – $99 million), both held by the Bank, are eliminated on consolidation.

The Bank securitizes a portion of its Canadian auto loan receivables (receivables) through Securitized Term Auto Receivables Trust 2016-1, 2017-1, 2017-2, 2018-1 and 2018-2 (START) Bank-sponsored structured entities. The START entities issue multiple series of Class A notes to third-party investors and may issue Class A and/or subordinated notes to the Bank, and the proceeds of such issuances are used to purchase discrete pools of retail indirect auto loan receivables from the Bank on a fully serviced basis. The sale of such pools does not qualify for derecognition and therefore the receivables continue to be recognized on the Bank’s Consolidated Statement of Financial Position. Recourse of the note holders is limited to the receivables. During the year, assets of $1,874 million were securitized through the START program (2017 – $2,176 million). As at October 31, 2018, the outstanding Class A and subordinated notes issued by the START entities that are held by the Bank of $447 million (2017 – $178 million) are eliminated on consolidation.

Guarantees and other commitments

Guarantees and other commitments are fee-based products that the Bank provides to its customers. These products can be categorized as follows:

• Standby letters of credit and letters of guarantee. As at October 31, 2018, these amounted to $35 billion, compared to $36 billion last year. These instruments are issued at the request of a Bank customer to secure the customer’s payment or performance obligations to a third party.

• Liquidity facilities. These generally provide an alternate source of funding to asset-backed commercial paper conduits in the event a general market disruption prevents the conduits from issuing commercial paper or, in some cases, when certain specified conditions or performance measures are not met;

• Indemnification contracts. In the ordinary course of business, the Bank enters into many contracts where it may indemnify contract counterparties for certain aspects of its operations that are dependent on other parties’ performance, or if certain events occur. The Bank cannot estimate, in all cases, the maximum potential future amount that may be payable, nor the amount of collateral or assets available under recourse provisions that would mitigate any such payments. Historically, the Bank has not made any significant payments under these indemnities;

• Loan commitments. The Bank has commitments to extend credit, subject to specific conditions, which represent undertakings to make credit available in the form of loans or other financings for specific amounts and maturities. As at October 31, 2018, these commitments amounted to $197 billion, compared to $186 billion last year. The year-over-year increase is primarily due to an increase in business activity.

These guarantees and loan commitments may expose the Bank to credit or liquidity risks, and are subject to the Bank’s standard review and approval processes. For the guaranteed products, the dollar amounts represent the maximum risk of loss in the event of a total default by the guaranteed parties, and are stated before any reduction for recoveries under recourse provisions, insurance policies or collateral held or pledged.

Fees from the Bank’s guarantees and loan commitment arrangements, recorded as credit fees in other income in the Consolidated Statement of Income, were $572 million in 2018, compared to $571 million in the prior year. Detailed information on guarantees and loan commitments is disclosed in Note 36 in the consolidated financial statements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Financial Instruments

Given the nature of the Bank’s main business activities, financial instruments make up a substantial portion of the Bank’s financial position and are integral to the Bank’s business. Assets that are financial instruments include cash resources, securities, securities purchased under resale agreements, loans and customers’ liability under acceptances. Financial instrument liabilities include deposits, acceptances, obligations related to securities sold under repurchase agreements, obligations related to securities sold short, subordinated debentures and capital instrument liabilities. In addition, the Bank uses derivative financial instruments for both trading and hedging purposes.

Financial instruments are generally carried at fair value, except for non-trading loans and receivables, certain securities and most financial liabilities, which are carried at amortized cost unless designated as fair value through profit and loss at inception.

Unrealized gains and losses on the following items are recorded in other comprehensive income (OCI):

• debt instruments measured at fair value through OCI,

• equity instruments measured at fair value through OCI,

• derivatives designated as cash flow hedges, and

• net investment hedges.

Gains and losses on derecognition of debt instruments at FVOCI and impairment provisions are reclassified from OCI to the Consolidated Statement of Income under non-interest income. Gains and losses on derecognition of equity instruments designated at FVOCI are not reclassified from OCI to the consolidated statement of income. Gains and losses on cash flow hedges and net investment hedges are recorded in the Consolidated Statement of Income when the hedged item affects income.

The Bank’s accounting policies for derivatives and hedging activities are further described in Note 3 to the consolidated financial statements.

Interest income and expense on non-trading interest-bearing financial instruments are recorded in the Consolidated Statement of Income as part of net interest income. Credit losses related to loans are recorded in the provision for credit losses in the Consolidated Statement of Income. Interest income and expense, as well as gains and losses, on trading securities and trading loans are recorded in non-interest income – trading revenues.

Several risks arise from transacting financial instruments, including credit risk, liquidity risk, operational risk and market risk. The Bank manages these risks using extensive risk management policies and practices, including various Board-approved risk management limits.

A discussion of the Bank’s risk management policies and practices can be found in the Risk Management section on pages 72 to 109. In addition, Note 37 to the consolidated financial statements presents the Bank’s exposure to credit risk, liquidity risk and market risks arising from financial instruments as well as the Bank’s corresponding risk management policies and procedures.

There are various measures that reflect the level of risk associated with the Bank’s portfolio of financial instruments. For example, the interest rate risk arising from the Bank’s financial instruments can be estimated by calculating the impact of a 100 basis point increase or decrease in interest rates on annual income, and the economic value of shareholders’ equity, as described on page 94. For trading activities, Table T46 discloses the average one-day Value at Risk by risk factor. For derivatives, based on the maturity profile of the notional amount of the Bank’s derivative financial instruments, only 18% (2017 – 17%) had a term to maturity greater than five years.

Note 10 to the consolidated financial statements provides details about derivatives used in trading and hedging activities, including notional amounts, remaining term to maturity, credit risk and fair values.

The fair value of the Bank’s financial instruments is provided in Note 7 to the consolidated financial statements along with a description of how these amounts were determined.

The fair value of the Bank’s financial instruments was favourable when compared to their carrying value by $2.8 billion as at October 31, 2018 (October 31, 2017 – favourable $1.7 billion). This difference relates mainly to loan assets, deposit liabilities, subordinated debentures and other liabilities. These changes are primarily driven by movements in interest rates and by volume changes. Fair value estimates are based on market conditions as at October 31, 2018, and may not be reflective of future fair values. Further information on how fair values are estimated is contained in the section on critical accounting estimates.

Disclosures specific to certain financial instruments designated at fair value through profit and loss can be found in Note 9 to the consolidated financial statements. These designations were made primarily to significantly reduce accounting mismatches.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    GROUP FINANCIAL CONDITION

Selected Credit Instruments – Publically Known Risk Items

Mortgage-backed securities

Total mortgage-backed securities held in the Non-trading and Trading portfolios are shown in Table T37.

T37 Mortgage-backed securities

As at October 31 Carrying value ($ millions)	2018				2017
	Non-trading portfolio		Trading portfolio		Non-trading portfolio		Trading portfolio
Canadian NHA mortgage-backed securities(1)	$	2,254	$	1,791	$	1,810	$	1,709
Commercial mortgage-backed securities		–		15		–		1
Other residential mortgage-backed securities		504		–		461		–
Total	$	2,758	$	1,806	$	2,271	$	1,710

(1) Canada Mortgage and Housing Corporation provides a guarantee of timely payment to NHA mortgage-backed security investors.

Collateralized debt obligations

Trading portfolio

The Bank does not have any collateralized debt obligations in its trading portfolios as at October 31, 2018 and October 31, 2017.

Other

As at October 31, 2018, the Bank has insignificant exposure to highly leveraged loans awaiting syndication, auction-rate securities, Alt-A type loans, monoline insurance and investments in structured investment vehicles.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

RISK MANAGEMENT

Effective risk management is fundamental to the success of the Bank, and is recognized as key in the Bank’s overall approach to strategy management. Scotiabank has a strong, disciplined risk culture where managing risk is a responsibility shared by all of the Bank’s employees.

Risk Management Framework

The primary goals of risk management are to ensure that the outcomes of risk-taking activities are consistent with the Bank’s strategies and risk appetite, and that there is an appropriate balance between risk and reward in order to maximize shareholder value. Scotiabank’s Enterprise-Wide Risk Management Framework articulates the foundation for achieving these goals.

This Framework is subject to constant evaluation to ensure that it meets the challenges and requirements of the global markets in which the Bank operates, including regulatory standards and industry best practices. The risk management programs of the Bank’s subsidiaries align in all material respects to the Bank’s risk management framework, although the actual execution of their programs may be different.

The Bank’s risk management framework is applied on an enterprise-wide basis and consists of five key elements:

• Risk Governance

• Risk Appetite

• Risk Management Tools

• Risk Identification and Assessment

• Risk Culture

Risk Management Principles

Risk-taking and risk management activities across the enterprise are guided by the following principles:

Risk and Reward – business and risk decisions are consistent with strategies and risk appetite.

Understand the Risks – all material risks to which the Bank is exposed, including both financial and non-financial, are identified and managed.

Forward Thinking – emerging risks and potential vulnerabilities are proactively identified.

Shared Accountability – every employee is responsible for managing risk.

Customer Focus – understanding our customers and their needs is essential to all business and risk decision-making.

Protect our Brand – all risk taking activities must be in line with the Bank’s risk appetite, Code of Conduct, values and policy principles.

Compensation – performance and compensation structures reinforce the Bank’s values and promote sound risk taking behaviour.

Risk Governance

Effective risk management begins with effective risk governance.

The Bank has a well-established risk governance structure, with an active and engaged Board of Directors supported by an experienced executive management team. Decision-making is highly centralized through a number of senior and executive risk management committees.

The Bank’s risk management framework is predicated on the three-lines-of-defence model. Within this model,

• the First Line of Defence (typically comprised of the business lines and most corporate functions) incurs and owns the risks,

• the Second Line of Defence (typically comprised of control functions such as Global Risk Management, Global Compliance, Global AML/ATF and Global Finance) provides independent oversight and objective challenge to the First Line of Defence, as well as monitoring and control of risk, and

• the Third Line of Defence (Internal Audit) provides enterprise-wide independent assurance over the design and operation of the Bank’s internal control, risk management and governance processes throughout the first and second lines of defence.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

In this risk governance structure, employees in every area of the organization are responsible for risk management.

The Board of Directors: as the top of the Bank’s risk management governance structure, provides oversight, either directly or through its committees, to satisfy itself that decision making is aligned with the Bank’s strategies and risk appetite. The Board receives regular updates on the key risks of the Bank – including a quarterly comprehensive summary of the Bank’s risk profile and performance of the portfolio against defined limits – and approves key risk policies, frameworks, and limits.

The Risk Committee of the Board: assists the Board in fulfilling its responsibilities for identifying and monitoring key financial and non-financial risks. The Committee assists the Board by providing oversight to the risk management, compliance and anti-money laundering/anti-terrorist finance functions at the Bank. This includes periodically reviewing and approving the Bank’s key risk management policies, frameworks and limits and satisfying itself that management is operating within the Bank’s Enterprise Risk Appetite Framework. The Committee also oversees the independence of each of these control functions, including the effectiveness of the heads of these functions, as well as the functions themselves.

Audit and Conduct Review Committee of the Board: assists the Board by providing oversight on the effectiveness of the Bank’s system of internal controls. The Committee oversees the integrity of the Bank’s consolidated financial statements and related quarterly results. This Committee assists the Board in fulfilling its oversight responsibilities for setting standards of conduct and ethical behaviour, and the oversight of conduct review and conduct risk. The Committee also oversees the Bank’s compliance with legal and regulatory requirements, and oversees the Global Finance and Audit functions at the Bank.

Human Resources Committee of the Board: in conjunction with the Risk Committee of the Board, satisfies itself that adequate procedures are in place to identify, assess and manage the risks associated with the Bank’s material compensation programs and that such procedures are consistent with the Bank’s risk management programs. The Committee has further responsibilities relating to leadership, succession planning and total rewards.

Corporate Governance Committee of the Board: acts in an advisory capacity to the Board to enhance the Bank’s corporate governance through a continuing assessment of the Bank’s approach to corporate governance and makes policy recommendations.

President and Chief Executive Officer (CEO): reports directly to the Board and is responsible for defining, communicating and implementing the strategic direction, goals and core values for Scotiabank that maximize long term shareholder value. The CEO oversees the establishment of the Bank’s risk appetite, in collaboration with the Chief Risk Officer and Chief Financial Officer, which is consistent with the Bank’s short and long term strategy, business and capital plans, as well as compensation programs.

Chief Risk Officer (CRO): reports to the CEO and is responsible for the overall management of Global Risk Management, Global Compliance and Global AML/ATF. The CRO and the heads of Global Compliance and Global AML/ATF also have unfettered access to the Risk Committee of the Board to ensure their independence. As a senior member of the Bank’s executive management team, the CRO participates in strategic decisions related to where and how the Bank will deploy its various sources of capital to meet the performance targets of the business lines.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Global Risk Management (GRM): supports the Bank’s objectives and is mandated to maintain an ongoing and effective enterprise-wide risk management framework that resonates through all levels of the Bank. GRM is responsible for providing reasonable assurance to executive management, the Board of Directors and shareholders that risks are actively identified, managed and communicated to all key stakeholders. This is achieved through reliable and timely reporting. GRM’s mission is to ensure that the outcomes of risk taking activities are consistent with the Bank’s strategies and risk appetite, and that there is an appropriate balance between risk and reward in order to maximize shareholder value.

Global Compliance: on an enterprise-wide basis, promotes and reports on ethical conduct and regulatory compliance throughout Scotiabank. Global Compliance develops policy and provides independent oversight and effective challenge of compliance risk management in the Bank’s business lines and corporate functions. It acts as a consultant and educator on regulatory compliance, internal policies and procedures and is responsible for conducting ongoing risk-based enterprise-wide assessments, monitoring, testing and other activities to gain reasonable assurance as to the adequacy of, adherence to, and effectiveness of the Bank’s Compliance Risk Management Program.

Global AML/ATF: on an enterprise-wide basis, develops standards to be followed in effectively controlling money laundering, terrorist financing, and sanctions risks. Global AML/ATF is responsible for maintaining the program current with Scotiabank needs, industry practice, and AML/ATF and sanctions legal and regulatory requirements, as well as providing risk-based independent oversight of Scotiabank’s compliance with these requirements and standards.

Global Finance: leads enterprise-wide financial strategies which support the Bank’s ability to maximize sustainable shareholder value, and actively manages the reliable and timely reporting of financial information to management, the Board of Directors and shareholders, regulators, as well as other stakeholders. This reporting includes the Bank’s consolidated financial statements and related quarterly and annual results, as well as financial regulatory filings. Global Finance executes the Bank’s financial and capital management strategies with appropriate governance and control, while ensuring its processes are efficient and effective.

Internal Audit: reports independently to the Audit and Conduct Review Committee of the Board on the design and operating effectiveness of the Bank’s risk governance and risk management framework. The mission of the audit department is to provide enterprise-wide independent, objective assurance over the design and operation of the Bank’s internal controls, risk management, operational governance processes and to provide consulting services designed to improve the Bank’s operations.

Business Line and Corporate Functions: as the first line of defence in the Three Lines of Defence model, are accountable for effective management of the risks within their business lines and functions through identifying, assessing, mitigating, monitoring and reporting the risks. Business lines and corporate functions actively implement effective internal controls to manage risk and maintain activities within risk appetite and policies. Further, business lines have processes to be able to effectively identify, monitor and report against allocated risk appetite limits.

Risk Appetite

Effective risk management requires clear articulation of the Bank’s risk appetite and how the Bank’s risk profile will be managed in relation to that appetite.

The Bank’s Enterprise Risk Appetite Framework (RAF) articulates the amount and types of risk the Bank is willing to take in order to meet its strategic objectives. The Enterprise RAF consists of the risk capacity, risk appetite statement, risk appetite metrics and roles and responsibilities. Together, the application of these components helps to ensure the Bank stays within appropriate risk boundaries, finds an optimal balance between risk and return, and supports a strong risk culture.

Scotiabank’s risk appetite is integrated into the strategic and capital planning process and is reviewed annually by senior management who recommend it to the Board for approval. Business lines, sub-business lines, control functions and key subsidiaries develop their own risk appetite frameworks and/or statements, which are aligned with the Bank’s Enterprise RAF.

Risk Appetite Statement

The Bank’s Risk Appetite Statement can be summarized as follows:

• The Bank favours businesses that generate sustainable, consistent and predictable earnings.

• The Bank expects to take certain risks in order to generate earnings, but sets limits to ensure risk taking activities are in line with the Bank’s strategic objectives, risk culture, and risk appetite.

• The Bank limits its risk-taking activities to those that are well understood and where there is sufficient expertise, resources and infrastructure to effectively measure and manage the risk and balance risk with reward.

• Capital considerations are part of all material risk decisions.

• The Bank has low appetite for reputational, legal, regulatory or taxation risk, and no appetite for breaches of the Code of Conduct.

• All employees of the Bank are responsible for understanding the limits and any other boundaries that apply to their activities.

Risk Appetite Metrics

Risk appetite metrics provide clear risk limits, which are critical in implementing effective risk management. Certain risk appetite metrics are supported by management level limit structures and controls, as applicable.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Other components of Scotiabank’s risk appetite metrics:

• Set risk capacity and appetite in relation to regulatory constraints

• Use stress testing to provide forward-looking metrics

• Ensure Scotiabank’s credit rating remains strong

• Minimize earnings volatility

• Limit exposure to operational events that can have an impact on earnings, including regulatory fines

• Ensure reputational risk is top of mind and strategy is being executed within operating parameters

Risk Management Tools

Effective risk management includes tools that are guided by the Bank’s risk appetite framework and integrated with the Bank’s strategies and business planning processes.

Scotiabank’s risk management framework is supported by a variety of risk management tools that are used together to manage enterprise-wide risks. Risk management tools are regularly reviewed and updated to ensure consistency with risk-taking activities, and relevance to the business and financial strategies of the Bank.

Policies, Frameworks & Limits

Policies and Frameworks

The Bank develops and implements its key risk policies and frameworks in consultation with the Board. Such policies and frameworks are also subject to the requirements and guidelines of the Office of the Superintendent of Financial Institutions (OSFI), the Bank Act, and the Canada Deposit Insurance Corporation (CDIC). Policy and framework development and implementation reflect best governance practices which the Bank strives to adhere to at all times. The Bank also provides advice and counsel to its subsidiaries in respect of their risk policies and frameworks to ensure alignment with the Bank, subject to the local regulatory requirements of each subsidiary.

Policies and frameworks apply to specific types of risk or to the activities that are used to measure and control risk exposure. They are based on recommendations from risk management, internal audit, business lines, and senior and executive management. Industry best practices and regulatory requirements are also factored into the policies and frameworks, are guided by the Bank’s risk appetite, and set the limits and controls within which the Bank and its subsidiaries can operate. Key risk policies and frameworks are supported by manuals, procedures and guidelines.

Limits

Limits control risk-taking activities within the appetite and tolerances established by the Board and executive management. Limits also establish accountability for key tasks in the risk-taking process and establish the level or conditions under which transactions may be approved or executed.

Risk Measurement

Models

The use of quantitative risk methodologies and models is balanced by a strong governance framework and includes the application of sound and experienced judgment. The development, independent review, and approval of models are subject to formalized policies such as the Model Risk Management Policy and oversight of senior management committees such as the Model Review Committee (for market risk, counterparty credit risk, and liquidity risk models). Key models used in the calculation of regulatory capital on an enterprise basis are OSFI approved. All in-scope models are incorporated into the Bank’s framework for governance and control of model risk to ensure that they continue to perform in line with regulatory requirements. The Bank uses models for a range of purposes including:

• valuing transactions,

• measuring risk exposures,

• determining credit risk ratings and parameters,

• calculating internal economic and regulatory capital

• calculating expected credit risk loss.

Monitoring and Reporting

The Bank continuously monitors its risk exposures to ensure business activities are operating within approved limits or guidelines, and the Bank’s strategies and risk appetite. Breaches, if any, of these limits or guidelines are reported to senior management and/or the Board depending on the limit or guideline.

Risk reporting aggregates measures of risk across products and businesses, and are used to ensure compliance with risk policies, limits, and guidelines. They also provide a clear statement of the amounts, types, and sensitivities of the various risks in the portfolio. Senior management and the Board use this information to understand the Bank’s risk profile and the performance of the portfolios. A comprehensive summary of the Bank’s risk profile and performance of the portfolio is presented quarterly to the Board of Directors.

Forward-Looking Exercises

Stress Testing

Stress testing programs at both the enterprise-wide level and individual risk level allow the Bank to estimate the potential impact on the Bank’s income and capital as a result of significant changes in market conditions, credit environment, liquidity demands, or other risk factors. Enterprise-wide stress testing is also integrated with both the strategic and financial planning processes, as well as financial crisis management planning. The development, approval and on-going review of the Bank’s stress testing programs are subject to policy, and the oversight of the Stress Testing and Credit Loss Models Committee or other management committees as appropriate. Where appropriate, the Board of Directors or the Risk Committee of the Board approves stress testing limits for certain risk factors, and receives reports on performance regularly. Each program is developed with input from a broad base of stakeholders, and results are integrated into management decision making processes for capital, funding, market risk limits, and credit risk appetite. The stress testing programs are designed to capture a number of enterprise-wide stress scenarios with differing severities, and time horizons.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Other Testing

Other tests are conducted as required at the enterprise-wide level and within specific functional areas to test the decision making processes of the Executive Management team and key personnel, by simulating a potential stress scenario. Simulated stress scenarios may include a number of complexities and disruptions through which Executive Management are engaged to make certain key decisions. Generally, the objectives of the simulations can include testing (1) the executability of activation protocols, (2) operational readiness, (3) the flexibility of the executive decision making process, and (4) the process by which actions to be taken are prioritized. The exercises may also be designed to test the applicability and relevance of available data and the timeliness of reporting for decision making under stressed/crisis conditions.

Risk Identification and Assessment

Effective risk management requires a comprehensive process to identify risks and assess their materiality.

Principal Risk Types

The Bank’s principal risk types are reviewed annually to determine that they adequately reflect the Bank’s risk profile. The principal risks can be categorized into two main categories:

Financial Risks:

Credit, Market, Liquidity, Insurance

These are risks that are directly associated with the Bank’s primary business and revenue generating activities. The Bank understands these risks well and takes them on in order to generate sustainable, consistent and predictable earnings. Financial risks are generally quantifiable and are relatively predictable. The Bank has higher risk appetite for financial risks which are considered to be a fundamental part of doing business; but only when they are well understood, within established limits, and meet the desired risk and return profile.

Non-Financial (i.e. Core) Risks:

Operational, IT & Cybersecurity, Data Compliance, ML& TF, Environmental, Reputational, Strategic

These are risks that are not directly associated with the Bank’s primary business and revenue generating activities, but nevertheless are inherent in our business and can have significant negative strategic, business, financial and/or reputational consequences if not managed properly. In comparison to financial risks, Core risks are less predictable and more difficult to define and measure. The Bank has low risk appetite for Core risks and mitigates these risks through robust internal controls and processes.

Assessment of Risks

On an annual basis, the Bank undergoes a Bank-wide risk assessment that identifies the material risks faced by the Bank for the Internal Capital Adequacy Assessment Process (ICAAP) and the determination of internal capital. This process evaluates the risks and determines the pervasiveness of the risk across multiple business lines, the significance of the risk to a specific business line, the likelihood and potential impact of the risk and whether the risk may cause unexpected losses in income and therefore would be mitigated by internal capital. The process also reviews other evolving and emerging risks and includes qualitative considerations such as strategic, economic and environmental risk factors. The identified risks are ascribed a rating of how probable and impactful they may be and are used as an important input in the ICAAP process and the determination of internal capital.

Top and Emerging Risks

The Bank is exposed to a variety of top and emerging risks. These risks can potentially adversely affect the Bank’s business, financial performance, reputation, and business strategies. As part of our risk management approach, we proactively identify, assess, review, monitor and manage a broad range of top and emerging risks so that appropriate risk mitigation strategies can be taken. Every quarter, a listing and a brief discussion of selected top and emerging risks is presented to Senior Management and the Board of Directors.

Other Considerations

Risk identification and assessment is performed on an ongoing basis through the following:

• Transactions – risks, including credit and market exposures, are assessed by the business lines and reviewed by GRM, as applicable.

• Monitoring – risks are identified by constantly monitoring and reporting current trends and analysis.

• New Products and Services – new products and services are assessed for potential risks through a standardized process.

• Strategic Investments – investment transactions are thoroughly reviewed for risks and are approved by the Strategic Transactions and Investment Committee (STIC) who provides advice & counsel and decisions on effective allocation and prioritization of resources.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Risk Culture

Effective risk management requires a strong, robust, and pervasive risk management culture where every Bank employee is a risk manager and is responsible for managing risks.

The Bank’s risk culture is influenced by numerous factors including the interdependent relationship amongst the Bank’s risk governance structure, risk appetite, strategy, organizational culture, and risk management tools.   The Bank’s risk culture is supported through the following foundational elements:   •  Tone from the Top – Clear and consistent communication from leaders on risk behavior expectations and the importance of Scotiabank’s values.   •  Accountability – All Scotiabankers are accountable for risk management in accordance with the Three Lines of Defence model.   •  Incentives – Performance and compensation structures encourage desired behaviors and reinforce the Bank’s risk culture.   •  Effective Challenge – Scotiabankers are encouraged to have a critical attitude – transparency and open dialogue is promoted.   Other elements that influence and support the Bank’s risk culture:   •  Code of Conduct: describes the minimum standards of behaviour to which all directors, officers, and employees must adhere and attest to on an annual basis.   •  Values: Integrity – Act With Honour; Respect – Value Every Voice; Accountability – Make It Happen; Passion – Be Your Best.  

• Communication: the Bank actively communicates risk appetite, and how it relates to Scotiabankers, to promote a sound risk culture.

o Reputation is everything,

o Information is key,

o Success depends on you,

o Know your boundaries.

• Compensation: programs are structured to discourage behaviours that are not aligned with the Bank’s values and Code of Conduct, and ensure that such behaviors are not rewarded.

• Training: risk culture is continually reinforced by providing effective and informative mandatory and non-mandatory training modules for all employees on a variety of risk management topics.

• Decision-making on risk issues is highly centralized: the flow of information and transactions to senior and executive committees keeps management well informed of the risks the Bank faces, and ensures that transactions and risks are aligned with the Bank’s risk appetite.

• Executive Mandates: all Executives across the Bank have risk management responsibilities within their mandates.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Principal Risk Types 

Risk Type	Key Governing Documentation	Ways that they support Risk Appetite
Credit Risk	•  Credit Risk Policy •  Credit Risk Appetite •  Residential Mortgage Underwriting Policy	Quantitative limits, such as: Credit Risk Appetite limits at the all-Bank level and Business Line level; Exposure to a single counterparty or group of related parties; Country risk; and Industry concentrations.
Market Risk	•  Market and Structural Risk Management Policy	Quantitative limits, such as: Value at Risk (VaR); Stress test results; Debt investment exposures; and Structural interest rate and foreign exchange exposures.
Liquidity Risk	•  Liquidity Risk and Collateral Management Policy	Quantitative limits, such as: Liquidity Coverage Ratio (LCR); Minimum amounts of high quality liquid assets that can be readily sold or pledged to provide contingent liquidity; Limits to control the maximum net cash outflow over a specified horizon; and minimize concentration through diversification of funding source.
Insurance Risk	•  Insurance Risk Policy •  Insurance Risk Management Framework	Where insurance risks are taken, it is on a selective basis to achieve stable and sustainable earnings; and the risk assumed is diversified geographically and by product. Quantitative limits, such as Insurance Earnings at Risk metrics are included in the Bank’s Risk Appetite Statement.
Operational Risk	•  Operational Risk Management Policy and Framework •  Internal Control Policy •  New Initiative Risk Management Policy •  Global Third Party Risk Management Policy •  Financial Crisis Management Planning policies & framework	Operational risk appetite expresses how much residual risk the Bank is willing to tolerate and is expressed quantitatively by an aggregate loss event limit, a single event loss limit, and a variety of limits for individual categories of operational risk.
Information Technology & Cybersecurity Risk	•  IT Risk Management Policy and Framework •  Information Security Policy and Governance Framework	The Bank has established minimum expectations and requirements for the systematic identification, measurement, mitigation and monitoring of IT and Cybersecurity risk, including requirements for the protection of information throughout its lifecycle.
Data Risk	•  Data Management Policy •  Data Governance Framework	The Bank has established appropriate minimum expectations to implement data management and governance through data quality business rules and dimensions in support of the Bank’s risk appetite enabling the Bank to measure the level of data quality on its critical data elements.
Compliance Risk	•  Compliance Policy •  Code of Conduct	Compliance Risk appetite is based on the moderate all-Bank Residual Compliance Risk Rating obtained through the annual Compliance Risk & Control Assessment.
Money Laundering & Terrorist Financing (ML/TF) Risk	•  AML/ATF and Sanctions Policy •  AML/ATF and Sanctions Handbook	The Bank has no appetite for entering into relationships with businesses or individuals engaged in illegal activities, or with businesses engaged in improper, quasi-legal, or inappropriate activities.
Reputational Risk	•  Reputational Risk Policy	Low appetite for reputational, legal, or taxation risk arising in business activities, initiatives, products, services, transactions or processes, or from a lack of suitability of products for clients.
Environmental Risk	•  Environmental Policy	The Bank has policies and procedures in place to ensure that it provides loans to borrowers that demonstrate an ability and willingness to practice sound environmental risk management.
Strategic Risk	•  Annual Strategy Report to the Board of Directors	Strategy report considers linkages between the Bank’s Enterprise Risk Appetite Framework with the enterprise strategy, business line strategies and corporate function strategies.

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T38 Exposure to risks arising from the activities of the Bank’s businesses

(1) Average assets for the Other segment include certain non-earning assets related to the business lines.

(2) Attributed Capital is a combination of regulatory: (i) Risk-based capital and (ii) Leverage capital. Attributed Capital is reported on a quarterly average basis.

(3) Includes Attributed Capital for significant investments, goodwill, intangibles and leverage capital.

(4) Risk-weighted assets (RWA) are as at October 31, 2018 as measured for regulatory purposes in accordance with the Basel III approach.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Top and emerging risks

The Bank is exposed to a variety of top and emerging risks. These risks can potentially adversely affect the Bank’s business strategies, financial performance, and reputation. As part of our risk management approach, we proactively identify, assess, review, monitor and manage a broad range of top and emerging risks and undertake appropriate risk mitigation strategies. Every quarter, a listing and a brief discussion of selected top and emerging risks is presented to Senior Management and the Board of Directors.

The Bank’s top and emerging risks are as follows:

Geopolitical risk

Geopolitical risks could affect volatility in foreign exchange and capital markets globally. This affects all participants in these markets. In the short run, a market shock could potentially impact the Bank’s trading and non-trading market activities and revenues. Over a longer period of time, the more broadly based macroeconomic effects could potentially impact the Bank’s exposures to customers and market segments impacted by those shocks. Although it is difficult to predict where new geopolitical disruption will occur, the Bank’s stress testing program assists in evaluating the potential impact of severe conditions, whether caused by geopolitical or other circumstances. Management’s strong understanding of the local political landscapes and macroeconomic environments in which the Bank operates, combined with the Bank’s business model and diversified geographic footprint, serve as ongoing mitigants to this risk.

Legal and regulatory compliance risk

The Bank is subject to extensive regulation in the jurisdictions in which it operates. Although the Bank continually monitors and evaluates the potential impact of regulatory developments to assess the impact on our businesses and to implement any necessary changes, regulators and private parties may challenge our compliance. Failure to comply with legal and regulatory requirements may result in fines, penalties, litigation, regulatory sanctions, enforcement actions and limitations or prohibitions from engaging in business activities, all of which may negatively impact the Bank’s financial performance and its reputation. In addition, day-to-day compliance with existing laws and regulations has involved and will continue to involve significant resources, including requiring the Bank to take actions or incur greater costs than anticipated, which may negatively impact the Bank’s financial performance. Such changes could also adversely impact the Bank’s business strategies or limit its product or service offerings, or enhance the ability of the Bank’s competitors to offer their own products and services that rival the Bank’s. Regulators have also evidenced an increase focus on conduct risk. This focus could lead to more regulatory or other enforcement actions including for practices which may historically have been considered acceptable.

Anti-money laundering

Money laundering and terrorist financing are receiving significant attention as nations attempt to deal with the harmful legal, economic, and social consequences of illegal activities. Governments, law enforcement agencies, and regulators around the world employ a variety of means, including establishing regulatory requirements on financial institutions, to curtail the ability of criminal and terrorist elements to profit from, or finance, their activities. It is widely recognized that financial institutions are uniquely positioned and possess the necessary infrastructure to assist in the fight against money laundering, terrorist financing, and criminal activity through prevention, detection, and the exchange of information.

Money laundering, terrorist financing and economic sanctions violations represent regulatory, legal, financial and reputational risk to the Bank. Scotiabank is subject to a number of expanding and constantly evolving anti-money laundering/anti-terrorist financing (AML/ATF) and economic sanctions, laws and regulations internationally given the Bank’s global footprint.

The Bank is committed to sustaining secure financial systems in the countries around the world in which it maintains operations by taking the necessary action, using a risk-based approach. The Bank’s AML program includes policies and internal controls with respect to client identification and due diligence, transaction monitoring, investigating and reporting of suspicious activity, and evaluation of new products and services to prevent and/or detect activities that may pose AML risk to the Bank. The AML program also facilitates an annual enterprise-wide AML/ATF risk assessment process and ensures that all employees, including the Board of Directors, undergo initial and ongoing AML/ATF training.

Technology, information and cyber security risk

Technology, information and cyber security risks continue to impact financial institutions and other businesses in Canada and around the globe. Threats are not only increasing in volume but in their sophistication as adversaries use ever evolving technologies and attack methodologies. The technology environment of the Bank, its customers and the third parties providing services to the Bank, may be subject to attacks, breaches or other compromises. Incidences like these can result in disruption to operations, misappropriation or unauthorized release of confidential, financial or personal information, and reputational damage, among other things. The Bank proactively monitors and manages the risks and constantly updates and refines programs as threats emerge to minimize disruptions and keep systems and information protected. In addition, the Bank has purchased insurance coverage to help mitigate against certain potential losses associated with cyber incidents.

Technology innovation and disruption

Fast evolving technology innovation continues to impact the financial services industry and its customers. Increasingly, non-traditional new participants are entering certain segments of the market and challenge the position of traditional financial institutions. New participants may use advanced technologies and analytical tools to innovate at an accelerating speed which has the potential to impact revenues and costs in certain of the Bank’s businesses. In response to increased customer demands, needs and expectations, the Bank has embarked on a multi-year digital transformation with the aspiration to be a digital leader in the financial services industry. To support this strategy the Bank has opened digital factories in Toronto and its key international markets in Mexico, Peru, Chile and Colombia. These factories contribute to financial innovation through partnerships with smaller financial technology companies. In addition, the Bank makes material investments in skills training and education through various digital partnerships with Canadian universities and other organizations.

Third party service providers

As the Bank continues to expand its ecosystem of third party information technology (IT) service and cloud providers and FinTec partners, the traditional boundaries of where the Bank is able to assert control becomes blurred. There is growing dependency on the effectiveness of the control environment in place at IT vendors to limit the impacts of vendor availability and security incidents on the Bank’s operations, intellectual property, and reputation. Additionally, third party service providers other than IT vendors, as well as service providers to those third parties (i.e. fourth party vendors) can also fall victim to systems, data and privacy breaches if their control environments fail to operate effectively. Any such breaches could impact the Bank if the Bank’s data is shared with such vendors in the course of their provision of services to the Bank. The Bank continues to enhance the resources, capabilities and accountabilities of third party risk management areas within the first and second line of defence areas.

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Canadian household indebtedness

Canadian household indebtedness has been stable in recent quarters due to slowdown in new lending volumes mainly for new mortgages, as housing market adapts to tighter qualifying criteria as well as increasing interest rates. These market factors could cause a change in debt service ratios, largely driven by an increasing interest rate environment. The Bank actively manages its lending portfolios and performs stress tests considering these sensitivities, while continuing to enhance risk management capabilities through investments in technology and analytics.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Credit Risk

Credit risk is the risk of loss resulting from the failure of a borrower or counterparty to honour its financial or contractual obligations to the Bank. Credit risk arises in the Bank’s direct lending operations, and in its funding, investment and trading activities where counterparties have repayment or other obligations to the Bank.

Index of all credit risk disclosures

	Page		Tables and charts	Page
Credit risk summary		83
Credit Risk Management Framework
Risk measures		83
Corporate and commercial		83
Risk ratings		83
Adjudication		84
Credit Risk Mitigation-Collateral/Security		84
Traditional Non-Retail Products		84
Commercial/Corporate Real Estate		84
Traded products		85
Credit Risk Mitigation-Collateral/Security		85
Retail		85
Adjudication		85
Risk ratings		85
Credit Risk Mitigation-Collateral/Security		86
Credit Quality		86	T3 Financial highlights		23
Impaired loans		86	T11 Provision for credit losses as a percentage of average loans and acceptances		30
Allowance for credit losses		87	T12 Net charge-offs as a percentage of average loans and acceptances		30
			T60 Gross impaired loans by geographic segment		121
			T61 Provision against impaired loans by geographic segment		121
			T62 Cross-border exposure to select countries		121
			T63 Loans and acceptances by type of borrower		122
			T64 Off-balance sheet credit instruments		122
			T65 Changes in net impaired loans		123
			T66 Provision for credit losses		123
			T67 Provision for credit losses against impaired loans by type of borrower		124
			T68 Impaired loans by type of borrower		124
			T69 Total credit risk exposures by geography		125
			T70 AIRB credit risk exposures by maturity		125
			T71 Total credit risk exposures and risk-weighted assets		126
			Analysis of the aggregate credit risk exposure including market risk exposure, assets of the Bank’s insurance subsidiaries and other assets that fully reconciles to the balance sheet (refer Note 37 – Financial instruments – risk management in the consolidated financial statements)		228
Portfolio review		87
Risk diversification		87	C24 Well diversified in Canada and internationally – loans and acceptances		89
			C25 and in household and business lending – loans and acceptances		89
			T59 Loans and acceptances by geography		120
Risk mitigation		87
Real estate secured lending		88	T43 Bank’s exposure distribution by country		90
Loans to Canadian condominium developers		90
European exposures		90
Financial instruments		70	T37 Mortgage-backed securities		71

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Credit risk summary

• Loans and acceptances (Retail and Non-Retail) remained diversified by region, industry and customer. Regional exposure is spread across our key markets (Canada 64%, United States 7%, Chile 8%, Mexico 5% and Other 16%). Financial Services constitutes 5% of overall gross exposures (before consideration of collateral) and was $29 billion, an increase of $5 billion from October 31, 2017. These exposures are predominately to highly rated counterparties and are generally collateralized.

• The Bank’s overall loan book as of October 31, 2018 increased to $573 billion versus $522 billion as of October 31, 2017, with growth reflected in Personal, and Business and Government lending. Residential mortgages were $253 billion as of October 31, 2018, with 84% in Canada. The corporate loan book, which accounts for 36% of the total loan book, is composed of 54% of loans with an investment grade rating as of October 31, 2018, unchanged from October 31, 2017.

The effective management of credit risk requires the establishment of an appropriate credit risk culture. Key credit risk policies and appetite statements are important elements used to create this culture.

The Board of Directors, either directly or through the Risk Committee (the Board), reviews and approves the Bank’s Credit Risk Appetite limits annually and Credit Risk Policy limits biennially.

• The objectives of the Credit Risk Appetite are to ensure that:

– target markets and product offerings are well defined at both the enterprise-wide and business line levels;

– the risk parameters for new underwritings and for the portfolios as a whole are clearly specified; and

– transactions, including origination, syndication, loan sales and hedging, are managed in a manner that is consistent with the Bank’s risk appetite.

• The Credit Risk Policy articulates the credit risk management framework, including:

– key credit risk management principles;

– delegation of authority;

– the credit risk management program;

– counterparty credit risk management for trading and investment activities; and

– aggregate limits, beyond which credit applications must be escalated to the Board for approval.

GRM develops the credit risk management framework and policies that detail, among other things, the credit risk rating systems and associated parameter estimates; the delegation of authority for granting credit; the calculation of the allowance for credit losses; and the authorization of write-offs.

Corporate and commercial credit exposures are segmented by country and by major industry group. Aggregate credit risk limits for each of these segments are also reviewed and approved annually by the Board. Portfolio management objectives and risk diversification are key factors in setting these limits.

Consistent with the Board-approved limits, borrower limits are set within the context of established lending criteria and guidelines for individual borrowers, particular industries, countries and certain types of lending, to ensure the Bank does not have excessive concentration in any single borrower, or related group of borrowers, particular industry sector or geographic region. Through the portfolio management process, loans may be syndicated to reduce overall exposure to a single name. For certain segments of the portfolio, credit derivative contracts are also used to mitigate the risk of loss due to borrower default. Risk is also mitigated through the selective sale of loans.

Banking units and GRM regularly review the various segments of the credit portfolio on an enterprise-wide basis to assess the impact of economic trends or specific events on the performance of the portfolio, and to determine whether corrective action is required. These reviews include the examination of the risk factors for particular products, industries and countries. The results of these reviews are reported to the Risk Policy Committee and, when significant, to the Board.

Risk measures

The credit risk rating systems support the determination of key credit risk parameter estimates which measure credit and transaction risk. These risk parameters – probability of default, loss given default and exposure at default are transparent and may be replicated in order to provide accuracy and consistency of credit adjudication, as well as minimum lending standards for each of the risk rating categories. The parameters are an integral part of enterprise-wide policies and procedures encompassing governance, risk management, and control structure, and are used in various internal and regulatory credit risk quantification calculations.

The Bank’s credit risk rating system is subject to a rigorous validation, governance and oversight framework. The objectives of this framework are to ensure that:

• Credit risk rating methodologies and parameters are appropriately designed and developed, independently validated, and regularly reviewed; and

• The review and validation processes represent an effective challenge to the design and development process.

Non-retail credit risk rating methodologies and parameters are reviewed and validated at least annually. Units within GRM are responsible for design and development, validation and review, and are functionally independent from the business units responsible for originating transactions. Within GRM, they are also independent from the units involved in risk rating approval and credit adjudication.

Internal credit risk ratings and associated risk parameters affect lending decisions, loan pricing, computation of the collective allowance for credit losses, and return on equity.

Corporate and commercial

Corporate and commercial credit exposure arises in Canadian Banking, International Banking and Global Banking and Markets business lines.

Risk ratings

The Bank’s risk rating system utilizes internal grade (IG) ratings – an 18 point scale used to differentiate the risk of default of borrowers, and the risk of loss on facilities. The general relationship between the Bank’s internal IG ratings and external agency ratings is shown in T29.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

IG ratings are also used to define credit adjudication authority levels appropriate to the size and risk of each credit application. Lower-rated credits require increasingly more senior management involvement depending upon the aggregate exposure. Where the decision is beyond

their authority levels, credit units will refer the request – with its recommendation – to a senior credit committee for adjudication. In certain cases, these must be referred to the Risk Committee of the Board of Directors.

Adjudication

Credit adjudication units within GRM analyze and evaluate all significant credit requests for corporate and commercial credit exposures, to ensure that risks are adequately assessed, properly approved, continually monitored and actively managed. The decision-making process begins with an assessment of the credit risk of the individual borrower or counterparty. Key factors considered in the assessment include:

• The borrower’s management;

• The borrower’s current and projected financial results and credit statistics;

• The industry in which the borrower operates;

• Economic trends; and

• Geopolitical risk.

Based on this assessment, a risk rating is assigned to the individual borrower or counterparty, using the Bank’s risk rating systems.

A separate risk rating is also assigned at the facility level, taking into consideration additional factors, such as security, seniority of claim, structure, term and any other forms of credit risk mitigation that affect the amount of potential loss in the event of a default of the facility. Security typically takes the form of charges over inventory, receivables, real estate, and operating assets when lending to corporate and commercial borrowers; and cash or treasuries for trading lines such as securities lending, repurchase transactions, and derivatives. The types of acceptable collateral, and related valuation processes are documented in risk management policies and manuals.

Other forms of credit risk mitigation include third party guarantees and, in the case of derivatives facilities, master netting agreements.

Internal borrower and facility risk ratings are assigned when a facility is first authorized, and are promptly re-evaluated and adjusted, if necessary, as a result of changes to the customer’s financial condition or business prospects. Re-evaluation is an ongoing process, and is done in the context of general economic changes, specific industry prospects, and event risks, such as revised financial projections, interim financial results and extraordinary announcements.

The internal credit risk ratings are also considered as part of the Bank’s adjudication limits, as guidelines for hold levels are tied to different risk ratings. Single borrower limits are much lower for higher risk borrowers than low risk borrowers.

The credit adjudication process also uses a risk-adjusted return on equity profitability model to ensure that the client and transaction structure offers an appropriate return for a given level of risk. For the corporate portfolio, and the large borrowers in International, the Loan Portfolio Management Group reviews the profitability model results, together with external benchmarks, and provides an opinion on the relative return and pricing of each transaction above a minimum threshold.

Individual credit exposures are regularly monitored by both the business line units and GRM for any signs of deterioration. In addition, the business line units and GRM conduct a review and risk analysis of each borrower annually, or more frequently for higher-risk borrowers. If, in the judgement of management, an account requires the expertise of specialists in workouts and restructurings, it will be transferred to a special accounts group for monitoring and resolution.

Credit Risk Mitigation – Collateral/Security

Traditional Non-Retail Products (e.g. Operating lines of Credit, Term Loans)

Collateral values are accurately identified at the outset and throughout the tenure of a transaction by using standard evaluation methodologies. Collateral valuation estimates are conducted at a frequency that is appropriate to the frequency by which the market value fluctuates, using the collateral type and the borrower risk profile.

In addition, when it is not cost effective to monitor highly volatile collateral (e.g. accounts receivable, inventory), appropriate lending margins are applied to compensate (e.g. accounts receivable are capped at 80% of value, inventory at 50%). The frequency of collateral valuations is also increased when early warning signals of a borrower’s deteriorating financial condition are identified.

Borrowers are required to confirm adherence to covenants including confirmation of collateral values on a periodic basis, which are used by the Bank to provide early warning signals of collateral value deterioration. Periodic inspections of physical collateral are performed where appropriate and where reasonable means of doing so are available.

Bank procedures require verification including certification by banking officers during initial, annual, and periodic reviews, that collateral values/margins/etc. have been assessed and, where necessary, steps have been taken to mitigate any decreased collateral values.

The Bank does not use automated valuation models (AVMs) for valuation purposes for traditional non-retail products. GRM performs its own valuations of companies based on various factors such as book value, discounted book value, enterprise value etc.

Commercial/Corporate Real Estate

New or updated appraisals are generally obtained at inception of a new facility, as well as during loan modifications, loan workouts and troubled debt restructure. The primary reason for requiring a new appraisal is if, in the reasonable opinion of the banking execution unit, or GRM, there has been a material change in value. Additionally, none of the appraisal guidelines contained within the policies should dissuade the Bank from requesting an appraisal more frequently if an adverse change in market conditions, sponsorship, credit worthiness, or other underwriting assumptions is realized or expected.

Appraisals must be in writing and must contain sufficient information and analysis to support the Bank’s decision to make the loan. Moreover, in rendering an opinion of the property’s market value, third party appraisers are responsible for establishing the scope of work necessary to develop

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credible assignment results. The appraisal must meet the regulatory and industry requirements which, depending on the type of property being appraised, contain any or all of the following three approaches to value:

i. comparable sales approach

ii. replacement cost approach

iii. income approach

The appraiser must disclose the rationale for the omission of any valuation approach. Furthermore, the appraiser must disclose whether the subject property was physically inspected and whether anyone provided significant assistance to the person signing the appraisal report. The report must contain a presentation and explanation of the assumptions used in determining value under each of the above mentioned approaches.

Review of every appraisal is conducted by the banking units and GRM to confirm that the appraisal identifies all of the relevant issues for the specific asset class, location and economic environment and incorporates all appropriate valuation methodologies and assumptions. In most cases, the banking units also include comparable properties in addition to what is included in the appraisal to further justify value.

When third party assessors are used, they must be accredited and satisfactory to the Bank. In addition, GRM validates any third party valuations via internal desktop estimates either based on comparables or discounted income valuations.

Traded products

Traded products are transactions such as derivatives, foreign exchange, commodities, repurchase/reverse repurchase agreements, and securities lending/borrowing. Credit risks arising from traded products cannot be determined with certainty at the outset, because during the tenure of a transaction the dollar value of the counterparty’s obligation to the Bank will be affected by changes in the capital markets (such as changes in stock prices, interest rates, and exchange rates). The Bank adjudicates credit exposures arising from transacting in traded products by considering their current fair value plus an additional component to reflect potential future changes in their mark-to-market value. The credit adjudication process also includes an evaluation of potential wrong-way risk, which arises when the exposure to a counterparty is positively correlated to the probability of default of that counterparty.

Credit risk associated with traded products is managed within the same credit adjudication process as the lending business. The Bank considers the credit risk arising from lending activities, as well as the potential credit risk arising from transacting in traded products with that counterparty.

Credit risk mitigation – collateral/security

Derivatives are generally transacted under industry standard International Swaps and Derivatives Association (ISDA) master netting agreements, which allow for a single net settlement of all transactions covered by that agreement in the event of a default or early termination of the transactions. ISDA agreements are frequently accompanied by an ISDA Credit Support Annex (CSA), the terms of which may vary according to each party’s view of the other party’s creditworthiness. CSAs can require one party or both parties to post initial margin at the onset of each transaction. CSAs also allow for variation margin to be called if total uncollateralized mark-to-market exposure exceeds an agreed upon threshold. Such variation margin provisions can be one-way (only one party will ever post collateral) or bilateral (either party may post depending upon which party is in-the-money). The CSA will also detail the types of collateral that are acceptable to each party, and the haircuts that will be applied against each collateral type. The terms of the ISDA master netting agreements and CSAs are taken into consideration in the calculation of counterparty credit risk exposure.

For derivative transactions, investment grade counterparties account for approximately 91% of the credit risk. Approximately 24% of the Bank’s derivative counterparty exposures are to bank counterparties. After taking into consideration, where applicable, netting and collateral arrangements, no net credit risk amount arising from traded products transactions with any single counterparty was considered material to the financial position of the Bank as at October 31, 2018. No individual exposure to an investment grade bilateral counterparty exceeded $1,877 million and no individual exposure to a corporate counterparty exceeded $516 million.

Retail

Retail credit exposures arise in the Canadian Banking and International Banking business lines.

Adjudication

The decision-making process for retail loans ensures that credit risks are adequately assessed, properly approved, continually monitored and actively managed. Generally, credit decisions on consumer loans are processed by proprietary adjudication software and are based on risk ratings, which are generated using predictive credit scoring models.

The Bank’s credit adjudication and portfolio management methodologies are designed to ensure consistent underwriting and early identification of problem loans. The Bank’s rigorous credit underwriting and retail risk modeling methodologies are more customer focused than product focused. The Bank’s view is that a customer-centric approach provides better risk assessment than product-based approaches, and should result in lower loan losses over time.

All credit scoring and policy changes are initiated by units within GRM that are functionally independent from the business units responsible for retail portfolios. Risk models and parameters are also subject to independent validation and review from the units involved in the design and development of models. The review process includes referral to the appropriate Senior Credit Committee for approval, where required. Consumer credit portfolios are reviewed monthly to identify emerging trends in loan quality and to assess whether corrective action is required.

Risk ratings

The Bank’s consumer risk rating systems are oriented to borrower or transaction risk. Each retail exposure is assigned a risk grade based on the customer’s credit history and/or internal credit score. The Bank’s automated risk rating systems assess the ongoing credit-worthiness of individual customers on a monthly basis. This process provides for meaningful and timely identification and management of problem loans.

The risk rating system under the AIRB approach is subject to regular review and ongoing performance monitoring of key components. Risk model validations are conducted independently from the areas responsible for rating system development and implementation, to ensure effective independence in design and performance review.

Customer behavior characteristics which are used as inputs within the Bank’s Basel III AIRB models are consistent with those used by the Bank’s Canadian consumer risk rating systems. The International portfolios are subject to the Standardized approach at this time.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Credit risk mitigation – collateral/security

The property values for residential real estate secured exposures are confirmed at origination through a variety of validation methodologies, including AVM and full appraisal’s (in-person inspection). The appraisal is completed by a third party, Bank approved appraiser. For monitoring of material portfolios, property values are indexed quarterly to house prices. For loan impairment within material portfolios, residential property values are re-confirmed using third party AVM’s.

Where AVM values are used, these AVM values are subject to routine validation through a continuous random sampling process that back-tests AVM values against available property appraisals (primarily third party AVMs). Where third party appraisals are obtained, the Bank relies on the professional industry accreditation of the appraiser. Samples of approved appraisal reports are reviewed by the Bank’s senior appraisers to ensure consistent appraisal quality and satisfactory appraisal values. The third party appraisers are selected from a pre-approved list of Bank-vetted appraisers.

Credit quality

T39 Impaired loans by business line⁽¹⁾

	IFRS 9						IAS 39
	2018						2017
As at October 31 ($ millions)	Gross impaired loans		Allowance for credit losses		Net impaired loans		Gross impaired loans		Allowance for credit losses			Net impaired loans
Canadian Banking
Retail	$	840	$	276	$	564	$	882	$	645		$	237
Commercial		158		104		54		174		134	(2)		40
	$	998	$	380	$	618	$	1,056	$	779		$	277
International Banking
Caribbean and Central America	$	1,389	$	326	$	1,063	$	1,221	$	461		$	760
Latin America
Mexico		359		164		195		303		219			84
Peru		581		317		264		704		402			302
Chile		753		158		595		565		245			320
Colombia		619		159		460		462		261			201
Other Latin America		148		98		50		182		142			40
Total Latin America		2,460		896		1,564		2,216		1,269			947
	$	3,849	$	1,222	$	2,627	$	3,437	$	1,730		$	1,707
Global Banking and Markets
Canada	$	1	$	1	$	–	$	1	$	1		$	–
U.S.		80		25		55		132		39			93
Asia and Europe		202		49		153		239		73			166
	$	283	$	75	$	208	$	372	$	113		$	259
Totals	$	5,130	$	1,677	$	3,453	$	4,865	$	2,622		$	2,243
Allowance for credit losses against performing loans				3,388						1,446

Impaired loan metrics

	Net impaired loans
As at October 31 ($ millions)	2018			2017(1)
Net impaired loans as a % of loans and acceptances		0.60	%		0.43	%
Allowance against impaired loans as a % of gross impaired loans		33	%		54	%

(1)    Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico, prior to 2018.

(2)    A portion of the existing allowance for credit losses on impaired loans as at October 31, 2017 was reclassified to performing loans with the adoption of IFRS 9 effective November  1, 2017, to conform with current period presentation.

Impaired loans

Gross impaired loans increased to $5,130 million as at October 31, 2018, from $4,865 million last year (excluding $62 million related to loans purchased under FDIC guarantee related to the acquisition of R-G Premier Bank of Puerto Rico), due primarily to purchased credit-impaired loans resulting from acquisitions.

Impaired loans in Canadian Banking decreased by $58 million, primarily in the retail portfolio.

In International Banking, impaired loans increased by $412 million, due primarily to purchased credit-impaired loans resulting from acquisitions and increases in the Caribbean and Central America region, Mexico, Colombia partially offset by decreases in Peru and Other Latin America.

Impaired loans in Global Banking and Markets decreased by $89 million, due primarily to resolutions during the year.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Net impaired loans, after deducting the allowance for credit losses, were $3,453 million as at October 31, 2018, an increase of $1,210 million from a year ago. Net impaired loans as a percentage of loans and acceptances were 0.60% as at October 31, 2018, an increase of 17 basis points from 0.43% a year ago.

Allowance for credit losses

The total allowance for credit losses was up $997 million to $5,065 million as at October 31, 2018 from $4,068 million last year (excluding $259 million related to loans acquired under FDIC guarantee related to the acquisition of R-G Premier Bank of Puerto Rico), due primarily to the impact of the implementation of IFRS 9 and impact of Day 1 provision for credit losses on acquired performing loans.

Allowance for credit losses on impaired loans in Canadian Banking decreased by $399 million to $380 million, due primarily to the impact of the implementation of IFRS 9.

In International Banking, allowance for credit losses on impaired loans decreased by $508 million to $1,222 million, due primarily to the impact of the implementation of IFRS 9.

Global Banking and Markets’ allowances for Impaired Loans decreased by $38 million to $75 million, due mainly to resolutions during the year.

Allowance for credit losses on performing loans have increased to $3,388 million compared to $1,446 million as at Oct 31, 2017 due primarily to the impact of the implementation of IFRS 9 and impact of Day 1 provision for credit losses on acquired performing loans.

Portfolio review

Canadian Banking

Gross impaired loans in the retail portfolio decreased by $42 million or 5%. Total provision for credit losses in the retail portfolio was $746 million, down $111 million or 15% from last year.

In the commercial loan portfolio, gross impaired loans decreased by $16 million to $158 million. The provision for credit losses was $48 million, down $8 million or 14% from last year.

International Banking

In retail, gross impaired loans decreased by $147 million to $2,026 million, with a decrease attributable mainly due to the impact of the implementation of IFRS 9, which was partially offset by increases due to acquisitions. The total provision for credit losses in the retail portfolio increased to $1,667 million from $1,090 million last year, primarily due to one-time provisions related to acquisitions and the impact of acquisition related benefits in the prior year.

In commercial banking, gross impaired loans were $1,823 million, an increase of $559 million over the prior year, due primarily to the impact of the implementation of IFRS 9, and purchased credit-impaired loans resulting from acquisitions. The total provision for credit losses in the commercial portfolio was $200 million compared with $204 million last year, down $4 million or 2%.

Global Banking and Markets

Gross impaired loans in Global Banking and Markets decreased by $89 million to $283 million, due primarily to resolutions during the year partially offset by the impact of the implementation of IFRS 9. The total provision for credit losses was a net reversal of $50 million compared with $42 million last year.

Risk diversification

The Bank’s exposure to various countries and types of borrowers are well diversified (see T59 and T63). Chart C24 shows loans and acceptances by geography. Ontario represents the largest Canadian exposure at 32% of the total. Latin America was 20% of the total exposure and the U.S. was 7%.

Chart C25 shows loans and acceptances by type of borrower (see T63). Excluding loans to households, the largest industry exposures were real estate and construction (5.1%), financial services (5.1% including banks and non-banks), wholesale and retail (4.4%), and energy (2.6%).

Risk mitigation

To mitigate exposures in its performing corporate portfolios, the Bank uses diversification by company, industry, and country, with loan sales and credit derivatives used sparingly. In 2018, loan sales totaled $25 million, compared to $242 million in 2017. The largest volume of loan sales in 2018 related to loans in the metals industry. As at October 31, 2018, credit derivatives used to mitigate exposures in the portfolios totaled $13 million (notional amount), compared to $23 million as at October 31, 2017.

The Bank actively monitors industry and country concentrations. As is the case with all industry exposures, the Bank continues to closely follow developing trends and takes additional steps to mitigate risk as warranted. Energy, mining, and shipping portfolios are being closely managed.

Overview of loan portfolio

The Bank has a well-diversified portfolio by product, business and geography. Details of certain portfolios of current focus are highlighted below.

Climate Change Risks

In February 2018, Scotiabank announced its support of the Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD). This particular disclosure relates to the Bank’s non-retail loan book. Additional disclosures relating to the non-retail loan book as well as other aspects of the Bank’s operations will be included in the 2018 Corporate Social Responsibility Report.

Governance

Board Oversight

Climate Change risk and related disclosure is reviewed and discussed at several committees within the Board, including the Risk Committee and Audit and Conduct Review Committee, as well as by the full Board of Directors.

The Risk Committee, however, retains primary oversight responsibility for climate change related risks and opportunities with respect to the Bank’s loan portfolio. As part of this responsibility, in 2018 the Risk Committee reviewed a Future of Energy report as part of its industry analyses and review of climate change risks. The Risk Committee advises the Board on key and emerging risks and related policies (e.g., Environmental Policy and Credit Risk Appetite) and reviews the Bank’s management of key risks such as climate change. Reporting on such risks and opportunities is provided to

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the Risk Committee via the Emerging Risks section of the quarterly Enterprise Risk Management Report (when appropriate), as well as review and approval of industry reports and individual credit submissions. Any significant climate-related natural disasters affecting the Bank’s loan book would also be discussed at Risk Committee.

The Corporate Governance Committee is also engaged, as it acts in an advisory capacity to the Board through a continuing assessment of the Bank’s approach to corporate governance and makes policy recommendations. Amongst its responsibilities, this Committee reviews the Bank’s corporate social responsibility strategy and reporting. This includes climate change, as one of the Bank’s corporate social responsibility priorities.

Management’s Role

The Bank’s existing Environmental Policy and Credit Risk Policy are the two main policy tools for identifying and managing climate related risks associated with the Bank’s non-retail lending portfolio. These risks are identified, assessed and managed through the Bank’s credit risk and environmental risk due diligence and adjudication processes. In 2018, the Bank continued its work on enhancing its climate change due diligence as part of the overall environmental risk due diligence process.

Specific and emerging risks and issues are raised to the relevant levels of management and/or risk committees for discussion or resolution and when deemed appropriate are reported quarterly in the Emerging Risk section of the Enterprise Risk Management Report to the Risk Committee of the Board.

The day-to-day responsibility for managing and reporting on climate change risk rests within Global Risk Management and its dedicated Environmental and Social Risk (ESR) team. The ESR team has responsibility for the integration of climate change considerations into individual credit applications and industry reviews, through the development and implementation of climate-related risk policies, procedures, tools and the provision of training to banking officers and credit adjudicators. The team also assists with the review of transactions to ensure climate-related risks are appropriately identified, considered and mitigated.

Strategy

Full integration of climate change considerations into Bank-wide processes will be a multi-year journey, with some aspects taking longer than others. In 2018, work began to develop a deeper understanding of climate-related risks by enhancing the Bank’s due diligence processes and integrating climate risk considerations into its industry reviews. With respect to the former, enhanced due diligence processes will lead to application of a climate change risk-rating on individual accounts, followed by application of climate change scenario analyses.

Risk Management

The Bank considers environmental risk (including climate-related risks) as a principal risk type. Climate-related risk refers to the possibility that climate change issues associated with Scotiabank or its customers could give rise to credit, reputational, operational or legal risk, and ultimately affect Bank performance.

For over a decade, the Bank has utilized and refined a comprehensive environmental risk due diligence process. It is using its existing expertise in environmental risk management to build strong climate change risk due diligence processes that are repeatable, systematic and specific. The Bank is working to build the processes and the controls to generate meaningful and practical outcomes, and develop metrics that will allow the Bank to identify, manage and report climate change related risks.

During 2018 the Bank undertook a significant amount of work related to climate risk in the loan book. Highlights include:

a) The existing environmental risk framework and tools were expanded to better identify climate related risks (both physical and transition risks) for non-retail lending.

b) A module on climate change risk was incorporated into the mandatory environmental risk training course for all non-retail banking officers and credit adjudicators.

c) Policies and procedures for non-retail lending have been updated to include climate related due diligence questions. When relevant, climate change risks are to be addressed in all new and annual review credit applications.

d) A detailed climate change risks and opportunities section was added to industry reviews for 28 economic sectors.

e) Work has been initiated to use global positioning systems to better understand and assess the climate-related physical risks that may be incurred by the Bank’s clients based upon their geographic location.

Metrics and Targets

Enhanced due diligence standards will allow the Bank to identify meaningful risk metrics. To that end, the Bank has engaged with a number of its non-retail clients to better understand their climate related risks; how they are being identified, mitigated, and reported; and the types of data that will be available.

The Bank is also working with its Canadian peers to develop common industry standards for risk metrics, which will facilitate future disclosures.

Once these risk metrics have been implemented, opportunities will exist to set meaningful targets.

Real estate secured lending

A large portion of the Bank’s lending portfolio is comprised of residential mortgages and consumer loans, which are well diversified by borrower. As at October 31, 2018, these loans accounted for $366 billion or 64% of the Bank’s total loans and acceptances outstanding (October 31, 2017 – $340 billion or 65%). Of these, $274 billion or 75% are real estate secured loans (October 31, 2017 – $257 billion or 76%). The tables below provide more details by portfolios.

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Insured and uninsured residential mortgages and home equity lines of credit

The following table presents amounts of insured and uninsured residential mortgages and home equity lines of credit (HELOCs), by geographic area.

T40 Insured and uninsured residential mortgages and home equity lines of credit (HELOCs), by geographic areas

	2018
	Residential mortgages															Home equity lines of credit
As at October 31	Insured(1)					Uninsured					Total					Insured(1)					Uninsured					Total
($ millions)	Amount		%			Amount		%			Amount		%			Amount		%			Amount		%			Amount		%
Canada:(2)
Atlantic provinces	$	6,060		2.8		$	5,309		2.5		$	11,369		5.3		$	–		–		$	1,175		5.6		$	1,175		5.6
Quebec		7,658		3.6			8,223		3.9			15,881		7.5			–		–			984		4.7			984		4.7
Ontario		41,351		19.4			65,660		30.8			107,011		50.2			–		–			11,086		53.0			11,086		53.0
Manitoba & Saskatchewan		5,473		2.6			3,992		1.9			9,465		4.5			1		–			795		3.8			796		3.8
Alberta		18,117		8.5			12,638		5.9			30,755		14.4			1		–			3,020		14.4			3,021		14.4
British Columbia & Territories		13,526		6.4			25,076		11.7			38,602		18.1			–		–			3,866		18.5			3,866		18.5
Canada(3)	$	92,185		43.3	%	$	120,898		56.7	%	$	213,083		100	%	$	2		–	%	$	20,926		100	%	$	20,928		100	%
International		–		–			40,274		100			40,274		100			–		–			–		–			–		–
Total	$	92,185		36.4	%	$	161,172		63.6	%	$	253,357		100	%	$	2		–	%	$	20,926		100	%	$	20,928		100	%
		2017
Canada(3)	$	100,921		49.0	%	$	104,872		51.0	%	$	205,793		100	%	$	4		–	%	$	20,148		100	%	$	20,152		100	%
International		–		–			31,123		100			31,123		–			–		–			–		–			–		–
Total	$	100,921		42.6	%	$	135,995		57.4	%	$	236,916		100	%	$	4		–	%	$	20,148		100	%	$	20,152		100	%

(1) Default insurance is contractual coverage for the life of eligible facilities whereby the Bank’s exposure to real estate secured lending is protected against potential shortfalls caused by borrower default. This insurance is provided by either government-backed entities or private mortgage insurers.

(2) The province represents the location of the property in Canada.

(3) Includes multi-residential dwellings (4+ units) of $2,899 (October 31, 2017 – $2,594) of which $2,029 are insured (October 31, 2017 – $1,689).

Amortization period ranges for residential mortgages

The following table presents the distribution of residential mortgages by remaining amortization periods, and by geographic areas.

T41 Distribution of residential mortgages by remaining amortization periods, and by geographic areas

		2018
		Residential mortgages by remaining amortization periods
As at October 31	Less than 20 years			20-24 years			25-29 years			30-34 years			35 years and greater			Total residential mortgage
Canada		33.9	%		38.0	%		27.1	%		0.9	%		0.1	%		100	%
International		65.1	%		18.9	%		13.2	%		2.7	%		0.1	%		100	%
		2017
Canada		33.8	%		37.9	%		26.9	%		1.3	%		0.1	%		100	%
International		69.3	%		17.2	%		11.1	%		2.3	%		0.1	%		100	%

Loan to value ratios

The Canadian residential mortgage portfolio is 57% uninsured (October 31, 2017 – 51%). The average loan-to-value (LTV) ratio of the uninsured portfolio is 54% (October 31, 2017 – 51%).

The following table presents the weighted average LTV ratio for total newly originated uninsured residential mortgages and home equity lines of credit during the year, which include mortgages for purchases, refinances with a request for additional funds and transfers from other financial institutions, by geographic areas.

C24 Well diversified in Canada and internationally...
loans and acceptances, October 2018

C25 … and in household and business lending
loans and acceptances, October 2018

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T42 Loan to value ratios

		Uninsured LTV ratios(1)
		For the year ended October 31, 2018
	Residential mortgages LTV%			Home equity lines of credit(2) LTV%
Canada:
Atlantic provinces		69.4	%		57.3	%
Quebec		65.4			67.5
Ontario		63.4			61.4
Manitoba & Saskatchewan		68.6			61.0
Alberta		67.3			70.5
British Columbia & Territories		61.6			59.9
Canada		63.8	%		62.0	%
International		68.9	%		n/a
		For the year ended October 31, 2017
Canada		64.0	%		62.7	%
International		70.4	%		n/a

(1) The province represents the location of the property in Canada.

(2) Includes only home equity lines of credit (HELOC) under Scotia Total Equity Plan. LTV is calculated based on the sum of residential mortgages and the authorized limit for related HELOCs, divided by the value of the related residential property, and presented on a weighted average basis for newly originated mortgages and HELOCs.

Potential impact on residential mortgages and real estate home equity lines of credit in the event of an economic downturn

The Bank stresses its mortgage book to determine the impact of a variety of combinations of home price declines, unemployment increases and rising interest rates. It benchmarks the scenarios against experience in various historical downturns to confirm that they are sufficiently robust tests of the portfolio. In stress, there are moderate increases in credit losses and negative impacts on capital ratios but within a level the Bank considers manageable. In practice, the portfolio is robust to such scenarios due to the low LTV of the book, the high proportion of insured exposures and the diversified composition of the portfolio.

Loans to Canadian condominium developers

With respect to loans to Canadian condominium developers, the Bank had loans outstanding of $1,192 million as at October 31, 2018 (October 31, 2017 – $949 million). This is a high quality portfolio with well-known developers who have long-term relationships with the Bank.

European exposures

The Bank believes that its European exposures are manageable, are sized appropriately relative to the credit worthiness of the counterparties (89% of the exposures are to investment grade counterparties based on a combination of internal and external ratings), and are modest relative to the capital levels of the Bank. The Bank’s European exposures are certified at amortized cost or fair value using observable inputs, with negligible amounts valued using models with unobservable inputs (Level 3). There were no significant events in the quarter that have materially impacted the Bank’s exposures.

The Bank’s exposure to sovereigns was $8.5 billion as at October 31, 2018 (October 31, 2017– $8.9 billion), $5.8 billion to banks (October 31, 2017 – $5.7 billion) and $15.8 billion to corporates (October 31, 2017– $17.6 billion).

In addition to exposures detailed in the table below, the Bank had indirect exposures consisting of securities exposures to non-European entities whose parent company is domiciled in Europe of $0.7 billion as at (October 31, 2017 – $1.3 billion).

The Bank’s current European exposure is distributed as follows:

T43 Bank’s exposure distribution by country

As at October 31	2018															2017
($ millions)	Loans and loan equivalents(1)		Deposits with financial institutions		Securities(2)			SFT and derivatives(3)		Funded Total		Undrawn Commitments(4)		Total		Total
Greece	$	146	$	–	$	–		$	–	$	146	$	–	$	146	$	213
Ireland		1,003		482		19			5		1,509		1,103		2,612		2,033
Italy		31		–		(2	)		1		30		118		148		133
Portugal		–		–		–			2		2		–		2		1
Spain		944		7		553			50		1,554		147		1,701		826
Total GIIPS	$	2,124	$	489	$	570		$	58	$	3,241	$	1,368	$	4,609	$	3,206
U.K.	$	7,633	$	4,317	$	1,150		$	1,293	$	14,393	$	5,610	$	20,003	$	20,166
Germany		1,475		651		1,115			21		3,262		1,023		4,285		4,495
France		1,136		289		1,411			49		2,885		1,314		4,199		5,053
Netherlands		855		181		(142	)		95		989		1,536		2,525		3,341
Switzerland		535		14		85			87		721		771		1,492		2,156
Other		1,926		255		2,175			236		4,592		3,396		7,988		8,068
Total Non-GIIPS	$	13,560	$	5,707	$	5,794		$	1,781	$	26,842	$	13,650	$	40,492	$	43,279
Total Europe	$	15,684	$	6,196	$	6,364		$	1,839	$	30,083	$	15,018	$	45,101	$	46,485
As at October 31, 2017	$	17,652	$	2,841	$	9,005		$	2,718	$	32,216	$	14,269	$	46,485

(1) Individual allowances for credit losses are $28. Letters of credit and guarantees are included as funded exposure as they have been issued. Included in loans and loans equivalent are letters of credit and guarantees which total $3,867 as at October 31, 2018 (October 31, 2017 – $3,366).

(2) Exposures for securities are calculated taking into account derivative positions where the security is the underlying reference asset and short trading positions, with net short positions in brackets.

(3) SFT comprise of securities purchased under resale agreements, obligations related to securities sold under repurchase agreements and securities lending and borrowing transactions. Gross and net funded exposures represent all net positive positions after taking into account collateral. Collateral held against derivatives was $1,899 and collateral held against SFT was $9,989.

(4) Undrawn commitments represent an estimate of the contractual amount that may be drawn upon by the obligor and include commitments to issue letters of credit on behalf of other banks in a syndicated bank lending arrangement.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Market Risk

Market risk is the risk of loss from changes in market prices and rates (including interest rates, credit spreads, equity prices, foreign exchange rates and commodity prices), the correlations between them, and their levels of volatility. Below is an index of market risk disclosures:

Index of all market risk disclosures

Index	Page		Tables and charts	Page
Market risk factors		92
Interest rate risk		92
Credit spread risk		92
Foreign currency risk		92
Equity risk		92
Commodity risk		92
Market risk governance		92
Risk measurement summary		92
Value at risk		92
Incremental risk charge		93
Stress testing		93
Sensitivity analysis		93
Gap analysis		93
Validation of market risk models		93
Non-trading market risk		93
Interest rate risk		93-94
			T44 Interest rate gap		94
			T45 Structural interest sensitivity		94
Foreign currency risk		94-95
Investment portfolio risks		95
Trading market risk		95	T46 Market risk measures		95
			C26 Trading revenue distribution		95
			C27 Daily trading revenue vs. VaR		95
Market risk linkage to Consolidated Statement of Financial Position		96	T47 Market risk linkage to Consolidated Statement of Financial Position of the Bank		96
Derivative instruments and structured transactions		96
Derivatives		96
Structured transactions		97
European exposures		90	T43 Bank’s exposure distribution by country		90
Market risk		66-67	T34 Total market risk capital		67
Financial instruments		70	T37 Mortgage-backed securities		71

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Market risk factors

Interest rate risk

The risk of loss due to changes in the level and/or the volatility of interest rates. This risk affects instruments such as, but not limited to, debt securities, loans, mortgages, deposits and derivatives.

Interest rate risks are managed through sensitivity, gap, stress testing, annual income and VaR limits and mitigated through portfolio diversification and hedges using interest rate derivatives and debt securities.

Credit spread risk

The risk of loss due to changes in the market price and volatility of credit, or the creditworthiness of issuers. This risk is mainly concentrated in loan and debt securities portfolios. Risk is managed through sensitivity, jump-to-default, stress testing and VaR limits and mitigated through hedges using credit derivatives.

Foreign currency risk

The risk of loss resulting from changes in currency exchange rates and exchange rate volatility. Foreign currency denominated debt and other securities as well as future cash flows in foreign currencies are exposed to this type of risk. Risk is managed through maximum net trading position, sensitivity, stress testing and VaR limits and mitigated through hedges using foreign exchange positions or derivatives.

Equity risk

The risk of loss due to changes in prices, volatility or any other equity related risk factor of individual equity or equity linked securities. This risk affects instruments such as, but not limited to, equities, exchange traded funds, mutual funds, derivatives and other equity linked products. Risk is managed through sensitivity, stress testing and VaR limits and mitigated through hedges using physical equity and derivatives instruments.

Commodity risk

The risk of loss due to changes in prices or volatility of precious metal, base metal, energy and agriculture products. Both physical commodity and derivatives positions are exposed to this risk. Risk is managed through aggregate and net trading position, sensitivity, stress testing and VaR limits and mitigated through hedges using physical commodity and derivative positions.

The following maps risk factors to trading and non-trading activities:

Non-trading Funding	Investments	Trading
Interest rate risk Foreign currency risk	Interest rate risk Credit spread risk Foreign currency risk Equity risk	Interest rate risk Credit spread risk Foreign currency risk Equity risk Commodity risk

Market risk governance

Overview

The Board of Directors reviews and approves market risk policies and limits annually. The Bank’s Asset-Liability Committee (ALCO) and Market Risk Management and Policy Committee (MRMPC) oversee the application of the framework set by the Board, and monitor the Bank’s market risk exposures and the activities that give rise to these exposures. The MRMPC establishes specific operating policies and sets limits at the product, portfolio, business unit and business line levels, and for the Bank in total. Limits are reviewed at least annually.

Global Risk Management provides independent oversight of all significant market risks, supporting the MRMPC and ALCO with analysis, risk measurement, monitoring, reporting, proposals for standards and support for new product development. To ensure compliance with policies and limits, market risk exposures are independently monitored on a continuing basis, either by Global Risk Management, the back offices, or Finance. They provide senior management, business units, the ALCO, and the MRMPC with a series of daily, weekly and monthly reports of market risk exposures by business line and risk type.

The Bank uses a variety of metrics and models to measure and control market risk exposures. These measurements are selected based on an assessment of the nature of risks in a particular activity. The principal measurement techniques are Value at Risk (VaR), Incremental Risk Charge, stress testing, sensitivity analysis and gap analysis. The use and attributes of each of these techniques are noted in the Risk Measurement Summary.

Risk measurement summary

Value at risk (VaR)

VaR is a statistical method of measuring potential loss due to market risk based upon a common confidence interval and time horizon. The Bank calculates VaR daily using a 99% confidence level, and a one-day holding period for its trading portfolios. This means that once in every 100 days, the trading positions are expected to lose more than the VaR estimate. VaR has two components: general market risk and debt specific risk. The Bank calculates general market risk VaR using historical simulation based on 300 days of market data. Obligor specific risk on debt instruments and credit derivatives not captured in general market risk VaR is calculated through the debt specific risk VaR, which uses historical resampling. In addition, the Bank calculates a Stressed VaR measure which follows the same basic methodology as VaR but is calibrated to a one year stressed period. The stressed period is determined based on analysis of the trading book’s risk profile against historical market data. Stressed VaR complements VaR in that it evaluates the impact of market volatility that is outside the VaR’s historical set.

All material risk factors are captured in VaR. Where historical data is not available, proxies are used to establish the relevant volatility for VaR and Stressed VaR until sufficient data is available. Changes in VaR between reporting periods are generally due to changes in positions, volatilities and/or correlations between asset classes. VaR is also used to evaluate risks arising in certain funding and investment portfolios. Backtesting is also an important and necessary part of the VaR process. The Bank backtests the actual trading profit and loss against the VaR result to validate the quality and accuracy of the Bank’s VaR model. The Board reviews VaR and backtesting results quarterly.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Incremental Risk Charge (IRC)

Basel market risk capital requirements includes IRC which captures the following:

Default risk: This is the potential for direct losses due to an obligor’s (equity/bond issuer or counterparty) default.

Credit migration risk: This is the potential for direct losses due to a credit rating downgrade or upgrade.

A Monte Carlo model is used to perform default and migration simulations for the obligors underlying credit derivative and bond portfolios. IRC is calculated at the 99.9th percentile with a one year liquidity horizon. The Board reviews IRC results quarterly.

Stress testing

A limitation of VaR and Stressed VaR is that they only reflect the recent history of market volatility and a specific one year stressed period, respectively. To complement these measures, stress testing examines the impact that abnormally large changes in market factors and periods of prolonged inactivity might have on trading portfolios. Stress testing scenarios are designed to include large shifts in risk factors as well as historical and theoretical multi risk market events. Historical scenarios capture severe movements over periods that are significantly longer than the one-day holding period captured in VaR, such as the 2008 Credit Crisis or the 1998 Russian Financial Crisis. Similar to Stressed VaR, stress testing provides management with information on potential losses due to tail events. In addition, the results from the stress testing program are used to verify that the Bank’s market risk capital is sufficient to absorb these potential losses.

The Bank subjects its trading portfolios to a series of daily, weekly and monthly stress tests. The Bank also evaluates risk in its investment portfolios monthly, using stress tests based on risk factor sensitivities and specific market events. The stress testing program is an essential component of the Bank’s comprehensive risk management framework which complements the VaR methodology and other risk measures and controls employed by the Bank. The Board reviews stress testing results quarterly.

Sensitivity analysis

In trading portfolios, sensitivity analysis is used to measure the effect of changes in risk factors, including prices and volatility, on financial products and portfolios. These measures apply across product types and geographies and are used for limit monitoring and management reporting.

In non-trading portfolios, sensitivity analysis assesses the effect of changes in interest rates on current earnings and on the economic value of shareholders’ equity. It is applied globally to each of the major currencies within the Bank’s operations. The Bank’s sensitivity analysis for limit and disclosure purposes is measured through positive and negative parallel shifts in the underlying interest rate curves. These calculations are based on a constant balance sheet and make no assumptions for management actions that may mitigate the risks. The Bank also performs sensitivity analysis using various non-parallel interest rate curve shifts, for example: curve steepeners, curve flatteners and curve twists.

Gap analysis

Gap analysis is used to assess the interest rate sensitivity of re-pricing mismatches in the Bank’s non-trading operations. Under gap analysis, interest rate sensitive assets, liabilities and off-balance sheet instruments are assigned to defined time periods based on expected re-pricing dates. Products with a contractual maturity are assigned an interest rate gap term based on the shorter of the contractual maturity date and the next re-pricing date. Products with no contractual maturity are assigned an interest rate gap based on observed historical consumer behaviour.

Validation of market risk models

Prior to the implementation of new market risk models, rigorous validation and testing is conducted. Validation is conducted when the model is initially developed and when any significant changes are made to the model. The models are also subject to ongoing validation, the frequency of which is determined by model risk ratings. Models may also be triggered for earlier revalidation when there have been significant structural changes in the market or changes to the composition of the portfolio. Model validation includes backtesting, and additional analysis such as:

• Theoretical review or tests to demonstrate whether assumptions made within the internal model are appropriate; and

• Impact tests including stress testing that would occur under historical and hypothetical market conditions.

The validation process is governed by the Bank’s Model Risk Management Policy.

Non-trading market risk

Funding and investment activities

Market risk arising from the Bank’s funding and investment activities is identified, managed and controlled through the Bank’s asset-liability management processes. The Asset-Liability Committee meets monthly to review risks and opportunities, and evaluate performance including the effectiveness of hedging strategies.

Interest rate risk

Interest rate risks in the non-trading portfolios are predominately driven by the interest rate mismatch (i.e. re-pricing frequency) in the asset and liability exposures. The largest exposures in the non-trading book arise from retail banking operations in Canada. The largest component of this risk is from positions related to the retail mortgage book. T44 shows a summary of the interest rate gaps for the Bank’s non-trading positions.

Interest rate risk arising from the Bank’s lending, funding and investment activities is managed in accordance with Board-approved policies and global limits, which are designed to control the risk to net interest income and economic value of shareholders’ equity. The annual income limit measures the effect of a specified change in interest rates on the Bank’s annual net interest income over the next twelve months, while the economic value limit measures the impact of a specified change in interest rates on the present value of the Bank’s net assets. These limits are set according to the documented risk appetite of the Bank. Board-level limit utilization is reported to both the Asset-Liability Committee and the Board on a regular basis. Any limit exceptions are reported according to the Limit Monitoring and Compliance Policy of the Bank.

Net interest income and the economic value of equity result from the differences between yields earned on the Bank’s non-trading assets and interest rate paid on its liabilities. The difference in yields partly reflects mismatch between the maturity and re-pricing characteristics of the assets and liabilities. This mismatch is inherent in the non-trading operations of the Bank and exposes it to adverse changes in the level of interest rates. The Asset-Liability Committee provides strategic direction for the management of structural interest rate risk within the risk appetite framework authorized by the Board of Directors. The asset/liability management strategy is executed by Group Treasury with the objective of protecting and enhancing net interest income within established risk tolerances.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Gap analysis, simulation modeling, sensitivity analysis and VaR are used to assess exposures and for limit monitoring and planning purposes. The Bank’s interest rate risk exposure calculations are generally based on the earlier of contractual re-pricing or maturity of on-balance sheet and off-balance sheet assets and liabilities, although certain assets and liabilities such as credit cards and deposits without a fixed maturity are assigned a maturity profile based on the longevity of the exposure. Expected prepayments from loans and cashable investment products are also incorporated into the exposure calculations.

T45 shows the after-tax impact of an immediate and sustained 100 basis point shock over a one year period on annual income and economic value of shareholders’ equity. The interest rate sensitivities tabulated are based on a static balance sheet. There are no assumptions made for management actions that may mitigate risk. Based on the Bank’s interest rate positions at year-end 2018, an immediate and sustained 100 basis point increase in interest rates across all currencies and maturities would decrease after-tax net interest income by approximately $105 million over the next 12 months, assuming no further management actions. During fiscal 2018, this measure ranged between $53 million and $105 million.

This same increase in interest rates would result in an after-tax decrease in the present value of the Bank’s net assets of approximately $870 million. During fiscal 2018, this measure ranged between $827 million and $1097 million. The directional sensitivity of these two key metrics is largely determined by the difference in time horizons (annual income captures the impact over the next twelve months only, whereas economic value considers the potential impact of interest rate changes on the present value of all future cash flows). The annual income and economic value results are compared to the authorized Board limits. There were no limit breaches in the reporting period.

T44 Interest rate gap

Interest rate sensitivity position(1) As at October 31, 2018 ($ billions)	Within 3 months			3 to 12 months			Over 1 year		Non-interest rate sensitive			Total
Canadian dollars
Assets	$	221.1		$	50.3		$	165.1	$	9.3		$	445.8
Liabilities	$	264.0		$	59.3		$	107.0	$	15.5		$	445.8
Gap	$	(42.9	)	$	(9.0	)	$	58.1	$	(6.2	)	$	–
Foreign currencies
Assets	$	337.9		$	42.1		$	87.6	$	85.1		$	552.7
Liabilities	$	332.4		$	43.0		$	69.4	$	107.9		$	552.7
Gap	$	5.5		$	(0.9	)	$	18.2	$	(22.8	)	$	–
Total
Gap	$	(37.4	)	$	(9.9	)	$	76.3	$	(29.0	)	$	–
As at October 31, 2017
Gap	$	(0.9)		$	1.9		$	28.8	$	(29.8)		$	–

(1) The above figures reflect the inclusion of off-balance sheet instruments, as well as an estimate of prepayments on consumer and mortgage loans and cashable GICs.

T45 Structural interest sensitivity

	2018				2017
As at October 31 ($ millions)	Economic Value of Shareholders’ Equity		Annual Income		Economic Value of Shareholders’ Equity			Annual Income
After-tax impact of
100bp increase in rates
Non-trading risk	$	(870)	$	(105)	$	(354	)	$	64
100bp decrease in rates
Non-trading risk	$	797	$	101	$	183		$	(67	)

Foreign currency risk

Foreign currency risk in the Bank’s unhedged funding and investment activities arises primarily from the Bank’s net investments in foreign operations as well as foreign currency earnings in its domestic and remitting foreign branch operations.

The Bank’s foreign currency exposure to its net investments in foreign operations is controlled by a Board-approved limit. This limit considers factors such as potential volatility to shareholders’ equity as well as the potential impact on capital ratios from foreign exchange fluctuations. On a quarterly basis, the Asset-Liability Committee reviews the Bank’s foreign currency net investment exposures and determines the appropriate hedging strategies. These may include funding the investments in the same currency or using other financial instruments, including derivatives.

Foreign currency translation gains and losses from net investments in foreign operations, net of related hedging activities and tax effects, are recorded in accumulated other comprehensive income within shareholders’ equity. However, the Bank’s regulatory capital ratios are not materially affected by these foreign exchange fluctuations because the risk-weighted assets of the foreign operations tend to move in a similar direction.

The Bank is also subject to foreign currency translation risk on the earnings of its domestic and remitting foreign branch operations. The Bank forecasts foreign currency revenues and expenses, which are primarily denominated in U.S. dollars, over a number of future fiscal quarters. The Asset-Liability Committee also assesses economic data trends and forecasts to determine if some or all of the estimated future foreign currency revenues and expenses should be hedged. Hedging instruments normally include foreign currency spot and forward contracts, as well as foreign currency options and swaps. Certain of these economic hedges may not qualify for hedge accounting resulting in a potential for a mismatch in the timing of the recognition of economic hedge gains/losses and the underlying foreign earnings translation gains/losses. In accordance with IFRS, foreign currency translation gains and losses relating to monetary and non-monetary items are recorded directly in earnings.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

As at October 31, 2018, a one percent increase (decrease) in the Canadian dollar against all currencies in which the Bank operates decreases (increases) the Bank’s before-tax annual earnings by approximately $65 million (October 31, 2017 – $58 million) in the absence of hedging activity, primarily from the exposure to U.S. dollars.

Investment portfolio risks

The Bank holds investment portfolios to meet liquidity and statutory reserve requirements and for investment purposes. These portfolios expose the Bank to interest rate, foreign currency, credit spread and equity risks. Debt investments primarily consist of government, agency, and corporate bonds. Equity investments include common and preferred shares, as well as a diversified portfolio of third-party managed funds. The majority of these securities are valued using prices obtained from external sources. These portfolios are controlled by a Board-approved policy and limits.

Trading market risk

The Bank’s policies, processes and controls for trading activities are designed to achieve a balance between pursuing profitable trading opportunities and managing earnings volatility within a framework of sound and prudent practices. Trading activities are primarily customer focused.

Market risk arising from the Bank’s trading activities is managed in accordance with Board-approved policies, and aggregate VaR and stress testing limits. The quality of the Bank’s VaR is validated by regular backtesting analysis, in which the VaR is compared to both theoretical profit and loss results based on fixed end of day positions and actual reported profit and loss. A VaR at the 99% confidence interval is an indication of a 1% probability that losses will exceed the VaR if positions remain unchanged during the next business day. Trading positions are however managed dynamically and, as a result, actual profit/loss backtesting exceptions are uncommon.

In fiscal 2018, the total one-day VaR for trading activities averaged $12.9 million, compared to $11.2 million in 2017.

T46 Market risk measures

	2018										2017
($ millions)	Year end			Avg			High		Low		Year end			Avg			High		Low
Credit Spread plus Interest Rate	$	11.0		$	11.6		$	17.8	$	6.9	$	10.1		$	10.8		$	15.1	$	8.0
Credit Spread		6.2			7.8			12.2		4.8		6.9			6.3			9.1		4.1
Interest Rate		7.7			9.5			17.2		4.3		8.4			8.4			12.0		5.3
Equities		5.8			3.0			15.5		1.2		3.2			2.2			4.8		1.0
Foreign Exchange		2.8			3.3			5.8		1.1		2.9			2.2			5.5		0.7
Commodities		1.7			1.6			2.1		1.0		1.3			1.4			2.6		0.6
Debt Specific		3.6			3.4			4.2		2.6		3.3			3.6			5.1		2.4
Diversification Effect		(11.7	)		(10.0	)		n/a		n/a		(10.2	)		(9.0	)		n/a		n/a
All-Bank VaR	$	13.2		$	12.9		$	18.4	$	8.6	$	10.6		$	11.2		$	14.9	$	9.1
All-Bank Stressed VaR	$	44.6		$	42.7		$	59.0	$	26.3	$	34.7		$	28.5		$	44.5	$	19.2
Incremental Risk Charge	$	77.9		$	173.4		$	474.7	$	60.0	$	144.5		$	271.2		$	399.8	$	144.5

The Bank also calculates a Stressed VaR which uses the same basic methodology as the VaR. However, Stressed VaR is calculated using market volatility from a one-year time period identified as stressful, given the risk profile of the trading portfolio. The current period is the 2008/2009 credit crisis surrounding the collapse of Lehman Brothers. In fiscal 2018, the total one-day Stressed VaR for trading activities averaged $42.7 million compared to $28.5 million in 2017.

In fiscal 2018, the average IRC decreased to $173.4 million from $271.2 million in 2017, primarily driven by reduced emerging market exposure.

Description of trading revenue components and graphical comparison of VaR to daily P&L

Chart C26 shows the distribution of daily trading revenue for fiscal 2018 and Chart C27 compares that distribution to daily VaR results. Trading revenue includes changes in portfolio value as well as the impact of new trades, commissions, fees and reserves. Some components of revenue which are calculated less frequently are pro-rated. Trading revenue averaged $5.9 million per day, compared to $6.0 million in 2017. Revenue was positive on 99.6% of trading days during the year, an increase from 99% in 2017. During the year, the largest single day trading loss was $3.2 million which occurred on December 15, 2017, and was smaller than the total VaR of $13.8 million on the same day.

C26 Trading revenue distribution

Year ended October 31, 2018

C27 Daily trading revenue vs. VaR

$ millions, November 1, 2017 to October 31, 2018

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Market risk linkage to Consolidated Statement of Financial Position

Trading assets and liabilities are marked to market daily and included in trading risk measures such as VaR. Derivatives risk related to Global Banking and Markets’ activities is captured under trading risk measures while derivatives used in asset/liability management are in the non-trading risk category. A comparison of Consolidated Statement of Financial Position items which are covered under the trading and non-trading risk measures is provided in the table below.

T47 Market risk linkage to Consolidated Statement of Financial Position of the Bank

	Market Risk Measure
As at October 31, 2018 ($ millions)	Consolidated Statement of Financial Position		Trading Risk		Non-trading risk		Not subject to market risk		Primary risk sensitivity of non-trading risk
Precious metals		$      3,191	$	3,191	$	–	$	–		n/a
Trading assets		100,262		99,650		612		–		Interest rate, FX
Financial instruments designated at fair value through profit or loss		12		–		12		–		Interest rate
Derivative financial instruments		37,558		33,937		3,621		–		Interest rate, FX, equity
Investment securities		78,396		–		78,396		–		Interest rate, FX, equity
Loans		551,834		–		551,834		–		Interest rate, FX
Assets not subject to market risk(1)		227,240		–		–		227,240		n/a
Total assets		$  998,493	$	136,778	$	634,475	$	227,240
Deposits		$  676,534	$	–	$	641,791	$	34,743		Interest rate, FX, equity
Financial instruments designated at fair value through profit or loss		8,188		–		8,188		–		Interest rate, equity
Obligations related to securities sold short		32,087		32,087		–		–		n/a
Derivative financial instruments		37,967		32,300		5,667		–		Interest rate, FX, equity
Trading liabilities(2)		5,019		5,019		–		–		n/a
Retirement and other benefit liabilities		1,727		–		1,727		–		Interest rate, credit spread, equity
Liabilities not subject to market risk(3)		169,291		–		–		169,291		n/a
Total liabilities		$  930,813	$	69,406	$	657,373	$	204,034

(1) Includes goodwill, intangibles, other assets and securities purchased under resale agreements and securities borrowed.

(2) Gold and silver certificates and bullion included in other liabilities.

(3) Includes obligations related to securities sold under repurchase agreements and securities lent and other liabilities.

	Market Risk Measure
As at October 31, 2017(1) ($ millions)	Consolidated Statement of Financial Position		Trading Risk		Non-trading risk		Not subject to market risk		Primary risk sensitivity of non-trading risk
Precious metals	$	5,717	$	5,717	$	–	$	–		n/a
Trading assets		98,464		98,464		–		–		n/a
Financial instruments designated at fair value through profit or loss		13		–		13		–		Interest rate
Derivative financial instruments		35,364		30,648		4,716		–		Interest rate, FX, equity
Investment securities		69,269		–		69,269		–		Interest rate, FX, equity
Loans		504,369		–		504,369		–		Interest rate, FX
Assets not subject to market risk(2)		202,077		–		–		202,077		n/a
Total assets	$	915,273	$	134,829	$	578,367	$	202,077
Deposits	$	625,367	$	–	$	593,174	$	32,193		Interest rate, FX, equity
Financial instruments designated at fair value through profit or loss		4,663		–		4,663		–		Interest rate, equity
Obligations related to securities sold short		30,766		30,766		–		–		n/a
Derivative financial instruments		34,200		30,545		3,655		–		Interest rate, FX, equity
Trading liabilities(3)		6,819		6,819		–		–		n/a
Retirement and other benefit liabilities		2,201		–		2,201		–		Interest rate, credit spread, equity
Liabilities not subject to market risk(4)		149,632		–		–		149,632		n/a
Total liabilities	$	853,648	$	68,130	$	603,693	$	181,825

(1) Amounts have not been restated in accordance with IFRS 9; prior period amounts are prepared in accordance with IAS 39 (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Includes goodwill, intangibles, other assets and securities purchased under resale agreements and securities borrowed.

(3) Gold and silver certificates and bullion included in other liabilities.

(4) Includes obligations related to securities sold under repurchase agreements and securities lent and other liabilities.

Derivative instruments and structured transactions

Derivatives

The Bank uses derivatives to meet customer needs, generate revenues from trading activities, manage market and credit risks arising from its lending, funding and investment activities, and to lower its cost of capital. The Bank uses several types of derivative products, including interest rate swaps, futures and options, to hedge interest rate risk exposure. Forward contracts, swaps and options are used to manage foreign currency risk exposures. Credit exposures in its lending and investment books are managed using credit default swaps. As a dealer, the Bank markets a range of derivatives to its customers, including interest rate, foreign exchange, equity, commodity and credit derivatives.

Market risk arising from derivatives transactions is subject to the control, reporting and analytical techniques noted above. Additional controls and analytical techniques are applied to address certain market-related risks that are unique to derivative products.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Structured transactions

Structured transactions are specialized transactions that may involve combinations of cash, other financial assets and derivatives designed to meet the specific risk management or financial requirements of customers. These transactions are carefully evaluated by the Bank to identify and address the credit, market, legal, tax, reputational and other risks, and are subject to a cross-functional review and sign-off by Trading Management, Global Risk Management, Taxation, Finance and Legal departments. Large structured transactions are also subject to review by senior risk management committees and evaluated in accordance with the procedures described below in Reputational Risk.

The market risk in these transactions is usually minimal, and returns are earned by providing structuring expertise and by taking credit risk. Once executed, structured transactions are subject to the same ongoing credit reviews and market risk analysis as other types of derivatives transactions. This review and analysis includes careful monitoring of the quality of the reference assets, and ongoing valuation of the derivatives and reference assets.

Liquidity Risk

Liquidity risk is the risk that the Bank is unable to meet its financial obligations in a timely manner at reasonable prices. Financial obligations include liabilities to depositors, payments due under derivative contracts, settlement of securities borrowing and repurchase transactions, and lending and investment commitments.

Effective liquidity risk management is essential to maintain the confidence of depositors and counterparties, manage the Bank’s cost of funds and to support core business activities, even under adverse circumstances.

Liquidity risk is managed within the framework of policies and limits that are approved by the Board of Directors. The Board receives reports on risk exposures and performance against approved limits. The Asset-Liability Committee (ALCO) provides senior management oversight of liquidity risk.

The key elements of the liquidity risk framework are:

• Measurement and modeling – the Bank’s liquidity model measures and forecasts cash inflows and outflows, including off-balance sheet cash flows on a daily basis. Risk is managed by a set of key limits over the maximum net cash outflow by currency over specified short-term horizons (cash gaps), a minimum level of core liquidity, and liquidity stress tests.

• Reporting – Global Risk Management provides independent oversight of all significant liquidity risks, supporting the ALCO with analysis, risk measurement, stress testing, monitoring and reporting.

• Stress testing – the Bank performs liquidity stress testing on a regular basis, to evaluate the effect of both industry-wide and Bank-specific disruptions on the Bank’s liquidity position. Liquidity stress testing has many purposes including:

– Helping the Bank understand the potential behavior of various on-balance sheet and off-balance sheet positions in circumstances of stress; and

– Based on this knowledge, facilitating the development of risk mitigation and contingency plans.

The Bank’s liquidity stress tests consider the effect of changes in funding assumptions, depositor behavior and the market value of liquid assets. The Bank performs industry standard stress tests, the results of which are reviewed at senior levels of the organization and are considered in making liquidity management decisions.

• Contingency planning – the Bank maintains a liquidity contingency plan that specifies an approach for analyzing and responding to actual and potential liquidity events. The plan outlines an appropriate governance structure for the management and monitoring of liquidity events, processes for effective internal and external communication, and identifies potential counter measures to be considered at various stages of an event. A contingency plan is maintained both at the parent-level as well as for major subsidiaries.

• Funding diversification – the Bank actively manages the diversification of its deposit liabilities by source, type of depositor, instrument, term and geography.

• Core liquidity – the Bank maintains a pool of highly liquid, unencumbered assets that can be readily sold or pledged to secure borrowings under stressed market conditions or due to Bank-specific events. The Bank also maintains liquid assets to support its intra-day settlement obligations in payment, depository and clearing systems.

Liquid assets

Liquid assets are a key component of liquidity management and the Bank holds these types of assets in sufficient quantity to meet potential needs for liquidity management.

Liquid assets can be used to generate cash either through sale, repurchase transactions or other transactions where these assets can be used as collateral to generate cash, or by allowing the asset to mature. Liquid assets include deposits at central banks, deposits with financial institutions, call and other short-term loans, marketable securities, precious metals and securities received as collateral from securities financing and derivative transactions. Liquid assets do not include borrowing capacity from central bank facilities.

Marketable securities are securities traded in active markets, which can be converted to cash within a timeframe that is in accordance with the Bank’s liquidity management framework. Assets are assessed considering a number of factors, including the expected time it would take to convert them to cash.

Marketable securities included in liquid assets are comprised of securities specifically held as a liquidity buffer or for asset liability management purposes; trading securities, which are primarily held by Global Banking and Markets; and collateral received for securities financing and derivative transactions.

The Bank maintains large holdings of unencumbered liquid assets to support its operations. These assets generally can be sold or pledged to meet the Bank’s obligations. As at October 31, 2018, unencumbered liquid assets were $202 billion (October 31, 2017 – $180 billion). Securities including NHA mortgage-backed securities, comprised 71% of liquid assets (October 31, 2017 – 67%). Other unencumbered liquid assets, comprising cash and deposits with central banks, deposits with financial institutions, precious metals and call and short loans, were 29% (October 31, 2017 – 33%). The increase in liquid assets was mainly attributable to an increase in unencumbered foreign government obligations, deposits with financial institutions and NHA mortgage-backed securities, which was partially offset by a decrease in cash and deposits with central banks and precious metals.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The carrying values outlined in the liquid asset table are consistent with the carrying values in the Bank’s Consolidated Statement of Financial Position as at October 31, 2018. The liquidity value of the portfolio will vary under different stress events as different assumptions are used for the stress scenarios.

The Bank’s liquid asset pool is summarized in the following table:

T48 Liquid asset pool

							Encumbered liquid assets				Unencumbered liquid assets
As at October 31, 2018 ($ millions)	Bank-owned liquid assets		Securities received as collateral from securities financing and derivative transactions		Total liquid assets		Pledged as collateral		Other(1)		Available as collateral		Other
Cash and deposits with central banks	$	48,352	$	–	$	48,352	$	–	$	7,906	$	40,446	$	–
Deposits with financial institutions		13,917		–		13,917		–		73		13,844		–
Precious metals		3,191		–		3,191		–		70		3,121		–
Securities:
Canadian government obligations		45,260		11,050		56,310		29,464		–		26,846		–
Foreign government obligations		60,553		63,816		124,369		68,531		–		55,838		–
Other securities		54,786		66,704		121,490		92,280		–		29,210		–
Loans:
NHA mortgage-backed securities(2)		34,636		–		34,636		2,605		–		32,031		–
Call and short loans		1,047		–		1,047		–		–		1,047		–
Total	$	261,742	$	141,570	$	403,312	$	192,880	$	8,049	$	202,383	$	–
							Encumbered liquid assets				Unencumbered liquid assets
As at October 31, 2017(3) ($ millions)	Bank-owned liquid assets		Securities received as collateral from securities financing and derivative transactions		Total liquid assets		Pledged as collateral		Other(1)		Available as collateral		Other
Cash and deposits with central banks	$	49,754	$	–	$	49,754	$	–	$	7,306	$	42,448	$	–
Deposits with financial institutions		9,909		–		9,909		–		108		9,801		–
Precious metals		5,717		–		5,717		–		123		5,594		–
Securities:
Canadian government obligations		41,791		9,836		51,627		24,505		–		27,122		–
Foreign government obligations		47,388		54,286		101,674		75,362		–		26,312		–
Other securities		56,444		59,590		116,034		79,363		–		36,671		–
Loans:
NHA mortgage-backed securities(2)		33,327		–		33,327		2,360		–		30,967		–
Call and short loans		1,405		–		1,405		–		–		1,405		–
Total	$	245,735	$	123,712	$	369,447	$	181,590	$	7,537	$	180,320	$	–

(1) Assets which are restricted from being used to secure funding for legal or other reasons.

(2) These mortgage-backed securities, which are available for sale, are reported as residential mortgage loans on the Consolidated Statement of Financial Position.

(3) Amounts have not been restated in accordance with IFRS 9; prior period amounts are prepared in accordance with IAS 39 (refer to Notes 3 and 4 in the consolidated financial statements).

A summary of total unencumbered liquid assets held by the parent bank and its branches, and domestic and foreign subsidiaries, is presented below:

T49 Total unencumbered liquid assets held by the parent bank and its branches, and domestic and foreign subsidiaries

As at October 31 ($ millions)	2018		2017
The Bank of Nova Scotia (Parent)	$	152,728	$	131,838
Bank domestic subsidiaries		15,344		13,753
Bank foreign subsidiaries		34,311		34,729
Total	$	202,383	$	180,320

The Bank’s liquidity pool is held across major currencies, mostly comprised of Canadian and U.S. dollar holdings. As shown above, the vast majority (83%) of liquid assets are held by the Bank’s corporate office, branches of the Bank, and Canadian subsidiaries of the Bank. To the extent a liquidity reserve held in a foreign subsidiary of the Bank is required for regulatory purposes, it is assumed to be unavailable to the rest of the Group. Other liquid assets held by a foreign subsidiary are assumed to be available only in limited circumstances. The Bank monitors and ensures compliance in relation to minimum levels of liquidity required and assets held within each entity, and/or jurisdiction.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Encumbered assets

In the course of the Bank’s day-to-day activities, securities and other assets are pledged to secure an obligation, participate in clearing or settlement systems, or operate in a foreign jurisdiction. Securities are also pledged under repurchase agreements. A summary of encumbered and unencumbered assets is presented below:

T50 Asset encumbrance

								Encumbered assets				Unencumbered assets
As at October 31, 2018 ($ millions)	Bank-owned assets		Securities received as collateral from securities financing and derivative transactions			Total assets		Pledged as collateral		Other(1)		Available as collateral(2)		Other(3)
Cash and deposits with central banks	$	48,352	$	–		$	48,352	$	–	$	7,906	$	40,446	$	–
Deposits with financial institutions		13,917		–			13,917		–		73		13,844		–
Precious metals		3,191		–			3,191		–		70		3,121		–
Liquid securities:
Canadian government obligations		45,260		11,050			56,310		29,464		–		26,846		–
Foreign government obligations		60,553		63,816			124,369		68,531		–		55,838		–
Other liquid securities		54,786		66,704			121,490		92,280		–		29,210		–
Other securities		3,283		5,400			8,683		4,978		–		–		3,705
Loans classified as liquid assets:
NHA mortgage-backed securities		34,636		–			34,636		2,605		–		32,031		–
Call and short loans		1,047		–			1,047		–		–		1,047		–
Other loans		530,485		–			530,485		8,430		59,460		12,864		449,731
Other financial assets(4)		163,209		(92,624	)		70,585		2,619		–		–		67,966
Non-financial assets		39,774		–			39,774		–		–		–		39,774
Total	$	998,493	$	54,346		$	1,052,839	$	208,907	$	67,509	$	215,247	$	561,176
								Encumbered assets				Unencumbered assets
As at October 31, 2017 ($ millions)	Bank-owned assets		Securities received as collateral from securities financing and derivative transactions			Total assets		Pledged as collateral		Other(1)		Available as collateral(2)		Other(3)
Cash and deposits with central banks	$	49,754	$	–		$	49,754	$	–	$	7,306	$	42,448	$	–
Deposits with financial institutions		9,909		–			9,909		–		108		9,801		–
Precious metals		5,717		–			5,717		–		123		5,594		–
Liquid securities:
Canadian government obligations		41,791		9,836			51,627		24,505		–		27,122		–
Foreign government obligations		47,388		54,286			101,674		75,362		–		26,312		–
Other liquid securities		56,444		59,590			116,034		79,363		–		36,671		–
Other securities		2,311		4,645			6,956		2,916		–		–		4,040
Loans classified as liquid assets:
NHA mortgage-backed securities		33,327		–			33,327		2,360		–		30,967		–
Call and short loans		1,405		–			1,405		–		–		1,405		–
Other loans		486,949		–			486,949		6,072		54,746		12,721		413,410
Other financial assets(4)		151,329		(85,691	)		65,638		4,212		–		–		61,426
Non-financial assets		28,949		–			28,949		–		–		–		28,949
Total	$	915,273	$	42,666		$	957,939	$	194,790	$	62,283	$	193,041	$	507,825

(1) Assets which are restricted from being used to secure funding for legal or other reasons.

(2) Assets that are readily available in the normal course of business to secure funding or meet collateral needs including central bank borrowing immediately available.

(3) Other unencumbered assets are not subject to any restrictions on their use to secure funding or as collateral but the Bank would not consider them to be readily available. These include loans, a portion of which may be used to access central bank facilities outside of the normal course or to raise secured funding through the Bank’s secured funding programs.

(4) Securities received as collateral against other financial assets are included within liquid securities and other securities.

As of October 31, 2018, total encumbered assets of the Bank were $276 billion (October 31, 2017 – $257 billion). Of the remaining $776 billion (October 31, 2017 – $701 billion) of unencumbered assets, $215 billion (October 31, 2017 – $193 billion) are considered readily available in the normal course of business to secure funding or meet collateral needs as detailed above.

In some over-the-counter derivative contracts, the Bank would be required to post additional collateral or receive less collateral in the event its credit rating was downgraded. The Bank maintains access to sufficient collateral to meet these obligations in the event of a downgrade of its ratings by one or more of the rating agencies. As at October 31, 2018, the potential adverse impact on derivatives collateral that would result from a one-notch or two-notch downgrade of the Bank’s rating below its lowest current rating was $50 million or $306 million, respectively.

Encumbered liquid assets are not considered to be available for liquidity management purposes. Liquid assets which are used to hedge derivative positions in trading books or for hedging purposes are considered to be available for liquidity management provided they meet the criteria discussed in liquid assets above.

Liquidity coverage ratio

The Liquidity Coverage Ratio measure (LCR) is based on a 30-day liquidity stress scenario, with assumptions defined in the OSFI Liquidity Adequacy Requirements (LAR) Guideline. The LCR is calculated as the ratio of high quality liquid assets (HQLA) to net cash outflows. The Bank is subject to a regulatory minimum LCR of 100%.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OSFI’s LAR stipulates that banks must maintain an adequate level of unencumbered HQLA that can be converted into cash to meet liquidity needs over a 30 calendar day horizon under a pre-defined significantly severe liquidity stress scenario. The LCR-prescribed liquidity stress scenario includes assumptions for asset haircuts, deposit run-off, wholesale rollover rates, and outflow rates for commitments.

HQLA are grouped into three categories: Level 1, Level 2A and Level 2B, based on guidelines from the LAR. Level 1 HQLA receive no haircuts, and includes cash, deposits with central banks, central bank reserves available to the Bank in times of stress, and securities with a 0% risk weight. Level 2A and 2B include HQLA of lesser quality and attracts haircuts ranging from 15%-50%.

The total weighted values for net cash outflows for the next 30 days are derived by applying the assumptions specified in the LAR Guideline to specific items, including loans, deposits, maturing debt, derivative transactions and commitments to extend credit.

The following table presents the Bank’s average LCR for the quarter ended October 31, 2018, based on the average daily position in the quarter.

T51 Bank’s average LCR

For the quarter ended October 31, 2018 ($ millions)(1)	Total unweighted value (Average)(2)			Total weighted value (Average)(3)
High-quality liquid assets
Total high-quality liquid assets (HQLA)			*	$	144,349
Cash outflows
Retail deposits and deposits from small business customers, of which:	$	173,809			12,191
Stable deposits		76,795			2,490
Less stable deposits		97,014			9,701
Unsecured wholesale funding, of which:		179,528			87,967
Operational deposits (all counterparties) and deposits in networks of cooperative banks		56,756			13,596
Non-operational deposits (all counterparties)		96,549			48,148
Unsecured debt		26,223			26,223
Secured wholesale funding			*		35,239
Additional requirements, of which:		198,215			42,822
Outflows related to derivative exposures and other collateral requirements		26,346			18,481
Outflows related to loss of funding on debt products		3,605			3,605
Credit and liquidity facilities		168,264			20,736
Other contractual funding obligations		1,231			1,186
Other contingent funding obligations(4)		454,996			7,678
Total cash outflows			*	$	187,083
Cash inflows
Secured lending (e.g. reverse repos)	$	130,332		$	29,206
Inflows from fully performing exposures		24,564			15,738
Other cash inflows		25,404			25,404
Total cash inflows	$	180,300		$	70,348
				Total adjusted value(5)
Total HQLA			*	$	144,349
Total net cash outflows			*	$	116,735
Liquidity coverage ratio (%)			*		124	%
For the quarter ended October 31, 2017 ($ millions)				Total adjusted value(5)
Total HQLA			*	$	127,444
Total net cash outflows			*	$	101,751
Liquidity coverage ratio (%)			*		125	%

* Disclosure is not required under regulatory guideline.

(1) Based on the average daily positions of the 63 business days in the quarter.

(2) Unweighted values represent outstanding balances maturing or callable within the next 30 days.

(3) Weighted values represent balances calculated after the application of HQLA haircuts or inflow and outflow rates, as prescribed by the OSFI LAR guidelines.

(4) Total unweighted value includes uncommitted credit and liquidity facilities, guarantees and letters of credit, outstanding debt securities with remaining maturity greater than 30 days, and other contractual cash outflows.

(5) Total adjusted value represents balances calculated after the application of both haircuts and inflow and outflow rates and any applicable caps.

HQLA continues to be substantially comprised of Level 1 assets. The Bank’s average LCR for the quarter ended October 31, 2018 was in line with the quarter ended October 31, 2017.

The Bank’s significant operating currencies are Canadian and U.S. dollars. The Bank monitors its significant currency exposures in accordance with its liquidity risk management framework and risk appetite.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Funding

The Bank ensures that its funding sources are well diversified. Funding concentrations are regularly monitored and analyzed by type. The sources of funding are capital, deposits from retail and commercial clients sourced through the Canadian and international branch network, deposits from financial institutions as well as wholesale debt issuances.

Capital and personal deposits are key components of the Bank’s core funding and these amounted to $289 billion as at October 31, 2018 (October 31, 2017 – $269 billion). The increase since October 31, 2017, was primarily due to deposit growth, internal capital generation and common and preferred share issuance, net of common share repurchases and redemptions of preferred shares and subordinated debentures. A portion of commercial deposits, particularly those of an operating or relationship nature, would be considered part of the Bank’s core funding. Furthermore, core funding is augmented by longer term wholesale debt issuances (original maturity over 1 year) of $157 billion (October 31, 2017 – $146 billion). Longer term wholesale debt issuances include senior notes, mortgage securitizations, asset-backed securities and covered bonds.

The Bank operates in many different currencies and countries. From a funding perspective, the most significant currencies are Canadian and U.S. dollars. With respect to the Bank’s operations outside Canada, there are different funding strategies depending on the nature of the activities in each country. For those countries where the Bank operates a branch banking subsidiary, the strategy is for the subsidiary to be substantially self-funding in its local market. For other subsidiaries or branches outside Canada where local deposit gathering capability is not sufficient, funding is provided through the wholesale funding activities of the Bank.

From an overall funding perspective the Bank’s objective is to achieve an appropriate balance between the cost and the stability of funding. Diversification of funding sources is a key element of the funding strategy.

The Bank’s wholesale debt diversification strategy is primarily executed via the Bank’s main wholesale funding centres, located in Toronto, New York, London and Singapore. The majority of these funds are sourced in Canadian and U.S. dollars. Where required, these funds are swapped to fund assets in different currencies. The funding strategy deployed by wholesale funding centres and the management of associated risks, such as geographic and currency risk, are managed centrally within the framework of policies and limits that are approved by the Board of Directors.

In the normal course, the Bank uses a mix of unsecured and secured wholesale funding instruments across a variety of markets. The choice of instruments and markets is based on a number of factors, including relative cost and market capacity as well as an objective of maintaining a diversified mix of sources of funding. Market conditions can change over time, impacting cost and capacity in particular markets or instruments. Changing market conditions can include periods of stress where the availability of funding in particular markets or instruments is constrained. In these circumstances the Bank would increase its focus on sources of funding in functioning markets and secured funding instruments. Should a period of extreme stress exist such that all wholesale funding sources are constrained, the Bank maintains a pool of liquid assets to mitigate its liquidity risk. This pool includes cash, deposits with central banks and securities.

In Canada, the Bank raises short- and longer-term wholesale debt through the issuance of senior unsecured notes. Additional longer-term wholesale debt may be generated through the Bank’s Canadian Debt and Equity Shelf, the securitization of Canadian insured residential mortgages through CMHC securitization programs (such as Canada Mortgage Bonds), uninsured residential mortgages through the Bank’s Covered Bond Program, unsecured personal lines of credit through the Halifax Receivables Trust (previously Hollis Receivables Term Trust II) program, retail credit card receivables through the Trillium Credit Card Trust II program and retail indirect auto loan receivables through the Securitized Term Auto Receivables Trust program. While the Bank includes CMHC securitization programs in its view of wholesale debt issuance, this source of funding does not entail the run-off risk that can be experienced in funding raised from capital markets.

Outside of Canada, short-term wholesale debt may be raised through the issuance of negotiable certificates of deposit in the United States, Hong Kong, the United Kingdom, and Australia and the issuance of commercial paper in the United States. The Bank operates longer-term wholesale debt issuance registered programs in the United States, such as its SEC Registered Debt and Equity Shelf, and non-registered programs, such as the securitization of retail indirect auto loan receivables through the Securitized Term Auto Receivables Trust program and the securitization of retail credit card receivables through the Trillium Credit Card Trust II program. The Bank’s Covered Bond Program is listed with the U.K. Listing Authority, and the Bank may issue under the program in Europe, the United States, Australia and Switzerland. The Bank also raises longer-term funding across a variety of currencies through its Australian Medium Term Note Programme, European Medium Term Note Programme and Singapore Medium Term Note Programme. The Bank’s European Medium Term Note Programme is listed with the U.K. Listing Authority, Swiss Stock Exchange and the Tokyo Pro-Bond Market. The Bank’s Singapore Medium Term Note Programme is listed with the Singapore Exchange and the Taiwan Exchange.

On September 23, 2018, the Bank Recapitalization (Bail-in) Conversion Regulations and the Bank Recapitalization (Bail-in) Issuance Regulations came into force. In general, any issuance of senior debt with an initial or amended term to maturity (including explicit or embedded options) greater than 400 days, that is unsecured or partially secured and has been assigned a CUSIP or ISIN or similar identification number is subject, in whole or in part, to conversion into the Bank’s common shares. Please refer to the “Regulatory Developments” section.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The table below provides the remaining contractual maturities of funding raised through wholesale funding. In the Consolidated Statement of Financial Position, these liabilities are primarily included in Business & Government Deposits.

T52 Wholesale funding⁽¹⁾

As at October 31, 2018 ($ millions)	Less than 1 month		1-3 months		3-6 months		6-9 months		9-12 months		Sub-Total < 1 Year		1-2 years		2-5 years		>5 years		Total
Deposits from banks(2)	$	1,720	$	196	$	211	$	212	$	116	$	2,455	$	29	$	145	$	32	$	2,661
Bearer deposit notes, commercial paper and short-term certificate of deposits		8,807		14,201		21,517		15,961		7,580		68,066		5,487		666		56		74,275
Asset-backed commercial paper(3)		2,088		4,697		165		–		–		6,950		–		–		–		6,950
Senior notes(4)(5)		180		2,714		4,070		6,214		5,168		18,346		15,179		36,765		14,298		84,588
Bail-inable notes(5)		–		–		–		–		–		–		–		–		–		–
Asset-backed securities		6		15		47		500		–		568		2,714		1,944		304		5,530
Covered bonds		–		2,910		1,491		–		1,975		6,376		4,312		16,779		1,772		29,239
Mortgage securitization(6)		–		765		316		567		508		2,156		2,388		12,966		4,646		22,156
Subordinated debentures(7)		–		–		–		–		–		–		–		237		7,539		7,776
Total wholesale funding sources	$	12,801	$	25,498	$	27,817	$	23,454	$	15,347	$	104,917	$	30,109	$	69,502	$	28,647	$	233,175
Of Which:
Unsecured funding	$	10,707	$	17,111	$	25,798	$	22,387	$	12,864	$	88,867	$	20,695	$	37,813	$	21,925	$	169,300
Secured funding		2,094		8,387		2,019		1,067		2,483		16,050		9,414		31,689		6,722		63,875
As at October 31, 2017 ($ millions)	Less than 1 month		1-3 months		3-6 months		6-9 months		9-12 months		Sub-Total < 1 Year		1-2 years		2-5 years		>5 years		Total
Deposits from banks(2)	$	2,740	$	471	$	405	$	264	$	110	$	3,990	$	205	$	153	$	–	$	4,348
Bearer deposit notes, commercial paper and short-term certificate of deposits		7,699		12,227		22,351		12,740		7,557		62,574		5,685		495		12		68,766
Asset-backed commercial paper(3)		1,885		4,233		981		–		–		7,099		–		–		–		7,099
Senior notes(4)(5)		24		3,621		8,480		5,469		6,378		23,972		13,024		32,927		10,453		80,376
Asset-backed securities		–		1		–		1,162		215		1,378		822		1,975		351		4,526
Covered bonds		2,821		–		–		13		686		3,520		6,378		14,719		1,410		26,027
Mortgage securitization(6)		–		569		666		556		310		2,101		2,158		10,522		4,943		19,724
Subordinated debentures(7)		–		–		–		–		–		–		–		181		7,022		7,203
Total wholesale funding sources	$	15,169	$	21,122	$	32,883	$	20,204	$	15,256	$	104,634	$	28,272	$	60,972	$	24,191	$	218,069
Of Which:
Unsecured funding	$	10,463	$	16,319	$	31,236	$	18,474	$	14,045	$	90,537	$	18,914	$	33,755	$	17,487	$	160,693
Secured funding		4,706		4,803		1,647		1,730		1,211		14,097		9,358		27,217		6,704		57,376

(1) Wholesale funding sources exclude repo transactions and bankers acceptances, which are disclosed in the T56 Contractual maturities. Amounts are based on remaining term to maturity.

(2) Only includes commercial bank deposits raised by Group Treasury.

(3) Wholesale funding sources also exclude asset-backed commercial paper issued by certain ABCP conduits that are not consolidated for financial reporting purposes.

(4) Not subject to bail-in.

(5) Includes Structured notes issued to institutional investors.

(6) Represents residential mortgages funded through Canadian Federal Government agency sponsored programs. Funding accessed through such programs does not impact the funding capacity of the Bank in its own name.

(7) Although subordinated debentures are a component of regulatory capital, they are included in this table in accordance with EDTF recommended disclosures.

Wholesale funding generally bears a higher risk of run-off in a stressed environment than other sources of funding. The Bank mitigates this risk through funding diversification, ongoing engagement with investors and by maintaining a large holding of unencumbered liquid assets. Unencumbered liquid assets of $202 billion as at October 31, 2018 (October 31, 2017 – $180 billion) were well in excess of wholesale funding sources that mature in the next twelve months.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Contractual maturities and obligations

The table below provides the maturity of assets and liabilities as well as the off-balance sheet commitments as at October 31, 2018, based on the contractual maturity date.

From a liquidity risk perspective the Bank considers factors other than contractual maturity in the assessment of liquid assets or in determining expected future cash flows. In particular, for securities with a fixed maturity date, the ability and time horizon to raise cash from these securities is more relevant to liquidity management than contractual maturity. For other assets and deposits the Bank uses assumptions about rollover rates to assess liquidity risk for normal course and stress scenarios. Similarly, the Bank uses assumptions to assess the potential drawdown of credit commitments in various scenarios.

The Bank’s contractual obligations include contracts and purchase obligations, including agreements to purchase goods and services that are enforceable, legally binding on the Bank and affect the Bank’s liquidity and capital resource needs. The Bank leases a large number of its branches, offices and other locations. The majority of these leases are for a term of five years, with options to renew. The total cost of these leases, net of rental income from subleases, was $477 million in 2018 (2017 – $444 million). The increase primarily reflects higher contractual rents, the impact of branch and office sale/leasebacks and acquisitions of BBVA Chile and Citibank Colombia.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T53 Contractual maturities

	As at October 31, 2018
($ millions)	Less than one month		One to three months		Three to six months		Six to nine months		Nine to twelve months		One to two years		Two to five years		Over five years		No specific maturity			Total
Assets
Cash and deposits with financial institutions and precious metals	$	54,254	$	920	$	284	$	101	$	117	$	326	$	726	$	223	$	8,509		$	65,460
Trading assets		4,792		5,311		3,326		5,463		2,309		7,934		12,765		18,130		40,232			100,262
Financial instruments designated at fair value through profit or loss		–		–		–		–		12		–		–		–		–			12
Securities purchased under resale agreement and securities borrowed		74,522		21,223		5,743		673		337		549		539		432		–			104,018
Derivative financial instruments		3,178		5,517		2,024		2,327		1,446		6,447		6,071		10,548		–			37,558
Investment securities – FVOCI		3,925		6,436		5,852		3,284		3,243		13,139		15,206		4,758		1,305			57,148
Investment securities – amortized cost		452		1,429		1,160		1,501		1,500		4,302		9,465		934		–			20,743
Investment securities – FVTPL		–		–		–		–		–		–		–		–		505			505
Loans		40,463		27,581		28,920		27,246		28,064		93,191		214,017		34,985		57,367			551,834
Residential mortgages		11,496		4,697		8,774		12,014		12,781		53,629		126,934		21,366		1,666	(1)		253,357
Personal loans		4,204		2,701		3,528		3,431		3,558		11,712		23,338		5,468		38,079			96,019
Credit cards		–		–		–		–		–		–		–		–		16,485			16,485
Business and government		24,763		20,183		16,618		11,801		11,725		27,850		63,745		8,151		6,202	(2)		191,038
Allowance for credit losses		–		–		–		–		–		–		–		–		(5,065	)		(5,065	)
Customers’ liabilities under acceptances		13,829		2,082		338		50		30		–		–		–		–			16,329
Other assets		–		–		–		–		–		–		–		–		44,624			44,624
Total assets		195,415		70,499		47,647		40,645		37,058		125,888		258,789		70,010		152,542			998,493
Liabilities and equity
Deposits	$	56,965	$	53,331	$	48,661	$	39,716	$	32,753	$	45,262	$	78,295	$	18,313	$	303,238		$	676,534
Personal		8,797		9,415		12,536		9,563		10,241		13,472		11,953		261		138,307			214,545
Non-personal		48,168		43,916		36,125		30,153		22,512		31,790		66,342		18,052		164,931			461,989
Financial instruments designated at fair value through profit or loss		22		77		360		410		523		3,090		1,646		1,969		91			8,188
Acceptances		13,838		2,082		338		50		30		–		–		–		–			16,338
Obligations related to securities sold short		910		972		870		305		1,013		3,896		8,685		7,388		8,048			32,087
Derivative financial instruments		2,520		4,288		1,613		2,716		1,583		6,773		7,699		10,775		–			37,967
Obligations related to securities sold under repurchase agreements and securities lent		96,157		3,466		1,634		–		–		–		–		–		–			101,257
Subordinated debentures		–		–		–		–		–		–		–		5,698		–			5,698
Other liabilities		2,720		592		1,302		422		757		1,784		6,167		5,978		33,022			52,744
Total equity		–		–		–		–		–		–		–		–		67,680			67,680
Total liabilities and equity		173,132		64,808		54,778		43,619		36,659		60,805		102,492		50,121		412,079			998,493
Off-Balance sheet commitments
Operating leases	$	36	$	72	$	106	$	104	$	102	$	378	$	818	$	880	$	–		$	2,496
Credit commitments(3)		4,232		5,588		13,438		15,182		22,619		23,906		105,988		6,486		–			197,439
Financial guarantees(4)		–		–		–		–		–		–		–		–		36,423			36,423
Outsourcing obligations(5)		18		36		52		52		52		207		311		–		1			729

(1) Includes primarily impaired mortgages.

(2) Includes primarily overdrafts and impaired loans.

(3) Includes the undrawn component of committed credit and liquidity facilities.

(4) Includes outstanding balances of guarantees, standby letters of credit and commercial letters of credit which may expire undrawn.

(5) The Bank relies on outsourcing arrangements for certain support and/or business functions, including, but not limited to, computer operations and cheque and bill payment processing. Outsourcing partners include, among others, IBM Canada and Symcor Inc.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

	As at October 31, 2017
($ millions)	Less than one month		One to three months		Three to six months		Six to nine months		Nine to twelve months		One to two years		Two to five years		Over five years		No specific maturity			Total
Assets
Cash and deposits with financial institutions and precious metals	$	51,646	$	894	$	395	$	175	$	159	$	396	$	514	$	290	$	10,911		$	65,380
Trading assets		5,484		5,106		3,275		2,740		2,224		5,272		14,816		17,776		41,771			98,464
Financial instruments designated at fair value through profit or loss		–		–		–		–		–		13		–		–		–			13
Securities purchased under resale agreement and securities borrowed		73,346		16,966		3,732		1,087		188		–		–		–		–			95,319
Derivative financial instruments		3,544		4,558		2,084		1,418		1,274		4,303		8,375		9,808		–			35,364
Investment securities – available-for-sale		3,094		5,645		4,495		2,170		2,131		6,506		18,098		7,054		1,311			50,504
Investment securities – held-to-maturity		739		779		1,052		1,193		123		5,847		8,923		109		–			18,765
Loans		28,840		25,032		28,778		29,291		27,197		74,303		209,229		28,667		53,032			504,369
Residential mortgages		3,072		4,065		9,542		15,700		13,083		42,460		129,448		18,017		1,529	(1)		236,916
Personal loans		3,980		2,309		3,124		3,322		3,217		10,899		20,601		5,293		36,482			89,227
Credit cards		–		–		–		–		–		–		–		–		14,104			14,104
Business and government		21,788		18,658		16,112		10,269		10,897		20,944		59,180		5,357		5,244	(2)		168,449
Allowance for credit losses		–		–		–		–		–		–		–		–		(4,327	)		(4,327	)
Customers’ liabilities under acceptances		10,875		2,399		254		22		10		–		–		–		–			13,560
Other assets		–		–		–		–		–		–		–		–		33,535			33,535
Total assets		177,568		61,379		44,065		38,096		33,306		96,640		259,955		63,704		140,560			915,273
Liabilities and equity
Deposits	$	56,154	$	48,037	$	49,107	$	30,938	$	26,373	$	44,735	$	73,099	$	16,037	$	280,887		$	625,367
Personal		7,058		7,247		8,500		7,840		7,862		13,223		13,741		393		134,166			200,030
Non-personal		49,096		40,790		40,607		23,098		18,511		31,512		59,358		15,644		146,721			425,337
Financial instruments designated at fair value through profit or loss		–		3		5		118		133		543		2,882		979		–			4,663
Acceptances		10,875		2,399		254		22		10		–		–		–		–			13,560
Obligations related to securities sold short		336		167		97		148		1,057		3,354		9,229		9,935		6,443			30,766
Derivative financial instruments		2,810		3,348		1,786		1,258		1,347		3,056		11,534		9,061		–			34,200
Obligations related to securities sold under repurchase agreements and securities lent		85,636		8,452		1,524		229		2		–		–		–		–			95,843
Subordinated debentures		–		–		–		–		–		–		–		5,935		–			5,935
Other liabilities		1,419		1,076		440		824		187		1,369		3,223		4,314		30,462			43,314
Total equity		–		–		–		–		–		–		–		–		61,625			61,625
Total liabilities and equity		157,230		63,482		53,213		33,537		29,109		53,057		99,967		46,261		379,417			915,273
Off-Balance sheet commitments
Operating leases	$	30	$	60	$	88	$	87	$	84	$	311	$	656	$	593	$	–		$	1,909
Credit commitments(3)		4,661		5,913		12,862		18,293		17,254		24,091		97,773		4,819		–			185,666
Financial guarantees(4)		–		–		–		–		–		–		–		–		36,344			36,344
Outsourcing obligations(5)		19		37		54		53		53		207		517		–		1			941

(1) Includes primarily impaired mortgages.

(2) Includes primarily overdrafts and impaired loans.

(3) Includes the undrawn component of committed credit and liquidity facilities.

(4) Includes outstanding balances of guarantees, standby letters of credit and commercial letters of credit which may expire undrawn.

(5) The Bank relies on outsourcing arrangements for certain support and/or business functions, including, but not limited to, computer operations and cheque and bill payment processing. Outsourcing partners include, among others, IBM Canada and Symcor Inc.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Other Risks

Operational Risk

Operational risk is the risk of loss, resulting from people, inadequate or failed processes and systems, or from external events. Operational risk includes legal risk but excludes strategic risk and reputational risk. Operational risk in some form exists in each of the Bank’s businesses and support activities and can result in financial loss, regulatory sanctions and damage to the Bank’s reputation. Operational risk is inherent in all our activities, including the practices and controls used to manage other risks. Failure to manage operational risk can result in direct or indirect financial loss, but also in regulatory sanctions and reputational impact.

Governance and organization

The Bank’s Operational Risk Management Framework sets out an integrated approach to identify, assess, control, mitigate and report operational risks across the Bank. The following are key components of the Bank’s Operational Risk Management Framework:

• The Bank’s Risk and Control Self-Assessment program, which includes formal reviews of significant units, operations and processes to identify and assess operational risks. This program provides a basis for management to ensure that key risks have been identified and that controls are functioning effectively. Business line management attests to the accuracy of each assessment and develops action plans to mitigate residual risk exposure, as appropriate.

• The Bank’s scenario analysis program provides a forward looking view of key risks and provides management with insights into how plausible but highly unlikely operational risk events might occur. Scenario analysis will also assist in the selection of severity distributions in the Bank’s Advanced Measurement Approach (AMA) capital model (discussed below).

• The Bank’s Key Risk Indicator (KRI) program provides information on the level of exposure to a given operational risk at a particular point in time and can help to monitor potential shifts in risk conditions or new emerging risks and/or measure residual risk exposure and effectiveness of controls.

• The Business Environment and Internal Control Factors (BEICF) program incorporates the impact of key business environment and internal control factors into the regulatory capital allocated to divisions by utilizing a BEICF scorecard. The scorecard is used to adjust capital calculations produced using the Bank’s AMA capital model and due to its forward-looking nature, it also assists with identifying new trends and emerging risks.

• The Bank’s New Initiatives Risk Management Policy which describes the general principles applicable to the review, approval and implementation of new products and services within Scotiabank and is intended to provide overarching guidance.

• The Bank’s centralized operational loss event database, which captures key information on operational losses and near-misses.

• The Bank’s monitoring of industry events, which identifies significant losses incurred at other financial institutions and provides a reference for reviewing and assessing the Bank’s own risk exposure.

• The Bank’s training programs, including the mandatory Anti-Money Laundering, Operational Risk and Information Security courses and examinations which work to ensure employees are aware of relevant risks and are equipped to safeguard our customers’ and the Bank’s assets.

• Operational risk reporting is provided to the Bank’s senior executive management and the Board of Directors, and includes information relating to key events, results, trends and themes across the operational risk tools. The combination of these information sources provides both a backward and forward-looking view of operational risk at the Bank.

Operational risk capital

There are two methods for the calculation of operational risk regulatory capital available to the Bank under the Basel framework – The Standardized Approach and the Advanced Measurement Approach (AMA). In 2016, OSFI approved our application to use the Advanced Measurement Approach (AMA) for operational risk, subject to a capital floor. In 2017, we formally began utilizing AMA to report regulatory capital.

Information Technology (IT) & Cybersecurity Risk

IT Risk refers to the likelihood of failures or deficiencies related to the IT environment that may result in loss or other negative impact to the Bank. IT risk is the business risk associated with the use, ownership, operation, involvement, influence and adoption of IT within an enterprise. Cybersecurity risk is a sub-discipline of IT risk, and refers to the protection of information assets by addressing threats to information processed, stored, and transported by internetworked information systems. IT & Cybersecurity risk consists of information technology related events (e.g., cybersecurity incidents, outages) that could potentially have an adverse impact on our business. Such events could result in business interruption, service disruptions, theft of intellectual property and confidential information, additional regulatory scrutiny, litigation and reputational damage.

IT and Cyber Security risks continue to evolve across the financial industry. The increasing use of online delivery channels and mobile devices to perform financial transactions leave the bank vulnerable to operational disruptions due to multiple factors such as: human errors, frauds, infrastructure failures, issues with our business partners, among others. Those events may increase costs or may negatively impact the Bank’s operational environment, our customers and other third parties. Regulatory oversight of IT and Cyber Security risk management practices has also been increased.

The Board of Directors approves the IT Risk Management and Information Security polices, which along with the respective frameworks are focused on safeguarding the Bank’s and its customers information, ensuring the Bank’s IT environment is reliable, secure, resilient and robust in supporting our business objectives.

Significant efforts are directed on risk management activities including the Cyber Security program in line with the industry standards and best practices. The Bank is expanding its capabilities to defend against potential threats and minimize the impact to the business, including the regular testing activities to continuously reinforce the Bank’s resilience to events caused by factors out of the Bank’s control. The dependency on third parties and the potential risks they bring to the continuity of our business activities is a key area of focus. The Bank has a governance framework to mitigate those risks.

The Bank continuously monitors the metrics and Key Risk Indicators, which are regularly reported to the Board of Directors, its Risk Committee and other internal committees who oversee the performance of the associated risk thresholds. Material issues are escalated to the executive management committees to ensure appropriate remediation. Information security awareness campaigns are conducted periodically, including annual mandatory training sessions on information security and operational risk to all our employees, reinforcing our risk culture.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Compliance Risk

Compliance Risk is the risk that a business activity may not be conducted in conformity with applicable Regulations, internal policies and procedures and ethical standards expected by regulators, customers, investors, employees and other stakeholders. “Regulations” means all Governmental Acts, laws, rules, regulations, regulatory guidelines and industry or self-regulatory organizational codes of conduct, rules and by-laws.

The Bank conducts business in many jurisdictions around the world and provides a wide variety of financial products and services through its various lines of business and operations. It is subject to, and must comply with, many and changing Regulations by governmental agencies, supervisory authorities and self-regulatory organizations in all the jurisdictions in which the Bank operates. The regulatory bar is constantly rising with Regulations being more vigorously enforced and new Regulations being enacted. The bar of public expectations is also constantly rising. Regulators and customers expect the Bank and its employees will operate its business in compliance with applicable laws and will refrain from unethical practices.

Compliance risk is managed on an enterprise-wide basis throughout the Bank via the operation of the Scotiabank Compliance Program (“the Program”) which includes the appointment of a Chief Compliance Officer (CCO) for the Bank and is responsible for overseeing Compliance Risk Management within the Bank. The CCO is responsible for assessing the adequacy of, adherence to and effectiveness of the Program, as well as for the development and application of written compliance policies and procedures that are kept up to date and approved by senior management, assessing and documenting compliance risks, developing and maintaining a written compliance training program, which in each case is performed either directly or indirectly by other departments within the Bank in coordination with Global Compliance. This program and these ancillary activities are subject to Internal Audit’s periodic review to assess the effectiveness of the Program.

The Board-approved Scotiabank Compliance Policy describes the general policies and principles applicable to compliance risk management within Scotiabank and encompasses the Bank’s Regulatory Compliance Management framework as contemplated by OSFI Guideline E-13. The Compliance Policy is an integral part of the enterprise-wide policies and procedures that collectively articulate the Bank’s governance and control structure. Other more specifically focused compliance risk management policies and procedures may be developed within the framework established by the Compliance Policy where necessary or appropriate.

Money Laundering & Terrorist Financing Risk

Money Laundering & Terrorist Financing (ML/TF) risk is the susceptibility of Scotiabank to be used by individuals or organizations to launder the proceeds of crime, finance terrorism, or violate economic sanctions. It also includes the risk that Scotiabank does not conform to applicable Anti-Money Laundering (“AML”) / Anti-Terrorist Financing (“ATF”) or sanctions legislation, or does not apply adequate controls reasonably designed to deter and detect ML/TF and sanctions violations or to file any required regulatory reports.

Money laundering, terrorist financing, and sanctions risks are managed throughout the Bank via the operation of the Bank’s AML/ATF and Sanctions program (“the Program”) which includes the appointment of a Chief Anti-Money Laundering Officer responsible for the Program, development and application of written compliance policies and procedures that are kept up to date and approved by senior management, assessing and documenting the risk of money laundering, terrorist-financing or sanctions violations, developing and maintaining a written ongoing compliance training program, and regular review of the effectiveness of the Program conducted by Internal Audit. The Chief Anti-Money Laundering Officer has unfettered access to, and direct communication with, Executive Management of the Bank and its Board.

In providing financial services to its customers, the Bank conducts Customer Due Diligence sufficient to form a reasonable belief that it knows the true identity of its customers, including in the case of an entity customer its material beneficial owners. The Bank will not maintain anonymous accounts, nor will it maintain accounts for shell Banks. Consistent with a risk-based approach, the Bank assesses the risks of its customers and, where appropriate, conducts enhanced due diligence on those who are considered higher risk. The Bank also conducts ongoing risk-based monitoring of its customers to detect and report suspicious transactions, and conducts customer and transaction screening against terrorist, sanctions, and other designated watch-lists. All active employees are provided with mandatory AML/ATF training on an annual basis.

The Bank’s business units conduct an annual self-assessment of their ML/TF risks, as well as self-assessments of their control measures designed to manage such risks. The process is overseen by the Bank’s Global AML/ATF Unit and the results shared with the Bank’s Senior Management and its Board.

Reputational Risk

Reputational risk is the risk that negative publicity regarding Scotiabank’s conduct, business practices or associations, whether true or not, will adversely affect its revenues, operations or customer base, or require costly litigation or other defensive measures.

Negative publicity about an institution’s business practices may involve any aspect of its operations, but usually relates to questions of business ethics and integrity, or quality of products and services. Negative publicity and attendant reputational risk frequently arise as a by-product of some other kind of risk management control failure.

Reputational risk is managed and controlled throughout the Bank by codes of conduct, governance practices and risk management programs, policies, procedures and training. Many relevant checks and balances are outlined in greater detail under other risk management sections, particularly Operational Risk, where reference is made to the Bank’s well-established compliance program. All directors, officers and employees have a responsibility to conduct their activities in accordance with the Scotiabank’s Code of Conduct, and in a manner that minimizes reputational risk. While all employees, officers and directors are expected to protect the reputation of Scotiabank by complying with the Scotiabank’s Code of Conduct, the activities of the Legal, Global Tax, Corporate Secretary, Global Communications, Global AML/ATF, Global Compliance and Global Risk Management departments, and the Reputational Risk Committee, are particularly oriented to the management of reputational risk.

In providing credit, advice, or products to customers, or entering into associations, the Bank considers whether the transaction, relationship or association might give rise to reputational risk. The Bank has a Reputational Risk Policy, as well as policy and procedures for managing reputational and legal risk related to structured finance transactions. Global Risk Management plays a significant role in the identification and management of reputational risk related to credit underwriting. In addition, the Reputational Risk Committee is available to support Global Risk Management, as well as other risk management committees and business units, with their assessment of reputational risk associated with transactions, business initiatives, new products and services and sales practice issues.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The Reputational Risk Committee considers a broad array of factors when assessing transactions, so that the Bank meets, and will be seen to meet, high ethical standards. These factors include the extent, and outcome, of legal and regulatory due diligence pertinent to the transaction; the economic intent of the transaction; the effect of the transaction on the transparency of a customer’s financial reporting; the need for customer or public disclosure; conflicts of interest; fairness issues; and public perception. The Reputational Risk Committee also holds regular quarterly meetings to review activities in the quarter, review metrics and discuss any emerging trends or themes.

The Reputational Risk Committee may impose conditions on customer transactions, including customer disclosure requirements to promote transparency in financial reporting, so that transactions meet Bank standards. In the event the Committee recommends not proceeding with a transaction and the sponsor of the transaction wishes to proceed, the transaction is referred to the Risk Policy Committee.

Environmental Risk

Environmental risk refers to the possibility that environmental concerns involving Scotiabank or its customers could affect the Bank’s performance.

To safeguard the Bank and the interests of its stakeholders, Scotiabank has an environmental policy, which is approved by the Bank’s Board of Directors. The policy guides day-to-day operations, lending practices, supplier agreements, the management of real estate holdings and external reporting practices. It is supplemented by specific policies and practices relating to individual business lines.

Environmental risks associated with the business operations of each borrower and any real property offered as security are considered in the Bank’s credit evaluation procedures. This includes an environmental risk assessment where applicable, and commentary on the potential impact of climate change (including physical or transition risk impacts) on the borrower. Global Risk Management has primary responsibility for establishing the related policies, processes and standards associated with mitigating environmental risk in the Bank’s lending activities. Decisions are taken in the context of the risk management framework.

In the area of project finance, the Equator Principles have been integrated into the Bank’s internal processes and procedures since 2006. The Equator Principles help financial institutions determine, assess, manage and report environmental and social risk. The principles apply to project finance loans and advisory assignments where total capital costs exceed US$10 million, and to certain project-related corporate loans. The Equator Principles provide safeguards for sensitive projects to ensure protection of natural habitats and the rights of indigenous peoples, as well as safeguards against the use of child and forced labour.

The Bank’s Environmental Policy plays a prominent role in guiding the reduction of the Bank’s environmental footprint. The Real Estate Department adheres to an Environmental Compliance Policy to ensure responsible management of the Bank’s real estate holdings from an environmental perspective. In addition, a variety of reduction measures are in place for energy, paper and waste in the Bank’s corporate offices and branch networks. Internal tracking systems are in place with respect to energy use, greenhouse gas emissions (GHG) and paper consumption. Since 2012, GHG emissions data for the branch network and corporate offices has been externally verified.

To continue operations in an environmentally responsible manner, the Bank monitors policy and legislative requirements through ongoing dialogue with government, industry and stakeholders in countries where it operates. Scotiabank has been meeting with environmental organizations, industry associations and socially responsible investment organizations with respect to the role that banks can play to help address issues such as climate change, protection of biodiversity, promotion of sustainable forestry practices, implementing the recommendations of the Task Force on Climate-related Financial Disclosure, and other environmental issues important to its customers and communities where it operates. The Bank has an ongoing process of reviewing its practices in these areas.

Scotiabank has a number of environmentally focused products and services, including: an EcoEnergy Financing program designed to support personal and small business customers who wish to install small-scale renewable energy projects; and an auto loan product for hybrid, electric and clean diesel vehicles. As well, Scotiabank has the Commodities Derivatives group, which assists corporate clients by providing liquidity and hedge solutions in the carbon market.

Environmental Reporting

Scotiabank is also a signatory to, and participant in the Carbon Disclosure Project, which provides corporate disclosure to the investment community on greenhouse gas emissions and climate change management. Further information is available in the Bank’s annual Corporate Social Responsibility Report.

Insurance Risk

The Bank is both a distributor of third party insurance products and underwriter of insurance risk. As a distributor of third party insurance products, the Bank earns fees but bears no insurance risk. The Bank bears insurance risk in its role as an underwriter, either through direct underwriting or via reinsurance.

Insurance risk is the risk of potential financial loss due to actual experience being different from that assumed in the pricing process of the insurance products.

Insurance by nature involves the distribution of products that transfer individual risks to the issuer with the expectation of a return built into the insurance premiums earned. The Bank is exposed to insurance risk primarily through its creditor, life and select property and casualty insurance and reinsurance products.

The insurance governance and risk management frameworks are calibrated within each insurance subsidiary commensurate with the nature and materiality of risk assumed. Senior management within the insurance business subsidiaries has primary responsibility for managing insurance risk through their risk committees. Typical committee members include the Chief Executive Officer, Chief Financial Officer and Chief Risk Officer. Second line of defense oversight is provided by Global Risk Management – Insurance Risk. The insurance subsidiaries have their own boards of directors, as well as independent appointed actuaries who provide actuarial management oversight.

The insurance subsidiaries maintain a number of policies and practices to manage insurance risk. Sound product design is an essential element. The vast majority of risks insured are short-term in nature, that is, they do not involve long-term pricing guarantees. Geographic diversification and product-line diversification are important elements as well. Reinsurance is commonly used as an effective tool to manage the insurance risk exposures. Insurance risk is also managed through effective underwriting and claim adjudication practices, ongoing monitoring of experience, and stress-testing scenario analysis.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    RISK MANAGEMENT

Strategic Risk

Strategic risk is the risk that the enterprise, business lines or corporate functions will make strategic choices that are ineffective or insufficiently resilient to changes in the business environment, or poorly execute such strategies.

The Board of Directors is ultimately responsible for oversight of strategic risk, by adopting a strategic planning process and approving, on an annual basis, a strategic plan for the Bank.

The Bank manages its strategic planning process through a series of coordinated efforts between the Executive Management Team, the Business Lines and the Corporate Functions. These efforts address a wide range of relevant considerations including capital and resource allocation, business initiatives, strategic transactions and investments, stress testing and alignment with the Bank’s Risk Appetite Framework. These considerations are reviewed in a consistent and disciplined manner. The process involves input from the entire Executive Management Team and from the Board of Directors.

On an annual basis, a comprehensive update on the Strategic Agenda is prepared that summarizes the Bank’s key strategic considerations, and is presented by the President and Chief Executive Officer to the Board of Directors for their review and approval.

The execution and evaluation of strategic plans within the Bank is critically important to the Bank’s enterprise-wide risk management framework. The Bank makes continuous efforts to ensure that all employees are aware of the Bank’s overall strategic direction, and that employees are also aware of the strategies and objectives for their respective business line or corporate function. On an ongoing basis, the business lines and corporate functions identify, manage and assess the internal and external considerations – including risk factors – that could affect the achievement of their strategic objectives. These matters are considered on an enterprise-wide basis by the Bank’s Executive Management Team, which makes adjustments, as required.

Data Risk

Data risk is the risk, whether direct or indirect, to data that is used to support the Bank’s ability to make informed decisions and develop accurate reporting and analytics for the Bank, including the Board, senior management and regulators, or for customer facing and/or marketing purposes. Risks to which the Bank is exposed include data management, data taxonomy, metadata, breaches or data that is incomplete, inaccurate, invalid, untimely and/or inaccessible.

Data is considered one of the Bank’s most strategic assets and the volume, value and type of data found within the Bank has exponentially increased in recent years. Enhanced rigor towards data management is a concentrated focus for the Bank with the increase in regulatory demands. The Data Executive Committee approves the Data Management Policy and Governance Framework. The goals of the policy and framework are to ensure oversight and management of critical Bank-wide data, and to provide governance, oversight, control structure and accountabilities to enable greater enterprise coordination and consistency.

The Data Office oversees and standardizes data management and data governance practices in establishing reliable, reusable and scalable data and is responsible for enterprise-wide management of data risk. Since data is produced and consumed by different business lines and geographies across the Bank, an effective, collaborative and holistic approach to data risk management is required to minimize reputational, regulatory and financial risk.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

CONTROLS AND ACCOUNTING POLICIES

Controls and Procedures

Management’s responsibility for financial information contained in this annual report is described on page 140.

Disclosure controls and procedures

The Bank’s disclosure controls and procedures are designed to provide reasonable assurance that information is accumulated and communicated to the Bank’s management, including the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of October 31, 2018, the Bank’s management, with the participation of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, evaluated the effectiveness of its disclosure controls and procedures, as defined under the rules adopted by the U.S. Securities and Exchange Commission (SEC) and the Canadian securities regulatory authorities, and have concluded that the Bank’s disclosure controls and procedures are effective.

Internal control over financial reporting

Management of the Bank is responsible for establishing and maintaining adequate internal control over financial reporting. These controls include policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Bank;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Bank; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Bank’s assets that could have a material effect on the financial statements.

All control systems contain inherent limitations, no matter how well designed. As a result, the Bank’s management acknowledges that its internal control over financial reporting will not prevent or detect all misstatements due to error or fraud. In addition, management’s evaluation of controls can provide only reasonable, not absolute, assurance that all control issues that may result in material misstatements, if any, have been detected.

Management assessed the effectiveness of internal control over financial reporting, using the Internal Control-Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and based on that assessment concluded that internal control over financial reporting was effective as of October 31, 2018.

Changes in internal control over financial reporting

There have been no changes in the Bank’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Bank’s internal control over financial reporting. The Bank adopted IFRS 9, Financial Instruments effective November 1, 2017 and as a result, has updated and modified certain internal controls over financial reporting. Refer to Note 3 of the consolidated financial statements for further information on changes to accounting policies and Note 4 regarding the transition impact on adoption of IFRS 9.

Critical Accounting Estimates

The Bank’s accounting policies are integral to understanding and interpreting the financial results reported in this annual report. Note 3 to the consolidated financial statements, summarizes the significant accounting policies used in preparing the Bank’s consolidated financial statements. Certain of these policies require management to make estimates, assumptions and subjective judgements that are difficult, complex, and often relate to matters that are inherently uncertain. The policies discussed below are considered to be particularly important to the presentation of the Bank’s financial position and results of operations, because changes in the estimates, assumptions and judgements could have a material impact on the Bank’s consolidated financial statements. These estimates, assumptions and judgements are adjusted in the normal course of business to reflect changing underlying circumstances.

Allowance for credit losses

Effective in 2018, the allowance for credit losses, using an expected credit loss approach as required under IFRS 9, is estimated using complex models and incorporates inputs, assumptions and techniques that involve a high degree of management judgment. Under IFRS 9 expected credit loss methodology, an allowance is recorded for expected credit losses on financial assets regardless of whether there has been an actual loss event. The Bank recognizes an allowance at an amount equal to 12 month expected credit losses, if the credit risk at the reporting date has not increased significantly since initial recognition (Stage 1). When a financial asset experiences a significant increase in credit risk subsequent to origination but is not considered to be in default, it is included in Stage 2 and subject to lifetime expected credit losses. Financial assets that are in default are included in Stage 3. Similar to Stage 2, the allowance for credit losses for Stage 3 financial assets captures the lifetime expected credit losses.

The main drivers in allowance for credit loss changes that are subject to significant judgment include the following:

• Determination of point-in-time parameters such as probability of default (PD), loss given default (LGD) and exposure at default (EAD).

• Forecast of macroeconomic variables for multiple scenarios and probability weighting of the scenarios.

• Assessment of significant increase in credit risk.

Measurement of expected credit losses

The probability of default (PD), exposure at default (EAD), and loss given default (LGD) inputs used to estimate expected credit losses are modelled based on macroeconomic variables that are most closely related with credit losses in the relevant portfolio.

Details of these statistical parameters/inputs are as follows:

• PD – The probability of default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the remaining estimated life, if the facility has not been previously derecognized and is still in the portfolio.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    CONTROLS AND ACCOUNTING POLICIES

• EAD – The exposure at default is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments.

• LGD – The loss given default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realization of any collateral. It is usually expressed as a percentage of the EAD.

Forward-looking macroeconomic scenarios

The Bank uses a broad range of forward-looking economic information as inputs to its models of expected credit losses and the related allowance. These include real GDP, unemployment rates, central-bank interest rates, and house-price indices. The allowance is determined using three probability-weighted, forward-looking scenarios. The Bank considers both internal and external sources of information and data in order to create unbiased projections and forecasts. The Bank prepares the scenarios using forecasts generated by Scotiabank Economics (SE). The forecasts are generated using both internally and externally developed models whose outputs are modified by SE as necessary to formulate a ‘base case’ view of the most probable future direction of economic developments; SE also develops a representative range of other alternative possible forecast scenarios. More specifically, the process involves the development of two additional economic scenarios to which relative probabilities are assigned. The development of the baseline and alternative scenarios is overseen by a governance committee that consists of internal stakeholders from across the bank. The final baseline and alternative scenarios reflect significant review and oversight, and may incorporate some judgment both in the determination of the scenarios’ forecasts and the probability weights that are assigned to them. Qualitative adjustments or overlays may also be made as temporary adjustments using expert credit judgment in circumstances where, in the Bank’s view, the existing regulatory guidance, inputs, assumptions, and/or modelling techniques do not capture all relevant risk factors. The use of management overlays may require significant judgment that may impact the amount of allowance recognized.

Significant Increase in credit risk (SIR)

The assessment of SIR since origination of a financial asset considers borrower-specific quantitative and qualitative information without consideration of collateral, and the impact of forward-looking information. Quantitative models may not always be able to capture all reasonable and supportable information that may indicate a significant increase in credit risk. Qualitative factors may be assessed to supplement the gap. Examples of situations include changes in adjudication criteria for a particular group of borrowers; changes in portfolio composition and natural disaster events impacting certain portfolios.

For retail exposures, a significant increase in credit risk cannot be assessed using forward looking information at an individual account level. Therefore, the assessment must be done at the segment level. Segment migration thresholds exist for each PD model by product which considers the proportionate change in PD as well as the absolute change in PD. The thresholds used for PD migration are reviewed and assessed at least annually, unless there is a significant change in credit risk management practices in which case the review is brought forward.

For Non-retail exposures the Bank uses an internal risk rating scale (IG codes) for its non-retail exposures. All non-retail exposures have an IG code assigned that reflects the probability of default of the borrower. Both borrower specific and non-borrower specific (i.e. macroeconomic) forward looking information is considered and reflected in the IG rating. Significant increase in credit risk is evaluated based on the migration of the exposures among IG codes.

Fair value of financial instruments

All financial instruments are measured at fair value on initial recognition. Subsequent measurement of a financial instrument depends on its classification. The contractual cash flow characteristics of a financial instrument and the business model under which it is held determines such classification. Non-trading loans and receivables, certain securities and most financial liabilities are carried at amortized cost unless classified or designated as fair value through profit and loss or fair value through other comprehensive income at inception.

Fair value of a financial asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal, or in its absence, the most advantageous market to which the Bank has access at the measurement date.

The best evidence of fair value for a financial instrument is the quoted price in an active market. Unadjusted quoted market prices for identical instruments represent a Level 1 valuation. Quoted prices are not always available for over-the-counter transactions, as well as transactions in inactive or illiquid markets. In these instances, internal models that maximize the use of observable inputs are used to estimate fair value. The chosen valuation technique incorporates all the factors that market participants would take into account in pricing a transaction. When all significant inputs are observable, the valuation is classified as Level 2. Financial instruments traded in a less active market have been valued using indicative market prices, present value of cash flows or other valuation techniques. Fair value estimates normally do not consider forced or liquidation sales. Where financial instruments trade in inactive markets or when using models where observable parameters do not exist, greater management judgement is required for valuation purposes such as multiple of the underlying earnings, pricing by third party providers, discount rates, volatilities and correlations. Valuations that require the significant use of unobservable inputs are considered Level 3. The calculation of estimated fair value is based on market conditions at a specific point in time and therefore may not be reflective of future fair values.

The Bank has controls and processes in place to ensure that the valuation of financial instruments is appropriately determined. Global Risk Management (GRM) is responsible for the design and application of the Bank’s risk management framework. GRM is independent from the Bank’s business units and is overseen by Executive Management and the Board of Directors. Senior management committees within GRM oversee and establish standards for risk management processes that are critical in ensuring that appropriate valuation methodologies and policies are in place for determining fair value.

Where possible, valuations are based on quoted prices or observable inputs obtained from active markets. GRM oversees a monthly Independent Price Verification (IPV) process in order to assess the reliability and accuracy of prices and inputs used in the determination of fair value. The IPV process is performed by price verification groups that are independent from the business. The Bank maintains an approved list of pricing sources that are used in the IPV process. These sources include, but are not limited to, brokers, dealers and consensus pricing services. The valuation policies relating to the IPV process require that all pricing or rate sources used be external to the Bank. On a periodic basis, an independent assessment of pricing or rate sources is also performed by GRM to determine market presence or market representative levels.

Where quoted prices are not readily available, such as for transactions in inactive or illiquid markets, internal models that maximize the use of observable inputs are used to estimate fair value. An independent senior management committee within GRM oversees the vetting, approval and ongoing validation of valuation models used in determining fair value. Risk policies associated with model development are approved by Executive Management and/or key risk committees.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

In determining fair value for certain instruments or portfolios of instruments, valuation adjustments or reserves may be required to arrive at a more accurate representation of fair value. The Bank’s policy of applying valuation reserves to a portfolio of instruments is approved by a senior management committee. These reserves include adjustments for credit risk, bid-offer spreads, unobservable parameters, constraints on prices in inactive or illiquid markets and when applicable funding costs. The methodology for the calculation of valuation reserves are reviewed at least annually by senior management.

Valuation adjustments recorded against the fair value of financial assets and financial liabilities totaled $138 million as at October 31, 2018, (2017 – $94 million), net of any write-offs. These valuation adjustments are due mainly to credit risk considerations and bid-offer spreads on derivative transactions.

As at October 31, 2018, a funding valuation adjustment (FVA) of $57 million pre-tax (2017 – $80 million) was recorded relating to uncollateralized derivative instruments.

The Bank discloses the classification of all financial instruments carried at fair value in a hierarchy based on the determination of fair value. The valuation hierarchy is as follows:

• Level 1 – fair value is based on unadjusted quoted prices in active markets for identical instruments,

• Level 2 – fair value is based on models using significant market-observable inputs other than quoted prices for the instruments, or

• Level 3 – fair value is based on models using significant inputs that are not based on observable market data.

The Bank’s assets and liabilities which are carried at fair value as classified by the valuation hierarchy are reflected in Note 7. The percentage of each asset and liability category by fair value hierarchy level are outlined as follows:

T54 Fair value hierarchy of financial instruments carried at fair value

	Assets						Liabilities
Fair value hierarchy As at October 31, 2018	Trading assets (incl. precious metals)		Investment securities		Derivatives		Obligations related to securities sold short		Derivatives
Level 1		63%		65%		3%		77%		3%
Level 2		37%		34%		97%		23%		97%
Level 3		–%		1%		–%		–%		–%
		100%		100%		100%		100%		100%

Employee benefits

The Bank provides pension and other benefit plans for eligible employees in Canada and internationally. Pension benefits are offered in the form of defined benefit pension plans (generally based on an employee’s length of service and average earnings at retirement), and in the form of defined contribution pension plans (where the Bank’s contribution is fixed and there is no legal or constructive obligation to pay further amounts). Other benefits include post-retirement health care, dental care and life insurance, along with other long-term employee benefits such as long-term disability benefits.

The employee benefit expenses and the related benefit obligation are calculated using actuarial methods and certain actuarial assumptions. These assumptions are based on management’s best estimate and are reviewed and approved annually. The most significant assumption is the discount rate used to determine the defined benefit obligation, which is set by reference to the yields on high quality corporate bonds that have durations that match the terms of the Bank’s obligations. Separate discount rates are used to determine the annual benefit expense in Canada and the US. These rates are determined with reference to the yields on high quality corporate bonds with durations that match the various components of the annual benefit expense. The discount rate used to determine the annual benefit expense for all other plans is the same as the rate used to determine the defined benefit obligation. If the assumed discount rates were 1% lower, the benefit expense for 2018 would have been $135 million higher. Other key assumptions include future compensation, health care costs, employee turnover, retirement age and mortality. When making these estimates, management considers expectations of future economic trends and business conditions, including inflation rates as well as other factors, such as plan specific experience and best practices.

The Bank uses a measurement date of October 31, and based on this measurement date, the Bank reported a deficit of $231 million (2017 – $513 million) in its principal pension plans and a deficit of $1,134 million (2017 – $1,392 million) in its principal other benefit plans, which are typically unfunded, as at October 31, 2018, as disclosed in Note 28 to the consolidated financial statements.

Actual experience that differs from assumptions made by management will result in a net actuarial gain or loss recognized immediately in other comprehensive income except for other long-term employee benefits where they are recognized in the Consolidated Statement of Income.

Note 28 contains details of the Bank’s employee benefit plans, such as the disclosure of pension and other benefit amounts, management’s key assumptions, and a sensitivity analysis of changes in these assumptions on the employee benefit obligation and expense.

Corporate income taxes

Management exercises judgment in determining the provision for income taxes and deferred income tax assets and liabilities. The provision is based on management’s expectations regarding the income tax consequences of transactions and events during the period. Management interprets the tax legislation for each jurisdiction in which the Bank operates and makes assumptions about the expected timing of the reversal of deferred income tax assets and liabilities. If management’s interpretations of the legislation differ from those of the tax authorities or if the actual timing of the reversals of the deferred income tax assets and liabilities is not as anticipated, the provision for income taxes could increase or decrease in future periods.

Total deferred tax assets related to the Bank’s unused income tax losses from operations arising in prior years were $338 million as at October 31, 2018 (2017 – $417 million). The tax related to temporary differences, unused tax losses and unused tax credits for which no deferred tax asset is recognized in the Consolidated Statement of Financial Position amounted to $14 million (2017 – $82 million). The amount related to unrecognized tax losses was $7 million, which will expire as follows: $1 million in 2020 and $6 million in 2023.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    CONTROLS AND ACCOUNTING POLICIES

The Bank maintains provisions for uncertain tax positions that it believes appropriately reflect the risk of tax positions under discussion, audit, dispute, or appeal with tax authorities, or which are otherwise considered to involve uncertainty. These provisions are made using the Bank’s best estimate of the amount expected to be paid based on an assessment of all relevant factors, which are reviewed at the end of each reporting period.

In November 2016, the Bank received a federal reassessment of $179 million for tax and interest as a result of the Canada Revenue Agency denying the tax deductibility of certain Canadian dividends received during the 2011 taxation year. In August 2017, the Bank received a reassessment of $185 million for tax and interest for the 2012 taxation year. The circumstances of the dividends subject to the reassessment are similar to those prospectively addressed by recently enacted rules which had been introduced in the 2015 Canadian federal budget. In June 2018, the Bank received a reassessment of $211 million for tax and interest in respect of the same circumstances for the 2013 taxation year. The Bank is confident that its tax filing position was appropriate and in accordance with the relevant provisions of the Income Tax Act (Canada), and intends to vigorously defend its position.

Note 27 of the 2018 consolidated financial statements contains further details with respect to the Bank’s provisions for income taxes.

Structured entities

In the normal course of business, the Bank enters into arrangements with structured entities on behalf of its customers and for its own purposes. These structured entities can be generally categorized as multi-seller commercial paper conduits, Bank funding vehicles and structured finance entities. Further details are provided in the Off-balance sheet arrangements section.

Management is required to exercise judgement to determine whether a structured entity should be consolidated. This evaluation involves understanding the arrangements, determining whether decisions about the relevant activities are made by means of voting rights or other contractual arrangements, and determining whether the Bank controls the structured entity.

The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The three elements of control are:

• power over the investee;

• exposure, or rights, to variable returns from involvement with the investee; and

• the ability to use power over the investee to affect the amount of the Bank’s returns.

This definition of control applies to circumstances:

• when voting rights or similar rights give the Bank power, including situations where the Bank holds less than a majority of voting rights or involving potential voting rights;

• when an investee is designed so that voting rights are not the dominant factor in deciding who controls the investee (i.e., relevant activities are directed by contractual arrangements);

• involving agency relationships; and

• when the Bank has control over specified assets of an investee.

The Bank does not control an investee when it is acting in an agent’s capacity. The Bank assesses whether it is an agent by determining whether it is primarily engaged to act on behalf and for the benefit of another party or parties. Factors that the Bank considers in this assessment include the scope of its decision-making authority over the investee, the rights held by other parties, the remuneration to which it is entitled, and the Bank’s exposure to variability of returns from other interests that it holds in the investee.

The analysis uses both qualitative and quantitative analytical techniques and involves the use of a number of assumptions about the business environment in which the structured entity operates and the amount and timing of future cash flows.

The Bank reassesses whether it controls an investee if facts and circumstances indicate that one or more of the three elements of control change.

Management is required to exercise judgement to determine if a change in control event has occurred.

During 2018, there were no change in control events that caused the Bank to change its control conclusion of its multi-seller conduits or other structured entities.

As described in Note 15 to the consolidated financial statements and in the discussion of off-balance sheet arrangements, the Bank does not control the two Canadian-based multi-seller conduits that it sponsors and they are not required to be consolidated on the Bank’s Consolidated Statement of Financial Position. The Bank controls its U.S.-based multi-seller conduit and consolidates it on the Bank’s Consolidated Statement of Financial Position.

Goodwill

For the purpose of impairment testing, goodwill acquired in a business combination is, on the acquisition date, allocated to each of the Bank’s group of cash-generating units (CGU) that are expected to benefit from the particular acquisition.

Goodwill is not amortized but tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Goodwill is reviewed at each reporting date to determine whether there is any indication of impairment. Each CGU to which goodwill is allocated for impairment testing purposes reflects the lowest level at which goodwill is monitored for internal management purposes.

The Bank determines the carrying value of the CGU using a regulatory capital approach based on credit, market, and operational risks, and leverage, consistent with the Bank’s capital attribution for business line performance measurement. An impairment loss is recognized if the carrying amount of a CGU exceeds its recoverable amount. The recoverable amount is the greater of fair value less costs of disposal and value in use. If either fair value less costs of disposal or value in use exceeds the carrying amount, there is no need to determine the other. The recoverable amount for the CGU has been determined using the fair value less costs of disposal method. In arriving at such value an appropriate valuation model is used which considers various factors including normalized net income, price earnings multiples and control premium. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators. An impairment loss, in respect of goodwill, is not reversed.

Significant judgement is applied in determining the recoverable amounts of the CGU and assessing whether certain events or circumstances constitute objective evidence of impairment.

Goodwill was assessed for annual impairment based on the methodology as at July 31, 2018, and no impairment was determined to exist. Additionally, there were no impairment indicators noted as of October 31, 2018.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Indefinite life intangible assets

Intangible assets with indefinite useful lives are not amortized but tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Intangible assets are reviewed at each reporting date to determine whether there is any indication of impairment.

The recoverable amount is the greater of fair value less costs of disposal and value in use. If either fair value less costs of disposal or value in use exceeds the carrying amount, there is no need to determine the other. Value in use method is used by the Bank to determine the recoverable amount of the intangible asset. In determining value in use, an appropriate valuation model is used which considers factors such as management-approved cash flow projections, discount rate and terminal growth rate. An impairment loss is recognized if the carrying amount of the intangible asset exceeds its recoverable amount. Impairment losses recognized in prior periods are reassessed at each reporting period for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the intangible asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognized.

The recoverable amount is significantly impacted by the discount rate and the terminal value. Significant judgement is applied in determining the intangible asset’s recoverable amount and assessing whether certain events or circumstances constitute objective evidence of impairment.

Intangible assets were assessed for annual impairment based on the methodology as at July 31, 2018, and no impairment was determined to exist. Additionally, there were no impairment indicators noted as of October 31, 2018.

Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the asset have expired, which occurs with repayment by the borrower or upon substantial modification of the asset terms. Assets are also derecognized when the Bank transfers the contractual rights to receive the cash flows from the financial asset, or has assumed an obligation to pay those cash flows to an independent third-party, and the Bank has transferred substantially all the risks and rewards of ownership of that asset to an independent third-party.

Management has to apply judgement in determining whether a modification of the terms of the financial asset is considered to be substantial. For loans, this includes the nature of the modification and the extent of changes to terms including interest rate, authorized amount, term or type of underlying collateral.

Management also has to apply judgement in determining, based on specific facts and circumstances, whether the Bank has retained or transferred substantially all the risks and rewards of ownership of the financial asset. Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Bank derecognizes the transferred asset only if it has lost control over that asset. If the Bank retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement.

The majority of assets transferred under repurchase agreements, securities lending agreements, securitizations of fully insured Canadian residential mortgages, and securitizations of personal lines of credit, credit cards and auto loans do not qualify for derecognition. The Bank continues to record the transferred assets on the Consolidated Statement of Financial Position as secured financings. Further information on derecognition of financial assets can be found in Note 14 of the consolidated financial statements.

Provisions

The Bank recognizes a provision if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Probable in this context means more likely than not. Significant judgement is required in determining whether a present obligation exists and in estimating the probability, timing, and amount of any future outflows.

Litigation and other

In the ordinary course of business, the Bank and its subsidiaries are routinely defendants in, or parties to a number of pending and threatened legal actions and regulatory proceedings, including actions brought on behalf of various classes of claimants. In view of the inherent difficulty of predicting the outcome of such matters, the Bank cannot state what the eventual outcome of such matters will be.

Legal provisions are established when it becomes probable that the Bank will incur an expense related to a legal action and the amount can be reliably estimated. Such provisions are recorded at the best estimate of the amount required to settle any obligation related to these legal actions as at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Management and internal and external experts are involved in estimating any amounts that may be required. The actual costs of resolving these claims may vary significantly from the amount of the legal provisions. The Bank’s estimate involves significant judgement, given the varying stages of the proceedings, the fact that the Bank’s liability, if any, has yet to be determined and the fact that the underlying matters will change from time to time. As such, there is a possibility that the ultimate resolution of those legal actions may be material to the Bank’s consolidated results of operations for any particular reporting period.

Future Accounting Developments

The Bank actively monitors developments and changes in accounting standards from the IASB as well as regulatory requirements from the Canadian Securities Administrators and OSFI.

Effective November 1, 2018

Revenue from contracts with customers

The IASB issued IFRS 15 Revenue from Contracts with Customers (IFRS 15), which replaces the previous revenue standard IAS 18 Revenue, and the related Interpretations on revenue recognition.

The standard is a control-based model as compared to the existing revenue standard which is primarily focused on risks and rewards and provides a single principle based framework to be applied to all contracts with customers that are in scope of the standard. Under the new standard, revenue is recognized when a customer obtains control of a good or service. Transfer of control occurs when the customer has the ability to direct the use of and obtain the benefits of the good or service. The standard introduces a new five step model governing revenue recognition to be applied to contracts with customers. The Bank must also determine whether its performance obligation is to provide the service itself (i.e. the Bank acts as a principal) or to arrange another party to provide the service (i.e. the Bank acts as an agent).

The Bank has assessed the scope of the new guidance to be limited to fees and commission revenues from wealth management and banking services in Canadian and International Banking and underwriting and advisory fees in Global Banking and Markets.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    CONTROLS AND ACCOUNTING POLICIES

The Bank will adopt the standard and its amendments as of November 1, 2018 using the modified retrospective approach. Under this approach, the Bank will recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings as of November 1, 2018, without restating comparative periods. As of November 1, 2018, the opening balance of retained earnings is expected to decrease by approximately $60 million (net of tax). The decrease in retained earnings relates to certain costs no longer eligible for deferral under the new standard and the re-measurement of certain liabilities at fulfilment cost.

The presentation of certain costs will also change prospectively from non-interest expenses to non-interest income where amounts are deemed to be part of consideration payable to customers or the Bank is deemed to be acting as an agent. This presentation change will not have a material impact to the Bank.

Effective November 1, 2019

Financial instruments: Prepayment features with negative compensation

On October 12, 2017, the IASB issued an amendment to IFRS 9 Financial Instruments, relating to prepayment features with negative compensation. The amendment will be effective prospectively for annual periods beginning on or after January 1, 2019, which will be effective November 1, 2019 for the Bank. Based on preliminary assessments, the amendment is not expected to have a material impact to the Bank.

Leases

On January 13, 2016, the IASB issued IFRS 16 Leases, which requires a lessee to recognize an asset for the right to use the leased item and a liability for the present value of its future lease payments. IFRS 16 will result in leases being recorded on the Bank’s balance sheet, including those currently classified as operating leases except for short-term leases and leases with low value of the underlying asset. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17.

IFRS 16 is effective for the Bank on November 1, 2019. On transition there are practical expedients available whereby the Bank will not need to reassess whether a contract is, or contains a lease, or reassess the accounting of sale leaseback transactions recognized prior to the date of initial application. A lessee will apply IFRS 16 to its leases either retrospectively to each prior reporting period presented; or retrospectively with the cumulative effect of initially applying IFRS 16 being recognized at the date of initial application.

The Bank is currently in the process of assessing existing contractual relationships to identify the existing population of leases that would be recorded on the balance sheet under the new standard. The Bank continues to evaluate the potential impact to the existing IT systems and processes and next steps include performing an initial quantification of the existing obligations and reviewing the additional disclosures required by the new standard. During 2019, the Bank will also complete its assessment of various practical expedients and formulate its accounting policies under IFRS 16.

IFRIC 23 Uncertainty over income tax treatments

On June 7, 2017, the IASB issued IFRIC 23 that is effective for the Bank beginning November 1, 2019. The interpretation clarifies application of recognition and measurement requirements in IAS 12 income taxes when there is uncertainty over income tax treatments. The Bank is currently assessing the impact of the interpretation.

Employee Benefits

On February 7, 2018, the IASB issued narrow-scope amendments to pension accounting that are effective for the Bank beginning November 1, 2019. The amendments relate to when a plan amendment, curtailment or settlement has occurred. In such instances, the Bank is required to use updated assumptions to determine current service cost and net interest for the remainder of the reporting period after the change to the plan. For the Bank, the narrow scope amendments are to be applied prospectively to plan amendments, curtailments and settlements occurring after November 1, 2019.

Effective November 1, 2020

Conceptual Framework

On March 29, 2018, the IASB issued the revised Conceptual Framework for Financial Reporting (Framework) that is effective for the Bank beginning November 1, 2020. The Framework itself is not a standard, and does not override existing standards. It is used by the IASB in developing accounting standards. The Bank is currently assessing the impact of the revisions.

Definition of business

On October 22, 2018, the IASB issued a narrow-scope amendment to IFRS 3 Business Combination. The amendments will help companies determine whether an acquisition is of a business or a group of assets. Distinguishing between a business and a group of assets is important because an acquirer recognizes goodwill only when acquiring a business. The amendments apply to transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. Earlier adoption is permitted. The Bank is currently assessing the impact.

Definition of material

On October 31, 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, clarifying the definition of material. Under the new definition, information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. The explanations accompanying the definition have also been improved. The amendments are effective prospectively for annual periods beginning on or after January 1, 2020. Earlier adoption is permitted. The Bank is currently assessing the impact.

Effective November 1, 2021

Insurance contracts

On May 18, 2017, the IASB issued IFRS 17 Insurance Contracts, which provides a comprehensive principle-based framework for the measurement and presentation of all insurance contracts. The new standard will replace IFRS 4 Insurance Contracts and requires insurance contracts to be measured using current fulfillment cash flows and for revenue to be recognized as the service is provided over the coverage period. On November 14, 2018, the IASB tentatively decided to defer the effective date, by one year, to annual periods on or after January 1, 2022. The Bank will continue to track the IASB Board’s meeting agenda items on issues and discussions related to the standard, further updates will be provided in Q1 2019.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

The IFRS 17 project structure and governance has been established along with a Project Management Office to assist the Executive Steering and Project Operations Committees. The committees comprise of representatives from Global Finance, Global Insurance Actuarial Services, Information Technology and the Insurance Business Operations. The Bank is currently in the Evaluation and Design Solution phase of the project, with Implementation planned for Fiscal 2019 through 2022.

Regulatory Developments

The Bank continues to monitor and respond to global regulatory developments relating to a broad spectrum of topics, including consumer protection measures and cybersecurity, in order to ensure that control and business units are responsive on a timely basis and business impacts, if any, are minimized.

Bank Recapitalization (Bail-in) Regime and Total Loss Absorbing Capacity (TLAC)

On September 23, 2018, the regulations under the Canada Deposit Insurance Corporation Act (Canada) (the “CDIC Act”) and the Bank Act (Canada) (collectively, the “Bail-In Regulations”) providing the details of conversion, issuance and compensation regimes for bail-in instruments issued by domestic systemically important banks, including the Bank, came into force. Pursuant to the CDIC Act, in circumstances where the Superintendent of Financial Institutions has determined that the Bank has ceased, or is about to cease, to be viable, the Governor in Council may, upon a recommendation of the Minister of Finance that he or she is of the opinion that it is in the public interest to do so, grant an order directing CDIC to convert all or a portion of certain shares and liabilities of the Bank into common shares of the Bank. For a description of the Canadian bank resolution powers and the consequent risk factors attaching to certain liabilities of the Bank, reference is made to the Annual Information Form.

On April 18, 2018, OSFI issued guidelines on Total Loss Absorbing Capacity (TLAC), which will apply to Canada’s D-SIBs as part of the Federal Government’s bail-in regime. The standards are intended to address the sufficiency of a systemically important bank’s loss absorbing capacity in supporting its recapitalization in the event of its failure. On August 21, 2018, OSFI provided notification requiring systemically important banks to maintain a minimum of 21.5% plus the domestic stability buffer of TLAC eligible instruments relative to their RWAs and 6.75% relative to their leverage exposures. We are expected to comply with the minimum TLAC requirements by November 1, 2021 and to begin disclosing our TLAC ratios in the first quarter of 2019. The Bank does not anticipate any challenges in meeting these TLAC requirements.

United Kingdom and European Regulatory Reform

The U.K. is in negotiations to exit the E.U. and the two-year negotiation period triggered by U.K.’s formal notice of intention to withdraw from the E.U. ends on March 29, 2019. Political agreement has been reached on a transition period, which would extend until December 31, 2020 (and possibly longer), providing additional time in which to ensure readiness, however that is dependent on an overall withdrawal agreement being concluded and ratified. If the transitional period is ratified then all E.U. legislation will continue to apply in the U.K. for its duration. There remains a possibility that the U.K. will leave the E.U. on March 29, 2019 without having a withdrawal agreement in place (a so-called “hard” Brexit).

The U.K.’s exit from the E.U. may result in significant changes in law(s), which may impact the Bank’s business, financial condition and/or results of operations and could adversely impact the Bank’s cost of funding in Europe. The Bank continually monitors developments to prepare for changes that have the potential to impact its operations in the U.K. and elsewhere in Europe and is developing and revising its contingency plans accordingly.

Cybersecurity and privacy developments

On November 1, 2018, changes to Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) went into effect . The changes require domestic and foreign organizations, such as the Bank, subject to PIPEDA to: (a) notify individuals impacted by privacy breaches; (b) report privacy breaches to the Office of the Privacy Commissioner of Canada and others in certain circumstances; and (c) keep certain records of privacy breaches. The impact to the Bank is not expected to be significant.

Regulatory Initiatives Impacting Financial Services in Canada

The federal government plans to introduce this year a comprehensive consumer protection framework into the Bank Act which will afford additional protections to consumers and will also enhance the mandate and powers of the Financial Consumer Agency of Canada (FCAC), which is the consumer protection regulator for federally regulated entities Federal regulatory agencies continue to focus on sales practices at Canadian banks. In addition, the FCAC’s new Supervisory Framework came into effect on October 1, 2018. The Framework outlines the principles and processes that underpin how the FCAC fulfills its supervision mandate, to promote, monitor and enforce market conduct obligations.

Provincial consumer protection initiatives are also being monitored to assess their possible implications from a financial services perspective. The federal government introduced legislative amendments in the 2018 Budget Implementation Act which are designed to provide greater flexibility for financial institutions to undertake and leverage broader financial technology activities and investments. Specifically, banks will be afforded greater flexibility in regard to referrals/networking, identification, authentication and verification services, permitted investments, and the ability to engage in certain financial technology activities without ministerial consent.

The relevant amendments to the Bank Act itself were given royal assent on June 21, 2018, although the pursuant regulations are not yet drafted, and are likely to be subject to a series of consultations before their final publication.

Basel Committee on Banking Supervision – Finalized Basel III reforms

In December 2017, the Group of Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BCBS), announced that they have agreed on an output floor of 72.5% and have finalized the remaining Basel III reforms.

The final Basel III reform package includes: a revised standardized approach for credit risk; revisions to the internal ratings-based approach for credit risk; revisions to the credit valuation adjustment (CVA) framework, including the removal of the internally modelled approach and the introduction of a revised standardized approach; a revised standardized approach for operational risk, which will replace the existing standardized approaches and the advanced measurement approaches; revisions to the measurement of the leverage ratio and a leverage ratio buffer for global systemically important banks (G-SIBs), which will take the form of a Tier 1 capital buffer set at 50% of a G-SIB’s risk-weighted capital buffer; and an aggregate output floor, which will ensure that banks’ risk-weighted assets (RWAs) generated by internal models are no lower than 72.5% of RWAs as calculated by the Basel III framework’s standardized approaches. Banks will also be required to disclose their RWAs based on these standardized approaches. Implementation of the new Basel III standards will be required in 2022. This includes the Fundamental Review of the Trading Book (FRTB) rules, which represents a delay from 2020. There is a phase-in period for the 72.5% output floor from January 1, 2022 until January 2027.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    CONTROLS AND ACCOUNTING POLICIES

In July 2018, OSFI issued a discussion paper seeking views from interested stakeholders on its proposed policy direction and its timelines for implementation of the final Basel III reforms in Canada. OSFI supports the changes proposed within the final Basel III reforms and intends to implement them domestically, while also considering the adjustments required to recognize the unique characteristics of the Canadian market, improving risk sensitivity and providing the right incentives, while promoting the safety and soundness of deposit taking institutions in consideration of level playing field and competitiveness issues. As part of these adjustments, OSFI is considering eliminating the BCBS’ transitional provisions for the output floor, setting the output floor at 72.5% commencing the first quarter of 2022. Responses to the questions raised within the discussion paper were due to OSFI by October 19, 2018. The Bank will continue to monitor and prepare for developments impacting regulatory capital requirements.

Regulatory Capital Pillar 3 Disclosure Requirements

In February 2018, the Basel Committee on Banking Supervision (BCBS) issued an update to its Pillar 3 disclosure requirements framework, as the third phase of the Committee’s disclosure project, which builds on the first and second phases, published by the Committee in January 2015 and March 2017, respectively. The third phase is primarily to address changes in disclosure requirements from the Basel III reforms finalized in December 2017, as well as other disclosure requirements related to asset encumbrance, capital distribution constraints, and the scope of disclosure requirements across resolution groups.

The Bank’s supplementary regulatory capital disclosures as at October 31, 2018 meet OSFI’s April 2017 disclosure guideline for the Committee’s first phase of the revised Pillar 3 disclosure requirements. OSFI’s disclosure guidelines for the implementation of the second and third phases of the Committee disclosure project are awaited.

In May 2018, OSFI issued its disclosure guidelines on Total Loss Absorbing Capacity (TLAC) Disclosure Requirements and Capital Disclosure Requirements (formerly the advisory entitled Public Capital Disclosure Requirements related to Basel III Pillar 3). Together, these guidelines are a key element of a TLAC regime designed to ensure Canada’s largest banks maintain a minimum capacity to absorb losses and enhance stability within the financial sector. These disclosure guidelines are effective for quarterly reporting commencing the first quarter of 2019.

Regulatory developments relating to liquidity

The Net Stable Funding Ratio (NSFR) is expected to become a minimum standard in OSFI’s liquidity framework. The NSFR is aimed at reducing structural funding risk by requiring banks to fund their activities with sufficiently stable sources of funding. OSFI has extended the targeted implementation timeline of the NSFR to January 2020.

Benchmark rate reform

In 2014, the Financial Stability Board and Financial Stability Oversight Council wrote a paper ‘Reforming Major Interest Rate Benchmarks’ recommending the reform or replacement of major interest rate reference rates, particularly interbank offered rates such as LIBOR, EURIBOR and TIBOR. In July 2017, the Financial Conduct Authority in the UK announced it would no longer compel panel banks to make submissions to LIBOR beyond the end of 2021, setting a broad timeline for transition to replacement rates. Europe and Japan have taken steps to either reform or replace EURIBOR and TIBOR, respectively.

The impact is expected to be broad-ranging, affecting derivatives, floating-rate notes, loans, securitizations and mortgages. Firms are working with trade associations and working groups to develop contract language and transition methodology to minimize the financial impact of the change. The Bank is actively participating in industry consultations, raising awareness internally across business lines and working on detailed impact analysis and exposure reports

Related Party Transactions

Compensation of key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly, and comprise the directors of the Bank, the President and Chief Executive Officer, certain direct reports of the President and Chief Executive Officer and Group Heads.

T55 Compensation of the Bank key management personnel

For the year ended October 31 ($ millions)	2018		2017
Salaries and cash incentives(1)	$	18	$	17
Equity-based payment(2)		27		25
Pension and other benefits(1)		4		3
Total	$	49	$	45

(1) Expensed during the year.

(2) Awarded during the year.

Directors can use some or all of their director fees earned to buy common shares of the Bank at market rates through the Director’s Share Purchase Plan. Non-officer directors may elect to receive all or a portion of their fees in the form of deferred stock units which vest immediately. Refer to Note 26 – Share-based payments for further details of these plans.

T56 Loans and deposits of key management personnel

Loans are currently granted to key management personnel at market terms and conditions.

As at October 31 ($ millions)	2018		2017
Loans	$	13	$	6
Deposits	$	6	$	8

The Bank’s committed credit exposure to companies controlled by directors totaled $132.4 million as at October 31, 2018 (October 31, 2017 – $145.2 million) while actual utilized accounts were $23.9 million (October 31, 2017 – $11.5 million).

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Transactions with associates and joint ventures

In the ordinary course of business, the Bank provides normal banking services and enters into transactions with its associated and other related corporations on terms similar to those offered to non-related parties. If these transactions are eliminated on consolidation, they are not disclosed as related party transactions. Transactions between the Bank and its associated companies and joint ventures also qualify as related party transactions and are as follows:

T57 Transactions with associates and joint ventures

As at and for the year ended October 31 ($ millions)	2018			2017
Net income / (loss)	$	(64	)	$	(46	)
Loans		702			703
Deposits		151			217
Guarantees and commitments	$	123		$	114

Scotiabank principal pension plan

The Bank manages assets of $3.8 billion (October 31, 2017 – $3.0 billion) which is a portion of the Scotiabank principal pension plan assets and earned $5.0 million (October 31, 2017 – $3.7 million) in fees.

Oversight and governance

The oversight responsibilities of the Audit and Conduct Review Committee (ACRC) with respect to related party transactions include reviewing policies and practices for identifying transactions with related parties that may materially affect the Bank, and reviewing the procedures for ensuring compliance with the Bank Act for related party transactions. The Bank Act requirements encompass a broader definition of related party transactions than is set out in IFRS. The Bank has various procedures in place to ensure that related party information is identified and reported to the ACRC on a semi-annual basis. The ACRC is provided with detailed reports that reflect the Bank’s compliance with its established procedures.

The Bank’s Internal Audit department carries out audit procedures as necessary to provide the ACRC with reasonable assurance that the Bank’s policies and procedures to identify, authorize and report related party transactions are appropriately designed and operating effectively.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

SUPPLEMENTARY DATA

Geographic Information

T58 Net income by geographic segment

	2018(1)																		2017(2)																		2016(2)
For the fiscal years ($ millions)	Canada		U.S.			Mexico		Peru		Chile		Colombia		Other Inter- national		Total			Canada		U.S.			Mexico		Peru		Chile		Colombia		Other Inter- national		Total			Canada		U.S.		Mexico		Peru		Chile		Colombia		Other Inter- national		Total
Net interest income	$	7,823	$	691		$	1,561	$	1,378	$	1,117	$	839	$	2,825	$	16,234		$	7,440	$	460		$	1,380	$	1,287	$	817	$	710	$	2,999	$	15,093		$	7,022	$	479	$	1,224	$	1,231	$	763	$	674	$	2,950	$	14,343
Non-interest income		7,040		843			613		662		565		484		2,612		12,819			6,924		830			536		635		409		455		2,502		12,291			6,893		871		554		600		325		419		2,409		12,071
Provision for credit losses		802		(34	)		239		351		498		511		244		2,611			906		(14	)		193		329		145		337		353		2,249			876		112		225		315		113		320		401		2,362
Non-interest expenses		7,591		701			1,196		770		837		723		3,148		14,966			7,650		606			1,123		762		630		620		3,069		14,460			7,339		633		1,121		740		605		550		3,036		14,024
Income tax expense		1,596		220			76		235		51		39		451		2,668			1,066		147			125		225		77		71		506		2,217			1,235		155		69		201		45		89		497		2,291
Subtotal		4,874		647			663		684		296		50		1,594		8,808			4,742		551			475		606		374		137		1,573		8,458			4,465		450		363		575		325		134		1,425		7,737
Net income attributable to non-controlling interests in subsidiaries		–		–			17		12		28		16		103		176			–		–			12		11		53		60		102		238			–		–		9		12		38		93		99		251
Total	$	4,874	$	647		$	646	$	672	$	268	$	34	$	1,491	$	8,632		$	4,742	$	551		$	463	$	595	$	321	$	77	$	1,471	$	8,220		$	4,465	$	450	$	354	$	563	$	287	$	41	$	1,326	$	7,486
Corporate adjustments																	(84	)																	(215	)																(369	)
Net income attributable to equity holders of the Bank																$	8,548																	$	8,005																$	7,117

(1) Amounts presented are on a reported basis. Adjusting for the impact of Acquisition-related costs, net income attributable to equity holders of the Bank in 2018 for Canada was $4,926, Chile was $439, and Colombia was $97. Refer to Acquisition-related costs in Non-GAAP measures.

(2) Amounts presented are on a reported basis. Adjusting for the impact of Acquisition-related costs, net income attributable to equity holders of the Bank was $8,065 in 2017, and it was $7,471 in 2016. Refer to Acquisition-related costs in Non-GAAP measures.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T59 Loans and acceptances by geography ⁽¹⁾

		IFRS 9					IAS 39
As at October 31 ($ billions)	2018					2017			2016
Canada
Atlantic provinces			$	21.9		$	22.7		$	26.7
Quebec				29.3			29.0			29.7
Ontario				185.7			173.6			156.7
Manitoba and Saskatchewan				17.3			17.1			17.0
Alberta				52.8			51.9			50.8
British Columbia				60.5			55.6			47.6
				367.5			349.9			328.5
U.S.				41.8			36.9			38.5
Mexico				27.5			24.2			20.8
Peru				20.1			18.4			17.8
Chile				43.8			22.8			19.4
Colombia				11.6			9.4			9.3
Other International
Latin America				8.8			6.6			6.4
Europe				9.4			10.0			8.4
Caribbean and Central America				31.1			31.4			32.6
Asia and Other				11.6			12.6			15.0
				60.9			60.6			62.4
			$	573.2		$	522.2		$	496.7
Total allowance for loan losses				(5.1	)		(4.3	)		(4.6	)
Total loans and acceptances net of allowance for loan losses			$	568.1		$	517.9		$	492.1

(1) The amounts for the year 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Note 3 and 4 in the consolidated financial statements).

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

T60 Gross impaired loans by geographic segment

As at October 31 ($ millions)	2018		2017(1)		2016(1)
Canada	$	999	$	1,049	$	1,258
U.S.		80		140		210
Mexico		359		303		301
Peru		581		704		764
Chile		753		565		499
Colombia		619		462		381
Other International		1,739		1,642		1,981
Total	$	5,130	$	4,865	$	5,394

(1) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico, for periods prior to 2018.

T61 Provision against impaired loans by geographic segment⁽¹⁾

For the fiscal years ($ millions)	2018			2017			2016
Canada	$	785		$	906		$	876
U.S.		(6	)		(14	)		112
Mexico		239			193			224
Peru		349			329			317
Chile		275			145			112
Colombia		358			337			320
Other International		355			353			401
Total	$	2,355		$	2,249		$	2,362

(1) The amounts for the year 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Note 3 and 4 in the consolidated financial statements).

T62 Cross–border exposure to select countries⁽¹⁾

As at October 31 ($ millions)	Loans		Trade		Interbank deposits		Government and other securities		Investment in subsidiaries and affiliates		Other				2017 Total
													2018 Total
Asia
China	$	1,478	$	1,947	$	333	$	87	$	828	$	41	$	4,714	$	4,367
India		1,489		163		–		–		–		20		1,672		2,254
Thailand		101		17		527		–		2,991		4		3,640		3,461
South Korea		650		37		–		–		–		38		725		968
Hong Kong		1,684		86		9		–		–		34		1,813		1,465
Malaysia		179		1		–		–		321		–		501		582
Japan		512		34		178		4,888		–		13		5,625		5,014
Others(2)		1,629		154		150		–		–		20		1,953		1,371
Total	$	7,722	$	2,439	$	1,197	$	4,975	$	4,140	$	170	$	20,643	$	19,482
Latin America
Chile	$	3,374	$	1,106	$	1,921	$	155	$	5,161	$	248	$	11,965	$	8,345
Mexico		2,483		355		–		578		3,942		175		7,533		6,901
Brazil		5,513		1,143		–		14		390		536		7,596		5,317
Peru		2,425		93		–		143		4,928		22		7,611		7,080
Colombia		1,310		171		–		–		1,561		8		3,050		2,982
Others(3)		134		11		–		–		532		–		677		678
Total	$	15,239	$	2,879	$	1,921	$	890	$	16,514	$	989	$	38,432	$	31,303
Caribbean and Central America
Panama	$	4,364	$	109	$	58	$	–	$	319	$	–	$	4,850	$	4,329
Costa Rica		1,793		130		–		–		1,034		14		2,971		2,540
El Salvador		391		29		–		–		693		–		1,113		1,270
Dominican Republic		1,132		22		28		–		–		–		1,182		1,222
Jamaica		58		18		–		–		879		–		955		785
Others(4)		1,493		65		–		–		425		–		1,983		2,030
Total	$	9,231	$	373	$	86	$	–	$	3,350	$	14	$	13,054	$	12,176
As at October 31, 2018	$	32,192	$	5,691	$	3,204	$	5,865	$	24,004	$	1,173	$	72,129
As at October 31, 2017	$	29,654	$	4,559	$	2,213	$	4,972	$	20,761	$	802	$	62,961

(1) Cross-border exposure represents a claim, denominated in a currency other than the local one, against a borrower in a foreign country on the basis of ultimate risk.

(2) Includes Indonesia, Macau, Singapore, Vietnam, Taiwan and Turkey.

(3) Includes Venezuela and Uruguay.

(4) Includes other English and Spanish Caribbean countries, such as Bahamas, Barbados, British Virgin Islands, Trinidad & Tobago, Turks & Caicos.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Credit Risk

T63 Loans and acceptances by type of borrower⁽¹⁾

As at October 31 ($ billions)	2018			2017			2016
Residential mortgages	$	253.4		$	236.9		$	222.9
Personal loans		96.0			89.2			19.4
Credit cards		16.5			14.1			80.1
Personal	$	365.9		$	340.2		$	322.4
Financial services
Non-bank	$	24.6		$	20.5		$	16.1
Bank(2)		4.5			3.8			3.7
Wholesale and retail		25.1			21.1			22.1
Real estate and construction		29.2			24.6			22.6
Energy(3)		14.8			14.5			14.5
Transportation		9.3			8.2			9.0
Automotive		14.7			13.0			11.5
Agriculture		11.5			10.2			8.8
Hospitality and leisure		4.0			3.5			3.5
Mining		5.5			4.9			5.4
Metals		3.0			2.6			2.5
Utilities		9.7			8.1			7.8
Health care		5.4			5.6			5.2
Technology and media		12.3			9.6			11.8
Chemicals(3)		1.9			2.1			2.7
Food and beverage		7.9			6.3			4.9
Forest products		1.9			1.7			2.5
Other(4)		16.9			17.0			14.7
Sovereign(5)		5.1			4.7			5.0
Business and government	$	207.3		$	182.0		$	174.3
	$	573.2		$	522.2		$	496.7
Total allowance for loan losses		(5.1	)		(4.3	)		(4.6	)
Total loans and acceptances net of allowance for loan losses	$	568.1		$	517.9		$	492.1

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Note 3 and 4 in the consolidated financial statements).

(2) Deposit taking institutions and securities firms.

(3) Prior periods have been restated to conform to the current presentation.

(4) Other related to $2.3 in financing products, $2.6 in services and $2.7 in wealth management (2017 – $3.5, $2.2, and $2.3 respectively).

(5) Includes central banks, regional and local governments, and supra-national agencies.

T64 Off-balance sheet credit instruments

As at October 31 ($ billions)	2018		2017		2016
Commitments to extend credit(1)	$	197.4	$	185.7	$	174.2
Standby letters of credit and letters of guarantee		35.4		35.5		34.5
Securities lending, securities purchase commitments and other		53.7		42.0		40.0
Total	$	286.5	$	263.2	$	248.7

(1) Excludes commitments which are unconditionally cancellable at the Bank’s discretion at any time.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

T65 Changes in net impaired loans⁽¹⁾

For the fiscal years ($ millions)	2018			2017			2016
Gross impaired loans
Balance at beginning of year	$	5,070		$	5,394		$	4,658
Net additions
New additions		3,871			4,297			4,684
Acquisition-related		233			–			–
Declassifications		(168	)		(42	)		(24	)
Payments		(722	)		(1,427	)		(1,344	)
Sales		(72	)		(50	)		(95	)
		3,142			2,778			3,221
Write-offs
Residential mortgages		(219	)		(170	)		(201	)
Personal loans		(1,441	)		(1,478	)		(1,279	)
Credit cards		(1,104	)		(1,024	)		(671	)
Business and government		(276	)		(501	)		(428	)
		(3,040	)		(3,173	)		(2,579	)
Foreign exchange and other		(42	)		(134	)		94
Balance at end of year	$	5,130		$	4,865		$	5,394
Allowance for credit losses on impaired loans(2)
Balance at beginning of year	$	1,756		$	2,948		$	2,573
Provision for credit losses		2,355			2,249			2,362
Write-offs		(3,040	)		(3,173	)		(2,579	)
Recoveries
Residential mortgages		96			70			20
Personal loans		275			252			305
Credit cards		250			303			217
Business and government		68			55			40
		689			680			582
Foreign exchange and other		(83	)		(82	)		10
Balance at end of year	$	1,677		$	2,622		$	2,948
Net impaired loans
Balance at beginning of year	$	3,314		$	2,446		$	2,085
Net change in gross impaired loans		60			(529	)		736
Net change in allowance for credit losses on impaired loans		79			326			(375	)
Balance at end of year	$	3,453		$	2,243		$	2,446

(1) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico, prior to 2018.

(2) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Note 3 and 4 in the consolidated financial statements).

T66 Provision for credit losses⁽¹⁾

For the fiscal years ($ millions)	2018
New provisions	$	3,267
Reversals		(223	)
Recoveries		(689	)
Provision for credit losses on impaired loans (Stage 3)		2,355
Provision for credit losses – performing (Stage 1 and 2)		256
Total Provision for credit losses	$	2,611

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Note 3 and 4 in the consolidated financial statements).

For the fiscal years ($ millions)	2017			2016
New provisions	$	3,057		$	3,072
Reversals		(128	)		(110	)
Recoveries		(680	)		(600	)
Net provisions for credit losses on impaired loans		2,249			2,362
Collective provision (reversals) on performing loans		–			50
Total Provision for credit losses	$	2,249		$	2,412

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Note 3 and 4 in the consolidated financial statements).

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T67 Provision for credit losses against impaired loans by type of borrower

For the fiscal years ($ millions)	2018			2017			2016
Residential mortgages	$	91		$	61		$	100
Personal loans		1,198			1,152			1,075
Credit cards		833			734			602
Personal		2,122			1,947			1,777
Financial services
Non-bank		1			10			(1	)
Bank		–			1			2
Wholesale and retail		92			63			61
Real estate and construction		48			62			34
Energy		(33	)		(8	)		290
Transportation		8			20			45
Automotive		9			8			28
Agriculture		15			14			14
Hospitality and leisure		(5	)		14			25
Mining		(1	)		2			6
Metals		(7	)		46			11
Utilities		20			12			20
Health care		12			7			9
Technology and media		7			(1	)		14
Chemicals		1			(1	)		(7	)
Food and beverage		17			18			6
Forest products		5			3			1
Other		(6	)		31			23
Sovereign		50			1			4
Business and government		233			302			585
Provision for credit losses on impaired loans	$	2,355		$	2,249		$	2,362

T68 Impaired loans by type of borrower

	2018						2017(1)
As at October 31 ($ millions)	Gross		Allowance for credit losses		Net		Gross		Allowance for credit losses		Net
Residential mortgages	$	1,797	$	360	$	1,437	$	1,445	$	326	$	1,119
Personal loans		1,069		644		425		1,067		1,040		27
Credit cards		–		–		–		543		543		–
Personal	$	2,866	$	1,004	$	1,862	$	3,055	$	1,909	$	1,146
Financial services
Non-bank		19		13		6		31		20		11
Bank		2		2		–		2		2		–
Wholesale and retail		390		168		222		242		132		110
Real estate and construction		469		112		357		257		115		142
Energy		135		30		105		265		77		188
Transportation		233		60		173		181		73		108
Automotive		50		16		34		20		7		13
Agriculture		150		50		100		55		30		25
Hospitality and leisure		37		1		36		41		7		34
Mining		25		5		20		11		5		6
Metals		48		17		31		107		27		80
Utilities		51		22		29		280		61		219
Health care		76		19		57		52		26		26
Technology and media		21		5		16		7		5		2
Chemicals		10		3		7		4		3		1
Food and beverage		99		50		49		95		35		60
Forest products		27		7		20		22		8		14
Other		159		78		81		123		74		49
Sovereign		263		15		248		15		6		9
Business and government	$	2,264	$	673	$	1,591	$	1,810	$	713	$	1,097
Total	$	5,130	$	1,677	$	3,453	$	4,865	$	2,622	$	2,243

(1) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

T69 Total credit risk exposures by geography⁽¹⁾⁽²⁾

	2018										2017
	Non-Retail
As at October 31 ($ millions)	Drawn		Undrawn		Other exposures(3)		Retail		Total		Total
Canada	$	101,207	$	41,691	$	37,748	$	341,157	$	521,803	$	502,224
U.S.		102,265		33,103		42,771		–		178,139		157,386
Chile		23,140		1,038		5,066		23,908		53,152		27,190
Mexico		18,714		1,339		2,611		10,630		33,294		30,528
Peru		15,686		1,506		2,992		8,311		28,495		28,733
Colombia		5,233		486		434		7,496		13,649		10,859
Other International
Europe		25,357		7,041		10,215		–		42,613		43,030
Caribbean and Central America		17,712		1,676		910		18,004		38,302		39,358
Latin America (other)		9,532		909		227		700		11,368		9,035
Other		22,647		3,514		2,258		–		28,419		30,070
Total	$	341,493	$	92,303	$	105,232	$	410,206	$	949,234	$	878,413
As at October 31, 2017	$	309,282	$	84,893	$	102,373	$	381,865	$	878,413

(1) Geographic segmentation is based upon the location of the ultimate risk of the credit exposure. Includes all credit risk portfolios and excludes equities and other assets.

(2) Amounts represent exposure at default.

(3) Includes off-balance sheet lending instruments such as letters of credit, letters of guarantee, derivatives, securitization and repo-style transactions after collateral.

T70 AIRB credit risk exposures by maturity⁽¹⁾⁽²⁾

	2018								2017
Residual maturity as at October 31 ($ millions)	Drawn		Undrawn		Other exposures(3)		Total		Total
Non-retail
Less than 1 year	$	145,558	$	25,264	$	64,808	$	235,630	$	213,124
One to 5 years		119,182		59,726		29,892		208,800		192,087
Over 5 years		9,228		1,809		6,581		17,618		23,217
Total non-retail	$	273,968	$	86,799	$	101,281	$	462,048	$	428,428
Retail
Less than 1 year	$	31,406	$	19,535	$	–	$	50,941	$	51,045
One to 5 years		188,922		–		–		188,922		178,940
Over 5 years		15,259		–		–		15,259		16,299
Revolving credits(4)		39,917		28,550		–		68,467		66,027
Total retail	$	275,504	$	48,085	$	–	$	323,589	$	312,311
Total	$	549,472	$	134,884	$	101,281	$	785,637	$	740,739
As at October 31, 2017	$	518,255	$	123,443	$	99,041	$	740,739

(1) Remaining term to maturity of the credit exposure. Includes all credit risk portfolios and excludes equity securities and other assets.

(2) Exposure at default, before credit risk mitigation.

(3) Off-balance sheet lending instruments, such as letters of credit, letters of guarantee, securitization, derivatives and repo-style transactions after collateral.

(4) Credit cards and lines of credit with unspecified maturity.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T71 Total credit risk exposures and risk-weighted assets

	2018												2017
	AIRB				Standardized(1)				Total				Total
As at October 31 ($ millions)	Exposure at Default(2)		CET1 risk- weighted assets(3)		Exposure at Default(2)		CET1 risk- weighted assets(3)		Exposure at Default(2)		CET1 risk- weighted assets(3)		Exposure at Default(2)		CET1 risk- weighted assets(3)
Non-retail
Corporate
Drawn	$	145,000	$	70,750	$	59,018	$	56,897	$	204,018	$	127,647	$	183,262	$	114,622
Undrawn		83,885		31,103		5,313		5,273		89,198		36,376		81,214		34,473
Other(4)		43,440		10,590		3,501		3,430		46,941		14,020		44,190		15,431
		272,325		112,443		67,832		65,600		340,157		178,043		308,666		164,526
Bank
Drawn		22,680		3,648		3,208		2,715		25,888		6,363		22,223		6,115
Undrawn		2,146		287		160		159		2,306		446		2,656		477
Other(4)		9,846		1,112		143		80		9,989		1,192		9,132		1,623
		34,672		5,047		3,511		2,954		38,183		8,001		34,011		8,215
Sovereign
Drawn		106,288		3,524		5,299		1,424		111,587		4,948		103,797		4,665
Undrawn		768		95		31		16		799		111		1,023		299
Other(4)		1,806		94		6		2		1,812		96		977		26
		108,862		3,713		5,336		1,442		114,198		5,155		105,797		4,990
Total Non-retail
Drawn		273,968		77,922		67,525		61,036		341,493		138,958		309,282		125,402
Undrawn		86,799		31,485		5,504		5,448		92,303		36,933		84,893		35,249
Other(4)		55,092		11,796		3,650		3,512		58,742		15,308		54,299		17,080
	$	415,859	$	121,203	$	76,679	$	69,996	$	492,538	$	191,199	$	448,474	$	177,731
Retail
Retail residential mortgages
Drawn	$	205,944	$	17,259	$	44,517	$	18,592	$	250,461	$	35,851	$	234,620	$	30,024
		205,944		17,259		44,517		18,592		250,461		35,851		234,620		30,024
Secured lines of credit
Drawn		21,047		3,639		–		–		21,047		3,639		20,281		3,351
Undrawn		17,864		1,081		–		–		17,864		1,081		15,356		917
		38,911		4,720		–		–		38,911		4,720		35,637		4,268
Qualifying retail revolving exposures
Drawn		17,337		9,993		–		–		17,337		9,993		16,939		9,676
Undrawn		28,550		3,470		–		–		28,550		3,470		27,445		3,291
		45,887		13,463		–		–		45,887		13,463		44,384		12,967
Other retail
Drawn		31,176		14,876		42,100		30,826		73,276		45,702		65,924		40,318
Undrawn		1,671		476		–		–		1,671		476		1,300		311
		32,847		15,352		42,100		30,826		74,947		46,178		67,224		40,629
Total retail
Drawn		275,504		45,767		86,617		49,418		362,121		95,185		337,764		83,369
Undrawn		48,085		5,027		–		–		48,085		5,027		44,101		4,519
	$	323,589	$	50,794	$	86,617	$	49,418	$	410,206	$	100,212	$	381,865	$	87,888
Securitization exposures		23,346		2,287		–		–		23,346		2,287		23,591		2,529
Trading derivatives		22,843		7,594		301		301		23,144		7,895		24,483		7,147
CVA derivatives		–		3,537		–		1,079		–		4,616		–		2,988
Subtotal	$	785,637	$	185,415	$	163,597	$	120,794	$	949,234	$	306,209	$	878,413	$	278,283
Equities		1,754		1,619		–		–		1,754		1,619		1,281		1,188
Other assets(5)		–		–		60,124		28,258		60,124		28,258		50,631		25,201
Total credit risk, before scaling factor	$	787,391	$	187,034	$	223,721	$	149,052	$	1,011,112	$	336,086	$	930,325	$	304,672
Add-on for 6% scaling factor(6)		–		11,010		–		–		–		11,010		–		10,487
Total credit risk	$	787,391	$	198,044	$	223,721	$	149,052	$	1,011,112	$	347,096	$	930,325	$	315,159

(1) Net of specific allowances for credit losses.

(2) Outstanding amount for on-balance sheet exposures and loan equivalent amount for off-balance sheet exposures, before credit risk mitigation.

(3) As at October 31, 2018, CVA risk-weighted assets were calculated using scalars of 0.80, 0.83, and 0.86 for the CET1, Tier 1 and Total capital ratios, respectively (scalars of 0.72, 0.77, and 0.81 in 2017).

(4) Other exposures include off-balance sheet lending instruments, such as letters of credit, letters of guarantee, non-trading derivatives and repo-style exposures, after collateral.

(5) Exposures at Default for Other Assets exclude amounts related to central counterparties.

(6) Basel Committee imposed a scaling factor (6%) on risk-weighted assets for Internal Ratings-Based credit risk portfolios.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

Revenues and Expenses

T72 Volume/rate analysis of change in net interest income

	Increase (decrease) due to change in: 2018 versus 2017									Increase (decrease) due to change in: 2017 versus 2016
($ millions)		Average volume			Average rate			Net change			Average volume			Average rate			Net change
Net interest income
Total earning assets	$	1,645		$	2,495		$	4,140		$	785		$	1,152		$	1,937
Total interest-bearing liabilities		408			2,576			2,984			29			1,165			1,194
Change in net interest income	$	1,237		$	(81	)	$	1,156		$	756		$	(13	)	$	743
Assets
Deposits with banks	$	10		$	327		$	337		$	(85	)	$	213		$	128
Trading assets		(7	)		34			27			–			(28	)		(28	)
Securities purchased under resale agreements		(8	)		171			163			(5	)		129			124
Investment securities		85			256			341			109			85			194
Loans:
Residential mortgages		513			411			924			326			(327	)		(1	)
Personal loans		281			432			713			149			122			271
Credit cards		300			(42	)		258			166			85			251
Business and government		471			906			1,377			125			873			998
Total loans		1,565			1,707			3,272			766			753			1,519
Total earning assets	$	1,645		$	2,495		$	4,140		$	785		$	1,152		$	1,937
Liabilities
Deposits:
Personal	$	131		$	471		$	602		$	106		$	156		$	262
Business and government		316			1,517			1,833			(101	)		937			836
Banks		1			230			231			(7	)		82			75
Total deposits		448			2,218			2,666			(2	)		1,175			1,173
Obligations related to securities sold under repurchase agreements		(13	)		43			30			6			13			19
Subordinated debentures		(43	)		30			(13	)		(12	)		6			(6	)
Other interest-bearing liabilities		16			285			301			37			(29	)		8
Total interest-bearing liabilities	$	408		$	2,576		$	2,984		$	29		$	1,165		$	1,194

T73 Provision for income taxes

For the fiscal years ($ millions)	2018		2017		2016		2018 versus 2017
Income taxes
Income tax expense	$	2,382	$	2,033	$	2,030		17	%
Other taxes
Payroll taxes		390		380		347		3
Business and capital taxes		464		423		403		10
Harmonized sales tax and other		437		412		363		6
Total other taxes		1,291		1,215		1,113		6
Total income and other taxes(1)	$	3,673	$	3,248	$	3,143		13	%
Net income before income taxes	$	11,106	$	10,276	$	9,398		8	%
Effective income tax rate (%)		21.5		19.8		21.6		1.7
Total tax rate (%)(2)		29.6		28.3		29.9		1.3

(1) Comprising $2,218 of Canadian taxes (2017 – $1,758; 2016 – $1,742) and $1,455 of foreign taxes (2017 – $1,490; 2016 – $1,401).

(2) Total income and other taxes as a percentage of net income before income and other taxes.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T74 Assets under administration and management

($ billions)	2018		2017		2016
Assets under administration
Personal
Retail brokerage	$	146.5	$	151.7	$	163.5
Investment management and trust		113.9		107.0		106.4
		260.4		258.7		269.9
Mutual funds		187.5		148.3		139.2
Institutional		68.1		63.2		63.7
Total	$	516.0	$	470.2	$	472.8
Assets under management
Personal	$	54.7	$	51.8	$	47.9
Mutual funds		173.0		134.0		125.1
Institutional		54.5		20.9		19.7
Total	$	282.2	$	206.7	$	192.7

T75 Changes in assets under administration and management

As at October 31 ($ billions)	2018			2017			2016
Assets under administration
Balance at beginning of year	$	470.2		$	472.8		$	453.9
Net inflows (outflows)(1)		51.5			(33.6	)		4.3
Impact of market changes, including foreign currency translation		(5.7	)		31.0			14.6
Balance at end of year	$	516.0		$	470.2		$	472.8

(1) Includes impact of business acquisitions/dispositions of $49.2 (2017 – $(33.5); 2016 – nil).

As at October 31 ($ billions)	2018		2017		2016
Assets under management
Balance at beginning of year	$	206.7	$	192.7	$	179.0
Net inflows (outflows)(1)		74.4		3.6		6.6
Impact of market changes, including foreign currency translation		1.1		10.4		7.1
Balance at end of year	$	282.2	$	206.7	$	192.7

(1) Includes impact of business acquisitions/dispositions of $76.0 (2017 – $(4.3); 2016 – nil).

T76 Fees paid to the shareholders’ auditors

For the fiscal years ($ millions)	2018		2017		2016
Audit services	$	28.9	$	28.5	$	26.1
Audit-related services		0.8		0.8		0.7
Tax services outside of the audit scope		–		–		–
Other non-audit services		0.4		0.4		0.4
Total	$	30.1	$	29.7	$	27.2

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

Selected Quarterly Information

T77 Selected quarterly information

	2018(1)								2017
As at and for the quarter ended	Q4		Q3		Q2		Q1		Q4		Q3		Q2		Q1
Operating results ($ millions)
Net interest income		4,220		4,085		3,950		3,936		3,831		3,833		3,728		3,643
Non-interest income		3,228		3,096		3,108		3,152		2,981		3,061		2,853		3,225
Total revenue		7,448		7,181		7,058		7,088		6,812		6,894		6,581		6,868
Provision for credit losses		590		943		534		544		536		573		587		553
Non-interest expenses		4,064		3,770		3,726		3,498		3,668		3,672		3,601		3,689
Income tax expense		523		529		621		709		538		546		332		617
Net income		2,271		1,939		2,177		2,337		2,070		2,103		2,061		2,009
Net income attributable to common shareholders		2,114		1,956		2,042		2,249		1,986		2,016		1,965		1,909
Operating performance
Basic earnings per share ($)		1.72		1.60		1.70		1.88		1.66		1.68		1.63		1.58
Diluted earnings per share ($)		1.71		1.55		1.70		1.86		1.64		1.66		1.62		1.57
Return on equity (%)		13.8		13.1		14.9		16.2		14.5		14.8		14.9		14.3
Productivity ratio (%)		54.6		52.5		52.8		49.3		53.8		53.3		54.7		53.7
Core banking margin (%)(2)		2.47		2.46		2.47		2.46		2.44		2.46		2.54		2.40
Financial position information ($ billions)
Cash and deposits with financial institutions		62.3		51.9		61.8		57.4		59.7		57.8		50.9		48.4
Trading assets		100.3		92.9		99.7		105.7		98.5		105.1		111.8		106.5
Loans		551.8		548.6		517.9		503.2		504.4		498.6		496.3		477.4
Total assets		998.5		946.7		926.3		923.2		915.3		906.3		921.6		887.0
Deposits		676.5		654.2		640.6		635.8		625.4		618.1		628.2		604.7
Common equity		61.0		60.8		57.3		55.1		55.5		53.4		55.1		53.0
Preferred shares and other equity instruments		4.2		4.2		4.2		4.6		4.6		3.0		3.0		3.2
Assets under administration		516.0		483.2		471.8		470.9		470.2		481.1		494.2		469.6
Assets under management		282.2		254.8		213.1		210.8		206.7		201.3		205.0		194.0
Capital and liquidity measures
Common Equity Tier 1 (CET1) capital ratio (%)		11.1		11.4		12.0		11.2		11.5		11.3		11.3		11.3
Tier 1 capital ratio (%)		12.5		12.8		13.5		12.7		13.1		12.6		12.5		12.6
Total capital ratio (%)		14.3		14.5		15.3		14.6		14.9		14.8		14.7		14.8
Leverage ratio (%)		4.5		4.9		4.8		4.6		4.7		4.4		4.4		4.5
CET1 risk-weighted assets ($ billions)(3)		400.5		411.4		375.9		382.2		376.4		365.4		374.9		359.6
Liquidity coverage ratio (LCR) (%)		124		125		127		128		125		125		126		132
Credit quality
Net impaired loans ($ millions)(4)		3,453		3,707		3,381		3,288		2,243		2,273		2,510		2,416
Allowance for credit losses ($ millions)(5)		5,154		5,418		5,017		4,923		4,327		4,290		4,591		4,508
Net impaired loans as a % of loans and acceptances(4)		0.60		0.65		0.63		0.63		0.43		0.44		0.49		0.49
Provision for credit losses as a % of average net loans and acceptances (annualized)(6)		0.39		0.69		0.42		0.42		0.42		0.45		0.49		0.45
Provision for credit losses on impaired loans as a % of average net loans and acceptances (annualized)(6)		0.42		0.41		0.46		0.43		0.42		0.45		0.49		0.45
Net write-offs as a % of average net loans and acceptances (annualized)		0.45		0.39		0.45		0.46		0.44		0.54		0.53		0.49
Adjusted results(2)
Adjusted net income ($ millions)		2,345		2,259		2,190		2,350		2,084		2,117		2,075		2,027
Adjusted diluted earnings per share ($)		1.77		1.76		1.71		1.87		1.65		1.68		1.63		1.58
Adjusted return on equity (%)		14.1		14.5		15.0		16.3		14.6		14.8		15.0		14.5
Adjusted productivity ratio (%)		53.2		51.8		52.5		49.1		53.6		53.0		54.4		53.3
Adjusted provision for credit losses ratio as a % of average net loans and acceptances(6)		0.39		0.40		0.42		0.42		0.42		0.45		0.49		0.45
Common share information
Closing share price ($) (TSX)		70.65		77.09		78.92		81.72		83.28		77.67		75.88		77.76
Shares outstanding (millions)
Average – Basic		1,230		1,223		1,198		1,199		1,198		1,200		1,206		1,209
Average – Diluted		1,246		1,240		1,203		1,215		1,215		1,219		1,223		1,229
End of period		1,227		1,232		1,199		1,198		1,199		1,198		1,202		1,208
Dividends paid per share ($)		0.85		0.82		0.82		0.79		0.79		0.76		0.76		0.74
Dividend yield (%)(7)		4.6		4.2		4.2		3.8		4.0		4.0		3.9		4.0
Market capitalization ($ billions) (TSX)		86.7		95.0		94.6		97.9		99.9		93.1		91.2		94.0
Book value per common share ($)		49.75		49.32		47.77		45.98		46.24		44.54		45.86		43.87
Market value to book value multiple		1.4		1.6		1.7		1.8		1.8		1.7		1.7		1.8
Price to earnings multiple (trailing 4 quarters)		10.2		11.3		11.4		11.9		12.7		12.0		12.0		13.1

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Refer to page 18 for a discussion of non-GAAP measures.

(3) Credit valuation adjustment (CVA) risk-weighted assets were calculated using scalars of 0.80, 0.83 and 0.86 to compute CET1, Tier 1 and Total capital ratios, respectively in 2018 (0.72, 0.77 and 0.81 in 2017).

(4) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico, for periods prior to 2018.

(5) Includes allowance for credit losses on all financial assets – loans, acceptances, off-balance sheet exposures, debt securities, and deposits with financial institutions.

(6) Includes provision for credit losses on certain financial assets – loans, acceptances and off-balance sheet exposures.

(7) Based on the average of the high and low common share price for the period.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Eleven-Year Statistical Review

T78 Consolidated Statement of Financial Position

		IFRS
As at October 31 ($ millions)	2018(1)		2017		2016		2015		2014		2013		2012			2011
Assets
Cash and deposits with financial institutions	$	62,269	$	59,663	$	46,344	$	73,927	$	56,730	$	53,338	$	47,337		$	38,723
Precious metals		3,191		5,717		8,442		10,550		7,286		8,880		12,387			9,249
Trading assets
Securities		85,474		78,652		87,287		78,380		95,363		84,196		74,639			62,192
Loans		14,334		17,312		19,421		18,341		14,508		11,225		12,857			13,607
Other		454		2,500		1,853		2,419		3,377		1,068		100			–
		100,262		98,464		108,561		99,140		113,248		96,489		87,596			75,799
Financial instruments designated at fair value through profit or loss		12		13		221		320		111		106		197			375
Securities purchased under resale agreements and securities borrowed		104,018		95,319		92,129		87,312		93,866		82,533		66,189			47,181
Derivative financial instruments		37,558		35,364		41,657		41,003		33,439		24,503		30,338			37,322
Investment securities		78,396		69,269		72,919		43,216		38,662		34,319		33,376			30,176
Loans
Residential mortgages		253,357		236,916		222,888		217,498		212,648		209,865		175,630			161,685
Personal loans		96,019		89,227		86,110		–		–		–		–			–
Credit cards		16,485		14,104		13,392		–		–		–		–			–
Personal and credit cards		–		–		–		91,477		84,204		76,008		68,277			63,317
Business and government		191,038		168,449		162,400		153,850		131,098		119,615		111,648			96,743
		556,899		508,696		484,790		462,825		427,950		405,488		355,555			321,745
Allowance for credit losses		5,065		4,327		4,626		4,197		3,641		3,273		2,977			2,689
		551,834		504,369		480,164		458,628		424,309		402,215		352,578			319,056
Other
Customers’ liability under acceptances, net of allowance		16,329		13,560		11,978		10,296		9,876		10,556		8,932			8,172
Property and equipment		2,684		2,381		2,520		2,286		2,272		2,214		2,218			2,504
Investments in associates		4,850		4,586		4,299		4,033		3,461		5,326		4,791			4,434
Goodwill and other intangible assets		17,719		12,106		12,141		11,449		10,884		10,704		8,692			7,639
Deferred tax assets		1,938		1,713		2,021		2,034		1,763		1,938		2,273			2,214
Other assets		17,433		12,749		12,870		12,303		9,759		10,523		11,321			11,579
		60,953		47,095		45,829		42,401		38,015		41,261		38,227			36,542
	$	998,493	$	915,273	$	896,266	$	856,497	$	805,666	$	743,644	$	668,225		$	594,423
Liabilities
Deposits
Personal	$	214,545	$	200,030	$	199,302	$	190,044	$	175,163	$	171,048	$	138,051		$	133,025
Business and government		422,002		384,988		372,303		375,144		342,367		313,820		293,460			262,833
Financial institutions		39,987		40,349		40,272		35,731		36,487		33,019		34,178			25,376
		676,534		625,367		611,877		600,919		554,017		517,887		465,689			421,234
Financial instruments designated at fair value through profit or loss		8,188		4,663		1,459		1,486		465		174		157			101
Other
Acceptances		16,338		13,560		11,978		10,296		9,876		10,556		8,932			8,172
Obligations related to securities sold short		32,087		30,766		23,312		20,212		27,050		24,977		18,622			15,450
Derivative financial instruments		37,967		34,200		42,387		45,270		36,438		29,267		35,323			40,236
Obligations related to securities sold under repurchase agreements and securities lent		101,257		95,843		97,083		77,015		88,953		77,508		56,968			38,216
Subordinated debentures		5,698		5,935		7,633		6,182		4,871		5,841		10,143			6,923
Capital instruments		–		–		–		–		–		–		–			2,003
Other liabilities		52,744		43,314		42,716		41,638		34,785		32,047		32,726			29,848
		246,091		223,618		225,109		200,613		201,973		180,196		162,714			140,848
		930,813		853,648		838,445		803,018		756,455		698,257		628,560			562,183
Equity
Common equity
Common shares		18,234		15,644		15,513		15,141		15,231		14,516		13,139			8,336
Retained earnings		41,414		38,117		34,752		31,316		28,609		25,068		21,775			18,421
Accumulated other comprehensive income (loss)		992		1,577		2,240		2,455		949		388		(745	)		(497	)
Other reserves		404		116		152		173		176		193		166			96
Total common equity		61,044		55,454		52,657		49,085		44,965		40,165		34,335			26,356
Preferred shares and other equity instruments		4,184		4,579		3,594		2,934		2,934		4,084		4,384			4,384
Total equity attributable to equity holders of the Bank		65,228		60,033		56,251		52,019		47,899		44,249		38,719			30,740
Non-controlling interests
Non-controlling interests in subsidiaries		2,452		1,592		1,570		1,460		1,312		1,138		946			626
Capital instrument equity holders		–		–		–		–		–		–		–			874
Total equity		67,680		61,625		57,821		53,479		49,211		45,387		39,665			32,240
	$	998,493	$	915,273	$	896,266	$	856,497	$	805,666	$	743,644	$	668,225		$	594,423

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

T79 Consolidated Statement of Income

		IFRS
For the year ended October 31 ($ millions)	2018		2017		2016		2015		2014		2013		2012		2011
Revenue
Interest income(1)
Loans	$	24,991	$	21,719	$	20,419	$	18,912	$	18,176	$	17,359	$	15,606	$	14,373
Securities		1,771		1,403		1,237		922		921		1,000		1,045		986
Securities purchased under resale agreements and securities borrowed		446		283		158		161		180		190		221		221
Deposits with financial institutions		859		522		394		292		263		279		287		275
		28,067		23,927		22,208		20,287		19,540		18,828		17,159		15,855
Interest expense
Deposits		10,544		7,878		6,793		6,070		6,173		6,397		6,117		5,589
Subordinated debentures		214		226		232		187		204		339		381		369
Capital instruments		–		–		–		–		–		–		–		138
Other		1,118		788		891		938		858		742		691		745
		11,876		8,892		7,916		7,195		7,235		7,478		7,189		6,841
Net interest income		16,191		15,035		14,292		13,092		12,305		11,350		9,970		9,014
Non-interest income(1)		12,584		12,120		12,058		10,957		11,299		9,949		9,676		8,296
Total revenue		28,775		27,155		26,350		24,049		23,604		21,299		19,646		17,310
Provision for credit losses(1)		2,611		2,249		2,412		1,942		1,703		1,288		1,252		1,076
Non-interest expenses		15,058		14,630		14,540		13,041		12,601		11,664		10,436		9,481
Income before taxes		11,106		10,276		9,398		9,066		9,300		8,347		7,958		6,753
Income tax expense		2,382		2,033		2,030		1,853		2,002		1,737		1,568		1,423
Net income	$	8,724	$	8,243	$	7,368	$	7,213	$	7,298	$	6,610	$	6,390	$	5,330
Net income attributable to non-controlling interests	$	176	$	238	$	251	$	199	$	227	$	231	$	196	$	149
Non-controlling interests in subsidiaries		176		238		251		199		227		231		196		91
Capital instrument equity holders		–		–		–		–		–		–		–		58
Net income attributable to equity holders of the Bank	$	8,548	$	8,005	$	7,117	$	7,014	$	7,071	$	6,379	$	6,194	$	5,181
Preferred shareholders and other equity instrument holders		187		129		130		117		155		217		220		216
Common shareholders	$	8,361	$	7,876	$	6,987	$	6,897	$	6,916	$	6,162	$	5,974	$	4,965
Earnings per common share (in dollars)
Basic	$	6.90	$	6.55	$	5.80	$	5.70	$	5.69	$	5.15	$	5.27	$	4.63
Diluted	$	6.82	$	6.49	$	5.77	$	5.67	$	5.66	$	5.11	$	5.18	$	4.53
Dividends per common share (in dollars)	$	3.28	$	3.05	$	2.88	$	2.72	$	2.56	$	2.39	$	2.19	$	2.05

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T78A Consolidated Balance Sheet – CGAAP

	CGAAP
As at October 31 ($ millions)	2010			2009			2008
Assets
Cash resources	$	46,027		$	43,278		$	37,318
Securities
Trading		64,684			58,067			48,292
Available-for-sale		47,228			55,699			38,823
Equity accounted investments		4,651			3,528			920
		116,563			117,294			88,035
Securities purchased under resale agreements		27,920			17,773			19,451
Loans
Residential mortgages		120,482			101,604			115,084
Personal and credit cards		62,548			61,048			50,719
Business and government		103,981			106,520			125,503
		287,011			269,172			291,306
Allowance for credit losses		2,787			2,870			2,626
		284,224			266,302			288,680
Other
Customers’ liability under acceptances		7,616			9,583			11,969
Derivative instruments		26,852			25,992			44,810
Land, buildings and equipment		2,450			2,372			2,449
Other assets		15,005			13,922			14,913
		51,923			51,869			74,141
	$	526,657		$	496,516		$	507,625
Liabilities and shareholders’ equity
Deposits
Personal	$	128,850		$	123,762		$	118,919
Business and government		210,687			203,594			200,566
Banks		22,113			23,063			27,095
		361,650			350,419			346,580
Other
Acceptances		7,616			9,583			11,969
Obligations related to securities sold under repurchase agreements		40,286			36,568			36,506
Obligations related to securities sold short		21,519			14,688			11,700
Derivative instruments		31,990			28,806			42,811
Other liabilities		28,947			24,682			31,063
		130,358			114,327			134,049
Subordinated debentures		5,939			5,944			4,352
Capital instrument liabilities		500			500			500
Shareholders’ equity
Preferred shares		3,975			3,710			2,860
Common shareholders’ equity
Common shares and contributed surplus		5,775			4,946			3,829
Retained earnings		21,932			19,916			18,549
Accumulated other comprehensive income (loss)		(4,051	)		(3,800	)		(3,596	)
Total common shareholders’ equity		23,656			21,062			18,782
Total equity attributable to equity holders of the Bank		27,631			24,772			21,642
Non-controlling interests		579			554			502
Total shareholders’ equity		28,210			25,326			22,144
	$	526,657		$	496,516		$	507,625

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

T79A Consolidated Statement of Income – CGAAP

	CGAAP
For the year ended October 31 ($ millions)	2010		2009		2008
Interest income
Loans	$	12,171	$	13,973	$	15,832
Securities		4,227		4,090		4,615
Securities purchased under resale agreements		201		390		786
Deposits with banks		292		482		1,083
		16,891		18,935		22,316
Interest expense
Deposits		6,768		8,339		12,131
Subordinated debentures		289		285		166
Capital instrument liabilities		37		37		37
Other		1,176		1,946		2,408
		8,270		10,607		14,742
Net interest income		8,621		8,328		7,574
Provision for credit losses		1,239		1,744		630
Net interest income after provision for credit losses		7,382		6,584		6,944
Other income		6,884		6,129		4,302
Net interest and other income		14,266		12,713		11,246
Non-interest expenses
Salaries and employee benefits		4,647		4,344		4,109
Other		3,535		3,575		3,187
		8,182		7,919		7,296
Income before income taxes		6,084		4,794		3,950
Provision for income taxes		1,745		1,133		691
Net income	$	4,339	$	3,661	$	3,259
Net income attributable to non-controlling interests	$	100	$	114	$	119
Net income attributable to equity holders of the Bank		4,239		3,547		3,140
Preferred shareholders		201		186		107
Common shareholders	$	4,038	$	3,361	$	3,033
Average number of common shares outstanding (millions)
Basic		1,032		1,013		987
Diluted		1,034		1,016		993
Earnings per common share (in dollars)(1)
Basic	$	3.91	$	3.32	$	3.07
Diluted	$	3.91	$	3.31	$	3.05
Dividends per common share (in dollars)	$	1.96	$	1.96	$	1.92

(1) The calculation of earnings per share is based on full dollar and share amounts.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T80 Consolidated Statement of Changes in Equity

	IFRS
For the year ended October 31 ($ millions)	2018			2017			2016			2015			2014			2013			2012			2011
Common shares
Balance at beginning of year	$	15,644		$	15,513		$	15,141		$	15,231		$	14,516		$	13,139		$	8,336		$	5,750
Issued		2,708			313			391			104			771			1,377			4,803			2,586
Purchased for cancellation		(118	)		(182	)		(19	)		(194	)		(56	)		–			–			–
Balance at end of year	$	18,234		$	15,644		$	15,513		$	15,141		$	15,231		$	14,516		$	13,139		$	8,336
Retained earnings
Balance at beginning of year		38,117			34,752			31,316			28,609			25,315			21,978			18,421			21,932
IFRS adjustment		(564	)(1)		–			–			–			(247	)		(203	)		(144	)		(6,248	)
Restated balances		37,553			34,752			31,316			28,609			25,068			21,775			18,277			15,684
Net income attributable to common shareholders of the Bank(2)		8,361			7,876			6,987			6,897			6,916			6,162			5,974			4,965
Dividends: Preferred(3)		–			–			–			–			–			–			–			–
Common		(3,985	)		(3,668	)		(3,468	)		(3,289	)		(3,110	)		(2,858	)		(2,493	)		(2,200	)
Purchase of shares for cancellation and premium on redemption		(514	)		(827	)		(61	)		(761	)		(264	)		–			–			–
Other		(1	)		(16	)		(22	)		(140	)(4)		(1	)		(11	)		17			(28	)
Balance at end of year	$	41,414		$	38,117		$	34,752		$	31,316		$	28,609		$	25,068		$	21,775		$	18,421
Accumulated other comprehensive income (loss)
Balance at beginning of year		1,577			2,240			2,455			949			545			(31	)		(497	)		(4,051	)
IFRS adjustment		51	(1)		–			–			–			(157	)		(714	)		32			4,320
Restated balances		1,628			2,240			2,455			949			388			(745	)		(465	)		269
Cumulative effect of adopting new accounting policies		–			–			–			(5	)(5)		–			–			–			–
Other comprehensive income (loss)		(693	)		(663	)		(215	)		1,511			561			1,133			(280	)		(766	)
Other		57			–			–			–			–			–			–			–
Balance at end of year	$	992		$	1,577		$	2,240		$	2,455		$	949		$	388		$	(745	)	$	(497	)
Other reserves(7)
Balance at beginning of year		116			152			173			176			193			166			96			25
Share-based payments(8)		6			8			7			14			30			36			38			46
Other		282			(44	)		(28	)		(17	)		(47	)		(9	)		32			25
Balance at end of year	$	404		$	116		$	152		$	173		$	176		$	193		$	166		$	96
Total common equity	$	61,044		$	55,454		$	52,657		$	49,085		$	44,965		$	40,165		$	34,335		$	26,356
Preferred shares and other equity instruments
Balance at beginning of year		4,579			3,594			2,934			2,934			4,084			4,384			4,384			3,975
Net income attributable to preferred shareholders and other equity instrument holders of the Bank(2)		187			129			130			117			155			217			220			216
Preferred and other equity instrument dividends(3)		(187	)		(129	)		(130	)		(117	)		(155	)		(217	)		(220	)		(216	)
Issued		300			1,560			1,350			–			–			–			–			409
Redeemed		(695	)		(575	)		(690	)		–			(1,150	)		(300	)		–			–
Balance at end of year	$	4,184		$	4,579		$	3,594		$	2,934		$	2,934		$	4,084		$	4,384		$	4,384
Non-controlling interests
Balance at beginning of year		1,592			1,570			1,460			1,312			1,155			1,743			1,500			579
IFRS adjustment		(97	)(1)		–			–			–			(17	)		(797	)		(891	)		936
Restated balances		1,495			1,570			1,460			1,312			1,138			946			609			1,515
Net income attributable to non-controlling interests		176			238			251			199			227			231			196			149
Distributions to non-controlling interests		(199	)		(133	)		(116	)		(86	)		(76	)		(80	)		(44	)		(181	)
Effect of foreign exchange and others		980			(83	)		(25	)		35			23			41			185			17
Balance at end of year	$	2,452		$	1,592		$	1,570		$	1,460		$	1,312		$	1,138		$	946		$	1,500
Total equity at end of year	$	67,680		$	61,625		$	57,821		$	53,479		$	49,211		$	45,387		$	39,665		$	32,240

(1) Refer to Note 4 in the consolidated financial statements.

(2) Under CGAAP, net income attributable to preferred shareholders was included in retained earnings.

(3) Under IFRS, preferred dividends are recorded as a reduction to preferred shareholders’ equity. Under CGAAP, dividends are a reduction to retained earnings.

(4) Includes retrospective adjustments primarily related to foreign currency translation on Allowance for Credit Losses with respect to periods prior to 2013 ($152).

(5) To reflect the adoption of the own credit risk provisions of IFRS 9 pertaining to financial liabilities designated at fair value through profit or loss.

(6) Relates to the adoption of the new accounting standard for impairment and classification of financial instruments under CGAAP.

(7) Under CGAAP, amounts represent Contributed Surplus.

(8) Represents amounts on account of share-based payments (refer to Note 26 in the consolidated financial statements).

T81 Consolidated Statement of Comprehensive Income

	IFRS
For the year ended October 31 ($ millions)	2018			2017			2016			2015			2014			2013		2012			2011
Net income	$	8,724		$	8,243		$	7,368		$	7,213		$	7,298		$	6,610	$	6,390		$	5,330
Other comprehensive income (loss), net of income taxes:
Items that will be reclassified subsequently to net income
Net change in unrealized foreign currency translation gains (losses)		(606	)		(1,259	)		396			1,855			889			346		149			(697	)
Net change in unrealized gains (losses) on available-for-sale securities (debt and equity)(1)		n/a			(55	)		(172	)		(480	)		(38	)		110		151			(169	)
Net change in fair value due to change in debt instruments measured at fair value through other comprehensive income(1)		(252	)		n/a			n/a			n/a			n/a			n/a		n/a			n/a
Net change in gains (losses) on derivative instruments designated as cash flow hedges		(361	)		(28	)		258			55			(6	)		93		116			105
Other comprehensive income (loss) from investments in associates		66			56			31			(9	)		60			20		25			–
Items that will not be reclassified subsequently to net income
Net change in remeasurement of employee benefit plan asset and liability		318			592			(716	)		(1	)		(320	)		563		(747	)		–
Net change in fair value due to change in equity instruments designated at fair value through other comprehensive income(1)		60			n/a			n/a			n/a			n/a			n/a		n/a			n/a
Net change in fair value due to change in own credit risk on financial liabilities designated under the fair value option(2)		(22	)		(21	)		(16	)		15			n/a			n/a		n/a			n/a
Other comprehensive income (loss) from investments in associates		(7	)		6			(10	)		1			(2	)		–		–			–
Other comprehensive income (loss)		(804	)		(709	)		(229	)		1,436			583			1,132		(306	)		(761	)
Comprehensive income	$	7,920		$	7,534		$	7,139		$	8,649		$	7,881		$	7,742	$	6,084		$	4,569
Comprehensive income attributable to:
Common shareholders of the Bank	$	7,668		$	7,213		$	6,772		$	8,408		$	7,477		$	7,298	$	5,694		$	4,199
Preferred shareholders and other equity instrument holders of the Bank		187			129			130			117			155			217		220			216
Non-controlling interests in subsidiaries		65			192			237			124			249			227		170			96
Capital instrument equity holders		–			–			–			–			–			–		–			58
	$	7,920		$	7,534		$	7,139		$	8,649		$	7,881		$	7,742	$	6,084		$	4,569

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) In accordance with the transition requirements for the own credit risk provisions of IFRS 9, prior year comparatives have not been restated for the adoption of this standard in 2015.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

CGAAP
2010			2009			2008
$	4,946		$	3,829		$	3,566
	804			1,117			266
	–			–			(3	)
$	5,750		$	4,946		$	3,829
	19,916			18,549			17,460
	–			–			–
	19,916			18,549			17,460
	4,239			3,547			3,140
	(201	)		(186	)		(107	)
	(2,023	)		(1,990	)		(1,896	)
	–			–			(37	)
	1			(4	)		(11	)
$	21,932		$	19,916		$	18,549
	(3,800	)		(3,596	)		(3,857	)
	–			–			–
	(3,800	)		(3,596	)		(3,857	)
	–			595	(6)		–
	(251	)		(799	)		261
	–			–			–
$	(4,051	)	$	(3,800	)	$	(3,596	)
	–			–			–
	25			–			–
	–			–			–
$	25		$	–		$	–
$	23,656		$	21,062		$	18,782
	3,710			2,860			1,635
	–			–			–
	–			–			–
	265			850			1,225
	–			–			–
$	3,975		$	3,710		$	2,860
	554			502			n/a
	–			–			–
	554			502			n/a
	100			114			n/a
	(35	)		(36	)		n/a
	(40	)		(26	)		n/a
$	579		$	554		$	502
$	28,210		$	25,326		$	22,144

CGAAP
2010			2009			2008
$	4,339		$	3,661		$	3,259
	(591	)		(1,736	)		2,368
	278			894			(1,588	)
	n/a			n/a			n/a
	62			43			(519	)
	–			–			–
	–			–			–
	n/a			n/a			n/a
	n/a			n/a			n/a
	–			–			–
	(251	)		(799	)		261
$	4,088		$	2,862		$	3,520
$	3,787		$	2,562		$	3,294
	201			186			107
	100			114			119
	–			–			–
$	4,088		$	2,862		$	3,520

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MANAGEMENT’S DISCUSSION AND ANALYSIS

T82 Other statistics

	IFRS
For the year ended October 31	2018(1)		2017		2016		2015		2014		2013		2012		2011
Operating performance
Basic earnings per share ($)		6.90		6.55		5.80		5.70		5.69		5.15		5.27		4.63
Diluted earnings per share ($)		6.82		6.49		5.77		5.67		5.66		5.11		5.18		4.53
Return on equity (%)		14.5		14.6		13.8		14.6		16.1		16.6		19.9		20.3
Productivity ratio (%)		52.3		53.9		55.2		54.2		53.4		54.8		53.1		54.8
Return on assets (%)		0.92		0.90		0.81		0.84		0.92		0.88		0.97		0.91
Core banking margin (%)(2)		2.46		2.46		2.38		2.39		2.39		2.31		2.31		2.32
Net interest margin on total average assets (%)		n/a		n/a		n/a		n/a		n/a		n/a		n/a		n/a
Capital measures(3)
Common Equity Tier 1 (CET1) capital ratio (%)		11.1		11.5		11.0		10.3		10.8		9.1		n/a		n/a
Tier 1 capital ratio (%)		12.5		13.1		12.4		11.5		12.2		11.1		13.6		12.2
Total capital ratio (%)		14.3		14.9		14.6		13.4		13.9		13.5		16.7		13.9
Leverage ratio (%)		4.5		4.7		4.5		4.2		n/a		n/a		n/a		n/a
Common share information
Closing share price ($) (TSX)		70.65		83.28		72.08		61.49		69.02		63.39		54.25		52.53
Number of shares outstanding (millions)		1,227		1,199		1,208		1,203		1,217		1,209		1,184		1,089
Dividends paid per share ($)		3.28		3.05		2.88		2.72		2.56		2.39		2.19		2.05
Dividend yield (%)(4)		4.2		4.0		4.7		4.4		3.8		4.1		4.2		3.7
Price to earnings multiple (trailing 4 quarters)		10.2		12.7		12.4		10.8		12.1		12.3		10.3		11.3
Book value per common share ($)		49.75		46.24		43.59		40.80		36.96		33.23		28.99		24.20
Other information
Average total assets ($ millions)		945,683		912,619		913,844		860,607		795,641		748,901		659,538		586,101
Number of branches and offices		3,095		3,003		3,113		3,177		3,288		3,330		3,123		2,926
Number of employees		97,629		88,645		88,901		89,214		86,932		86,690		81,497		75,362
Number of automated banking machines		9,029		8,140		8,144		8,191		8,732		8,471		7,341		6,260

(1) The amounts for 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4 in the consolidated financial statements).

(2) Refer to page 18 for a discussion of non-GAAP measures.

(3) Effective November 1, 2012, regulatory capital ratios are determined in accordance with Basel III rules as an all-in basis. Comparative amounts for periods 2012-2008 were determined in accordance with Basel II rules.

(4) Based on the average of the high and low common share price for the year.

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MANAGEMENT’S DISCUSSION AND ANALYSIS    |    SUPPLEMENTARY DATA

CGAAP
2010		2009		2008
	3.91		3.32		3.07
	3.91		3.31		3.05
	18.3		16.7		16.7
	52.8		54.8		61.4
	0.84		0.71		0.72
	n/a		n/a		n/a
	1.67		1.62		1.66
	n/a		n/a		n/a
	11.8		10.7		9.3
	13.8		12.9		11.1
	n/a		n/a		n/a
	54.67		45.25		40.19
	1,043		1,025		992
	1.96		1.96		1.92
	3.9		5.4		4.3
	14.0		13.6		13.1
	22.68		20.55		18.94
	515,991		513,149		455,539
	2,784		2,686		2,672
	70,772		67,802		69,049
	5,978		5,778		5,609

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EX-99.3

CONSOLIDATED FINANCIAL STATEMENTS 

Table of Contents

140	Management’s Responsibility for Financial Information
141	Independent Auditors’ Report of Registered Public Accounting Firm
142	Consolidated Statement of Financial Position
143	Consolidated Statement of Income
144	Consolidated Statement of Comprehensive Income
145	Consolidated Statement of Changes in Equity
146	Consolidated Statement of Cash Flows
147	Notes to the 2018 Consolidated Financial Statements

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CONSOLIDATED FINANCIAL STATEMENTS

Management’s Responsibility for Financial Information

The management of The Bank of Nova Scotia (the Bank) is responsible for the integrity and fair presentation of the financial information contained in this Annual Report. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The consolidated financial statements also comply with the accounting requirements of the Bank Act.

The consolidated financial statements, where necessary, include amounts which are based on the best estimates and judgment of management. Financial information presented elsewhere in this Annual Report is consistent with that shown in the consolidated financial statements.

Management has always recognized the importance of the Bank maintaining and reinforcing the highest possible standards of conduct in all of its actions, including the preparation and dissemination of statements fairly presenting the financial condition of the Bank. In this regard, management has developed and maintains a system of accounting and reporting which provides for the necessary internal controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition, and liabilities are recognized. The system is augmented by written policies and procedures, the careful selection and training of qualified staff, the establishment of organizational structures providing an appropriate and well-defined division of responsibilities, and the communication of policies and guidelines of Scotiabank’s Code of Conduct throughout the Bank.

Management, under the supervision of and the participation of the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, have a process in place to evaluate disclosure controls and procedures and internal control over financial reporting in line with Canadian and U.S. securities regulations.

The system of internal controls is further supported by a professional staff of internal auditors who conduct periodic audits of all aspects of the Bank’s operations. As well, the Bank’s Chief Auditor has full and free access to, and meets periodically with the Audit and Conduct Review Committee of the Board of Directors. In addition, the Bank’s compliance function maintains policies, procedures and programs directed at ensuring compliance with regulatory requirements, including conflict of interest rules.

The Office of the Superintendent of Financial Institutions Canada, which is mandated to protect the rights and interests of the depositors and creditors of the Bank, examines and enquires into the business and affairs of the Bank, as deemed necessary, to determine whether the provisions of the Bank Act are being complied with, and that the Bank is in a sound financial condition.

The Audit and Conduct Review Committee, composed entirely of outside directors, reviews the consolidated financial statements with both management and the independent auditors before such statements are approved by the Board of Directors and submitted to the shareholders of the Bank.

The Audit and Conduct Review Committee reviews and reports its findings to the Board of Directors on all related party transactions that may have a material impact on the Bank.

KPMG LLP, the independent auditors appointed by the shareholders of the Bank, have audited the consolidated financial position of the Bank as at October 31, 2018 and October 31, 2017 and its consolidated financial performance and its consolidated cash flows for each of the years in the three-year period ended October 31, 2018 prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board in accordance with Canadian Generally Accepted Auditing Standards and the standards of the Public Company Accounting Oversight Board (United States) and the effectiveness of internal control over financial reporting and have expressed their opinions upon completion of such audits in the following report to the shareholders. The Shareholders’ Auditors have full and free access to, and meet periodically with, the Audit and Conduct Review Committee to discuss their audits, including any findings as to the integrity of the Bank’s accounting, financial reporting and related matters.

Brian J. Porter

President and Chief Executive Officer

Raj Viswanathan

Executive Vice President and Chief Financial Officer

Toronto, Canada

November 27, 2018

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CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors’ Report of Registered Public Accounting Firm

To the Shareholders of The Bank of Nova Scotia

We have audited the accompanying consolidated financial statements of The Bank of Nova Scotia (the “Bank”), which comprise the consolidated statements of financial position as at October 31, 2018 and October 31, 2017, the consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended October 31, 2018, and the related notes, comprising a summary of significant accounting policies and other explanatory information (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Bank as at October 31, 2018 and October 31, 2017, and its consolidated financial performance and its consolidated cash flows for each of the years in the three-year period ended October 31, 2018 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Change in Accounting Principle

Without qualifying our opinion on the consolidated financial statements, we draw attention to Note 4 to the consolidated financial statements, which indicates that the Bank has changed its method of accounting for financial instruments in 2018 due to the adoption of International Financial Reporting Standard 9 Financial Instruments.

Report on Internal Control Over Financial Reporting

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Bank’s internal control over financial reporting as of October 31, 2018, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated November 27, 2018 expressed an unqualified (unmodified) opinion on the effectiveness of the Bank’s internal control over financial reporting.

Basis for Opinion

A – Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

B – Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement, whether due to error or fraud. Those standards also require that we comply with ethical requirements, including independence. We are required to be independent with respect to the Bank in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We are a public accounting firm registered with the PCAOB.

An audit includes performing procedures to assess the risks of material misstatements of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included obtaining and examining, on a test basis, audit evidence regarding the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Bank’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of accounting policies and principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a reasonable basis for our audit opinion.

Chartered Professional Accountants, Licensed Public Accountants

We have served as the Bank’s auditor since 2006 and as joint auditor for the prior 14 years.

November 27, 2018

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Financial Position
As at October 31 ($ millions)	Note			2018(1)		2017
Assets
Cash and deposits with financial institutions		6		$	62,269	$	59,663
Precious metals					3,191		5,717
Trading assets
Securities		8	(a)		85,474		78,652
Loans		8	(b)		14,334		17,312
Other					454		2,500
					100,262		98,464
Financial instruments designated at fair value through profit or loss		9			12		13
Securities purchased under resale agreements and securities borrowed					104,018		95,319
Derivative financial instruments		10			37,558		35,364
Investment securities		12			78,396		69,269
Loans
Residential mortgages		13			253,357		236,916
Personal loans		13			96,019		89,227
Credit cards		13			16,485		14,104
Business and government		13			191,038		168,449
					556,899		508,696
Allowance for credit losses		13	(e)		5,065		4,327
					551,834		504,369
Other
Customers’ liability under acceptances, net of allowance					16,329		13,560
Property and equipment		16			2,684		2,381
Investments in associates		17			4,850		4,586
Goodwill and other intangible assets		18			17,719		12,106
Deferred tax assets		27	(c)		1,938		1,713
Other assets		19			17,433		12,749
					60,953		47,095
				$	998,493	$	915,273
Liabilities
Deposits
Personal		20		$	214,545	$	200,030
Business and government		20			422,002		384,988
Financial institutions		20			39,987		40,349
					676,534		625,367
Financial instruments designated at fair value through profit or loss		9			8,188		4,663
Other
Acceptances					16,338		13,560
Obligations related to securities sold short					32,087		30,766
Derivative financial instruments		10			37,967		34,200
Obligations related to securities sold under repurchase agreements and securities lent					101,257		95,843
Subordinated debentures		21			5,698		5,935
Other liabilities		22			52,744		43,314
					246,091		223,618
					930,813		853,648
Equity
Common equity
Common shares		24	(a)		18,234		15,644
Retained earnings					41,414		38,117
Accumulated other comprehensive income (loss)					992		1,577
Other reserves					404		116
Total common equity					61,044		55,454
Preferred shares and other equity instruments		24	(b)		4,184		4,579
Total equity attributable to equity holders of the Bank					65,228		60,033
Non-controlling interests in subsidiaries		31	(b)		2,452		1,592
					67,680		61,625
				$	998,493	$	915,273

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

Thomas C. O’Neill	Brian J. Porter
Chairman of the Board	President and Chief Executive Officer

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Income

For the year ended October 31 ($ millions)	Note			2018		2017		2016
Revenue
Interest income(1)(2)		32
Loans				$	24,991	$	21,719	$	20,419
Securities					1,771		1,403		1,237
Securities purchased under resale agreements and securities borrowed					446		283		158
Deposits with financial institutions					859		522		394
					28,067		23,927		22,208
Interest expense		32
Deposits					10,544		7,878		6,793
Subordinated debentures					214		226		232
Other					1,118		788		891
					11,876		8,892		7,916
Net interest income					16,191		15,035		14,292
Non-interest income(1)
Banking		33			4,001		3,855		3,669
Wealth management		33			3,341		3,318		3,282
Underwriting and other advisory					514		598		594
Non-trading foreign exchange					622		557		540
Trading revenues(3)		34			1,420		986		1,228
Net gain on sale of investment securities		12	(g)		146		380		534
Net income from investments in associated corporations		17			559		407		414
Insurance underwriting income, net of claims					686		626		603
Other fees and commissions(3)					841		903		732
Other(3)					454		490		462
					12,584		12,120		12,058
Total revenue					28,775		27,155		26,350
Provision for credit losses(1)		13	(e)		2,611		2,249		2,412
					26,164		24,906		23,938
Non-interest expenses
Salaries and employee benefits					7,455		7,375		7,025
Premises and technology					2,577		2,436		2,238
Depreciation and amortization					848		761		684
Communications					447		437		442
Advertising and business development					581		581		617
Professional					881		775		693
Business and capital taxes					464		423		403
Other					1,805		1,842		2,438
					15,058		14,630		14,540
Income before taxes					11,106		10,276		9,398
Income tax expense		27			2,382		2,033		2,030
Net income				$	8,724	$	8,243	$	7,368
Net income attributable to non-controlling interests in subsidiaries		31	(b)		176		238		251
Net income attributable to equity holders of the Bank				$	8,548	$	8,005	$	7,117
Preferred shareholders and other equity instrument holders					187		129		130
Common shareholders				$	8,361	$	7,876	$	6,987
Earnings per common share (in dollars)
Basic		35		$	6.90	$	6.55	$	5.80
Diluted		35			6.82		6.49		5.77
Dividends paid per common share (in dollars)		24	(a)		3.28		3.05		2.88

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

(2) Interest income on financial assets measured at amortized cost and FVOCI is calculated using the effective interest method. Includes interest income of $27,854 for the year ended October 31, 2018 from these financial assets.

(3) Prior year amounts have been reclassified to conform with current period presentation.

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Comprehensive Income

For the year ended October 31 ($ millions)	2018			2017			2016
Net income	$	8,724		$	8,243		$	7,368
Other comprehensive income (loss)
Items that will be reclassified subsequently to net income
Net change in unrealized foreign currency translation gains (losses):
Net unrealized foreign currency translation gains (losses)		(406	)		(1,564	)		614
Net gains (losses) on hedges of net investments in foreign operations		(281	)		404			(300	)
Income tax expense (benefit):
Net unrealized foreign currency translation gains (losses)		(7	)		(8	)		(3	)
Net gains (losses) on hedges of net investments in foreign operations		(74	)		107			(79	)
		(606	)		(1,259	)		396
Net change in unrealized gains (losses) on available-for-sale securities (debt and equity)(1):
Net unrealized gains (losses) on available-for-sale securities		n/a			(217	)		308
Reclassification of net (gains) losses to net income(2)		n/a			143			(549	)
Income tax expense (benefit):
Net unrealized gains (losses) on available-for-sale securities		n/a			(61	)		82
Reclassification of net (gains) losses to net income		n/a			42			(151	)
		n/a			(55	)		(172	)
Net change in fair value due to change in debt instruments measured at fair value through other comprehensive income(1):
Net gains (losses) in fair value		(605	)		n/a			n/a
Reclassification of net (gains) losses to net income		281			n/a			n/a
Income tax expense (benefit):
Net gains (losses) in fair value		(145	)		n/a			n/a
Reclassification of net (gains) losses to net income		73			n/a			n/a
		(252	)		n/a			n/a
Net change in gains (losses) on derivative instruments designated as cash flow hedges:
Net gains (losses) on derivative instruments designated as cash flow hedges		(1,181	)		1,722			(7	)
Reclassification of net (gains) losses(3)		695			(1,761	)		357
Income tax expense (benefit):
Net gains (losses) on derivative instruments designated as cash flow hedges		(307	)		454			9
Reclassification of net (gains) losses to net income		182			(465	)		83
		(361	)		(28	)		258
Other comprehensive income (loss) from investments in associates		66			56			31
Items that will not be reclassified subsequently to net income
Net change in remeasurement of employee benefit plan asset and liability:
Actuarial gains (losses) on employee benefit plans		444			805			(972	)
Income tax expense (benefit)		126			213			(256	)
		318			592			(716	)
Net change in fair value due to change in equity instruments designated at fair value through other comprehensive income(1):
Net gains (losses) in fair value		75			n/a			n/a
Income tax expense (benefit)		15			n/a			n/a
		60			n/a			n/a
Net change in fair value due to change in own credit risk on financial liabilities designated under the fair value option:
Change in fair value due to change in own credit risk on financial liabilities designated under the fair value option		(30	)		(28	)		(23	)
Income tax expense (benefit)		(8	)		(7	)		(7	)
		(22	)		(21	)		(16	)
Other comprehensive income (loss) from investments in associates		(7	)		6			(10	)
Other comprehensive income (loss)		(804	)		(709	)		(229	)
Comprehensive income	$	7,920		$	7,534		$	7,139
Comprehensive income attributable to non-controlling interests		65			192			237
Comprehensive income attributable to equity holders of the Bank	$	7,855		$	7,342		$	6,902
Preferred shareholders and other equity instrument holders		187			129			130
Common shareholders	$	7,668		$	7,213		$	6,772

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Includes amounts related to qualifying hedges.

(3) Amount for 2016 includes reclassification of $22 pre-tax to goodwill for acquisition-related cash flow hedges.

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Changes in Equity

							Accumulated other comprehensive income (loss)
($ millions)	Common shares (Note 24)			Retained earnings(1)			Foreign currency translation			Available- for-sale securities			Debt instruments FVOCI			Equity instruments FVOCI			Cash flow hedges			Other(2)			Other reserves			Total common equity			Preferred shares and other equity instruments (Note 24)			Total attributable to equity holders			Non- controlling interests in subsidiaries (Note 31(b))			Total
Balance as at October 31, 2017	$	15,644		$	38,117		$	1,861		$	(46	)	$	–		$	–		$	235		$	(473	)	$	116		$	55,454		$	4,579		$	60,033		$	1,592		$	61,625
Cumulative effect of adopting IFRS 9(3)		–			(564	)		–			46			184			(179	)		–			–			–			(513	)		–			(513	)		(97	)		(610	)
Balance as at November 1, 2017		15,644			37,553			1,861			–			184			(179	)		235			(473	)		116			54,941			4,579			59,520			1,495			61,015
Net income		–			8,361			–			–			–			–			–			–			–			8,361			187			8,548			176			8,724
Other comprehensive income (loss)		–			–			(477	)		–			(252	)		53			(356	)		339			–			(693	)		–			(693	)		(111	)		(804	)
Total comprehensive income	$	–		$	8,361		$	(477	)	$	–		$	(252	)	$	53		$	(356	)	$	339		$	–		$	7,668		$	187		$	7,855		$	65		$	7,920
Shares issued		2,708			–			–			–			–			–			–			–			(19	)		2,689			300			2,989			–			2,989
Shares repurchased/redeemed		(118	)		(514	)		–			–			–			–			–			–			–			(632	)		(695	)		(1,327	)		–			(1,327	)
Dividends and distributions paid to equity holders		–			(3,985	)		–			–			–			–			–			–			–			(3,985	)		(187	)		(4,172	)		(199	)		(4,371	)
Share-based payments(4)		–			–			–			–			–			–			–			–			6			6			–			6			–			6
Other		–			(1	)		57			–			–			–			–			–			301	(5)		357			–			357			1,091	(5)		1,448
Balance as at October 31, 2018	$	18,234		$	41,414		$	1,441		$	–		$	(68	)		$  (126	)	$	(121	)	$	(134	)	$	404		$	61,044		$	4,184		$	65,228		$	2,452		$	67,680
Balance as at November 1, 2016	$	15,513		$	34,752		$	3,055		$	14		$	–		$	–		$	264		$	(1,093)		$	152		$	52,657		$	3,594		$	56,251		$	1,570		$	57,821
Net income		–			7,876			–			–			–			–			–			–			–			7,876			129			8,005			238			8,243
Other comprehensive income (loss)		–			–			(1,194	)		(60	)		–			–			(29	)		620			–			(663	)		–			(663	)		(46	)		(709	)
Total comprehensive income	$	–		$	7,876		$	(1,194	)	$	(60	)	$	–		$	–		$	(29	)	$	620		$	–		$	7,213		$	129		$	7,342		$	192		$	7,534
Shares and other equity instruments issued		313			–			–			–			–			–			–			–			(44	)		269			1,560			1,829			–			1,829
Shares repurchased/redeemed		(182	)		(827	)		–			–			–			–			–			–			–			(1,009	)		(575	)		(1,584	)		–			(1,584	)
Dividends and distributions paid to equity holders		–			(3,668	)		–			–			–			–			–			–			–			(3,668	)		(129	)		(3,797	)		(133	)		(3,930	)
Share-based payments(4)		–			–			–			–			–			–			–			–			8			8			–			8			–			8
Other		–			(16	)		–			–			–			–			–			–			–			(16	)		–			(16	)		(37	)(5)		(53	)
Balance as at October 31, 2017	$	15,644		$	38,117		$	1,861		$	(46	)	$	–		$	–		$	235		$	(473	)	$	116		$	55,454		$	4,579		$	60,033		$	1,592		$	61,625
Balance as at November 1, 2015	$	15,141		$	31,316		$	2,633		$	194		$	–		$	–		$	7		$	(379	)	$	173		$	49,085		$	2,934		$	52,019		$	1,460		$	53,479
Net income		–			6,987			–			–			–			–			–			–			–			6,987			130			7,117			251			7,368
Other comprehensive income (loss)		–			–			422			(180	)		–			–			257			(714	)		–			(215	)		–			(215	)		(14	)		(229	)
Total comprehensive income	$	–		$	6,987		$	422		$	(180	)	$	–		$	–		$	257		$	(714	)	$	–		$	6,772		$	130		$	6,902		$	237		$	7,139
Shares issued		391			–			–			–			–			–			–			–			(28	)		363			1,350			1,713			–			1,713
Shares repurchased/redeemed		(19	)		(61	)		–			–			–			–			–			–			–			(80	)		(690	)		(770	)		–			(770	)
Dividends and distributions paid to equity holders		–			(3,468	)		–			–			–			–			–			–			–			(3,468	)		(130	)		(3,598	)		(116	)		(3,714	)
Share-based payments(4)		–			–			–			–			–			–			–			–			7			7			–			7			–			7
Other		–			(22	)		–			–			–			–			–			–			–			(22	)		–			(22	)		(11	)(5)		(33	)
Balance as at October 31, 2016	$	15,513		$	34,752		$	3,055		$	14		$	–		$	–		$	264		$	(1,093	)	$	152		$	52,657		$	3,594		$	56,251		$	1,570		$	57,821

(1) Includes undistributed retained earnings of $62 (2017 – $61; 2016 – $63) related to a foreign associated corporation, which is subject to local regulatory restriction.

(2) Includes Share from associates, Employee benefits and Own credit risk.

(3) Refer to Note 4.

(4) Represents amounts on account of share-based payments (refer to Note 26).

(5) Includes changes to non-controlling interests arising from business combinations and related transactions.

The accompanying notes are an integral part of these consolidated financial statements    

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Cash Flows

Sources (uses) of cash flows for the year ended October 31 ($ millions)	2018(1)			2017			2016
Cash flows from operating activities
Net income	$	8,724		$	8,243		$	7,368
Adjustment for:
Net interest income		(16,191	)		(15,035	)		(14,292	)
Depreciation and amortization		848			761			684
Provision for credit losses		2,611			2,249			2,412
Equity-settled share-based payment expense		6			8			7
Net gain on sale of investment securities		(146	)		(380	)		(534	)
Net gain on disposition of business		–			(62	)		(116	)
Net income from investments in associated corporations		(559	)		(407	)		(414	)
Income tax expense		2,382			2,033			2,030
Restructuring charge		–			–			378
Changes in operating assets and liabilities:
Trading assets		111			8,377			(10,044	)
Securities purchased under resale agreements and securities borrowed		(7,721	)		(4,631	)		(5,363	)
Loans		(31,848	)		(32,589	)		(20,355	)
Deposits		40,338			27,516			6,702
Obligations related to securities sold short		239			7,533			4,007
Obligations related to securities sold under repurchase agreements and securities lent		4,387			849			20,865
Net derivative financial instruments		440			(391	)		(3,806	)
Other, net		(188	)		(1,997	)		2,293
Dividends received		332			1,600			873
Interest received		27,384			23,649			21,099
Interest paid		(11,400	)		(8,730	)		(7,787	)
Income tax paid		(1,938	)		(2,012	)		(1,471	)
Net cash from/(used in) operating activities		17,811			16,584			4,536
Cash flows from investing activities
Interest-bearing deposits with financial institutions		(704	)		(14,006	)		28,447
Purchase of investment securities		(91,896	)		(64,560	)		(94,441	)
Proceeds from sale and maturity of investment securities		84,336			66,179			65,069
Acquisition/sale of subsidiaries, associated corporations or business units, net of cash acquired		(3,862	)		229			(1,050	)
Property and equipment, net of disposals		(416	)		3			(348	)
Other, net		(1,183	)		(385	)		(431	)
Net cash from/(used in) investing activities		(13,725	)		(12,540	)		(2,754	)
Cash flows from financing activities
Proceeds from issue of subordinated debentures		–			–			2,465
Redemption/repayment of subordinated debentures		(233	)		(1,500	)		(1,035	)
Proceeds from common shares issued		1,830			313			391
Proceeds from preferred shares and other equity instruments issued		300			1,560			1,350
Redemption of preferred shares		(695	)		(575	)		(690	)
Common shares purchased for cancellation		(632	)		(1,009	)		(80	)
Cash dividends and distributions paid		(4,172	)		(3,797	)		(3,598	)
Distributions to non-controlling interests		(199	)		(133	)		(116	)
Other, net		931			2,209			(320	)
Net cash from/(used in) financing activities		(2,870	)		(2,932	)		(1,633	)
Effect of exchange rate changes on cash and cash equivalents		(44	)		(142	)		(18	)
Net change in cash and cash equivalents		1,172			970			131
Cash and cash equivalents at beginning of year(2)		7,825			6,855			6,724
Cash and cash equivalents at end of year(2)	$	8,997		$	7,825		$	6,855

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

(2) Represents cash and non-interest bearing deposits with financial institutions (refer to Note 6).

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO THE 2018 CONSOLIDATED FINANCIAL STATEMENTS 

Table of Contents

Page	Note
148	1	Reporting entity
148	2	Basis of preparation
149	3	Significant accounting policies
165	4	Transition to IFRS 9
168	5	Future accounting developments
169	6	Cash and deposits with financial institutions
169	7	Fair value of financial instruments
176	8	Trading assets
177	9	Financial instruments designated at fair value through profit or loss
178	10	Derivative financial instruments
185	11	Offsetting financial assets and financial liabilities
186	12	Investment securities
189	13	Loans, impaired loans and allowance for credit losses
197	14	Derecognition of financial assets
198	15	Structured entities
201	16	Property and equipment
201	17	Investments in associates
202	18	Goodwill and other intangible assets
203	19	Other assets

Page	Note
204	20	Deposits
204	21	Subordinated debentures
205	22	Other liabilities
205	23	Provisions
205	24	Common shares, preferred shares and other equity instruments
209	25	Capital management
209	26	Share-based payments
212	27	Corporate income taxes
214	28	Employee benefits
219	29	Operating segments
221	30	Related party transactions
223	31	Principal subsidiaries and non-controlling interests in subsidiaries
224	32	Interest income and expense
225	33	Non-interest income
225	34	Trading revenues
225	35	Earnings per share
226	36	Guarantees, commitments and pledged assets
228	37	Financial instruments – risk management
235	38	Business combinations

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CONSOLIDATED FINANCIAL STATEMENTS

1 Reporting Entity

The Bank of Nova Scotia (the Bank) is a chartered schedule I bank under the Bank Act (Canada) (the Bank Act) and is regulated by the Office of the Superintendent of Financial Institutions (OSFI). The Bank is a global financial services provider offering a diverse range of products and services, including personal, commercial, corporate and investment banking. The head office of the Bank is located at 1709 Hollis Street, Halifax, Nova Scotia, Canada and its executive offices are at Scotia Plaza, 44 King Street West, Toronto, Canada. The common shares of the Bank are listed on the Toronto Stock Exchange and the New York Stock Exchange.

2 Basis of Preparation

Statement of compliance

These consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB) and accounting requirements of OSFI in accordance with Section 308 of the Bank Act. Section 308 states that, except as otherwise specified by OSFI, the financial statements are to be prepared in accordance with IFRS.

The consolidated financial statements for the year ended October 31, 2018 have been approved by the Board of Directors for issue on November 27, 2018.

Certain comparative amounts have been restated to conform with the basis of presentation in the current year.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items that are measured at fair value in the Consolidated Statement of Financial Position:

• Financial assets and liabilities measured at fair value through profit or loss

• Financial assets and liabilities designated at fair value through profit or loss

• Derivative financial instruments

• Available-for-sale investment securities (applicable prior to November 1, 2017)

• Equity instruments designated at fair value through other comprehensive income (effective November 1, 2017)

• Debt instruments measured at fair value through other comprehensive income (effective November 1, 2017)

Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars, which is the Bank’s functional currency. All financial information presented in Canadian dollars has been rounded to the nearest million unless otherwise stated.

Management’s use of estimates, assumptions and judgments

The Bank’s accounting policies require estimates, assumptions and judgments that relate to matters that are inherently uncertain. The Bank has established procedures to ensure that accounting policies are applied consistently. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected.

Use of estimates and assumptions

The preparation of these consolidated financial statements, in conformity with IFRS, requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the consolidated financial statements, other comprehensive income and income and expenses during the reporting period. Estimates made by management are based on historical experience and other assumptions that are believed to be reasonable. Key areas of estimation uncertainty include those relating to the allowance for credit losses, the fair value of financial instruments (including derivatives), corporate income taxes, employee benefits, goodwill and intangible assets, the fair value of all identifiable assets and liabilities as a result of business combinations, impairment of non-financial assets, derecognition of financial assets and liabilities and provisions. While management makes its best estimates and assumptions, actual results could differ from these and other estimates.

Significant judgments

In the preparation of these consolidated financial statements, management is required to make significant judgments in the classification and presentation of transactions and instruments and accounting for involvement with other entities.

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CONSOLIDATED FINANCIAL STATEMENTS

Significant estimates, assumptions and judgments have been made in the following areas and are discussed as noted in the consolidated financial statements:

Allowance for credit losses	Note 3 Note 13(d)
Fair value of financial instruments	Note 3 Note 7
Corporate income taxes	Note 3 Note 27
Employee benefits	Note 3 Note 28
Goodwill and intangible assets	Note 3 Note 18
Fair value of all identifiable assets and liabilities as a result of business combinations	Note 3 Note 38
Impairment of investment securities	Note 3 Note 12
Impairment of non-financial assets	Note 3 Note 16
Structured entities	Note 3 Note 15
De facto control of other entities	Note 3 Note 31
Derecognition of financial assets and liabilities	Note 3 Note 14
Provisions	Note 3 Note 23

3 Significant Accounting Policies

The significant accounting policies used in the preparation of these consolidated financial statements, including any additional accounting requirements of OSFI, as set out below, have been applied consistently to all periods presented in these consolidated financial statements, with the exception of the adoption of IFRS 9 (refer Note 4).

Basis of consolidation

The consolidated financial statements include the assets, liabilities, financial performance and cash flows of the Bank and all of its subsidiaries, after elimination of intercompany transactions and balances. Subsidiaries are defined as entities controlled by the Bank and exclude associates and joint arrangements. The Bank’s subsidiaries can be classified as entities controlled through voting interests or structured entities. The Bank consolidates a subsidiary from the date it obtains control. The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. For the Bank to control an entity, all of the three elements of control should be in existence:

• power over the investee;

• exposure, or rights, to variable returns from involvement with the investee; and

• the ability to use power over the investee to affect the amount of the Bank’s returns.

The Bank does not control an investee when it is acting as an agent. The Bank assesses whether it is an agent by determining whether it is primarily engaged to act on behalf of and for the benefit of another party or parties. The Bank reassesses whether it controls an investee if facts and circumstances indicate that one or more of the elements of control has changed. Non-controlling interests are presented within equity in the Consolidated Statement of Financial Position separate from equity attributable to equity holders of the Bank. Partial sales and incremental purchases of interests in subsidiaries that do not result in a change of control are accounted for as equity transactions with non-controlling interest holders. Any difference between the carrying amount of the interest and the transaction amount is recorded as an adjustment to retained earnings.

Voting-interest subsidiaries

Control is presumed with an ownership interest of more than 50% of the voting rights in an entity unless there are other factors that indicate that the Bank does not control the entity despite having more than 50% of voting rights.

The Bank may consolidate an entity when it owns less than 50% of the voting rights when it has one or more other attributes of power:

• by virtue of an agreement, over more than half of the voting rights;

• to govern the financial and operating policies of the entity under a statute or an agreement;

• to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or

• to govern the financial and operating policies of the entity through the size of its holding of voting rights relative to the size and dispersion of holding of the other vote holders and voting patterns at shareholder meetings (i.e., de facto control).

Structured entities

Structured entities are designed to accomplish certain well-defined objectives and for which voting or similar rights are not the dominant factor in deciding who controls the entity. The Bank may become involved with structured entities either at the formation stage or at a later date. The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Bank consolidates all structured entities that it controls.

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CONSOLIDATED FINANCIAL STATEMENTS

Investments in associates

An associate is an entity in which the Bank has significant influence, but not control, over the operating and financial policies of the entity. Significant influence is ordinarily presumed to exist when the Bank holds between 20% and 50% of the voting rights. The Bank may also be able to exercise significant influence through board representation. The effects of potential voting rights that are currently exercisable or convertible are considered in assessing whether the Bank has significant influence.

Investments in associates are recognized initially at cost, which includes the purchase price and other costs directly attributable to the purchase. Associates are accounted for using the equity method which reflects the Bank’s share of the increase or decrease of the post-acquisition earnings and other movements in the associate’s equity.

If there is a loss of significant influence and the investment ceases to be an associate, equity accounting is discontinued from the date of loss of significant influence. If the retained interest on the date of loss of significant influence is a financial asset, it is measured at fair value and the difference between the fair value and the carrying value is recorded as an unrealized gain or loss in the Consolidated Statement of Income.

Investments in associates are evaluated for impairment at the end of each financial reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

For purposes of applying the equity method for an investment that has a different reporting period from the Bank, adjustments are made for the effects of any significant events or transactions that occur between the reporting date of the investment and the reporting date of the Bank.

Joint arrangements

A joint arrangement is an arrangement over which two or more parties have joint control. Joint control exists only when decisions about the relevant activities (i.e., those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing the control of the arrangement. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.

Similar to accounting for investment in associates, for joint ventures, investments are recognized initially at cost and accounted for using the equity method which reflects the Bank’s share of the increase or decrease of the post-acquisition earnings and other movements in the joint venture’s equity. Investments in joint ventures are evaluated for impairment at the end of each financial reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

If there is a loss of joint control and it does not result in the Bank having significant influence over the joint venture, equity accounting is discontinued from the date of loss of joint control. If the retained interest in the former joint venture on the date of loss of joint control is a financial asset, it is measured at fair value and the difference between the fair value and the carrying value is recorded as an unrealized gain or loss in the Consolidated Statement of Income.

Translation of foreign currencies

The financial statements of each of the Bank’s foreign operations are measured using its functional currency, being the currency of the primary economic environment of the foreign operation.

Translation gains and losses related to the Bank’s monetary items are recognized in non-interest income in the Consolidated Statement of Income. Revenues and expenses denominated in foreign currencies are translated using average exchange rates, except for depreciation and amortization of buildings, equipment and leasehold improvements of the Bank, purchased in foreign currency, which are translated using historical rates. Foreign currency non-monetary items that are measured at historical cost are translated into the functional currency at historical rates. Foreign currency non-monetary items measured at fair value are translated into functional currency using the rate of exchange at the date the fair value was determined. Foreign currency gains and losses on non-monetary items are recognized in the Consolidated Statement of Income or Consolidated Statement of Comprehensive Income consistent with the gain or loss on the non-monetary item.

Unrealized gains and losses arising upon translation of foreign operations, together with any gains or losses arising from hedges of those net investment positions to the extent effective, are credited or charged to net change in unrealized foreign currency translation gains/losses in other comprehensive income in the Consolidated Statement of Comprehensive Income. On disposal or partial disposal of a foreign operation, an appropriate portion of the translation differences previously recognized in other comprehensive income are recognized in the Consolidated Statement of Income.

Financial assets and liabilities

Recognition and initial measurement

The Bank, on the date of origination or purchase, recognizes loans, debt and equity securities, deposits and subordinated debentures at the fair value of consideration paid. Regular-way purchases and sales of financial assets are recognized on the settlement date. All other financial assets and liabilities, including derivatives, are initially recognized on the trade date at which the Bank becomes a party to the contractual provisions of the instrument.

The initial measurement of a financial asset or liability is at fair value plus transaction costs that are directly attributable to its purchase or issuance. For instruments measured at fair value through profit or loss, transaction costs are recognized immediately in profit or loss.

Classification and measurement, derecognition, and impairment of financial instruments effective November 1, 2017

Classification and measurement

Classification and measurement of financial assets

Financial assets are classified into one of the following measurement categories:

• Amortized cost;

• Fair value through other comprehensive income (FVOCI);

• Fair value through profit or loss (FVTPL);

• Elected at fair value through other comprehensive income (Equities only); or

• Designated at FVTPL

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CONSOLIDATED FINANCIAL STATEMENTS

Financial assets include both debt and equity instruments.

Debt instruments

Debt instruments, including loans and debt securities, are classified into one of the following measurement categories:

• Amortized cost;

• Fair value through other comprehensive income (FVOCI);

• Fair value through profit or loss (FVTPL); or

• Designated at FVTPL

Classification of debt instruments is determined based on:

(i) The business model under which the asset is held; and

(ii) The contractual cash flow characteristics of the instrument.

Business model assessment

Business model assessment involves determining how financial assets are managed in order to generate cash flows. The Bank’s business model assessment is based on the following categories:

• Held to collect: The objective of the business model is to hold assets and collect contractual cash flows. Any sales of the asset are incidental to the objective of the model.

• Held to collect and for sale: Both collecting contractual cash flows and sales are integral to achieving the objectives of the business model.

• Other business model: The business model is neither held-to-collect nor held-to-collect and for sale.

The Bank assesses business model at a portfolio level reflective of how groups of assets are managed together to achieve a particular business objective. For the assessment of a business model, the Bank takes into consideration the following factors:

• How the performance of assets in a portfolio is evaluated and reported to group heads and other key decision makers within the Bank’s business lines;

• How compensation is determined for the Bank’s business lines’ management that manages the assets;

• Whether the assets are held for trading purposes i.e., assets that the Bank acquires or incurs principally for the purpose of selling or repurchasing in the near term, or holds as part of a portfolio that is managed together for short-term profit or position taking;

• The risks that affect the performance of assets held within a business model and how those risks are managed; and

• The frequency and volume of sales in prior periods and expectations about future sales activity.

Contractual cash flow characteristics assessment

The contractual cash flow characteristics assessment involves assessing the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest on the principal amount outstanding (SPPI).

Principal is defined as the fair value of the instrument at initial recognition. Principal may change over the life of the instrument due to repayments or amortization of premium/discount.

Interest is defined as the consideration for the time value of money and the credit risk associated with the principal amount outstanding and for other basic lending risks and costs (liquidity risk and administrative costs), and a profit margin.

If the Bank identifies any contractual features that could significantly modify the cash flows of the instrument such that they are no longer consistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.

Debt instruments measured at amortized cost

Debt instruments are measured at amortized cost if they are held within a business model whose objective is to hold for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are carried at amortized cost. Interest income on these instruments is recognized in interest income using the effective interest rate method. The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. Amortized cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the effective interest rate.

Impairment on debt instruments measured at amortized cost is calculated using the expected credit loss approach. Loans and debt securities measured at amortized cost are presented net of the allowance for credit losses (ACL) in the statement of financial position.

Debt instruments measured at FVOCI

Debt instruments are measured at FVOCI if they are held within a business model whose objective is to hold for collection of contractual cash flows and for selling financial assets, where the assets’ cash flows represent payments that are solely payments of principal and interest. Subsequent to initial recognition, unrealized gains and losses on debt instruments measured at FVOCI are recorded in other comprehensive income (OCI), unless the instrument is designated in a fair value hedge relationship. When designated in a fair value hedge relationship, any changes in fair value due to changes in the hedged risk are recognized in Non-interest income in the Consolidated Statement of Income. Upon derecognition, realized gains and losses are reclassified from OCI and recorded in Non-interest income in the Consolidated Statement of Income on an average cost basis. Foreign exchange gains and losses that relate to the amortized cost of the debt instrument are recognized in the Consolidated Statement of Income. Premiums, discounts and related transaction costs are amortized over the expected life of the instrument to Interest income in the Consolidated Statement of Income using the effective interest rate method.

Impairment on debt instruments measured at FVOCI is calculated using the expected credit loss approach. The ACL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the Consolidated Statement of Financial Position, which remains at its fair value. Instead, an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to Provision for credit losses in the Consolidated Statement of Income. The accumulated allowance recognised in OCI is recycled to the Consolidated Statement of Income upon derecognition of the debt instrument.

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CONSOLIDATED FINANCIAL STATEMENTS

Debt instruments measured at FVTPL

Debt instruments are measured at FVTPL if assets:

i) Are held for trading purposes;

ii) Are held as part of a portfolio managed on a fair value basis; or

iii) Whose cash flows do not represent payments that are solely payments of principal and interest.

These instruments are measured at fair value in the Consolidated Statement of Financial Position, with transaction costs recognized immediately in the Consolidated Statement of Income as part of Non-interest income. Realized and unrealized gains and losses are recognized as part of Non-interest income in the Consolidated Statement of Income.

Debt instruments designated at FVTPL

Financial assets classified in this category are those that have been designated by the Bank upon initial recognition, and once designated, the designation is irrevocable. The FVTPL designation is available only for those financial assets for which a reliable estimate of fair value can be obtained. Financial assets are designated at FVTPL if doing so eliminates or significantly reduces an accounting mismatch which would otherwise arise.

Financial assets designated at FVTPL are recorded in the Consolidated Statement of Financial Position at fair value. Changes in fair value are recognized in Non-interest income in the Consolidated Statement of Income.

Equity instruments

Equity instruments are classified into one of the following measurement categories:

• Fair value through profit or loss (FVTPL); or

• Elected at fair value through other comprehensive income (FVOCI).

Equity instruments measured at FVTPL

Equity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase, with transaction costs recognized immediately in the Consolidated Statement of Income as part of Non-interest income. Subsequent to initial recognition the changes in fair value are recognized as part of Non-interest income in the Consolidated Statement of Income.

Equity instruments measured at FVOCI

At initial recognition, there is an irrevocable option for the Bank to classify non-trading equity instruments at FVOCI. This election is used for certain equity investments for strategic or longer term investment purposes. This election is made on an instrument-by-instrument basis and is not available to equity instruments that are held for trading purposes.

Gains and losses on these instruments including when derecognized/sold are recorded in OCI and are not subsequently reclassified to the Consolidated Statement of Income. As such, there is no specific impairment requirement. Dividends received are recorded in Interest income in the Consolidated Statement of Income. Any transaction costs incurred upon purchase of the security are added to the cost basis of the security and are not reclassified to the Consolidated Statement of Income on sale of the security.

Classification and measurement of financial liabilities

Financial liabilities are classified into one of the following measurement categories:

• Fair value through profit or loss (FVTPL);

• Amortized cost; or

• Designated at FVTPL.

Financial liabilities measured at FVTPL

Financial liabilities measured at FVTPL are held principally for the purpose of repurchasing in the near term, or form part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. Financial liabilities are recognized on a trade date basis and are accounted for at fair value, with changes in fair value and any gains or losses recognized in the Consolidated Statement of Income as part of the non-interest income. Transaction costs are expensed as incurred.

Financial liabilities measured at amortized cost

Deposits, subordinated notes and debentures are accounted for at amortized cost. Interest on deposits, calculated using the effective interest rate method, is recognized as interest expense. Interest on subordinated notes and debentures, including capitalized transaction costs, is recognized using the effective interest rate method as interest expense.

Financial liabilities designated at FVTPL

Financial liabilities classified in this category are those that have been designated by the Bank upon initial recognition, and once designated, the designation is irrevocable. The FVTPL designation is available only for those financial liabilities for which a reliable estimate of fair value can be obtained.

Financial liabilities are designated at FVTPL when one of the following criteria is met:

• The designation eliminates or significantly reduces an accounting mismatch which would otherwise arise; or

• A group of financial liabilities are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management strategy; or

• The financial liability contains one or more embedded derivatives which significantly modify the cash flows otherwise required.

Financial liabilities designated at FVTPL are recorded in the Consolidated Statement of Financial Position at fair value. Any changes in fair value are recognized in Non-interest income in the Consolidated Statement of Income, except for changes in fair value arising from changes in the Bank’s own credit risk which are recognized in the OCI. Changes in fair value due to changes in the Bank’s own credit risk are not subsequently reclassified to Consolidated Statement of Income upon derecognition/extinguishment of the liabilities.

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CONSOLIDATED FINANCIAL STATEMENTS

Determination of fair value

Fair value of a financial asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal, or in its absence, the most advantageous market to which the Bank has access at the measurement date.

The Bank values instruments carried at fair value using quoted market prices, where available. Unadjusted quoted market prices for identical instruments represent a Level 1 valuation. When quoted market prices are not available, the Bank maximizes the use of observable inputs within valuation models. When all significant inputs are observable, the valuation is classified as Level 2. Valuations that require the significant use of unobservable inputs are considered Level 3.

Inception gains and losses are only recognized where the valuation is dependent only on observable market data, otherwise, they are deferred and amortized over the life of the related contract or until the valuation inputs become observable.

IFRS 13 permits 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 has adopted this exception through an accounting policy choice. Consequently, the fair values of certain portfolios of financial instruments are determined based on the net exposure of those instruments to particular market, credit or funding risk.

In determining fair value for certain instruments or portfolios of instruments, valuation adjustments or reserves may be required to arrive at a more accurate representation of fair value. These adjustments include those made for credit risk, bid-offer spreads, unobservable parameters, constraints on prices in inactive or illiquid markets and when applicable funding costs.

Derecognition of financial assets and liabilities

Derecognition of financial assets

The derecognition criteria are applied to the transfer of part of an asset, rather than the asset as a whole, only if such part comprises specifically identified cash flows from the asset, a fully proportionate share of the cash flows from the asset, or a fully proportionate share of specifically identified cash flows from the asset.

A financial asset is derecognized when the contractual rights to the cash flows from the asset has expired; or the Bank transfers the contractual rights to receive the cash flows from the financial asset; or has assumed an obligation to pay those cash flows to an independent third-party; or the Bank has transferred substantially all the risks and rewards of ownership of that asset to an independent third-party. Management determines whether substantially all the risk and rewards of ownership have been transferred by quantitatively comparing the variability in cash flows before and after the transfer. If the variability in cash flows remains significantly similar subsequent to the transfer, the Bank has retained substantially all of the risks and rewards of ownership.

Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Bank derecognizes the transferred asset only if it has lost control over that asset. Control over the asset is represented by the practical ability to sell the transferred asset. If the Bank retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement. At times such continuing involvement may be in the form of investment in senior or subordinated tranches of notes issued by non-consolidated structured entities.

On derecognition of a financial asset, the difference between the carrying amount and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in other comprehensive income is recognized in the Consolidated Statement of Income.

Transfers of financial assets that do not qualify for derecognition are reported as secured financings in the Consolidated Statement of Financial Position.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, canceled or expires. If an existing financial liability is replaced by another from the same counterparty on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability at fair value. The difference in the respective carrying amount of the existing liability and the new liability is recognized as a gain/loss in the Consolidated Statement of Income.

Impairment

Scope

The Bank applies a three-stage approach to measure allowance for credit losses, using an expected credit loss approach as required under IFRS 9, for the following categories of financial instruments that are not measured at fair value through profit or loss:

• Amortized cost financial assets;

• Debt securities classified as at FVOCI;

• Off-balance sheet loan commitments; and

• Financial guarantee contracts.

Expected credit loss impairment model

The Bank’s allowance for credit losses calculations are outputs of models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. The expected credit loss impairment model reflects the present value of all cash shortfalls related to default events either (i) over the following twelve months or (ii) over the expected life of a financial instrument depending on credit deterioration from inception. The allowance for credit losses reflects an unbiased, probability-weighted outcome which considers multiple scenarios based on reasonable and supportable forecasts.

This impairment model measures credit loss allowances using a three-stage approach based on the extent of credit deterioration since origination:

• Stage 1 – Where there has not been a significant increase in credit risk (SIR) since initial recognition of a financial instrument, an amount equal to 12 months expected credit loss is recorded. The expected credit loss is computed using a probability of default occurring over the next 12 months. For those instruments with a remaining maturity of less than 12 months, a probability of default corresponding to remaining term to maturity is used.

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CONSOLIDATED FINANCIAL STATEMENTS

• Stage 2 – When a financial instrument experiences a SIR subsequent to origination but is not considered to be in default, it is included in Stage 2. This requires the computation of expected credit loss based on the probability of default over the remaining estimated life of the financial instrument.

• Stage 3 – Financial instruments that are considered to be in default are included in this stage. Similar to Stage 2, the allowance for credit losses captures the lifetime expected credit losses.

Measurement of expected credit loss

The probability of default (PD), exposure at default (EAD), and loss given default (LGD) inputs used to estimate expected credit losses are modelled based on macroeconomic variables that are most closely related with credit losses in the relevant portfolio.

Details of these statistical parameters/inputs are as follows:

• PD – The probability of default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the remaining estimated life, if the facility has not been previously derecognized and is still in the portfolio.

• EAD – The exposure at default is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments.

• LGD – The loss given default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realization of any collateral. It is usually expressed as a percentage of the EAD.

Forward-looking information

The estimation of expected credit losses for each stage and the assessment of significant increases in credit risk consider information about past events and current conditions as well as reasonable and supportable forecasts of future events and economic conditions. The estimation and application of forward-looking information may require significant judgment.

Macroeconomic factors

In its models, the Bank relies on a broad range of forward-looking economic information as inputs, such as: GDP growth, unemployment rates, central-bank interest rates, and house-price indices. The inputs and models used for calculating expected credit losses may not always capture all characteristics of the market at the date of the financial statements. To reflect this, qualitative adjustments or overlays may be made as temporary adjustments using expert credit judgment.

Multiple forward-looking scenarios

The Bank determines its allowance for credit losses using three probability-weighted forward-looking scenarios. The Bank considers both internal and external sources of information and data in order to achieve an unbiased projections and forecasts. The Bank prepares the scenarios using forecasts generated by Scotiabank Economics (SE). The forecasts are created using internal and external models which are modified by SE as necessary to formulate a ‘base case’ view of the most probable future direction of relevant economic variables as well as a representative range of other possible forecast scenarios. The process involves the development of two additional economic scenarios and consideration of the relative probabilities of each outcome.

The ‘base case’ represents the most likely outcome and is aligned with information used by the Bank for other purposes such as strategic planning and budgeting. The other scenarios represent more optimistic and more pessimistic outcomes. The Bank has identified and documented key drivers of credit risk and credit losses for each portfolio of financial instruments and, using an analysis of historical data, has estimated relationships between macroeconomic variables, credit risk, and credit losses.

Assessment of significant increase in credit risk (SIR)

At each reporting date, the Bank assesses whether there has been a significant increase in credit risk for exposures since initial recognition by comparing the risk of default occurring over the remaining expected life from the reporting date and the date of initial recognition. The assessment considers borrower-specific quantitative and qualitative information without consideration of collateral, and the impact of forward-looking macroeconomic factors.

The common assessments for SIR on retail and non-retail portfolios include macroeconomic outlook, management judgement, and delinquency and monitoring. Forward-looking macroeconomic factors are a key component of the macroeconomic outlook. The importance and relevance of each specific macroeconomic factor depends on the type of product, characteristics of the financial instruments and the borrower and the geographical region. Quantitative models may not always be able to capture all reasonable and supportable information that may indicate a significant increase in credit risk. Qualitative factors may be assessed to supplement the gap. Examples of situations include changes in adjudication criteria for a particular group of borrowers; changes in portfolio composition; and natural disasters impacting certain portfolios. With regards to delinquency and monitoring, there is a rebuttable presumption that the credit risk of the financial instrument has increased since initial recognition when contractual payments are more than 30 days overdue.

Retail portfolio – For retail exposures, a significant increase in credit risk cannot be assessed using forward looking information at an individual account level. Therefore, the assessment must be done at the segment level. Segment migration thresholds exist for each PD model by product which considers the proportionate change in PD as well as the absolute change in PD. The thresholds used for PD migration are reviewed and assessed at least annually, unless there is a significant change in credit risk management practices in which case the review is brought forward.

Non-retail portfolio – The Bank uses a risk rating scale (IG codes) for its non-retail exposures. All non-retail exposures have an IG code assigned that reflects the probability of default of the borrower. Both borrower specific and non-borrower specific (i.e. macroeconomic) forward looking information is considered and reflected in the IG rating. Significant increase in credit risk is evaluated based on the migration of the exposures among IG codes.

Expected life

When measuring expected credit loss, the Bank considers the maximum contractual period over which the Bank is exposed to credit risk. All contractual terms are considered when determining the expected life, including prepayment, and extension and rollover options. For certain revolving credit facilities, such as credit cards, the expected life is estimated based on the period over which the Bank is exposed to credit risk and how the credit losses are mitigated by management actions.

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Presentation of allowance for credit losses in the Statement of Financial Position

• Financial assets measured at amortized cost: as a deduction from the gross carrying amount of the financial assets;

• Debt instruments measured at fair value through other comprehensive income: no allowance is recognized in the Statement of Financial Position because the carrying value of these assets is their fair value. However, the allowance determined is presented in the accumulated other comprehensive income;

• Off-balance sheet credit risks include undrawn lending commitments, letters of credit and letters of guarantee: as a provision in other liabilities.

Modified financial assets

If the terms of a financial asset are modified or an existing financial asset is replaced with a new one, an assessment is made to determine if the existing financial asset should be derecognized. Where a modification does not result in derecognition, the date of origination continues to be used to determine SIR. Where a modification results in derecognition, the new financial asset is recognized at its fair value on the modification date. The modification date is also the date of origination for this new asset.

The Bank may modify the contractual terms of loans for either commercial or credit reasons. The terms of a loan in good standing may be modified for commercial reasons to provide competitive pricing to borrowers. Loans are also modified for credit reasons where the contractual terms are modified to grant a concession to a borrower that may be experiencing financial difficulty.

For all financial assets modifications of the contractual terms may result in derecognition of the original asset when the changes to the terms of the loans are considered substantial. These terms include interest rate, authorized amount, term, or type of underlying collateral. The original loan is derecognized and the new loan is recognized at its fair value. The difference between the carrying value of the derecognized asset and the fair value of the new asset is recognized in the Income Statement.

For all loans, performing and credit-impaired, where the modification of terms did not result in the derecognition of the loan, the gross carrying amount of the modified loan is recalculated based on the present value of the modified cash flows discounted at the original effective interest rate and any gain or loss from the modification is recorded in the provision for credit losses line in the income statement.

Definition of default

The Bank considers a financial instrument to be in default as a result of one or more loss events that occurred after the date of initial recognition of the instrument and the loss event has a negative impact on the estimated future cash flows of the instrument that can be reliably estimated. This includes events that indicate:

• significant financial difficulty of the borrower;

• default or delinquency in interest or principal payments;

• high probability of the borrower entering a phase of bankruptcy or a financial reorganization;

• measurable decrease in the estimated future cash flows from the loan or the underlying assets that back the loan.

The Bank considers that default has occurred and classifies the financial asset as impaired when it is more than 90 days past due, with the exception of credit card receivables that are treated as defaulted when 180 days past due, unless reasonable and supportable information demonstrates that a more lagging default criterion is appropriate.

Write-off policy

The Bank writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. Where financial assets are secured, write-off is generally after receipt of any proceeds from the realization of security. In circumstances where the net realizable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier. Credit card receivables 180 days past due are written-off. In subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the Consolidated Statement of Income.

Purchased loans

All purchased loans are initially measured at fair value on the date of acquisition. As a result no allowance for credit losses would be recorded in the Consolidated Statement of Financial Position on the date of acquisition. Purchased loans may fit into either of the two categories: Performing loans or Purchased Credit Impaired (PCI) loans.

Purchased performing loans follow the same accounting as originated performing loans and are reflected in Stage 1 on the date of the acquisition. They will be subject to a 12-month allowance for credit losses which is recorded as a provision for credit losses in the Consolidated Statement of Income. The fair value adjustment set up for these loans on the date of acquisition is amortized into interest income over the life of these loans.

PCI loans are reflected in Stage 3 and are always subject to lifetime allowance for credit losses. Any changes in the expected cash flows since the date of acquisition are recorded as a charge/recovery in the provision for credit losses in the Consolidated Statement of Income at the end of all reporting periods subsequent to the date of acquisition.

Classification and measurement, derecognition, and impairment of financial instruments effective prior to November 1, 2017

Trading assets and liabilities

Trading assets and liabilities are measured at fair value in the Consolidated Statement of Financial Position, with transaction costs recognized immediately in the Consolidated Statement of Income as part of non-interest income – trading revenues. Gains and losses realized on disposal and unrealized gains and losses due to fair value changes on trading assets and liabilities, other than certain derivatives, are recognized as part of non-interest income – trading revenues in the Consolidated Statement of Income. Trading assets and liabilities are not reclassified subsequent to their initial recognition.

Investment securities

Investment securities are comprised of available-for-sale and held-to-maturity securities.

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CONSOLIDATED FINANCIAL STATEMENTS

Available-for-sale investment securities

Available-for-sale investment securities include equity and debt securities. Equity investments classified as available-for-sale are those which are neither classified as held-for-trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

Available-for-sale investment securities are recorded at fair value with unrealized gains and losses recorded in other comprehensive income. When realized, these gains and losses are reclassified from the Consolidated Statement of Comprehensive Income and recorded in the Consolidated Statement of Income on an average cost basis. For non-monetary investment securities designated as available-for-sale, the gain or loss recognized in other comprehensive income includes any related foreign exchange gains or losses. Foreign exchange gains and losses that relate to the amortized cost of an available-for-sale debt security are recognized in the Consolidated Statement of Income.

Premiums, discounts and related transaction costs on available-for-sale debt securities are amortized over the expected life of the instrument to interest income – securities in the Consolidated Statement of Income using the effective interest method.

Transaction costs on available-for-sale equity securities are initially capitalized and then recognized as part of the net realized gain/loss on subsequent sale of the instrument in the Consolidated Statement of Income.

Held-to-maturity investment securities

Held-to-maturity investment securities are non-derivative assets with fixed or determinable payments and fixed maturity that the Bank has the positive intent and ability to hold to maturity, and which do not meet the definition of a loan, are not held-for-trading, and are not designated at fair value through profit or loss or as available-for-sale. After initial measurement, held-to-maturity investment securities are carried at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the effective interest rate. The amortization is included in interest income – securities in the Consolidated Statement of Income.

A sale or reclassification of a more than an insignificant amount of held-to-maturity investments would result in the reclassification of all held-to-maturity investments as available-for-sale, and would prevent the Bank from classifying investment securities as held-to-maturity for the current and the following two financial years. However, sales and reclassifications in any of the following circumstances would not trigger a reclassification:

• Sales or reclassifications that are so close to maturity that changes in the market rate of interest would not have a significant effect on the financial asset’s fair value;

• Sales or reclassifications after the Bank has collected substantially all of the asset’s original principal; or

• Sales or reclassifications attributable to non-recurring isolated events beyond the Bank’s control that could not have been reasonably anticipated.

Impairment of investment securities

Investment securities are evaluated for impairment at the end of each reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

In the case of equity instruments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its original cost is objective evidence of impairment. In the case of debt instruments classified as available-for-sale and held-to-maturity investment securities, impairment is assessed based on the same criteria as impairment of loans.

When a decline in value of available-for-sale debt or equity instrument is due to impairment, the carrying value of the security continues to reflect fair value. Losses arising from impairment are reclassified from accumulated other comprehensive income and included in net gain on investment securities within non-interest income in the Consolidated Statement of Income.

The losses arising from impairment of held-to-maturity investment securities are recognized in net gain on investment securities within non-interest income in the Consolidated Statement of Income.

Reversals of impairment losses on available-for-sale debt instruments resulting from increases in fair value related to events occurring after the date of impairment are included in net gain on investment securities within non-interest income in the Consolidated Statement of Income, to a maximum of the original impairment charge. Reversals of impairment on available-for-sale equity instruments are not recognized in the Consolidated Statement of Income; increases in fair value of such instruments after impairment are recognized in accumulated other comprehensive income.

Reversals of impairment losses on held-to-maturity investment securities are included in net gain on investment securities within non-interest income in the Consolidated Statement of Income, to a maximum of the amortized cost of the investment before the original impairment charge.

Financial assets and liabilities designated at fair value through profit or loss

Financial assets and financial liabilities classified in this category are those that have been designated by the Bank on initial recognition. The Bank may only designate an instrument at fair value through profit or loss when one of the following criteria is met, and designation is determined on an instrument by instrument basis:

• The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or liabilities on a different basis; or

• The assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed together and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy and the information about the group is provided to key management personnel and it can be demonstrated that significant financial risks are eliminated or significantly reduced; or

• The financial instrument contains one or more embedded derivatives which significantly modify the cash flows otherwise required.

Financial assets and financial liabilities designated at fair value through profit or loss are recorded in the Consolidated Statement of Financial Position at fair value. For assets designated at fair value through profit or loss, changes in fair value are recognized in the Consolidated Statement of Income. For liabilities designated at fair value through profit or loss, changes in fair value arising from changes in the Bank’s own credit risk are recognized in the Consolidated Statement of Comprehensive Income (OCI), without subsequent reclassification to the Consolidated Statement of Income, unless doing so would create or increase an accounting mismatch. All other changes in fair value are recognized in the Consolidated Statement of Income.

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CONSOLIDATED FINANCIAL STATEMENTS

Loans

Loans include loans and advances originated or purchased by the Bank which are not classified as held-for-trading, held-to-maturity or designated at fair value. Debt securities, which are not trading securities or have not been designated as available-for-sale securities and that are not quoted in an active market, are also classified as loans.

Loans originated by the Bank are recognized when cash is advanced to a borrower. Loans purchased are recognized when cash consideration is paid by the Bank. Loans are measured at amortized cost using the effective interest method, less any impairment losses. Loans are stated net of allowance for credit losses.

Derecognition of financial assets and liabilities

Derecognition of financial assets

The derecognition criteria are applied to the transfer of part of an asset, rather than the asset as a whole, only if such part comprises specifically identified cash flows from the asset, a fully proportionate share of the cash flows from the asset, or a fully proportionate share of specifically identified cash flows from the asset.

A financial asset is derecognized when the contractual rights to the cash flows from the asset has expired; or the Bank transfers the contractual rights to receive the cash flows from the financial asset; or has assumed an obligation to pay those cash flows to an independent third-party; or the Bank has transferred substantially all the risks and rewards of ownership of that asset to an independent third-party. Management determines whether substantially all the risk and rewards of ownership have been transferred by quantitatively comparing the variability in cash flows before and after the transfer. If the variability in cash flows remains significantly similar subsequent to the transfer, the Bank has retained substantially all of the risks and rewards of ownership.

Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Bank derecognizes the transferred asset only if it has lost control over that asset. Control over the asset is represented by the practical ability to sell the transferred asset. If the Bank retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement. At times such continuing involvement may be in the form of investment in senior or subordinated tranches of notes issued by non-consolidated structured entities.

On derecognition of a financial asset, the difference between the carrying amount and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in other comprehensive income is recognized in the Consolidated Statement of Income.

Transfers of financial assets that do not qualify for derecognition are reported as secured financings in the Consolidated Statement of Financial Position.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, canceled or expires. If an existing financial liability is replaced by another from the same counterparty on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability at fair value. The difference in the respective carrying amount of the existing liability and the new liability is recognized as a gain/loss in the Consolidated Statement of Income.

Loan impairment and allowance for credit losses:

The Bank considers a loan to be impaired when there is objective evidence of impairment as a result of one or more loss events that occurred after the date of initial recognition of the loan and the loss event has an impact on the estimated future cash flows of the loan that can be reliably estimated.

Objective evidence is represented by observable data that comes to the attention of the Bank and includes events that indicate:

• significant financial difficulty of the borrower;

• a default or delinquency in interest or principal payments;

• a high probability of the borrower entering a phase of bankruptcy or a financial reorganization;

• a measurable decrease in the estimated future cash flows from the loan or the underlying assets that back the loan.

If a payment on a loan is contractually 90 days in arrears, the loan will be classified as impaired, if not already classified as such, unless the loan is fully secured, the collection of the debt is in process, and the collection efforts are reasonably expected to result in repayment of the loan or in restoring it to a current status within 180 days from the date a payment has become contractually in arrears. Finally, a loan that is contractually 180 days in arrears is classified as impaired in all situations, except when it is guaranteed or insured by the Canadian government, the provinces or a Canadian government agency; such loans are classified as impaired if the loan is contractually in arrears for 365 days. Any credit card loan that has a payment that is contractually 180 days in arrears is written off.

Losses expected as a result of future events are not recognized.

The Bank considers evidence of impairment for loans and advances at both an individual and collective level.

Individual impairment allowance

For all loans that are considered individually significant, the Bank assesses on a case-by-case basis at each reporting period whether an individual allowance for loan losses is required.

For those loans where objective evidence of impairment exists and the Bank has determined the loan to be impaired, impairment losses are determined based on the Bank’s aggregate exposure to the customer considering the following factors:

• the customer’s ability to generate sufficient cash flow to service debt obligations;

• the extent of other creditors’ commitments ranking ahead of, or pari passu with, the Bank and the likelihood of other creditors continuing to support the company;

• the complexity of determining the aggregate amount and ranking of all creditor claims and the extent to which legal and insurance uncertainties are evident; and

• the realizable value of security (or other credit mitigants) and likelihood of successful repossession.

Impairment losses are calculated by discounting the expected future cash flows of a loan at its original effective interest rate, and comparing the resultant present value with the loan’s current carrying amount. This results in interest income being recognized using the original effective interest rate.

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Collective impairment allowance

For loans that have not been individually assessed as being impaired, the Bank pools them into groups to assess them on a collective basis. Collective allowances are calculated for impaired loans and performing loans. Allowances related to performing loans estimate probable incurred losses that are inherent in the portfolio but have not yet been specifically identified as impaired.

Internal risk rating parameters are used in the calculation of the collective impairment allowance. For non-retail loan portfolios, internal risk rating parameters form the basis for calculating the quantitative portion of the collective allowance for performing loans:

• Probability of Default rates (PD) which are based upon the internal risk rating for each borrower;

• Loss Given Default rates (LGD); and

• Exposure at Default factors (EAD).

Funded exposures are multiplied by the borrower’s PD and by the relevant LGD parameter.

Committed but undrawn exposures are multiplied by the borrower’s PD, by the relevant LGD parameter, and by the relevant EAD parameter. A model stress component is also applied to recognize uncertainty in the credit risk parameters and the fact that current actual loss rates may differ from the long-term averages included in the model.

Retail loans

Retail loans represented by residential mortgages, credit cards and other personal loans are considered by the Bank to be homogeneous groups of loans that are not considered individually significant. All homogeneous groups of loans are assessed for impairment on a collective basis.

Mortgages are collectively assessed for impairment, taking into account number of days past due, historical loss experience and incorporating both quantitative and qualitative factors including the current business and economic environment and the realizable value of collateral to determine the appropriate level of the collective impairment allowance.

A roll rate methodology is used to determine impairment losses on a collective basis for credit cards and other personal loans because individual loan assessment is impracticable. Under this methodology, loans with similar credit characteristics are grouped into ranges according to the number of days past due and statistical analysis is used to estimate the likelihood that loans in each range will progress through the various stages of delinquency and ultimately prove irrecoverable. This methodology employs statistical analyses of historical data and experience of delinquency and default to estimate the amount of loans that will eventually be written off as a result of the events not identifiable on an individual loan basis. When the portfolio size is small or when information is insufficient or not reliable enough to adopt a roll rate methodology, the Bank adopts a basic formulaic approach based on historical loss rate experience.

Performing loans

Over and above the individually assessed and retail roll rate allowances, loans that were subject to individual assessment for which no evidence of impairment existed, are grouped together according to their credit risk characteristics for the purpose of reassessing them on a collective basis. This reflects impairment losses that the Bank has incurred as a result of events that have occurred but where the individual loss has not been identified.

The collective impairment allowance for such loans is determined after taking into account:

• historical loss experience in portfolios of similar credit risk characteristics (for example, by industry sector, loan grade or product);

• the estimated period between impairment occurring and the loss being identified and evidenced by the establishment of an appropriate allowance against the individual loan; and

• management’s experienced judgment as to whether current economic and credit conditions are such that the actual level of inherent losses at the reporting date is likely to be greater or less than that suggested by historical experience. As soon as information becomes available which identifies losses on individual loans within the group, those loans are removed from the group and assessed on an individual basis for impairment.

Provision for credit losses on off-balance sheet positions

A provision is set up for the Bank’s off-balance sheet positions and recorded in other liabilities on the Consolidated Statement of Financial Position. The process to determine the provision for off-balance sheet positions is similar to the methodology used for loans. Any change in the provision is recorded in the Consolidated Statement of Income as provision for credit losses.

Write-off of loans

Loans (and the related impairment allowance accounts) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans are secured, write-off is generally after receipt of any proceeds from the realization of security. In circumstances where the net realizable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier.

Reversals of impairment

If the amount of an impairment loss related to loans decreases in a subsequent period, and the decrease can be related objectively to an event occurring after the impairment was recognized, the excess is written back by reducing the loan impairment allowance account accordingly. The write-back is recognized in the provision for credit losses in the Consolidated Statement of Income.

Restructured loans

Restructured loans include loans where the Bank has renegotiated the original terms of a loan by granting a concession to the borrower (concessions). These concessions include interest rate adjustments, deferral or extension of principal or interest payments and forgiveness of a portion of principal or interest. Once the terms of the loan have been renegotiated and agreed upon with the borrower the loan is considered a restructured loan. The investment in the loan is reduced as of the date of the restructuring to the amount of the net expected cash flows receivable under the modified terms, discounted at the original effective interest rate inherent in the loan. The loan is no longer considered past due and the reduction in the carrying value of the loan is recognized as a charge for loan impairment in the Consolidated Statement of Income in the period in which the loan is restructured. In other cases, restructuring may be considered substantial enough to result in recognition of a new loan.

Offsetting of financial instruments

Financial assets and financial liabilities with the same counterparty are offset, with the net amount reported in the Consolidated Statement of Financial Position, only if there is currently a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to

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CONSOLIDATED FINANCIAL STATEMENTS

realize the assets and settle the liabilities simultaneously. When financial assets and financial liabilities are offset in the Consolidated Statement of Financial Position, the related income and expense items will also be offset in the Consolidated Statement of Income, unless specifically prohibited by an applicable accounting standard.

Cash and deposits with financial institutions

Cash and deposits with financial institutions comprises cash, cash equivalents, demand deposits with banks and other financial institutions, highly liquid investments that are readily convertible to cash, subject to insignificant risk of changes in value. These investments are those with less than three months’ maturity from the date of acquisition.

Precious metals

Precious metals are carried at fair value less costs to sell, and any changes in fair value less costs to sell are credited or charged to non-interest income – trading revenues in the Consolidated Statement of Income.

Securities purchased and sold under resale agreements

Securities purchased under resale agreements (reverse repurchase agreements) involve the Bank to purchase securities from a counterparty with an agreement entered to resell the securities at a fixed price at a future date. Since the Bank is reselling the securities at a fixed price at a future date, the risks and rewards have not been transferred to the Bank. The Bank has the right to liquidate the securities purchased in the event of counterparty default.

Whereas, securities sold under agreements to repurchase (repurchase agreements) involve the Bank to sell securities to a counterparty with an agreement entered simultaneously to purchase the securities back at a fixed price at a future date. Since the Bank is purchasing the securities back at a fixed price at a future date, the risks and rewards have not been transferred from the Bank. The counterparty has the right to use the collateral pledged by the Bank in the event of default.

These agreements are treated as collateralized financing arrangements and are initially recognized at amortized cost. The party disbursing the cash takes possession of the securities serving as collateral for the financing and having a market value equal to, or in excess of, the principal amount loaned. The securities received under reverse repurchase agreements and securities delivered under repurchase agreements are not recognized on, or derecognized from, the Consolidated Statement of Financial Position, unless the risks and rewards of ownership are obtained or relinquished. The related interest income and interest expense are recorded on an accrual basis using the effective interest rate method in interest income on the Consolidated Statement of Income.

Obligations related to securities sold short

Obligations related to securities sold short arise in dealing and market-making activities where debt securities and equity shares are sold without possessing such securities.

Similarly, if securities purchased under an agreement to resell are subsequently sold to third parties, the obligation to return the securities is recorded as a short sale within obligations related to securities sold short in the Consolidated Statement of Financial Position. These trading liabilities are measured at fair value with any gains or losses included in non-interest income – trading revenues in the Consolidated Statement of Income. Interest expense accruing on debt securities sold short is recorded in interest expense – other, in the Consolidated Statement of Income.

Securities lending and borrowing

Securities lending and borrowing transactions are usually collateralized by securities or cash. The transfer of the securities to counterparties is only reflected on the Consolidated Statement of Financial Position if the risks and rewards of ownership are also transferred. For cash collateral advanced or received, the Bank presents these transactions as securities sold under repurchase agreement or securities purchased under reverse repurchase agreement, respectively. Interest on cash collateral advanced or received is presented in interest income – securities purchased under resale agreements and securities borrowed or interest expense – other, respectively. Fees received and paid are reported as fee and commission revenues and expenses in the Consolidated Statement of Income, respectively.

Securities borrowed are not recognized on the Consolidated Statement of Financial Position, unless they are then sold to third parties, in which case the obligation to return the securities is recorded as a trading liability and measured at fair value with any gains or losses included in non-interest income – trading revenues, in the Consolidated Statement of Income.

Derivative instruments

Derivative instruments are contracts whose value is derived from interest rates, foreign exchange rates, commodities, equity prices or other financial variables. Most derivative instruments can be characterized as interest rate contracts, foreign exchange and gold contracts, commodity contracts, equity contracts or credit contracts. Derivative instruments are either exchange-traded contracts or negotiated over-the-counter contracts. Negotiated over-the-counter contracts include swaps, forwards and options.

The Bank enters into these derivative contracts for trading purposes, as well as to manage its risk exposures (i.e., to manage the Bank’s non-trading interest rate, foreign currency and other exposures). Trading activities are undertaken to meet the needs of the Bank’s customers, as well as for the Bank’s own account to generate income from trading operations.

Derivatives embedded in other financial liabilities or host contracts are treated as separate derivatives when the following conditions are met:

• their economic characteristics and risks are not closely related to those of the host contract;

• a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and

• the combined contract is not held for trading or designated at fair value through profit or loss.

Where an embedded derivative is separable from the host contract but the fair value, as at the acquisition or reporting date, cannot be reliably measured separately, the entire combined contract is measured at fair value. All embedded derivatives are presented on a combined basis with the host contracts although they are separated for measurement purposes when conditions requiring separation are met. Subsequent changes in fair value of embedded derivatives are recognized in non-interest income in the Consolidated Statement of Income.

All derivatives, including embedded derivatives that must be separately accounted for, are recorded at fair value in the Consolidated Statement of Financial Position. The determination of the fair value of derivatives includes consideration of credit risk, estimated funding costs and ongoing direct costs over the life of the instruments. Inception gains or losses on derivatives are only recognized where the valuation is dependent only on observable market data, otherwise, they are deferred and amortized over the life of the related contract, or until the valuation inputs become observable.

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CONSOLIDATED FINANCIAL STATEMENTS

The gains and losses resulting from changes in fair values of trading derivatives are included in non-interest income – trading revenues in the Consolidated Statement of Income.

Changes in the fair value of non-trading derivatives that do not qualify for hedge accounting are recorded in the Consolidated Statement of Income in non-interest income – other. Where derivative instruments are used to manage the volatility of share-based payment expense, these derivatives are carried at fair value with changes in the fair value in relation to units hedged included in non-interest expenses – salaries and employee benefits in the Consolidated Statement of Income.

Changes in the fair value of derivatives that qualify for hedge accounting are recorded as non-interest income – other in the Consolidated Statement of Income for fair value hedges and other comprehensive income in the Consolidated Statement of Comprehensive Income for cash flow hedges and net investment hedges.

Hedge accounting

The Bank has elected to continue to apply the hedge accounting requirements of IAS 39. However, the Bank has implemented the additional hedge accounting disclosures that are required by the IFRS 9 related amendments to IFRS 7 “Financial Instruments: Disclosures”.

The Bank formally documents all hedging relationships and its risk management objective and strategy for undertaking these hedge transactions at inception. The hedge documentation includes identification of the asset, liability, firm commitment or highly probable forecasted transaction being hedged, the nature of the risk being hedged, the hedging instrument used and the method used to assess the effectiveness of the hedge. The Bank also formally assesses, both at each hedge’s inception and on an ongoing basis, whether the hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items. Hedge ineffectiveness is measured and recorded in non-interest income – other in the Consolidated Statement of Income.

There are three types of hedges: (i) fair value hedges, (ii) cash flow hedges and (iii) net investment hedges.

Fair value hedges

For fair value hedges, the change in fair value of the hedging instrument is offset in the Consolidated Statement of Income by the change in fair value of the hedged item attributable to the hedged risk. For hedges that are discontinued, the hedged item is no longer adjusted for changes in fair value. The cumulative fair value adjustment of the hedged item is amortized to non-interest income over its remaining term to maturity or written off to non-interest income directly if the hedged item ceases to exist. The Bank utilizes fair value hedges primarily to convert fixed rate financial instruments to floating rate financial instruments. Hedged items include debt securities, loans, deposit liabilities and subordinated debentures. Hedging instruments include single-currency interest rate swaps and cross-currency interest rate swaps.

Cash flow hedges

For cash flow hedges, the change in fair value of the hedging instrument, to the extent effective, is recorded in other comprehensive income until the corresponding gains and losses on the hedged item is recognized in income. For hedges that are discontinued, the cumulative unrealized gain or loss recognized in other comprehensive income is reclassified to non-interest income and/or salaries and employee benefits as the variability in the cash flows of hedged item affects income. However, if the hedged item is derecognized or the forecasted transaction is no longer expected to occur, the unrealized gain or loss is reclassified immediately to non-interest income and/or salaries and employee benefits. The Bank utilizes cash flow hedges primarily to hedge the variability in cash flows relating to floating rate financial instruments and highly probable forecasted revenues and expenses. Hedged items include debt securities, loans, deposit liabilities and highly probable forecasted transactions. Hedging instruments include single-currency interest rate swaps, cross-currency interest rate swaps, total return swaps, foreign currency forwards and foreign currency assets or liabilities.

Net investment hedges

For net investment hedges, the change in fair value of the hedging instrument, to the extent effective, is recorded in other comprehensive income until the corresponding cumulative translation adjustments on the hedged net investment are recognized in income. The Bank designates foreign currency liabilities and foreign currency forwards as hedging instruments to manage the foreign currency exposure and impact on capital ratios arising from foreign operations.

Property and equipment

Land, buildings and equipment

Land is carried at cost. Buildings (including building fittings), equipment, and leasehold improvements are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset. Depreciation is calculated using the straight-line method over the estimated useful life of the related asset less any residual value as follows: buildings – 40 years, building fittings – 15 years, equipment 3 to 10 years, and leasehold improvements – lease term determined by the Bank. Depreciation expense is included in the Consolidated Statement of Income under non-interest expenses – depreciation and amortization. Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted as appropriate.

When major components of building and equipment have different useful lives, they are accounted for separately and depreciated over each component’s estimated useful life.

Net gains and losses on disposal are included in non-interest income – other in the Consolidated Statement of Income in the year of disposal.

Investment property

Investment property is property held either for rental income or for capital appreciation or for both. The Bank holds certain investment properties which are presented in property and equipment on the Consolidated Statement of Financial Position.

Investment property is carried at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated using the straight-line method over the estimated useful life of 40 years. Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted as appropriate.

Assets held-for-sale

Non-current non-financial assets (and disposal groups) are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. These assets meet the criteria for classification as held-for-sale if they are available for immediate sale in their present condition and their sale is considered highly probable to occur within one year.

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CONSOLIDATED FINANCIAL STATEMENTS

Non-current non-financial assets classified as held-for-sale are measured at the lower of their carrying amount and fair value (less costs to sell) and are presented within other assets in the Consolidated Statement of Financial Position. Any subsequent write-down to fair value less costs to sell is recognized in the Consolidated Statement of Income, in non-interest income. Any subsequent increase in the fair value less costs to sell, to the extent this does not exceed the cumulative write-down, is also recognized in non-interest income, together with any realized gains or losses on disposal.

Non-financial assets acquired in exchange for loans as part of an orderly realization are recorded as assets held-for-sale or assets held-for-use. If the acquired asset does not meet the requirement to be considered held-for-sale, the asset is considered held-for-use, measured initially at cost which equals the carrying value of the loan and accounted for in the same manner as a similar asset acquired in the normal course of business.

Business combinations and goodwill

The Bank follows the acquisition method of accounting for the acquisition of subsidiaries. The Bank considers the date on which control is obtained and it legally transfers the consideration for the acquired assets and assumed liabilities of the subsidiary to be the date of acquisition. The cost of an acquisition is measured at the fair value of the consideration paid. The fair value of the consideration transferred by the Bank in a business combination is calculated as the sum of the acquisition date fair value of the assets transferred by the Bank, the liabilities incurred by the Bank to former owners of the acquiree, and the equity interests, including any options, issued by the Bank. The Bank recognizes the acquisition date fair values of any previously held investment in the subsidiary and contingent consideration as part of the consideration transferred in exchange for the acquisition. A gain or loss on any previously held investments of an acquiree is recognized in non-interest income – other in the Consolidated Statement of Income.

In general, all identifiable assets acquired (including intangible assets) and liabilities assumed (including any contingent liabilities) are measured at the acquisition date fair value. The Bank records identifiable intangible assets irrespective of whether the assets have been recognized by the acquiree before the business combination. Non-controlling interests, if any, are recognized at their proportionate share of the fair value of identifiable assets and liabilities, unless otherwise indicated. Where the Bank has an obligation to purchase a non-controlling interest for cash or another financial asset, a portion of the non-controlling interest is recognized as a financial liability based on management’s best estimate of the present value of the redemption amount. Where the Bank has a corresponding option to settle the purchase of a non-controlling interest by issuing its own common shares, no financial liability is recorded.

Any excess of the cost of acquisition over the Bank’s share of the net fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill. If the cost of acquisition is less than the fair value of the Bank’s share of the identifiable assets acquired and liabilities assumed, the resulting gain is recognized immediately in non-interest income – other in the Consolidated Statement of Income.

During the measurement period (which is within one year from the acquisition date), the Bank may, on a retrospective basis, adjust the amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.

The Bank accounts for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received.

Subsequent to acquisition, the Bank accounts for the following assets and liabilities recognized in a business combination as described below:

• Contingent liabilities, until resolved, are measured at the higher of the amount that would be recognized as a provision or the amount initially recognized, with any change recognized in the Consolidated Statement of Income.

• Indemnification assets are measured on the same basis as the item to which the indemnification relates.

• Contingent consideration classified as a liability is measured at fair value, with any change recognized in the Consolidated Statement of Income.

• Liabilities to non-controlling interest holders when remeasured at the end of each reporting period, a corresponding change is recorded in equity.

After initial recognition of goodwill in a business combination, goodwill in aggregate is measured at cost less any accumulated impairment losses. Goodwill is not amortized but tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Goodwill is reviewed at each reporting date to determine whether there is any indication of impairment. For the purpose of impairment testing, goodwill acquired in a business combination is, on the acquisition date, allocated to each of the Bank’s group of cash-generating units (CGUs) that is expected to benefit from the combination. CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal management purposes. Goodwill impairment, at a standalone subsidiary level, may not in itself result in an impairment at the consolidated Bank level.

The Bank determines the carrying value of the CGU using a regulatory capital approach based on credit, market, and operational risks, and leverage, consistent with the Bank’s capital attribution for business line performance measurement. The recoverable amount is the greater of fair value less costs of disposal and value in use. If either fair value less costs of disposal or value in use exceeds the carrying amount, there is no need to determine the other. The recoverable amount of the CGU has been determined using the fair value less costs of disposal method. The estimation of fair value less costs of disposal involves significant judgment in the determination of inputs. In determining fair value less costs of disposal, an appropriate valuation model is used which considers various factors including normalized net income, control premiums and price earnings multiples. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators. An impairment loss is recognized if the carrying amount of the CGU exceeds the recoverable amount. An impairment loss, in respect of goodwill, is not reversed.

Intangible assets

Intangible assets represent identifiable non-monetary assets and are acquired either separately or through a business combination or generated internally. The Bank’s intangible assets are mainly comprised of computer software, customer relationships, contract intangibles, core deposit intangibles and fund management contracts.

The cost of a separately acquired intangible asset includes its purchase price and directly attributable costs of preparing the asset for its intended use. Intangibles acquired as part of a business combination are initially recognized at fair value.

In respect of internally generated intangible assets, cost includes all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management.

After initial recognition, an intangible asset is carried at its cost less any accumulated amortization and accumulated impairment losses.

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Intangible assets that have finite useful lives are initially measured at cost and are amortized on a straight-line basis over their useful lives as follows: computer software – 5 to 10 years; and other intangible assets – 5 to 20 years. Amortization expense is included in the Consolidated Statement of Income under operating expenses – depreciation and amortization. As intangible assets are considered to be non-financial assets, the impairment model for non-financial assets is applied. Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Impairment of non-financial assets

The carrying amount of the Bank’s non-financial assets, other than goodwill and indefinite life intangible assets and deferred tax assets which are separately addressed, is reviewed at each reporting date to determine whether there is any indication of impairment. For the purpose of impairment testing, non-financial assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent from the cash inflows of other assets or groups of assets.

If any indication of impairment exists then the asset’s recoverable amount is estimated. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. The Bank’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses of continuing operations are recognized in the Consolidated Statement of Income in those expense categories consistent with the nature of the impaired asset. Impairment losses recognized in prior periods are reassessed at each reporting date for any indication that the loss had decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Such reversal is recognized in the Consolidated Statement of Income.

Significant judgment is applied in determining the non-financial asset’s recoverable amount and assessing whether certain events or circumstances constitute objective evidence of impairment.

Corporate income taxes

The Bank follows the balance sheet liability method for corporate income taxes. Under this method, deferred tax assets and liabilities represent the cumulative amount of tax applicable to temporary differences which are the differences between the carrying amount of the assets and liabilities, and their values for tax purposes. Deferred tax assets are recognized only to the extent it is probable that sufficient taxable profits will be available against which the benefit of these deferred tax assets can be utilized.

Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred and current tax assets and liabilities are only offset when they arise in the same tax reporting group and where the Bank has both the legal right and the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

The Bank maintains provisions for uncertain tax positions that it believes appropriately reflect the risk of tax positions under discussion, audit, dispute, or appeal with tax authorities, or which are otherwise considered to involve uncertainty. These provisions are made using the Bank’s best estimate of the amount expected to be paid based on an assessment of all relevant factors, which are reviewed at the end of each reporting period.

Income tax is recognized in the Consolidated Statement of Income except where it relates to items recognized in other comprehensive income or directly in equity, in which case income tax is recognized in the same line as the related item.

Leases

Bank as a lessor

Assets leased to customers under agreements which transfer substantially all the risks and rewards of ownership, with or without ultimate legal title, are classified as finance leases and presented within loans in the Consolidated Statement of Financial Position. When assets held are subject to a finance lease, the leased assets are derecognized and a receivable is recognized which is equal to the present value of the minimum lease payments, discounted at the interest rate implicit in the lease. Initial direct costs incurred in negotiating and arranging a finance lease are incorporated into the receivable through the discount rate applied to the lease. Finance lease income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease. Finance lease income is included in the Consolidated Statement of Income under interest income from loans.

Assets leased to customers under agreements which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. The leased assets are included within property and equipment on the Bank’s Consolidated Statement of Financial Position. Rental income is recognized on a straight-line basis over the period of the lease in non-interest income – other in the Consolidated Statement of Income. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense on a straight-line basis over the lease term.

Bank as a lessee

Assets held under finance leases are initially recognized as property and equipment in the Consolidated Statement of Financial Position at an amount equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The corresponding finance lease obligation is included in other liabilities in the Consolidated Statement of Financial Position. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease. Contingent rentals are recognized as expense in the periods in which they are incurred.

Operating lease rentals payable are recognized as an expense on a straight-line basis over the lease term, which commences when the lessee controls the physical use of the asset. Lease incentives are treated as a reduction of rental expense and are also recognized over the lease term on a straight-line basis. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

Sale and lease-back

Where the Bank enters into a sale leaseback transaction for a non-financial asset at fair market value that results in the Bank retaining an operating lease (where the buyer/lessor retains substantially all risks and rewards of ownership), any gains and losses are recognized immediately in net income. Where the sale leaseback transaction results in a finance lease, any gain on sale is deferred and recognized in net income over the remaining term of the lease.

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CONSOLIDATED FINANCIAL STATEMENTS

Leasehold improvements

Leasehold improvements are investments made to customize buildings and offices occupied under operating lease contracts to make them suitable for their intended purpose. The present value of estimated reinstatement costs to bring a leased property into its original condition at the end of the lease, if required, is capitalized as part of the total leasehold improvements costs. At the same time, a corresponding liability is recognized to reflect the obligation incurred. Reinstatement costs are recognized in net income through depreciation of the capitalized leasehold improvements over their estimated useful life.

Provisions

A provision, including for restructuring, is recognized if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The amount recognized as a provision is the Bank’s best estimate of the consideration required to settle the present obligation, taking into account the risks and uncertainties surrounding the obligation. If the effect of the time value of money is considered material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The increase in the provision due to the passage of time is recorded as interest expense – other in the Consolidated Statement of Income.

Insurance contracts

Gross premiums for life insurance contracts are recognized as income when due. Gross premiums for non-life insurance business, primarily property and casualty, are recognized as income over the term of the insurance contracts. Unearned premiums represent the portion of premiums written in the current year that relate to the period of risk after the reporting date. Insurance claims recoveries are accounted as income in the same period as the related claims.

Gross insurance claims for life insurance contracts reflect the cost of all claims arising during the year. Gross insurance claims for property and casualty insurance contracts include paid claims and movements in outstanding claim liabilities. Insurance premiums ceded to reinsurers are accounted as an expense in the same period as the premiums for the direct insurance contracts to which they relate.

Guarantees

A guarantee is a contract that contingently requires the Bank to make specified payments to reimburse the holder for a loss it incurs because a specified debtor failed to make payment when due in accordance with the original or modified terms of a debt instrument. Guarantees include standby letters of credit, letters of guarantee, indemnifications, credit enhancements and other similar contracts. Guarantees that qualify as a derivative are accounted for in accordance with the policy for derivative instruments. For guarantees that do not qualify as a derivative, a liability is recorded for the fair value of the obligation assumed at inception. The fair value of the obligation at inception is generally based on the discounted cash flow of the premium to be received for the guarantee, resulting in a corresponding asset. Subsequent to initial recognition, such guarantees are measured at the higher of the initial amount, less amortization to recognize any fee income earned over the period, and the best estimate of the amount required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability is reported in the Consolidated Statement of Income.

Employee benefits

The Bank provides pension and other benefit plans for eligible employees in Canada and internationally. Pension benefits are offered in the form of defined benefit pension plans (generally based on an employee’s length of service and average earnings at retirement), and in the form of defined contribution pension plans (where the Bank’s contribution is fixed and there is no legal or constructive obligation to pay further amounts). Other benefits provided include post-retirement health care, dental care and life insurance, along with other long-term employee benefits such as long-term disability benefits.

Defined benefit pension plans and other post-retirement benefit plans

The cost of these employee benefits is actuarially determined each year using the projected unit credit method. The calculation uses management’s best estimate of a number of assumptions – including the discount rate, future compensation, health care costs, mortality, as well as the retirement age of employees. The most significant assumption is the discount rate used to determine the defined benefit obligation, which is set by reference to the yields on high quality corporate bonds that have durations that match the terms of the Bank’s obligations. Separate discount rates are used to determine the annual benefit expense in Canada and the US. These rates are determined with reference to the yields on high quality corporate bonds with durations that match the various components of the annual benefit expense. The discount rate used to determine the annual benefit expense for all other plans is the same as the rate used to determine the defined benefit obligation at the beginning of the period.

The Bank’s net asset or liability in respect of employee benefit plans is calculated separately for each plan as the difference between the present value of future benefits earned in respect of service for prior periods and the fair value of plan assets. The net asset or liability is included in other assets and other liabilities, as appropriate, in the Consolidated Statement of Financial Position. When the net amount in the Consolidated Statement of Financial Position is an asset, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.

The current service cost, net interest expense (income), past service cost, and administrative expense are recognized in net income. Net interest expense (income) is calculated by applying the discount rate at the beginning of the annual period to the net defined benefit asset or liability. When the benefits of a plan are improved (reduced), a past service cost (credit) is recognized immediately in net income.

Remeasurements comprising of actuarial gains and losses, the effect of the asset ceiling and the return on plan assets in excess of the interest income on the fair value of assets are recognized immediately in the Consolidated Statement of Financial Position with a charge or credit to the Statement of Comprehensive Income (OCI) in the period in which they occur. Amounts recorded in OCI are not recycled to the Consolidated Statement of Income.

Other long-term employee benefits

Other long-term employee benefits are accounted for similarly to defined benefit pension plans and other post-retirement benefit plans described above, except that remeasurements are recognized in the Consolidated Statement of Income in the period in which they arise.

Defined contribution plans

The cost of such plans are equal to contributions payable by the Bank to employees’ accounts for service rendered during the period and expensed.

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CONSOLIDATED FINANCIAL STATEMENTS

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided and a liability is measured on an undiscounted basis net of payments made.

Recognition of income and expenses

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Bank and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognized:

Interest and similar income and expenses

For all non-trading interest-bearing financial instruments, interest income or expense is recorded in net interest income using the effective interest rate. This is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into account all the contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses.

For trading financial instruments, mark-to-market changes including related interest income or expense are recorded in non-interest income – trading revenues.

The carrying amount of interest-bearing financial instruments, measured at amortized cost or classified as FVOCI, is adjusted if the Bank revises its estimates of payments or receipts. The adjusted carrying amount is calculated based on the original effective interest rate and the change in carrying amount is recorded as non-interest income in the Consolidated Statement of Income.

Once the carrying value of a financial asset or a group of similar financial assets has been reduced due to an impairment loss, interest income continues to be recognized based on net effective interest rate inherent in the investment.

Loan origination costs are deferred and amortized into interest income using the effective interest method over the expected term of the loan. Loan fees are recognized in interest income over the appropriate lending or commitment period. Mortgage prepayment fees are recognized in interest income when received, unless they relate to a minor modification to the terms of the mortgage, in which case the fees are deferred and amortized using the effective interest method over the remaining period of the original mortgage.

Loan syndication fees are recognized when no other services are required of the Bank and the fees are non-refundable unless the yield we retain is less than that of comparable lenders in the syndicate. In such cases, an appropriate portion will be deferred and amortized in interest income over the term of the loan.

Loan commitment fees for loans that are likely to be drawn down and other credit related fees are deferred (together with any incremental costs) and recognized as part of the effective interest on the loan. When it is unlikely that a loan will be drawn down, the loan commitment fees are recognized over the commitment period on a straight-line basis.

Fee and commission revenues

The Bank earns fee and commission revenues from a diverse range of services it provides to its customers. Fee income can be divided into the following two categories:

Fees earned for the provision of services over a period of time are accrued over that period the services are provided. These fees include commission income, investment management, custody and other management and advisory fees. Investment management fees and custodial fees are mainly calculated as a percentage of daily or period-end market value of the assets under management (AUM) or assets under administration (AUA) and are received monthly, quarterly, semi-annually, or annually based on the underlying investment management contracts. Performance-based fees related to AUM are earned based on exceeding certain benchmarks or other performance targets, and are recognized at the end of the performance period in which the target is met.

Fees arising from negotiating or participating in the negotiation of a transaction for a third-party, such as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognized on completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are recognized after fulfilling the corresponding criteria.

Fee and commission expenses

Fee and commission expenses relate to transaction and service fees which are expensed as the services are received.

Dividend income

Dividend income on equity securities is recognized in Interest income when the Bank’s right to receive payment is established.

Share-based payments

Share-based payments awarded to employees are recognized as compensation expense in the Consolidated Statement of Income over the vesting period based on the number of awards expected to vest including the impact of expected forfeitures. For awards that are delivered in tranches, each tranche is considered a separate award and accounted for separately.

Stock appreciation rights and other awards that must be settled for cash are classified as liabilities. Liability-classified awards are re-measured to fair value at each reporting date while they remain outstanding, with any changes in fair value recognized in compensation expense in the period. The liability is expensed over the vesting period which incorporates the re-measurement of the fair value and a revised forfeiture rate that anticipates units expected to vest.

Employee stock options with tandem stock appreciation rights give the employee the right to exercise for shares or settle in cash. These options are classified as liabilities and are re-measured to fair value at each reporting date while they remain outstanding. If an option is exercised, thereby cancelling the tandem stock appreciation right, both the exercise price proceeds together with the accrued liability and associated taxes are credited to equity – common shares in the Consolidated Statement of Financial Position.

Plain vanilla options and other awards that must be settled for shares are classified as equity awards. Equity-classified awards are expensed based on the grant date fair value with a corresponding increase to equity – other reserves in the Consolidated Statement of Financial Position. If an option is exercised, both the exercise price proceeds together with the amount recorded in other reserves is credited to equity – common shares in the Consolidated Statement of Financial Position.

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CONSOLIDATED FINANCIAL STATEMENTS

For tandem stock appreciation rights, stock appreciation rights and plain vanilla options, the Bank estimates fair value using an option pricing model. The option pricing model requires inputs such as the exercise price of the option, the current share price, the risk free interest rate, expected dividends, expected volatility (calculated using an equal weighting of implied and historical volatility) and specific employee exercise behaviour patterns based on statistical data. For other awards, fair value is the quoted market price of the Bank’s common shares at the reporting date.

Where derivatives are used to economically hedge share-based payment expense, related mark-to-market gains and losses are included in non-interest expenses – salaries and employee benefits in the Consolidated Statement of Income.

A voluntary renouncement of a tandem stock appreciation right where an employee retains the corresponding option for shares with no change in the overall fair value of the award, results in a reclassification of the accrued liability and associated tax to equity – other reserves in the Consolidated Statement of Financial Position. This reclassification is measured at the fair value of the renounced awards as of the renouncement date. Subsequent to the voluntary renouncement, these awards are accounted for as plain vanilla options, based on the fair value as of the renouncement date.

Customer loyalty programs

The Bank operates loyalty points programs, which allow customers to accumulate points when they use the Bank’s products and services. The points can then be redeemed for free or discounted products or services, subject to certain conditions.

Consideration received is allocated between the products sold or services rendered and points issued, with the consideration allocated to points equal to their fair value. The fair value of points is generally based on equivalent retail prices for the mix of awards expected to be redeemed. The fair value of the points issued is deferred in other liabilities and recognized as banking revenues when the points are redeemed or lapsed. Management judgment is involved in determining the redemption rate to be used in the estimate of points to be redeemed.

Dividends on shares

Dividends on common and preferred shares and other equity instruments are recognized as a liability and deducted from equity when they are declared and no longer at the discretion of the Bank.

Segment reporting

Management’s internal view is the basis for the determination of operating segments. The operating segments are those whose operating results are regularly reviewed by the Bank’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance. The Bank has three operating segments: Canadian Banking, International Banking, and Global Banking and Markets. The other category represents smaller operating segments, including Group Treasury and other corporate items, which are not allocated to an operating segment. These segments offer different products and services and are managed separately based on the Bank’s management and internal reporting structure.

The results of these business segments are based upon the internal financial reporting systems of the Bank. The accounting policies used in these segments are generally consistent with those followed in the preparation of the consolidated financial statements by the Bank. The only notable accounting measurement difference is the grossing up of revenues which are tax-exempt and income from associate corporations to an equivalent before-tax basis for those affected segments. This change in measurement enables comparison of income arising from taxable and tax-exempt sources.

Because of the complexity of the Bank, various estimates and allocation methodologies are used in the preparation of the business segment financial information. The funding value of assets and liabilities is transfer-priced at wholesale market rates, and corporate expenses are allocated to each segment on an equitable basis using various parameters. As well, capital is apportioned to the business segments on a risk-based methodology. Transactions between segments are recorded within segment results as if conducted with a third-party and are eliminated on consolidation.

Earnings per share (EPS)

Basic EPS is computed by dividing net income for the period attributable to the Bank’s common shareholders by the weighted-average number of common shares outstanding during the period.

Diluted EPS is calculated by dividing adjusted net income for the period attributable to common shareholders by the weighted-average number of diluted common shares outstanding for the period. In the calculation of diluted earnings per share, earnings are adjusted for changes in income or expenses that would result from the issuance of dilutive shares. The weighted-average number of diluted common shares outstanding for the period reflects the potential dilution that would occur if options, securities or other contracts that entitle their holders to obtain common shares had been outstanding from the beginning of the period (or a later date) to the end of the period (or an earlier date). Instruments determined to have an antidilutive impact for the period are excluded from the calculation of diluted EPS.

Earnings are adjusted by the after-tax amount of distributions related to dilutive capital instruments recognized in the period. For tandem stock appreciation rights that are carried as liabilities, the after-tax re-measurement included in salaries and employee benefits expense, net of related hedges, is adjusted to reflect the expense had these rights been equity-classified.

The number of additional shares for inclusion in diluted EPS for share-based payment options is determined using the treasury share method. Under this method, the net number of incremental common shares is determined by assuming that in-the-money stock options are exercised and the proceeds are used to purchase common shares at the average market price during the period.

The number of additional shares associated with capital instruments that potentially result in the issuance of common shares is based on the terms of the contract. On occurrence of contingencies as specified in the Non-Viability Contingent Capital (NVCC) Instruments, the number of additional common shares associated with the NVCC subordinated debentures, NVCC subordinated additional Tier 1 capital securities and NVCC preferred shares is based on an automatic conversion formula as set out in the respective prospectus supplements.

4 Transition to IFRS 9

(a) Reconciliation of IAS 39 to IFRS 9

The following table provides the impact from the transition to IFRS 9 on the Consolidated Statement of Financial Position at transition date, November 1, 2017. The impact consists of reclassification and remeasurement.

Reclassification:

These adjustments reflect the movement of balances between categories on the Consolidated Statement of Financial Position with no impact to shareholders’ equity. There is no change to the carrying value of the balances as a result of the reclassification.

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Remeasurement:

These adjustments, which include expected credit loss, result in a change to the carrying value of the item on the Statement of Financial Position with an impact to shareholders’ equity net of tax.

			IAS 39		IAS 39									IFRS 9			IFRS 9
As at November 1, 2017 ($ millions)	Note		Measurement basis		Carrying amount			Reclassification			Remeasurement			Carrying amount			Measurement basis		IFRS 9
Assets
Cash and deposits with financial institutions				Amortized cost	$	59,663		$	–		$	(3	)	$	59,660			Amortized cost		Cash and deposits with financial institutions	*
Precious metals				FVTPL		5,717			–			–			5,717			FVTPL		Precious metals
Trading Assets																				Trading assets
Debt securities		1		FVTPL		39,333			76			–			39,409			FVTPL		Debt securities
Equity securities				FVTPL		39,319			–			–			39,319			FVTPL		Equity securities
Loans		3		FVTPL		17,312			660			1			17,973			FVTPL		Loans
Other				FVTPL		2,500			–			–			2,500			FVTPL		Other
						98,464			736			1			99,201
Financial assets designated at FVTPL																				Financial assets designated at FVTPL
Debt securities				FVTPL (Designated)		13			–			–			13			FVTPL (Designated)		Debt securities
Securities purchased under resale agreements and securities borrowed				Amortized cost		95,319			–			–			95,319			Amortized cost		Securities purchased under resale agreements and securities borrowed	*
Derivative financial instruments		3		FVTPL		35,364			(2	)		–			35,362			FVTPL		Derivative financial instruments
Investment securities																				Investment securities
Debt securities		1,5,8		Amortized cost		18,765			4,205			118			23,088			Amortized cost		Debt securities	*
Debt securities		1		FVOCI		49,193			(4,281	)		–			44,912			FVOCI		Debt securities
Equity securities		2		FVOCI		1,311			(301	)		–			1,010			FVOCI		Equity securities
Equity securities		2		FVOCI		–			301			–			301			FVTPL		Equity securities
						69,269			(76	)		118			69,311
Loans																				Loans
Residential mortgages		3,4		Loans & receivables		236,916			(33	)		(134	)		236,749			Amortized cost		Residential mortgages
Personal loans		4		Loans & receivables		89,227			–			2			89,229			Amortized cost		Personal loans
Credit cards		4		Loans & receivables		14,104			–			–			14,104			Amortized cost		Credit cards
Business and government		3		Loans & receivables		168,449			(623	)		–			167,826			Amortized cost		Business and government
						508,696			(656	)		(132	)		507,908
Allowance for credit loss		5		Loans & receivables		(4,327	)		–			(593	)		(4,920	)		Amortized cost		Allowance for credit loss
Other																				Other
Customers’ liability under acceptances		5		Amortized cost		13,560			–			(16	)		13,544			Amortized cost		Customer’s liability under acceptances	*
Property and equipment						2,381			–			–			2,381					Property and equipment
Investment in associates		5				4,586			–			(184	)		4,402					Investment in associates
Goodwill and other intangible assets						12,106			–			–			12,106					Goodwill and other intangible assets
Deferred tax assets		1,6				1,713			–			50			1,763					Deferred tax assets
Other assets		5				12,749			–			(2	)		12,747					Other assets
						47,095			–			(152	)		46,943
Total assets					$	915,273		$	2			$  (761	)	$	914,514

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			IAS 39		IAS 39								IFRS 9		IFRS 9
As at November 1, 2017 ($ millions)	Note		Measurement basis		Carrying amount		Reclassification			Remeasurement			Carrying amount		Measurement basis		IFRS 9
Liabilities
Deposits				Amortized cost	$	625,367	$	–		$	–		$	625,367		Amortized cost		Deposits
Financial instruments designated at fair value through profit or loss				FVTPL		4,663		–			–			4,663		FVTPL		Financial instruments designated at fair value through profit or loss
Other																		Other
Acceptances				Amortized cost		13,560		–			–			13,560		Amortized cost		Acceptances
Obligations related to securities sold short				Amortized cost		30,766		–			–			30,766		Amortized cost		Obligations related to securities sold short
Derivative financial instruments		3		FVTPL		34,200		(2	)		–			34,198		FVTPL		Derivative financial instruments
Obligations related to securities sold under repurchase agreements and securities lent				Amortized cost		95,843		–			–			95,843		Amortized cost		Obligations related to securities sold under repurchase agreements and securities lent
Subordinated debentures				Amortized cost		5,935		–			–			5,935		Amortized cost		Subordinated debentures
Other liabilities		7				43,314		4			(151	)		43,167				Other liabilities
Total liabilities						853,648		2			(151	)		853,499
Equity
Common equity																		Common equity
Common shares						15,644		–			–			15,644				Common shares
Retained earnings		1,2				38,117		49			(613	)		37,553				Retained earnings
Accumulated other comprehensive income		1,2				1,577		(49	)		100			1,628				Accumulated other comprehensive income
Other reserves						116		–			–			116				Other reserves
Total common equity						55,454		–			(513	)		54,941				Total common equity
Preferred shares						4,579		–			–			4,579				Preferred shares
Total equity attributable to equity holders to the Bank						60,033		–			(513	)		59,520				Total equity attributable to equity holders to the Bank
Non-controlling interests in subsidiaries						1,592		–			(97	)		1,495				Non-controlling interests in subsidiaries
						61,625		–			(610	)		61,015
Total liabilities and equity					$	915,273	$	2			$  (761	)	$	914,514

* Net of applicable allowance for credit losses.

(1) AFS Debt instruments of $4,281 measured at fair value through other comprehensive income (FVOCI) were reclassified to amortized cost in the amount of $4,205 and $76 to fair value through profit or loss (FVTPL). The reclassifications were due to the business model being “held-to-collect” and the cash flows that did not represent payments that are solely payments of principal and interest (SPPI). The reclassification of debt instruments to amortized cost resulted in remeasurement of $118 with an offset to other comprehensive income (AOCI) and deferred tax assets. The reclassification of AOCI to retained earnings related to FVTPL classification.

(2) AFS Equity instruments of $301 previously fair valued through OCI are now classified as FVTPL, which resulted in reclassification of AOCI to retained earnings.

(3) Certain precious metal loans of $627 and the related derivatives that failed the SPPI test were classified to FVTPL, and $33 of residential mortgages were reclassified to trading to reflect the business model.

(4) Adjustments to certain balances against allowance for credit losses.

(5) Expected credit loss on financial assets and the Bank’s share of associated corporations.

(6) The increase in deferred tax assets relates to the impact of the IFRS 9 related adjustments to retained earnings.

(7) The decrease in remeasurement of $151 is comprised of a reduction in deferred tax liabilities of $129, a net decrease of $22 which includes allowance for credit losses related to undrawn commitments, letters of credit and letters of guarantee.

(8) Debt securities managed under a business model of held-to-collect were reclassifed from available-for-sale to amortized cost. As of October 31, 2018, the fair value of these securities was $3,951. For the year ended October 31, 2018, $67 of losses would have been recognized in other comprehensive income if the securities had not been reclassified.

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(b) Reconciliation of impairment allowance balance from IAS 39 to IFRS 9

The following table reconciles the closing impairment allowance for financial assets in accordance with IAS 39 and provisions for loan commitments and financial guarantee contracts in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets as at October 31, 2017 to the opening impairment allowance under IFRS 9 as at November 1, 2017.

($ millions)	Impairment allowance under IAS 39 as at October 31, 2017		Remeasurement			Impairment allowance under IFRS 9 as at November 1, 2017
Loans and acceptances(1)	$	4,327	$	611		$	4,938
Investment securities (Debt) at amortized cost		–		1			1
Investment securities (Debt) at FVOCI(2)		–		13			13
Deposits with financial institutions		–		3			3
Off-balance sheet credit risks(3)		120		(36	)		84
Total	$	4,447	$	592		$	5,039

(1) The remeasurement impact of $611 is comprised of loans $593, acceptances $16 and accrued interest of $2.

(2) The allowance for credit losses of $13 is recorded in accumulated other comprehensive income. These debt securities remain at fair value on the balance sheet.

(3) Off-balance sheet credit risks include credit risks such as undrawn lending commitments, letters of credit and letters of guarantee.

5 Future Accounting Developments

The Bank actively monitors developments and changes in accounting standards from the IASB, as well as requirements from the other regulatory bodies, including OSFI. The Bank is currently assessing the measurement impact of the adoption of new standards issued by the IASB will have on its consolidated financial statements and also evaluating the alternative elections available on transition.

Effective November 1, 2018

Revenue from contracts with customers

The IASB issued IFRS 15 Revenue from Contracts with Customers (IFRS 15), which replaces the previous revenue standard IAS 18 Revenue, and the related Interpretations on revenue recognition.

The standard is a control-based model as compared to the existing revenue standard which is primarily focused on risks and rewards and provides a single principle based framework to be applied to all contracts with customers that are in scope of the standard. Under the new standard, revenue is recognized when a customer obtains control of a good or service. Transfer of control occurs when the customer has the ability to direct the use of and obtain the benefits of the good or service. The standard introduces a new five step model governing revenue recognition to be applied to contracts with customers. The Bank must also determine whether its performance obligation is to provide the service itself (i.e. the Bank acts as a principal) or to arrange another party to provide the service (i.e. the Bank acts as an agent).

The Bank has assessed the scope of the new guidance to be limited to fees and commission revenues from wealth management and banking services in Canadian and International Banking and underwriting and advisory fees in Global Banking and Markets.

The Bank will adopt the standard and its amendments as of November 1, 2018 using the modified retrospective approach. Under this approach, the Bank will recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings as of November 1, 2018, without restating comparative periods. As of November 1, 2018, the opening balance of retained earnings is expected to decrease by approximately $60 million (net of tax). The decrease in retained earnings relates to certain costs no longer eligible for deferral under the new standard and the re-measurement of certain liabilities at fulfilment cost.

The presentation of certain costs will also change prospectively from non-interest expenses to non-interest income where amounts are deemed to be part of consideration payable to customers or the Bank is deemed to be acting as an agent. This presentation change will not have a material impact on the Bank’s consolidated financial statements.

Effective November 1, 2019

Financial instruments: Prepayment features with negative compensation

On October 12, 2017, the IASB issued an amendment to IFRS 9 Financial Instruments. The amendment allows certain pre-payable financial assets with so-called negative compensation prepayment option to be measured at amortized cost or fair value through other comprehensive income, if the prepayment amount substantially represents unpaid principal and interest and reasonable compensation. Reasonable compensation may be positive or negative. Prior to this amendment financial assets with this negative compensation feature would have failed the solely payments of principal and interest test and be mandatorily measured at fair value through profit or loss. The amendment will be effective for annual periods beginning on or after January 1, 2019, with early adoption permitted. Based on preliminary assessments, the amendment is not expected to impact the Bank.

Leases

On January 13, 2016, the IASB issued IFRS 16 Leases, which requires a lessee to recognize an asset for the right to use the leased item and a liability for the present value of its future lease payments. IFRS 16 will result in leases being recorded on the Bank’s balance sheet, including those currently classified as operating leases except for short-term leases and leases with low value of the underlying asset. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17.

IFRS 16 is effective for the Bank on November 1, 2019. On transition, there are practical expedients available whereby the Bank will not need to reassess whether a contract is, or contains a lease, or reassess the accounting of sale leaseback transactions recognized prior to the date of initial application. A lessee will apply IFRS 16 to its leases either retrospectively to each prior reporting period presented; or retrospectively with the cumulative effect of initially applying IFRS 16 being recognized at the date of initial application.

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The Bank is currently in the process of assessing existing contractual relationships to identify the existing population of leases that would be recorded on the balance sheet under the new standard. The Bank continues to evaluate the potential impact to the existing IT systems and processes and next steps include performing an initial quantification of the existing obligations and reviewing the additional disclosures required by the new standard. During 2019, the Bank will also complete its assessment of various practical expedients and formulate its accounting policies under IFRS 16.

IFRIC 23 Uncertainty over income tax treatments

On June 7, 2017, the IASB issued IFRIC 23 that is effective for the Bank beginning November 1, 2019. The interpretation clarifies the accounting for uncertainties over income taxes. The interpretation clarifies application of recognition and measurement requirements in IAS 12 income taxes when there is uncertainty over income tax treatments. The Bank is currently assessing the impact of the interpretation.

Employee Benefits

On February 7, 2018, the IASB issued narrow-scope amendments to pension accounting that is effective for the Bank beginning November 1, 2019. The amendments relate to when a plan amendment, curtailment or settlement has occurred. In such instances, the Bank is required to use updated assumptions to determine current service cost and net interest for the remainder of the reporting period after the change to the plan. For the Bank, the narrow scope amendments are to be applied prospectively to plan amendments, curtailments and settlements occurring after November 1, 2019.

Effective November 1, 2020

Conceptual Framework

On March 29, 2018, the IASB issued the revised Conceptual Framework for Financial Reporting (Framework) that is effective for the Bank beginning November 1, 2020. The Framework itself is not a standard, and does not override existing standards. It is used by the IASB in developing accounting standards. The Bank is currently assessing the impact of the revisions.

Definition of business

On October 22, 2018, the IASB issued a narrow-scope amendment to IFRS 3 Business Combination. The amendments will help companies determine whether an acquisition is of a business or a group of assets. Distinguishing between a business and a group of assets is important because an acquirer recognizes goodwill only when acquiring a business. The amendments apply to transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. Earlier adoption is permitted. The Bank is currently assessing the impact.

Definition of material

On October 31, 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, clarifying the definition of material. Under the new definition, information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. The explanations accompanying the definition have also been improved. The amendments are effective prospectively for annual periods beginning on or after January 1, 2020. Earlier adoption is permitted. The Bank is currently assessing the impact.

Effective November 1, 2021

Insurance Contracts

On May 18, 2017, the IASB issued IFRS 17 Insurance Contracts, which provides a comprehensive principle-based framework for the measurement and presentation of all insurance contracts. The new standard will replace IFRS 4 Insurance Contracts and requires insurance contracts to be measured using current fulfillment cash flows and for revenue to be recognized as the service is provided over the coverage period. On November 14, 2018, the IASB tentatively decided to defer the effective date, by one year, to annual periods on or after January 1, 2022. The Bank will continue to track the IASB Board’s meeting agenda items on issues and discussions related to the standard, further updates will be provided in Q1 2019.

The IFRS 17 project structure and governance has been established along with a Project Management Office to assist the Executive Steering and Project Operations Committees. The committees comprise of representatives from Global Finance, Global Insurance Actuarial Services, Information Technology and the Insurance Business Operations. The Bank is currently in the Evaluation and Design Solution phase of the project, with Implementation planned for Fiscal 2019 through 2022.

6 Cash and Deposits with Financial Institutions

As at October 31 ($ millions)	2018			2017
Cash and non-interest-bearing deposits with financial institutions	$	8,997		$	7,825
Interest-bearing deposits with financial institutions		53,272			51,838
Total	$	62,269	(1)	$	59,663

(1) Net of impairment allowances of $3.

The Bank is required to maintain balances with central banks, other regulatory authorities and certain counterparties and these amounted to $8,886 million (2017 – $7,282 million).

7 Fair Value of Financial Instruments

Determination of fair value

The calculation of fair value is based on market conditions at a specific point in time and therefore may not be reflective of future fair values. The Bank has controls and processes in place to ensure that the valuation of financial instruments is appropriately determined.

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The best evidence of fair value for a financial instrument is the quoted price in an active market. Unadjusted quoted market prices for identical instruments represent a Level 1 valuation. Where possible, valuations are based on quoted prices or observable inputs obtained from active markets. Independent Price Verification (IPV) is undertaken to assess the reliability and accuracy of prices and inputs used in the determination of fair value. The IPV process is performed by price verification groups that are independent from the business. The Bank maintains a list of pricing sources that are used in the IPV process. These sources include, but are not limited to, brokers, dealers and consensus pricing services. The valuation policies relating to the IPV process require that all pricing or rate sources used be external to the Bank. On a periodic basis, an independent assessment of pricing or rate sources is performed to determine market presence or market representative levels.

Quoted prices are not always available for over-the-counter transactions, as well as transactions in inactive or illiquid markets. In these instances, internal models that maximize the use of observable inputs are used to estimate fair value. The chosen valuation technique incorporates all the factors that market participants would take into account in pricing a transaction. When all significant inputs to models are observable, the valuation is classified as Level 2. Financial instruments traded in a less active market are valued using indicative market prices, present value of cash-flows or other valuation techniques. Fair value estimates normally do not consider forced or liquidation sales.

Where financial instruments trade in inactive markets or when using models where observable parameters do not exist, greater management judgment is required for valuation purposes. Valuations that require the significant use of unobservable inputs are considered Level 3.

The specific inputs and valuation techniques used in determining the fair value of financial instruments are noted below. For Level 3 instruments, additional information is disclosed in the Level 3 sensitivity analysis on page 175.

The fair values of cash and deposits with banks, securities purchased under resale agreements and securities borrowed, customers’ liability under acceptances, obligations related to securities sold under repurchase agreements and securities lent, acceptances, and obligations related to securities sold short are assumed to approximate their carrying values, either due to their short-term nature or because they are frequently repriced to current market rates.

Trading loans

Trading loans as they relate to precious metals (primarily gold and silver) are valued using a discounted cash flow model incorporating market-observable inputs, including precious metals spot and forward prices and interest rate curves (Level 2). Other trading loans that serve as hedges to loan-based credit total return swaps are valued using consensus prices from Bank approved independent pricing services (Level 2).

Government issued or guaranteed securities

The fair values of government issued or guaranteed debt securities are primarily based on unadjusted quoted prices in active markets, where available (Level 1). Where quoted prices are not available, the fair value is determined by utilizing recent transaction prices, broker quotes, or pricing services (Level 2).

For securities that are not actively traded, the Bank uses a discounted cash flow method, using the effective yield of a similar instrument adjusted for instrument-specific risk factors such as credit spread and contracted features (Level 2).

Corporate and other debt

Corporate and other debt securities are valued using unadjusted quoted prices from independent market data providers or third-party broker quotes (Level 1). Where prices are not available consistently, the last available data is used and verified with a yield-based valuation approach (Level 2). In some instances, interpolated yields of similar bonds are used to price securities (Level 2). The Bank uses pricing models with observable inputs from market sources such as credit spread, interest rate curves, and recovery rates (Level 2). These inputs are verified through an IPV process on a monthly basis.

For certain securities where there is no active market, no consensus market pricing and no indicative or executable independent third-party quotes, the Bank uses pricing by third-party providers or internal pricing models and cannot readily observe the market inputs used to price such instruments (Level 3).

Mortgage-backed securities

The fair value of residential mortgage-backed securities is primarily determined using third-party broker quotes and independent market data providers, where the market is more active (Level 2). Where the market is inactive, an internal price-based model is used (Level 3).

Equity securities

The fair value of equity securities is based on unadjusted quoted prices in active markets, where available (Level 1). Where equity securities are less frequently traded, the most recent exchange-quoted pricing is used to determine fair value. Where there is a wide bid-offer spread, fair value is determined based on quoted market prices for similar securities (Level 2).

Where quoted prices in active markets are not readily available, such as for private equity securities, the fair value is determined as a multiple of the underlying earnings or percentage of underlying assets obtained from third-party general partner statements (Level 3).

Income funds

The fair value of income funds is based on observable unadjusted quoted prices where available (Level 1). Where quoted or active market prices are unavailable, the last available Net Asset Value, fund statements and other financial information available from third-party fund managers at the fund level are used in arriving at the fair value.

Derivatives

Fair values of exchange-traded derivatives are based on unadjusted quoted market prices (Level 1). Fair values of over-the-counter (OTC) derivatives or inactive exchange-traded derivatives are determined using pricing models, which take into account input factors such as current market and contractual prices of the underlying instruments, as well as time value and yield curve or volatility factors underlying the positions (Level 2). The

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determination of the fair value of derivatives includes consideration of credit risk, estimated funding costs and ongoing direct costs over the life of the instruments.

Derivative products valued using a valuation technique with market-observable inputs mainly include interest rate swaps and options, currency swaps and forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including foreign exchange spot and forward rates and interest rate curves (Level 2).

Derivative products valued using a valuation technique with significant unobservable inputs are long dated contracts (interest rate swaps, currency swaps, forward foreign exchange contracts, option contracts and certain credit default swaps) and other derivative products that reference a basket of assets, commodities or currencies. These models incorporate certain significant non-observable inputs such as volatility and correlation (Level 3).

Loans

The estimated fair value of loans carried at amortized cost reflects changes in the general level of interest rates and credit worthiness of borrowers that have occurred since the loans were originated or purchased. The particular valuation methods used are as follows:

• Canadian fixed rate residential mortgages are fair valued by discounting the expected future contractual cash flows, taking into account expected prepayments and using management’s best estimate of average market interest rates currently offered for mortgages with similar remaining terms (Level 3).

• For fixed rate business and government loans, fair value is determined by discounting the expected future contractual cash flows of these loans at interest rates estimated by using the appropriate currency swap curves for the remaining term, adjusted for a credit mark of the expected losses in the portfolio (Level 3).

• For all other fixed rate loans, fair value is determined by discounting the expected future contractual cash flows of these loans at interest rates estimated by using the appropriate currency swap curves for the remaining term (Level 3).

• For all floating rate loans fair value is assumed to equal book value.

The fair value of loans is not adjusted for the value of any credit protection the Bank has purchased to mitigate credit risk.

Deposits

The fair values of deposits payable on demand or after notice or floating rate deposits payable on a fixed date is assumed to equal book value. The estimated fair values of Canadian personal fixed rate deposits payable on a fixed date are fair valued by discounting the expected future contractual cash outflows, using management’s best estimate of average market interest rates currently offered for deposits with similar remaining terms (Level 2).

Deposits under the Canada Mortgage Bond (CMB) program are fair valued by discounting expected future contractual cash flows using market observable inputs (Level 2).

For all other fixed rate deposits, fair value is determined by discounting the expected future contractual cash flows of these deposits at interest rates estimated by using the appropriate currency swap curves for the remaining term (Level 2).

For structured notes containing embedded features that are bifurcated from the Plain Vanilla notes, the fair value of the embedded derivatives is determined using option pricing models with inputs similar to other interest rate or equity derivative contracts (Level 2). The fair value of certain embedded derivatives is determined using net asset values (Level 3).

Subordinated debentures and other liabilities

The fair values of subordinated debentures, including debentures issued by subsidiaries which are included in other liabilities, are determined by reference to quoted market prices where available or market prices for debt with similar terms and risks (Level 2). The fair values of other liabilities is determined by the discounted contractual cash flow method with appropriate currency swap curves for the remaining term (Level 2).

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CONSOLIDATED FINANCIAL STATEMENTS

Fair value of financial instruments

The following table sets out the fair values of financial instruments of the Bank using the valuation methods and assumptions described above. The fair values disclosed do not include non-financial assets, such as property and equipment, investments in associates, precious metals, goodwill and other intangible assets.

	2018				2017
As at October 31 ($ millions)	Total fair value		Total carrying value		Total fair value		Total carrying value
Assets:
Cash and deposits with financial institutions	$	62,269	$	62,269	$	59,663	$	59,663
Trading assets		100,262		100,262		98,464		98,464
Financial instruments designated at fair value through profit or loss		12		12		13		13
Securities purchased under resale agreements and securities borrowed		104,018		104,018		95,319		95,319
Derivative financial instruments		37,558		37,558		35,364		35,364
Investment securities – other		57,653		57,653		50,504		50,504
Investment securities – amortized cost		20,316		20,743		18,716		18,765
Loans		553,758		551,834		507,276		504,369
Customers’ liability under acceptances		16,329		16,329		13,560		13,560
Other financial assets		10,913		10,913		9,314		9,314
Liabilities:
Deposits		674,535		676,534		625,964		625,367
Financial instruments designated at fair value through profit or loss		8,188		8,188		4,663		4,663
Acceptances		16,338		16,338		13,560		13,560
Obligations related to securities sold short		32,087		32,087		30,766		30,766
Derivative financial instruments		37,967		37,967		34,200		34,200
Obligations related to securities sold under repurchase agreements and securities lent		101,257		101,257		95,843		95,843
Subordinated debentures		5,627		5,698		6,105		5,935
Other financial liabilities		35,432		34,805		27,531		27,118

Changes in interest rates, credit spreads and liquidity costs are the main cause of changes in the fair value of the Bank’s financial instruments resulting in a favourable or unfavourable variance compared to carrying value. For the Bank’s financial instruments carried at cost or amortized cost, the carrying value is not adjusted to reflect increases or decreases in fair value due to market fluctuations, including those due to interest rate changes. For FVOCI investment securities, derivatives and financial instruments measured at FVTPL or designated as fair value through profit or loss, the carrying value is adjusted regularly to reflect the fair value.

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CONSOLIDATED FINANCIAL STATEMENTS

Fair value hierarchy

The following table outlines the fair value hierarchy of instruments carried at fair value on a recurring basis and of instruments not carried at fair value.

	2018(1)												2017
As at October 31 ($ millions)	Level 1			Level 2			Level 3			Total			Level 1		Level 2			Level 3		Total
Instruments carried at fair value on a recurring basis:
Assets:
Precious metals(2)	$	–		$	3,175		$	16		$	3,191		$	–	$	5,717		$	–	$	5,717
Trading assets
Loans		–			14,334			–			14,334			–		17,312			–		17,312
Canadian federal government and government guaranteed debt		13,003			–			–			13,003			10,343		–			–		10,343
Canadian provincial and municipal debt		–			10,159			–			10,159			–		7,325			–		7,325
US treasury and other US agencies’ debt		7,164			–			–			7,164			6,894		–			–		6,894
Other foreign governments’ debt		4,610			1,833			–			6,443			5,680		1,149			–		6,829
Corporate and other debt		3			8,984			18	(3)		9,005			44		7,920			22		7,986
Income funds		29			–			–			29			180		165			–		345
Equity securities		39,513			158			–			39,671			38,760		170			–		38,930
Other(4)		454			–			–			454			2,500		–			–		2,500
	$	64,776		$	38,643		$	34		$	103,453		$	64,401	$	39,758		$	22	$	104,181
Financial assets designated at fair value through profit or loss	$	12		$	–		$	–		$	12		$	13	$	–		$	–	$	13
Investment securities(5)
Canadian federal government and government guaranteed debt		6,373			2,518			–			8,891			9,677		2,416			–		12,093
Canadian provincial and municipal debt		366			3,986			–			4,352			593		4,230			–		4,823
US treasury and other US agencies’ debt		18,472			669			–			19,141			6,305		367			–		6,672
Other foreign governments’ debt		10,457			9,485			48	(6)		19,990			10,944		8,746			113		19,803
Corporate and other debt		732			1,818			13	(3)		2,563			750		3,584			53		4,387
Mortgage-backed securities		–	(7)		906			–			906			539		876			–		1,415
Equity securities		838			263			709			1,810			590		177			544		1,311
	$	37,238		$	19,645		$	770		$	57,653		$	29,398	$	20,396		$	710	$	50,504
Derivative financial instruments
Interest rate contracts	$	–		$	8,927		$	112		$	9,039		$	–	$	9,742		$	36	$	9,778
Foreign exchange and gold contracts		5			22,197			–			22,202			4		21,496			–		21,500
Equity contracts		797			1,556			8			2,361			615		1,720			–		2,335
Credit contracts		–			349			–			349			–		175			–		175
Commodity contracts		92			3,515			–			3,607			133		1,443			–		1,576
	$	894		$	36,544		$	120		$	37,558		$	752	$	34,576		$	36	$	35,364
Liabilities:
Deposits(8)	$	–		$	(401	)	$	–		$	(401	)	$	–	$	(7	)	$	–	$	(7	)
Financial liabilities designated at fair value through profit or loss		–			8,188			–			8,188			–		4,663			–		4,663
Obligations related to securities sold short		24,563			7,524			–			32,087			27,796		2,970			–		30,766
Derivative financial instruments
Interest rate contracts		–			11,012			74			11,086			–		10,823			267		11,090
Foreign exchange and gold contracts		–			20,537			–			20,537			3		17,646			–		17,649
Equity contracts		1,057			1,884			5			2,946			502		2,724			7		3,233
Credit contracts		–			70			–			70			–		179			–		179
Commodity contracts		34			3,294			–			3,328			268		1,781			–		2,049
	$	1,091		$	36,797		$	79		$	37,967		$	773	$	33,153		$	274	$	34,200
Instruments not carried at fair value(9):
Assets:
Investment securities – amortized cost	$	7,392	(7)	$	12,815		$	109	(6)	$	20,316		$	4,240	$	14,476		$	–	$	18,716
Loans(10)		–			313,490			–			313,490			–		–			286,621		286,621
Liabilities:
Deposits(10)(11)		–			293,898			–			293,898			–		266,995			–		266,995
Subordinated debentures		–			5,627			–			5,627			–		6,105			–		6,105
Other liabilities		–			20,383			–			20,383			–		13,363			–		13,363

(1) The amounts for October 31, 2018 have been prepared in accordance with IFRS 9, prior periods have not been restated (refer to Notes 3 and 4).

(2) The fair value of precious metals is determined based on quoted market prices and forward spot prices, where applicable.

(3) IFRS 9 adoption resulted in reclassification of $17 million of corporate and other debt to trading assets in Level 3 from available-for-sale debt securities (refer to Note 4).

(4) Represents energy related assets for the year ended October 31, 2018 (October 31, 2017 – represents base metal positions).

(5) Excludes debt investment securities measured at amortized cost of $20,743 (held-to-maturity as at October 31, 2017 – $18,765).

(6) IFRS 9 adoption resulted in reclassification of $104 million of other foreign governments’ debt in Level 3 to debt securities measured at amortized cost (refer to Note 4).

(7) IFRS 9 adoption resulted in reclassification of $539 million of mortgage backed securities in Level 1 to debt securities measured at amortized cost (refer to Note 4).

(8) These amounts represent embedded derivatives bifurcated from structured notes.

(9) Represents the fair value of financial assets and liabilities where the carrying amount is not a reasonable approximation of fair value.

(10) Excludes floating rate instruments as carrying value approximates fair value.

(11) Excludes embedded derivatives bifurcated from structured notes.

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CONSOLIDATED FINANCIAL STATEMENTS

Level 3 instrument fair value changes

Financial instruments categorized as Level 3 as at October 31, 2018, in the fair value hierarchy comprise certain precious metals, illiquid government bonds, highly-structured corporate bonds, illiquid investments in private equity securities, and complex derivatives.

The following table summarizes the changes in Level 3 instruments carried at fair value for the year ended October 31, 2018.

All positive balances represent assets and negative balances represent liabilities. Consequently, positive amounts indicate purchases of assets or settlements of liabilities and negative amounts indicate sales of assets or issuances of liabilities.

	As at October 31, 2018(1)
($ millions)	Fair value November 1 2017			Gains/(losses) recorded in income			Gains/(losses) recorded in OCI			Purchases/ Issuances			Sales/ Settlements			Transfers into/out of Level 3			Fair value October 31 2018			Change in unrealized gains/(losses) recorded in income for instruments still held(2)
Precious metals	$	–		$	–		$	–		$	5		$	(8	)	$	19		$	16		$	–
		–			–			–			5			(8	)		19			16			–
Trading assets
Loans		–			–			–			–			(2)			2			–			–
Corporate and other debt		39			(10	)		–			–			(16	)		5			18			–
		39			(10	)		–			–			(18	)		7			18			–
Investment securities
Other foreign governments’ debt		9			–			–			61			(22	)		–			48			n/a
Corporate and other debt		36			–			(5	)		–			(18	)		–			13			n/a
Equity securities		544			16			18			218	(3)		(67	)		(20	)		709			14
		589			16			13			279			(107	)		(20	)		770			14
Derivative financial instruments – assets
Interest rate contracts		36			67			–			31			(22	)		–			112			58
Equity contracts		–			(2	)		–			4			–			6			8			(2	)(4)
Derivative financial instruments – liabilities
Interest rate contracts		(267	)		(108	)		–			(24	)		22			303			(74	)		(26	)(5)
Foreign exchange and gold contracts		–			–			–			(6	)		–			6			–			–
Equity contracts		(7	)		–			–			(5	)		–			7			(5	)		–
		(238	)		(43	)		–			–			–			322			41			30
Total	$	390		$	(37	)	$	13		$	284			$  (133)		$	328		$	845		$	44

(1) The amounts for November 1, 2017 and October 31, 2018 have been prepared in accordance with IFRS 9, prior period amounts have not been restated (refer to Notes 3 and 4).

(2) These amounts represent the gains and losses from fair value changes of Level 3 instruments still held at the end of the period that are recorded in the Consolidated Statement of Income.

(3) Includes amount related to BBVA Chile acquisition of $45 million.

(4) Certain unrealized gains and losses on derivative assets and liabilities are largely offset by mark-to-market changes on other instruments included in trading revenues in the Consolidated Statement of Income, since these instruments act as an economic hedge to certain derivative assets and liabilities.

(5) Certain unrealized losses on interest rate derivative contracts are largely offset by mark-to-market changes on embedded derivatives on certain deposit liabilities in the Consolidated Statement of Income.

The following table summarizes the changes in Level 3 instruments carried at fair value for the year ended October 31, 2017.

	As at October 31, 2017
($ millions)	Fair value November 1 2016			Gains/(losses) recorded in income(1)			Gains/(losses) recorded in OCI		Purchases/ Issuances			Sales/ Settlements			Transfers into/out of Level 3			Fair value October 31 2017
Trading assets	$	1,222		$	(20	)	$	–	$	–		$	(1,180	)	$	–		$	22
Investment securities(2)		909			(24	)		38		122			(332	)		(3	)		710
Derivative financial instruments		(236	)		10			–		(6	)		3			(9	)		(238	)
Deposits(3)		(1,163	)		6			–		–			1,157			–			–

(1) Gains or losses for items in Level 3 may be offset with losses or gains on related hedges in Level 1 or Level 2.

(2) Investment securities include financial assets designated as available-for-sale.

(3) These amounts represent embedded derivatives bifurcated from certain deposit liabilities.

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CONSOLIDATED FINANCIAL STATEMENTS

Significant transfers

Significant transfers can occur between the fair value hierarchy levels when additional or new information regarding valuation inputs and their refinement and observability become available. The Bank recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.

Derivative liabilities of $316 million were transferred out of Level 3 into Level 2 for the year ended October 31, 2018. All transfers were as a result of new information being obtained regarding the observability of inputs used in the valuation.

The following significant transfers were made among Levels 2 and 3 for the year ended October 31, 2017:

A net amount of derivative assets of $135 million and derivative liabilities of $126 million were transferred out of Level 3 into Level 2 for equity derivatives. Transfers were primarily as a result of assessment and consideration of volatility as an insignificant input for certain equity derivative contracts.

Level 3 sensitivity analysis

The table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.

	Valuation technique	Significant unobservable inputs	Range of estimates for unobservable inputs(1)		Changes in fair value from reasonably possible alternatives ($ millions)
Derivative financial instruments
Interest rate contracts	Option pricing	Interest rate		7% - 93%	–
	model	volatility
Equity contracts	Option pricing	Equity volatility		2% - 124%	(9)/9
	model	Single stock correlation		(70)% - 97%

(1) The range of estimates represents the actual lowest and highest level inputs used to fair value financial instruments within each financial statement category.

The Bank applies judgment in determining unobservable inputs used to calculate the fair value of Level 3 instruments.

The following section discusses the significant unobservable inputs for Level 3 instruments.

Correlation

Correlation in a credit derivative or debt instrument refers to the likelihood of a single default causing a succession of defaults. It affects the distribution of the defaults throughout the portfolio and therefore affects the valuation of instruments such as collateralized debt obligation tranches. A higher correlation may increase or decrease fair value depending on the seniority of the instrument.

Correlation becomes an input into equity derivative pricing when the relationship between price movements of two or more of the underlying assets is relevant.

Volatility

Volatility is a measure of security price fluctuation. Historic volatility is often calculated as the annualized standard deviation of daily price variation for a given time period. Implied volatility is volatility, when input into an option pricing model, that returns a value equal to the current market value of the option.

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CONSOLIDATED FINANCIAL STATEMENTS

8 Trading Assets

(a) Trading securities

An analysis of the carrying value of trading securities is as follows:

As at October 31, 2018 ($ millions)	Remaining term to maturity
	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Trading securities:
Canadian federal government issued or guaranteed debt	$	1,500	$	4,040	$	4,781	$	863	$	1,819	$	–	$	13,003
Canadian provincial and municipal debt		859		876		2,122		3,425		2,877		–		10,159
U.S. treasury and other U.S. agency debt		514		1,574		3,348		1,602		126		–		7,164
Other foreign government debt		1,353		1,042		2,452		1,155		441		–		6,443
Common shares		–		–		–		–		–		39,700		39,700
Other		595		1,650		4,888		1,203		585		84		9,005
Total	$	4,821	$	9,182	$	17,591	$	8,248	$	5,848	$	39,784	$	85,474
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,711	$	5,222	$	5,901	$	4,798	$	4,972	$	9,730	$	33,334
U.S. dollar		620		2,414		7,105		2,377		523		16,695		29,734
Mexican peso		322		119		538		21		4		405		1,409
Other currencies		1,168		1,427		4,047		1,052		349		12,954		20,997
Total trading securities	$	4,821	$	9,182	$	17,591	$	8,248	$	5,848	$	39,784	$	85,474
As at October 31, 2017 ($ millions)	Remaining term to maturity
	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Trading securities:
Canadian federal government issued or guaranteed debt	$	950	$	1,696	$	4,283	$	1,333	$	2,081	$	–	$	10,343
Canadian provincial and municipal debt		1,230		1,127		1,536		1,269		2,163		–		7,325
U.S. treasury and other U.S. agency debt		113		980		3,301		2,214		286		–		6,894
Other foreign government debt		1,172		819		2,716		1,132		990		–		6,829
Common shares		–		–		–		–		–		39,275		39,275
Other		530		1,134		4,702		1,088		532		–		7,986
Total	$	3,995	$	5,756	$	16,538	$	7,036	$	6,052	$	39,275	$	78,652
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,368	$	3,064	$	5,130	$	3,068	$	4,524	$	8,619	$	26,773
U.S. dollar		372		1,771		6,807		2,777		526		12,016		24,269
Mexican peso		249		235		488		1		1		997		1,971
Other currencies		1,006		686		4,113		1,190		1,001		17,643		25,639
Total trading securities	$	3,995	$	5,756	$	16,538	$	7,036	$	6,052	$	39,275	$	78,652

(b) Trading loans

The following table provides the geographic breakdown of trading loans:

As at October 31 ($ millions)	2018		2017
Trading loans(1)(2)
U.S.(3)	$	9,080	$	10,654
Europe(4)		3,066		3,824
Asia Pacific(4)		1,077		1,605
Canada(4)		280		376
Other(4)		831		853
Total	$	14,334	$	17,312

(1) Geographic segmentation of trading loans is based upon the location of the ultimate risk of the underlying asset.

(2) Loans are denominated in U.S. dollars.

(3) Includes trading loans that serve as a hedge to loan-based credit total return swaps of $6,071 (2017 – $7,390), while the remaining relates to short-term precious metals trading and lending activities.

(4) These loans are primarily related to short-term precious metals trading and lending activities.

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CONSOLIDATED FINANCIAL STATEMENTS

9 Financial Instruments Designated at Fair Value Through Profit or Loss

In accordance with its risk management strategy, the Bank has elected to designate certain investments, loans and senior note liabilities at fair value through profit or loss to reduce an accounting mismatch between fair value changes in these instruments and fair value changes in related derivatives, and where a hybrid financial liability contains one or more embedded derivatives that are not closely related to the host contract. Changes in fair value of financial liabilities arising from the Bank’s own credit risk are recognized in other comprehensive income, without subsequent reclassification to net income.

The cumulative fair value adjustment due to own credit risk is determined at a point in time by comparing the present value of expected future cash flows over the term of these liabilities discounted at the Bank’s effective funding rate, and the present value of expected future cash flows discounted under a benchmark rate. The change in fair value attributable to change in credit risk is determined by the change in the cumulative fair value adjustment due to own credit risk.

The following table presents the fair value of financial assets and liabilities designated at fair value through profit or loss and their changes in fair value.

	Fair value				Change in fair value					Cumulative change in FV(1)
	As at				For the year ended
October 31 ($ millions)	2018		2017		2018		2017			2018		2017
Assets
Investment securities(2)	$	12	$	13	$	–	$	–		$	–	$	11
Loans(3)		–		–		–		(205	)		–		(197	)
Liabilities
Senior note liabilities(4)		8,188		4,663		869		103			778		(91	)

(1) The cumulative change in fair value is measured from the instruments’ date of initial recognition.

(2) Changes in fair value are recorded in non-interest income – other.

(3) Changes in fair value are recorded in non-interest income – trading revenues.

(4) Changes in fair value attributable to changes in the Bank’s own credit risk are recorded in other comprehensive income. Other changes in fair value are recorded in non-interest income – trading revenues.

The following tables present the changes in fair value attributable to changes in the Bank’s own credit risk for financial liabilities designated at fair value through profit or loss as well as their contractual maturity and carrying amounts.

	Senior Note Liabilities
	Contractual maturity amount(1)		Carrying Value		Difference between carrying value and contractual maturity amount			Changes in fair value for the period attributable to changes in own credit risk recorded in other comprehensive income			Cumulative changes in fair value attributable to changes in own credit risk(1)
As at October 31, 2018	$	8,966	$	8,188	$	778		$	(30	)	$(66)
As at October 31, 2017	$	4,572	$	4,663	$	(91	)	$	(28	)	$(36)

(1) The cumulative change in fair value is measured from the instruments’ date of initial recognition.

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CONSOLIDATED FINANCIAL STATEMENTS

10 Derivative Financial Instruments

(a) Notional amounts⁽¹⁾

The following table provides the aggregate notional amounts of derivative financial instruments outstanding by type and segregated between those used by the Bank in its dealer capacity (Trading) and those derivatives designated in hedging relationships. The notional amounts of these contracts represent the derivatives volume outstanding and do not represent the potential gain or loss associated with the market risk or credit risk of such instruments. Credit derivatives within other derivative contracts are comprised primarily of purchased and sold credit default swap transactions. To a lesser extent, this category also includes total return swaps referenced to loans and debt securities. Other derivative contracts – other includes precious metals other than gold, and other commodities including energy and base metal derivatives.

	2018						2017
As at October 31 ($ millions)	Trading		Hedging		Total		Trading		Hedging		Total
Interest rate contracts
Exchange-traded:
Futures	$	127,595	$	–	$	127,595	$	161,590	$	–	$	161,590
Options purchased		3,402		–		3,402		5,474		–		5,474
Options written		–		–		–		2,894		–		2,894
		130,997		–		130,997		169,958		–		169,958
Over-the-counter:
Forward rate agreements		11,407		–		11,407		208		–		208
Swaps		403,061		30,480		433,541		441,607		18,609		460,216
Options purchased		29,617		–		29,617		34,190		–		34,190
Options written		34,655		–		34,655		38,099		–		38,099
		478,740		30,480		509,220		514,104		18,609		532,713
Over-the-counter (settled through central counterparties):
Forward rate agreements		319,026		–		319,026		329,853		–		329,853
Swaps		3,028,670		136,188		3,164,858		2,236,148		106,979		2,343,127
Options purchased		–		–		–		–		–		–
Options written		–		–		–		–		–		–
		3,347,696		136,188		3,483,884		2,566,001		106,979		2,672,980
Total	$	3,957,433	$	166,668	$	4,124,101	$	3,250,063	$	125,588	$	3,375,651
Foreign exchange and gold contracts
Exchange-traded:
Futures	$	7,476	$	–	$	7,476	$	32,452	$	–	$	32,452
Options purchased		48		–		48		16		–		16
Options written		36		–		36		481		–		481
		7,560		–		7,560		32,949		–		32,949
Over-the-counter:
Spot and forwards		412,229		26,433		438,662		427,112		21,623		448,735
Swaps		340,614		57,380		397,994		321,567		63,300		384,867
Options purchased		42,497		–		42,497		39,100		–		39,100
Options written		41,768		–		41,768		39,547		–		39,547
		837,108		83,813		920,921		827,326		84,923		912,249
Over-the-counter (settled through central counterparties):
Spot and forwards		27,886		–		27,886		–		–		–
Swaps		–		–		–		–		–		–
Options purchased		–		–		–		–		–		–
Options written		–		–		–		–		–		–
		27,886		–		27,886		–		–		–
Total	$	872,554	$	83,813	$	956,367	$	860,275	$	84,923	$	945,198
Other derivative contracts
Exchange-traded:
Equity	$	43,323	$	–	$	43,323	$	33,287	$	–	$	33,287
Credit		–		–		–		–		–		–
Commodity and other contracts		55,076		–		55,076		45,938		–		45,938
		98,399		–		98,399		79,225		–		79,225
Over-the-counter:
Equity		79,226		756		79,982		64,444		796		65,240
Credit		18,902		–		18,902		26,737		–		26,737
Commodity and other contracts		45,174		–		45,174		34,715		–		34,715
		143,302		756		144,058		125,896		796		126,692
Over-the-counter (settled through central counterparties):
Equity		–		–		–		2,863		–		2,863
Credit		10,964		–		10,964		10,855		–		10,855
Commodity and other contracts		326		–		326		6,762		–		6,762
		11,290		–		11,290		20,480		–		20,480
Total	$	252,991	$	756	$	253,747	$	225,601	$	796	$	226,397
Total notional amounts outstanding	$	5,082,978	$	251,237	$	5,334,215	$	4,335,939	$	211,307	$	4,547,246

(1) The notional amounts represent the amount to which a rate or price is applied to determine the amount of cash flows to be exchanged.

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(b) Remaining term to maturity

The following table summarizes the remaining term to maturity of the notional amounts of the Bank’s derivative financial instruments by type:

As at October 31, 2018 ($ millions)	Within one year		One to five years		Over five years		Total
Interest rate contracts
Futures	$	72,068	$	55,519	$	8	$	127,595
Forward rate agreements		227,761		92,717		9,955		330,433
Swaps		1,316,741		1,448,580		833,078		3,598,399
Options purchased		6,644		22,985		3,390		33,019
Options written		4,211		24,718		5,726		34,655
		1,627,425		1,644,519		852,157		4,124,101
Foreign exchange and gold contracts
Futures		3,005		4,100		371		7,476
Spot and forwards		438,760		26,241		1,547		466,548
Swaps		90,987		195,484		111,523		397,994
Options purchased		39,505		2,851		189		42,545
Options written		39,395		2,199		210		41,804
		611,652		230,875		113,840		956,367
Other derivative contracts
Equity		84,333		34,890		4,082		123,305
Credit		13,056		13,798		3,012		29,866
Commodity and other contracts		70,292		29,958		326		100,576
		167,681		78,646		7,420		253,747
Total	$	2,406,758	$	1,954,040	$	973,417	$	5,334,215
As at October 31, 2017 ($ millions)	Within one year		One to five years		Over five years		Total
Interest rate contracts
Futures	$	62,152	$	98,731	$	707	$	161,590
Forward rate agreements		282,062		47,999		–		330,061
Swaps		971,003		1,172,422		659,918		2,803,343
Options purchased		10,690		17,036		11,938		39,664
Options written		5,809		23,800		11,384		40,993
		1,331,716		1,359,988		683,947		3,375,651
Foreign exchange and gold contracts
Futures		4,810		27,474		168		32,452
Spot and forwards		401,461		47,210		64		448,735
Swaps		96,767		185,747		102,353		384,867
Options purchased		36,291		2,825		–		39,116
Options written		37,309		2,719		–		40,028
		576,638		265,975		102,585		945,198
Other derivative contracts
Equity		73,983		26,514		893		101,390
Credit		18,249		15,272		4,071		37,592
Commodity and other contracts		50,253		37,021		141		87,415
		142,485		78,807		5,105		226,397
Total	$	2,050,839	$	1,704,770	$	791,637	$	4,547,246

(c) Credit risk

As with other financial assets, derivative instruments are subject to credit risk. Credit risk arises from the possibility that counterparties may default on their obligations to the Bank. However, whereas the credit risk of other financial assets is represented by the principal amount net of any applicable allowance for credit losses, the credit risk associated with derivatives is normally a small fraction of the notional amount of the derivative instrument.

Derivative contracts generally expose the Bank to credit loss if changes in market rates affect a counterparty’s position unfavourably and the counterparty defaults on payment. Accordingly, exposure to credit risk of derivatives is represented by the positive fair value of the instrument.

Negotiated over-the-counter derivatives generally present greater credit exposure than exchange-traded contracts. The net change in the exchange-traded contracts is normally settled daily in cash with the exchange. Holders of these contracts look to the exchange for performance under the contract.

The Bank strives to limit credit risk by dealing with counterparties that it believes are creditworthy, and investment grade counterparties account for a significant portion of the credit risk exposure arising from the Bank’s derivative transactions as at October 31, 2018. To control credit risk associated with derivatives, the Bank uses the same credit risk management activities and procedures that are used in the lending business in assessing and adjudicating potential credit exposure. The Bank applies limits to each counterparty, measures exposure as the current positive fair value plus potential future exposure, and uses credit mitigation techniques, such as netting and collateralization.

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The Bank obtains the benefit of netting by entering into master netting arrangements with counterparties (typically industry standard International Swaps and Derivatives Association (ISDA) agreements), which allow for a single net settlement of all transactions covered by that agreement in the event of a default or early termination of the transactions. In this manner, the credit risk associated with favourable contracts is eliminated by the master netting arrangement to the extent that unfavourable contracts with the same counterparty are not settled before favourable contracts.

Collateralization is typically documented by way of an ISDA Credit Support Annex (CSA), the terms of which may vary according to each party’s view of the other party’s creditworthiness. CSAs can require one party to post initial margin at the onset of each transaction. CSAs also allow for variation margin to be called if total uncollateralized mark-to-market exposure exceeds an agreed upon threshold. Such variation margin provisions can be one way (only one party will ever post collateral) or bi-lateral (either party may post collateral depending upon which party is in-the-money). The CSA will also detail the types of collateral that are acceptable to each party, and the adjustments that will be applied against each collateral type. The terms of the ISDA master netting agreements and CSAs are taken into consideration in the calculation of counterparty credit risk exposure (see also page 85 of the 2018 Annual Report).

Derivatives instruments used by the Bank include credit derivatives in its investment and loan portfolios: credit protection is sold as an alternative to acquiring exposure to bond or loan assets, while credit protection is bought to manage or mitigate credit exposures.

The following table summarizes the credit exposure of the Bank’s derivative financial instruments. The credit risk amount (CRA) represents the estimated replacement cost, or positive fair value, for all contracts taking into account master netting or collateral arrangements that have been made. The CRA does not reflect actual or expected losses.

The credit equivalent amount (CEA) is the CRA plus an add-on for potential future exposure. The add-on amount is based on a formula prescribed in the Capital Adequacy Requirements (CAR) Guideline of the Superintendent. The risk-weighted balance is calculated by multiplying the CEA by the capital requirement (K) times 12.5, where K is a function of the probability of default (PD), loss given default (LGD), maturity and prescribed correlation factors. Other derivative contracts – other includes precious metals other than gold, and other commodities, including energy and base metal derivatives.

	2018								2017
As at October 31 ($ millions)	Notional amount		Credit risk amount (CRA)(1)		Credit equivalent amount (CEA)(1)		CET1 Risk Weighted Assets(2)		Notional amount		Credit risk amount (CRA)(1)		Credit equivalent amount (CEA)(1)		CET1 Risk Weighted Assets(2)
Interest rate contracts
Futures	$	127,595	$	–	$	93	$	–	$	161,590	$	–	$	65	$	–
Forward rate agreements		330,433		36		157		82		330,061		20		30		20
Swaps		3,598,399		96		4,436		1,125		2,803,343		250		5,459		1,341
Options purchased		33,019		36		138		63		39,664		5		105		57
Options written		34,655		–		2		1		40,993		–		15		3
		4,124,101		168		4,826		1,271		3,375,651		275		5,674		1,421
Foreign exchange and gold contracts
Futures		7,476		–		85		–		32,452		–		56		–
Spot and forwards		466,548		2,571		5,440		2,006		448,735		2,370		6,311		1,765
Swaps		397,994		4,297		8,232		2,604		384,867		4,023		7,297		1,898
Options purchased		42,545		712		240		76		39,116		523		515		113
Options written		41,804		–		20		5		40,028		–		83		12
		956,367		7,580		14,017		4,691		945,198		6,916		14,262		3,788
Other derivative contracts
Equity		123,305		455		4,927		1,505		101,390		45		5,123		1,575
Credit		29,866		239		420		119		37,592		12		1,421		174
Commodity and other contracts		100,576		1,182		8,052		830		87,415		9		10,953		807
		253,747		1,876		13,399		2,454		226,397		66		17,497		2,556
Credit Valuation Adjustment(2)		–		–		–		4,616		–		–		–		2,988
Total derivatives	$	5,334,215	$	9,624	$	32,242	$	13,032	$	4,547,246	$	7,257	$	37,433	$	10,753
Amount settled through central counterparties(3)
Exchange-traded		236,956		–		7,300		153		282,132		–		10,385		208
Over-the-counter		3,523,060		–		781		16		2,693,460		–		1,334		27
	$	3,760,016	$	–	$	8,081	$	169	$	2,975,592	$	–	$	11,719	$	235

(1) The amounts presented are net of collateral and master netting agreements at the product level. The total amounts relating to netting and collateral were $27,934 (2017 – $28,107) for CRA, and $63,831 (2017 – $51,623) for CEA.

(2) As per OSFI guideline, effective 2014, Credit Valuation Adjustment (CVA) to CET1 RWA for derivatives was phased-in. In 2018, the CVA was 0.80 (2017 – 0.72).

(3) Amounts are included under total derivatives above. Amounts include exposures settled directly through central counterparties and exposures settled through clearing members of central counterparties.

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(d) Fair value

The following table summarizes the fair value of derivatives segregated by type and segregated between trading and those derivatives designated in hedging relationships.

As at October 31 ($ millions)	2018				2018				2017
	Average fair value				Year-end fair value				Year-end fair value(1)
	Favourable		Unfavourable		Favourable		Unfavourable		Favourable		Unfavourable
Trading
Interest rate contracts
Forward rate agreements	$	83	$	17	$	57	$	–	$	27	$	1
Swaps		8,193		10,130		8,158		8,956		8,895		10,330
Options		84		107		104		128		53		75
		8,360		10,254		8,319		9,084		8,975		10,406
Foreign exchange and gold contracts
Forwards		5,213		5,232		6,611		5,800		5,973		5,223
Swaps		10,660		8,570		11,864		10,292		10,945		8,774
Options		765		691		826		831		730		681
		16,638		14,493		19,301		16,923		17,648		14,678
Other derivative contracts
Equity		2,451		3,380		2,361		2,895		2,274		3,233
Credit		299		128		349		70		175		179
Commodity and other contracts		2,829		2,765		3,607		3,328		1,576		2,049
		5,579		6,273		6,317		6,293		4,025		5,461
Trading derivatives’ market valuation	$	30,577	$	31,020	$	33,937	$	32,300	$	30,648	$	30,545
Hedging
Interest rate contracts
Swaps					$	720	$	2,002	$	803	$	684
Foreign exchange and gold contracts
Forwards						331		310		634		215
Swaps						2,570		3,304		3,218		2,756
					$	2,901	$	3,614	$	3,852	$	2,971
Other derivative contracts
Equity					$	–	$	51	$	61	$	–
Hedging derivatives’ market valuation					$	3,621	$	5,667	$	4,716	$	3,655
Total derivative financial instruments as per Statement of Financial Position					$	37,558	$	37,967	$	35,364	$	34,200
Less: impact of master netting and collateral(2)						27,934		27,934		28,107		28,107
Net derivative financial instruments(2)					$	9,624	$	10,033	$	7,257	$	6,093

(1) The average fair value of trading derivatives’ market valuation for the year ended October 31, 2017 was: favourable $30,780 and unfavourable $34,032. Average fair value amounts are based on the latest 13 month-end balances.

(2) Master netting agreement amounts are based on the capital adequacy criteria of the Basel Committee on Banking Supervision (BCBS) and OSFI. These criteria allow netting where there are legally enforceable contracts which enable net settlement in the event of a default, bankruptcy, liquidation or similar circumstances.

(e) Hedging activities

The Bank manages interest rate risk, foreign currency risk and equity risk through hedge accounting transactions.

Interest rate risk

Single-currency interest rate swaps are used to hedge interest rate risk exposure. In fair value hedges of interest rate risk, the interest rate exposure from fixed rate assets and liabilities is converted from a fixed to floating exposure. In cash flow hedges of interest rate risk, the interest rate exposure from floating rate assets and liabilities is converted from floating to fixed. The Bank generally hedges interest rate risk only to the extent of benchmark interest rates. The total interest cash flows usually comprise a spread in addition to the benchmark rate.

Foreign currency risk

In fair value hedges, cross-currency interest rate swaps and single-currency interest rate swaps are used to manage foreign currency exposure in conjunction with interest rate exposure. Cross-currency interest rate swaps or a combination of cross-currency and single-currency interest rate swaps are mainly used to convert a foreign currency fixed rate exposure to a functional currency floating rate exposure The Bank generally hedges interest rate risk only to the extent of benchmark interest rates. The total interest cash flows usually comprise a spread in addition to the benchmark rate.

In cash flow hedges, cross-currency interest rate swaps, single-currency interest rate swaps, foreign currency forwards and foreign currency assets or liabilities are used to manage foreign currency exposure, or a combined foreign currency and interest rate exposure. Cross-currency interest rate swaps are used to offset the foreign currency exposure by exchanging the interest cash flows in one currency for interest cash flows in another currency. Single-currency interest rate swaps may be used in conjunction with cross-currency interest rate swaps to convert the foreign currency exposure or resulting functional currency exposure from floating to fixed. Foreign currency forwards and foreign currency denominated assets and liabilities are used to offset the exposure arising from highly probable future cash flows and purchase considerations for business acquisitions denominated in a foreign currency. In hedges of both foreign currency and interest rate exposure, the interest rate risk is generally hedged only to the extent of the

benchmark interest rate. The total interest cash flows usually comprise a spread in addition to the benchmark rate.

In net investment hedges, the Bank designates foreign currency liabilities and foreign currency forwards as hedging instruments to manage foreign currency exposure. The designated non-derivative liabilities are denominated in the functional currency of the net investment, such that the foreign

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exchange translation impact from the net investment will be offset by the foreign exchange impact from the designated liabilities. The foreign currency forward contracts are structured to sell the functional currency of the net investment in return for the Bank’s functional currency.

Equity risk

Equity risk is created by the Bank’s share-based compensation plans awarded to employees. In cash flow hedges, total return swaps are mainly used to offset the equity exposure by exchanging interest payments for payments based on the returns on the underlying shares.

For all of the risks identified above, the economic relationship and hedge ratio are determined using a qualitative and quantitative assessment. This assessment incorporates comparison of critical terms of the hedged and hedging item, and regression analysis. For regression analysis, a hedging relationship is considered highly effective when all of the following criteria are met: correlation between the variables in the regression is at least 0.8 or greater; slope of the regression is within a 0.8-1.25 range; and confidence level of the slope is at least 95%.The main sources of hedge ineffectiveness include the following:

• The use of different discount curves to value the hedged item and the hedging derivative in fair value hedges, in order to reflect the reduced credit risk of collateralized derivatives;

• Differences in the underlying reference interest rate tenor and reset/settlement frequency between the hedging instruments and the hedged item.

The Bank has elected to continue to apply the hedge accounting requirements of IAS 39. However, the Bank has implemented the additional hedge accounting disclosures that are required by the IFRS 9 related amendments to IFRS 7 “Financial Instruments: Disclosures”. The following tables present current fiscal year information in accordance with these new disclosure requirements. Prior year comparatives have not been restated and are presented in accordance with the prior IFRS 7 disclosure requirements at the end of this section.

The following table summarizes the notional amounts of derivatives and carrying amounts of cash and deposit liabilities designated as hedging instruments.

	Notional amounts(1)
	Remaining term to maturity						No specific
As at October 31, 2018 ($ millions)	Within one year		One to five years		Over five years		maturity		Total
Fair value hedges
Interest rate risk – swaps	$	16,006	$	78,236	$	11,270	$	–	$	105,512
Foreign currency/interest rate risk – swaps		–		689		–		–		689
Cash flow hedges
Interest rate risk – swaps		12,257		21,908		9,713		–		43,878
Foreign currency/interest rate risk – swaps		5,539		19,193		2,489		–		27,221
Foreign currency risk
Swaps		20,983		63,697		8,465		–		93,145
Foreign currency forwards		8,999		–		–		–		8,999
Cash		–		–		–		92		92
Equity risk – total return swaps		298		458		–		–		756
Net investment hedges
Foreign currency risk
Foreign currency forwards		17,434		–		–		–		17,434
Deposit liabilities – carrying amount		–		–		–		6,077		6,077
Total	$	81,516	$	184,181	$	31,937	$	6,169	$	303,803

(1) Notional amounts relating to derivatives that are hedging multiple risks in both assets and liabilities are included in more than one category.

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The following table shows the average rate or price of significant hedging instruments.

	Average rate or price(1)
As at October 31, 2018	Fixed interest rate			FX rate		Price
Fair value hedges
Interest rate risk – swaps		2.04	%		n/a		n/a
Foreign currency/interest rate risk – swaps
CAD-USD		2.22	%		1.29		n/a
CAD-EUR		3.02	%		1.33		n/a
Cash flow hedges
Interest rate risk – swaps		2.37	%		n/a		n/a
Foreign currency/ interest rate risk – swaps
CAD-USD		1.75	%		1.27		n/a
Foreign currency risk
Swaps
CAD-USD		n/a			1.30		n/a
CAD-EUR		n/a			1.48		n/a
CAD-GBP		n/a			1.74		n/a
Foreign currency forwards
CAD-USD		n/a			1.30		n/a
Equity price risk – total return swaps		n/a			n/a	$	73.87
Net investment hedges
Foreign currency risk – foreign currency forwards
CAD-USD		n/a			1.29		n/a
CAD-MXN		n/a			15.77		n/a
CAD-PEN		n/a			2.59		n/a

(1) The average rate or price is calculated in aggregate for all of the Bank’s hedge relationships, including hedges of assets and liabilities. The majority of the Bank’s hedges have a remaining term of maturity of less than 5 years.

For fair value hedges, the following table contains information related to items designated as hedging instruments, hedged items and ineffectiveness.

For the year ended October 31, 2018 ($ millions)	Carrying amount of the hedging instruments(1)					Hedge Ineffectiveness(2)												Accumulated amount of fair value hedge adjustment gains/ (losses) on the hedged item(4)
	Assets		Liabilities			Gains/(losses) on hedging instrument used to calculate hedge ineffectiveness			Gains/(losses) on hedged item used to calculate hedge ineffectiveness			Ineffectiveness recorded in non-interest income – other			Carrying amount of the hedged item(3)			Active hedges			Discontinued hedges
Fair value hedges
Interest rate risk – swaps	$	448	$	(1,454	)	$	(475	)	$	469		$	(6	)
Investment securities							360			(367	)		(7	)	$	16,286		$	(149	)	$	63
Loans							260			(265	)		(5	)		23,763			(246	)		(149	)
Deposit liabilities							(1,037	)		1,043			6			(58,026	)		1,065			186
Subordinated debentures							(58	)		58			–			(3,923	)		37			40
Foreign currency/interest rate risk – swaps		7		(31	)		–			(1	)		(1	)
Investment securities							5			(5	)		–			814			6			–
Deposit liabilities							(4	)		4			–			(466	)		3			–
Subordinated debentures							(1	)		–			(1	)		–			–			–
Total	$	455		$  (1,485	)		$  (475	)	$	468			$  (7	)		$  (21,552	)	$	716		$	140

(1) Comprises unrealized gains/losses and are recorded within derivative financial instruments in assets and liabilities, respectively in the Consolidated Statement of Financial Position.

(2) Includes ineffectiveness related to hedges discontinued during the year ended October 31, 2018.

(3) This represents the carrying value on the Consolidated Statement of Financial Position and comprises amortized cost before allowance for credit losses, plus fair value hedge adjustment, except for investment securities which are carried at fair value.

(4) This represents the accumulated fair value hedge adjustment and is a component of the carrying amount of the hedged item.

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CONSOLIDATED FINANCIAL STATEMENTS

For cash flow hedges and net investment hedges, the following table contains information related to items designated as hedging instruments, hedged items and ineffectiveness.

	Carrying amount of the hedging instruments(1)					Hedge Ineffectiveness(2)
For the year ended October 31, 2018 ($ millions)	Assets		Liabilities			Gains/(losses) on hedging instrument used to calculate hedge ineffectiveness			Gains/(losses) on hypothetical derivative used to calculate hedge ineffectiveness(3)			Ineffectiveness recorded in non-interest income – other(4)
Cash flow hedges
Interest rate risk – swaps	$	961	$	(1,350	)	$	(339	)	$	(341	)	$	2
Foreign currency/interest rate risk – swaps		101		(955	)		(530	)		(549	)		(6	)
Foreign currency risk
Swaps		1,773		(1,516	)		(563	)		(562	)		(6	)
Foreign currency forwards		143		(14	)		332			332			–
Cash		92		–			1			1			–
Equity risk – total return swaps		–		(51	)		(92	)		(92	)		–
		3,070		(3,886	)		(1,191	)		(1,211	)		(10	)
Net investment hedges
Foreign currency risk
Foreign currency forwards		188		(296	)		(160	)		(160	)		–
Deposit liabilities		–		(6,077	)		(121	)		(121	)		–
		188		(6,373	)		(281	)		(281	)		–
Total	$	3,258		$  (10,259	)		$  (1,472	)		$  (1,492	)		$  (10	)

(1) Comprises unrealized gains/losses for derivative instruments and are recorded within derivative financial instruments in assets and liabilities, respectively in the Consolidated Statement of Financial Position.

(2) Includes ineffectiveness related to hedges discontinued during the year ended October 31, 2018.

(3) For cash flow hedges, hypothetical derivatives having critical terms which match those of the underlying hedged item are used to assess hedge ineffectiveness.

(4) For cash flow hedges, ineffectiveness is only recognized in the Consolidated Statement of Income when the life-to-date cumulative change in the hedging instrument exceeds the cumulative change in the hypothetical derivative.

For cash flow hedges and net investment hedges, the following table contains information regarding the impacts on the Consolidated Statement of Other Comprehensive Income on a pre-tax basis.

	AOCI as at November 1, 2017			Net gains/ (losses) recognized in OCI			Amount reclassified to net income as the hedged item affects net income(1)		Amount reclassified to net income for hedges of forecasted transactions that are no longer expected to occur(1)			Net gains (losses) included in non-financial asset/liability as a result of a hedged forecasted transaction			AOCI as at October 31, 2018			Balance in cash flow hedge reserve/unrealized foreign currency translation account as at October 31, 2018
For the year ended October 31, 2018 ($ millions)																		Active hedges			Discountinued hedges
Cash flow hedges
Interest rate risk	$	104		$	(341	)	$	83	$	–		$	–		$	(154	)	$	(262	)	$	108
Foreign currency/interest rate risk		(151	)		(524	)		225		–			–			(450	)		(352	)		(98	)
Foreign currency risk		321			(224	)		464		(22	)		(94	)		445			433			12
Equity risk		46			(92	)		39		–			–			(7	)		(7	)		–
		320			(1,181	)		811		(22	)		(94	)		(166	)		(188	)		22
Net investment hedges
Foreign currency risk		(2,970	)		(281	)		–		–			–			(3,251	)		(3,199	)		(52	)
Total	$	(2,650	)	$	(1,462	)	$	811		$  (22	)		$  (94	)		$  (3,417	)		$  (3,387	)	$	(30	)

(1) Amounts reclassified from the cash flow hedge reserve to net income are recorded in non-interest income-other.

Comparative year information under prior IFRS 7 disclosure requirements

Ineffectiveness of hedge relationships

Due to the ineffective portion of designated hedges, the Bank recorded the following amounts in non-interest income – other:

For the year ended October 31 ($ millions)	2017
Fair value hedges
Gain (loss) recorded on hedged items	$	574
Gain (loss) recorded on hedging instruments		(588	)
Ineffectiveness	$	(14	)
Cash flow hedges
Ineffectiveness	$	24

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CONSOLIDATED FINANCIAL STATEMENTS

Hedging instruments

Market valuation is disclosed by the type of relationship:

	2017
As at October 31 ($ millions)	Favourable		Unfavourable
Derivatives designated in fair value hedging relationships(1)	$	687	$	751
Derivatives designated in cash flow hedging relationships		3,746		2,749
Derivatives designated in net investment hedging relationships(1)		283		155
Total derivatives designated in hedging relationships	$	4,716	$	3,655

(1) As at October 31, 2017, the fair value of non-derivative instruments designated as net investment hedges and fair value hedges was $6,183 (2016 – $6,905). These non-derivative hedging instruments are presented as deposits – financial institutions on the Consolidated Statement of Financial Position.

Cash flow hedges

The period when cash flows of designated hedged items are expected to occur and impact the Consolidated Statement of Income are as follows:

As at October 31, 2017 ($ millions)	Within one year			Within one to five years			More than five years
Cash inflows from assets	$	11,235		$	19,866		$	4,178
Cash outflows from liabilities		(31,542	)		(26,863)			(4,746)
Net cash flows	$	(20,307)		$	(6,997	)	$	(568	)

Income related to interest cash flows is recognized using the effective interest method over the life of the underlying instrument. Foreign currency gains and losses related to future cash flows of on-balance sheet monetary items are recognized as incurred. Forecasted revenue is recognized over the period to which it relates.

11 Offsetting Financial Assets and Financial Liabilities

The Bank is eligible to present certain financial assets and financial liabilities as listed in the table below on a net basis on the Consolidated Statement of Financial Position pursuant to criteria described in Note 3 – Significant accounting policies.

The following tables provide information on the impact of offsetting on the Bank’s Consolidated Statement of Financial Position, as well as the financial impact of netting for instruments that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for offsetting in the Consolidated Statement of Financial Position, as well as available cash and financial instrument collateral.

As at October 31, 2018 ($ millions)
Types of financial assets	Gross amounts of recognized financial assets			Gross amounts of recognized financial liabilities offset in the  consolidated statement of financial position			Net amounts of financial assets presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position						Net amount(3)
									Impact of master netting arrangements or similar agreements(1)			Collateral(2)
Derivative financial instruments	$	37,887	(4)	$	(329	)(4)	$	37,558	$	(24,568	)	$	(4,085	)	$	8,905
Securities purchased under resale agreements and securities borrowed		116,375			(12,357	)		104,018		(6,849	)		(91,347	)		5,822
Total	$	154,262		$	(12,686	)	$	141,576	$	(31,417	)	$	(95,432	)	$	14,727

As at October 31, 2018 ($ millions)
Types of financial liabilities	Gross amounts of recognized financial liabilities			Gross amounts of recognized financial assets offset in the consolidated statement  of financial position			Net amounts of financial liabilities presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position						Net amount
									Impact of master netting arrangements or similar agreements(1)			Collateral(2)
Derivative financial instruments	$	38,296	(4)	$	(329	)(4)	$	37,967	$	(24,568	)	$	(5,051	)	$	8,348
Obligations related to securities sold under repurchase agreements and securities lent		113,614			(12,357	)		101,257		(6,849	)		(88,154	)		6,254
Total	$	151,910		$	(12,686	)	$	139,224	$	(31,417	)	$	(93,205	)	$	14,602

(1) Amounts that are subject to master netting arrangements or similar agreements but were not offset in the Consolidated Statement of Financial Position because they did not meet the net settlement/simultaneous settlement criteria; or because the rights of set off are conditional upon the default of the counterparty only.

(2) Cash and financial instrument collateral amounts received or pledged in relation to the total amounts of financial assets and financial liabilities, including those that were not offset in the Consolidated Statement of Financial Position. These amounts are disclosed at fair value and the rights of set off are conditional upon the default of the counterparty.

(3) Not intended to represent the Bank’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to offsetting and collateral arrangements.

(4) During 2018, the Bank adopted the settlement-to-market (STM) model for derivatives cleared through a clearing organization. Under this model, the legal characterization of variation margin is considered to be settled at the end of each day. As such, the balances in the Gross amounts of recognized financial assets/liabilities and the Gross amounts offset in the consolidated statement of financial position decreased by approximately $18 billion each.

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CONSOLIDATED FINANCIAL STATEMENTS

As at October 31, 2017 ($ millions)
Types of financial assets	Gross amounts of recognized financial assets		Gross amounts of recognized financial liabilities offset in the consolidated statement  of financial position			Net amounts of financial assets presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position
								Impact of master netting arrangements or similar agreements(1)			Collateral(2)			Net amount(3)
Derivative financial instruments(4)	$	49,512	$	(14,148	)	$	35,364	$	(22,400	)	$	(5,915	)	$	7,049
Securities purchased under resale agreements and securities borrowed		106,721		(11,402	)		95,319		(11,649	)		(75,675	)		7,995
Total	$	156,233	$	(25,550)		$	130,683	$	(34,049)		$	(81,590)		$	15,044

As at October 31, 2017 ($ millions)
Types of financial liabilities	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial assets offset in the consolidated statement  of financial position			Net amounts of financial liabilities presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position
								Impact of master netting arrangements or similar agreements(1)			Collateral(2)			Net amount
Derivative financial instruments(4)	$	48,348	$	(14,148	)	$	34,200	$	(22,400	)	$	(4,700	)	$	7,100
Obligations related to securities sold under repurchase agreements and securities lent		107,245		(11,402	)		95,843		(11,649	)		(72,311	)		11,883
Total	$	155,593	$	(25,550)		$	130,043	$	(34,049)		$	(77,011)		$	18,983

(1) Amounts that are subject to master netting arrangements or similar agreements but were not offset in the Consolidated Statement of Financial Position because they did not meet the net settlement/simultaneous settlement criteria; or because the rights of set off are conditional upon the default of the counterparty only.

(2) Cash and financial instrument collateral amounts received or pledged in relation to the total amounts of financial assets and financial liabilities, including those that were not offset in the Consolidated Statement of Financial Position. These amounts are disclosed at fair value and the rights of set off are conditional upon the default of the counterparty.

(3) Not intended to represent the Bank’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to offsetting and collateral arrangements.

(4) For fiscal 2017, the cash collateral received against the positive market values of derivative financial instruments of $793 and the cash collateral pledged towards the negative mark to market of derivative financial instruments of $1,112 are recorded within other liabilities and other assets, respectively.

12 Investment Securities

The following table presents the carrying amounts of the Bank’s investment securities per measurement category.

As at October 31, 2018 ($ millions)	2018(1)		2017
Debt investment securities measured at FVOCI	$	55,843	$	n/a
Debt investment securities measured at amortized cost		20,743		n/a
Equity investment securities designated as at FVOCI		1,305		n/a
Equity investment securities measured at FVTPL		505		n/a
Available-for-sale investment securities		n/a		50,504
Held-to-maturity investment securities		n/a		18,765
Total investment securities		78,396		69,269

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(a) Debt investment securities measured at fair value through other comprehensive income (FVOCI)

As at October 31, 2018 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Canadian federal government issued or guaranteed debt	$	8,903	$	38	$	50	$	8,891
Canadian provincial and municipal debt		4,403		3		54		4,352
U.S. treasury and other U.S. agency debt		19,298		6		163		19,141
Other foreign government debt		20,022		49		81		19,990
Other debt		3,503		6		40		3,469
Total debt securities measured at FVOCI	$	56,129	$	102	$	388	$	55,843

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CONSOLIDATED FINANCIAL STATEMENTS

(b) Debt investment securities measured at amortized cost

As at October 31, 2018 ($ millions)	Fair Value		Carrying value(1)
Canadian federal and provincial government issued or guaranteed debt	$	6,530	$	6,681
U.S. treasury and other U.S. agency debt		4,321		4,462
Other foreign government debt		3,086		3,131
Corporate debt		6,379		6,469
Total debt investment securities measured at amortized cost	$	20,316	$	20,743

(1) Balances are net of impairment allowances of $(1).

(c) Equity investment securities designated at fair value through other comprehensive income (FVOCI)

The Bank has designated certain instruments shown in the following table as equity securities FVOCI as these investments are expected to be held for the long-term for strategic purposes, effective November 1, 2017. In prior years, these instruments were classified as available-for-sale and measured at fair value with changes to carrying value recognized in other comprehensive income.

As at October 31, 2018 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Preferred equity instruments	$	334	$	–	$	54	$	280
Common shares		937		126		38		1,025
Total equity investment securities designated at FVOCI	$	1,271	$	126	$	92	$	1,305

(d) Available-for-sale investment securities

An analysis of unrealized gains and losses on available-for-sale securities is as follows:

As at October 31, 2017 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Canadian federal government issued or guaranteed debt	$	12,069	$	119	$	95	$	12,093
Canadian provincial and municipal debt		4,839		13		29		4,823
U.S. treasury and other U.S. agency debt		6,761		1		90		6,672
Other foreign government debt		19,788		49		34		19,803
Other debt		5,792		34		24		5,802
Preferred shares		397		1		87		311
Common shares		899		164		63		1,000
Total available-for-sale securities	$	50,545	$	381	$	422	$	50,504

The net unrealized loss on available-for-sale securities of $41 million increases to a net unrealized loss of $48 million after the impact of qualifying hedges is taken into account. The net unrealized loss on available-for-sale securities is recorded in Accumulated Other Comprehensive Income.

(e) Held-to-maturity investment securities

An analysis of the fair value and carrying value of held-to-maturity securities is presented below:

As at October 31, 2017 ($ millions)	Fair value		Carrying value
Canadian federal and provincial government issued or guaranteed debt	$	5,748	$	5,779
U.S. treasury and other U.S. agency debt		3,991		3,993
Other foreign government debt		2,690		2,705
Corporate debt		6,287		6,288
Total held-to-maturity securities	$	18,716	$	18,765

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CONSOLIDATED FINANCIAL STATEMENTS

(f) An analysis of the carrying value of investment securities is as follows:

	Remaining term to maturity
As at October 31, 2018 ($ millions)	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Fair value through other comprehensive income
Debt instruments
Canadian federal government issued or guaranteed debt	$	1,439	$	407	$	5,878	$	105	$	1,062	$	–	$	8,891
Yield(1) %		0.6		1.5		2.0		2.6		3.5		–		1.9
Canadian provincial and municipal debt		1,092		1,107		2,084		64		5		–		4,352
Yield(1) %		1.7		1.8		1.8		3.2		2.9		–		1.8
U.S. treasury and other U.S. agency debt		322		3,517		13,485		1,654		163		–		19,141
Yield(1) %		1.8		2.0		2.4		3.1		3.2		–		2.4
Other foreign government debt		6,884		6,379		5,349		1,053		325		–		19,990
Yield(1) %		1.3		1.7		3.7		3.8		4.3		–		2.3
Other debt		718		872		1,553		141		185		–		3,469
Yield(1) %		1.5		1.8		2.0		2.6		2.6		–		1.9
		10,455		12,282		28,349		3,017		1,740		–		55,843
Equity instruments
Preferred equity instruments		–		–		–		–		–		280		280
Common shares		–		–		–		–		–		1,025		1,025
												1,305		1,305
Total FVOCI		10,455		12,282		28,349		3,017		1,740		1,305		57,148
Amortized cost
Canadian federal and provincial government issued or guaranteed debt		692		868		5,121		–		–		–		6,681
U.S. treasury and other U.S. agency debt		197		988		3,266		–		11		–		4,462
Other foreign government debt		354		1,193		966		502		116		–		3,131
Corporate debt		637		1,113		4,414		246		59		–		6,469
		1,880		4,162		13,767		748		186		–		20,743
Fair value through profit or loss
Equity instruments		–		–		–		–		–		505		505
Total investment securities	$	12,335	$	16,444	$	42,116	$	3,765	$	1,926	$	1,810	$	78,396
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,918	$	1,828	$	11,478	$	357	$	1,102	$	967	$	18,650
U.S. dollar		1,797		8,384		26,137		2,053		354		366		39,091
Mexican peso		640		541		892		282		–		15		2,370
Other currencies		6,980		5,691		3,609		1,073		470		462		18,285
Total investment securities	$	12,335	$	16,444	$	42,116	$	3,765	$	1,926	$	1,810	$	78,396

(1) Represents the weighted-average yield of fixed income securities.

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CONSOLIDATED FINANCIAL STATEMENTS

	Remaining term to maturity
As at October 31, 2017 ($ millions)	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Available-for-sale
Canadian federal government issued or guaranteed debt	$	8	$	291	$	9,780	$	905	$	1,109	$	–	$	12,093
Yield(1) %		0.9		1.1		1.1		2.7		3.2		–		1.4
Canadian provincial and municipal debt		99		737		3,698		284		5		–		4,823
Yield(1) %		0.6		1.5		1.7		2.4		2.9		–		1.7
U.S. treasury and other U.S. agency debt		106		1,260		2,374		2,704		228		–		6,672
Yield(1) %		1.0		1.5		1.0		1.6		1.5		–		1.3
Other foreign government debt		7,810		5,283		5,313		1,259		138		–		19,803
Yield(1) %		0.6		2.8		4.1		5.7		6.2		–		2.5
Other debt		1,082		1,541		2,784		210		185		–		5,802
Yield(1) %		0.6		0.8		1.6		2.5		2.5		–		1.2
Preferred shares		–		–		–		–		–		311		311
Common shares		–		–		–		–		–		1,000		1,000
Total available-for-sale securities		9,105		9,112		23,949		5,362		1,665		1,311		50,504
Held-to-maturity
Canadian federal and provincial government issued or guaranteed debt		65		860		4,854		–		–		–		5,779
U.S. treasury and other U.S. agency debt		1,290		–		2,703		–		–		–		3,993
Other foreign government debt		–		683		1,914		102		6		–		2,705
Corporate debt		167		821		5,300		–		–		–		6,288
Total held-to-maturity assets		1,522		2,364		14,771		102		6		–		18,765
Total investment securities	$	10,627	$	11,476	$	38,720	$	5,464	$	1,671	$	1,311	$	69,269
Total by currency (in Canadian equivalent):
Canadian dollar	$	76	$	1,165	$	15,500	$	1,276	$	1,130	$	539	$	19,686
U.S. dollar		1,961		4,178		19,344		3,023		419		372		29,297
Mexican peso		420		579		1,568		285		–		9		2,861
Other currencies		8,170		5,554		2,308		880		122		391		17,425
Total investment securities	$	10,627	$	11,476	$	38,720	$	5,464	$	1,671	$	1,311	$	69,269

(1) Represents the weighted-average yield of fixed income securities.

(g) Net gain on sale of investment securities

The following table presents the net gain on sale of investment securities:

For the year ended October 31 ($ millions)	2018(1)		2017			2016
Net realized gains	$	n/a	$	399		$	570
Debt investment securities measured at fair value through other comprehensive income (FVOCI)		146		n/a			n/a
Total net realized gains on investment securities		146		399			570
Impairment losses		–		19	(2)		36	(2)
Net gain on sale of investment securities	$	146	$	380		$	534

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Impairment losses are comprised of (2017 – $14; 2016 – $36) from equity securities and (2017 –$5; 2016 – nil) from other debt securities.

13 Loans, Impaired Loans and Allowance for Credit Losses

(a) Loans at amortized cost

	IFRS 9						IAS 39
	2018(1)						2017
As at October 31 ($ millions)	Gross loans		Allowance for credit losses		Net carrying amount		Gross loans		Allowance for credit losses		Net carrying amount
Residential mortgages	$	253,357	$	678	$	252,679	$	236,916	$	551	$	236,365
Personal loans		96,019		2,109		93,910		89,227		1,502		87,725
Credit cards		16,485		1,213		15,272		14,104		802		13,302
Business and government		191,038		1,065		189,973		168,449		1,472		166,977
Total	$	556,899	$	5,065	$	551,834	$	508,696	$	4,327	$	504,369

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

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CONSOLIDATED FINANCIAL STATEMENTS

(b) Loans and acceptances outstanding by geography⁽¹⁾

As at October 31 ($ millions)	2018			2017
Canada:
Residential mortgages	$	213,083		$	205,793
Personal loans		72,935			64,295
Credit cards		7,361			13,495
Business and government		57,918			52,935
		351,297			336,518
United States:
Personal loans		1,193			1,228
Business and government		40,613			35,702
		41,806			36,930
Mexico:
Residential mortgages		7,651			6,911
Personal loans		3,298			3,064
Credit cards		674			520
Business and government		15,399			13,635
		27,022			24,130
Chile:
Residential mortgages		15,313			7,302
Personal loans		6,023			3,587
Credit cards		2,592			1,744
Business and government		19,876			10,109
		43,804			22,742
Peru:
Residential mortgages		2,947			2,735
Personal loans		3,888			3,682
Credit cards		1,575			1,410
Business and government		11,707			10,617
		20,117			18,444
Colombia:
Residential mortgages		2,189			1,999
Personal loans		3,138			1,845
Credit cards		2,255			1,746
Business and government		3,996			3,838
		11,578			9,428
Other International:
Residential mortgages		12,174			12,176
Personal loans		5,544			4,471
Credit cards		2,028			2,244
Business and government		41,529			41,613
		61,275			60,504
Total loans		556,899			508,696
Acceptances(2)		16,329			13,560
Total loans and acceptances(3)		573,228			522,256
Allowance for credit losses(4)		(5,073	)		(4,327	)
Total loans and acceptances net of allowances for loan losses	$	568,155		$	517,929

(1) Geographic segmentation is based on the location of the property for residential mortgages; otherwise, the residence of the borrower.

(2) 1.6% of borrowers reside outside Canada.

(3) Loans and acceptances denominated in US dollars were $107,944 (2017 – $100,452), in Chilean pesos $37,515 (2017 – $17,824), Mexican pesos $21,561 (2017 – $18,857), and in other foreign currencies $49,223 (2017 – $44,176).

(4) Allowance for credit losses for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amount have not been restated (refer to Notes 2, 3, 4).

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(c) Loan maturities

As at October 31, 2018	Remaining term to maturity														Rate sensitivity
($ millions)	Within one year		One to five years		Five to ten years		Over ten years		No specific maturity			Total			Floating		Fixed rate		Non-rate sensitive			Total
Residential mortgages	$	49,762	$	180,563	$	10,326	$	11,040	$	1,666		$	253,357		$	59,351	$	191,802	$	2,204		$	253,357
Personal loans		17,422		35,050		4,775		693		38,079			96,019			37,003		58,007		1,009			96,019
Credit cards		–		–		–		–		16,485			16,485			5,334		11,151		–			16,485
Business and government		85,090		91,595		7,378		773		6,202			191,038			138,510		50,606		1,922			191,038
Total	$	152,274	$	307,208	$	22,479	$	12,506	$	62,432		$	556,899		$	240,198	$	311,566	$	5,135		$	556,899
Allowance for credit losses		–		–		–		–		(5,065	)		(5,065	)		–		–		(5,065	)		(5,065	)
Total loans net of allowance for credit losses	$	152,274	$	307,208	$	22,479	$	12,506	$	57,367		$	551,834		$	240,198	$	311,566	$	70		$	551,834
As at October 31, 2017	Remaining term to maturity														Rate sensitivity
($ millions)	Within one year		One to five years		Five to ten years		Over ten years		No specific maturity			Total			Floating		Fixed rate		Non-rate sensitive			Total
Residential mortgages	$	45,462	$	171,908	$	9,098	$	8,919	$	1,529		$	236,916		$	56,862	$	178,044	$	2,010		$	236,916
Personal loans		15,952		31,500		4,478		815		36,482			89,227			39,004		49,137		1,086			89,227
Credit cards		–		–		–		–		14,104			14,104			4,733		9,371		–			14,104
Business and government		77,724		80,124		4,597		760		5,244			168,449			119,515		47,162		1,772			168,449
Total loans	$	139,138	$	283,532	$	18,173	$	10,494	$	57,359		$	508,696		$	220,114	$	283,714	$	4,868		$	508,696
Allowance for credit losses		–		–		–		–		(4,327	)		(4,327	)		–		–		(4,327	)		(4,327	)
Total loans net of allowance for credit losses	$	139,138	$	283,532	$	18,173	$	10,494	$	53,032		$	504,369		$	220,114	$	283,714	$	541		$	504,369

(d) Impaired loans⁽¹⁾⁽²⁾

	IFRS 9							IAS 39
	2018(4)							2017(3)
As at October 31 ($ millions)	Gross impaired loans(1)		Allowance for credit losses			Net		Gross impaired loans(1)		Allowance for credit losses			Net
Residential mortgages	$	1,797	$	360	(5)	$	1,437	$	1,445	$	326	(5)	$	1,119
Personal loans		1,069		644	(5)		425		1,067		1,040	(5)		27
Credit cards		–		–	(5)		–		543		543	(5)		–
Business and government		2,264		673	(6)		1,591		1,810		713	(6)		1,097
Total	$	5,130	$	1,677		$	3,453	$	4,865	$	2,622	(7)	$	2,243
By geography:
Canada	$	999		381			618	$	1,049
United States		80		25			55		140
Mexico		359		164			195		303
Peru		581		317			264		704
Chile		753		158			595		565
Colombia		619		159			460		462
Other International		1,739		473			1,266		1,642
Total	$	5,130		1,677			3,453	$	4,865

(1) Interest income recognized on impaired loans during the year ended October 31, 2018 was $49 (2017 – $23).

(2) Additional interest income of approximately $370 million would have been recorded if the above loans had not been classified as impaired (2017 – $363 million).

(3) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico. For loans where the guarantee has expired, the total amount of loans considered impaired is $59 for 2017.

(4) Amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 2, 3 and 4).

(5) Allowance for credit losses for residential mortgages, personal loans and credit card loans is assessed on a collective basis.

(6) Allowance for credit losses for business and government loans is individually assessed.

(7) A portion of the existing allowance for credit losses on impaired loans as at October 31, 2017, was reclassified against performing loans with the adoption of IFRS 9 effective November 1, 2017, to conform with current period presentation.

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CONSOLIDATED FINANCIAL STATEMENTS

(e) Allowance for credit losses

Key inputs and assumptions

The Bank’s allowance calculations are outputs of complex models with a number of underlying assumptions regarding the choice of variable inputs. Some of the key drivers include the following:

• Changes in risk ratings of the borrower or instrument reflecting changes in their credit quality;

• Changes in the volumes of transactions;

• Changes in the forward-looking macroeconomic environment reflected in the variables used in the models such as GDP growth, unemployment rates, commodity prices, and house price indices, which are most closely related with credit losses in the relevant portfolio;

• Changes in macroeconomic scenarios and the probability weights assigned to each scenario; and

• Borrower migration between the three stages which can result from changes to any of the above inputs and assumptions.

(i) Key macroeconomic variables

(i)(a) The following table shows certain key macroeconomic variables used in modelling the allowance for credit losses for Stages 1 and 2. For the base case, optimistic and pessimistic scenarios, the projections are provided for the next 12 months and for the remaining forecast period, which represents a medium-term view.

	Base Case Scenario				Alternative Scenario – Optimistic				Alternative Scenario – Pessimistic
	Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period
Canada
Real GDP growth, y/y % change		2.2		1.7		2.6		2.1		1.7		1.2
Unemployment rate, average %		5.9		5.9		5.7		5.0		6.2		6.8
Bank of Canada overnight rate target, average %		2.13		2.87		2.25		3.66		1.98		2.10
HPI – Housing Price Index, y/y % change		5.1		3.7		5.4		4.1		4.9		3.3
CPI – Consumer Price Index, y/y % change		2.7		2.1		2.7		2.6		2.7		1.5
USDCAD exchange rate, average		1.24		1.24		1.24		1.20		1.25		1.27
US
Real GDP growth, y/y % change		2.7		1.7		3.3		2.4		1.9		1.0
Unemployment rate, average %		4.0		4.1		3.7		3.2		4.3		5.0
Mexico
Real GDP growth, y/y % change		2.0		2.3		2.7		3.2		1.3		1.4
Unemployment rate, average %		3.7		4.2		3.5		3.4		4.0		4.9
Chile
Real GDP growth, y/y % change		3.9		3.5		5.0		4.8		2.7		2.3
Unemployment rate, average %		6.2		6.4		5.8		4.5		6.7		8.3
Peru
Real GDP growth, y/y % change		3.9		3.7		4.8		4.7		3.1		2.5
Unemployment rate, average %		6.3		6.1		5.7		4.5		6.8		7.7
Colombia
Real GDP growth, y/y % change		3.3		3.2		4.0		4.2		3.0		2.2
Unemployment rate, average %		9.1		8.8		8.7		7.4		9.3		10.0
Caribbean
Real GDP growth, y/y % change		4.0		4.1		5.2		5.4		2.8		2.9
Global
WTI oil price, average USD/bbl		71		67		75		84		67		54
Copper price, average USD/lb		2.91		3.11		2.98		3.44		2.84		2.84

(i)(b) The table below provides a comparison between the reported Allowance for Credit Losses (ACL) for financial assets in Stage 1 and Stage 2, and the ACL under the base, optimistic and pessimistic scenarios for such assets.

	Reported under IFRS 9		Base case scenario		Optimistic scenario		Pessimistic scenario
ACL (Stage 1 and Stage 2)		3,475		3,467		3,345		3,618

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(i)(c) The following table illustrates the impact of staging on the Bank’s ACL by comparing the allowance if all performing financial assets were in Stage 1 or if all such assets were in Stage 2 to the actual ACL recorded on these assets.

	Stage 1 and 2 ACL under IFRS 9	ACL – All performing loans in Stage 1	Impact of staging
Financial assets	3,475	3,022		(453)
	Stage 1 and 2 ACL under IFRS 9	ACL – All performing loans in Stage 2	Impact of staging
Financial assets	3,475	5,361		1,886

(ii) Allowance for credit losses on loans

	IFRS 9
($ millions)	Balance as at November 1, 2017		Provision for credit losses		Net write-offs			Other, including foreign currency adjustment			Balance as at October 31, 2018
Residential mortgages	$	717	$	104	$	(123	)	$	(20	)	$	678
Personal loans		1,879		1,411		(1,166	)		(15	)		2,109
Credit cards		1,163		898		(854	)		6			1,213
Business and government		1,261		166		(208	)		(72	)		1,147
	$	5,020	$	2,579	$	(2,351	)	$	(101	)	$	5,147
Presented as:
Allowance for credit losses on loans	$	4,920									$	5,065
Allowance for credit losses on acceptances		16										8
Allowance for credit losses on off-balance sheet exposures		84										74

Allowance for credit losses on loans

	IFRS 9
As at October 31, 2018 ($ millions)	Stage 1		Stage 2		Stage 3		Total
Residential mortgages	$	112	$	206	$	360	$	678
Personal loans		578		887		644		2,109
Credit cards		401		812		–		1,213
Business and government		132		260		673		1,065
Total(1)	$	1,223	$	2,165	$	1,677	$	5,065

(1) Excludes, allowance for credit losses for other financial assets including acceptances, investment securities, deposits with banks and off-balance sheet credit risks which amounted to $89.

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The following table presents the changes to the allowance for credit losses on loans.    

	IFRS 9
As at October 31, 2018 ($ millions)	Stage 1			Stage 2			Stage 3			Total
Residential mortgages
Balance at beginning of the year	$	103		$	214		$	400		$	717
Provision for credit losses
Remeasurement(1)		(131	)		5			151			25
Newly originated or purchased financial assets		88			–			–			88
Derecognition of financial assets and maturities		(2	)		(7	)		–			(9	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		77			(65	)		(12	)		–
Stage 2		(18	)		106			(88	)		–
Stage 3		–			(39	)		39			–
Gross write-offs		–			–			(219	)		(219	)
Recoveries		–			–			96			96
Foreign exchange and other movements		(5	)		(8	)		(7	)		(20	)
Balance at end of year(2)	$	112		$	206		$	360		$	678
Personal loans
Balance at beginning of the year	$	477		$	802		$	600		$	1,879
Provision for credit losses
Remeasurement(1)		(670	)		629			1,015			974
Newly originated or purchased financial assets		615			–			–			615
Derecognition of financial assets and maturities		(82	)		(96	)		–			(178	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		453			(442	)		(11	)		–
Stage 2		(189	)		284			(95	)		–
Stage 3		(4	)		(286	)		290			–
Gross write-offs		–			–			(1,441	)		(1,441	)
Recoveries		–			–			275			275
Foreign exchange and other movements		(22	)		(4	)		11			(15	)
Balance at end of year(2)	$	578		$	887		$	644		$	2,109
Credit cards
Balance at beginning of the year	$	364		$	799		$	–		$	1,163
Provision for credit losses
Remeasurement(1)		(276	)		448			593			765
Newly originated or purchased financial assets		329			–			–			329
Derecognition of financial assets and maturities		(91	)		(105	)		–			(196	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		259			(259	)		–			–
Stage 2		(162	)		162			–			–
Stage 3		(1	)		(239	)		240			–
Gross write-offs		–			–			(1,104	)		(1,104	)
Recoveries		–			–			250			250
Foreign exchange and other movements		(21	)		6			21			6
Balance at end of year(2)	$	401		$	812		$	–		$	1,213
Business and government
Balance at beginning of the year	$	178		$	307		$	760		$	1,245
Provision for credit losses
Remeasurement(1)		(93	)		6			264			177
Newly originated or purchased financial assets		322			–			–			322
Derecognition of financial assets and maturities		(108	)		(164	)		(68	)		(340	)
Changes in models and methodologies		3			14			–			17
Transfer to (from):		–			–			–			–
Stage 1		63			(58	)		(5	)		–
Stage 2		(187	)		218			(31	)		–
Stage 3		(2	)		(30	)		32			–
Gross write-offs		–			–			(276	)		(276	)
Recoveries		–			–			68			68
Foreign exchange and other movements		(3	)		(2	)		(69	)		(74	)
Balance at end of period including off-balance sheet exposures(2)	$	173		$	291		$	675		$	1,139
Less: Allowance for credits losses on off-balance sheet exposures(2)(3)		41			31			2			74
Balance at end of year(2)	$	132		$	260		$	673		$	1,065

(1) Includes credit risk changes as a result of significant increases in credit risk, changes in credit risk that did not result in a transfer between stages, changes in model inputs and assumptions and changes due to drawdowns of undrawn commitments.

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(2) Interest income on impaired loans for residential mortgages, personal loans, credit cards, and business and government loans totaled $370.

(3) Allowance for credit losses on off-balance sheet exposures is recorded in other liabilities in the Consolidated Statement of Financial Position.

(4) Allowance for credit losses on acceptances are recorded against the financial asset in the Consolidated Statement of Financial Position.

(5) There are no accumulated credit losses on purchased or originated credit impaired loans.

(6) During the year ended October 31, 2018, the contractual terms of certain financial assets were modified where the modification did not result in derecognition. The amortized cost of such loans that were modified in Stage 3 before the modification was $185.

The following table presents the allowance for credit losses under IAS 39 as at October 31, 2017.

	IAS 39
	As at and for the year ended October 31, 2017
($ millions)	Balance at beginning of year		Write-offs			Recoveries		Provision for credit losses			Other, including foreign currency adjustment			Balance at end of year
Individual	$	894	$	(501	)	$	55	$	304		$	(39	)	$	713
Collective		3,498		(2,658	)		571		1,952			(8	)		3,355
Total before loans acquired under FDIC guarantee		4,392		(3,159	)		626		2,256			(47	)		4,068
Loans acquired under FDIC guarantee(1)		234		(14	)		54		(7	)		(8	)		259
	$	4,626	$	(3,173	)	$	680	$	2,249		$	(55	)	$	4,327
Represented by:
Allowance against impaired loans														$	2,622
Allowance against performing loans(2)															1,446
Total before loans acquired under FDIC guarantee															4,068
Loans acquired under FDIC guarantee(1)															259
														$	4,327

(1) This represents the gross amount of allowance for credit losses as the receivable from FDIC is separately recorded in other assets.

(2) The allowance against performing loans is attributable to business and government loans $625 with the remainder allocated to personal and credit card loans $720 and residential mortgages $101.

(f) Carrying value of exposures by risk rating

Residential mortgages	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	146,461	$	307	$	–	$	146,768
Low		58,154		378		–		58,532
Medium		11,689		972		–		12,661
High		1,615		3,515		–		5,130
Very high		25		1,779		–		1,804
Loans not graded(1)		23,139		3,526		–		26,665
Default		–		–		1,797		1,797
Total		241,083		10,477		1,797		253,357
Allowance for credit losses		112		206		360		678
Carrying value	$	240,971	$	10,271	$	1,437	$	252,679

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Personal loans	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	30,660	$	66	$	–	$	30,726
Low		26,039		151		–		26,190
Medium		8,315		402		–		8,717
High		6,686		3,647		–		10,333
Very high		58		1,362		–		1,420
Loans not graded(1)		15,452		2,112		–		17,564
Default		–		–		1,069		1,069
Total		87,210		7,740		1,069		96,019
Allowance for credit losses		578		887		644		2,109
Carrying value	$	86,632	$	6,853	$	425	$	93,910

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

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Credit cards	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	1,418	$	5	$	–	$	1,423
Low		2,436		14		–		2,450
Medium		3,358		71		–		3,429
High		2,929		1,455		–		4,384
Very high		37		697		–		734
Loans not graded(1)		2,905		1,159		–		4,064
Default		–		–		–		–
Total		13,083		3,401		–		16,484
Allowance for credit losses		401		812		–		1,213
Carrying value	$	12,682	$	2,589	$	–	$	15,271

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Undrawn loan commitments – Retail	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	72,321	$	–	$	–	$	72,321
Low		16,531		2		–		16,533
Medium		6,029		79		–		6,108
High		2,631		670		–		3,301
Very high		26		367		–		393
Loans not graded(1)		14,774		3,364		–		18,138
Default		–		–		–		–
Total		112,312		4,482		–		116,794
Allowance for credit losses		–		–		–		–
Carrying value	$	112,312	$	4,482	$	–	$	116,794

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Business and government loans	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Investment grade	$	87,047	$	3,770	$	–	$	90,817
Non-Investment grade		83,730		9,706		–		93,436
Watch list		130		2,689		–		2,819
Loans not graded(1)		1,050		652		–		1,702
Default		–		–		2,264		2,264
Total		171,957		16,817		2,264		191,038
Allowance for credit losses		132		260		673		1,065
Carrying value	$	171,825	$	16,557	$	1,591	$	189,973

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Undrawn loan commitments – Business and government	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Investment grade	$	159,880	$	1,663	$	–	$	161,543
Non-Investment grade		56,001		3,445		–		59,446
Watch list		81		977		–		1,058
Loans not graded(1)		2,178		28		–		2,206
Default		–		–		4		4
Total		218,140		6,113		4		224,257
Allowance for credit losses		41		31		2		74
Carrying value	$	218,099	$	6,082	$	2	$	224,183

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

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(g) Loans acquired under FDIC guarantee

Loans purchased as part of the acquisition of R-G Premier Bank of Puerto Rico are subject to loss share agreements with the FDIC. Under this agreement, the FDIC guarantees 80% of net loan losses. As at October 31, 2018, the carrying value of the loans covered by the FDIC guarantee was $1.3 billion (October 31, 2017 – $1.4 billion).

A net receivable of $77 million (2017 – $106 million) from the FDIC is included in Other assets in the Consolidated Statement of Financial Position. The remaining guarantee on single family home loans will expire in April 2020.

(h) Loans past due but not impaired⁽¹⁾

A loan is considered past due when a counterparty has not made a payment by the contractual due date. The following table presents the carrying value of loans that are contractually past due but not classified as impaired because they are either less than 90 days past due or fully secured and collection efforts are reasonably expected to result in repayment, or restoring it to a current status in accordance with the Bank’s policy.

	2018								2017(3)
As at October 31 ($ millions)	31 – 60 days		61 – 90 days		91 days and greater(2)		Total		31 – 60 days		61 – 90 days		91 days and greater		Total
Residential mortgages	$	1,290	$	521	$	–	$	1,811	$	1,035	$	446	$	122	$	1,603
Personal loans		609		322		–		931		522		284		–		806
Credit cards		231		154		353		738		202		139		75		416
Business and government		167		40		–		207		215		55		187		457
Total	$	2,297	$	1,037	$	353	$	3,687	$	1,974	$	924	$	384	$	3,282

(1) Loans past due 30 days or less are not presented in this analysis as they are not administratively considered past due.

(2) Under IFRS 9, all loans that are 90 days past due are considered impaired with the exception of credit card receivables which are considered impaired when 180 days past due. Prior amounts have not been restated (refer to Notes 3 and 4).

(3) Excludes loans acquired under the FDIC guarantee related to the acquisition of R-G Premier Bank of Puerto Rico.

(i) Purchased credit-impaired loans

Certain financial assets including loans are credit-impaired on initial recognition either through acquisition or origination.

The following table provides details of such assets:

As at October 31 ($ millions)	2018
Unpaid principal balance(1)	$	548
Credit related fair value adjustments		(168	)
Carrying value		380
Stage 3 allowance		–
Carrying value net of related allowance	$	380

(1) Represents principal amount owed net of write-offs.

14 Derecognition of Financial Assets

Securitization of residential mortgage loans

The Bank securitizes fully insured residential mortgage loans, Bank originated and others, through the creation of mortgage backed securities (MBS) under the National Housing Act (NHA) MBS program, sponsored by Canada Mortgage Housing Corporation (CMHC). MBS created under the program are sold to Canada Housing Trust (the Trust), a government sponsored entity, under the Canada Mortgage Bond (CMB) program and/or third-party investors. The Trust issues securities to third-party investors.

The sale of mortgages under the above programs does not meet the derecognition requirements, as the Bank retains the pre-payment and interest rate risk associated with the mortgages, which represents substantially all the risk and rewards associated with the transferred assets.

The transferred mortgages continue to be recognized on the Consolidated Statement of Financial Position as residential mortgage loans. Cash proceeds from the transfer are treated as secured borrowings and included in Deposits – Business and government on the Consolidated Statement of Financial Position.

The following table provides the carrying amount of transferred assets that do not qualify for derecognition and the associated liabilities:

As at October 31 ($ millions)	2018(1)		2017(1)
Assets
Carrying value of residential mortgage loans	$	20,498	$	18,178
Other related assets(2)		2,679		2,293
Liabilities
Carrying value of associated liabilities		21,459		19,278

(1) The fair value of the transferred assets is $23,237 (2017 – $20,580) and the fair value of the associated liabilities is $22,468 (2017 – $19,863), for a net position of $769 (2017 – $717).

(2) These include cash held in trust and trust permitted investment assets acquired as part of principal reinvestment account that the Bank is required to maintain in order to participate in the programs.

Securitization of personal lines of credit, credit cards and auto loans

The Bank securitizes a portion of its unsecured personal lines of credit, credit card and auto loan receivables through consolidated structured entities. These receivables continue to be recognized on the Consolidated Statement of Financial Position as personal loans and credit cards loans. For further details, refer to Note 15.

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CONSOLIDATED FINANCIAL STATEMENTS

Securities sold under repurchase agreements and securities lent

The Bank enters into transactions, such as repurchase agreements and securities lending agreements, where the Bank transfers assets under agreements to repurchase them on a future date and retains all the substantial risks and rewards associated with the assets. The transferred assets remain on the Consolidated Statement of Financial Position.

The following table provides the carrying amount of the transferred assets and the associated liabilities:

As at October 31 ($ millions)	2018(1)		2017(1)
Carrying value of assets associated with:
Repurchase agreements(2)	$	82,816	$	86,789
Securities lending agreements		49,718		40,535
Total		132,534		127,324
Carrying value of associated liabilities(3)	$	101,257	$	95,843

(1) The fair value of transferred assets is $132,534 (2017 – $127,324) and the fair value of the associated liabilities is $101,257 (2017 – $95,843), for a net position of $31,277 (2017 – $31,481).

(2) Does not include over-collateralization of assets pledged.

(3) Liabilities for securities lending arrangements only include amounts related to cash collateral received. In most cases, securities are received as collateral.

15 Structured Entities

(a) Consolidated structured entities

U.S. multi-seller conduit

The Bank-sponsored U.S. multi-seller conduit purchases high-quality financial assets from independent third parties (the sellers) funded by the issuance of highly rated asset-backed commercial paper. The sellers continue to service the financial assets and provide credit enhancements through overcollateralization protection and cash reserves.

Each asset purchased by the conduit has a deal-specific liquidity facility provided by the Bank in the form of a Liquidity Asset Purchase Agreement (LAPA). The primary purpose of the backstop liquidity facility is to provide an alternative source of financing in the event the conduit is unable to access the asset-backed commercial paper market. The administration agent can require the Bank in its capacity as liquidity provider to perform under its asset-specific LAPA agreements, in which case the Bank is obliged to purchase an interest in the related assets owned by the conduit. The Bank is not obligated to perform under the LAPA agreements in the event the conduit itself is insolvent.

The Bank’s liquidity agreements with the conduit call for the Bank to fund full par value of the assets, including defaulted assets, if any, of the conduit. This facility is available to absorb the losses on defaulted assets, if any, in excess of losses absorbed by deal-specific seller credit enhancements. Further, the Bank holds the subordinated note issued by the conduit.

The Bank’s exposure from the U.S. conduit through the LAPA, including the obligation to purchase defaulted assets and investment in the conduit’s subordinated note, give the Bank the obligation to absorb losses that could potentially be significant to the conduit, which in conjunction with power to direct the conduit’s activities, result in the Bank consolidating the U.S. multi-seller conduit.

The conduit’s assets are primarily included in business and government loans on the Bank’s Consolidated Statement of Financial Position.

There are contractual restrictions on the ability of the Bank’s consolidated U.S. multi-seller conduit to transfer funds to the Bank. The Bank is restricted from accessing the conduit’s assets under the relevant arrangements. The Bank has no rights to the assets owned by the conduit. In the normal course of business, the assets of the conduit can only be used to settle the obligations of the conduit.

Bank funding vehicles

The Bank uses funding vehicles to facilitate cost-efficient financing of its own operations, including the issuance of covered bonds and notes. These vehicles include Scotiabank Covered Bond Guarantor Limited Partnership, Halifax Receivables Trust, Trillium Credit Card Trust II and Securitized Term Auto Receivables Trust 2016-1, 2017-1, 2017-2, 2018-1 and 2018-2.

Activities of these structured entities are generally limited to holding an interest in a pool of assets or receivables generated by the Bank.

These structured entities are consolidated due to the Bank’s decision-making power and ability to use the power to affect the Bank’s returns.

Scotiabank Covered Bond Guarantor Limited Partnership

The Bank has a registered covered bond program through which it issues debt that is guaranteed by Scotiabank Covered Bond Guarantor Limited Partnership (the “LP”). Under this program, the LP purchases uninsured residential mortgages from the Bank, which it acquires with funding provided by the Bank.

As at October 31, 2018, $29.1 billion (2017 – $25.7 billion) covered bonds were outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position. The Bank’s outstanding covered bonds are denominated in U.S. dollars, Australian dollars, British pounds and Euros. As at October 31, 2018, assets pledged in relation to these covered bonds were uninsured residential mortgages denominated in Canadian dollars of $30.7 billion (2017 – $27.8 billion).

Personal line of credit securitization trust

The Bank securitizes a portion of its Canadian unsecured personal line of credit receivables (receivables) through Halifax Receivables Trust (Halifax), a Bank-sponsored structured entity. Halifax issues notes to third-party investors and the Bank, proceeds of which are used to purchase co-ownership interests in receivables originated by the Bank. Recourse of the note holders is limited to the purchased interests.

The Bank is responsible for servicing the transferred receivables as well as performing administrative functions for Halifax. The subordinated notes issued by Halifax are held by the Bank. As at October 31, 2018, $1 billion notes (2017 – $1 billion) were outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position. As at October 31, 2018, assets pledged in relation to these notes were $1.3 billion (2017 – $1.3 billion).

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CONSOLIDATED FINANCIAL STATEMENTS

Credit card receivables securitization trust

The Bank securitizes a portion of its Canadian credit card receivables (receivables) through Trillium Credit Card Trust II (Trillium), a Bank-sponsored structured entity. Trillium issues notes to third-party investors and the Bank, and the proceeds of such issuance are used to purchase co-ownership interests in receivables originated by the Bank. Recourse of the note holders is limited to the purchased interest.

The Bank is responsible for servicing the transferred receivables as well as performing administrative functions for Trillium. The subordinated notes issued by Trillium are held by the Bank. As at October 31, 2018, US $1.2 billion ($1.6 billion Canadian dollars) (2017 – US $0.9 billion, $1.2 billion Canadian dollars) Class A notes were outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position. As at October 31, 2018 assets pledged in relation to these notes were credit card receivables, denominated in Canadian dollars, of $1.8 billion (2017 – $1.3 billion).

Auto loan receivables securitization trusts

The Bank securitizes a portion of its Canadian auto loan receivables (receivables) through Securitized Term Auto Receivables Trust 2016-1, 2017-1, 2017-2, 2018-1 and 2018-2 (START entities). Each entity is a Bank-sponsored structured entity. START entities issue multiple series of Class A notes to third-party investors and may issue Class A and/or subordinated notes to the Bank, and the proceeds of such issuances are used to purchase discrete pools of retail indirect auto loan receivables from the Bank on a fully serviced basis. Recourse of the note holders is limited to the receivables.

The Bank is responsible for servicing the transferred receivables as well as performing administrative functions for START. The subordinated notes and certain Class A notes issued by START are held by the Bank. As at October 31, 2018, the aggregate Class A notes issued to third parties outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position were US $1.8 billion ($2.4 billion Canadian dollars) (2017 – US $1.6 billion, $2.1 billion Canadian dollars). As at October 31, 2018, assets pledged in relation to these notes were Canadian auto loan receivables denominated in Canadian dollars of $3 billion (2017 – $2.3 billion).

Other

Assets of other consolidated structured entities are comprised of securities, deposits with banks and other assets to meet the Bank’s and customer needs.

(b) Unconsolidated structured entities

The following table provides information about other structured entities in which the Bank has a significant interest but does not control and therefore does not consolidate. A significant interest is generally considered to exist where the Bank is exposed to 10% or more of the unconsolidated structured entities’ maximum exposure to loss.

	As at October 31, 2018
($ millions)		Canadian multi-seller conduits that the Bank administers		Structured finance entities		Capital funding vehicles		Total
Total assets (on structured entity’s financial statements)	$	3,216	$	4,488	$	1,520	$	9,224
Assets recognized on the Bank’s financial statements
Trading assets		3		–		–		3
Investment securities		–		1,054		17		1,071
Loans(1)		–		978		45		1,023
		3		2,032		62		2,097
Liabilities recognized on the Bank’s financial statements
Deposits – Business and government		–		–		1,458		1,458
Derivative financial instruments		6		–		–		6
		6		–		1,458		1,464
Bank’s maximum exposure to loss	$	3,219	$	2,032	$	62	$	5,313
		As at October 31, 2017
($ millions)		Canadian multi-seller conduits that the Bank administers		Structured finance entities		Capital funding vehicles		Total
Total assets (on structured entity’s financial statements)	$	3,127	$	3,991	$	1,520	$	8,638
Assets recognized on the Bank’s financial statements
Trading assets		–		5		–		5
Investment securities		–		1,091		15		1,106
Loans(1)		–		731		40		771
		–		1,827		55		1,882
Liabilities recognized on the Bank’s financial statements
Deposits – Business and government		–		–		1,465		1,465
Derivative financial instruments		6		–		–		6
		6		–		1,465		1,471
Bank’s maximum exposure to loss	$	3,127	$	1,827	$	55	$	5,009

(1) Loan balances are presented net of allowance for credit losses.

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CONSOLIDATED FINANCIAL STATEMENTS

The Bank’s maximum exposure to loss represents the notional amounts of guarantees, liquidity facilities, and other credit support relationships with the structured entities, the credit risk amount for certain derivative contracts with the entities and the amount invested where the Bank holds an ownership interest in the structured entities. Of the aggregate amount of maximum exposure to loss as at October 31, 2018, the Bank has recorded $2 billion (2017 – $1.8 billion), primarily its interest in the structured entities, on its Consolidated Statement of Financial Position.

Canadian multi-seller conduits that the Bank administers

The Bank sponsors two Canadian multi-seller conduits. The conduits purchase assets from independent third parties (the sellers) funded by the issuance of asset-backed commercial paper. The sellers continue to service the assets and provide credit enhancements through overcollateralization protection and cash reserves. The Bank has no rights to these assets as they are available to support the obligations of the respective programs, but manages for a fee the commercial paper selling programs. To ensure timely repayment of the commercial paper, each asset pool financed by the multi-seller conduits has a deal-specific LAPA with the Bank. Pursuant to the terms of the LAPA, the Bank as the liquidity provider is obligated to purchase non-defaulted assets, transferred by the conduit at the conduit’s original cost as reflected in the table above. In most cases, the liquidity agreements do not require the Bank to purchase defaulted assets. Additionally, the Bank has not provided any program-wide credit enhancement to these conduits. The Bank provides additional liquidity facilities to these multi-seller conduits to a maximum amount of $0.8 billion (2017 – $1.9 billion) based on future asset purchases by these conduits.

Although the Bank has power over the relevant activities of the conduits, it has limited exposure to variability in returns, which results in the Bank not consolidating the two Canadian conduits.

Structured finance entities

The Bank has interests in structured entities used to assist corporate clients in accessing cost-efficient financing through their securitization structures. The Bank may act as an administrator, an investor or a combination of both in these types of structures.

Capital funding vehicles

These entities are designed to pass the Bank’s credit risk to the holders of the securities. Therefore the Bank does not have exposure or rights to variable returns from these entities.

(c) Other unconsolidated Bank-sponsored entities

The Bank sponsors unconsolidated structured entities including mutual funds, in which it has insignificant or no interest at the reporting date. The Bank is a sponsor when it is significantly involved in the design and formation at inception of the structured entities, and the Bank’s name is used by the structured entities to create an awareness of the instruments being backed by the Bank’s reputation and obligation. The Bank also considers other factors, such as its continuing involvement and obligations to determine if, in substance, the Bank is a sponsor. The Bank considers mutual funds and managed companies as sponsored entities.

The following table provides information on revenue from unconsolidated Bank-sponsored entities.

As at October 31 ($ millions)	2018						2017
	Funds(1)		Scotia Managed Companies		Total		Funds(1)		Scotia Managed Companies		Total
Revenue	$	2,118	$	3	$	2,121	$	2,016	$	5	$	2,021

(1) Includes mutual funds, other funds and trusts.

The Bank earned revenue of $2,121 million (2017 – $2,021 million) from its involvement with the unconsolidated Bank-sponsored structured entities including mutual funds, for the year ended October 31, 2018, which was comprised of interest income of $1 million (2017 – $1 million), non-interest income – banking of $137 million (2017 – $134 million) and non-interest income – wealth management of $1,983 million (2017 – $1,886 million), including mutual fund, brokerage and investment management and trust fees.

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CONSOLIDATED FINANCIAL STATEMENTS

16 Property and Equipment

($ millions)	Land & Building			Equipment			Technology Assets			Leasehold Improvements			Total
Cost
Balance as at October 31, 2016	$	2,071		$	1,728		$	1,983		$	1,357		$	7,139
Additions		169			147			161			126			603
Disposals		(224	)		(52	)		(41	)		(28	)		(345	)
Foreign currency adjustments and other		(294	)		69			(15	)		(45	)		(285	)
Balance as at October 31, 2017	$	1,722		$	1,892		$	2,088		$	1,410		$	7,112
Acquisitions		214			96			186			97			593
Additions		142			56			141			148			487
Disposals		(231	)		(38	)		(33	)		(49	)		(351	)
Foreign currency adjustments and other		36			95			(86	)		(21	)		24
Balance as at October 31, 2018	$	1,883		$	2,101		$	2,296		$	1,585		$	7,865
Accumulated depreciation
Balance as at October 31, 2016	$	766		$	1,362		$	1,653		$	838		$	4,619
Depreciation		47			91			131			71			340
Disposals		(58	)		(37	)		(40	)		(17	)		(152	)
Foreign currency adjustments and other		(69	)		34			(25	)		(16	)		(76	)
Balance as at October 31, 2017	$	686		$	1,450		$	1,719		$	876		$	4,731
Depreciation		62			80			143			69			354
Disposals		(56	)		(35	)		(24	)		(17	)		(132	)
Foreign currency adjustments and other		13			174			10			31			228
Balance as at October 31, 2018	$	705		$	1,669		$	1,848		$	959		$	5,181
Net book value
Balance as at October 31, 2017	$	1,036		$	442		$	369		$	534		$	2,381	(1)
Balance as at October 31, 2018	$	1,178		$	432		$	448		$	626		$	2,684	(1)

(1) Includes $36 (2017 – $16) of investment property.

17 Investments in Associates

The Bank had significant investments in the following associates:

					2018							2017
As at October 31 ($ millions)	Country of incorporation		Nature of business		Ownership percentage			Date of financial statements(1)		Carrying value		Carrying value
Thanachart Bank Public Company Limited		Thailand		Banking		49.0	%		October 31, 2018	$	2,961	$	2,789
Canadian Tire’s Financial Services business (CTFS)(2)		Canada		Financial Services		20.0	%		September 30, 2018		518		542
Bank of Xi’an Co. Ltd.		China		Banking		19.9	%		September 30, 2018		772		711
Maduro & Curiel’s Bank N.V.(3)		Curacao		Banking		48.1	%		September 30, 2018		304		284

(1) Represents the date of the most recent financial statements. Where available, financial statements prepared by the associates’ management or other published information is used to estimate the change in the Bank’s interest since the most recent financial statements.

(2) Canadian Tire has an option to sell to the Bank up to an additional 29% equity interest within the next 10 years at the then fair value, that can be settled, at the Bank’s discretion, by issuance of common shares or cash. After 10 years, for a period of six months, the Bank has the option to sell its equity interest back to Canadian Tire at the then fair value. As at October 1, 2014 CTFS had total assets of $5,351 and total liabilities of $4,387.

(3) The local regulator requires financial institutions to set aside reserves for general banking risks. These reserves are not required under IFRS, and represent undistributed retained earnings related to a foreign associated corporation, which are subject to local regulatory restrictions. As of October 31, 2018 these reserves amounted to $62 (2017 – $61).

Summarized financial information of the Bank’s significant associates are as follows.

	For the twelve months ended(1)				As at
($ millions)	Revenue		Net income		Total assets		Total liabilities
Thanachart Bank Public Company Limited	$	1,871	$	590	$	39,875	$	34,289
Canadian Tire’s Financial Services business (CTFS)		1,143		348		6,256		5,279
Bank of Xi’an Co. Ltd.		1,123		456		45,261		41,595
Maduro & Curiel’s Bank N.V.		348		92		5,832		5,165

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CONSOLIDATED FINANCIAL STATEMENTS

	For the twelve months ended and as at September 30, 2017(1)
($ millions)	Revenue		Net income		Total assets		Total liabilities
Thanachart Bank Public Company Limited	$	1,718	$	508	$	38,050	$	32,902
Canadian Tire’s Financial Services business (CTFS)		1,040		334		6,233		5,235
Bank of Xi’an Co. Ltd.		915		411		41,170		37,821
Maduro & Curiel’s Bank N.V.		343		80		5,501		4,896

(1) Based on the most recent available financial statements.

18 Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amounts of goodwill by cash-generating unit (CGU) are as follows:

($ millions)	Canadian Banking			Global Banking and Markets			Latin America			Caribbean and Central America			Total
Balance as at October 31, 2016	$	3,403		$	265		$	2,461		$	1,255		$	7,384
Acquisitions		–			–			–			–			–
Dispositions		(36	)		–			–			–			(36	)
Foreign currency adjustments and other		18			(10	)		(61	)		(52	)		(105	)
Balance as at October 31, 2017		3,385			255			2,400			1,203			7,243
Acquisitions		1,710			–			1,164			–			2,874
Dispositions		–			–			–			–			–
Foreign currency adjustments and other		–			5			(110	)		(5	)		(110	)
Balance as at October 31, 2018	$	5,095		$	260		$	3,454		$	1,198		$	10,007

Impairment testing of goodwill

Goodwill acquired in business combinations is allocated to each of the Bank’s group of CGUs that are expected to benefit from the synergies of the particular acquisition. Goodwill is assessed for impairment annually or more frequently if events or circumstances occur that may result in the recoverable amount of the CGU falling below its carrying value.

The Bank determines the carrying value of the CGU using a regulatory capital approach based on credit, market, and operational risks, and leverage, consistent with the Bank’s capital attribution for business line performance measurement. The recoverable amount is the higher of fair value less costs of disposal and value in use. The recoverable amount for the CGU has been determined using the fair value less costs of disposal method. In arriving at such value for the CGU, the Bank has used price earnings (P/E) multiples applied to normalized net income for the last four quarters as of the test date, a control premium is added based on a five year weighted average acquisition premium paid for comparable companies, and costs of disposal are deducted from the fair value of the CGU. The resulting recoverable amount determined is then compared to its respective carrying amount to identify any impairment. P/E multiples ranging from 11 to 13.5 times (2017 – 11 to 12.5 times) have been used.

The fair value less costs of disposal of the CGU is sensitive to changes in net income, P/E multiples and control premiums.

Goodwill was assessed for annual impairment as at July 31, 2018 and July 31, 2017 and no impairment was determined to exist.

Management believes that reasonable negative changes in any one key assumption used to determine the recoverable amount of the CGU would not result in an impairment. No significant negative changes were noted as of October 31, 2018.

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CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets

Intangible assets consist of assets with indefinite and finite useful lives. Indefinite life intangible assets consist substantially of fund management contracts. The fund management contracts are for the management of open-ended funds. Finite life intangible assets include assets such as computer software, customer relationships and core deposit intangibles.

		Finite life						Indefinite life
($ millions)	Computer software			Other intangibles			Fund management contracts(1)		Other intangibles		Total
Cost
Balance as at October 31, 2016	$	2,737		$	1,631		$	2,325	$	68	$	6,761
Acquisitions		–			–			–		–		–
Additions		584			5			–		–		589
Disposals		(3	)		(56	)		–		–		(59	)
Foreign currency adjustments and other		(40	)		(17	)		–		–		(57	)
Balance as at October 31, 2017	$	3,278		$	1,563		$	2,325	$	68	$	7,234
Acquisitions		47			480			2,090		98		2,715
Additions		673			3			–		–		676
Disposals		(8	)		–			–		–		(8	)
Foreign currency adjustments and other		(44	)		(30	)		–		–		(74	)
Balance as at October 31, 2018	$	3,946		$	2,016		$	4,415	$	166	$	10,543
Accumulated amortization
Balance as at October 31, 2016	$	1,009		$	995		$	–	$	–	$	2,004
Amortization		339			82			–		–		421
Disposals		(2	)		(18	)		–		–		(20	)
Foreign currency adjustments and other		(25	)		(9	)		–		–		(34	)
Balance as at October 31, 2017	$	1,321		$	1,050		$	–	$	–	$	2,371
Amortization		409			85			–		–		494
Disposals		(8	)		–			–		–		(8	)
Foreign currency adjustments and other		(17	)		(9	)		–		–		(26	)
Balance as at October 31, 2018	$	1,705		$	1,126		$	–	$	–	$	2,831
Net book value
As at October 31, 2017	$	1,957	(2)	$	513		$	2,325	$	68	$	4,863
As at October 31, 2018	$	2,241	(2)	$	890		$	4,415	$	166	$	7,712

(1) Fund management contracts are attributable to HollisWealth Inc. (formerly DundeeWealth Inc.).

(2) Computer software comprises of purchased software of $483 (2017 – $500), internally generated software of $1,208 (2017 – $981), and in process software not subject to amortization of $550 (2017 – $476).

Impairment testing of indefinite life intangible assets

Indefinite life intangible assets are not amortized and are assessed for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. Impairment is assessed by comparing the carrying value of the indefinite life intangible asset to its recoverable amount. The recoverable amount of the fund management contracts is based on a value in use approach using the multi-period excess earnings method. This approach uses cash flow projections from management-approved financial budgets which include key assumptions related to market appreciation, net sales of funds, and operating margins taking into consideration past experience and market expectations. The forecast cash flows cover a 5-year period, with a terminal growth rate of 4.5% (2017 – 4.5%) applied thereafter. These cash flows have been discounted at a rate of 10% (2017 – 10%).

Indefinite life intangible assets were assessed for annual impairment as at July 31, 2018 and July 31, 2017 and no impairment was determined to exist.

Management believes that reasonable negative changes in any one key assumption used to determine the recoverable amount would not result in an impairment. No significant negative changes were noted as of October 31, 2018.

19 Other Assets

As at October 31 ($ millions)	2018		2017
Accrued interest	$	2,800	$	2,176
Accounts receivable and prepaids		1,878		1,674
Current tax assets		657		327
Margin deposit derivatives		3,247		3,041
Segregated fund assets		2,736		–
Pension assets (Note 28)		360		256
Receivable from brokers, dealers and clients		2,061		913
Receivable from the Federal Deposit Insurance Corporation (Note 13)		77		106
Other		3,617		4,256
Total	$	17,433	$	12,749

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CONSOLIDATED FINANCIAL STATEMENTS

20 Deposits

		2018												2017
		Payable on demand(1)
As at October 31 ($ millions)		Interest- bearing		Non-interest bearing		Payable after notice	(2)		Payable on a fixed date	(3)		Total
Personal	$	7,517	$	7,488	$	123,302		$	76,238		$	214,545	$	200,030
Business and government		94,812		24,310		34,600			268,280			422,002		384,988
Financial institutions		6,510		2,804		1,895			28,778			39,987		40,349
Total	$	108,839	$	34,602	$	159,797	(4)	$	373,296		$	676,534	$	625,367
Recorded in:
Canada	$	84,638	$	17,825	$	122,974		$	247,361		$	472,798	$	445,487
United States		14,080		128		8,950			36,780			59,938		58,070
United Kingdom		–		–		152			16,695			16,847		12,041
Mexico		14		4,362		5,382			11,393			21,151		19,419
Peru		2,738		1,284		4,129			7,062			15,213		15,216
Chile		3,392		3,029		146			17,613			24,180		11,574
Colombia		37		507		3,963			5,036			9,543		7,587
Other International		3,940		7,467		14,101			31,356			56,864		55,973
Total(5)	$	108,839	$	34,602	$	159,797		$	373,296		$	676,534	$	625,367

(1) Deposits payable on demand include all deposits for which we do not have the right to notice of withdrawal, generally chequing accounts.

(2) Deposits payable after notice include all deposits for which we require notice of withdrawal, generally savings accounts.

(3) All deposits that mature on a specified date, generally term deposits, guaranteed investments certificates and similar instruments.

(4) Includes $141 (2017 – $141) of non-interest bearing deposits.

(5) Deposits denominated in U.S. dollars amount to $219,195 (2017 – $216,018), deposits denominated in Chilean pesos amount to $22,731 (2017 – $11,066), deposits denominated in Mexican pesos amount to $18,341 (2017 – $17,156) and deposits denominated in other foreign currencies amount to $79,582 (2017 – $70,217).

The following table presents the maturity schedule for term deposits in Canada greater than $100,000⁽¹⁾.

($ millions)	Within three months		Three to six months		Six to twelve months		One to five years		Over five years		Total
As at October 31, 2018	$	36,670	$	23,913	$	42,830	$	99,734	$	19,872	$	223,019
As at October 31, 2017	$	33,678	$	26,579	$	31,190	$	94,563	$	16,073	$	202,083

(1) The majority of foreign term deposits are in excess of $100,000.

21 Subordinated Debentures

These debentures are direct, unsecured obligations of the Bank and are subordinate to the claims of the Bank’s depositors and other creditors. The Bank, where appropriate, enters into interest rate and cross-currency swaps to hedge the related risks.

As at October 31 ($ millions)				2018		2017
Maturity date	Interest rate (%)		Terms(1)	Carrying value(2)		Carrying value(2)
October 2024		3.036	Redeemable on or after October 18, 2017. After October 18, 2019, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.14%.	$	1,740	$	1,756
June 2025		8.90	Redeemable at any time.		259		260
December 2025(3)		3.367	Redeemable on or after December 8, 2020. After December 8, 2020, interest will be payable at an annual rate equal to the 90 day bankers’ acceptance rate plus 2.19%.		729		737
December 2025(3)		4.50	US$1,250 million. Interest will be payable semi-annually in arrears on June 16 and December 16 of each year.		1,645		1,613
March 2027(3)		2.58	Redeemable on or after March 30, 2022. After March 30, 2022, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.19%.		1,195		1,219
November 2037(4)		3.015	JPY 10 billion. Redeemed on November 20, 2017.		–		113
April 2038(5)		3.37	JPY 10 billion. Redeemed on April 9, 2018.		–		110
August 2085		Floating	US$99 million bearing interest at a floating rate of the offered rate for six-month Eurodollar deposits plus 0.125%. Redeemable on any interest payment date.		130		127
				$	5,698	$	5,935

(1) In accordance with the provisions of the Capital Adequacy Guideline of the Superintendent, all redemptions are subject to regulatory approval and subject to the terms in the relevant prospectus.

(2) The carrying value of subordinated debentures may differ from par value due to adjustments related to hedge accounting.

(3) These debentures contain non-viability contingent capital (NVCC) provisions. Under such NVCC provisions, the debentures are convertible into a variable number of common shares if OSFI announces that the Bank has ceased, or is about to cease, to be viable, or if a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent thereof without which the Bank would have been determined by OSFI to be non-viable. If such a conversion were to occur, the debentures would be converted into common shares pursuant to an automatic conversion formula defined as 150% of the par value plus accrued and unpaid interest divided by the conversion price. The conversion price is based on the greater of: (i) a floor price of $5.00 or, where applicable, the US dollar equivalent of $5.00 (subject to, in each case, adjustments in certain events as set out in the respective prospectus supplements), and (ii) the current market price of the Bank’s common shares at the time of the trigger event (10-day weighted average), where applicable converted from CAD to USD.

(4) On November 29, 2017, the Bank redeemed all outstanding 3.015% subordinated debentures due November 30, 2038 at their par value of JPY 10 billion plus accrued interest.

(5) On April 9, 2018, the Bank redeemed all outstanding 3.370% subordinated debentures due April 9, 2038 at their par value of JPY 10 billion plus accrued interest.

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CONSOLIDATED FINANCIAL STATEMENTS

22 Other Liabilities

As at October 31 ($ millions)	2018		2017
Accrued interest	$	2,634	$	2,172
Accounts payable and accrued expenses		6,198		5,867
Current tax liabilities		435		408
Deferred tax liabilities (Note 27)		1,205		697
Gold and silver certificates and bullion		5,019		6,819
Margin and collateral accounts		6,523		7,129
Segregated fund liabilities		2,736		–
Payables to brokers, dealers and clients		564		796
Provisions (Note 23)(1)		181		213
Allowance for credit losses on off-balance sheet exposures - IFRS 9 (Note 13)		74		n/a
Allowance for credit losses on off-balance sheet exposures - IAS 39(1)		n/a		120
Pension liabilities (Note 28)		593		808
Other liabilities of subsidiaries and structured entities		19,933		12,954
Other		6,649		5,331
Total	$	52,744	$	43,314

(1) Prior year amounts have been reclassified to conform with current period presentation.

23 Provisions

($ millions)	Restructuring			Litigation & other			Total
As at November 1, 2016	$	277		$	121		$	398
Provisions made during the year		–			27			27
Provisions utilized / released during the year		(174	)		(38	)		(212	)
Balance as at October 31, 2017	$	103		$	110		$	213
Provisions made during the year		–			79			79
Provisions utilized / released during the year		(79	)		(32	)		(111	)
Balance as at October 31, 2018	$	24		$	157		$	181

Restructuring charge

During fiscal 2016, the Bank recorded a restructuring provision of $378 million ($278 million after tax) as part of the Bank’s efforts to enhance customer experience, reduce costs in a sustainable manner, to achieve greater operational efficiencies, and to simplify the organization. The restructuring charge primarily related to employee severance and was recorded within non-interest expenses. As at October 31, 2018, $24 million of the restructuring provision remains.

Litigation and Other

Other primarily includes provisions related to litigation. In the ordinary course of business, the Bank and its subsidiaries are routinely defendants in, or parties to a number of pending and threatened legal actions and regulatory proceedings, including actions brought on behalf of various classes of claimants. In view of the inherent difficulty of predicting the outcome of such matters, the Bank cannot state what the eventual outcome of such matters will be. However, based on current knowledge, management does not believe that liabilities, if any, arising from pending litigation or regulatory proceedings will have a material adverse effect on the Consolidated Statement of Financial Position or results of operations of the Bank.

Legal provisions are established when it becomes probable that the Bank will incur an expense related to a legal action and the amount can be reliably estimated. Such provisions are recorded at the best estimate of the amount required to settle any obligation related to these legal actions as at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Management and internal and external experts are involved in estimating any amounts that may be required. The actual costs of resolving these claims may vary significantly from the amount of the legal provisions. The Bank’s estimate involves significant judgement, given the varying stages of the proceedings, the fact that the Bank’s liability, if any, has yet to be determined and the fact that the underlying matters will change from time to time. As such, there is a possibility that the ultimate resolution of those legal actions may be material to the Bank’s consolidated results of operations for any particular reporting period.

24 Common shares, preferred shares and other equity instruments

(a) Common shares

Authorized:

An unlimited number of common shares without nominal or par value.

Issued and fully paid:

	2018						2017
As at October 31 ($ millions)	Number of shares			Amount			Number of shares			Amount
Outstanding at beginning of year		1,199,231,715		$	15,644			1,207,893,604		$	15,513
Issued in relation to share-based payments, net (Note 26)		2,238,468			135			5,338,111			313
Issued in relation to the acquisition of a subsidiary or associated corporation		33,788,141			2,573			–			–
Repurchased for cancellation under the Normal Course Issuer Bid		(8,230,700	)		(118	)		(14,000,000	)		(182	)
Outstanding at end of year		1,227,027,624	(1)	$	18,234			1,199,231,715	(1)	$	15,644

(1) In the normal course of business, the Bank’s regulated Dealer subsidiary purchases and sells the Bank’s common shares to facilitate trading/institutional client activity. During fiscal 2018, the number of such shares bought and sold was 14,667,143 (2017 – 15,856,738).

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CONSOLIDATED FINANCIAL STATEMENTS

Dividend

The dividends paid on common shares in fiscal 2018 and 2017 were $3,985 million ($3.28 per share) and $3,668 million ($3.05 per share), respectively. The Board of Directors approved a quarterly dividend of 85 cents per common share at its meeting on November 26, 2018. This quarterly dividend applies to shareholders of record at the close of business on January 2, 2019, and is payable January 29, 2019.

Common shares issued

On May 1, 2018, the Bank issued 11,133,141 common shares at a price of $78.86 per common share in connection with the acquisition of Jarislowsky Fraser. As a result of the issuance, the Bank recorded an increase to equity – common shares of $878 million.

On June 8, 2018, the Bank completed its public offering of 22,655,000 common shares, at a price of $76.15 per common share. As a result of the public offering, the Bank recorded an increase to equity – common shares of $1,696 million, net of transaction costs of $29 million. The Bank has used the proceeds of the public offering to partially fund the acquisition of MD Financial Management.

Normal Course Issuer Bid

On May 29, 2018, the Bank announced that OSFI and TSX approved a normal course issuer bid (the “2018 NCIB”) pursuant to which it may repurchase for cancellation up to 24 million of the Bank’s common shares. Purchases under the 2018 NCIB will terminate upon earlier of: (i) the Bank purchasing the maximum number of common shares under the 2018 NCIB, (ii) the Bank providing a notice of termination, or (iii) June 3, 2019. On a quarterly basis, the Bank will notify OSFI prior to making purchases. Under the 2018 NCIB, the Bank has cumulatively repurchased and cancelled approximately 5.98 million common shares at an average price of $75.85 per share.

On May 30, 2017, the Bank announced that OSFI and the Toronto Stock Exchange (TSX) approved a normal course issuer bid (the “2017 NCIB”) pursuant to which it may repurchase for cancellation up to 24 million of the Bank’s common shares. The 2017 NCIB terminated on June 1, 2018. Under the 2017 NCIB, the Bank cumulatively repurchased and cancelled approximately 6.25 million common shares at an average price of $76.41 per share.

During the year ended October 31, 2018, under normal course issuer bids, the Bank repurchased and cancelled approximately 8.23 million common shares (2017 – 14 million) at a volume weighted average price of $76.77 per share (2017 – $72.09) for a total amount of $632 million (2017 – $1,009 million). Approximately 2 million of the common shares purchased were pursuant to a private agreement with an arm’s length third party seller and at a discount to the prevailing market price of the Bank’s common shares on the TSX at the time of the purchases.

Non-viability Contingent Capital

The maximum number of common shares issuable on conversion of NVCC subordinated debentures, NVCC subordinated additional tier 1 capital securities and NVCC preferred shares as at October 31, 2018 would be 1,835 million common shares (2017 – 1,757 million common shares) based on the floor price and excluding the impact of any accrued and unpaid interest and any declared but unpaid dividends (refer to Note 21 – Subordinated debentures and Note 24(b) – Preferred shares and Other Equity Instruments for further details).

(b) Preferred shares and other equity instruments

Preferred shares

Authorized:

An unlimited number of preferred shares without nominal or par value.

Issued and fully paid:

	2018								2017
As at October 31 ($ millions)	Number of shares		Amount		Dividends declared per share		Conversion feature		Number of shares		Amount		Dividends declared per share		Conversion feature
Preferred shares:(a)
Series 18(b)		–		–		0.418750		–		7,497,663		187		0.837500		Series 19
Series 19(b)		–		–		0.374547		–		6,302,337		158		0.642626		Series 18
Series 20(c)		–		–		0.902500		–		8,039,268		201		0.902500		Series 21
Series 21(c)		–		–		0.691967		–		5,960,732		149		0.554501		Series 20
Series 22(d)(e)		9,376,944		234		0.957500		Series 23		9,376,944		234		0.957500		Series 23
Series 23(d)(e)		2,623,056		66		0.736967		Series 22		2,623,056		66		0.600126		Series 22
Series 30(d)(f)		6,142,738		154		0.455000		Series 31		6,142,738		154		0.455000		Series 31
Series 31(d)(f)		4,457,262		111		0.516968		Series 30		4,457,262		111		0.380126		Series 30
Series 32(d)(g)		11,161,422		279		0.515752		Series 33		11,161,422		279		0.515752		Series 33
Series 33(d)(g)		5,184,345		130		0.601968		Series 32		5,184,345		130		0.465159		Series 32
Series 34(d)(h)(i)		14,000,000		350		1.375000		Series 35		14,000,000		350		1.375000		Series 35
Series 36(d)(h)(j)		20,000,000		500		1.375000		Series 37		20,000,000		500		1.375000		Series 37
Series 38(d)(h)(k)		20,000,000		500		1.212500		Series 39		20,000,000		500		1.351175		Series 39
Series 40(d)(h)(l)		12,000,000		300		–		Series 41		–		–		–		–
Total preferred shares		104,945,767	$	2,624						120,745,767	$	3,019

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CONSOLIDATED FINANCIAL STATEMENTS

Terms of preferred shares

	First issue date		Issue price		Initial dividend		Initial dividend payment date		Rate reset spread			Redemption date		Redemption price
Preferred shares(a):
Series 18(b)		March 25, 2008		25.00		0.431500		July 29, 2008		0.00	%		April 26, 2018		25.00
Series 19(b)		April 26, 2013		25.00		0.189250		July 29, 2013		0.00	%		April 26, 2018		25.00
Series 20(c)		June 10, 2008		25.00		0.167800		July 29, 2008		0.00	%		October 26, 2018		25.00
Series 21(c)		October 26, 2013		25.00		0.167875		January 29, 2014		0.00	%		October 26, 2018		25.00
Series 22(d)(e)		September 9, 2008		25.00		0.482900		January 28, 2009		1.88	%		January 26, 2019		25.00
Series 23(d)(e)		January 26, 2014		25.00		0.173875		April 28, 2014		1.88	%		January 26, 2014 to January 26, 2019		25.50
Series 30(d)(f)		April 12, 2010		25.00		0.282200		July 28, 2010		1.00	%		April 26, 2020		25.00
Series 31(d)(f)		April 26, 2015		25.00		0.095500		July 29, 2015		1.00	%		April 26, 2015 to April 26, 2020		25.50
Series 32(d)(g)		February 28, 2011		25.00		0.215410		April 27, 2011		1.34	%		February 2, 2021		25.00
Series 33(d)(g)		February 2, 2016		25.00		0.105690		April 27, 2016		1.34	%		February 2, 2016 to February 2, 2021		25.50
Series 34(d)(h)(i)		December 17, 2015		25.00		0.497300		April 27, 2016		4.51	%		April 26, 2021		25.00
Series 36(d)(h)(j)		March 14, 2016		25.00		0.508600		July 27, 2016		4.72	%		July 26, 2021		25.00
Series 38(d)(h)(k)		September 16, 2016		25.00		0.441800		January 27, 2017		4.19	%		January 27, 2022		25.00
Series 40(d)(h)(l)		October 12, 2018		25.00		0.362100		January 29, 2019		2.43	%		January 27, 2024		25.00

(a) Non-cumulative preferential cash dividends on all series are payable quarterly, as and when declared by the Board. Dividends on the Non-cumulative 5-Year Rate Reset Preferred Shares (Series 22, 30 and 32) and the Non-cumulative 5-Year Rate Reset Preferred Shares Non Viability Contingent Capital (NVCC) (Series 34, 36, 38, and 40) are payable at the applicable rate for the initial five-year fixed rate period ending one day prior to the redemption date. Subsequent to the initial five-year fixed rate period, and resetting every five years thereafter, the dividend on such Rate Reset Preferred Shares will be determined by the sum of the 5-year Government of Canada Yield plus the indicated rate reset spread, multiplied by $25.00. If outstanding, non-cumulative preferential cash dividends on the Series 23, 31, 33, 35, 37, 39, and 41 are payable quarterly, as and when declared by the Board. Dividends on the Non-cumulative 5-Year Rate Reset Preferred Shares (Series 23, 31 and 33) and the Non-cumulative 5-Year Rate Reset Preferred Shares NVCC (Series 35, 37, 39, and 41) are payable, at a rate equal to the sum of the three month Government of Canada Treasury Bill rate plus the rate reset spread of the converted preferred shares, multiplied by $25.00. For each of the years presented, the Bank paid all of the non-cumulative preferred share dividends.

(b) On April 26, 2018, the Bank redeemed all outstanding Non-cumulative Preferred Shares Series 18 and Series 19 and paid dividends of $0.209375 and $0.181788 per share, respectively.

(c) On October 26, 2018, the Bank redeemed all outstanding Non-Cumulative Preferred Shares 20 and 21 and paid a dividend of $0.225625 and $0.187403, respectively, per share.

(d) Holders of Fixed Rate Reset Preferred Shares will have the option to convert shares into an equal number of the relevant series of Floating Rate Preferred Shares on the applicable Rate Reset Series conversion date and every five years thereafter. Holders of Floating Rate Reset Preferred Shares have reciprocal conversion options into the relevant series of Fixed Rate Reset Preferred Shares. With respect to Series 22 and 23, 30 and 31, 32 and 33, 34 and 35, 36 and 37, 38 and 39, and 40 and 41, if the Bank determines that, after giving effect to any Election Notices received, there would be less than 1,000,000 Fixed Rate or Floating Rate Preferred Shares of such Series issued and outstanding on an applicable conversion date, then all of the issued and outstanding preferred shares of such Series will automatically be converted into an equal number of the preferred shares of the other relevant Series.

(e) Holders of Series 22 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 23 non-cumulative floating rate preferred shares on January 26, 2019, and on January 26 every five years thereafter. With regulatory approval, the Series 22 preferred shares may be redeemed by the Bank on January 26, 2019, and every five years thereafter, respectively, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 23 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on January 26, 2019 and on January 26 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed for redemption on any other date after January 26, 2014.

(f) Holders of Series 30 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 31 non-cumulative floating rate preferred shares on April 26, 2020, and on April 26 every five years thereafter. With regulatory approval, the Series 30 preferred shares may be redeemed by the Bank on April 26, 2020, and every five years thereafter, respectively, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 31 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on April 26, 2020 and on April 26 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed for redemption on any other date after April 26, 2015.

(g) Holders of Series 32 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 33 non-cumulative floating rate preferred shares on February 2, 2021 and on February 2 every five years thereafter. With regulatory approval, the Series 32 preferred shares may be redeemed by the Bank on February 2, 2021, and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 33 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on February 2, 2021

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CONSOLIDATED FINANCIAL STATEMENTS

and on February 2 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed redemption on any other date after February 2, 2016.

(h) These preferred shares contain NVCC provisions necessary for the shares to qualify as Tier 1 regulatory capital under Basel III.

(i) Holders of Series 34 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 35 non-cumulative floating rate preferred shares on April 26, 2021, and on April 26 every five years thereafter. With regulatory approval, Series 34 preferred shares may be redeemed by the Bank on April 26, 2021 and every five years thereafter, and for Series 35 preferred shares (NVCC), if applicable, on April 26, 2026 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(j) Holders of Series 36 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 37 non-cumulative floating rate preferred shares (NVCC) on July 26, 2021, and on July 26 every five years thereafter. With regulatory approval, Series 36 preferred shares may be redeemed by the Bank on July 26, 2021 and every five years thereafter, and for Series 37 preferred shares, if applicable, on July 26, 2026 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(k) Holders of Series 38 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 39 non-cumulative floating rate preferred shares (NVCC) on January 27, 2022, and on January 27 every five years thereafter. With regulatory approval, Series 38 preferred shares may be redeemed by the Bank on January 27, 2022 and every five years thereafter, and for Series 39 preferred shares, if applicable, on January 27, 2027 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(l) On October 12, 2018, the Bank issued 12 million Non-Cumulative 5-year Rate Reset Preferred Shares Series 40 (NVCC) for $300 million. The initial dividend, if declared, will be payable on January 29, 2019. Holder of Series 40, Non-Cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into equal number of Non-Cumulative Floating Rate Preferred Shares Series 41 (NVCC), on January 27, 2024 and on January 27 every five years thereafter. With regulatory approval, Series 40 may be redeemed by the Bank on January 27, 2024 and every five years thereafter, and for Series 41, if applicable, on January 27, 2029 and every five years thereafter, at $25.00 per share together with declared and unpaid dividends.

Under NVCC provisions, NVCC preferred shares Series 34, 35, 36, 37, 38, 39, 40 and 41, if outstanding, are convertible into a variable number of common shares if OSFI announces that the Bank has ceased, or is about to cease, to be viable, or if a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent thereof without which the Bank would have been determined by OSFI to be non-viable. If such a conversion were to occur, NVCC preferred shares Series 34, 35, 36, 37, 38, 39, 40 and 41, if outstanding, would be converted into common shares pursuant to an automatic conversion formula defined as 100% times the share value of $25.00 plus declared and unpaid dividends divided by the conversion price. The conversion price is based on the greater of: (i) a floor price of $5.00 or (subject to adjustments in certain events as set out in their respective prospectus supplements), and (ii) the current market price of the Bank’s common shares at the time of the trigger event (10-day weighted average).

Other equity instruments

Other equity instruments of $1,560 million (US$1.25 billion) include USD-denominated perpetual fixed to floating rate non-cumulative subordinated additional Tier 1 capital securities (NVCC).

The terms of the notes are described below:

• The price per note is USD $1,000, with interest paid semi-annually in arrears at 4.65% per annum, for the initial five years. Thereafter, the interest will reset quarterly and accrue at a rate per annum equal to three-month LIBOR plus 2.648%.

• While interest is payable on a semi-annual basis for the initial five year period, and quarterly thereafter, the Bank may, at its discretion, with notice, cancel the payments. If the Bank does not pay the interest in full to the note holders, the Bank will not declare dividends on its common or preferred shares or redeem, purchase or otherwise retire such shares until the month commencing after the Bank resumes full interest payments on the notes.

• The notes are redeemable at par 5 years after issuance solely at the option of the Bank, or following a regulatory or tax event, as described in the offering documents. All redemptions are subject to regulatory consent.

• The notes are the Bank’s direct unsecured obligations, ranking subordinate to all of the Bank’s subordinated indebtedness.

• NVCC provisions require the conversion of these capital instruments into a variable number of common shares if OSFI announces that the Bank has ceased, or is about to cease, to be viable, or if a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent thereof without which the Bank would have been determined by OSFI to be non-viable. If such a conversion were to occur, outstanding NVCC subordinated additional Tier 1 capital securities, would be converted into common shares pursuant to an automatic conversion formula defined as 125% of the par value plus accrued and unpaid interest divided by the conversion price. The conversion price is based on the greater of: (i) the U.S. dollar equivalent of $5.00 (subject to adjustments in certain events as set out in their respective prospectus supplements), and (ii) the U.S. dollar equivalent of the current market price of the Bank’s common shares at the time of the trigger event (10-day weighted average). The U.S. dollar equivalents of the floor price and the current market price are based on the mid-day CAD/USD exchange rate on the day prior to the trigger event.

The notes have been determined to be compound instruments that have both equity and liability features. At inception, the fair value of the liability component is initially measured with any residual amount assigned to the equity component. On the date of issuance, the Bank has assigned an insignificant value to the liability component of the notes and, as a result, the proceeds received upon issuance of the notes have been presented as equity. The Bank will continue to monitor events that could impact the value of the liability component.

During the year ended October 31, 2018, the Bank paid interest of US$58 million (2017 - nil) in respect of these notes.

(c) Restrictions on dividend payments

Under the Bank Act, the Bank is prohibited from declaring any dividends on its common or preferred shares when the Bank is, or would be placed by such a declaration, in contravention of the capital adequacy, liquidity or any other regulatory directives issued under the Bank Act. In addition, common share dividends cannot be paid unless all dividends to which preferred shareholders are then entitled have been paid or sufficient funds have been set aside to do so.

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In the event that applicable cash distributions on any of the Scotiabank Trust Securities are not paid on a regular distribution date, the Bank has undertaken not to declare dividends of any kind on its preferred or common shares. Similarly, should the Bank fail to declare regular dividends on any of its directly issued outstanding preferred or common shares, cash distributions will also not be made on any of the Scotiabank Trust Securities.

In the event that distributions on the Bank’s subordinated additional Tier 1 capital securities (NVCC) are not paid in full, the Bank has undertaken not to declare dividends on its common or preferred shares until the month commencing after such distributions have been made in full.

Currently, these limitations do not restrict the payment of dividends on preferred or common shares.

25 Capital Management

The primary regulator over the Bank’s consolidated capital adequacy is the Office of the Superintendent of Financial Institutions, Canada (OSFI). The capital adequacy regulations in Canada are largely consistent with international standards set by the Basel Committee on Banking Supervision (BCBS). OSFI requires Canadian deposit-taking institutions to fully implement the 2019 Basel III reforms, without the transitional phase-in provisions for capital deductions (referred to as ‘all-in’), and achieve minimums of 7%, 8.5% and 10.5% for CET1, Tier 1 and Total Capital, respectively. OSFI has also designated the Bank as a domestic systemically important bank (D-SIB), increasing its minimum capital ratio requirements by 1% across all tiers of capital effective January 1, 2016, in line with the requirements for global systemically important banks.

In addition to risk-based capital requirements, the Basel III reforms introduced a simpler, non risk-based Leverage ratio requirement to act as a supplementary measure to its risk-based capital requirements. Institutions are expected to maintain a material operating buffer above the 3% minimum.

The Bank’s regulatory capital ratios were as follows:

	2018(3)			2017
As at October 31 ($ millions)	All-in			All-in			Transitional
Capital
Common Equity Tier 1 Capital	$	44,443		$	43,352		$	46,051
Net Tier 1 Capital		50,187			49,473			50,623
Total regulatory capital		57,364			56,113			57,222
Risk-weighted assets/exposures used in calculation of capital ratios
CET1 risk-weighted assets(1)(2)	$	400,507		$	376,379		$	387,292
Tier 1 risk-weighted assets(1)(2)		400,680			376,379			387,292
Total risk-weighted assets(1)(2)		400,853			376,379			387,292
Leverage exposures		1,119,099			1,052,891			1,053,928
Capital ratios
Common Equity Tier 1 Capital ratio		11.1	%		11.5	%		11.9	%
Tier 1 capital ratio		12.5	%		13.1	%		13.1	%
Total capital ratio		14.3	%		14.9	%		14.8	%
Leverage ratio		4.5	%		4.7	%		4.8	%

(1) In accordance with OSFI’s requirements, scalars for CVA risk-weighted assets of 0.80, 0.83 and 0.86 (0.72, 0.77 and 0.81 in 2017) were used to compute the CET1 capital ratio, Tier 1 capital ratio and Total capital ratio, respectively.

(2) Since the introduction of Basel II in 2008, OSFI has prescribed a minimum capital floor for institutions that use the advanced internal ratings-based approach for credit risk. The Basel I capital floor add-on is determined by comparing a capital requirement calculated by reference to Basel I against the Basel III calculation, as specified by OSFI. A shortfall in the Basel III capital requirement as compared with the Basel I floor is added to RWA. OSFI replaced the Basel I regulatory capital floor with a capital floor based on the Basel II standardized approach for credit risk, effective April 30, 2018. Revised capital floor requirements also include risk-weighted assets for market risk and CVA. Under this new Basel II regulatory capital floor requirement, the Bank does not have a capital floor add-on as at October 31, 2018 (as at October 31, 2017 – Basel I floor add-on: CET1 $12.8 billion, Tier 1 $12.6 billion, and Total Capital $12.4 billion).

(3) The Transitional approach is no longer applicable effective Fiscal 2018.

The Bank substantially exceeded the OSFI minimum capital ratios as at October 31, 2018, including the Domestic Stability Buffer requirement.

26 Share-Based Payments

(a) Stock option plans

The Bank grants stock options and stand-alone stock appreciation rights (SARs) as part of the Employee Stock Option Plan. Options to purchase common shares and/or to receive an equivalent cash payment, as applicable, may be granted to selected employees at an exercise price of the higher of the closing price of the Bank’s common shares on the Toronto Stock Exchange (TSX) on the trading day prior to the grant date or the volume weighted average trading price for the five trading days immediately preceding the grant date.

Stock Options granted since December 2014 vest 50% at the end of the third year and 50% at the end of the fourth year. This change is prospective and does not impact prior period grants. Stock Options are exercisable no later than 10 years after the grant date. In the event that the expiry date falls within an insider trading blackout period, the expiry date will be extended for 10 business days after the end of the blackout period. As approved by the shareholders, a total of 129 million common shares have been reserved for issuance under the Bank’s Employee Stock Option Plan of which 106.8 million common shares have been issued as a result of the exercise of options and 14 million common shares are committed under outstanding options, leaving 8.2 million common shares available for issuance as options. Outstanding options expire on dates ranging from December 5, 2018 to December 7, 2027.

The cost of these options is recognized on a graded vesting basis except where the employee is eligible to retire prior to a tranche’s vesting date, in which case the cost is recognized between the grant date and the date the employee is eligible to retire.

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The stock option plans include:

● Tandem stock appreciation rights

Employee stock options granted between December 2, 2005 to November 1, 2009 have Tandem SARs, which provide the employee the choice to either exercise the stock option for shares, or to exercise the Tandem SARs and thereby receive the intrinsic value of the stock option in cash. As at October 31, 2018, 3,900 Tandem SARs were outstanding (2017 – 5,900).

The share-based payment liability recognized for vested Tandem SARs as at October 31, 2018 was $0.1 million (2017 – nil). The corresponding intrinsic value of this liability as at October 31, 2018 was $0.2 million (2017 – nil).

In 2018, an expense of $0.6 million (2017 – $0.4 million expense) was recorded in salaries and employee benefits in the Consolidated Statement of Income. This expense is net of losses arising from derivatives used to manage the volatility of share-based payments of nil (2017 – $0.3 million gains).

● Stock options

Employee stock options granted beginning December 2009 are equity-classified stock options which call for settlement in shares and do not have Tandem SARs features.

The amount recorded in equity – other reserves for vested stock options as at October 31, 2018 was $164 million (2017 – $177 million).

In 2018, an expense of $7 million (2017 – $7 million) was recorded in salaries and employee benefits in the Consolidated Statement of Income. As at October 31, 2018, future unrecognized compensation cost for non-vested stock options was $4 million (2017 – $4 million) which is to be recognized over a weighted-average period of 2.07 years (2017 – 1.90 years).

● Stock appreciation rights

Stand-alone SARs are granted instead of stock options to selected employees in countries where local laws may restrict the Bank from issuing shares. When a SAR is exercised, the Bank pays the appreciation amount in cash equal to the rise in the market price of the Bank’s common shares since the grant date.

During fiscal 2018, 53,056 SARs were granted (2017 – 60,840) and as at October 31, 2018, 1,073,146 SARs were outstanding (2017 – 1,275,608), of which 1,032,495 SARs were vested (2017 – 1,229,330).

The share-based payment liability recognized for vested SARs as at October 31, 2018 was $14 million (2017 – $31 million). The corresponding intrinsic value of this liability as at October 31, 2018 was $27 million (2017 – $28 million).

In 2018, a benefit of $3 million (2017 – benefit of $2 million) was recorded in salaries and employee benefits in the Consolidated Statement of Income. This benefit is net of losses arising from derivatives used to manage the volatility of share-based payment of $8 million (2017 – $20 million gains).

Determination of fair values

The share-based payment liability and corresponding expense for SARs and options with Tandem SAR features were quantified using the Black-Scholes option pricing model with the following assumptions and resulting fair value per award:

As at October 31	2018		2017
Assumptions
Risk-free interest rate%		2.26% - 2.34%		1.38% - 1.59%
Expected dividend yield		4.58%		3.61%
Expected price volatility		13.75% - 28.12%		15.3% - 23.38%
Expected life of option		0.00 - 4.58 years		0.00 - 4.53 years
Fair value
Weighted-average fair value	$	13.39	$	25.72

The share-based payment expense for stock options, i.e., without Tandem SAR features, was quantified using the Black-Scholes option pricing model on the date of grant. The fiscal 2018 and 2017 stock option grants were fair valued using the following weighted-average assumptions and resulting fair value per award:

	2018 Grant		2017 Grant
Assumptions
Risk-free interest rate %		1.73%		1.27%
Expected dividend yield		3.62%		3.81%
Expected price volatility		15.86%		17.24%
Expected life of option		6.64 years		6.67 years
Fair value
Weighted-average fair value	$	7.68	$	6.51

The risk-free rate is based on Canadian treasury bond rates interpolated for the maturity equal to the expected life until exercise of the options. Expected dividend yield is based on historical dividend payout. Expected price volatility is determined based on the historical volatility for compensation. For accounting purposes, an average of the market consensus implied volatility for traded options on our common shares and the historical volatility is used.

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Details of the Bank’s Employee Stock Option Plan are as follows⁽¹⁾:

	2018					2017
As at October 31	Number of stock options (000’s)			Weighted average exercise price		Number of stock options (000’s)			Weighted average exercise price
Outstanding at beginning of year		15,555		$	57.42		19,852		$	54.55
Granted		988			81.81		1,141			74.14
Exercised as options		(2,238	)		51.37		(5,338	)		50.25
Exercised as Tandem SARs		(19	)		41.95		(33	)		52.59
Forfeited		(146	)		65.93		(67	)		65.97
Expired		–			–		–			–
Outstanding at end of year(2)		14,140		$	60.02		15,555		$	57.42
Exercisable at end of year(2)		10,176		$	55.76		10,980		$	53.44
Available for grant		8,334					9,156

	Options Outstanding						Options Exercisable
As at October 31, 2018	Number of stock options (000’s)		Weighted average remaining contractual life (years)		Weighted average exercise price		Number of stock options (000’s)		Weighted average exercise price
Range of exercise prices
$33.89 to $47.75		1,571		0.84	$	44.02		1,571	$	44.02
$49.93 to $55.21		1,838		3.00	$	50.30		1,838	$	50.30
$55.63 to $60.67		4,794		4.18	$	56.88		3,606	$	55.63
$63.98 to $81.81		5,937		6.40	$	69.80		3,161	$	64.91
		14,140		4.59	$	60.02		10,176	$	55.76

(1) Excludes SARs.

(2) Includes options of 3,900 Tandem SARs (2017 – 5,900) and 130,000 options originally issued under HollisWealth plans (2017 – 156,520).

(b) Employee share ownership plans

Eligible employees can contribute up to a specified percentage of salary towards the purchase of common shares of the Bank. In general, the Bank matches 50% of eligible contributions, up to a maximum dollar amount, which is expensed in salaries and employee benefits. During 2018, the Bank’s contributions totalled $55 million (2017 – $54 million). Contributions, which are used to purchase common shares in the open market, do not result in a subsequent expense to the Bank from share price appreciation.

As at October 31, 2018, an aggregate of 16 million common shares were held under the employee share ownership plans (2017 – 18 million). The shares in the employee share ownership plans are considered outstanding for computing the Bank’s basic and diluted earnings per share.

(c) Other share-based payment plans

Other share-based payment plans use notional units that are valued based on the Bank’s common share price on the TSX. These units accumulate dividend equivalents in the form of additional units based on the dividends paid on the Bank’s common shares. These plans are settled in cash and, as a result, are liability-classified. Fluctuations in the Bank’s share price change the value of the units, which affects the Bank’s share-based payment expense. As described below, the value of a portion of the Performance Share Unit notional units also varies based on Bank performance. Upon exercise or redemption, payments are made to the employees with a corresponding reduction in the accrued liability.

In 2018, an aggregate expense of $188 million (2017 – $203 million) was recorded in salaries and employee benefits in the Consolidated Statement of Income for these plans. This expense includes losses from derivatives used to manage the volatility of share-based payment of $85 million (2017 – $160 million gains).

As at October 31, 2018, the share-based payment liability recognized for vested awards under these plans was $745 million (2017 – $946 million).

Details of these other share-based payment plans are as follows:

Deferred Stock Unit Plan (DSU)

Under the DSU Plan, senior executives may elect to receive all or a portion of their cash bonus under the Annual Incentive Plan (which is expensed for the year awarded in salaries and employee benefits in the Consolidated Statement of Income) in the form of deferred stock units which vest immediately. In addition the DSU plan allows for eligible executives of the Bank to participate in grants that are not allocated from the Annual Incentive Plan election. These grants are subject to specific vesting schedules. Units are redeemable in cash only when an executive ceases to be a Bank employee, and must be redeemed by December 31 of the year following that event. As at October 31, 2018, there were 939,290 units (2017 – 755,472) awarded and outstanding of which 795,783 units were vested (2017 – 684,017).

Directors’ Deferred Stock Unit Plan (DDSU)

Under the DDSU Plan, non-officer directors of the Bank may elect to receive all or a portion of their fee for that fiscal year (which is expensed by the Bank in other expenses in the Consolidated Statement of Income) in the form of deferred stock units which vest immediately. Units are redeemable in cash, only following resignation or retirement, and must be redeemed by December 31 of the year following that event. As at October 31, 2018, there were 314,424 units outstanding (2017 – 299,867).

Restricted Share Unit Plan (RSU)

Under the RSU Plan, selected employees receive an award of restricted share units which, for the majority of grants, vest at the end of three years. There are certain grants that provide for a graduated vesting schedule. Upon vesting all RSU units are paid in cash to the employee. The share-based payment expense is recognized evenly over the vesting period except where the employee is eligible to retire prior to the vesting date in which case, the expense is recognized between the grant date and the date the employee is eligible to retire. As at October 31, 2018, there were 2,639,165 units (2017 – 2,197,100) awarded and outstanding of which 1,665,885 were vested (2017 – 1,497,340).

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Performance Share Unit Plan (PSU)

Eligible executives receive an award of performance share units, for the majority of grants vest at the end of three years. One grant provides for a graduated vesting schedule which includes a specific performance factor calculation. A portion of the PSU awards are subject to performance criteria measured over a three-year period whereby a multiplier factor is applied which impacts the incremental number of outstanding shares due to employees. The three-year performance measures include return on equity compared to target and total shareholder return relative to a comparator group selected prior to the granting of the award. The Bank uses a probability-weighted-average of potential outcomes to estimate the multiplier impact. The share-based payment expense is recognized over the vesting period except where the employee is eligible to retire prior to the vesting date; in which case, the expense is recognized between the grant date and the date the employee is eligible to retire. This expense varies based on changes in the Bank’s share price and the Bank’s performance compared to the performance measures. Upon vesting, the units are paid in cash to the employee. As at October 31, 2018, there were 7,813,011 units (2017 – 8,250,143) outstanding subject to performance criteria, of which 6,403,107 units were vested (2017 – 6,718,738).

Deferred Performance Plan

Under the Deferred Performance Plan, a portion of the bonus received by Global Banking and Markets employees (which is accrued and expensed in the year to which it relates) is allocated to qualifying employees in the form of units. These units are subsequently paid in cash to the employees over each of the following three years. Changes in the value of the units, which arise from fluctuations in the market price of the Bank’s common shares, are expensed in the same manner as the Bank’s other liability-classified share-based payment plans in the salaries and employee benefits expense in the Consolidated Statement of Income. As at October 31, 2018, there were 1,251,576 units outstanding (2017 – 1,587,037). November 30, 2017 was the last grant under this plan, there will be no further grants.

27 Corporate Income Taxes

Corporate income taxes recorded in the Bank’s consolidated financial statements for the years ended October 31 are as follows:

(a) Components of income tax provision

For the year ended October 31 ($ millions)	2018			2017			2016
Provision for income taxes in the Consolidated Statement of Income:
Current income taxes:
Domestic:
Federal	$	797		$	533		$	467
Provincial		633			424			386
Adjustments related to prior periods		(25	)		24			4
Foreign		994			903			935
Adjustments related to prior periods		(14	)		(29	)		(19	)
		2,385			1,855			1,773
Deferred income taxes:
Domestic:
Federal		34			33			141
Provincial		16			16			70
Foreign		(53	)		129			46
		(3	)		178			257
Total provision for income taxes in the Consolidated Statement of Income	$	2,382		$	2,033		$	2,030
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Current income taxes	$	(136	)	$	82		$	(158	)
Deferred income taxes		(193	)		198			(168	)
		(329	)		280			(326	)
Reported in:
Other Comprehensive Income		(145	)		275			(322	)
Retained earnings		(194	)		(1	)		(10	)
Accumulated Other Comprehensive Income		18			–			–
Common shares		(10	)		1			1
Other reserves		2			5			5
Total provision for income taxes in the Consolidated Statement of Changes in Equity		(329	)		280			(326	)
Total provision for income taxes	$	2,053		$	2,313		$	1,704
Provision for income taxes in the Consolidated Statement of Income includes:
Deferred tax expense (benefit) relating to origination/reversal of temporary differences	$	64		$	191		$	372
Deferred tax expense (benefit) of tax rate changes		(2	)		(2	)		(4	)
Deferred tax expense (benefit) of previously unrecognized tax losses, tax credits and temporary differences		(65	)		(11	)		(111	)
	$	(3	)	$	178		$	257

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(b) Reconciliation to statutory rate

Income taxes in the Consolidated Statement of Income vary from the amounts that would be computed by applying the composite federal and provincial statutory income tax rate for the following reasons:

	2018						2017						2016
For the year ended October 31 ($ millions)	Amount			Percent of pre-tax income			Amount			Percent of pre-tax income			Amount			Percent of pre-tax income
Income taxes at Canadian statutory rate	$	2,943			26.5	%	$	2,715			26.4	%	$	2,485			26.4	%
Increase (decrease) in income taxes resulting from:
Lower average tax rate applicable to subsidiaries and foreign branches		(439	)		(3.9	)		(286	)		(2.8	)		(234	)		(2.5	)
Tax-exempt income from securities		(90	)		(0.8	)		(407	)		(3.9	)		(220	)		(2.3	)
Deferred income tax effect of substantively enacted tax rate changes		(2	)		–			(2	)		–			(4	)		–
Other, net		(30	)		(0.3	)		13			0.1			3			–
Total income taxes and effective tax rate	$	2,382			21.5	%	$	2,033			19.8	%	$	2,030			21.6	%

(c) Deferred taxes

Significant components of the Bank’s deferred tax assets and liabilities are as follows:

	Statement of Income						Statement of Financial Position
	For the year ended						As at
October 31 ($ millions)	2018			2017			2018		2017
Deferred tax assets:
Loss carryforwards	$	73		$	62		$	338	$	417
Allowance for credit losses		(177	)		45			877		793
Deferred compensation		41			(25	)		178		219
Deferred income		(68	)		(124	)		476		405
Property and equipment		48			(19	)		417		133
Pension and other post-retirement benefits		16			(6	)		536		720
Securities		(17	)		(17	)		199		169
Other		(235	)		(169	)		633		640
Total deferred tax assets	$	(319	)	$	(253	)	$	3,654	$	3,496
Deferred tax liabilities:
Deferred income	$	(22	)	$	(21	)	$	156	$	133
Property and equipment		(93	)		(32	)		137		138
Pension and other post-retirement benefits		(12	)		(9	)		110		136
Securities		(8	)		111			166		126
Intangible assets		69			(53	)		1,788		1,094
Other		(250	)		(427	)		564		853
Total deferred tax liabilities	$	(316	)	$	(431	)	$	2,921	$	2,480
Net deferred tax assets (liabilities)(1)	$	(3	)	$	178		$	733	$	1,016

(1) For Consolidated Statement of Financial Position presentation, deferred tax assets and liabilities are assessed by legal entity. As a result, the net deferred tax assets of $733 (2017 – $1,016) are represented by deferred tax assets of $1,938 (2017 – $1,713), and deferred tax liabilities of $1,205 (2017 – $697) on the Consolidated Statement of Financial Position.

The major changes to net deferred taxes were as follows:

For the year ended October 31 ($ millions)	2018			2017
Balance at beginning of year	$	1,016		$	1,410
Deferred tax benefit (expense) for the year recorded in income		3			(178	)
Deferred tax benefit (expense) for the year recorded in equity		193			(198	)
Acquired in business combinations		(493	)		–
Other		14			(18	)
Balance at end of year	$	733		$	1,016

The tax related to temporary differences, unused tax losses and unused tax credits for which no deferred tax asset is recognized in the Consolidated Statement of Financial Position amounts to $14 million (October 31, 2017 – $82 million). The amount related to unrecognized losses is $7 million, which will expire as follows: $1 million in 2020 and beyond and $6 million in 2023.

Included in the net deferred tax asset are tax benefits of $92 million (2017 – $92 million) that have been recognized in certain Canadian and foreign subsidiaries that have incurred losses in either the current or the preceding year. In determining if it is appropriate to recognize these tax benefits, the Bank relied on projections of future taxable profits.

The amount of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures for which deferred tax liabilities have not been recognized at October 31, 2018 is approximately $33 billion (2017 – $27 billion).

Reassessment of dividend deductions

In November 2016, the Bank received a federal reassessment of $179 million for tax and interest as a result of the Canada Revenue Agency denying the tax deductibility of certain Canadian dividends received during the 2011 taxation year. In August 2017, the Bank received a reassessment of $185 million for tax and interest for the 2012 taxation year. The circumstances of the dividends subject to the reassessment are similar to those

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prospectively addressed by recently enacted rules which had been introduced in the 2015 Canadian federal budget. In June 2018, the Bank received a reassessment of $211 million for tax and interest in respect of the same circumstances for the 2013 taxation year. The Bank is confident that its tax filing position was appropriate and in accordance with the relevant provisions of the Income Tax Act (Canada), and intends to vigorously defend its position.

28 Employee Benefits

The Bank sponsors a number of employee benefit plans, including pensions (defined benefit and defined contribution) and other benefit plans (post-retirement benefits and other long-term employee benefits) for most of its employees globally. The information presented below relates to the Bank’s principal plans; other plans operated by certain subsidiaries of the Bank are not considered material and are not included in these disclosures.

Global pension plans

The principal pension plans include plans in Canada, the US, Mexico, the UK, Ireland, Jamaica, Trinidad & Tobago and other countries in the Caribbean in which the Bank operates. The Bank has a strong and well defined governance structure to manage these global obligations. The investment policy for each principal plan is reviewed periodically and all plans are in good standing with respect to legislation and local regulations.

Actuarial valuations for funding purposes for the Bank’s funded pension plans are conducted as required by applicable legislation. The purpose of the actuarial valuation is to determine the funded status of the plans on a going-concern and statutory basis and to determine the required contributions. The plans are funded in accordance with applicable pension legislation and the Bank’s funding policies such that future benefit promises based on plan provisions are well secured. The assumptions used for the funding valuations are set by independent plan actuaries on the basis of the requirements of the local actuarial standards of practice and statutes.

Scotiabank Pension Plan (Canada)

The most significant pension plan is the Scotiabank Pension Plan (SPP) in Canada, a defined benefit pension plan (which includes an optional defined contribution (DC) component for employees in Canada hired on or after January 1, 2016) which was recently amended to include a defined contribution pension plan for employees in Canada hired on or after May 1, 2018 (the defined benefit provision of the pension plan is closed to employees hired on or after May 1, 2018). As the administrator of the SPP, the Bank has established a well-defined governance structure and policies to maintain compliance with legislative and regulatory requirements under OSFI and the Canada Revenue Agency. The Bank appoints a number of committees to oversee and make decisions related to the administration of the SPP. Certain committees are also responsible for the investment of the assets of the SPP Fund and for monitoring the investment managers and performance.

• The Human Resources Committee (HRC) of the Board approves the charter of the Pension Administration and Investment Committee (PAIC), reviews reports, and approves the investment policy. The HRC also reviews and recommends any amendments to the SPP to the Board of Directors.

• PAIC is responsible for recommending the investment policy to the HRC, for appointing and monitoring investment managers, and for reviewing auditor and actuary reports. PAIC also monitors the administration of member pension benefits.

• The Scotiabank Master Trust Committee (MTC) invests assets in accordance with the investment policy and all applicable legislation. The MTC assigns specific mandates to investment managers. PAIC and the MTC both have independent member representation on the committees.

• The Capital Accumulation Plans (CAP) Committee is responsible for the administration and investment of the DC component of the SPP including the selection and monitoring of investment options available to DC participants.

Actuarial valuations for funding purposes for the SPP are conducted on an annual basis. The most recent funding valuation was conducted as of November 1, 2017. Contributions are being made to the SPP in accordance with this valuation and are shown in the table in b) below. The assumptions used for the funding valuation are set by independent plan actuaries on the basis of the requirements of the Canadian Institute of Actuaries and applicable regulation.

Other benefit plans

The principal other benefit plans include plans in Canada, the US, Mexico, Uruguay, the UK, Jamaica, Trinidad & Tobago, Colombia and other countries in the Caribbean in which the Bank operates. The most significant other benefit plans provided by the Bank are in Canada.

Key assumptions

The financial information reported below in respect of pension and other benefit plans is based on a number of assumptions. The most significant assumption is the discount rate used to determine the defined benefit obligation, which is set by reference to the yields on high quality corporate bonds that have durations that match the terms of the Bank’s obligations. Separate discount rates are used to determine the annual benefit expense in Canada and the US. These rates are determined with reference to the yields on high quality corporate bonds with durations that match the various components of the annual benefit expense. The discount rate used to determine the annual benefit expense for all other plans continues to be the same as the rate used to determine the defined benefit obligation at the beginning of the period. Other assumptions set by management are determined in reference to market conditions, plan-level experience, best practices and future expectations. The key weighted-average assumptions used by the Bank for the measurement of the benefit obligation and benefit expense for all of the Bank’s principal plans are summarized in the table in f) below.

Risk management

The Bank’s defined benefit pension plans and other benefit plans expose the Bank to a number of risks. Some of the more significant risks include interest rate risk, investment risk, longevity risk and health care cost increases, among others. These risks could result in higher defined benefit expense and a higher defined benefit obligation to the extent that:

• there is a decline in discount rates; and/or

• plan assets returns are less than expected; and/or

• plan members live longer than expected; and/or

• health care costs are higher than assumed.

In addition to the governance structure and policies in place, the Bank manages risks by regularly monitoring market developments and asset investment performance. The Bank also monitors regulatory and legislative changes along with demographic trends and revisits the investment strategy and/or plan design as warranted.

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a) Relative size of plan obligations and assets

	Pension plans									Other benefit plans
	Canada
For the year ended October 31, 2018	SPP			Other			International			Canada			International
Percentage of total benefit obligations		70	%		14	%		16	%		58	%		42	%
Percentage of total plan assets		72	%		9	%		19	%		16	%		84	%
Percentage of total benefit expense(1)		82	%		16	%		2	%		39	%		61	%

	Pension plans									Other benefit plans
	Canada
For the year ended October 31, 2017	SPP			Other			International			Canada			International
Percentage of total benefit obligations		74	%		11	%		15	%		63	%		37	%
Percentage of total plan assets		76	%		6	%		18	%		18	%		82	%
Percentage of total benefit expense(1)		80	%		16	%		4	%		51	%		49	%

(1) Excludes non-routine benefit expense items such as past service costs, curtailment charges and settlement charges.

b) Cash contributions and payments

The table below shows the cash contributions and payments made by the Bank to its principal plans in 2018, and the two prior years.

Contributions to the principal plans for the year ended October 31 ($ millions)	2018		2017		2016
Defined benefit pension plans (cash contributions to fund the plans, including paying beneficiaries under the unfunded pension arrangements)
SPP (excluding DC provision)	$	238	$	286	$	187
All other plans		78		185		77
Other benefit plans (cash contributions mainly in the form of benefit payments to beneficiaries)		61		51		45
Defined contribution pension plans (cash contributions)		41		35		31
Total contributions(1)	$	418	$	557	$	340

(1) Based on preliminary estimates, the Bank expects to make contributions of $238 to the SPP (excluding the DC provision), $51 to all other defined benefit pension plans, $65 to other benefit plans and $63 to all other defined contribution plans for the year ending October 31, 2019.

c) Funded and unfunded plans

The excess (deficit) of the fair value of assets over the benefit obligation at the end of the year includes the following amounts for plans that are wholly unfunded and plans that are wholly or partly funded.

	Pension plans									Other benefit plans
As at October 31 ($ millions)	2018			2017			2016			2018			2017			2016
Benefit obligation
Benefit obligation of plans that are wholly unfunded	$	400		$	418		$	408		$	1,101		$	1,324		$	1,310
Benefit obligation of plans that are wholly or partly funded		7,868			8,424			8,731			273			334			372
Funded status
Benefit obligation of plans that are wholly or partly funded	$	7,868		$	8,424		$	8,731		$	273		$	334		$	372
Fair value of assets		8,037			8,329			7,770			240			266			284
Excess (deficit) of fair value of assets over benefit obligation of wholly or partly funded plans	$	169		$	(95	)	$	(961	)	$	(33	)	$	(68	)	$	(88	)
Benefit obligation of plans that are wholly unfunded		400			418			408			1,101			1,324			1,310
Excess (deficit) of fair value of assets over total benefit obligation	$	(231	)	$	(513	)	$	(1,369)		$	(1,134)		$	(1,392)		$	(1,398)
Effect of asset limitation and minimum funding requirement		(2	)		(39	)		(60	)		–			–			–
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)

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d) Financial information

The following tables present financial information related to the Bank’s principal plans.

	Pension plans									Other benefit plans
For the year ended October 31 ($ millions)	2018			2017			2016			2018			2017			2016
Change in benefit obligation
Benefit obligation at beginning of year	$	8,842		$	9,139		$	8,113		$	1,658		$	1,682		$	1,639
Current service cost		334			330			284			30			39			39
Interest cost on benefit obligation		309			297			314			70			72			77
Employee contributions		22			24			24			–			–			–
Benefits paid		(1,012	)		(724	)		(593	)		(90	)		(76	)		(71	)
Actuarial loss (gain)		(495	)		(46	)		1,119			(96	)		(36	)		95
Past service cost		5			–			(16	)		(196	)(2)		4			(77	)
Business acquisition		264			–			–			6			1			9
Settlements		(2	)		(157	)		–			–			–			–
Foreign exchange		1			(21	)		(106	)		(8	)		(28	)		(29	)
Benefit obligation at end of year	$	8,268		$	8,842		$	9,139		$	1,374		$	1,658		$	1,682
Change in fair value of assets
Fair value of assets at beginning of year		8,329			7,770			7,615			266			284			307
Interest income on fair value of assets		305			273			310			20			19			22
Return on plan assets in excess of (less than) interest income on fair value of assets		(166	)		700			275			(11	)		1			5
Employer contributions		316			471			264			61			51			45
Employee contributions		22			24			24			–			–			–
Benefits paid		(1,012	)		(724	)		(593	)		(90	)		(76	)		(71	)
Administrative expenses		(14	)		(13	)		(12	)		–			–			–
Business acquisition		251			–			–			–			–			2
Settlements		(2	)		(157	)		–			–			(1	)		–
Foreign exchange		8			(15	)		(113	)		(6	)		(12	)		(26	)
Fair value of assets at end of year	$	8,037		$	8,329		$	7,770		$	240		$	266		$	284
Funded status
Excess (deficit) of fair value of assets over benefit obligation at end of year		(231	)		(513	)		(1,369	)		(1,134	)		(1,392	)		(1,398	)
Effect of asset limitation and minimum funding requirement(1)		(2	)		(39	)		(60	)		–			–			–
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)
Recorded in:
Other assets in the Bank’s Consolidated Statement of Financial Position		360			256			184			–			1			–
Other liabilities in the Bank’s Consolidated Statement of Financial Position		(593	)		(808	)		(1,613	)		(1,134	)		(1,393	)		(1,398	)
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)
Annual benefit expense
Current service cost		334			330			284			30			39			39
Net interest expense (income)		7			29			9			50			53			55
Administrative expenses		12			11			13			–			–			–
Past service costs		5			–			(16	)		(196	)(2)		4			(77	)
Amount of settlement (gain) loss recognized		–			–			–			–			–			–
Remeasurement of other long-term benefits		–			–			–			(10	)		(3	)		(20	)
Benefit expense (income) recorded in the Consolidated Statement of Income	$	358		$	370		$	290		$	(126	)	$	93		$	(3	)
Defined contribution benefit expense	$	41		$	35		$	31		$	–		$	–		$	–
Remeasurements
(Return) on plan assets in excess of interest income on fair value of assets		166			(700	)		(275	)		11			1			(3	)
Actuarial loss (gain) on benefit obligation		(495	)		(46	)		1,119			(86	)		(35	)		113
Change in the asset limitation		(40	)		(25	)		18			–			–			–
Remeasurements recorded in OCI	$	(369	)	$	(771	)	$	862		$	(75	)	$	(34	)	$	110
Total benefit cost	$	30		$	(366	)	$	1,183		$	(201	)	$	59		$	107
Additional details on actual return on assets and actuarial (gains) and losses
Actual return on assets (net of administrative expenses)	$	125		$	960		$	573		$	9		$	20		$	27
Actuarial (gains) and losses from changes in demographic assumptions		(148	)		(6	)		9			(23	)		–			(5	)
Actuarial (gains) and losses from changes in financial assumptions		(548	)		(71	)		1,116			(92	)		(13	)		133
Actuarial (gains) and losses from changes in experience		201			31			(6	)		19			(23	)		(33	)
Additional details on fair value of pension plan assets invested
In Scotiabank securities (stock, bonds)		377			457			410			3			4			–
In property occupied by Scotiabank		4			4			5			–			–			–
Change in asset ceiling/onerous liability
Asset ceiling /onerous liability at end of prior year		39			60			41			–			–			–
Interest expense		3			5			5			–			–			–
Remeasurements		(40	)		(25	)		18			–			–			–
Foreign exchange		–			(1	)		(4	)		–			–			–
Asset ceiling /onerous liability at end of year	$	2		$	39		$	60		$	–		$	–		$	–

(1) The recognized asset is limited by the present value of economic benefits available from a reduction in future contributions to a plan and from the ability to pay plan expenses from the fund.

(2) The past service cost for other benefit plans includes a decrease of $203 million in the first quarter of fiscal 2018, related to modifications to the Bank’s postretirement benefits plan.

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e) Maturity profile of the defined benefit obligation

The weighted average duration of the total benefit obligation at October 31, 2018 is 14.4 years (2017 – 15.3 years, 2016 – 15.3 years).

	Pension plans									Other benefit plans
For the year ended October 31	2018			2017			2016			2018			2017			2016
Disaggregation of the benefit obligation (%)
Canada
Active members		57	%		58	%		60	%		9	%		29	%		33	%
Inactive and retired members		43	%		42	%		40	%		91	%		71	%		67	%
Total		100	%		100	%		100	%		100	%		100	%		100	%
Mexico
Active members		26	%		27	%		29	%		54	%		55	%		57	%
Inactive and retired members		74	%		73	%		71	%		46	%		45	%		43	%
Total		100	%		100	%		100	%		100	%		100	%		100	%
United States
Active members		45	%		48	%		33	%		34	%		35	%		38	%
Inactive and retired members		55	%		52	%		67	%		66	%		65	%		62	%
Total		100	%		100	%		100	%		100	%		100	%		100	%

f) Key assumptions (%)

The key weighted-average assumptions used by the Bank for the measurement of the benefit obligation and benefit expense for all of the Bank’s principal plans are summarized as follows:

	Pension plans									Other benefit plans
For the year ended October 31	2018			2017			2016			2018			2017			2016
Benefit obligation at end of year
Discount rate – all plans		4.35	%		3.90	%		3.86	%		5.54	%		4.86	%		4.74	%
Discount rate – Canadian plans only		4.10	%		3.60	%		3.60	%		3.96	%		3.53	%		3.42	%
Rate of increase in future compensation(1)		2.80	%		2.76	%		2.72	%		3.83	%		4.07	%		4.09	%
Benefit expense (income) for the year
Discount rate – All plans
Discount rate for defined benefit obligations		3.90	%		3.86	%		4.64	%		4.86	%		4.74	%		5.33	%
Discount rate for net interest cost		3.55	%		3.33	%		4.03	%		4.60	%		4.42	%		4.91	%
Discount rate for service cost		4.04	%		4.01	%		4.83	%		5.11	%		5.09	%		5.62	%
Discount rate for interest on service cost		3.77	%		3.64	%		4.31	%		5.04	%		4.94	%		5.56	%
Discount rate – Canadian plans only
Discount rate for defined benefit obligations		3.60	%		3.60	%		4.40	%		3.53	%		3.42	%		4.27	%
Discount rate for net interest cost		3.20	%		3.00	%		3.70	%		3.18	%		2.98	%		3.67	%
Discount rate for service cost		3.70	%		3.70	%		4.60	%		3.76	%		3.75	%		4.54	%
Discount rate for interest on service cost		3.40	%		3.30	%		4.00	%		3.66	%		3.56	%		4.44	%
Rate of increase in future compensation(1)		2.76	%		2.72	%		2.75	%		4.07	%		4.09	%		4.41	%
Health care cost trend rates at end of year
Initial rate		n/a			n/a			n/a			5.81	%		5.99	%		6.12	%
Ultimate rate		n/a			n/a			n/a			4.66	%		4.93	%		4.93	%
Year ultimate rate reached		n/a			n/a			n/a			2040			2030			2030
Assumed life expectancy in Canada (years)
Life expectancy at 65 for current pensioners – male		23.3			23.2			23.2			23.3			23.2			23.2
Life expectancy at 65 for current pensioners – female		24.4			24.4			24.3			24.4			24.4			24.3
Life expectancy at 65, for future pensioners currently aged 45 – male		24.3			24.2			24.2			24.3			24.2			24.2
Life expectancy at 65, for future pensioners currently aged 45 – female		25.3			25.3			25.3			25.3			25.3			25.3
Assumed life expectancy in Mexico (years)
Life expectancy at 65 for current pensioners – male		21.3			21.3			21.3			21.3			21.3			21.3
Life expectancy at 65 for current pensioners – female		23.8			23.8			23.8			23.8			23.8			23.8
Life expectancy at 65, for future pensioners currently aged 45 – male		21.7			21.7			21.7			21.7			21.7			21.7
Life expectancy at 65, for future pensioners currently aged 45 – female		24.0			24.0			24.0			24.0			24.0			24.0
Assumed life expectancy in United States (years)
Life expectancy at 65 for current pensioners – male		22.7			22.7			23.0			22.7			22.7			23.0
Life expectancy at 65 for current pensioners – female		24.4			24.4			24.7			24.4			24.4			24.7
Life expectancy at 65, for future pensioners currently aged 45 – male		24.3			24.3			23.7			24.3			24.3			23.7
Life expectancy at 65, for future pensioners currently aged 45 – female		25.9			25.9			25.6			25.9			25.9			25.6

(1) The weighted-average rates of increase in future compensation shown for other benefit plans do not include Canadian flexible post-retirement benefits plans established in fiscal 2005, as they are not impacted by future compensation increases.

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CONSOLIDATED FINANCIAL STATEMENTS

g) Sensitivity analysis

The sensitivity analysis presented represents the impact of a change in a single assumption with other assumptions left unchanged. For purposes of the sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation recognized in the statement of financial position.

	Pension plans				Other benefit plans
For the year ended October 31, 2018 ($ millions)	Benefit obligation		Benefit expense		Benefit obligation			Benefit expense
Impact of the following changes:
1% decrease in discount rate	$	1,383	$	122	$	189		$	13
0.25% increase in rate of increase in future compensation		78		9		1			–
1% increase in health care cost trend rate		n/a		n/a		132			16
1% decrease in health care cost trend rate		n/a		n/a		(106	)		(12	)
1 year increase in Canadian life expectancy		151		10		20			1
1 year increase in Mexican life expectancy		2		–		2			–
1 year increase in the United States life expectancy		4		–		4			–

h) Assets

The Bank’s principal pension plans’ assets are generally invested with the long-term objective of maximizing overall expected returns, at an acceptable level of risk relative to the benefit obligation. A key factor in managing long-term investment risk is asset mix. Investing the pension assets in different asset classes and geographic regions helps to mitigate risk and to minimize the impact of declines in any single asset class, particular region or type of investment. Investment managers – including related-party managers – are typically hired and assigned specific mandates within each asset class.

Pension plan asset mix guidelines are set for the long term, and are documented in each plan’s investment policy. Asset mix policy typically also reflects the nature of the plan’s benefit obligations. Legislation places certain restrictions on asset mix – for example, there are usually limits on concentration in any one investment. Other concentration and quality limits are also set forth in the investment policies. The use of derivatives is generally prohibited without specific authorization; currently, the main use of derivatives is for currency hedging. Asset mix guidelines are reviewed at least once each year, and adjusted, where appropriate, based on market conditions and opportunities. However, large asset class shifts are not common, and typically reflect a change in the pension plan’s situation (e.g. plan amendments) and/or in the investment strategy. Actual asset mix is reviewed regularly, and rebalancing back to target asset mix is considered – as needed – generally on a semi-annual basis. The Bank’s other benefit plans are generally not funded, with the exception of certain programs in Canada and Mexico.

The tables below shows the weighted-average actual and target asset allocations for the Bank’s principal plans at October 31, by asset category.

	Pension plans									Other benefit plans
Asset category %	Actual 2018			Actual 2017			Actual 2016			Actual 2018			Actual 2017			Actual 2016
Cash and cash equivalents		4	%		2	%		2	%		1	%		1	%		2	%
Equity investments
Quoted in an active market		36	%		43	%		44	%		42	%		46	%		45	%
Non quoted		12	%		16	%		16	%		2	%		–	%		–	%
		48	%		59	%		60	%		44	%		46	%		45	%
Fixed income investments
Quoted in an active market		9	%		5	%		4	%		34	%		32	%		29	%
Non quoted		29	%		26	%		27	%		21	%		21	%		24	%
		38	%		31	%		31	%		55	%		53	%		53	%
Property
Quoted in an active market		–	%		–	%		–	%		–	%		–	%		–	%
Non quoted		1	%		–	%		–	%		–	%		–	%		–	%
		1	%		–	%		–	%		–	%		–	%		–	%
Other
Quoted in an active market		–	%		–	%		1	%		–	%		–	%		–	%
Non quoted		9	%		8	%		6	%		–	%		–	%		–	%
		9	%		8	%		7	%		–	%		–	%		–	%
Total		100	%		100	%		100	%		100	%		100	%		100	%

Target asset allocation at October 31, 2018 Asset category %	Pension plans			Other benefit plans
Cash and cash equivalents		–	%		2	%
Equity investments		48	%		45	%
Fixed income investments		42	%		53	%
Property		2	%		–	%
Other		8	%		–	%
Total		100	%		100	%

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CONSOLIDATED FINANCIAL STATEMENTS

29 Operating Segments

Scotiabank is a diversified financial services institution that provides a wide range of financial products and services to retail, commercial and corporate customers around the world. The Bank’s businesses are grouped into three business lines: Canadian Banking, International Banking and Global Banking and Markets. Other smaller business segments are included in the Other segment. The results of these business segments are based upon the internal financial reporting systems of the Bank. The accounting policies used in these segments are generally consistent with those followed in the preparation of the consolidated financial statements as disclosed in Note 3. Notable accounting measurement differences are:

• tax normalization adjustments related to the gross-up of income from associated corporations. This adjustment normalizes the effective tax rate in the divisions to better present the contribution of the associated companies to the divisional results.

• the grossing up of tax-exempt net interest income and non-interest income to an equivalent before-tax basis for those affected segments.

These differences in measurement enable comparison of net interest income and non-interest income arising from taxable and tax-exempt sources.

Scotiabank’s results, and average assets and liabilities, allocated by these operating segments, are as follows:

For the year ended October 31, 2018(1)
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets			Other(2)			Total
Net interest income(3)	$	7,898	$	7,322	$	1,454		$	(483	)	$	16,191
Non-interest income(4)		5,452		4,111		3,074			(53	)		12,584
Total revenues		13,350		11,433		4,528			(536	)		28,775
Provision for credit losses		794		1,867		(50	)		–			2,611
Depreciation and amortization		460		304		69			15			848
Non-interest expenses		6,194		5,807		2,164			45			14,210
Income tax expense		1,538		706		587			(449	)		2,382
Net income	$	4,364	$	2,749	$	1,758		$	(147	)	$	8,724
Net income attributable to non-controlling interests in subsidiaries		–		176		–			–			176
Net income attributable to equity holders of the Bank		4,364		2,573		1,758			(147	)		8,548
Average assets ($ billions)		342		168		321			115			946
Average liabilities ($ billions)		254		131		265			232			882

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2018 amounting to $112 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(3) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(4) Includes net income from investments in associated corporations for Canadian Banking – $93; International Banking – $643 and Other – $(177).

For the year ended October 31, 2017
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets		Other(1)			Total
Net interest income(2)	$	7,363	$	6,726	$	1,336	$	(390	)	$	15,035
Non-interest income(3)		5,488		3,688		3,288		(344	)		12,120
Total revenues		12,851		10,414		4,624		(734	)		27,155
Provision for credit losses		913		1,294		42		–			2,249
Depreciation and amortization		412		283		55		11			761
Non-interest expenses		6,075		5,381		2,105		308			13,869
Income tax expense		1,387		828		604		(786	)		2,033
Net income	$	4,064	$	2,628	$	1,818	$	(267	)	$	8,243
Net income attributable to non-controlling interests in subsidiaries		–		238		–		–			238
Net income attributable to equity holders of the Bank		4,064		2,390		1,818		(267	)		8,005
Average assets ($ billions)		323		148		336		106			913
Average liabilities ($ billions)		244		115		267		228			854

(1) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2017 amounting to $562 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(2) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(3) Includes net income from investments in associated corporations for Canadian Banking – $66; International Banking – $482 and Other – $(141).

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CONSOLIDATED FINANCIAL STATEMENTS

For the year ended October 31, 2016
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets		Other(1)			Total
Net interest income(2)	$	7,024	$	6,359	$	1,293	$	(384	)	$	14,292
Non-interest income(3)		5,164		3,482		3,139		273			12,058
Total revenues		12,188		9,841		4,432		(111	)		26,350
Provision for credit losses		832		1,281		249		50			2,412
Depreciation and amortization		340		265		68		11			684
Non-interest expenses		5,984		5,258		1,972		642			13,856
Income tax expense		1,296		707		572		(545	)		2,030
Net income	$	3,736	$	2,330	$	1,571	$	(269	)	$	7,368
Net income attributable to non-controlling interests in subsidiaries		–		251		–		–			251
Net income attributable to equity holders of the Bank		3,736		2,079		1,571		(269	)		7,117
Average assets ($ billions)		309		143		351		111			914
Average liabilities ($ billions)		232		109		270		247			858

(1) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2016 amounting to $299 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(2) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(3) Includes net income from investments in associated corporations for Canadian Banking – $78; International Banking – $473 and Other – $(137).

Geographical segmentation

The following table summarizes the Bank’s financial results by geographic region. Revenues and expenses which have not been allocated back to specific operating business lines are reflected in corporate adjustments.

For the year ended October 31, 2018 ($ millions)(1)(2)	Canada		United States			Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,823	$	691		$	1,561	$	1,378	$	1,117	$	839	$	2,825	$	16,234
Non-interest income(2)		7,040		843			613		662		565		484		2,612		12,819
Total revenues(3)		14,863		1,534			2,174		2,040		1,682		1,323		5,437		29,053
Provision for credit losses		802		(34	)		239		351		498		511		244		2,611
Non-interest expenses		7,591		701			1,196		770		837		723		3,148		14,966
Income tax expense		1,596		220			76		235		51		39		451		2,668
Subtotal		4,874		647			663		684		296		50		1,594		8,808
Net income attributable to non-controlling interests in subsidiaries		–		–			17		12		28		16		103		176
Total	$	4,874	$	647		$	646	$	672	$	268	$	34	$	1,491	$	8,632
Corporate adjustments																	(84	)
Net income attributable to equity holders of the Bank																$	8,548
Total average assets ($ billions)	$	548	$	119		$	32	$	24	$	33	$	12	$	161	$	929
Corporate adjustments																	17
Total average assets, including corporate adjustments																$	946

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Includes net income from investments in associated corporations for Canada – $93; Peru – $9 and Other International – $634.

(3) Revenues are attributed to countries based on where services are performed or assets are recorded.

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CONSOLIDATED FINANCIAL STATEMENTS

For the year ended October 31, 2017 ($ millions)	Canada		United States			Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,440	$	460		$	1,380	$	1,287	$	817	$	710	$	2,999	$	15,093
Non-interest income(1)		6,924		830			536		635		409		455		2,502		12,291
Total revenues(2)		14,364		1,290			1,916		1,922		1,226		1,165		5,501		27,384
Provision for credit losses		906		(14	)		193		329		145		337		353		2,249
Non-interest expenses		7,650		606			1,123		762		630		620		3,069		14,460
Income tax expense		1,066		147			125		225		77		71		506		2,217
Subtotal		4,742		551			475		606		374		137		1,573		8,458
Net income attributable to non-controlling interests in subsidiaries		–		–			12		11		53		60		102		238
Total	$	4,742	$	551		$	463	$	595	$	321	$	77	$	1,471	$	8,220
Corporate adjustments																	(215	)
Net income attributable to equity holders of the Bank																$	8,005
Total average assets ($ billions)	$	539	$	111		$	28	$	24	$	23	$	11	$	162	$	898
Corporate adjustments																	15
Total average assets, including corporate adjustments																$	913

(1) Includes net income from investments in associated corporations for Canada – $66; Peru – $6 and Other International – $476.

(2) Revenues are attributed to countries based on where services are performed or assets are recorded.

For the year ended October 31, 2016 ($ millions)	Canada		United States		Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,022	$	479	$	1,224	$	1,231	$	763	$	674	$	2,950	$	14,343
Non-interest income(1)		6,893		871		554		600		325		419		2,409		12,071
Total revenues(2)		13,915		1,350		1,778		1,831		1,088		1,093		5,359		26,414
Provision for credit losses		876		112		225		315		113		320		401		2,362
Non-interest expenses		7,339		633		1,121		740		605		550		3,036		14,024
Income tax expense		1,235		155		69		201		45		89		497		2,291
Subtotal		4,465		450		363		575		325		134		1,425		7,737
Net income attributable to non-controlling interests in subsidiaries		–		–		9		12		38		93		99		251
Total	$	4,465	$	450	$	354	$	563	$	287	$	41	$	1,326	$	7,486
Corporate adjustments																(369	)
Net income attributable to equity holders of the Bank															$	7,117
Total average assets ($ billions)	$	529	$	126	$	27	$	23	$	20	$	10	$	165	$	900
Corporate adjustments																14
Total average assets, including corporate adjustments															$	914

(1) Includes net income from investments in associated corporations for Canada – $78; Peru – $5 and Other International – $468.

(2) Revenues are attributed to countries based on where services are performed or assets are recorded.

30 Related Party Transactions

Compensation of key management personnel of the Bank

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly, and comprise the directors of the Bank, the President and Chief Executive Officer, certain direct reports of the President and Chief Executive Officer and Group Heads.

For the year ended October 31 ($ millions)	2018		2017
Salaries and cash incentives(1)	$	18	$	17
Equity-based payment(2)		27		25
Pension and other benefits(1)		4		3
Total	$	49	$	45

(1) Expensed during the year.

(2) Awarded during the year.

Directors can use some or all of their director fees earned to buy common shares of the Bank at market rates through the Director’s Share Purchase Plan. Non-officer directors may elect to receive all or a portion of their fees in the form of deferred stock units which vest immediately. Refer to Note 26 for further details of these plans.

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CONSOLIDATED FINANCIAL STATEMENTS

Loans and deposits of key management personnel

As at October 31 ($ millions)	2018		2017
Loans	$	13	$	6
Deposits	$	6	$	8

The Bank’s committed credit exposure to companies controlled by directors totaled $132.4 million as at October 31, 2018 (2017 – $145.2 million), while actual utilized amounts were $23.9 million (2017 – $11.5 million).

Transactions with associates and joint ventures

In the ordinary course of business, the Bank provides normal banking services and enters into transactions with its associated and other related corporations on terms similar to those offered to non-related parties. If these transactions are eliminated on consolidation, they are not disclosed as related party transactions. Transactions between the Bank and its associated companies and joint ventures also qualify as related party transactions and were recorded as follows:

As at and for the year ended October 31 ($ millions)	2018			2017			2016
Net income / (loss)	$	(64	)	$	(46	)	$	(45	)
Loans		702			703			788
Deposits		151			217			338
Guarantees and commitments		123			114			99

Scotiabank principal pension plan

The Bank manages assets of $3.8 billion (2017 – $3.0 billion) which is a portion of the Scotiabank principal pension plan assets and earned $5.0 million (2017 – $3.7 million) in fees.

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CONSOLIDATED FINANCIAL STATEMENTS

31 Principal Subsidiaries and Non-Controlling Interests in Subsidiaries

(a) Principal subsidiaries⁽¹⁾

The following table presents the major operating subsidiaries the Bank owns, directly or indirectly. All of these subsidiaries are included in the Bank’s consolidated financial statements.

			Carrying value of shares
As at October 31 ($ millions)	Principal office		2018		2017
Canadian
1832 Asset Management L.P.		Toronto, Ontario	$	1,524	$	2,006
BNS Investments Inc.		Toronto, Ontario		13,870		13,551
Montreal Trust Company of Canada		Montreal, Quebec
National Trust Company(2)		Stratford, Ontario		415		449
Roynat Inc.		Calgary, Alberta		432		239
Scotia Capital Inc.		Toronto, Ontario		1,391		1,024
Scotia Dealer Advantage Inc.		Burnaby, British Columbia		592		567
Scotia Life Insurance Company		Toronto, Ontario		219		189
Scotia Mortgage Corporation		Toronto, Ontario		588		615
Scotia Securities Inc.		Toronto, Ontario		40		34
Tangerine Bank		Toronto, Ontario		3,525		3,488
Jarislowsky, Fraser Limited		Montreal, Quebec		947		–
MD Financial Management Inc.		Ottawa, Ontario		2,612		–
International
Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) (51%)(3)		Bogota, Colombia		1,221		1,160
The Bank of Nova Scotia Berhad		Kuala Lumpur, Malaysia		318		303
The Bank of Nova Scotia International Limited		Nassau, Bahamas		19,312		18,223
BNS Asia Limited		Singapore
The Bank of Nova Scotia Trust Company (Bahamas) Limited		Nassau, Bahamas
Grupo BNS de Costa Rica, S.A.		San Jose, Costa Rica
Scotiabank & Trust (Cayman) Ltd.		Grand Cayman, Cayman Islands
Scotiabank (Bahamas) Limited		Nassau, Bahamas
Scotiabank (British Virgin Islands) Limited		Road Town, Tortola, B.V.I.
Scotiabank (Hong Kong) Limited		Hong Kong, China
Scotiabank (Ireland) Designated Activity Company		Dublin, Ireland
Scotiabank (Turks and Caicos) Ltd.		Providenciales, Turks and Caicos Islands
BNS International (Panama) S.A.		Panama City, Panama
Grupo Financiero Scotiabank Inverlat, S.A. de C.V. (97.4%)		Mexico City, Mexico		3,901		3,544
Nova Scotia Inversiones Limitada		Santiago, Chile		5,100		3,325
Scotiabank Chile S.A. (75.5%)		Santiago, Chile
Scotia Holdings (US) Inc.(4)		New York, New York
Scotiabanc Inc.		Houston, Texas
Scotia Capital (USA) Inc.(4)(5)		New York, New York
Scotia International Limited		Nassau, Bahamas		635		642
Scotiabank Anguilla Limited		The Valley, Anguilla
Scotiabank Brasil S.A. Banco Multiplo		Sao Paulo, Brazil		386		223
Scotiabank Caribbean Holdings Ltd.		Bridgetown, Barbados		1,847		1,710
Scotia Group Jamaica Limited (71.8%)		Kingston, Jamaica
The Bank of Nova Scotia Jamaica Limited		Kingston, Jamaica
Scotia Investments Jamaica Limited		Kingston, Jamaica
Scotiabank (Belize) Ltd.		Belize City, Belize
Scotiabank Trinidad and Tobago Limited (50.9%)		Port of Spain, Trinidad and Tobago
Scotiabank (Panama) S.A.		Panama City, Panama
Scotiabank Uruguay S.A.		Montevideo, Uruguay		490		496
Scotiabank de Puerto Rico		San Juan, Puerto Rico		1,555		1,395
Scotiabank El Salvador, S.A. (99.6%)		San Salvador, El Salvador		686		659
Scotiabank Europe plc		London, United Kingdom		2,432		2,400
Scotiabank Peru S.A.A. (98.05%)		Lima, Peru		4,877		4,518

(1) The Bank (or immediate parent of an entity) owns 100% of the outstanding voting shares of each subsidiary unless otherwise noted.

(2) Effective October 29, 2018, National Trustco Inc. was dissolved and National Trust Company is held by the Bank.

(3) Effective June 15, 2018, the name was changed to Scotiabank Colpatria S.A.

(4) The carrying value of this subsidiary is included with that of its parent, BNS Investments Inc.

(5) The carrying value of this subsidiary is included with that of its parent, Scotia Holdings (US) Inc.

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CONSOLIDATED FINANCIAL STATEMENTS

Subsidiaries may have a different reporting date from that of the Bank of October 31. Dates may differ for a variety of reasons including local reporting requirements or tax laws. In accordance with our accounting policies, for the purpose of inclusion in the consolidated financial statements of the Bank, adjustments are made where significant for subsidiaries with different reporting dates.

(b) Non-controlling interests in subsidiaries

The Bank’s significant non-controlling interests in subsidiaries are comprised of the following entities:

	As at and for the year ended
	2018							2017
	Non-controlling interest %			Non-controlling interests in subsidiaries		Dividends paid to non-controlling interest		Non-controlling interests in subsidiaries		Dividends paid to non-controlling interest
Scotiabank Chile S.A.(1)		24.5%		$	917	$	115	$	191	$	14
Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) (51%)(2)		49.0%			519		–		445		38
Scotia Group Jamaica Limited		28.2%			340		17		300		17
Scotiabank Trinidad and Tobago Limited		49.1%			365		49		354		56
Other		0.1% - 49.0%	(3)		311		18		302		8
Total				$	2,452	$	199	$	1,592	$	133

(1) Non-controlling interest holders for Scotiabank Chile S.A. have a right to sell their holding to the Bank at fair market value that can be settled at the Bank’s discretion, by issuance of common shares or cash.

(2) Non-controlling interest holders for Scotiabank Colpatria S.A. have a right to sell their holding to the Bank after the end of 7th anniversary (January 17, 2019) and at subsequent pre-agreed intervals, into the future, at fair market value that can be settled at the Bank’s discretion, by issuance of common shares or cash.

(3) Range of non-controlling interest % for other subsidiaries.

Summarized financial information of the Bank’s subsidiaries with significant non-controlling interests are as follows:

	As at and for the year ended October 31, 2018								As at and for the year ended October 31, 2017
($ millions)	Revenue		Total comprehensive income		Total assets		Total liabilities		Revenue		Total comprehensive income		Total assets		Total liabilities
Total	$	3,615	$	173	$	80,352	$	73,449	$	2,978	$	567	$	49,077	$	42,943

32 Interest Income and Expense

The following table presents details of interest income from financial assets.

For the year ended October 31 ($ millions)	2018
Loans at amortized cost(1)	$	24,991
Securities
Amortized cost(1)		353
FVOCI(1)		1,205
Other		213
Securities purchased under resale agreements and securities borrowed not at FVTPL(1)		446
Deposit with financial institutions(1)		859
Interest income	$	28,067

(1) The interest income on the financial assets measured at amortized cost and FVOCI is calculated using the effective interest method.

The following table presents details of interest expense from financial liabilities.

For the year ended October 31 ($ millions)	2018
Deposits
Amortized cost(1)	$	10,460
FVTPL		84
Subordinated debentures(1)		214
Other
Amortized cost(1)		1,084
FVTPL		34
Interest expense	$	11,876

(1) The interest expense on the financial liabilities measured at amortized cost is calculated using the effective interest method.

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CONSOLIDATED FINANCIAL STATEMENTS

33 Non-Interest Income

The following table presents details of banking revenues and wealth management revenues in non-interest income.

For the year ended October 31 ($ millions)	2018		2017		2016
Banking
Card revenues	$	1,656	$	1,514	$	1,359
Deposit and payment services		1,366		1,324		1,279
Credit fees		1,191		1,153		1,154
Other		466		472		436
		4,679		4,463		4,228
Banking fee related expenses		678		608		559
Total banking	$	4,001	$	3,855	$	3,669
Wealth management
Mutual funds	$	1,714	$	1,639	$	1,624
Brokerage fees(1)		895		1,047		1,034
Investment management and trust(1)		732		632		624
Total wealth management	$	3,341	$	3,318	$	3,282

(1) Prior period amounts have been reclassified to conform with current period presentation.

34 Trading Revenues

The following table presents details of trading revenues.

For the year ended October 31 ($ millions)	2018		2017(1)			2016(1)
Interest rate and credit	$	272	$	474		$	559
Equities		441		(125	)		(20	)
Commodities		231		295			376
Foreign exchange		295		250			262
Other		181		92			51
Total	$	1,420	$	986		$	1,228

(1) Certain comparative amounts have been restated to conform with current period presentation.

35 Earnings Per Share

For the year ended October 31 ($ millions)	2018		2017		2016
Basic earnings per common share
Net income attributable to common shareholders	$	8,361	$	7,876	$	6,987
Weighted average number of common shares outstanding (millions)		1,213		1,203		1,204
Basic earnings per common share(1) (in dollars)	$	6.90	$	6.55	$	5.80
Diluted earnings per common share
Net income attributable to common shareholders	$	8,361	$	7,876	$	6,987
Dilutive impact of share-based payment options and others(2)		16		59		83
Net income attributable to common shareholders (diluted)	$	8,377	$	7,935	$	7,070
Weighted average number of common shares outstanding (millions)		1,213		1,203		1,204
Dilutive impact of share-based payment options and others(2) (millions)		16		20		22
Weighted average number of diluted common shares outstanding (millions)		1,229		1,223		1,226
Diluted earnings per common share(1) (in dollars)	$	6.82	$	6.49	$	5.77

(1) Earnings per share calculations are based on full dollar and share amounts.

(2) Certain tandem stock appreciation rights or options as well as acquisition related put/call options that the Bank may settle at its own discretion by issuing common shares were not included in the calculation of diluted earnings per share as they were anti-dilutive.

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CONSOLIDATED FINANCIAL STATEMENTS

36 Guarantees, Commitments and Pledged Assets

(a) Guarantees

The Bank enters into various types of guarantees and indemnifications in the normal course of business. Guarantees represent an undertaking to another party to make a payment to that party when certain specified events occur. The various guarantees and indemnifications that the Bank provides with respect to its customers and other third parties are presented below:

	2018		2017
As at October 31 ($ millions)	Maximum potential amount of future payments(1)		Maximum potential amount of future payments(1)
Standby letters of credit and letters of guarantee	$	35,376	$	35,523
Liquidity facilities		4,043		4,996
Derivative instruments		6,969		5,398
Indemnifications		571		587

(1) The maximum potential amount of future payments represents those guarantees that can be quantified and excludes other guarantees that cannot be quantified. As many of these guarantees will not be drawn upon and the maximum potential amount of future payments listed above does not consider the possibility of recovery under recourse or collateral provisions, the above amounts are not indicative of future cash requirements, credit risk, or the Bank’s expected losses from these arrangements.

(i) Standby letters of credit and letters of guarantee

Standby letters of credit and letters of guarantee are irrevocable undertakings by the Bank on behalf of a customer, to make payments to a third party in the event that the customer is unable to meet its obligations to the third party. Generally, the term of these guarantees does not exceed four years. The types and amounts of collateral security held by the Bank for these guarantees is generally the same as for loans. As at October 31, 2018, $4 million (2017 – $4 million) was included in other liabilities in the Consolidated Statement of Financial Position with respect to these guarantees.

(ii) Liquidity facilities

The Bank’s backstop liquidity facilities are committed liquidity and provided to asset-backed commercial paper conduits, administered by the Bank. These facilities generally provide an alternative source of financing in the event market disruption prevents the conduit from issuing commercial paper or, in some cases, when certain specified conditions or performance measures are not met. These facilities generally have a term of up to three years.

(iii) Derivative instruments

The Bank enters into written credit derivative contracts under which a counterparty is compensated for losses on a specified referenced asset, typically a loan or bond, if certain events occur. The Bank also enters into written option contracts under which a counterparty is granted the right, but not the obligation, to sell a specified quantity of a financial instrument at a pre-determined price on or before a set date. These written option contracts are normally referenced to interest rates, foreign exchange rates, commodity prices or equity prices. Typically, a corporate or government entity is the counterparty to the written credit derivative and option contracts that meet the characteristics of guarantees described above. The maximum potential amount of future payments disclosed in the table above relates to written credit derivatives, puts and floors. However, these amounts exclude certain derivatives contracts, such as written caps, as the nature of these contracts prevents quantification of the maximum potential amount of future payments. As at October 31, 2018, $377 million (2017 – $274 million) was included in derivative instrument liabilities in the Consolidated Statement of Financial Position with respect to these derivative instruments.

(iv) Indemnifications

In the ordinary course of business, the Bank enters into many contracts which contain indemnification provisions, such as purchase contracts, service agreements, trademark licensing agreements, director / officer contracts, escrow arrangements, sales of assets or businesses, outsourcing agreements, leasing arrangements, clearing system arrangements, securities lending agency agreements and structured transactions. The Bank cannot estimate the maximum potential future amount that may be payable. The Bank has not made any significant payments under such indemnifications. Historically, the Bank has not made any significant payments under these indemnities. As at October 31, 2018, $2 million (2017 – $2 million) was included in other liabilities in the Consolidated Statement of Financial Position with respect to indemnifications.

(b) Other indirect commitments

In the normal course of business, various other indirect commitments are outstanding which are not reflected on the Consolidated Statement of Financial Position. These may include:

• Commercial letters of credit which require the Bank to honour drafts presented by a third-party when specific activities are completed;

• Commitments to extend credit which represent undertakings to make credit available in the form of loans or other financings for specific amounts and maturities, subject to specific conditions;

• Securities lending transactions under which the Bank, acting as principal or agent, agrees to lend securities to a borrower. The borrower must fully collateralize the security loan at all times. The market value of the collateral is monitored relative to the amounts due under the agreements, and where necessary, additional collateral is obtained; and

• Security purchase commitments which require the Bank to fund future investments.

These financial instruments are subject to normal credit standards, financial controls and monitoring procedures.

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CONSOLIDATED FINANCIAL STATEMENTS

The table below provides a detailed breakdown of the Bank’s other indirect commitments expressed in terms of the contractual amounts of the related commitment or contract which are not reflected on the Consolidated Statement of Financial Position.

As at October 31 ($ millions)	2018		2017
Commercial letters of credit	$	1,046	$	821
Commitments to extend credit(1)
Original term to maturity of one year or less		75,033		57,321
Original term to maturity of more than one year		122,407		128,345
Securities lending		51,723		40,535
Securities purchase and other commitments		888		614
Total	$	251,097	$	227,636

(1) Includes liquidity facilities.

(c) Lease commitments

Operating lease commitments

The Bank leases various offices, branches and other premises under non-cancellable operating lease arrangements. The leases have various terms, escalation and renewal rights. There are no contingent rents payable. The Bank also leases equipment under non-cancellable lease arrangements. Where the Bank is the lessee, the future minimum lease payment under non-cancellable operating leases are as follows:

As at October 31 ($ millions)	2018		2017
Within one year	$	420	$	349
After one year but not more than five years		1,196		967
More than five years		880		593
Total	$	2,496	$	1,909

Building rent expense, included in premises and technology expense in the Consolidated Statement of Income, was $477 million (2017 – $444 million).

(d) Assets pledged and repurchase agreements

In the ordinary course of business, securities and other assets are pledged against liabilities. As well, securities are sold under repurchase agreements. The carrying value of pledged assets and details of related activities are shown below.

As at October 31 ($ millions)	2018		2017
Assets pledged to:
Bank of Canada(1)	$	118	$	25
Foreign governments and central banks(1)		3,147		2,653
Clearing systems, payment systems and depositories(1)		1,629		1,195
Assets pledged in relation to exchange-traded derivative transactions		3,127		2,181
Assets pledged in relation to over-the-counter derivative transactions		7,246		8,126
Assets pledged as collateral related to securities borrowing and lending		128,383		115,987
Assets pledged in relation to covered bond program (Note 15)		30,725		27,806
Assets pledged in relation to other securitization programs (Note 15)		6,085		4,801
Assets pledged under CMHC programs (Note 14)		23,178		20,471
Other		963		643
Total assets pledged	$	204,601	$	183,888
Obligations related to securities sold under repurchase agreements		82,816		86,789
Total(2)	$	287,417	$	270,677

(1) Includes assets pledged in order to participate in clearing and payment systems and depositories, or pledged to have access to the facilities of central banks in foreign jurisdictions.

(2) Includes assets that have been received from counterparties through normal course of business in securities financing and derivative transactions.

(e) Other executory contracts

Effective July 2018, the Bank has entered into an $800 million contract for naming rights of an arena for 20 years.

The Bank and its subsidiaries have also entered into other long-term executory contracts, relating to outsourced services. The significant outsourcing arrangements have variable pricing based on utilization and are cancellable with notice.

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CONSOLIDATED FINANCIAL STATEMENTS

37 Financial Instruments – Risk Management

The Bank’s principal business activities result in a balance sheet that consists primarily of financial instruments. In addition, the Bank uses derivative financial instruments for both trading and hedging purposes. The principal financial risks that arise from transacting financial instruments include credit risk, liquidity risk and market risk. The Bank’s framework to monitor, evaluate and manage these risks is consistent with that in place as at October 31, 2018:

• extensive risk management policies define the Bank’s risk appetite, set the limits and controls within which the Bank and its subsidiaries can operate, and reflect the requirements of regulatory authorities. These policies are approved by the Bank’s Board of Directors, either directly or through the Risk Committee of the Board, (the Board);

• guidelines are developed to clarify risk limits and conditions under which the Bank’s risk policies are implemented;

• processes are implemented to identify, evaluate, document, report and control risk. Standards define the breadth and quality of information required to make a decision; and

• compliance with risk policies, limits and guidelines is measured, monitored and reported to ensure consistency against defined goals.

Further details on the fair value of financial instruments and how these amounts were determined are provided in Note 7. Note 10 provides details on the terms and conditions of the Bank’s derivative financial instruments including notional amounts, remaining term to maturity, credit risk, and fair values of derivatives used in trading and hedging activities.

(a) Credit risk

Credit risk is the risk of loss resulting from the failure of a borrower or counterparty to honour its financial or contractual obligations to the Bank. The Bank’s Credit Risk Appetite and Credit Risk Policy are developed by its Global Risk Management (GRM) department and limits are reviewed and approved by the Board on an annual and biennial basis, respectively. The Credit Risk Appetite defines target markets and risk tolerances that are developed at an all-Bank level, and then further refined at the business line level. The objectives of the Credit Risk Appetite are to ensure that, for the Bank, including the individual business lines:

• target markets and product offerings are well defined;

• the risk parameters for new underwritings and for the portfolios as a whole are clearly specified; and

• transactions, including origination, syndication, loan sales and hedging, are managed in a manner to ensure the goals for the overall portfolio are met.

The Credit Risk Policy sets out, among other things, the credit risk rating systems and associated parameter estimates, the delegation of authority for granting credit, and the calculation of allowance for credit losses. It forms an integral part of enterprise-wide policies and procedures that encompass governance, risk management and control structure.

The Bank’s credit risk rating systems are designed to support the determination of key credit risk parameter estimates which measure credit and transaction risk. For non-retail exposures, parameters are associated with each credit facility through the assignment of borrower and transaction ratings. Borrower risk is evaluated using methodologies that are specific to particular industry sectors and/or business lines. The risk associated with facilities of a given borrower is assessed by considering the facilities’ structural and collateral-related elements. For retail portfolios, product specific models assign accounts into homogeneous segments using internal and external borrower/facility-level credit experience. This process provides for a meaningful differentiation of risk, and allows for appropriate and consistent estimation of loss characteristics at the model and segment level. Further details on credit risk relating to derivatives are provided in Note 10(c).

(i) Credit risk exposures

Credit risk exposures disclosed below are presented based on the Basel framework utilized by the Bank i.e. exposures subject to credit risk capital. The Bank uses the Advanced Internal Ratings Based approach (AIRB) for all material Canadian, U.S., European portfolios, and effective 2011 for a significant portion of all international corporate and commercial portfolios. The remaining portfolios, including other individual portfolios, are treated under the standardized approach. Under the AIRB approach, the Bank uses internal risk parameter estimates, based on historical experience, for probability of default (PD), loss given default (LGD) and exposure at default (EAD), as defined below:

• EAD: Generally represents the expected gross exposure – outstanding amount for on-balance sheet exposure and loan equivalent amount for off-balance sheet exposure.

• PD: Measures the likelihood that a borrower will default within a 1-year time horizon, expressed as a percentage.

• LGD: Measures the severity of loss on a facility in the event of a borrower’s default, expressed as a percentage of exposure at default.

Under the standardized approach, credit risk is estimated using the risk weights as prescribed by the Basel framework either based on credit assessments by external rating agencies or based on the counterparty type for non-retail exposures and product type for retail exposures. Standardized risk weights also takes into account other factors such as specific provisions for defaulted exposures, eligible collateral, and loan-to-value for real estate secured retail exposures.

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CONSOLIDATED FINANCIAL STATEMENTS

As at October 31 ($ millions)	2018								2017
	Exposure at default(1)
Category	Drawn(2)		Undrawn commitments		Other exposures(3)		Total		Total
By counterparty type
Non-retail
AIRB portfolio
Corporate	$	146,324	$	83,885	$	77,751	$	307,960	$	285,191
Bank		22,680		2,146		16,676		41,502		40,903
Sovereign		188,480		768		6,854		196,102		195,429
		357,484		86,799		101,281		545,564		521,523
Standardized portfolio
Corporate		59,018		5,313		3,802		68,133		59,164
Bank		3,208		160		143		3,511		2,619
Sovereign		5,299		31		6		5,336		6,337
		67,525		5,504		3,951		76,980		68,120
Total non-retail	$	425,009	$	92,303	$	105,232	$	622,544	$	589,643
Retail
AIRB portfolio
Real estate secured		143,475		17,864		–		161,339		143,160
Qualifying revolving		17,337		28,550		–		45,887		44,384
Other retail		31,176		1,671		–		32,847		31,672
	$	191,988	$	48,085	$	–	$	240,073	$	219,216
Standardized portfolio
Real estate secured		44,517		–		–		44,517		34,002
Other retail		42,100		–		–		42,100		35,552
		86,617		–		–		86,617		69,554
Total retail	$	278,605	$	48,085	$	–	$	326,690	$	288,770
Total	$	703,614	$	140,388	$	105,232	$	949,234	$	878,413
By geography(4)
Canada	$	394,279	$	89,776	$	37,748	$	521,803	$	502,224
United States		102,265		33,103		42,771		178,139		157,386
Chile		47,048		1,038		5,066		53,152		27,190
Mexico		29,344		1,339		2,611		33,294		30,528
Peru		23,997		1,506		2,992		28,495		28,733
Colombia		12,729		486		434		13,649		10,859
Other International
Europe		25,357		7,041		10,215		42,613		43,030
Caribbean		35,716		1,676		910		38,302		39,358
Latin America (other)		10,232		909		227		11,368		9,035
All other		22,647		3,514		2,258		28,419		30,070
Total	$	703,614	$	140,388	$	105,232	$	949,234	$	878,413

(1) Exposure at default is presented after credit risk mitigation. Exposures exclude equity securities and other assets.

(2) Non-retail drawn includes loans, acceptances, deposits with financial institutions and FVOCI debt securities. Retail drawn includes residential mortgages, credit cards, lines of credit, and other personal loans.

(3) Non-retail other exposures include off-balance sheet lending instruments such as letters of credit, letters of guarantees, securitizations including nil first loss protection (2017 – nil), derivatives and repo-style transactions (reverse repurchase agreements, repurchase agreements, securities lending and securities borrowing), net of related collateral. Not applicable for retail exposures.

(4) Geographic segmentation is based upon the location of the ultimate risk of the credit exposure.

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CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Financial Position asset categories cross-referenced to credit risk exposures

The table below provides mapping of on-balance sheet asset categories that are included in the various Basel III exposure categories as presented in the credit risk exposure summary table of these consolidated financial statements. In addition, it also provides other exposures which are subject to market risk and/or other assets which are not subject to market and credit risk with a reconciliation to the Consolidated Statement of Financial Position. The credit risk exposures on certain assets such as cash, precious metals, investment securities (equities) and other assets are not included on the credit risk exposure summary table. Also excluded from the credit risk exposures are certain trading assets and all assets of the Bank’s insurance subsidiaries.

Credit Risk Exposures

Other Exposures

Drawn

Other Exposures

Market Risk Exposures

As at October 31, 2018 ($ millions)

Non-retail

Retail

Securitization

Repo-style Transactions

OTC Derivatives

Equity

Also subject to Credit Risk

All Other(1)

Total

Cash and deposits with financial institutions

$

58,728

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

3,541

$

62,269

Precious metals

–

–

–

–

–

–

–

3,191

–

3,191

Trading assets

Securities

24

–

–

–

–

–

–

85,450

–

85,474

Loans

7,183

12

–

–

–

–

6,606

7,139

–

14,334

Other

–

–

–

–

–

–

–

454

–

454

Financial assets designated at fair value through profit or loss

12

–

–

–

–

–

–

–

–

12

Securities purchased under resale agreements and securities borrowed

–

–

–

104,010

–

–

–

–

8

104,018

Derivative financial instruments

–

–

–

–

37,558

–

33,937

–

–

37,558

Investment securities

75,837

–

–

–

–

1,754

–

–

805

78,396

Loans:

Residential mortgages(2)

86,417

166,752

–

–

–

–

–

–

188

253,357

Personal loans

–

94,392

1,613

–

–

–

–

–

14

96,019

Credit cards

–

14,331

687

–

–

–

–

–

1,467

16,485

Business & government

180,164

3,193

7,748

–

–

–

–

–

(67

)

191,038

Allowances for credit losses(3)

(560

)

(786

)

–

–

–

–

–

–

(3,719

)

(5,065

)

Customers’ liability under acceptances

16,338

–

–

–

–

–

–

–

(9

)

16,329

Property and equipment

–

–

–

–

–

–

–

–

2,684

2,684

Investment in associates

–

–

–

–

–

–

–

–

4,850

4,850

Goodwill and other intangibles assets

–

–

–

–

–

–

–

–

17,719

17,719

Other (including Deferred tax assets)

866

711

–

–

–

–

–

–

17,794

19,371

Total

$

425,009

$

278,605

$

10,048

$

104,010

$

37,558

$

1,754

$

40,543

$

96,234

$

45,275

$

998,493

(1) Includes the Bank’s insurance subsidiaries’ assets and all other assets which are not subject to credit and market risks.

(2) Includes $82.2 billion in mortgages guaranteed by Canada Mortgage Housing Corporation including 90% of privately insured mortgages.

(3) Amounts for AIRB exposures are reported gross of allowances and amounts for standardized exposures are reported net of allowances.

Credit Risk Exposures

Other Exposures

Drawn

Other Exposures

Market Risk Exposures

As at October 31, 2017 ($ millions)

Non-retail

Retail

Securitization

Repo-style Transactions

OTC Derivatives

Equity

Also subject to Credit Risk

All Other(1)

Total

Cash and deposits with financial institutions

$

57,104

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

2,559

$

59,663

Precious metals

–

–

–

–

–

–

–

5,717

–

5,717

Trading assets

Securities

–

–

–

–

–

–

–

78,652

–

78,652

Loans

9,087

–

–

–

–

–

9,087

8,225

–

17,312

Other

–

–

–

–

–

–

–

2,500

–

2,500

Financial assets designated at fair value through profit or loss

13

–

–

–

–

–

–

–

–

13

Securities purchased under resale agreements and securities borrowed

–

–

–

95,319

–

–

–

–

–

95,319

Derivative financial instruments

–

–

–

–

35,364

–

30,648

–

–

35,364

Investment securities

67,255

–

–

–

–

1,281

–

–

733

69,269

Loans:

Residential mortgages(2)

95,692

141,066

–

–

–

–

–

–

158

236,916

Personal loans(3)

–

87,892

1,314

–

–

–

–

–

21

89,227

Credit cards(3)

–

12,289

724

–

–

–

–

–

1,091

14,104

Business & government

158,510

2,878

7,032

–

–

–

–

–

29

168,449

Allowances for credit losses(4)

(649

)

–

–

–

–

–

–

–

(3,678

)

(4,327

)

Customers’ liability under acceptances

13,560

–

–

–

–

–

–

–

–

13,560

Property and equipment

–

–

–

–

–

–

–

–

2,381

2,381

Investment in associates

–

–

–

–

–

–

–

–

4,586

4,586

Goodwill and other intangibles assets

–

–

–

–

–

–

–

–

12,106

12,106

Other (including Deferred tax assets)

1,805

545

–

–

–

–

–

–

12,112

14,462

Total

$

402,377

$

244,670

$

9,070

$

95,319

$

35,364

$

1,281

$

39,735

$

95,094

$

32,098

$

915,273

(1) Includes the Bank’s insurance subsidiaries’ assets and all other assets which are not subject to credit and market risks.

(2) Includes $91.7 billion in mortgages guaranteed by Canada Mortgage Housing Corporation including 90% of privately insured mortgages.

(3) Restated to reflect the current period presentation.

(4) Amounts for AIRB exposures are reported gross of allowances and amounts for standardized exposures are reported net of allowances.

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(ii) Credit quality of non-retail exposures

Credit decisions are made based upon an assessment of the credit risk of the individual borrower or counterparty. Key factors considered in the assessment include: the borrower’s management; the borrower’s current and projected financial results and credit statistics; the industry in which the borrower operates; economic trends; and geopolitical risk. Banking units and Global Risk Management also review the credit quality of the credit portfolio across the organization on a regular basis to assess whether economic trends or specific events may affect the performance of the portfolio.

The Bank’s non-retail portfolio is well diversified by industry. As at October 31, 2018, and October 31, 2017, a significant portion of the authorized corporate and commercial lending portfolio was internally assessed at a grade that would generally equate to an investment grade rating by external rating agencies. There has not been a significant change in concentrations of credit risk since October 31, 2017.

Internal grades (IG) are used to differentiate the risk of default of a borrower. The following table cross references the Bank’s internal borrower grades with equivalent ratings categories utilized by external rating agencies:

Cross referencing of internal ratings to external ratings(1)
Equivalent External Rating
S&P	Moody’s	DBRS	Internal Grade	Internal Grade Code	PD Range(2)
AAA to AA+	Aaa to Aa1	AAA to AA (high)		99 – 98	0.0000% – 0.0448%
AA to A+	Aa2 to A1	AA to A (high)		95	0.0448% – 0.1304%
A to A-	A2 to A3	A to A (low)	Investment grade	90	0.0552% – 0.1402%
BBB+	Baa1	BBB (high)		87	0.0876% – 0.2187%
BBB	Baa2	BBB		85	0.1251% – 0.3176%
BBB-	Baa3	BBB (low)		83	0.1788% – 0.4610%
BB+	Ba1	BB (high)		80	0.2886% – 0.5134%
BB	Ba2	BB		77	0.4658% – 0.5716%
BB-	Ba3	BB (low)	Non-Investment grade	75	0.5716% – 0.7518%
B+	B1	B (high)		73	0.7518% – 1.4444%
B to B-	B2 to B3	B to B (low)		70	1.4444% – 2.7749%
CCC+	Caa1	–		65	2.7749% – 10.1814%
CCC	Caa2	–	Watch list	60	10.1814% – 19.4452%
CCC- to CC	Caa3 to Ca	–		40	19.4452% – 35.4088%
–	–	–		30	35.4088% – 59.5053%
Default			Default	21	100%

(1) Applies to non-retail portfolio.

(2) PD ranges overlap across IG codes as the Bank utilizes two risk rating systems for its AIRB portfolios, and each risk rating system has its own separate IG to PD mapping.

Non-retail AIRB portfolio

The credit quality of the non-retail AIRB portfolio, expressed in terms of risk categories of borrower internal grades is shown in the table below:

			2018								2017
			Exposure at Default(1)
As at October 31 ($ millions) Category of internal grades	IG Code		Drawn		Undrawn commitments		Other exposures(2)		Total		Total
Investment grade		99 – 98	$	77,598	$	2,758	$	17,456	$	97,812	$	91,159
		95		35,694		9,315		19,661		64,670		53,618
		90		25,281		15,394		25,234		65,909		61,508
		87		21,318		13,714		12,513		47,545		44,533
		85		21,472		12,861		9,992		44,325		40,478
		83		22,544		13,230		7,054		42,828		41,600
Non-Investment grade		80		26,618		10,019		2,993		39,630		36,235
		77		20,005		4,944		1,945		26,894		23,058
		75		13,267		2,717		3,296		19,280		20,418
		73		5,905		1,049		566		7,520		7,271
		70		2,157		432		228		2,817		3,758
Watch list		65		892		105		146		1,143		2,167
		60		936		90		78		1,104		761
		40		526		41		9		576		1,311
		30		141		–		–		141		159
Default		21		938		130		110		1,178		1,752
Total			$	275,292	$	86,799	$	101,281	$	463,372	$	429,786
Government guaranteed residential mortgages(3)				82,192		–		–		82,192		91,737
Total			$	357,484	$	86,799	$	101,281	$	545,564	$	521,523

(1) After credit risk mitigation.

(2) Includes off-balance sheet lending instruments such as letters of credit, letters of guarantee, securitizations, excluding nil first loss protection (2017 – nil), derivatives and repo-style transactions (reverse repurchase agreements, repurchase agreements and securities lending and borrowing), net of related collateral.

(3) These exposures are classified as sovereign exposures and are included in the non-retail category.

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Non-retail standardized portfolio

The non-retail standardized portfolio relies on external credit ratings (e.g. S&P, Moody’s, DBRS, etc.,) of the borrower, if available, to compute regulatory capital for credit risk. Exposures are risk-weight based on prescribed percentages and a mapping process as defined within OSFI’s Capital Adequacy Requirements Guideline. Non-retail standardized portfolio as at October 31, 2018 comprised of drawn, undrawn and other exposures to corporate, bank and sovereign counterparties amounted to $77 billion (October 31, 2017 – $68 billion). Within this portfolio, the majority of Corporate/Commercial exposures are to unrated counterparties, mainly in the Caribbean and Latin American region.

(iii) Credit quality of retail exposures

The Bank’s retail portfolios consist of a number of relatively small loans to a large number of borrowers. The portfolios are distributed across Canada and a wide range of countries. As such, the portfolios inherently have a high degree of diversification. In addition, as of October 31, 2018, 43% of the Canadian banking residential mortgage portfolio is insured and the average loan-to-value ratio of the uninsured portion of the portfolio is 54%.

Retail AIRB portfolio

The data in the table below provides a distribution of the retail AIRB exposure within each PD range by asset class:

As at October 31 ($ millions)	2018												2017
	Exposure at default(1)
			Real estate secured
Category of (PD) grades	PD range		Mortgages		HELOC		Qualifying revolving		Other retail		Total		Total
Exceptionally Low		0.0000% – 0.0499%		$              –	$	–	$	11,657	$	498	$	12,155	$	16,026
Very Low		0.0500% – 0.1999%		41,146		32,079		9,348		6,971		89,544		80,507
Low		0.2000% – 0.9999%		73,094		5,130		12,091		16,721		107,036		94,081
Medium Low		1.0000% – 2.9999%		6,494		1,068		7,893		5,123		20,578		17,070
Medium		3.0000% – 9.9999%		738		310		3,594		2,569		7,211		8,583
High		10.0000% – 19.9999%		345		185		354		486		1,370		889
Extremely High		20.0000% – 99.9999%		416		69		803		303		1,591		1,453
Default		100%		195		70		147		176		588		607
Total				$  122,428	$	38,911	$	45,887	$	32,847	$	240,073	$	219,216

(1) After credit risk mitigation.

Retail standardized portfolio

The retail standardized portfolio of $87 billion as at October 31, 2018 (2017 – $70 billion) was comprised of residential mortgages, personal loans, credit cards and lines of credit to individuals, mainly in the Latin American and Caribbean region. Of the total retail standardized exposures, $45 billion (2017 –$34 billion) was represented by mortgages and loans secured by residential real estate, mostly with a loan-to-value ratio of below 80%.

(iv) Collateral

Collateral held

In the normal course of business, to reduce its exposure to counterparty credit risk, the Bank receives collateral for capital markets related activities. The following are examples of the terms and conditions customary to collateral for these types of transactions:

• The risks and rewards of the pledged assets reside with the pledgor.

• Additional collateral is required when the market value of the transaction exceeds thresholds agreed upon with the pledgor.

• The Bank is normally permitted to sell or repledge the collateral it receives, although this right is specific to each agreement under which the collateral is pledged.

• Upon satisfaction of the obligation, the Bank must return the pledged assets, unless the Bank has the right to sell or repledge the collateral it receives, in which case the Bank must return comparable collateral to the pledgor.

As at October 31, 2018, the approximate market value of cash and securities collateral accepted that may be sold or repledged by the Bank was $136 billion (2017 – $115 billion). This collateral is held primarily in connection with reverse repurchase agreements, margin loans, securities lending and derivative transactions. The Bank also borrows securities under standard securities borrowing agreements that it is able to re-pledge. Including these borrowed securities, the approximate market value of securities collateral accepted that may be sold or re-pledged was $183 billion (2017 – $169 billion), of which approximately $29 billion was not sold or re-pledged (2017 – $24 billion).

Collateral pledged

In the normal course of business, securities and other assets are pledged to secure an obligation, participate in clearing or settlement systems, or operate in a foreign jurisdiction. Note 36(d) details the nature and extent of the Bank’s asset pledging activities. Asset pledging transactions are conducted under terms that are common and customary to standard derivative, securities financing, and other borrowing activities. Standard risk management controls are applied with respect to asset pledging.

Assets acquired in exchange for loans

The carrying value of assets acquired in exchange for loans as at October 31, 2018 was $426 million (2017 – $412 million) mainly comprised of real estate and was classified as either held for sale or held for use as appropriate.

(b) Liquidity risk

Liquidity risk is the risk that the Bank is unable to meet its financial obligations in a timely manner at reasonable prices. The Bank’s liquidity risk is subject to extensive risk management controls and is managed within the framework of policies and limits approved by the Board. The Board receives reports on risk exposures and performance against approved limits. The Asset-Liability Committee (ALCO) provides senior management oversight of liquidity risk.

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The key elements of the Bank’s liquidity risk management framework include:

• liquidity risk measurement and management limits, including limits on maximum net cash outflow by currency over specified short-term horizons;

• prudent diversification of its wholesale funding activities by using a number of different funding programs to access the global financial markets and manage its maturity profile, as appropriate;

• large holdings of liquid assets to support its operations, which can generally be sold or pledged to meet the Bank’s obligations;

• liquidity stress testing, including Bank-specific, global-systemic, and combination systemic/Bank-specific scenarios; and

• liquidity contingency planning.

The Bank’s foreign operations have liquidity management frameworks that are similar to the Bank’s framework. Local deposits are managed from a liquidity risk perspective based on the local management frameworks and regulatory requirements.

(i) Commitments to extend credit

In the normal course of business, the Bank enters into commitments to extend credit in the form of loans or other financings for specific amounts and maturities, subject to specific conditions. These commitments, which are not reflected on the Consolidated Statement of Financial Position, are subject to normal credit standards, financial controls and monitoring procedures.

(ii) Derivative instruments

The Bank is subject to liquidity risk relating to its use of derivatives to meet customer needs, generate revenues from trading activities, manage market and credit risks arising from its lending, funding and investment activities, and lower its cost of capital. The maturity profile of the notional amounts of the Bank’s derivative instruments is summarized in Note 10(b).

(c) Market risk

Market risk arises from changes in market prices and rates (including interest rates, credit spreads, equity prices, foreign exchange rates and commodity prices), the correlations between them, and their levels of volatility. Market risk is subject to extensive risk management controls, and is managed within the framework of market risk policies and limits approved by the Board. The ALCO and Market Risk Management and Policy Committee oversee the application of the framework set by the Board, and monitor the Bank’s market risk exposures and the activities that give rise to these exposures.

The Bank uses a variety of metrics and models to measure and control market risk exposures. The measurements used are selected based on an assessment of the nature of risks in a particular activity. The principal measurement techniques are Value at Risk (VaR), stress testing, sensitivity analysis and simulation modeling, and gap analysis. The Board reviews results from these metrics quarterly. Models are independently validated internally prior to implementation and are subject to formal periodic review.

VaR is a statistical measure that estimates the potential loss in value of the Bank’s trading positions due to adverse market movements over a defined time horizon with a specified confidence level. The quality of the Bank’s VaR is validated by regular back testing analysis, in which the VaR is compared to theoretical and actual profit and loss results. To complement VaR, the Bank also uses stress testing to examine the impact that abnormally large swings in market factors and periods of prolonged inactivity might have on trading portfolios. The stress testing program is designed to identify key risks and ensure that the Bank’s capital can absorb potential losses from abnormal events. The Bank subjects its trading portfolios to a series of stress tests on a daily, weekly and monthly basis.

In trading portfolios, sensitivity analysis is used to measure the effect of changes in risk factors, including prices and volatility, on financial products and portfolios. In non-trading portfolios, sensitivity analysis assesses the effect of changes in interest rates on current earnings and on the economic value of shareholders’ equity. Simulation modeling under various scenarios is particularly important for managing risk in the deposit, lending and investment products the Bank offers to its retail customers. Gap analysis is used to assess the interest rate sensitivity of the Bank’s retail, wholesale banking and international operations. Under gap analysis, interest rate-sensitive assets, liabilities and derivative instruments are assigned to defined time periods, on the earlier of contractual repricing or maturity dates on the basis of expected repricing dates.

(i) Non-trading interest rate risk

Interest rate risk, inclusive of credit spread risk, is the risk of loss due to the following: changes in the level, slope and curvature of the yield curve; the volatility of interest rates; mortgage prepayment rates; changes in the market price of credit; and the creditworthiness of a particular issuer. The Bank actively manages its interest rate exposures with the objective of protecting and enhancing net interest income within established risk tolerances. Interest rate risk arising from the Bank’s funding and investment activities is managed in accordance with Board-approved policies and global limits, which are designed to control the risk to net interest income and economic value of shareholders’ equity. The income limit measures the effect of a specified shift in interest rates on the Bank’s annual net income over the next twelve months, while the economic value limit measures the impact of a specified change in interest rates on the present value of the Bank’s net assets. These calculations are based on a constant balance sheet and make no assumptions for management actions that may mitigate the risk.

Interest rate sensitivity

Based on the Bank’s interest rate positions, the following table shows the pro-forma after-tax impact on the Bank’s net interest income over the next twelve months and economic value of shareholders’ equity of an immediate and sustained 100 basis point increase and decrease in interest rates across major currencies as defined by the Bank.

As at October 31 ($ millions)	2018																		2017
	Net income									Economic value of equity
	Canadian dollar			Other currencies			Total			Canadian dollar			Other currencies			Total			Net income			Economic value of equity
100 bp increase	$	(181	)	$	76		$	(105	)	$	(458	)	$	(412	)	$	(870	)	$	64		$	(354	)
100 bp decrease	$	177		$	(76	)	$	101		$	291		$	506		$	797		$	(67	)	$	183

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(ii) Non-trading foreign currency risk

Foreign currency risk is the risk of loss due to changes in spot and forward rates, and the volatility of currency exchange rates. Non-trading foreign currency risk, also referred to as structural foreign exchange risk, arises primarily from the Bank’s net investments in self-sustaining foreign operations and is controlled by a Board-approved limit. This limit considers potential volatility to shareholders’ equity as well as the potential impact on capital ratios from foreign exchange fluctuations. On a quarterly basis, the Asset-Liability Committee (ALCO) reviews the Bank’s exposures to these net investments. The Bank may fully or partially hedge this exposure by funding the investments in the same currency, or by using other financial instruments, including derivatives.

The Bank is subject to foreign currency risk on the earnings of its foreign operations. To manage this risk, foreign currency revenues and expenses, which are primarily denominated in U.S. dollars, are projected over a number of future fiscal quarters. The ALCO assesses economic data and forecasts to decide on the portion of the estimated future foreign currency revenues and expenses to hedge. Hedging instruments normally include foreign currency spot and forward contracts, as well as foreign currency options and swaps.

As at October 31, 2018, a one percent increase (decrease) in the Canadian dollar against all currencies in which the Bank operates decreases (increases) the Bank’s before-tax annual earnings by approximately $65 million (October 31, 2017 – $58 million) in the absence of hedging activity, primarily from exposure to U.S. dollars. A similar change in the Canadian dollar as at October 31, 2018 would increase (decrease) the unrealized foreign currency translation losses in the accumulated other comprehensive income in equity by approximately $384 million (2017 – $345 million), net of hedging.

(iii) Non-trading equity risk

Equity risk is the risk of loss due to adverse movements in equity prices. Equity price risk is often classified into two categories: general equity risk, which refers to the sensitivity of an instrument or portfolio’s value to changes in the overall level of equity prices, and specific equity risk, which refers to that portion of an individual equity instrument’s price volatility that is determined by entity-specific characteristics.

The Bank is exposed to equity risk through its equity investment portfolios, which are controlled by Board-approved portfolio, VaR, and stress-test limits. Equity investments include common and preferred shares, as well as a diversified portfolio of third-party managed funds.

The majority of the Bank’s equity investment portfolios are managed by Group Treasury under the strategic direction of the ALCO. Group Treasury delegates the management of a portion of equity and equity-related portfolios to other external fund managers to take advantage of these fund managers’ expertise in particular market niches and products.

The fair value of equity securities designated at FVOCI is shown in Note 12.

(iv) Trading portfolio risk management

The Bank’s policies, processes and controls for trading activities are designed to achieve a balance between pursuing profitable trading opportunities and managing earnings volatility within a framework of sound and prudent practices. Trading activities are primarily customer focused.

Market risk arising from the Bank’s trading activities is managed in accordance with Board-approved policies and limits, including aggregate VaR and stress testing limits.

Trading portfolios are marked-to-market in accordance with the Bank’s valuation policies. Positions are marked-to-market daily and valuations are independently reviewed by back office, GRM or finance units on a regular basis. These units also provide profit and loss reporting, as well as VaR and limit compliance reporting to business unit management and executive management for evaluation and action as appropriate. VaR is calculated daily using a 99% confidence level, and a one-day holding period. This means that, once in every 100 days, the trading positions are expected to lose more than the VaR estimate. The Bank calculates general market risk VaR using historical simulation based on 300 days of market data. For debt specific risk VaR, the Bank uses historical resampling. The table below shows the Bank’s VaR by risk factor:

				For the year ended October 31, 2018
($ millions)	As at October 31, 2018			Average			High		Low		As at October 31, 2017
Credit spread plus interest rate	$	11.0		$	11.6		$	17.8	$	6.9	$	10.1
Credit spread		6.2			7.8			12.2		4.8		6.9
Interest rate		7.7			9.5			17.2		4.3		8.4
Equities		5.8			3.0			15.5		1.2		3.2
Foreign exchange		2.8			3.3			5.8		1.1		2.9
Commodities		1.7			1.6			2.1		1.0		1.3
Debt specific		3.6			3.4			4.2		2.6		3.3
Diversification effect		(11.7	)		(10.0	)		n/a		n/a		(10.3	)
All-Bank VaR	$	13.2		$	12.9		$	18.4	$	8.6	$	10.6
All-Bank stressed VaR	$	44.6		$	42.7		$	59.0	$	26.3	$	34.7

Below are the market risk capital requirements as at October 31, 2018.

($ millions)
All-Bank VaR	$	124
All-Bank stressed VaR		419
Incremental risk charge		95
Standardized approach		31
Total market risk capital	$	669	(1)

(1) Equates to $8,357 million of risk-weighted assets (2017 – $7,839 million).

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(d) Operational risk

Operational risk is the risk of loss, whether direct or indirect, to which the Bank is exposed due to inadequate or failed internal processes or systems, human error, or external events. Operational risk includes legal and regulatory risk, business process and change risk, fiduciary or disclosure breaches, technology failure, financial crime and environmental risk. Operational risk, in some form, exists in each of the Bank’s businesses and support activities, and can result in financial loss, regulatory sanctions and damage to the Bank’s reputation. The Bank has developed policies, processes and assessment methodologies to ensure that operational risk is appropriately identified and managed with effective controls with a view to safeguarding client assets and preserving shareholder value.

38 Business Combinations

Acquisitions that closed in 2018

Jarislowsky, Fraser Limited, Canada

On May 1, 2018, the Bank completed the acquisition of Jarislowsky, Fraser Limited, an independent investment firm with approximately $40 billion in assets under management on behalf of institutional and high net worth clients. The purchase price of $978 million was satisfied primarily by the issuance of 11.1 million common shares valued at $878 million and cash of $44 million. The fair value of the common shares issued is based on the quoted price of the shares of the Bank as at May 1, 2018 which was $78.86. Included in this purchase price is an earn-out of an amount of $56 million in additional common shares which may be paid based on achieving future growth targets. The acquired business forms part of the Canadian Banking business segment.

The fair value of the identifiable net assets of Jarislowsky, Fraser Limited at the date of acquisition was:

($ million)
Total net assets acquired	$	9
Intangible assets
Finite life intangible asset arising on acquisition(1)		255
Indefinite life intangible assets arising on acquisition(2)		308
Deferred tax liability		(150	)
Goodwill arising on acquisition		556
Purchase consideration transferred	$	978

(1) Comprised of customer relationship intangible of $255.

(2) Comprised of fund management contracts of $290 and trademark of $18.

Goodwill of $556 million largely reflects the value of synergies expected by combining certain operations within the Bank’s asset management businesses as well as Jarislowsky Fraser’s strong market presence and future growth prospects.

Citibank’s consumer and small and medium enterprise operations, Colombia

On June 30, 2018, the Bank’s Colombian subsidiary, Scotiabank Colpatria S.A., completed the previously announced acquisition of Citibank’s consumer (retail and credit cards) and small and medium enterprise operations in Colombia. The acquired business forms part of the Bank’s International Banking business segment.

The Bank has not finalized its initial accounting for the acquisition as it is still completing its valuation of the assets acquired and liabilities assumed. As at October 31, 2018, $2.0 billion of assets (mainly loans of $1.9 billion) and $1.4 billion of liabilities (mainly deposits of $1.3 billion) have been recorded. Subsequent adjustment during the measurement period will occur as the Bank completes its estimation of fair values of assets acquired and liabilities assumed.

BBVA, Chile

On July 6, 2018, the Bank acquired 68.2% of Banco Bilbao Vizcaya Argentaria, Chile, 100% of BBVA Seguros Vida S.A., 100% of Servicios Corporativos S.A., 68.1% of Inmobiliaria e Inversiones S.A. and 4.1% of Inversiones DCV S.A. (together “BBVA Chile”) in Chile for cash consideration of US$ 2.2 billion, following receipt of regulatory approvals in Chile and Canada. The Bank consolidated 100% of BBVA Chile’s assets and liabilities and recorded a non-controlling interest of 31.8%. The acquired business forms part of the International Banking business segment.

On September 1, 2018, BBVA Chile merged with Scotiabank Chile. The minority shareholder in BBVA Chile paid the Bank US$ 0.4 billion to increase their pro forma ownership of the merged entity. Subsequent to these transactions, the Bank retained control over the combined entity with 75.5% of the total shares. Under this agreement, the non-controlling shareholders have the option to sell all or a portion of their shares to the Bank at the then fair value, which can be settled, at the Bank’s discretion, by the issuance of common shares or cash.

Based on the current estimates of acquisition date fair values, the Bank has estimated and recorded loans of $19.9 billion, other assets of $8.4 billion and an aggregate amount of goodwill and intangibles of $1.3 billion. Simultaneously, the Bank has recorded deposits of $13.4 billion and other liabilities of $12.8 billion. The Bank had recorded a non-controlling interest in BBVA Chile of approximately $0.6 billion at the time of the acquisition, which changed to approximately $0.8 billion at the time of the merger of BBVA Chile with Scotiabank Chile. The purchase price allocation is considered to be preliminary and subsequent adjustments during the measurement period will occur as the Bank completes its estimation of fair values of assets acquired and liabilities assumed.

MD Financial Management, Canada

On October 3, 2018, the Bank completed the previously announced acquisition of MD Financial Management (“MD Financial”) from the Canadian Medical Association, (“CMA”), for approximately $2.7 billion, payable in cash. MD Financial is Canada’s leading provider of financial services to physicians and their families, with approximately $49 billion in assets under management and administration. The acquired business forms part of the Canadian Banking business segment.

On closing, the Bank and the CMA entered into a 10- year affinity agreement under which the Bank has committed to pay $115 million over the next 10 years to support the advancement of the medical profession and health care in Canada.

Based on current estimates of acquisition date fair values, the Bank has estimated and recorded approximately $1.9 billion of indefinite life intangibles, goodwill of $1.2 billion, $70 million of finite life intangibles, $0.5 billion of deferred tax liabilities and $0.1 billion of other net assets acquired. The

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CONSOLIDATED FINANCIAL STATEMENTS

purchase price allocation is considered to be preliminary and will be refined as the Bank completes its valuation of the fair value of assets acquired and liabilities assumed.

Aggregate impact to Consolidated Income

For the year ended October 31, 2018, all four acquisitions contributed revenue of $394 million in aggregate and a net loss of $257 million in aggregate.

The primary reason for the net loss is the recording of a provision for credit losses of $404 million ($285 million after-tax) on acquired performing financial assets, as required under IFRS 9.

Acquisition costs directly related to the four acquisitions of $44 million are included in non-interest expenses in the Consolidated Statement of Income.

Acquisitions announced but not closed

Banco Cencosud, Peru

On May 9, 2018, the Bank announced that Scotiabank Peru, its wholly owned subsidiary, has reached an agreement to acquire a 51% controlling interest in Banco Cencosud, which offers credit cards and consumer loans in Peru, for approximately $130 million. Under the terms of the agreement, the two companies will also enter into a 15-year partnership to manage the credit card business and provide additional products and services to customers.

Subject to regulatory approvals and closing conditions the acquisition is expected to close in the first quarter of 2019.

Banco Dominicano del Progreso, Dominican Republic

On August 14, 2018, the Bank announced that it has reached an agreement to acquire Banco Dominicano del Progreso, S.A. – Banco Múltiple (Banco Dominicano del Progreso), a bank with operations in the Dominican Republic, subject to regulatory approval. The transaction is not considered financially material to the Bank.

Subject to regulatory approvals and closing conditions the acquisition is expected to close in the first quarter of 2019.

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EX-99.4

MANAGEMENT’S DISCUSSION AND ANALYSIS

Management’s Report on Internal Control Over Financial Reporting

The management of The Bank of Nova Scotia (the Bank) is responsible for establishing and maintaining adequate internal control over financial reporting, and have designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by The International Accounting Standards Board.

Management has used the Internal Control – Integrated Framework (2013) to evaluate the effectiveness of internal control over financial reporting, which is a recognized and suitable framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has evaluated the design and operation of the Bank’s internal control over financial reporting as of October 31, 2018, and has concluded that such internal control over financial reporting is effective. There are no material weaknesses that have been identified by management in this regard.

KPMG LLP, the independent auditors appointed by the shareholders of the Bank, who have audited the consolidated financial statements, have also audited internal control over financial reporting and have issued their report below.

Brian J. Porter	Raj Viswanathan
President and Chief Executive Officer	Executive Vice President and Chief Financial Officer

Toronto, Canada

November 27, 2018

Report of Independent Registered Public Accounting Firm

To the Shareholders of The Bank of Nova Scotia

We have audited The Bank of Nova Scotia’s (the “Bank”) internal control over financial reporting as of October 31, 2018, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Bank maintained, in all material respects, effective internal control over financial reporting as of October 31, 2018, based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Report on the Consolidated Financial Statements

We also have audited, in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Bank, which comprise the consolidated statements of financial position as at October 31, 2018 and October 31, 2017, the consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the years in the three year period ended October 31, 2018, and the related notes, comprising a summary of significant accounting policies and other explanatory information (collectively referred to as the “consolidated financial statements”), and our report dated November 27, 2018 expressed an unmodified (unqualified) opinion on those consolidated financial statements.

Basis for Opinion

The Bank’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Report on Internal Control over Financial Reporting”. Our responsibility is to express an opinion on the Bank’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Bank in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB and in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Chartered Professional Accountants, Licensed Public Accountants

November 27, 2018

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EX-99.5

Exhibit 99.5

CORPORATE GOVERNANCE

Corporate Governance Regulation

The Board of Directors and management believe that a strong, effective, independent Board plays a crucial role in building long-term sustainable growth in shareholder value, maximizing the value shareholders receive from their investment in the Bank and protecting the interests of stakeholders. The Board is committed to meeting high standards of corporate governance in all aspects of the Bank’s affairs.

The Bank’s corporate governance practices are regulated by many different parties, including the Bank’s primary regulator, the Office of the Superintendent of Financial Institutions Canada, and the Board looks to evolving best practices domestically and internationally in reviewing its corporate governance practices. Our practices:

• Meet or exceed the standards set out in the guidelines and rules of the Bank Act (Canada) (the “Bank Act”) and those of the Canadian Securities Administrators (“CSA”) – which include National Instrument 52-110, National Instrument 52-109, National Policy 58-201 and National Instrument 58-101, and

• Comply with applicable requirements of the New York Stock Exchange (“NYSE”) and the Sarbanes-Oxley Act of 2002, including applicable rules of the U.S. Securities and Exchange Commission.

The Bank is not required to comply with most of the NYSE corporate governance rules. However, the Bank meets or exceeds these rules in all significant respects, except as summarized in the Corporate Governance section of the Bank’s website (www.scotiabank.com).

The Corporate Governance Policies and the committee charters are available in the Corporate Governance section of the Bank’s website and in print to any shareholder who requests a copy from the Bank’s Secretary. Additional information on the Bank’s Audit and Conduct Review Committee, including a copy of its charter and descriptions of its members and their applicable education and experience, can be found in Exhibit 1, the Bank’s Annual Information Form under the heading “The Bank’s Audit and Conduct Review Committee” and in Schedule “C” thereto.

Director Independence

The Bank is committed to complying with all applicable laws, rules and regulations related to the status of its Directors. The Bank defines a Director who does not have a direct or indirect material relationship with the Bank as independent. The Board has approved Director Independence Standards (the “Independence Standards”), which provide a framework for the Board to assess any material relationships of the Directors with the Bank. The Independence Standards are derived from the Bank Act Affiliated Persons Regulations, the CSA rules and the NYSE corporate governance rules. Each year:

• The Board reviews its Directors against these standards, considering all relevant facts and circumstances, including the relationship of the non-management Directors to the Bank — as well as any relationship to the Bank of their spouses, children, principal business affiliations and any other relevant individuals.

• All Directors complete a detailed questionnaire to inform this review.

• All Directors certify their compliance with the Bank’s Code of Conduct, including the requirement that they declare any material interest in matters coming before the Board.

Brian J. Porter is non-independent, due to his position as President and Chief Executive Officer. Eduardo Pacheco is also non-independent, due to his business relationships with the Bank and its subsidiary, Banco Colpatria.

That means, 14 of the current 16 (or 88%) Directors are independent, including Thomas C. O’Neill, the Chairman of the Board.

The Board also takes appropriate steps to ensure that the Board is able to function independent of management. The independent members of the Board held an “in camera” session at all regularly scheduled Board meeting held in fiscal 2018. The non-executive members of the Board held an “in camera” session at all regularly scheduled Board meetings held in fiscal 2018.

The following Directors are independent: Nora A. Aufreiter, Guillermo E. Babatz, Scott B. Bonham, Charles H. Dallara, Tiff Macklem, Thomas C. O’Neill, Michael D. Penner, Una M. Power, Aaron W. Regent, Indira V. Samarasekera, Susan L. Segal, Barbara S. Thomas, L. Scott Thomson and Benita M. Warmbold.

Director Independence Standards

A majority of the Bank’s directors are independent, as required by the CSA’s National Policy 58-201 — Corporate Governance Guidelines and the NYSE listed company corporate governance rules. To be considered independent under these rules, the Board must determine that a director has no direct or indirect material relationship with the Bank. A material relationship is a relationship that could, in the view of the Board, be reasonably expected to interfere with the exercise of a director’s judgment independent of management. The rules permit the Board to adopt categorical standards in making its independence determinations. The standards adopted by the Board are reproduced below. Definitions and interpretation of terms in the standards are in accordance with applicable source rules and regulations, as amended from time to time. In applying these standards, the Board broadly considers all relevant facts and circumstances.

1. A director will not be independent if:

• the director is, or has been within the last three years, an employee or executive officer of the Bank or a subsidiary, or an immediate family member of the director is, or has been within the last three years, an executive officer of the Bank or a subsidiary;

• the director has received, or an immediate family member of the director has received for service as an executive officer, during any twelve-month period within the last three years, more than the lesser of Cdn$75,000 and US$120,000 in direct compensation from the Bank or a subsidiary, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);

• (a) the director or an immediate family member of the director is a current partner of a firm that is the Bank’s or a subsidiary’s internal or external auditor; (b) the director is a current employee of such firm; (c) an immediate family member of the director is a current employee of such a firm and personally works on the Bank’s or a subsidiary’s audit, or the director’s spouse, or child or stepchild who shares a home with the director, is an employee of such firm and participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (d) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Bank’s or a subsidiary’s audit within that time;

• the director or an immediate family member of the director, is, or has been within the last three years, employed as an executive officer of another company where any of the Bank’s or a subsidiary’s present executive officers at the same time serves or served on that company’s compensation committee;

• the director is currently an employee, or an immediate family member of the director is currently an executive officer, of a company that has made payments to, or received payments from, the Bank or a subsidiary for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of US$1 million or 2% of such other company’s consolidated gross revenues (with the exception that contributions to tax exempt organizations shall not be considered payments for this purpose); or

• the director is “affiliated” with the Bank as that term is used in the Affiliated Persons (Banks) Regulations made under the Bank Act.

An “immediate family member” includes a person’s spouse, parents, children, stepchildren, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares the person’s home.

2. In addition to satisfying the independence standards set forth above, members of the audit committee must satisfy the following additional independence requirements:

• An audit committee member may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from the Bank or any subsidiary, other than compensation in his

or her capacity as a member of the Board or any committee or any fixed amount of compensation under a retirement plan (including deferred compensation) for prior service with the Bank (provided such compensation is not contingent in any way on continued service).

• An audit committee member may not be an “affiliated” person of the Bank or any subsidiary, as defined in applicable Canadian and U.S. securities laws.

The indirect acceptance by an audit committee member of any consulting, advisory or other compensatory fee includes acceptance of such fee by a spouse, minor child or stepchild or a child or stepchild who shares a home with the audit committee member or by an entity in which such audit committee member is a partner, member, an officer such as a managing director occupying a comparable position or executive officer, or occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to the Bank or any subsidiary.

3. In addition to satisfying the independence standards set forth above in section 1, in affirmatively determining the independence of any director who will serve on the Bank’s compensation committee, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the Bank which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to:

• the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Bank or a subsidiary to such director; and

• whether such director is affiliated with the Bank, a subsidiary of the Bank or an affiliate of a subsidiary of the Bank.

Whether directors meet these categorical independence standards will be reviewed and will be made public annually prior to their standing for re-election to the Board. The Board will examine relationships such as the nature of the director’s banking, lending or other business dealings with the Bank or a director’s role in a charitable organization which has received a certain level of contributions from the Bank. For relationships not covered by the standards in section 1 above, the determination of whether the relationship is material, and therefore whether the director would be independent, will be made by the directors who satisfy those standards. The Bank will disclose the basis for any Board determination that a relationship is immaterial despite the fact that it does not meet the categorical standards set forth above.

EX-99.6

Exhibit 99.6

KPMG LLP Bay Adelaide Centre 333 Bay Street Suite 4600 Toronto, ON M5H 2S5 Canada Telephone Fax Internet (416) 777-8500 (416) 777-8818 www.kpmg.ca

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of The Bank of Nova Scotia

We consent to the incorporation by reference of our reports, each dated November 27, 2018, with respect to the consolidated financial statements and the effectiveness of internal control over financial reporting included in this annual report on Form 40-F.

We also consent to the incorporation by reference of such reports in the Registration Statement – Form F-3 – File No. 333-215597 and the Registration Statement – Form S-8 – File No. 333-199099 of the Bank.

Chartered Professional Accountants, Licensed Public Accountants

November 27, 2018

Toronto, Canada

KPMG LLP is a Canadian limited liability partnership and a

member firm of the KPMG network of independent member

firms affiliated with KPMG International Cooperative (“KPMG

International”), a Swiss entity. KPMG Canada provides services

to KPMG LLP.

EX-99.7

Exhibit 99.7

CERTIFICATIONS

I, BRIAN J. PORTER, certify that:

1. I have reviewed the annual report on Form 40-F of The Bank of Nova Scotia;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: November 27, 2018

/s/ Brian J. Porter                                                 

Brian J. Porter

President and Chief Executive Officer

CERTIFICATIONS

I, RAJAGOPAL VISWANATHAN, certify that:

1. I have reviewed the annual report on Form 40-F of The Bank of Nova Scotia;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: November 27, 2018

/s/ Rajagopal Viswanathan                                                 

Rajagopal Viswanathan

Executive Vice-President and Chief Financial Officer

EX-99.8

Exhibit 99.8

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

In connection with the annual report of The Bank of Nova Scotia (the “Bank”) on Form 40-F for the year ended October 31, 2018 (the “Report”) as filed with the U.S. Securities and Exchange Commission,

I, Brian J. Porter, President and Chief Executive Officer of the Bank, certify, pursuant to 18 U.S.C. section 1350, as enacted pursuant to section 906 of the U.S. Sarbanes-Oxley Act of 2002, that to my knowledge:

(i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Bank.

November 27, 2018	/s/ Brian J. Porter
	Brian J. Porter
	President and Chief Executive Officer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

In connection with the annual report of The Bank of Nova Scotia (the “Bank”) on Form 40-F for the year ended October 31, 2018 (the “Report”) as filed with the U.S. Securities and Exchange Commission,

I, Rajagopal Viswanathan, Executive Vice-President and Chief Financial Officer of the Bank, certify, pursuant to 18 U.S.C. section 1350, as enacted pursuant to section 906 of the U.S. Sarbanes-Oxley Act of 2002, that to my knowledge:

(i) the Report fully complies with the requirements of section 13(a) or 15(d) of the U.S. Securities Exchange Act of 1934; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Bank.

November 27, 2018	/s/ Rajagopal Viswanathan
	Rajagopal Viswanathan
	Executive Vice-President and Chief Financial Officer

XML

Document and Entity Information	12 Months Ended
	Oct. 31, 2018 shares
Document - Document and Entity Information [Abstract]
Document Type	40-F
Amendment Flag	false
Document Period End Date	Oct. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	BNS
Entity Registrant Name	BANK OF NOVA SCOTIA
Entity Central Index Key	0000009631
Current Fiscal Year End Date	--10-31
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding	1,227,027,624

XML

Consolidated Statement of Financial Position - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Assets
Cash and deposits with financial institutions	$ 62,269	[1]	$ 59,663
Precious metals	3,191	[1]	5,717
Trading assets
Securities	85,474	[1]	78,652
Loans	14,334	[1]	17,312
Other	454	[1]	2,500
Total trading assets	100,262	[1]	98,464
Financial instruments designated at fair value through profit or loss	12	[1]	13
Securities purchased under resale agreements and securities borrowed	104,018	[1]	95,319
Derivative financial instruments	37,558	[1]	35,364
Investment securities	78,396	[1]	69,269
Loans
Residential mortgages	253,357	[1]	236,916
Personal loans	96,019	[1]	89,227
Credit cards	16,485	[1]	14,104
Business and government	191,038	[1]	168,449
Loans and receivables gross	556,899	[1]	508,696
Allowance for credit losses	5,065	[1]	4,327
Loans and receivables	551,834	[1]	504,369
Other
Customers' liability under acceptances, net of allowance	16,329	[1]	13,560
Property and equipment	2,684	[1]	2,381
Investments in associates	4,850	[1]	4,586
Goodwill and other intangible assets	17,719	[1]	12,106
Deferred tax assets	1,938	[1]	1,713
Other assets	17,433	[1]	12,749
Other Assets	60,953	[1]	47,095
Total assets	998,493	[1]	915,273
Deposits
Personal	214,545	[1]	200,030
Business and government	422,002	[1]	384,988
Financial institutions	39,987	[1]	40,349
Deposits	676,534	[1]	625,367
Financial instruments designated at fair value through profit or loss	8,188	[1]	4,663
Other
Acceptances	16,338	[1]	13,560
Obligations related to securities sold short	32,087	[1]	30,766
Derivative financial instruments	37,967	[1]	34,200
Obligations related to securities sold under repurchase agreements and securities lent	101,257	[1]	95,843
Subordinated debentures	5,698	[1]	5,935
Other liabilities	52,744	[1]	43,314
Other Liabilities	246,091	[1]	223,618
Total liabilities	930,813	[1]	853,648
Common equity
Retained earnings	41,414	[1]	38,117
Accumulated other comprehensive income (loss)	992	[1]	1,577
Other reserves	404	[1]	116
Total common equity	61,044	[1]	55,454
Total equity attributable to equity holders of the Bank	65,228	[1]	60,033
Non-controlling interests in subsidiaries	2,452	[1]	1,592
Total equity	67,680	[1]	61,625
Total liabilities and equity	998,493	[1]	915,273
Common shares [member]
Common equity
Common shares	18,234	[1]	15,644
Total equity	18,234		15,644
Preference shares [member]
Common equity
Preferred shares and other equity instruments	$ 4,184	[1]	$ 4,579

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Consolidated Statement of Income - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016
Interest income
Loans	[1],[2]	$ 24,991		$ 21,719	$ 20,419
Securities	[1],[2]	1,771		1,403	1,237
Securities purchased under resale agreements and securities borrowed	[1],[2]	446		283	158
Deposits with financial institutions	[1],[2]	859		522	394
Interest income	[1],[2]	28,067		23,927	22,208
Interest expense
Deposits		10,544		7,878	6,793
Subordinated debentures		214		226	232
Other		1,118		788	891
Interest expenses		11,876		8,892	7,916
Net interest income		16,191		15,035	14,292
Non-interest income
Banking	[2]	4,001		3,855	3,669
Wealth management	[2]	3,341		3,318	3,282
Underwriting and other advisory	[2]	514		598	594
Non-trading foreign exchange	[2]	622		557	540
Trading revenues	[2],[3]	1,420		986	1,228
Net gain on sale of investment securities	[2]	146		380	534
Net income from investments in associated corporations	[2]	559		407	414
Insurance underwriting income, net of claims	[2]	686		626	603
Other fees and commissions	[2],[3]	841		903	732
Other	[2],[3]	454		490	462
Total non-interest income	[2]	12,584		12,120	12,058
Total revenue		28,775		27,155	26,350
Provision for credit losses	[2]	2,611		2,249	2,412
Profit from operating activity		26,164		24,906	23,938
Non-interest expenses
Salaries and employee benefits		7,455		7,375	7,025
Premises and technology		2,577		2,436	2,238
Depreciation and amortization		848		761	684
Communications		447		437	442
Advertising and business development		581		581	617
Professional		881		775	693
Business and capital taxes		464		423	403
Other		1,805		1,842	2,438
Total non-interest expenses		15,058		14,630	14,540
Income before taxes		11,106		10,276	9,398
Income tax expense		2,382		2,033	2,030
Net income		8,724	[4]	8,243	7,368
Net income attributable to non-controlling interests in subsidiaries		176		238	251
Net income attributable to equity holders of the Bank		8,548		8,005	7,117
Preferred shareholders and other equity instrument holders		187		129	130
Common shareholders		$ 8,361		$ 7,876	$ 6,987
Earnings per common share (in dollars)
Basic		$ 6.90		$ 6.55	$ 5.80
Diluted		6.82		6.49	5.77
Dividends paid per common share (in dollars)		$ 3.28		$ 3.05	$ 2.88

[1] Interest income on financial assets measured at amortized cost and FVOCI is calculated using the effective interest method. Includes interest income of $27,854 for the year ended October 31, 2018 from these financial assets.

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

[3] Prior year amounts have been reclassified to conform with current period presentation.

[4] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

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Consolidated Statement of Income (Parenthetical) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)
Profit or loss [abstract]
Interest income calculated using effective interest method	$ 27,854

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Consolidated Statement of Comprehensive Income - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016
Statement of comprehensive income [abstract]
Net income		$ 8,724	[1]	$ 8,243	$ 7,368
Net change in unrealized foreign currency translation gains (losses):
Net unrealized foreign currency translation gains (losses)		(406)		(1,564)	614
Net gains (losses) on hedges of net investments in foreign operations		(281)		404	(300)
Income tax expense (benefit):
Net unrealized foreign currency translation gains (losses)		(7)		(8)	(3)
Net gains (losses) on hedges of net investments in foreign operations		(74)		107	(79)
Other comprehensive income on foreign currency translation and hedges of net investments net of tax		(606)		(1,259)	396
Net change in unrealized gains (losses) on available-for-sale securities (debt and equity)(1):
Net unrealized gains (losses) on available-for-salesecurities	[2]			(217)	308
Reclassification of net (gains) losses to net income	[2],[3]			143	(549)
Income tax expense (benefit):
Net unrealized gains (losses) on available-for-salesecurities				(61)	82
Reclassification of net (gains) losses to net income				42	(151)
Other comprehensive income net of tax available for sale financial assets net of tax				(55)	(172)
Net change in fair value due to change in debt instruments measured at fair value through other comprehensive income(1):
Net gains (losses) in fair value	[2]	(605)
Reclassification of net (gains) losses to net income	[2]	281
Income tax expense (benefit):
Net gains (losses) in fair value		(145)
Reclassification of net (gains) losses to net income		73
Other comprehensive income net of tax available for sale financial assets net of tax		(252)
Net change in gains (losses) on derivative instruments designated as cash flow hedges:
Net gains (losses) on derivative instruments designated as cash flow hedges		(1,181)		1,722	(7)
Reclassification of net (gains) losses to net income	[4]	695		(1,761)	357
Income tax expense (benefit):
Net gains (losses) on derivative instruments designated as cash flow hedges		(307)		454	9
Reclassification of net (gains) losses to net income		182		(465)	83
Other comprehensive income net of tax cash flow hedges		(361)		(28)	258
Other comprehensive income (loss) from investments in associates		66		56	31
Net change in remeasurement of employee benefit plan asset and liability:
Actuarial gains (losses) on employee benefit plans		444		805	(972)
Income tax expense (benefit)		126		213	(256)
Other comprehensive income net of tax actuarial gains (losses) on employee benefit plans		318		592	(716)
Net change in fair value due to change in equity instruments designated at fair value through other comprehensive income(1):
Net gains (losses) in fair value	[2]	75
Income tax expense (benefit)	[2]	15
Other comprehensive income net of tax for equity instruments designated at fair value through other comprehensive income	[2]	60
Net change in fair value due to change in own credit risk on financial liabilities designated under the fair value option:
Change in fair value due to change in own credit risk on financial liabilities designated under the fair value option		(30)		(28)	(23)
Income tax expense (benefit)		(8)		(7)	(7)
Other comprehensive income net of tax change in fair value due to change in own credit risk on financial liabilities designated under the fair value option		(22)		(21)	(16)
Other comprehensive income (loss) from investments in associates		(7)		6	(10)
Other comprehensive income (loss)		(804)		(709)	(229)
Comprehensive income		7,920		7,534	7,139
Comprehensive income attributable to non-controlling interests		65		192	237
Comprehensive income attributable to equity holders of the Bank		7,855		7,342	6,902
Preferred shareholders and other equity instrument holders		187		129	130
Common shareholders		$ 7,668		$ 7,213	$ 6,772

[1] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

[3] Includes amounts related to qualifying hedges.

[4] Amount for 2016 includes reclassification of $22 pre-tax to goodwill for acquisition-related cash flow hedges.

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Consolidated Statement of Comprehensive Income (Parenthetical) $ in Millions	12 Months Ended
	Oct. 31, 2016 CAD ($)
Reclassification of net (gains) losses	$ (357)	[1]
Goodwill [member]
Reclassification of net (gains) losses	$ 22

[1] Amount for 2016 includes reclassification of $22 pre-tax to goodwill for acquisition-related cash flow hedges.

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Consolidated Statement of Changes in Equity - CAD ($) $ in Millions		Total		IFRS9 [member]	Common shares [member]	Retained earnings [member]	[1]	Retained earnings [member] IFRS9 [member]	[1]	Other reserves [member]		Total common equity [member]	Total common equity [member] IFRS9 [member]	Preferred shares and other equity instruments [member]	Total common and preferred equity [member]	Total common and preferred equity [member] IFRS9 [member]	Non-controlling interests [member]		Non-controlling interests [member] IFRS9 [member]	Foreign currency translation [member] Accumulated other comprehensive income (loss) [member]	Available- for-sale securities [member] Accumulated other comprehensive income (loss) [member]	Available- for-sale securities [member] Accumulated other comprehensive income (loss) [member] IFRS9 [member]	Debt Instruments Fair Value Other Comprehensive Income [member] Accumulated other comprehensive income (loss) [member]	Debt Instruments Fair Value Other Comprehensive Income [member] Accumulated other comprehensive income (loss) [member] IFRS9 [member]	Equity Instruments Fair Value Other Comprehensive Income [member] Accumulated other comprehensive income (loss) [member]	Equity Instruments Fair Value Other Comprehensive Income [member] Accumulated other comprehensive income (loss) [member] IFRS9 [member]	Cash flow hedging reserve [member]	Other [member]	[2]
Beginning Balance at Oct. 31, 2015		$ 53,479			$ 15,141	$ 31,316				$ 173		$ 49,085		$ 2,934	$ 52,019		$ 1,460			$ 2,633	$ 194						$ 7	$ (379)
Net income		7,368				6,987						6,987		130	7,117		251
Other comprehensive income (loss)		(229)										(215)			(215)		(14)			422	(180)						257	(714)
Total comprehensive income		7,139				6,987						6,772		130	6,902		237			422	(180)						257	(714)
Shares issued		1,713			391					(28)		363		1,350	1,713
Shares repurchased/redeemed		(770)			(19)	(61)						(80)		(690)	(770)
Dividends and distributions paid to equity holders		(3,714)				(3,468)						(3,468)		(130)	(3,598)		(116)
Share-based payments	[3]	7								7		7			7
Other		(33)				(22)						(22)			(22)		(11)	[4]
Ending Balance at Oct. 31, 2016		57,821			15,513	34,752				152		52,657		3,594	56,251		1,570			3,055	14						264	(1,093)
Net income		8,243				7,876						7,876		129	8,005		238
Other comprehensive income (loss)		(709)										(663)			(663)		(46)			(1,194)	(60)						(29)	620
Total comprehensive income		7,534				7,876						7,213		129	7,342		192			(1,194)	(60)						(29)	620
Shares issued		1,829			313					(44)		269		1,560	1,829
Shares repurchased/redeemed		(1,584)			(182)	(827)						(1,009)		(575)	(1,584)
Dividends and distributions paid to equity holders		(3,930)				(3,668)						(3,668)		(129)	(3,797)		(133)
Share-based payments	[3]	8								8		8			8
Other		(53)				(16)						(16)			(16)		(37)	[4]
Ending Balance (Previously stated [member]) at Oct. 31, 2017		61,625			15,644	38,117				116		55,454		4,579	60,033		1,592			1,861	(46)						235	(473)
Ending Balance (Increase (decrease) due to changes in accounting policy required by IFRSs [member]) at Oct. 31, 2017	[5]			$ (610)				$ (564)					$ (513)			$ (513)			$ (97)			$ 46		$ 184		$ (179)
Ending Balance (Balance After IFRS Adjustments [Member]) at Oct. 31, 2017		61,015			15,644	37,553				116		54,941		4,579	59,520		1,495			1,861			$ 184		$ (179)		235	(473)
Ending Balance at Oct. 31, 2017		61,625			15,644	38,117				116		55,454		4,579	60,033		1,592			1,861	$ (46)						235	(473)
Net income		8,724	[6]			8,361						8,361		187	8,548		176
Other comprehensive income (loss)		(804)										(693)			(693)		(111)			(477)			(252)		53		(356)	339
Total comprehensive income		7,920				8,361						7,668		187	7,855		65			(477)			(252)		53		(356)	339
Shares issued		2,989			2,708					(19)		2,689		300	2,989
Shares repurchased/redeemed		(1,327)			(118)	(514)						(632)		(695)	(1,327)
Dividends and distributions paid to equity holders		(4,371)				(3,985)						(3,985)		(187)	(4,172)		(199)
Share-based payments	[3]	6								6		6			6
Other		1,448				(1)				301	[4]	357			357		1,091	[4]		57
Ending Balance at Oct. 31, 2018		$ 67,680	[7]		$ 18,234	$ 41,414				$ 404		$ 61,044		$ 4,184	$ 65,228		$ 2,452			$ 1,441			$ (68)		$ (126)		$ (121)	$ (134)

[1] Includes undistributed retained earnings of $62 (2017 - $61; 2016 - $63) related to a foreign associated corporation, which is subject to local regulatory restriction.

[2] Includes Share from associates, Employee benefits and Own credit risk.

[3] Represents amounts on account of share-based payments (refer to Note 26).

[4] Includes changes to non-controlling interests arising from business combinations and related transactions.

[5] Refer to Note 4.

[6] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

[7] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Consolidated Statement of Changes in Equity (Parenthetical) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure Of Restatement [Abstract]
Undistributed retained earnings	$ 62	$ 61	$ 63

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Consolidated Statement of Cash Flows - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018	[1]	Oct. 31, 2017		Oct. 31, 2016
Cash flows from operating activities
Net income		$ 8,724		$ 8,243		$ 7,368
Adjustment for:
Net interest income		(16,191)		(15,035)		(14,292)
Depreciation and amortization		848		761		684
Provision for credit losses		2,611		2,249		2,412
Equity-settled share-based payment expense		6		8		7
Net gain on sale of investment securities		(146)		(380)		(534)
Net gain on disposition of business				(62)		(116)
Net income from investments in associated corporations		(559)		(407)		(414)
Income tax expense		2,382		2,033		2,030
Restructuring charge						378
Changes in operating assets and liabilities:
Trading assets		111		8,377		(10,044)
Securities purchased under resale agreements and securities borrowed		(7,721)		(4,631)		(5,363)
Loans		(31,848)		(32,589)		(20,355)
Deposits		40,338		27,516		6,702
Obligations related to securities sold short		239		7,533		4,007
Obligations related to securities sold under repurchase agreements and securities lent		4,387		849		20,865
Net derivative financial instruments		440		(391)		(3,806)
Other, net		(188)		(1,997)		2,293
Dividends received		332		1,600		873
Interest received		27,384		23,649		21,099
Interest paid		(11,400)		(8,730)		(7,787)
Income tax paid		(1,938)		(2,012)		(1,471)
Net cash from/(used in) operating activities		17,811		16,584		4,536
Cash flows from investing activities
Interest-bearing deposits with financial institutions		(704)		(14,006)		28,447
Purchase of investment securities		(91,896)		(64,560)		(94,441)
Proceeds from sale and maturity of investment securities		84,336		66,179		65,069
Acquisition/sale of subsidiaries, associated corporations or business units, net of cash acquired		(3,862)		229		(1,050)
Property and equipment, net of disposals		(416)		3		(348)
Other, net		(1,183)		(385)		(431)
Net cash from/(used in) investing activities		(13,725)		(12,540)		(2,754)
Cash flows from financing activities
Proceeds from issue of subordinated debentures						2,465
Redemption/repayment of subordinated debentures		(233)		(1,500)		(1,035)
Proceeds from common shares issued		1,830		313		391
Proceeds from preferred shares and other equity instruments issued		300		1,560		1,350
Redemption of preferred shares		(695)		(575)		(690)
Common shares purchased for cancellation		(632)		(1,009)		(80)
Cash dividends and distributions paid		(4,172)		(3,797)		(3,598)
Distributions to non-controlling interests		(199)		(133)		(116)
Other, net		931		2,209		(320)
Net cash from/(used in) financing activities		(2,870)		(2,932)		(1,633)
Effect of exchange rate changes on cash and cash equivalents		(44)		(142)		(18)
Net change in cash and cash equivalents		1,172		970		131
Cash and cash equivalents at beginning of year	[2]	7,825		6,855		6,724
Cash and cash equivalents at end of year	[2]	$ 8,997		$ 7,825	[1]	$ 6,855

[1] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

[2] Represents cash and non-interest bearing deposits with financial institutions (refer to Note 6).

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Reporting Entity

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Reporting Entity

1 Reporting Entity

The Bank of Nova Scotia (the Bank) is a chartered schedule I bank under the Bank Act (Canada) (the Bank Act) and is regulated by the Office of the Superintendent of Financial Institutions (OSFI). The Bank is a global financial services provider offering a diverse range of products and services, including personal, commercial, corporate and investment banking. The head office of the Bank is located at 1709 Hollis Street, Halifax, Nova Scotia, Canada and its executive offices are at Scotia Plaza, 44 King Street West, Toronto, Canada. The common shares of the Bank are listed on the Toronto Stock Exchange and the New York Stock Exchange.

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Basis of Preparation

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Basis of Preparation

2 Basis of Preparation

Statement of compliance

These consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB) and accounting requirements of OSFI in accordance with Section 308 of the Bank Act. Section 308 states that, except as otherwise specified by OSFI, the financial statements are to be prepared in accordance with IFRS.

The consolidated financial statements for the year ended October 31, 2018 have been approved by the Board of Directors for issue on November 27, 2018.

Certain comparative amounts have been restated to conform with the basis of presentation in the current year.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items that are measured at fair value in the Consolidated Statement of Financial Position:

• Financial assets and liabilities measured at fair value through profit or loss

• Financial assets and liabilities designated at fair value through profit or loss

• Derivative financial instruments

• Available-for-sale investment securities (applicable prior to November 1, 2017)

• Equity instruments designated at fair value through other comprehensive income (effective November 1, 2017)

• Debt instruments measured at fair value through other comprehensive income (effective November 1, 2017)

Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars, which is the Bank’s functional currency. All financial information presented in Canadian dollars has been rounded to the nearest million unless otherwise stated.

Management’s use of estimates, assumptions and judgments

The Bank’s accounting policies require estimates, assumptions and judgments that relate to matters that are inherently uncertain. The Bank has established procedures to ensure that accounting policies are applied consistently. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected.

Use of estimates and assumptions

The preparation of these consolidated financial statements, in conformity with IFRS, requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the consolidated financial statements, other comprehensive income and income and expenses during the reporting period. Estimates made by management are based on historical experience and other assumptions that are believed to be reasonable. Key areas of estimation uncertainty include those relating to the allowance for credit losses, the fair value of financial instruments (including derivatives), corporate income taxes, employee benefits, goodwill and intangible assets, the fair value of all identifiable assets and liabilities as a result of business combinations, impairment of non-financial assets, derecognition of financial assets and liabilities and provisions. While management makes its best estimates and assumptions, actual results could differ from these and other estimates.

Significant judgments

In the preparation of these consolidated financial statements, management is required to make significant judgments in the classification and presentation of transactions and instruments and accounting for involvement with other entities.

Significant estimates, assumptions and judgments have been made in the following areas and are discussed as noted in the consolidated financial statements:

Allowance for credit losses	Note 3 Note 13(d)
Fair value of financial instruments	Note 3 Note 7
Corporate income taxes	Note 3 Note 27
Employee benefits	Note 3 Note 28
Goodwill and intangible assets	Note 3 Note 18
Fair value of all identifiable assets and liabilities as a result of business combinations	Note 3 Note 38
Impairment of investment securities	Note 3 Note 12
Impairment of non-financial assets	Note 3 Note 16
Structured entities	Note 3 Note 15
De facto control of other entities	Note 3 Note 31
Derecognition of financial assets and liabilities	Note 3 Note 14
Provisions	Note 3 Note 23

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Significant Accounting Policies

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Significant Accounting Policies

3 Significant Accounting Policies

The significant accounting policies used in the preparation of these consolidated financial statements, including any additional accounting requirements of OSFI, as set out below, have been applied consistently to all periods presented in these consolidated financial statements, with the exception of the adoption of IFRS 9 (refer Note 4).

Basis of consolidation

The consolidated financial statements include the assets, liabilities, financial performance and cash flows of the Bank and all of its subsidiaries, after elimination of intercompany transactions and balances. Subsidiaries are defined as entities controlled by the Bank and exclude associates and joint arrangements. The Bank’s subsidiaries can be classified as entities controlled through voting interests or structured entities. The Bank consolidates a subsidiary from the date it obtains control. The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. For the Bank to control an entity, all of the three elements of control should be in existence:

• power over the investee;

• exposure, or rights, to variable returns from involvement with the investee; and

• the ability to use power over the investee to affect the amount of the Bank’s returns.

The Bank does not control an investee when it is acting as an agent. The Bank assesses whether it is an agent by determining whether it is primarily engaged to act on behalf of and for the benefit of another party or parties. The Bank reassesses whether it controls an investee if facts and circumstances indicate that one or more of the elements of control has changed. Non-controlling interests are presented within equity in the Consolidated Statement of Financial Position separate from equity attributable to equity holders of the Bank. Partial sales and incremental purchases of interests in subsidiaries that do not result in a change of control are accounted for as equity transactions with non-controlling interest holders. Any difference between the carrying amount of the interest and the transaction amount is recorded as an adjustment to retained earnings.

Voting-interest subsidiaries

Control is presumed with an ownership interest of more than 50% of the voting rights in an entity unless there are other factors that indicate that the Bank does not control the entity despite having more than 50% of voting rights.

The Bank may consolidate an entity when it owns less than 50% of the voting rights when it has one or more other attributes of power:

• by virtue of an agreement, over more than half of the voting rights;

• to govern the financial and operating policies of the entity under a statute or an agreement;

• to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or

• to govern the financial and operating policies of the entity through the size of its holding of voting rights relative to the size and dispersion of holding of the other vote holders and voting patterns at shareholder meetings (i.e., de facto control).

Structured entities

Structured entities are designed to accomplish certain well-defined objectives and for which voting or similar rights are not the dominant factor in deciding who controls the entity. The Bank may become involved with structured entities either at the formation stage or at a later date. The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Bank consolidates all structured entities that it controls.

Investments in associates

An associate is an entity in which the Bank has significant influence, but not control, over the operating and financial policies of the entity. Significant influence is ordinarily presumed to exist when the Bank holds between 20% and 50% of the voting rights. The Bank may also be able to exercise significant influence through board representation. The effects of potential voting rights that are currently exercisable or convertible are considered in assessing whether the Bank has significant influence.

Investments in associates are recognized initially at cost, which includes the purchase price and other costs directly attributable to the purchase. Associates are accounted for using the equity method which reflects the Bank’s share of the increase or decrease of the post-acquisition earnings and other movements in the associate’s equity.

If there is a loss of significant influence and the investment ceases to be an associate, equity accounting is discontinued from the date of loss of significant influence. If the retained interest on the date of loss of significant influence is a financial asset, it is measured at fair value and the difference between the fair value and the carrying value is recorded as an unrealized gain or loss in the Consolidated Statement of Income.

Investments in associates are evaluated for impairment at the end of each financial reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

For purposes of applying the equity method for an investment that has a different reporting period from the Bank, adjustments are made for the effects of any significant events or transactions that occur between the reporting date of the investment and the reporting date of the Bank.

Joint arrangements

A joint arrangement is an arrangement over which two or more parties have joint control. Joint control exists only when decisions about the relevant activities (i.e., those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing the control of the arrangement. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.

Similar to accounting for investment in associates, for joint ventures, investments are recognized initially at cost and accounted for using the equity method which reflects the Bank’s share of the increase or decrease of the post-acquisition earnings and other movements in the joint venture’s equity. Investments in joint ventures are evaluated for impairment at the end of each financial reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

If there is a loss of joint control and it does not result in the Bank having significant influence over the joint venture, equity accounting is discontinued from the date of loss of joint control. If the retained interest in the former joint venture on the date of loss of joint control is a financial asset, it is measured at fair value and the difference between the fair value and the carrying value is recorded as an unrealized gain or loss in the Consolidated Statement of Income.

Translation of foreign currencies

The financial statements of each of the Bank’s foreign operations are measured using its functional currency, being the currency of the primary economic environment of the foreign operation.

Translation gains and losses related to the Bank’s monetary items are recognized in non-interest income in the Consolidated Statement of Income. Revenues and expenses denominated in foreign currencies are translated using average exchange rates, except for depreciation and amortization of buildings, equipment and leasehold improvements of the Bank, purchased in foreign currency, which are translated using historical rates. Foreign currency non-monetary items that are measured at historical cost are translated into the functional currency at historical rates. Foreign currency non-monetary items measured at fair value are translated into functional currency using the rate of exchange at the date the fair value was determined. Foreign currency gains and losses on non-monetary items are recognized in the Consolidated Statement of Income or Consolidated Statement of Comprehensive Income consistent with the gain or loss on the non-monetary item.

Unrealized gains and losses arising upon translation of foreign operations, together with any gains or losses arising from hedges of those net investment positions to the extent effective, are credited or charged to net change in unrealized foreign currency translation gains/losses in other comprehensive income in the Consolidated Statement of Comprehensive Income. On disposal or partial disposal of a foreign operation, an appropriate portion of the translation differences previously recognized in other comprehensive income are recognized in the Consolidated Statement of Income.

Financial assets and liabilities

Recognition and initial measurement

The Bank, on the date of origination or purchase, recognizes loans, debt and equity securities, deposits and subordinated debentures at the fair value of consideration paid. Regular-way purchases and sales of financial assets are recognized on the settlement date. All other financial assets and liabilities, including derivatives, are initially recognized on the trade date at which the Bank becomes a party to the contractual provisions of the instrument.

The initial measurement of a financial asset or liability is at fair value plus transaction costs that are directly attributable to its purchase or issuance. For instruments measured at fair value through profit or loss, transaction costs are recognized immediately in profit or loss.

Classification and measurement, derecognition, and impairment of financial instruments effective November 1, 2017

Classification and measurement

Classification and measurement of financial assets

Financial assets are classified into one of the following measurement categories:

• Amortized cost;

• Fair value through other comprehensive income (FVOCI);

• Fair value through profit or loss (FVTPL);

• Elected at fair value through other comprehensive income (Equities only); or

• Designated at FVTPL

Financial assets include both debt and equity instruments.

Debt instruments

Debt instruments, including loans and debt securities, are classified into one of the following measurement categories:

• Amortized cost;

• Fair value through other comprehensive income (FVOCI);

• Fair value through profit or loss (FVTPL); or

• Designated at FVTPL

Classification of debt instruments is determined based on:

(i) The business model under which the asset is held; and

(ii) The contractual cash flow characteristics of the instrument.

Business model assessment

Business model assessment involves determining how financial assets are managed in order to generate cash flows. The Bank’s business model assessment is based on the following categories:

• Held to collect: The objective of the business model is to hold assets and collect contractual cash flows. Any sales of the asset are incidental to the objective of the model.

• Held to collect and for sale: Both collecting contractual cash flows and sales are integral to achieving the objectives of the business model.

• Other business model: The business model is neither held-to-collect nor held-to-collect and for sale.

The Bank assesses business model at a portfolio level reflective of how groups of assets are managed together to achieve a particular business objective. For the assessment of a business model, the Bank takes into consideration the following factors:

• How the performance of assets in a portfolio is evaluated and reported to group heads and other key decision makers within the Bank’s business lines;

• How compensation is determined for the Bank’s business lines’ management that manages the assets;

• Whether the assets are held for trading purposes i.e., assets that the Bank acquires or incurs principally for the purpose of selling or repurchasing in the near term, or holds as part of a portfolio that is managed together for short-term profit or position taking;

• The risks that affect the performance of assets held within a business model and how those risks are managed; and

• The frequency and volume of sales in prior periods and expectations about future sales activity.

Contractual cash flow characteristics assessment

The contractual cash flow characteristics assessment involves assessing the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest on the principal amount outstanding (SPPI).

Principal is defined as the fair value of the instrument at initial recognition. Principal may change over the life of the instrument due to repayments or amortization of premium/discount.

Interest is defined as the consideration for the time value of money and the credit risk associated with the principal amount outstanding and for other basic lending risks and costs (liquidity risk and administrative costs), and a profit margin.

If the Bank identifies any contractual features that could significantly modify the cash flows of the instrument such that they are no longer consistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.

Debt instruments measured at amortized cost

Debt instruments are measured at amortized cost if they are held within a business model whose objective is to hold for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are carried at amortized cost. Interest income on these instruments is recognized in interest income using the effective interest rate method. The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. Amortized cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the effective interest rate.

Impairment on debt instruments measured at amortized cost is calculated using the expected credit loss approach. Loans and debt securities measured at amortized cost are presented net of the allowance for credit losses (ACL) in the statement of financial position.

Debt instruments measured at FVOCI

Debt instruments are measured at FVOCI if they are held within a business model whose objective is to hold for collection of contractual cash flows and for selling financial assets, where the assets’ cash flows represent payments that are solely payments of principal and interest. Subsequent to initial recognition, unrealized gains and losses on debt instruments measured at FVOCI are recorded in other comprehensive income (OCI), unless the instrument is designated in a fair value hedge relationship. When designated in a fair value hedge relationship, any changes in fair value due to changes in the hedged risk are recognized in Non-interest income in the Consolidated Statement of Income. Upon derecognition, realized gains and losses are reclassified from OCI and recorded in Non-interest income in the Consolidated Statement of Income on an average cost basis. Foreign exchange gains and losses that relate to the amortized cost of the debt instrument are recognized in the Consolidated Statement of Income. Premiums, discounts and related transaction costs are amortized over the expected life of the instrument to Interest income in the Consolidated Statement of Income using the effective interest rate method.

Impairment on debt instruments measured at FVOCI is calculated using the expected credit loss approach. The ACL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the Consolidated Statement of Financial Position, which remains at its fair value. Instead, an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to Provision for credit losses in the Consolidated Statement of Income. The accumulated allowance recognised in OCI is recycled to the Consolidated Statement of Income upon derecognition of the debt instrument.

Debt instruments measured at FVTPL

Debt instruments are measured at FVTPL if assets:

i) Are held for trading purposes;

ii) Are held as part of a portfolio managed on a fair value basis; or

iii) Whose cash flows do not represent payments that are solely payments of principal and interest.

These instruments are measured at fair value in the Consolidated Statement of Financial Position, with transaction costs recognized immediately in the Consolidated Statement of Income as part of Non-interest income. Realized and unrealized gains and losses are recognized as part of Non-interest income in the Consolidated Statement of Income.

Debt instruments designated at FVTPL

Financial assets classified in this category are those that have been designated by the Bank upon initial recognition, and once designated, the designation is irrevocable. The FVTPL designation is available only for those financial assets for which a reliable estimate of fair value can be obtained. Financial assets are designated at FVTPL if doing so eliminates or significantly reduces an accounting mismatch which would otherwise arise.

Financial assets designated at FVTPL are recorded in the Consolidated Statement of Financial Position at fair value. Changes in fair value are recognized in Non-interest income in the Consolidated Statement of Income.

Equity instruments

Equity instruments are classified into one of the following measurement categories:

• Fair value through profit or loss (FVTPL); or

• Elected at fair value through other comprehensive income (FVOCI).

Equity instruments measured at FVTPL

Equity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase, with transaction costs recognized immediately in the Consolidated Statement of Income as part of Non-interest income. Subsequent to initial recognition the changes in fair value are recognized as part of Non-interest income in the Consolidated Statement of Income.

Equity instruments measured at FVOCI

At initial recognition, there is an irrevocable option for the Bank to classify non-trading equity instruments at FVOCI. This election is used for certain equity investments for strategic or longer term investment purposes. This election is made on an instrument-by-instrument basis and is not available to equity instruments that are held for trading purposes.

Gains and losses on these instruments including when derecognized/sold are recorded in OCI and are not subsequently reclassified to the Consolidated Statement of Income. As such, there is no specific impairment requirement. Dividends received are recorded in Interest income in the Consolidated Statement of Income. Any transaction costs incurred upon purchase of the security are added to the cost basis of the security and are not reclassified to the Consolidated Statement of Income on sale of the security.

Classification and measurement of financial liabilities

Financial liabilities are classified into one of the following measurement categories:

• Fair value through profit or loss (FVTPL);

• Amortized cost; or

• Designated at FVTPL.

Financial liabilities measured at FVTPL

Financial liabilities measured at FVTPL are held principally for the purpose of repurchasing in the near term, or form part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. Financial liabilities are recognized on a trade date basis and are accounted for at fair value, with changes in fair value and any gains or losses recognized in the Consolidated Statement of Income as part of the non-interest income. Transaction costs are expensed as incurred.

Financial liabilities measured at amortized cost

Deposits, subordinated notes and debentures are accounted for at amortized cost. Interest on deposits, calculated using the effective interest rate method, is recognized as interest expense. Interest on subordinated notes and debentures, including capitalized transaction costs, is recognized using the effective interest rate method as interest expense.

Financial liabilities designated at FVTPL

Financial liabilities classified in this category are those that have been designated by the Bank upon initial recognition, and once designated, the designation is irrevocable. The FVTPL designation is available only for those financial liabilities for which a reliable estimate of fair value can be obtained.

Financial liabilities are designated at FVTPL when one of the following criteria is met:

• The designation eliminates or significantly reduces an accounting mismatch which would otherwise arise; or

• A group of financial liabilities are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management strategy; or

• The financial liability contains one or more embedded derivatives which significantly modify the cash flows otherwise required.

Financial liabilities designated at FVTPL are recorded in the Consolidated Statement of Financial Position at fair value. Any changes in fair value are recognized in Non-interest income in the Consolidated Statement of Income, except for changes in fair value arising from changes in the Bank’s own credit risk which are recognized in the OCI. Changes in fair value due to changes in the Bank’s own credit risk are not subsequently reclassified to Consolidated Statement of Income upon derecognition/extinguishment of the liabilities.

Determination of fair value

Fair value of a financial asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal, or in its absence, the most advantageous market to which the Bank has access at the measurement date.

The Bank values instruments carried at fair value using quoted market prices, where available. Unadjusted quoted market prices for identical instruments represent a Level 1 valuation. When quoted market prices are not available, the Bank maximizes the use of observable inputs within valuation models. When all significant inputs are observable, the valuation is classified as Level 2. Valuations that require the significant use of unobservable inputs are considered Level 3.

Inception gains and losses are only recognized where the valuation is dependent only on observable market data, otherwise, they are deferred and amortized over the life of the related contract or until the valuation inputs become observable.

IFRS 13 permits 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 has adopted this exception through an accounting policy choice. Consequently, the fair values of certain portfolios of financial instruments are determined based on the net exposure of those instruments to particular market, credit or funding risk.

In determining fair value for certain instruments or portfolios of instruments, valuation adjustments or reserves may be required to arrive at a more accurate representation of fair value. These adjustments include those made for credit risk, bid-offer spreads, unobservable parameters, constraints on prices in inactive or illiquid markets and when applicable funding costs.

Derecognition of financial assets and liabilities

Derecognition of financial assets

The derecognition criteria are applied to the transfer of part of an asset, rather than the asset as a whole, only if such part comprises specifically identified cash flows from the asset, a fully proportionate share of the cash flows from the asset, or a fully proportionate share of specifically identified cash flows from the asset.

A financial asset is derecognized when the contractual rights to the cash flows from the asset has expired; or the Bank transfers the contractual rights to receive the cash flows from the financial asset; or has assumed an obligation to pay those cash flows to an independent third-party; or the Bank has transferred substantially all the risks and rewards of ownership of that asset to an independent third-party. Management determines whether substantially all the risk and rewards of ownership have been transferred by quantitatively comparing the variability in cash flows before and after the transfer. If the variability in cash flows remains significantly similar subsequent to the transfer, the Bank has retained substantially all of the risks and rewards of ownership.

Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Bank derecognizes the transferred asset only if it has lost control over that asset. Control over the asset is represented by the practical ability to sell the transferred asset. If the Bank retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement. At times such continuing involvement may be in the form of investment in senior or subordinated tranches of notes issued by non-consolidated structured entities.

On derecognition of a financial asset, the difference between the carrying amount and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in other comprehensive income is recognized in the Consolidated Statement of Income.

Transfers of financial assets that do not qualify for derecognition are reported as secured financings in the Consolidated Statement of Financial Position.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, canceled or expires. If an existing financial liability is replaced by another from the same counterparty on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability at fair value. The difference in the respective carrying amount of the existing liability and the new liability is recognized as a gain/loss in the Consolidated Statement of Income.

Impairment

Scope

The Bank applies a three-stage approach to measure allowance for credit losses, using an expected credit loss approach as required under IFRS 9, for the following categories of financial instruments that are not measured at fair value through profit or loss:

• Amortized cost financial assets;

• Debt securities classified as at FVOCI;

• Off-balance sheet loan commitments; and

• Financial guarantee contracts.

Expected credit loss impairment model

The Bank’s allowance for credit losses calculations are outputs of models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. The expected credit loss impairment model reflects the present value of all cash shortfalls related to default events either (i) over the following twelve months or (ii) over the expected life of a financial instrument depending on credit deterioration from inception. The allowance for credit losses reflects an unbiased, probability-weighted outcome which considers multiple scenarios based on reasonable and supportable forecasts.

This impairment model measures credit loss allowances using a three-stage approach based on the extent of credit deterioration since origination:

• Stage 1 – Where there has not been a significant increase in credit risk (SIR) since initial recognition of a financial instrument, an amount equal to 12 months expected credit loss is recorded. The expected credit loss is computed using a probability of default occurring over the next 12 months. For those instruments with a remaining maturity of less than 12 months, a probability of default corresponding to remaining term to maturity is used.

• Stage 2 – When a financial instrument experiences a SIR subsequent to origination but is not considered to be in default, it is included in Stage 2. This requires the computation of expected credit loss based on the probability of default over the remaining estimated life of the financial instrument.

• Stage 3 – Financial instruments that are considered to be in default are included in this stage. Similar to Stage 2, the allowance for credit losses captures the lifetime expected credit losses.

Measurement of expected credit loss

The probability of default (PD), exposure at default (EAD), and loss given default (LGD) inputs used to estimate expected credit losses are modelled based on macroeconomic variables that are most closely related with credit losses in the relevant portfolio.

Details of these statistical parameters/inputs are as follows:

• PD – The probability of default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the remaining estimated life, if the facility has not been previously derecognized and is still in the portfolio.

• EAD – The exposure at default is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments.

• LGD – The loss given default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realization of any collateral. It is usually expressed as a percentage of the EAD.

Forward-looking information

The estimation of expected credit losses for each stage and the assessment of significant increases in credit risk consider information about past events and current conditions as well as reasonable and supportable forecasts of future events and economic conditions. The estimation and application of forward-looking information may require significant judgment.

Macroeconomic factors

In its models, the Bank relies on a broad range of forward-looking economic information as inputs, such as: GDP growth, unemployment rates, central-bank interest rates, and house-price indices. The inputs and models used for calculating expected credit losses may not always capture all characteristics of the market at the date of the financial statements. To reflect this, qualitative adjustments or overlays may be made as temporary adjustments using expert credit judgment.

Multiple forward-looking scenarios

The Bank determines its allowance for credit losses using three probability-weighted forward-looking scenarios. The Bank considers both internal and external sources of information and data in order to achieve an unbiased projections and forecasts. The Bank prepares the scenarios using forecasts generated by Scotiabank Economics (SE). The forecasts are created using internal and external models which are modified by SE as necessary to formulate a ‘base case’ view of the most probable future direction of relevant economic variables as well as a representative range of other possible forecast scenarios. The process involves the development of two additional economic scenarios and consideration of the relative probabilities of each outcome.

The ‘base case’ represents the most likely outcome and is aligned with information used by the Bank for other purposes such as strategic planning and budgeting. The other scenarios represent more optimistic and more pessimistic outcomes. The Bank has identified and documented key drivers of credit risk and credit losses for each portfolio of financial instruments and, using an analysis of historical data, has estimated relationships between macroeconomic variables, credit risk, and credit losses.

Assessment of significant increase in credit risk (SIR)

At each reporting date, the Bank assesses whether there has been a significant increase in credit risk for exposures since initial recognition by comparing the risk of default occurring over the remaining expected life from the reporting date and the date of initial recognition. The assessment considers borrower-specific quantitative and qualitative information without consideration of collateral, and the impact of forward-looking macroeconomic factors.

The common assessments for SIR on retail and non-retail portfolios include macroeconomic outlook, management judgement, and delinquency and monitoring. Forward-looking macroeconomic factors are a key component of the macroeconomic outlook. The importance and relevance of each specific macroeconomic factor depends on the type of product, characteristics of the financial instruments and the borrower and the geographical region. Quantitative models may not always be able to capture all reasonable and supportable information that may indicate a significant increase in credit risk. Qualitative factors may be assessed to supplement the gap. Examples of situations include changes in adjudication criteria for a particular group of borrowers; changes in portfolio composition; and natural disasters impacting certain portfolios. With regards to delinquency and monitoring, there is a rebuttable presumption that the credit risk of the financial instrument has increased since initial recognition when contractual payments are more than 30 days overdue.

Retail portfolio – For retail exposures, a significant increase in credit risk cannot be assessed using forward looking information at an individual account level. Therefore, the assessment must be done at the segment level. Segment migration thresholds exist for each PD model by product which considers the proportionate change in PD as well as the absolute change in PD. The thresholds used for PD migration are reviewed and assessed at least annually, unless there is a significant change in credit risk management practices in which case the review is brought forward.

Non-retail portfolio – The Bank uses a risk rating scale (IG codes) for its non-retail exposures. All non-retail exposures have an IG code assigned that reflects the probability of default of the borrower. Both borrower specific and non-borrower specific (i.e. macroeconomic) forward looking information is considered and reflected in the IG rating. Significant increase in credit risk is evaluated based on the migration of the exposures among IG codes.

Expected life

When measuring expected credit loss, the Bank considers the maximum contractual period over which the Bank is exposed to credit risk. All contractual terms are considered when determining the expected life, including prepayment, and extension and rollover options. For certain revolving credit facilities, such as credit cards, the expected life is estimated based on the period over which the Bank is exposed to credit risk and how the credit losses are mitigated by management actions.

Presentation of allowance for credit losses in the Statement of Financial Position

• Financial assets measured at amortized cost: as a deduction from the gross carrying amount of the financial assets;

• Debt instruments measured at fair value through other comprehensive income: no allowance is recognized in the Statement of Financial Position because the carrying value of these assets is their fair value. However, the allowance determined is presented in the accumulated other comprehensive income;

• Off-balance sheet credit risks include undrawn lending commitments, letters of credit and letters of guarantee: as a provision in other liabilities.

Modified financial assets

If the terms of a financial asset are modified or an existing financial asset is replaced with a new one, an assessment is made to determine if the existing financial asset should be derecognized. Where a modification does not result in derecognition, the date of origination continues to be used to determine SIR. Where a modification results in derecognition, the new financial asset is recognized at its fair value on the modification date. The modification date is also the date of origination for this new asset.

The Bank may modify the contractual terms of loans for either commercial or credit reasons. The terms of a loan in good standing may be modified for commercial reasons to provide competitive pricing to borrowers. Loans are also modified for credit reasons where the contractual terms are modified to grant a concession to a borrower that may be experiencing financial difficulty.

For all financial assets modifications of the contractual terms may result in derecognition of the original asset when the changes to the terms of the loans are considered substantial. These terms include interest rate, authorized amount, term, or type of underlying collateral. The original loan is derecognized and the new loan is recognized at its fair value. The difference between the carrying value of the derecognized asset and the fair value of the new asset is recognized in the Income Statement.

For all loans, performing and credit-impaired, where the modification of terms did not result in the derecognition of the loan, the gross carrying amount of the modified loan is recalculated based on the present value of the modified cash flows discounted at the original effective interest rate and any gain or loss from the modification is recorded in the provision for credit losses line in the income statement.

Definition of default

The Bank considers a financial instrument to be in default as a result of one or more loss events that occurred after the date of initial recognition of the instrument and the loss event has a negative impact on the estimated future cash flows of the instrument that can be reliably estimated. This includes events that indicate:

• significant financial difficulty of the borrower;

• default or delinquency in interest or principal payments;

• high probability of the borrower entering a phase of bankruptcy or a financial reorganization;

• measurable decrease in the estimated future cash flows from the loan or the underlying assets that back the loan.

The Bank considers that default has occurred and classifies the financial asset as impaired when it is more than 90 days past due, with the exception of credit card receivables that are treated as defaulted when 180 days past due, unless reasonable and supportable information demonstrates that a more lagging default criterion is appropriate.

Write-off policy

The Bank writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. Where financial assets are secured, write-off is generally after receipt of any proceeds from the realization of security. In circumstances where the net realizable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier. Credit card receivables 180 days past due are written-off. In subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the Consolidated Statement of Income.

Purchased loans

All purchased loans are initially measured at fair value on the date of acquisition. As a result no allowance for credit losses would be recorded in the Consolidated Statement of Financial Position on the date of acquisition. Purchased loans may fit into either of the two categories: Performing loans or Purchased Credit Impaired (PCI) loans.

Purchased performing loans follow the same accounting as originated performing loans and are reflected in Stage 1 on the date of the acquisition. They will be subject to a 12-month allowance for credit losses which is recorded as a provision for credit losses in the Consolidated Statement of Income. The fair value adjustment set up for these loans on the date of acquisition is amortized into interest income over the life of these loans.

PCI loans are reflected in Stage 3 and are always subject to lifetime allowance for credit losses. Any changes in the expected cash flows since the date of acquisition are recorded as a charge/recovery in the provision for credit losses in the Consolidated Statement of Income at the end of all reporting periods subsequent to the date of acquisition.

Classification and measurement, derecognition, and impairment of financial instruments effective prior to November 1, 2017

Trading assets and liabilities

Trading assets and liabilities are measured at fair value in the Consolidated Statement of Financial Position, with transaction costs recognized immediately in the Consolidated Statement of Income as part of non-interest income – trading revenues. Gains and losses realized on disposal and unrealized gains and losses due to fair value changes on trading assets and liabilities, other than certain derivatives, are recognized as part of non-interest income – trading revenues in the Consolidated Statement of Income. Trading assets and liabilities are not reclassified subsequent to their initial recognition.

Investment securities

Investment securities are comprised of available-for-sale and held-to-maturity securities.

Available-for-sale investment securities

Available-for-sale investment securities include equity and debt securities. Equity investments classified as available-for-sale are those which are neither classified as held-for-trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

Available-for-sale investment securities are recorded at fair value with unrealized gains and losses recorded in other comprehensive income. When realized, these gains and losses are reclassified from the Consolidated Statement of Comprehensive Income and recorded in the Consolidated Statement of Income on an average cost basis. For non-monetary investment securities designated as available-for-sale, the gain or loss recognized in other comprehensive income includes any related foreign exchange gains or losses. Foreign exchange gains and losses that relate to the amortized cost of an available-for-sale debt security are recognized in the Consolidated Statement of Income.

Premiums, discounts and related transaction costs on available-for-sale debt securities are amortized over the expected life of the instrument to interest income – securities in the Consolidated Statement of Income using the effective interest method.

Transaction costs on available-for-sale equity securities are initially capitalized and then recognized as part of the net realized gain/loss on subsequent sale of the instrument in the Consolidated Statement of Income.

Held-to-maturity investment securities

Held-to-maturity investment securities are non-derivative assets with fixed or determinable payments and fixed maturity that the Bank has the positive intent and ability to hold to maturity, and which do not meet the definition of a loan, are not held-for-trading, and are not designated at fair value through profit or loss or as available-for-sale. After initial measurement, held-to-maturity investment securities are carried at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the effective interest rate. The amortization is included in interest income – securities in the Consolidated Statement of Income.

A sale or reclassification of a more than an insignificant amount of held-to-maturity investments would result in the reclassification of all held-to-maturity investments as available-for-sale, and would prevent the Bank from classifying investment securities as held-to-maturity for the current and the following two financial years. However, sales and reclassifications in any of the following circumstances would not trigger a reclassification:

• Sales or reclassifications that are so close to maturity that changes in the market rate of interest would not have a significant effect on the financial asset’s fair value;

• Sales or reclassifications after the Bank has collected substantially all of the asset’s original principal; or

• Sales or reclassifications attributable to non-recurring isolated events beyond the Bank’s control that could not have been reasonably anticipated.

Impairment of investment securities

Investment securities are evaluated for impairment at the end of each reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

In the case of equity instruments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its original cost is objective evidence of impairment. In the case of debt instruments classified as available-for-sale and held-to-maturity investment securities, impairment is assessed based on the same criteria as impairment of loans.

When a decline in value of available-for-sale debt or equity instrument is due to impairment, the carrying value of the security continues to reflect fair value. Losses arising from impairment are reclassified from accumulated other comprehensive income and included in net gain on investment securities within non-interest income in the Consolidated Statement of Income.

The losses arising from impairment of held-to-maturity investment securities are recognized in net gain on investment securities within non-interest income in the Consolidated Statement of Income.

Reversals of impairment losses on available-for-sale debt instruments resulting from increases in fair value related to events occurring after the date of impairment are included in net gain on investment securities within non-interest income in the Consolidated Statement of Income, to a maximum of the original impairment charge. Reversals of impairment on available-for-sale equity instruments are not recognized in the Consolidated Statement of Income; increases in fair value of such instruments after impairment are recognized in accumulated other comprehensive income.

Reversals of impairment losses on held-to-maturity investment securities are included in net gain on investment securities within non-interest income in the Consolidated Statement of Income, to a maximum of the amortized cost of the investment before the original impairment charge.

Financial assets and liabilities designated at fair value through profit or loss

Financial assets and financial liabilities classified in this category are those that have been designated by the Bank on initial recognition. The Bank may only designate an instrument at fair value through profit or loss when one of the following criteria is met, and designation is determined on an instrument by instrument basis:

• The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or liabilities on a different basis; or

• The assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed together and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy and the information about the group is provided to key management personnel and it can be demonstrated that significant financial risks are eliminated or significantly reduced; or

• The financial instrument contains one or more embedded derivatives which significantly modify the cash flows otherwise required.

Financial assets and financial liabilities designated at fair value through profit or loss are recorded in the Consolidated Statement of Financial Position at fair value. For assets designated at fair value through profit or loss, changes in fair value are recognized in the Consolidated Statement of Income. For liabilities designated at fair value through profit or loss, changes in fair value arising from changes in the Bank’s own credit risk are recognized in the Consolidated Statement of Comprehensive Income (OCI), without subsequent reclassification to the Consolidated Statement of Income, unless doing so would create or increase an accounting mismatch. All other changes in fair value are recognized in the Consolidated Statement of Income.

Loans

Loans include loans and advances originated or purchased by the Bank which are not classified as held-for-trading, held-to-maturity or designated at fair value. Debt securities, which are not trading securities or have not been designated as available-for-sale securities and that are not quoted in an active market, are also classified as loans.

Loans originated by the Bank are recognized when cash is advanced to a borrower. Loans purchased are recognized when cash consideration is paid by the Bank. Loans are measured at amortized cost using the effective interest method, less any impairment losses. Loans are stated net of allowance for credit losses.

Derecognition of financial assets and liabilities

Derecognition of financial assets

The derecognition criteria are applied to the transfer of part of an asset, rather than the asset as a whole, only if such part comprises specifically identified cash flows from the asset, a fully proportionate share of the cash flows from the asset, or a fully proportionate share of specifically identified cash flows from the asset.

A financial asset is derecognized when the contractual rights to the cash flows from the asset has expired; or the Bank transfers the contractual rights to receive the cash flows from the financial asset; or has assumed an obligation to pay those cash flows to an independent third-party; or the Bank has transferred substantially all the risks and rewards of ownership of that asset to an independent third-party. Management determines whether substantially all the risk and rewards of ownership have been transferred by quantitatively comparing the variability in cash flows before and after the transfer. If the variability in cash flows remains significantly similar subsequent to the transfer, the Bank has retained substantially all of the risks and rewards of ownership.

Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Bank derecognizes the transferred asset only if it has lost control over that asset. Control over the asset is represented by the practical ability to sell the transferred asset. If the Bank retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement. At times such continuing involvement may be in the form of investment in senior or subordinated tranches of notes issued by non-consolidated structured entities.

On derecognition of a financial asset, the difference between the carrying amount and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in other comprehensive income is recognized in the Consolidated Statement of Income.

Transfers of financial assets that do not qualify for derecognition are reported as secured financings in the Consolidated Statement of Financial Position.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, canceled or expires. If an existing financial liability is replaced by another from the same counterparty on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability at fair value. The difference in the respective carrying amount of the existing liability and the new liability is recognized as a gain/loss in the Consolidated Statement of Income.

Loan impairment and allowance for credit losses:

The Bank considers a loan to be impaired when there is objective evidence of impairment as a result of one or more loss events that occurred after the date of initial recognition of the loan and the loss event has an impact on the estimated future cash flows of the loan that can be reliably estimated.

Objective evidence is represented by observable data that comes to the attention of the Bank and includes events that indicate:

• significant financial difficulty of the borrower;

• a default or delinquency in interest or principal payments;

• a high probability of the borrower entering a phase of bankruptcy or a financial reorganization;

• a measurable decrease in the estimated future cash flows from the loan or the underlying assets that back the loan.

If a payment on a loan is contractually 90 days in arrears, the loan will be classified as impaired, if not already classified as such, unless the loan is fully secured, the collection of the debt is in process, and the collection efforts are reasonably expected to result in repayment of the loan or in restoring it to a current status within 180 days from the date a payment has become contractually in arrears. Finally, a loan that is contractually 180 days in arrears is classified as impaired in all situations, except when it is guaranteed or insured by the Canadian government, the provinces or a Canadian government agency; such loans are classified as impaired if the loan is contractually in arrears for 365 days. Any credit card loan that has a payment that is contractually 180 days in arrears is written off.

Losses expected as a result of future events are not recognized.

The Bank considers evidence of impairment for loans and advances at both an individual and collective level.

Individual impairment allowance

For all loans that are considered individually significant, the Bank assesses on a case-by-case basis at each reporting period whether an individual allowance for loan losses is required.

For those loans where objective evidence of impairment exists and the Bank has determined the loan to be impaired, impairment losses are determined based on the Bank’s aggregate exposure to the customer considering the following factors:

• the customer’s ability to generate sufficient cash flow to service debt obligations;

• the extent of other creditors’ commitments ranking ahead of, or pari passu with, the Bank and the likelihood of other creditors continuing to support the company;

• the complexity of determining the aggregate amount and ranking of all creditor claims and the extent to which legal and insurance uncertainties are evident; and

• the realizable value of security (or other credit mitigants) and likelihood of successful repossession.

Impairment losses are calculated by discounting the expected future cash flows of a loan at its original effective interest rate, and comparing the resultant present value with the loan’s current carrying amount. This results in interest income being recognized using the original effective interest rate.

Collective impairment allowance

For loans that have not been individually assessed as being impaired, the Bank pools them into groups to assess them on a collective basis. Collective allowances are calculated for impaired loans and performing loans. Allowances related to performing loans estimate probable incurred losses that are inherent in the portfolio but have not yet been specifically identified as impaired.

Internal risk rating parameters are used in the calculation of the collective impairment allowance. For non-retail loan portfolios, internal risk rating parameters form the basis for calculating the quantitative portion of the collective allowance for performing loans:

• Probability of Default rates (PD) which are based upon the internal risk rating for each borrower;

• Loss Given Default rates (LGD); and

• Exposure at Default factors (EAD).

Funded exposures are multiplied by the borrower’s PD and by the relevant LGD parameter.

Committed but undrawn exposures are multiplied by the borrower’s PD, by the relevant LGD parameter, and by the relevant EAD parameter. A model stress component is also applied to recognize uncertainty in the credit risk parameters and the fact that current actual loss rates may differ from the long-term averages included in the model.

Retail loans

Retail loans represented by residential mortgages, credit cards and other personal loans are considered by the Bank to be homogeneous groups of loans that are not considered individually significant. All homogeneous groups of loans are assessed for impairment on a collective basis.

Mortgages are collectively assessed for impairment, taking into account number of days past due, historical loss experience and incorporating both quantitative and qualitative factors including the current business and economic environment and the realizable value of collateral to determine the appropriate level of the collective impairment allowance.

A roll rate methodology is used to determine impairment losses on a collective basis for credit cards and other personal loans because individual loan assessment is impracticable. Under this methodology, loans with similar credit characteristics are grouped into ranges according to the number of days past due and statistical analysis is used to estimate the likelihood that loans in each range will progress through the various stages of delinquency and ultimately prove irrecoverable. This methodology employs statistical analyses of historical data and experience of delinquency and default to estimate the amount of loans that will eventually be written off as a result of the events not identifiable on an individual loan basis. When the portfolio size is small or when information is insufficient or not reliable enough to adopt a roll rate methodology, the Bank adopts a basic formulaic approach based on historical loss rate experience.

Performing loans

Over and above the individually assessed and retail roll rate allowances, loans that were subject to individual assessment for which no evidence of impairment existed, are grouped together according to their credit risk characteristics for the purpose of reassessing them on a collective basis. This reflects impairment losses that the Bank has incurred as a result of events that have occurred but where the individual loss has not been identified.

The collective impairment allowance for such loans is determined after taking into account:

• historical loss experience in portfolios of similar credit risk characteristics (for example, by industry sector, loan grade or product);

• the estimated period between impairment occurring and the loss being identified and evidenced by the establishment of an appropriate allowance against the individual loan; and

• management’s experienced judgment as to whether current economic and credit conditions are such that the actual level of inherent losses at the reporting date is likely to be greater or less than that suggested by historical experience. As soon as information becomes available which identifies losses on individual loans within the group, those loans are removed from the group and assessed on an individual basis for impairment.

Provision for credit losses on off-balance sheet positions

A provision is set up for the Bank’s off-balance sheet positions and recorded in other liabilities on the Consolidated Statement of Financial Position. The process to determine the provision for off-balance sheet positions is similar to the methodology used for loans. Any change in the provision is recorded in the Consolidated Statement of Income as provision for credit losses.

Write-off of loans

Loans (and the related impairment allowance accounts) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans are secured, write-off is generally after receipt of any proceeds from the realization of security. In circumstances where the net realizable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier.

Reversals of impairment

If the amount of an impairment loss related to loans decreases in a subsequent period, and the decrease can be related objectively to an event occurring after the impairment was recognized, the excess is written back by reducing the loan impairment allowance account accordingly. The write-back is recognized in the provision for credit losses in the Consolidated Statement of Income.

Restructured loans

Restructured loans include loans where the Bank has renegotiated the original terms of a loan by granting a concession to the borrower (concessions). These concessions include interest rate adjustments, deferral or extension of principal or interest payments and forgiveness of a portion of principal or interest. Once the terms of the loan have been renegotiated and agreed upon with the borrower the loan is considered a restructured loan. The investment in the loan is reduced as of the date of the restructuring to the amount of the net expected cash flows receivable under the modified terms, discounted at the original effective interest rate inherent in the loan. The loan is no longer considered past due and the reduction in the carrying value of the loan is recognized as a charge for loan impairment in the Consolidated Statement of Income in the period in which the loan is restructured. In other cases, restructuring may be considered substantial enough to result in recognition of a new loan.

Offsetting of financial instruments

Financial assets and financial liabilities with the same counterparty are offset, with the net amount reported in the Consolidated Statement of Financial Position, only if there is currently a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. When financial assets and financial liabilities are offset in the Consolidated Statement of Financial Position, the related income and expense items will also be offset in the Consolidated Statement of Income, unless specifically prohibited by an applicable accounting standard.

Cash and deposits with financial institutions

Cash and deposits with financial institutions comprises cash, cash equivalents, demand deposits with banks and other financial institutions, highly liquid investments that are readily convertible to cash, subject to insignificant risk of changes in value. These investments are those with less than three months’ maturity from the date of acquisition.

Precious metals

Precious metals are carried at fair value less costs to sell, and any changes in fair value less costs to sell are credited or charged to non-interest income – trading revenues in the Consolidated Statement of Income.

Securities purchased and sold under resale agreements

Securities purchased under resale agreements (reverse repurchase agreements) involve the Bank to purchase securities from a counterparty with an agreement entered to resell the securities at a fixed price at a future date. Since the Bank is reselling the securities at a fixed price at a future date, the risks and rewards have not been transferred to the Bank. The Bank has the right to liquidate the securities purchased in the event of counterparty default.

Whereas, securities sold under agreements to repurchase (repurchase agreements) involve the Bank to sell securities to a counterparty with an agreement entered simultaneously to purchase the securities back at a fixed price at a future date. Since the Bank is purchasing the securities back at a fixed price at a future date, the risks and rewards have not been transferred from the Bank. The counterparty has the right to use the collateral pledged by the Bank in the event of default.

These agreements are treated as collateralized financing arrangements and are initially recognized at amortized cost. The party disbursing the cash takes possession of the securities serving as collateral for the financing and having a market value equal to, or in excess of, the principal amount loaned. The securities received under reverse repurchase agreements and securities delivered under repurchase agreements are not recognized on, or derecognized from, the Consolidated Statement of Financial Position, unless the risks and rewards of ownership are obtained or relinquished. The related interest income and interest expense are recorded on an accrual basis using the effective interest rate method in interest income on the Consolidated Statement of Income.

Obligations related to securities sold short

Obligations related to securities sold short arise in dealing and market-making activities where debt securities and equity shares are sold without possessing such securities.

Similarly, if securities purchased under an agreement to resell are subsequently sold to third parties, the obligation to return the securities is recorded as a short sale within obligations related to securities sold short in the Consolidated Statement of Financial Position. These trading liabilities are measured at fair value with any gains or losses included in non-interest income – trading revenues in the Consolidated Statement of Income. Interest expense accruing on debt securities sold short is recorded in interest expense – other, in the Consolidated Statement of Income.

Securities lending and borrowing

Securities lending and borrowing transactions are usually collateralized by securities or cash. The transfer of the securities to counterparties is only reflected on the Consolidated Statement of Financial Position if the risks and rewards of ownership are also transferred. For cash collateral advanced or received, the Bank presents these transactions as securities sold under repurchase agreement or securities purchased under reverse repurchase agreement, respectively. Interest on cash collateral advanced or received is presented in interest income – securities purchased under resale agreements and securities borrowed or interest expense – other, respectively. Fees received and paid are reported as fee and commission revenues and expenses in the Consolidated Statement of Income, respectively.

Securities borrowed are not recognized on the Consolidated Statement of Financial Position, unless they are then sold to third parties, in which case the obligation to return the securities is recorded as a trading liability and measured at fair value with any gains or losses included in non-interest income – trading revenues, in the Consolidated Statement of Income.

Derivative instruments

Derivative instruments are contracts whose value is derived from interest rates, foreign exchange rates, commodities, equity prices or other financial variables. Most derivative instruments can be characterized as interest rate contracts, foreign exchange and gold contracts, commodity contracts, equity contracts or credit contracts. Derivative instruments are either exchange-traded contracts or negotiated over-the-counter contracts. Negotiated over-the-counter contracts include swaps, forwards and options.

The Bank enters into these derivative contracts for trading purposes, as well as to manage its risk exposures (i.e., to manage the Bank’s non-trading interest rate, foreign currency and other exposures). Trading activities are undertaken to meet the needs of the Bank’s customers, as well as for the Bank’s own account to generate income from trading operations.

Derivatives embedded in other financial liabilities or host contracts are treated as separate derivatives when the following conditions are met:

• their economic characteristics and risks are not closely related to those of the host contract;

• a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and

• the combined contract is not held for trading or designated at fair value through profit or loss.

Where an embedded derivative is separable from the host contract but the fair value, as at the acquisition or reporting date, cannot be reliably measured separately, the entire combined contract is measured at fair value. All embedded derivatives are presented on a combined basis with the host contracts although they are separated for measurement purposes when conditions requiring separation are met. Subsequent changes in fair value of embedded derivatives are recognized in non-interest income in the Consolidated Statement of Income.

All derivatives, including embedded derivatives that must be separately accounted for, are recorded at fair value in the Consolidated Statement of Financial Position. The determination of the fair value of derivatives includes consideration of credit risk, estimated funding costs and ongoing direct costs over the life of the instruments. Inception gains or losses on derivatives are only recognized where the valuation is dependent only on observable market data, otherwise, they are deferred and amortized over the life of the related contract, or until the valuation inputs become observable.

The gains and losses resulting from changes in fair values of trading derivatives are included in non-interest income – trading revenues in the Consolidated Statement of Income.

Changes in the fair value of non-trading derivatives that do not qualify for hedge accounting are recorded in the Consolidated Statement of Income in non-interest income – other. Where derivative instruments are used to manage the volatility of share-based payment expense, these derivatives are carried at fair value with changes in the fair value in relation to units hedged included in non-interest expenses – salaries and employee benefits in the Consolidated Statement of Income.

Changes in the fair value of derivatives that qualify for hedge accounting are recorded as non-interest income – other in the Consolidated Statement of Income for fair value hedges and other comprehensive income in the Consolidated Statement of Comprehensive Income for cash flow hedges and net investment hedges.

Hedge accounting

The Bank has elected to continue to apply the hedge accounting requirements of IAS 39. However, the Bank has implemented the additional hedge accounting disclosures that are required by the IFRS 9 related amendments to IFRS 7 “Financial Instruments: Disclosures”.

The Bank formally documents all hedging relationships and its risk management objective and strategy for undertaking these hedge transactions at inception. The hedge documentation includes identification of the asset, liability, firm commitment or highly probable forecasted transaction being hedged, the nature of the risk being hedged, the hedging instrument used and the method used to assess the effectiveness of the hedge. The Bank also formally assesses, both at each hedge’s inception and on an ongoing basis, whether the hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items. Hedge ineffectiveness is measured and recorded in non-interest income – other in the Consolidated Statement of Income.

There are three types of hedges: (i) fair value hedges, (ii) cash flow hedges and (iii) net investment hedges.

Fair value hedges

For fair value hedges, the change in fair value of the hedging instrument is offset in the Consolidated Statement of Income by the change in fair value of the hedged item attributable to the hedged risk. For hedges that are discontinued, the hedged item is no longer adjusted for changes in fair value. The cumulative fair value adjustment of the hedged item is amortized to non-interest income over its remaining term to maturity or written off to non-interest income directly if the hedged item ceases to exist. The Bank utilizes fair value hedges primarily to convert fixed rate financial instruments to floating rate financial instruments. Hedged items include debt securities, loans, deposit liabilities and subordinated debentures. Hedging instruments include single-currency interest rate swaps and cross-currency interest rate swaps.

Cash flow hedges

For cash flow hedges, the change in fair value of the hedging instrument, to the extent effective, is recorded in other comprehensive income until the corresponding gains and losses on the hedged item is recognized in income. For hedges that are discontinued, the cumulative unrealized gain or loss recognized in other comprehensive income is reclassified to non-interest income and/or salaries and employee benefits as the variability in the cash flows of hedged item affects income. However, if the hedged item is derecognized or the forecasted transaction is no longer expected to occur, the unrealized gain or loss is reclassified immediately to non-interest income and/or salaries and employee benefits. The Bank utilizes cash flow hedges primarily to hedge the variability in cash flows relating to floating rate financial instruments and highly probable forecasted revenues and expenses. Hedged items include debt securities, loans, deposit liabilities and highly probable forecasted transactions. Hedging instruments include single-currency interest rate swaps, cross-currency interest rate swaps, total return swaps, foreign currency forwards and foreign currency assets or liabilities.

Net investment hedges

For net investment hedges, the change in fair value of the hedging instrument, to the extent effective, is recorded in other comprehensive income until the corresponding cumulative translation adjustments on the hedged net investment are recognized in income. The Bank designates foreign currency liabilities and foreign currency forwards as hedging instruments to manage the foreign currency exposure and impact on capital ratios arising from foreign operations.

Property and equipment

Land, buildings and equipment

Land is carried at cost. Buildings (including building fittings), equipment, and leasehold improvements are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset. Depreciation is calculated using the straight-line method over the estimated useful life of the related asset less any residual value as follows: buildings – 40 years, building fittings – 15 years, equipment 3 to 10 years, and leasehold improvements – lease term determined by the Bank. Depreciation expense is included in the Consolidated Statement of Income under non-interest expenses – depreciation and amortization. Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted as appropriate.

When major components of building and equipment have different useful lives, they are accounted for separately and depreciated over each component’s estimated useful life.

Net gains and losses on disposal are included in non-interest income – other in the Consolidated Statement of Income in the year of disposal.

Investment property

Investment property is property held either for rental income or for capital appreciation or for both. The Bank holds certain investment properties which are presented in property and equipment on the Consolidated Statement of Financial Position.

Investment property is carried at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated using the straight-line method over the estimated useful life of 40 years. Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted as appropriate.

Assets held-for-sale

Non-current non-financial assets (and disposal groups) are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. These assets meet the criteria for classification as held-for-sale if they are available for immediate sale in their present condition and their sale is considered highly probable to occur within one year.

Non-current non-financial assets classified as held-for-sale are measured at the lower of their carrying amount and fair value (less costs to sell) and are presented within other assets in the Consolidated Statement of Financial Position. Any subsequent write-down to fair value less costs to sell is recognized in the Consolidated Statement of Income, in non-interest income. Any subsequent increase in the fair value less costs to sell, to the extent this does not exceed the cumulative write-down, is also recognized in non-interest income, together with any realized gains or losses on disposal.

Non-financial assets acquired in exchange for loans as part of an orderly realization are recorded as assets held-for-sale or assets held-for-use. If the acquired asset does not meet the requirement to be considered held-for-sale, the asset is considered held-for-use, measured initially at cost which equals the carrying value of the loan and accounted for in the same manner as a similar asset acquired in the normal course of business.

Business combinations and goodwill

The Bank follows the acquisition method of accounting for the acquisition of subsidiaries. The Bank considers the date on which control is obtained and it legally transfers the consideration for the acquired assets and assumed liabilities of the subsidiary to be the date of acquisition. The cost of an acquisition is measured at the fair value of the consideration paid. The fair value of the consideration transferred by the Bank in a business combination is calculated as the sum of the acquisition date fair value of the assets transferred by the Bank, the liabilities incurred by the Bank to former owners of the acquiree, and the equity interests, including any options, issued by the Bank. The Bank recognizes the acquisition date fair values of any previously held investment in the subsidiary and contingent consideration as part of the consideration transferred in exchange for the acquisition. A gain or loss on any previously held investments of an acquiree is recognized in non-interest income – other in the Consolidated Statement of Income.

In general, all identifiable assets acquired (including intangible assets) and liabilities assumed (including any contingent liabilities) are measured at the acquisition date fair value. The Bank records identifiable intangible assets irrespective of whether the assets have been recognized by the acquiree before the business combination. Non-controlling interests, if any, are recognized at their proportionate share of the fair value of identifiable assets and liabilities, unless otherwise indicated. Where the Bank has an obligation to purchase a non-controlling interest for cash or another financial asset, a portion of the non-controlling interest is recognized as a financial liability based on management’s best estimate of the present value of the redemption amount. Where the Bank has a corresponding option to settle the purchase of a non-controlling interest by issuing its own common shares, no financial liability is recorded.

Any excess of the cost of acquisition over the Bank’s share of the net fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill. If the cost of acquisition is less than the fair value of the Bank’s share of the identifiable assets acquired and liabilities assumed, the resulting gain is recognized immediately in non-interest income – other in the Consolidated Statement of Income.

During the measurement period (which is within one year from the acquisition date), the Bank may, on a retrospective basis, adjust the amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.

The Bank accounts for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received.

Subsequent to acquisition, the Bank accounts for the following assets and liabilities recognized in a business combination as described below:

• Contingent liabilities, until resolved, are measured at the higher of the amount that would be recognized as a provision or the amount initially recognized, with any change recognized in the Consolidated Statement of Income.

• Indemnification assets are measured on the same basis as the item to which the indemnification relates.

• Contingent consideration classified as a liability is measured at fair value, with any change recognized in the Consolidated Statement of Income.

• Liabilities to non-controlling interest holders when remeasured at the end of each reporting period, a corresponding change is recorded in equity.

After initial recognition of goodwill in a business combination, goodwill in aggregate is measured at cost less any accumulated impairment losses. Goodwill is not amortized but tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Goodwill is reviewed at each reporting date to determine whether there is any indication of impairment. For the purpose of impairment testing, goodwill acquired in a business combination is, on the acquisition date, allocated to each of the Bank’s group of cash-generating units (CGUs) that is expected to benefit from the combination. CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal management purposes. Goodwill impairment, at a standalone subsidiary level, may not in itself result in an impairment at the consolidated Bank level.

The Bank determines the carrying value of the CGU using a regulatory capital approach based on credit, market, and operational risks, and leverage, consistent with the Bank’s capital attribution for business line performance measurement. The recoverable amount is the greater of fair value less costs of disposal and value in use. If either fair value less costs of disposal or value in use exceeds the carrying amount, there is no need to determine the other. The recoverable amount of the CGU has been determined using the fair value less costs of disposal method. The estimation of fair value less costs of disposal involves significant judgment in the determination of inputs. In determining fair value less costs of disposal, an appropriate valuation model is used which considers various factors including normalized net income, control premiums and price earnings multiples. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators. An impairment loss is recognized if the carrying amount of the CGU exceeds the recoverable amount. An impairment loss, in respect of goodwill, is not reversed.

Intangible assets

Intangible assets represent identifiable non-monetary assets and are acquired either separately or through a business combination or generated internally. The Bank’s intangible assets are mainly comprised of computer software, customer relationships, contract intangibles, core deposit intangibles and fund management contracts.

The cost of a separately acquired intangible asset includes its purchase price and directly attributable costs of preparing the asset for its intended use. Intangibles acquired as part of a business combination are initially recognized at fair value.

In respect of internally generated intangible assets, cost includes all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management.

After initial recognition, an intangible asset is carried at its cost less any accumulated amortization and accumulated impairment losses.

Intangible assets that have finite useful lives are initially measured at cost and are amortized on a straight-line basis over their useful lives as follows: computer software – 5 to 10 years; and other intangible assets – 5 to 20 years. Amortization expense is included in the Consolidated Statement of Income under operating expenses – depreciation and amortization. As intangible assets are considered to be non-financial assets, the impairment model for non-financial assets is applied. Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Impairment of non-financial assets

The carrying amount of the Bank’s non-financial assets, other than goodwill and indefinite life intangible assets and deferred tax assets which are separately addressed, is reviewed at each reporting date to determine whether there is any indication of impairment. For the purpose of impairment testing, non-financial assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent from the cash inflows of other assets or groups of assets.

If any indication of impairment exists then the asset’s recoverable amount is estimated. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. The Bank’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses of continuing operations are recognized in the Consolidated Statement of Income in those expense categories consistent with the nature of the impaired asset. Impairment losses recognized in prior periods are reassessed at each reporting date for any indication that the loss had decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Such reversal is recognized in the Consolidated Statement of Income.

Significant judgment is applied in determining the non-financial asset’s recoverable amount and assessing whether certain events or circumstances constitute objective evidence of impairment.

Corporate income taxes

The Bank follows the balance sheet liability method for corporate income taxes. Under this method, deferred tax assets and liabilities represent the cumulative amount of tax applicable to temporary differences which are the differences between the carrying amount of the assets and liabilities, and their values for tax purposes. Deferred tax assets are recognized only to the extent it is probable that sufficient taxable profits will be available against which the benefit of these deferred tax assets can be utilized.

Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred and current tax assets and liabilities are only offset when they arise in the same tax reporting group and where the Bank has both the legal right and the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

The Bank maintains provisions for uncertain tax positions that it believes appropriately reflect the risk of tax positions under discussion, audit, dispute, or appeal with tax authorities, or which are otherwise considered to involve uncertainty. These provisions are made using the Bank’s best estimate of the amount expected to be paid based on an assessment of all relevant factors, which are reviewed at the end of each reporting period.

Income tax is recognized in the Consolidated Statement of Income except where it relates to items recognized in other comprehensive income or directly in equity, in which case income tax is recognized in the same line as the related item.

Leases

Bank as a lessor

Assets leased to customers under agreements which transfer substantially all the risks and rewards of ownership, with or without ultimate legal title, are classified as finance leases and presented within loans in the Consolidated Statement of Financial Position. When assets held are subject to a finance lease, the leased assets are derecognized and a receivable is recognized which is equal to the present value of the minimum lease payments, discounted at the interest rate implicit in the lease. Initial direct costs incurred in negotiating and arranging a finance lease are incorporated into the receivable through the discount rate applied to the lease. Finance lease income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease. Finance lease income is included in the Consolidated Statement of Income under interest income from loans.

Assets leased to customers under agreements which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. The leased assets are included within property and equipment on the Bank’s Consolidated Statement of Financial Position. Rental income is recognized on a straight-line basis over the period of the lease in non-interest income – other in the Consolidated Statement of Income. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense on a straight-line basis over the lease term.

Bank as a lessee

Assets held under finance leases are initially recognized as property and equipment in the Consolidated Statement of Financial Position at an amount equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The corresponding finance lease obligation is included in other liabilities in the Consolidated Statement of Financial Position. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease. Contingent rentals are recognized as expense in the periods in which they are incurred.

Operating lease rentals payable are recognized as an expense on a straight-line basis over the lease term, which commences when the lessee controls the physical use of the asset. Lease incentives are treated as a reduction of rental expense and are also recognized over the lease term on a straight-line basis. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

Sale and lease-back

Where the Bank enters into a sale leaseback transaction for a non-financial asset at fair market value that results in the Bank retaining an operating lease (where the buyer/lessor retains substantially all risks and rewards of ownership), any gains and losses are recognized immediately in net income. Where the sale leaseback transaction results in a finance lease, any gain on sale is deferred and recognized in net income over the remaining term of the lease.

Leasehold improvements

Leasehold improvements are investments made to customize buildings and offices occupied under operating lease contracts to make them suitable for their intended purpose. The present value of estimated reinstatement costs to bring a leased property into its original condition at the end of the lease, if required, is capitalized as part of the total leasehold improvements costs. At the same time, a corresponding liability is recognized to reflect the obligation incurred. Reinstatement costs are recognized in net income through depreciation of the capitalized leasehold improvements over their estimated useful life.

Provisions

A provision, including for restructuring, is recognized if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The amount recognized as a provision is the Bank’s best estimate of the consideration required to settle the present obligation, taking into account the risks and uncertainties surrounding the obligation. If the effect of the time value of money is considered material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The increase in the provision due to the passage of time is recorded as interest expense – other in the Consolidated Statement of Income.

Insurance contracts

Gross premiums for life insurance contracts are recognized as income when due. Gross premiums for non-life insurance business, primarily property and casualty, are recognized as income over the term of the insurance contracts. Unearned premiums represent the portion of premiums written in the current year that relate to the period of risk after the reporting date. Insurance claims recoveries are accounted as income in the same period as the related claims.

Gross insurance claims for life insurance contracts reflect the cost of all claims arising during the year. Gross insurance claims for property and casualty insurance contracts include paid claims and movements in outstanding claim liabilities. Insurance premiums ceded to reinsurers are accounted as an expense in the same period as the premiums for the direct insurance contracts to which they relate.

Guarantees

A guarantee is a contract that contingently requires the Bank to make specified payments to reimburse the holder for a loss it incurs because a specified debtor failed to make payment when due in accordance with the original or modified terms of a debt instrument. Guarantees include standby letters of credit, letters of guarantee, indemnifications, credit enhancements and other similar contracts. Guarantees that qualify as a derivative are accounted for in accordance with the policy for derivative instruments. For guarantees that do not qualify as a derivative, a liability is recorded for the fair value of the obligation assumed at inception. The fair value of the obligation at inception is generally based on the discounted cash flow of the premium to be received for the guarantee, resulting in a corresponding asset. Subsequent to initial recognition, such guarantees are measured at the higher of the initial amount, less amortization to recognize any fee income earned over the period, and the best estimate of the amount required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability is reported in the Consolidated Statement of Income.

Employee benefits

The Bank provides pension and other benefit plans for eligible employees in Canada and internationally. Pension benefits are offered in the form of defined benefit pension plans (generally based on an employee’s length of service and average earnings at retirement), and in the form of defined contribution pension plans (where the Bank’s contribution is fixed and there is no legal or constructive obligation to pay further amounts). Other benefits provided include post-retirement health care, dental care and life insurance, along with other long-term employee benefits such as long-term disability benefits.

Defined benefit pension plans and other post-retirement benefit plans

The cost of these employee benefits is actuarially determined each year using the projected unit credit method. The calculation uses management’s best estimate of a number of assumptions – including the discount rate, future compensation, health care costs, mortality, as well as the retirement age of employees. The most significant assumption is the discount rate used to determine the defined benefit obligation, which is set by reference to the yields on high quality corporate bonds that have durations that match the terms of the Bank’s obligations. Separate discount rates are used to determine the annual benefit expense in Canada and the US. These rates are determined with reference to the yields on high quality corporate bonds with durations that match the various components of the annual benefit expense. The discount rate used to determine the annual benefit expense for all other plans is the same as the rate used to determine the defined benefit obligation at the beginning of the period.

The Bank’s net asset or liability in respect of employee benefit plans is calculated separately for each plan as the difference between the present value of future benefits earned in respect of service for prior periods and the fair value of plan assets. The net asset or liability is included in other assets and other liabilities, as appropriate, in the Consolidated Statement of Financial Position. When the net amount in the Consolidated Statement of Financial Position is an asset, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.

The current service cost, net interest expense (income), past service cost, and administrative expense are recognized in net income. Net interest expense (income) is calculated by applying the discount rate at the beginning of the annual period to the net defined benefit asset or liability. When the benefits of a plan are improved (reduced), a past service cost (credit) is recognized immediately in net income.

Remeasurements comprising of actuarial gains and losses, the effect of the asset ceiling and the return on plan assets in excess of the interest income on the fair value of assets are recognized immediately in the Consolidated Statement of Financial Position with a charge or credit to the Statement of Comprehensive Income (OCI) in the period in which they occur. Amounts recorded in OCI are not recycled to the Consolidated Statement of Income.

Other long-term employee benefits

Other long-term employee benefits are accounted for similarly to defined benefit pension plans and other post-retirement benefit plans described above, except that remeasurements are recognized in the Consolidated Statement of Income in the period in which they arise.

Defined contribution plans

The cost of such plans are equal to contributions payable by the Bank to employees’ accounts for service rendered during the period and expensed.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided and a liability is measured on an undiscounted basis net of payments made.

Recognition of income and expenses

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Bank and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognized:

Interest and similar income and expenses

For all non-trading interest-bearing financial instruments, interest income or expense is recorded in net interest income using the effective interest rate. This is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into account all the contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses.

For trading financial instruments, mark-to-market changes including related interest income or expense are recorded in non-interest income – trading revenues.

The carrying amount of interest-bearing financial instruments, measured at amortized cost or classified as FVOCI, is adjusted if the Bank revises its estimates of payments or receipts. The adjusted carrying amount is calculated based on the original effective interest rate and the change in carrying amount is recorded as non-interest income in the Consolidated Statement of Income.

Once the carrying value of a financial asset or a group of similar financial assets has been reduced due to an impairment loss, interest income continues to be recognized based on net effective interest rate inherent in the investment.

Loan origination costs are deferred and amortized into interest income using the effective interest method over the expected term of the loan. Loan fees are recognized in interest income over the appropriate lending or commitment period. Mortgage prepayment fees are recognized in interest income when received, unless they relate to a minor modification to the terms of the mortgage, in which case the fees are deferred and amortized using the effective interest method over the remaining period of the original mortgage.

Loan syndication fees are recognized when no other services are required of the Bank and the fees are non-refundable unless the yield we retain is less than that of comparable lenders in the syndicate. In such cases, an appropriate portion will be deferred and amortized in interest income over the term of the loan.

Loan commitment fees for loans that are likely to be drawn down and other credit related fees are deferred (together with any incremental costs) and recognized as part of the effective interest on the loan. When it is unlikely that a loan will be drawn down, the loan commitment fees are recognized over the commitment period on a straight-line basis.

Fee and commission revenues

The Bank earns fee and commission revenues from a diverse range of services it provides to its customers. Fee income can be divided into the following two categories:

Fees earned for the provision of services over a period of time are accrued over that period the services are provided. These fees include commission income, investment management, custody and other management and advisory fees. Investment management fees and custodial fees are mainly calculated as a percentage of daily or period-end market value of the assets under management (AUM) or assets under administration (AUA) and are received monthly, quarterly, semi-annually, or annually based on the underlying investment management contracts. Performance-based fees related to AUM are earned based on exceeding certain benchmarks or other performance targets, and are recognized at the end of the performance period in which the target is met.

Fees arising from negotiating or participating in the negotiation of a transaction for a third-party, such as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognized on completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are recognized after fulfilling the corresponding criteria.

Fee and commission expenses

Fee and commission expenses relate to transaction and service fees which are expensed as the services are received.

Dividend income

Dividend income on equity securities is recognized in Interest income when the Bank’s right to receive payment is established.

Share-based payments

Share-based payments awarded to employees are recognized as compensation expense in the Consolidated Statement of Income over the vesting period based on the number of awards expected to vest including the impact of expected forfeitures. For awards that are delivered in tranches, each tranche is considered a separate award and accounted for separately.

Stock appreciation rights and other awards that must be settled for cash are classified as liabilities. Liability-classified awards are re-measured to fair value at each reporting date while they remain outstanding, with any changes in fair value recognized in compensation expense in the period. The liability is expensed over the vesting period which incorporates the re-measurement of the fair value and a revised forfeiture rate that anticipates units expected to vest.

Employee stock options with tandem stock appreciation rights give the employee the right to exercise for shares or settle in cash. These options are classified as liabilities and are re-measured to fair value at each reporting date while they remain outstanding. If an option is exercised, thereby cancelling the tandem stock appreciation right, both the exercise price proceeds together with the accrued liability and associated taxes are credited to equity – common shares in the Consolidated Statement of Financial Position.

Plain vanilla options and other awards that must be settled for shares are classified as equity awards. Equity-classified awards are expensed based on the grant date fair value with a corresponding increase to equity – other reserves in the Consolidated Statement of Financial Position. If an option is exercised, both the exercise price proceeds together with the amount recorded in other reserves is credited to equity – common shares in the Consolidated Statement of Financial Position.

For tandem stock appreciation rights, stock appreciation rights and plain vanilla options, the Bank estimates fair value using an option pricing model. The option pricing model requires inputs such as the exercise price of the option, the current share price, the risk free interest rate, expected dividends, expected volatility (calculated using an equal weighting of implied and historical volatility) and specific employee exercise behaviour patterns based on statistical data. For other awards, fair value is the quoted market price of the Bank’s common shares at the reporting date.

Where derivatives are used to economically hedge share-based payment expense, related mark-to-market gains and losses are included in non-interest expenses – salaries and employee benefits in the Consolidated Statement of Income.

A voluntary renouncement of a tandem stock appreciation right where an employee retains the corresponding option for shares with no change in the overall fair value of the award, results in a reclassification of the accrued liability and associated tax to equity – other reserves in the Consolidated Statement of Financial Position. This reclassification is measured at the fair value of the renounced awards as of the renouncement date. Subsequent to the voluntary renouncement, these awards are accounted for as plain vanilla options, based on the fair value as of the renouncement date.

Customer loyalty programs

The Bank operates loyalty points programs, which allow customers to accumulate points when they use the Bank’s products and services. The points can then be redeemed for free or discounted products or services, subject to certain conditions.

Consideration received is allocated between the products sold or services rendered and points issued, with the consideration allocated to points equal to their fair value. The fair value of points is generally based on equivalent retail prices for the mix of awards expected to be redeemed. The fair value of the points issued is deferred in other liabilities and recognized as banking revenues when the points are redeemed or lapsed. Management judgment is involved in determining the redemption rate to be used in the estimate of points to be redeemed.

Dividends on shares

Dividends on common and preferred shares and other equity instruments are recognized as a liability and deducted from equity when they are declared and no longer at the discretion of the Bank.

Segment reporting

Management’s internal view is the basis for the determination of operating segments. The operating segments are those whose operating results are regularly reviewed by the Bank’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance. The Bank has three operating segments: Canadian Banking, International Banking, and Global Banking and Markets. The other category represents smaller operating segments, including Group Treasury and other corporate items, which are not allocated to an operating segment. These segments offer different products and services and are managed separately based on the Bank’s management and internal reporting structure.

The results of these business segments are based upon the internal financial reporting systems of the Bank. The accounting policies used in these segments are generally consistent with those followed in the preparation of the consolidated financial statements by the Bank. The only notable accounting measurement difference is the grossing up of revenues which are tax-exempt and income from associate corporations to an equivalent before-tax basis for those affected segments. This change in measurement enables comparison of income arising from taxable and tax-exempt sources.

Because of the complexity of the Bank, various estimates and allocation methodologies are used in the preparation of the business segment financial information. The funding value of assets and liabilities is transfer-priced at wholesale market rates, and corporate expenses are allocated to each segment on an equitable basis using various parameters. As well, capital is apportioned to the business segments on a risk-based methodology. Transactions between segments are recorded within segment results as if conducted with a third-party and are eliminated on consolidation.

Earnings per share (EPS)

Basic EPS is computed by dividing net income for the period attributable to the Bank’s common shareholders by the weighted-average number of common shares outstanding during the period.

Diluted EPS is calculated by dividing adjusted net income for the period attributable to common shareholders by the weighted-average number of diluted common shares outstanding for the period. In the calculation of diluted earnings per share, earnings are adjusted for changes in income or expenses that would result from the issuance of dilutive shares. The weighted-average number of diluted common shares outstanding for the period reflects the potential dilution that would occur if options, securities or other contracts that entitle their holders to obtain common shares had been outstanding from the beginning of the period (or a later date) to the end of the period (or an earlier date). Instruments determined to have an antidilutive impact for the period are excluded from the calculation of diluted EPS.

Earnings are adjusted by the after-tax amount of distributions related to dilutive capital instruments recognized in the period. For tandem stock appreciation rights that are carried as liabilities, the after-tax re-measurement included in salaries and employee benefits expense, net of related hedges, is adjusted to reflect the expense had these rights been equity-classified.

The number of additional shares for inclusion in diluted EPS for share-based payment options is determined using the treasury share method. Under this method, the net number of incremental common shares is determined by assuming that in-the-money stock options are exercised and the proceeds are used to purchase common shares at the average market price during the period.

The number of additional shares associated with capital instruments that potentially result in the issuance of common shares is based on the terms of the contract. On occurrence of contingencies as specified in the Non-Viability Contingent Capital (NVCC) Instruments, the number of additional common shares associated with the NVCC subordinated debentures, NVCC subordinated additional Tier 1 capital securities and NVCC preferred shares is based on an automatic conversion formula as set out in the respective prospectus supplements.

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Transition to IFRS 9

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Transition to IFRS 9

4 Transition to IFRS 9

(a) Reconciliation of IAS 39 to IFRS 9

The following table provides the impact from the transition to IFRS 9 on the Consolidated Statement of Financial Position at transition date, November 1, 2017. The impact consists of reclassification and remeasurement.

Reclassification:

These adjustments reflect the movement of balances between categories on the Consolidated Statement of Financial Position with no impact to shareholders’ equity. There is no change to the carrying value of the balances as a result of the reclassification.

Remeasurement:

These adjustments, which include expected credit loss, result in a change to the carrying value of the item on the Statement of Financial Position with an impact to shareholders’ equity net of tax.

			IAS 39		IAS 39									IFRS 9			IFRS 9
As at November 1, 2017 ($ millions)	Note		Measurement basis		Carrying amount			Reclassification			Remeasurement			Carrying amount			Measurement basis		IFRS 9
Assets
Cash and deposits with financial institutions				Amortized cost	$	59,663		$	–		$	(3	)	$	59,660			Amortized cost		Cash and deposits with financial institutions	*
Precious metals				FVTPL		5,717			–			–			5,717			FVTPL		Precious metals
Trading Assets																				Trading assets
Debt securities		1		FVTPL		39,333			76			–			39,409			FVTPL		Debt securities
Equity securities				FVTPL		39,319			–			–			39,319			FVTPL		Equity securities
Loans		3		FVTPL		17,312			660			1			17,973			FVTPL		Loans
Other				FVTPL		2,500			–			–			2,500			FVTPL		Other
						98,464			736			1			99,201
Financial assets designated at FVTPL																				Financial assets designated at FVTPL
Debt securities				FVTPL (Designated)		13			–			–			13			FVTPL (Designated)		Debt securities
Securities purchased under resale agreements and securities borrowed				Amortized cost		95,319			–			–			95,319			Amortized cost		Securities purchased under resale agreements and securities borrowed	*
Derivative financial instruments		3		FVTPL		35,364			(2	)		–			35,362			FVTPL		Derivative financial instruments
Investment securities																				Investment securities
Debt securities		1,5,8		Amortized cost		18,765			4,205			118			23,088			Amortized cost		Debt securities	*
Debt securities		1		FVOCI		49,193			(4,281	)		–			44,912			FVOCI		Debt securities
Equity securities		2		FVOCI		1,311			(301	)		–			1,010			FVOCI		Equity securities
Equity securities		2		FVOCI		–			301			–			301			FVTPL		Equity securities
						69,269			(76	)		118			69,311
Loans																				Loans
Residential mortgages		3,4		Loans & receivables		236,916			(33	)		(134	)		236,749			Amortized cost		Residential mortgages
Personal loans		4		Loans & receivables		89,227			–			2			89,229			Amortized cost		Personal loans
Credit cards		4		Loans & receivables		14,104			–			–			14,104			Amortized cost		Credit cards
Business and government		3		Loans & receivables		168,449			(623	)		–			167,826			Amortized cost		Business and government
						508,696			(656	)		(132	)		507,908
Allowance for credit loss		5		Loans & receivables		(4,327	)		–			(593	)		(4,920	)		Amortized cost		Allowance for credit loss
Other																				Other
Customers’ liability under acceptances		5		Amortized cost		13,560			–			(16	)		13,544			Amortized cost		Customer’s liability under acceptances	*
Property and equipment						2,381			–			–			2,381					Property and equipment
Investment in associates		5				4,586			–			(184	)		4,402					Investment in associates
Goodwill and other intangible assets						12,106			–			–			12,106					Goodwill and other intangible assets
Deferred tax assets		1,6				1,713			–			50			1,763					Deferred tax assets
Other assets		5				12,749			–			(2	)		12,747					Other assets
						47,095			–			(152	)		46,943
Total assets					$	915,273		$	2			$  (761	)	$	914,514
Liabilities
Deposits				Amortized cost	$	625,367		$	–		$	–		$	625,367			Amortized cost		Deposits
Financial instruments designated at fair value through profit or loss				FVTPL		4,663			–			–			4,663			FVTPL		Financial instruments designated at fair value through profit or loss
Other																				Other
Acceptances				Amortized cost		13,560			–			–			13,560			Amortized cost		Acceptances
Obligations related to securities sold short				Amortized cost		30,766			–			–			30,766			Amortized cost		Obligations related to securities sold short
Derivative financial instruments		3		FVTPL		34,200			(2	)		–			34,198			FVTPL		Derivative financial instruments
Obligations related to securities sold under repurchase agreements and securities lent				Amortized cost		95,843			–			–			95,843			Amortized cost		Obligations related to securities sold under repurchase agreements and securities lent
Subordinated debentures				Amortized cost		5,935			–			–			5,935			Amortized cost		Subordinated debentures
Other liabilities		7				43,314			4			(151	)		43,167					Other liabilities
Total liabilities						853,648			2			(151	)		853,499
Equity
Common equity																				Common equity
Common shares						15,644			–			–			15,644					Common shares
Retained earnings		1,2				38,117			49			(613	)		37,553					Retained earnings
Accumulated other comprehensive income		1,2				1,577			(49	)		100			1,628					Accumulated other comprehensive income
Other reserves						116			–			–			116					Other reserves
Total common equity						55,454			–			(513	)		54,941					Total common equity
Preferred shares						4,579			–			–			4,579					Preferred shares
Total equity attributable to equity holders to the Bank						60,033			–			(513	)		59,520					Total equity attributable to equity holders to the Bank
Non-controlling interests in subsidiaries						1,592			–			(97	)		1,495					Non-controlling interests in subsidiaries
						61,625			–			(610	)		61,015
Total liabilities and equity					$	915,273		$	2			$  (761	)	$	914,514

* Net of applicable allowance for credit losses.

(1) AFS Debt instruments of $4,281 measured at fair value through other comprehensive income (FVOCI) were reclassified to amortized cost in the amount of $4,205 and $76 to fair value through profit or loss (FVTPL). The reclassifications were due to the business model being “held-to-collect” and the cash flows that did not represent payments that are solely payments of principal and interest (SPPI). The reclassification of debt instruments to amortized cost resulted in remeasurement of $118 with an offset to other comprehensive income (AOCI) and deferred tax assets. The reclassification of AOCI to retained earnings related to FVTPL classification.

(2) AFS Equity instruments of $301 previously fair valued through OCI are now classified as FVTPL, which resulted in reclassification of AOCI to retained earnings.

(3) Certain precious metal loans of $627 and the related derivatives that failed the SPPI test were classified to FVTPL, and $33 of residential mortgages were reclassified to trading to reflect the business model.

(4) Adjustments to certain balances against allowance for credit losses.

(5) Expected credit loss on financial assets and the Bank’s share of associated corporations.

(6) The increase in deferred tax assets relates to the impact of the IFRS 9 related adjustments to retained earnings.

(7) The decrease in remeasurement of $151 is comprised of a reduction in deferred tax liabilities of $129, a net decrease of $22 which includes allowance for credit losses related to undrawn commitments, letters of credit and letters of guarantee.

(8) Debt securities managed under a business model of held-to-collect were reclassifed from available-for-sale to amortized cost. As of October 31, 2018, the fair value of these securities was $3,951. For the year ended October 31, 2018, $67 of losses would have been recognized in other comprehensive income if the securities had not been reclassified.

(b) Reconciliation of impairment allowance balance from IAS 39 to IFRS 9

The following table reconciles the closing impairment allowance for financial assets in accordance with IAS 39 and provisions for loan commitments and financial guarantee contracts in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets as at October 31, 2017 to the opening impairment allowance under IFRS 9 as at November 1, 2017.

($ millions)	Impairment allowance under IAS 39 as at October 31, 2017		Remeasurement			Impairment allowance under IFRS 9 as at November 1, 2017
Loans and acceptances(1)	$	4,327	$	611		$	4,938
Investment securities (Debt) at amortized cost		–		1			1
Investment securities (Debt) at FVOCI(2)		–		13			13
Deposits with financial institutions		–		3			3
Off-balance sheet credit risks(3)		120		(36	)		84
Total	$	4,447	$	592		$	5,039

(1) The remeasurement impact of $611 is comprised of loans $593, acceptances $16 and accrued interest of $2.

(2) The allowance for credit losses of $13 is recorded in accumulated other comprehensive income. These debt securities remain at fair value on the balance sheet.

(3) Off-balance sheet credit risks include credit risks such as undrawn lending commitments, letters of credit and letters of guarantee.

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Future Accounting Developments

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Future Accounting Developments

5 Future Accounting Developments

The Bank actively monitors developments and changes in accounting standards from the IASB, as well as requirements from the other regulatory bodies, including OSFI. The Bank is currently assessing the measurement impact of the adoption of new standards issued by the IASB will have on its consolidated financial statements and also evaluating the alternative elections available on transition.

Effective November 1, 2018

Revenue from contracts with customers

The IASB issued IFRS 15 Revenue from Contracts with Customers (IFRS 15), which replaces the previous revenue standard IAS 18 Revenue, and the related Interpretations on revenue recognition.

The standard is a control-based model as compared to the existing revenue standard which is primarily focused on risks and rewards and provides a single principle based framework to be applied to all contracts with customers that are in scope of the standard. Under the new standard, revenue is recognized when a customer obtains control of a good or service. Transfer of control occurs when the customer has the ability to direct the use of and obtain the benefits of the good or service. The standard introduces a new five step model governing revenue recognition to be applied to contracts with customers. The Bank must also determine whether its performance obligation is to provide the service itself (i.e. the Bank acts as a principal) or to arrange another party to provide the service (i.e. the Bank acts as an agent).

The Bank has assessed the scope of the new guidance to be limited to fees and commission revenues from wealth management and banking services in Canadian and International Banking and underwriting and advisory fees in Global Banking and Markets.

The Bank will adopt the standard and its amendments as of November 1, 2018 using the modified retrospective approach. Under this approach, the Bank will recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings as of November 1, 2018, without restating comparative periods. As of November 1, 2018, the opening balance of retained earnings is expected to decrease by approximately $60 million (net of tax). The decrease in retained earnings relates to certain costs no longer eligible for deferral under the new standard and the re-measurement of certain liabilities at fulfilment cost.

The presentation of certain costs will also change prospectively from non-interest expenses to non-interest income where amounts are deemed to be part of consideration payable to customers or the Bank is deemed to be acting as an agent. This presentation change will not have a material impact on the Bank’s consolidated financial statements.

Effective November 1, 2019

Financial instruments: Prepayment features with negative compensation

On October 12, 2017, the IASB issued an amendment to IFRS 9 Financial Instruments. The amendment allows certain pre-payable financial assets with so-called negative compensation prepayment option to be measured at amortized cost or fair value through other comprehensive income, if the prepayment amount substantially represents unpaid principal and interest and reasonable compensation. Reasonable compensation may be positive or negative. Prior to this amendment financial assets with this negative compensation feature would have failed the solely payments of principal and interest test and be mandatorily measured at fair value through profit or loss. The amendment will be effective for annual periods beginning on or after January 1, 2019, with early adoption permitted. Based on preliminary assessments, the amendment is not expected to impact the Bank.

Leases

On January 13, 2016, the IASB issued IFRS 16 Leases, which requires a lessee to recognize an asset for the right to use the leased item and a liability for the present value of its future lease payments. IFRS 16 will result in leases being recorded on the Bank’s balance sheet, including those currently classified as operating leases except for short-term leases and leases with low value of the underlying asset. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17.

IFRS 16 is effective for the Bank on November 1, 2019. On transition, there are practical expedients available whereby the Bank will not need to reassess whether a contract is, or contains a lease, or reassess the accounting of sale leaseback transactions recognized prior to the date of initial application. A lessee will apply IFRS 16 to its leases either retrospectively to each prior reporting period presented; or retrospectively with the cumulative effect of initially applying IFRS 16 being recognized at the date of initial application.

The Bank is currently in the process of assessing existing contractual relationships to identify the existing population of leases that would be recorded on the balance sheet under the new standard. The Bank continues to evaluate the potential impact to the existing IT systems and processes and next steps include performing an initial quantification of the existing obligations and reviewing the additional disclosures required by the new standard. During 2019, the Bank will also complete its assessment of various practical expedients and formulate its accounting policies under IFRS 16.

IFRIC 23 Uncertainty over income tax treatments

On June 7, 2017, the IASB issued IFRIC 23 that is effective for the Bank beginning November 1, 2019. The interpretation clarifies the accounting for uncertainties over income taxes. The interpretation clarifies application of recognition and measurement requirements in IAS 12 income taxes when there is uncertainty over income tax treatments. The Bank is currently assessing the impact of the interpretation.

Employee Benefits

On February 7, 2018, the IASB issued narrow-scope amendments to pension accounting that is effective for the Bank beginning November 1, 2019. The amendments relate to when a plan amendment, curtailment or settlement has occurred. In such instances, the Bank is required to use updated assumptions to determine current service cost and net interest for the remainder of the reporting period after the change to the plan. For the Bank, the narrow scope amendments are to be applied prospectively to plan amendments, curtailments and settlements occurring after November 1, 2019.

Effective November 1, 2020

Conceptual Framework

On March 29, 2018, the IASB issued the revised Conceptual Framework for Financial Reporting (Framework) that is effective for the Bank beginning November 1, 2020. The Framework itself is not a standard, and does not override existing standards. It is used by the IASB in developing accounting standards. The Bank is currently assessing the impact of the revisions.

Definition of business

On October 22, 2018, the IASB issued a narrow-scope amendment to IFRS 3 Business Combination. The amendments will help companies determine whether an acquisition is of a business or a group of assets. Distinguishing between a business and a group of assets is important because an acquirer recognizes goodwill only when acquiring a business. The amendments apply to transactions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. Earlier adoption is permitted. The Bank is currently assessing the impact.

Definition of material

On October 31, 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, clarifying the definition of material. Under the new definition, information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. The explanations accompanying the definition have also been improved. The amendments are effective prospectively for annual periods beginning on or after January 1, 2020. Earlier adoption is permitted. The Bank is currently assessing the impact.

Effective November 1, 2021

Insurance Contracts

On May 18, 2017, the IASB issued IFRS 17 Insurance Contracts, which provides a comprehensive principle-based framework for the measurement and presentation of all insurance contracts. The new standard will replace IFRS 4 Insurance Contracts and requires insurance contracts to be measured using current fulfillment cash flows and for revenue to be recognized as the service is provided over the coverage period. On November 14, 2018, the IASB tentatively decided to defer the effective date, by one year, to annual periods on or after January 1, 2022. The Bank will continue to track the IASB Board’s meeting agenda items on issues and discussions related to the standard, further updates will be provided in Q1 2019.

The IFRS 17 project structure and governance has been established along with a Project Management Office to assist the Executive Steering and Project Operations Committees. The committees comprise of representatives from Global Finance, Global Insurance Actuarial Services, Information Technology and the Insurance Business Operations. The Bank is currently in the Evaluation and Design Solution phase of the project, with Implementation planned for Fiscal 2019 through 2022.

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Cash and Deposits with Financial Institutions

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Cash and Deposits with Financial Institutions

6 Cash and Deposits with Financial Institutions

As at October 31 ($ millions)	2018			2017
Cash and non-interest-bearing deposits with financial institutions	$	8,997		$	7,825
Interest-bearing deposits with financial institutions		53,272			51,838
Total	$	62,269	(1)	$	59,663

(1) Net of impairment allowances of $3.

The Bank is required to maintain balances with central banks, other regulatory authorities and certain counterparties and these amounted to $8,886 million (2017 – $7,282 million).

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Fair Value of Financial Instruments

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Fair Value of Financial Instruments

7 Fair Value of Financial Instruments

Determination of fair value

The calculation of fair value is based on market conditions at a specific point in time and therefore may not be reflective of future fair values. The Bank has controls and processes in place to ensure that the valuation of financial instruments is appropriately determined.

The best evidence of fair value for a financial instrument is the quoted price in an active market. Unadjusted quoted market prices for identical instruments represent a Level 1 valuation. Where possible, valuations are based on quoted prices or observable inputs obtained from active markets. Independent Price Verification (IPV) is undertaken to assess the reliability and accuracy of prices and inputs used in the determination of fair value. The IPV process is performed by price verification groups that are independent from the business. The Bank maintains a list of pricing sources that are used in the IPV process. These sources include, but are not limited to, brokers, dealers and consensus pricing services. The valuation policies relating to the IPV process require that all pricing or rate sources used be external to the Bank. On a periodic basis, an independent assessment of pricing or rate sources is performed to determine market presence or market representative levels.

Quoted prices are not always available for over-the-counter transactions, as well as transactions in inactive or illiquid markets. In these instances, internal models that maximize the use of observable inputs are used to estimate fair value. The chosen valuation technique incorporates all the factors that market participants would take into account in pricing a transaction. When all significant inputs to models are observable, the valuation is classified as Level 2. Financial instruments traded in a less active market are valued using indicative market prices, present value of cash-flows or other valuation techniques. Fair value estimates normally do not consider forced or liquidation sales.

Where financial instruments trade in inactive markets or when using models where observable parameters do not exist, greater management judgment is required for valuation purposes. Valuations that require the significant use of unobservable inputs are considered Level 3.

The specific inputs and valuation techniques used in determining the fair value of financial instruments are noted below. For Level 3 instruments, additional information is disclosed in the Level 3 sensitivity analysis on page 175.

The fair values of cash and deposits with banks, securities purchased under resale agreements and securities borrowed, customers’ liability under acceptances, obligations related to securities sold under repurchase agreements and securities lent, acceptances, and obligations related to securities sold short are assumed to approximate their carrying values, either due to their short-term nature or because they are frequently repriced to current market rates.

Trading loans

Trading loans as they relate to precious metals (primarily gold and silver) are valued using a discounted cash flow model incorporating market-observable inputs, including precious metals spot and forward prices and interest rate curves (Level 2). Other trading loans that serve as hedges to loan-based credit total return swaps are valued using consensus prices from Bank approved independent pricing services (Level 2).

Government issued or guaranteed securities

The fair values of government issued or guaranteed debt securities are primarily based on unadjusted quoted prices in active markets, where available (Level 1). Where quoted prices are not available, the fair value is determined by utilizing recent transaction prices, broker quotes, or pricing services (Level 2).

For securities that are not actively traded, the Bank uses a discounted cash flow method, using the effective yield of a similar instrument adjusted for instrument-specific risk factors such as credit spread and contracted features (Level 2).

Corporate and other debt

Corporate and other debt securities are valued using unadjusted quoted prices from independent market data providers or third-party broker quotes (Level 1). Where prices are not available consistently, the last available data is used and verified with a yield-based valuation approach (Level 2). In some instances, interpolated yields of similar bonds are used to price securities (Level 2). The Bank uses pricing models with observable inputs from market sources such as credit spread, interest rate curves, and recovery rates (Level 2). These inputs are verified through an IPV process on a monthly basis.

For certain securities where there is no active market, no consensus market pricing and no indicative or executable independent third-party quotes, the Bank uses pricing by third-party providers or internal pricing models and cannot readily observe the market inputs used to price such instruments (Level 3).

Mortgage-backed securities

The fair value of residential mortgage-backed securities is primarily determined using third-party broker quotes and independent market data providers, where the market is more active (Level 2). Where the market is inactive, an internal price-based model is used (Level 3).

Equity securities

The fair value of equity securities is based on unadjusted quoted prices in active markets, where available (Level 1). Where equity securities are less frequently traded, the most recent exchange-quoted pricing is used to determine fair value. Where there is a wide bid-offer spread, fair value is determined based on quoted market prices for similar securities (Level 2).

Where quoted prices in active markets are not readily available, such as for private equity securities, the fair value is determined as a multiple of the underlying earnings or percentage of underlying assets obtained from third-party general partner statements (Level 3).

Income funds

The fair value of income funds is based on observable unadjusted quoted prices where available (Level 1). Where quoted or active market prices are unavailable, the last available Net Asset Value, fund statements and other financial information available from third-party fund managers at the fund level are used in arriving at the fair value.

Derivatives

Fair values of exchange-traded derivatives are based on unadjusted quoted market prices (Level 1). Fair values of over-the-counter (OTC) derivatives or inactive exchange-traded derivatives are determined using pricing models, which take into account input factors such as current market and contractual prices of the underlying instruments, as well as time value and yield curve or volatility factors underlying the positions (Level 2). The determination of the fair value of derivatives includes consideration of credit risk, estimated funding costs and ongoing direct costs over the life of the instruments.

Derivative products valued using a valuation technique with market-observable inputs mainly include interest rate swaps and options, currency swaps and forward foreign exchange contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including foreign exchange spot and forward rates and interest rate curves (Level 2).

Derivative products valued using a valuation technique with significant unobservable inputs are long dated contracts (interest rate swaps, currency swaps, forward foreign exchange contracts, option contracts and certain credit default swaps) and other derivative products that reference a basket of assets, commodities or currencies. These models incorporate certain significant non-observable inputs such as volatility and correlation (Level 3).

Loans

The estimated fair value of loans carried at amortized cost reflects changes in the general level of interest rates and credit worthiness of borrowers that have occurred since the loans were originated or purchased. The particular valuation methods used are as follows:

• Canadian fixed rate residential mortgages are fair valued by discounting the expected future contractual cash flows, taking into account expected prepayments and using management’s best estimate of average market interest rates currently offered for mortgages with similar remaining terms (Level 3).

• For fixed rate business and government loans, fair value is determined by discounting the expected future contractual cash flows of these loans at interest rates estimated by using the appropriate currency swap curves for the remaining term, adjusted for a credit mark of the expected losses in the portfolio (Level 3).

• For all other fixed rate loans, fair value is determined by discounting the expected future contractual cash flows of these loans at interest rates estimated by using the appropriate currency swap curves for the remaining term (Level 3).

• For all floating rate loans fair value is assumed to equal book value.

The fair value of loans is not adjusted for the value of any credit protection the Bank has purchased to mitigate credit risk.

Deposits

The fair values of deposits payable on demand or after notice or floating rate deposits payable on a fixed date is assumed to equal book value. The estimated fair values of Canadian personal fixed rate deposits payable on a fixed date are fair valued by discounting the expected future contractual cash outflows, using management’s best estimate of average market interest rates currently offered for deposits with similar remaining terms (Level 2).

Deposits under the Canada Mortgage Bond (CMB) program are fair valued by discounting expected future contractual cash flows using market observable inputs (Level 2).

For all other fixed rate deposits, fair value is determined by discounting the expected future contractual cash flows of these deposits at interest rates estimated by using the appropriate currency swap curves for the remaining term (Level 2).

For structured notes containing embedded features that are bifurcated from the Plain Vanilla notes, the fair value of the embedded derivatives is determined using option pricing models with inputs similar to other interest rate or equity derivative contracts (Level 2). The fair value of certain embedded derivatives is determined using net asset values (Level 3).

Subordinated debentures and other liabilities

The fair values of subordinated debentures, including debentures issued by subsidiaries which are included in other liabilities, are determined by reference to quoted market prices where available or market prices for debt with similar terms and risks (Level 2). The fair values of other liabilities is determined by the discounted contractual cash flow method with appropriate currency swap curves for the remaining term (Level 2).

Fair value of financial instruments

The following table sets out the fair values of financial instruments of the Bank using the valuation methods and assumptions described above. The fair values disclosed do not include non-financial assets, such as property and equipment, investments in associates, precious metals, goodwill and other intangible assets.

	2018				2017
As at October 31 ($ millions)	Total fair value		Total carrying value		Total fair value		Total carrying value
Assets:
Cash and deposits with financial institutions	$	62,269	$	62,269	$	59,663	$	59,663
Trading assets		100,262		100,262		98,464		98,464
Financial instruments designated at fair value through profit or loss		12		12		13		13
Securities purchased under resale agreements and securities borrowed		104,018		104,018		95,319		95,319
Derivative financial instruments		37,558		37,558		35,364		35,364
Investment securities – other		57,653		57,653		50,504		50,504
Investment securities – amortized cost		20,316		20,743		18,716		18,765
Loans		553,758		551,834		507,276		504,369
Customers’ liability under acceptances		16,329		16,329		13,560		13,560
Other financial assets		10,913		10,913		9,314		9,314
Liabilities:
Deposits		674,535		676,534		625,964		625,367
Financial instruments designated at fair value through profit or loss		8,188		8,188		4,663		4,663
Acceptances		16,338		16,338		13,560		13,560
Obligations related to securities sold short		32,087		32,087		30,766		30,766
Derivative financial instruments		37,967		37,967		34,200		34,200
Obligations related to securities sold under repurchase agreements and securities lent		101,257		101,257		95,843		95,843
Subordinated debentures		5,627		5,698		6,105		5,935
Other financial liabilities		35,432		34,805		27,531		27,118

Changes in interest rates, credit spreads and liquidity costs are the main cause of changes in the fair value of the Bank’s financial instruments resulting in a favourable or unfavourable variance compared to carrying value. For the Bank’s financial instruments carried at cost or amortized cost, the carrying value is not adjusted to reflect increases or decreases in fair value due to market fluctuations, including those due to interest rate changes. For FVOCI investment securities, derivatives and financial instruments measured at FVTPL or designated as fair value through profit or loss, the carrying value is adjusted regularly to reflect the fair value.

Fair value hierarchy

The following table outlines the fair value hierarchy of instruments carried at fair value on a recurring basis and of instruments not carried at fair value.

	2018(1)												2017
As at October 31 ($ millions)	Level 1			Level 2			Level 3			Total			Level 1		Level 2			Level 3		Total
Instruments carried at fair value on a recurring basis:
Assets:
Precious metals(2)	$	–		$	3,175		$	16		$	3,191		$	–	$	5,717		$	–	$	5,717
Trading assets
Loans		–			14,334			–			14,334			–		17,312			–		17,312
Canadian federal government and government guaranteed debt		13,003			–			–			13,003			10,343		–			–		10,343
Canadian provincial and municipal debt		–			10,159			–			10,159			–		7,325			–		7,325
US treasury and other US agencies’ debt		7,164			–			–			7,164			6,894		–			–		6,894
Other foreign governments’ debt		4,610			1,833			–			6,443			5,680		1,149			–		6,829
Corporate and other debt		3			8,984			18	(3)		9,005			44		7,920			22		7,986
Income funds		29			–			–			29			180		165			–		345
Equity securities		39,513			158			–			39,671			38,760		170			–		38,930
Other(4)		454			–			–			454			2,500		–			–		2,500
	$	64,776		$	38,643		$	34		$	103,453		$	64,401	$	39,758		$	22	$	104,181
Financial assets designated at fair value through profit or loss	$	12		$	–		$	–		$	12		$	13	$	–		$	–	$	13
Investment securities(5)
Canadian federal government and government guaranteed debt		6,373			2,518			–			8,891			9,677		2,416			–		12,093
Canadian provincial and municipal debt		366			3,986			–			4,352			593		4,230			–		4,823
US treasury and other US agencies’ debt		18,472			669			–			19,141			6,305		367			–		6,672
Other foreign governments’ debt		10,457			9,485			48	(6)		19,990			10,944		8,746			113		19,803
Corporate and other debt		732			1,818			13	(3)		2,563			750		3,584			53		4,387
Mortgage-backed securities		–	(7)		906			–			906			539		876			–		1,415
Equity securities		838			263			709			1,810			590		177			544		1,311
	$	37,238		$	19,645		$	770		$	57,653		$	29,398	$	20,396		$	710	$	50,504
Derivative financial instruments
Interest rate contracts	$	–		$	8,927		$	112		$	9,039		$	–	$	9,742		$	36	$	9,778
Foreign exchange and gold contracts		5			22,197			–			22,202			4		21,496			–		21,500
Equity contracts		797			1,556			8			2,361			615		1,720			–		2,335
Credit contracts		–			349			–			349			–		175			–		175
Commodity contracts		92			3,515			–			3,607			133		1,443			–		1,576
	$	894		$	36,544		$	120		$	37,558		$	752	$	34,576		$	36	$	35,364
Liabilities:
Deposits(8)	$	–		$	(401	)	$	–		$	(401	)	$	–	$	(7	)	$	–	$	(7	)
Financial liabilities designated at fair value through profit or loss		–			8,188			–			8,188			–		4,663			–		4,663
Obligations related to securities sold short		24,563			7,524			–			32,087			27,796		2,970			–		30,766
Derivative financial instruments
Interest rate contracts		–			11,012			74			11,086			–		10,823			267		11,090
Foreign exchange and gold contracts		–			20,537			–			20,537			3		17,646			–		17,649
Equity contracts		1,057			1,884			5			2,946			502		2,724			7		3,233
Credit contracts		–			70			–			70			–		179			–		179
Commodity contracts		34			3,294			–			3,328			268		1,781			–		2,049
	$	1,091		$	36,797		$	79		$	37,967		$	773	$	33,153		$	274	$	34,200
Instruments not carried at fair value(9):
Assets:
Investment securities – amortized cost	$	7,392	(7)	$	12,815		$	109	(6)	$	20,316		$	4,240	$	14,476		$	–	$	18,716
Loans(10)		–			313,490			–			313,490			–		–			286,621		286,621
Liabilities:
Deposits(10)(11)		–			293,898			–			293,898			–		266,995			–		266,995
Subordinated debentures		–			5,627			–			5,627			–		6,105			–		6,105
Other liabilities		–			20,383			–			20,383			–		13,363			–		13,363

(1) The amounts for October 31, 2018 have been prepared in accordance with IFRS 9, prior periods have not been restated (refer to Notes 3 and 4).

(2) The fair value of precious metals is determined based on quoted market prices and forward spot prices, where applicable.

(3) IFRS 9 adoption resulted in reclassification of $17 million of corporate and other debt to trading assets in Level 3 from available-for-sale debt securities (refer to Note 4).

(4) Represents energy related assets for the year ended October 31, 2018 (October 31, 2017 – represents base metal positions).

(5) Excludes debt investment securities measured at amortized cost of $20,743 (held-to-maturity as at October 31, 2017 – $18,765).

(6) IFRS 9 adoption resulted in reclassification of $104 million of other foreign governments’ debt in Level 3 to debt securities measured at amortized cost (refer to Note 4).

(7) IFRS 9 adoption resulted in reclassification of $539 million of mortgage backed securities in Level 1 to debt securities measured at amortized cost (refer to Note 4).

(8) These amounts represent embedded derivatives bifurcated from structured notes.

(9) Represents the fair value of financial assets and liabilities where the carrying amount is not a reasonable approximation of fair value.

(10) Excludes floating rate instruments as carrying value approximates fair value.

(11) Excludes embedded derivatives bifurcated from structured notes.

Level 3 instrument fair value changes

Financial instruments categorized as Level 3 as at October 31, 2018, in the fair value hierarchy comprise certain precious metals, illiquid government bonds, highly-structured corporate bonds, illiquid investments in private equity securities, and complex derivatives.

The following table summarizes the changes in Level 3 instruments carried at fair value for the year ended October 31, 2018.

All positive balances represent assets and negative balances represent liabilities. Consequently, positive amounts indicate purchases of assets or settlements of liabilities and negative amounts indicate sales of assets or issuances of liabilities.

	As at October 31, 2018(1)
($ millions)	Fair value November 1 2017			Gains/(losses) recorded in income			Gains/(losses) recorded in OCI			Purchases/ Issuances			Sales/ Settlements			Transfers into/out of Level 3			Fair value October 31 2018			Change in unrealized gains/(losses) recorded in income for instruments still held(2)
Precious metals	$	–		$	–		$	–		$	5		$	(8	)	$	19		$	16		$	–
		–			–			–			5			(8	)		19			16			–
Trading assets
Loans		–			–			–			–			(2)			2			–			–
Corporate and other debt		39			(10	)		–			–			(16	)		5			18			–
		39			(10	)		–			–			(18	)		7			18			–
Investment securities
Other foreign governments’ debt		9			–			–			61			(22	)		–			48			n/a
Corporate and other debt		36			–			(5	)		–			(18	)		–			13			n/a
Equity securities		544			16			18			218	(3)		(67	)		(20	)		709			14
		589			16			13			279			(107	)		(20	)		770			14
Derivative financial instruments – assets
Interest rate contracts		36			67			–			31			(22	)		–			112			58
Equity contracts		–			(2	)		–			4			–			6			8			(2	)(4)
Derivative financial instruments – liabilities
Interest rate contracts		(267	)		(108	)		–			(24	)		22			303			(74	)		(26	)(5)
Foreign exchange and gold contracts		–			–			–			(6	)		–			6			–			–
Equity contracts		(7	)		–			–			(5	)		–			7			(5	)		–
		(238	)		(43	)		–			–			–			322			41			30
Total	$	390		$	(37	)	$	13		$	284			$  (133)		$	328		$	845		$	44

(1) The amounts for November 1, 2017 and October 31, 2018 have been prepared in accordance with IFRS 9, prior period amounts have not been restated (refer to Notes 3 and 4).

(2) These amounts represent the gains and losses from fair value changes of Level 3 instruments still held at the end of the period that are recorded in the Consolidated Statement of Income.

(3) Includes amount related to BBVA Chile acquisition of $45 million.

(4) Certain unrealized gains and losses on derivative assets and liabilities are largely offset by mark-to-market changes on other instruments included in trading revenues in the Consolidated Statement of Income, since these instruments act as an economic hedge to certain derivative assets and liabilities.

(5) Certain unrealized losses on interest rate derivative contracts are largely offset by mark-to-market changes on embedded derivatives on certain deposit liabilities in the Consolidated Statement of Income.

The following table summarizes the changes in Level 3 instruments carried at fair value for the year ended October 31, 2017.

	As at October 31, 2017
($ millions)	Fair value November 1 2016			Gains/(losses) recorded in income(1)			Gains/(losses) recorded in OCI		Purchases/ Issuances			Sales/ Settlements			Transfers into/out of Level 3			Fair value October 31 2017
Trading assets	$	1,222		$	(20	)	$	–	$	–		$	(1,180	)	$	–		$	22
Investment securities(2)		909			(24	)		38		122			(332	)		(3	)		710
Derivative financial instruments		(236	)		10			–		(6	)		3			(9	)		(238	)
Deposits(3)		(1,163	)		6			–		–			1,157			–			–

(1) Gains or losses for items in Level 3 may be offset with losses or gains on related hedges in Level 1 or Level 2.

(2) Investment securities include financial assets designated as available-for-sale.

(3) These amounts represent embedded derivatives bifurcated from certain deposit liabilities.

Significant transfers

Significant transfers can occur between the fair value hierarchy levels when additional or new information regarding valuation inputs and their refinement and observability become available. The Bank recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.

Derivative liabilities of $316 million were transferred out of Level 3 into Level 2 for the year ended October 31, 2018. All transfers were as a result of new information being obtained regarding the observability of inputs used in the valuation.

The following significant transfers were made among Levels 2 and 3 for the year ended October 31, 2017:

A net amount of derivative assets of $135 million and derivative liabilities of $126 million were transferred out of Level 3 into Level 2 for equity derivatives. Transfers were primarily as a result of assessment and consideration of volatility as an insignificant input for certain equity derivative contracts.

Level 3 sensitivity analysis

The table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.

	Valuation technique	Significant unobservable inputs	Range of estimates for unobservable inputs(1)		Changes in fair value from reasonably possible alternatives ($ millions)
Derivative financial instruments
Interest rate contracts	Option pricing	Interest rate		7% - 93%	–
	model	volatility
Equity contracts	Option pricing	Equity volatility		2% - 124%	(9)/9
	model	Single stock correlation		(70)% - 97%

(1) The range of estimates represents the actual lowest and highest level inputs used to fair value financial instruments within each financial statement category.

The Bank applies judgment in determining unobservable inputs used to calculate the fair value of Level 3 instruments.

The following section discusses the significant unobservable inputs for Level 3 instruments.

Correlation

Correlation in a credit derivative or debt instrument refers to the likelihood of a single default causing a succession of defaults. It affects the distribution of the defaults throughout the portfolio and therefore affects the valuation of instruments such as collateralized debt obligation tranches. A higher correlation may increase or decrease fair value depending on the seniority of the instrument.

Correlation becomes an input into equity derivative pricing when the relationship between price movements of two or more of the underlying assets is relevant.

Volatility

Volatility is a measure of security price fluctuation. Historic volatility is often calculated as the annualized standard deviation of daily price variation for a given time period. Implied volatility is volatility, when input into an option pricing model, that returns a value equal to the current market value of the option.

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Trading Assets

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Trading Assets

8 Trading Assets

(a) Trading securities

An analysis of the carrying value of trading securities is as follows:

As at October 31, 2018 ($ millions)	Remaining term to maturity
	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Trading securities:
Canadian federal government issued or guaranteed debt	$	1,500	$	4,040	$	4,781	$	863	$	1,819	$	–	$	13,003
Canadian provincial and municipal debt		859		876		2,122		3,425		2,877		–		10,159
U.S. treasury and other U.S. agency debt		514		1,574		3,348		1,602		126		–		7,164
Other foreign government debt		1,353		1,042		2,452		1,155		441		–		6,443
Common shares		–		–		–		–		–		39,700		39,700
Other		595		1,650		4,888		1,203		585		84		9,005
Total	$	4,821	$	9,182	$	17,591	$	8,248	$	5,848	$	39,784	$	85,474
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,711	$	5,222	$	5,901	$	4,798	$	4,972	$	9,730	$	33,334
U.S. dollar		620		2,414		7,105		2,377		523		16,695		29,734
Mexican peso		322		119		538		21		4		405		1,409
Other currencies		1,168		1,427		4,047		1,052		349		12,954		20,997
Total trading securities	$	4,821	$	9,182	$	17,591	$	8,248	$	5,848	$	39,784	$	85,474
As at October 31, 2017 ($ millions)	Remaining term to maturity
	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Trading securities:
Canadian federal government issued or guaranteed debt	$	950	$	1,696	$	4,283	$	1,333	$	2,081	$	–	$	10,343
Canadian provincial and municipal debt		1,230		1,127		1,536		1,269		2,163		–		7,325
U.S. treasury and other U.S. agency debt		113		980		3,301		2,214		286		–		6,894
Other foreign government debt		1,172		819		2,716		1,132		990		–		6,829
Common shares		–		–		–		–		–		39,275		39,275
Other		530		1,134		4,702		1,088		532		–		7,986
Total	$	3,995	$	5,756	$	16,538	$	7,036	$	6,052	$	39,275	$	78,652
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,368	$	3,064	$	5,130	$	3,068	$	4,524	$	8,619	$	26,773
U.S. dollar		372		1,771		6,807		2,777		526		12,016		24,269
Mexican peso		249		235		488		1		1		997		1,971
Other currencies		1,006		686		4,113		1,190		1,001		17,643		25,639
Total trading securities	$	3,995	$	5,756	$	16,538	$	7,036	$	6,052	$	39,275	$	78,652

(b) Trading loans

The following table provides the geographic breakdown of trading loans:

As at October 31 ($ millions)	2018		2017
Trading loans(1)(2)
U.S.(3)	$	9,080	$	10,654
Europe(4)		3,066		3,824
Asia Pacific(4)		1,077		1,605
Canada(4)		280		376
Other(4)		831		853
Total	$	14,334	$	17,312

(1) Geographic segmentation of trading loans is based upon the location of the ultimate risk of the underlying asset.

(2) Loans are denominated in U.S. dollars.

(3) Includes trading loans that serve as a hedge to loan-based credit total return swaps of $6,071 (2017 – $7,390), while the remaining relates to short-term precious metals trading and lending activities.

(4) These loans are primarily related to short-term precious metals trading and lending activities.

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Financial Instruments Designated at Fair Value Through Profit or Loss

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Financial Instruments Designated at Fair Value Through Profit or Loss

9 Financial Instruments Designated at Fair Value Through Profit or Loss

In accordance with its risk management strategy, the Bank has elected to designate certain investments, loans and senior note liabilities at fair value through profit or loss to reduce an accounting mismatch between fair value changes in these instruments and fair value changes in related derivatives, and where a hybrid financial liability contains one or more embedded derivatives that are not closely related to the host contract. Changes in fair value of financial liabilities arising from the Bank’s own credit risk are recognized in other comprehensive income, without subsequent reclassification to net income.

The cumulative fair value adjustment due to own credit risk is determined at a point in time by comparing the present value of expected future cash flows over the term of these liabilities discounted at the Bank’s effective funding rate, and the present value of expected future cash flows discounted under a benchmark rate. The change in fair value attributable to change in credit risk is determined by the change in the cumulative fair value adjustment due to own credit risk.

The following table presents the fair value of financial assets and liabilities designated at fair value through profit or loss and their changes in fair value.

	Fair value				Change in fair value					Cumulative change in FV(1)
	As at				For the year ended
October 31 ($ millions)	2018		2017		2018		2017			2018		2017
Assets
Investment securities(2)	$	12	$	13	$	–	$	–		$	–	$	11
Loans(3)		–		–		–		(205	)		–		(197	)
Liabilities
Senior note liabilities(4)		8,188		4,663		869		103			778		(91	)

(1) The cumulative change in fair value is measured from the instruments’ date of initial recognition.

(2) Changes in fair value are recorded in non-interest income – other.

(3) Changes in fair value are recorded in non-interest income – trading revenues.

(4) Changes in fair value attributable to changes in the Bank’s own credit risk are recorded in other comprehensive income. Other changes in fair value are recorded in non-interest income – trading revenues.

The following tables present the changes in fair value attributable to changes in the Bank’s own credit risk for financial liabilities designated at fair value through profit or loss as well as their contractual maturity and carrying amounts.

	Senior Note Liabilities
	Contractual maturity amount(1)		Carrying Value		Difference between carrying value and contractual maturity amount			Changes in fair value for the period attributable to changes in own credit risk recorded in other comprehensive income			Cumulative changes in fair value attributable to changes in own credit risk(1)
As at October 31, 2018	$	8,966	$	8,188	$	778		$	(30	)	$(66)
As at October 31, 2017	$	4,572	$	4,663	$	(91	)	$	(28	)	$(36)

(1) The cumulative change in fair value is measured from the instruments’ date of initial recognition.

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Derivative Financial Instruments

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Derivative Financial Instruments

10 Derivative Financial Instruments

(a) Notional amounts⁽¹⁾

The following table provides the aggregate notional amounts of derivative financial instruments outstanding by type and segregated between those used by the Bank in its dealer capacity (Trading) and those derivatives designated in hedging relationships. The notional amounts of these contracts represent the derivatives volume outstanding and do not represent the potential gain or loss associated with the market risk or credit risk of such instruments. Credit derivatives within other derivative contracts are comprised primarily of purchased and sold credit default swap transactions. To a lesser extent, this category also includes total return swaps referenced to loans and debt securities. Other derivative contracts – other includes precious metals other than gold, and other commodities including energy and base metal derivatives.

	2018						2017
As at October 31 ($ millions)	Trading		Hedging		Total		Trading		Hedging		Total
Interest rate contracts
Exchange-traded:
Futures	$	127,595	$	–	$	127,595	$	161,590	$	–	$	161,590
Options purchased		3,402		–		3,402		5,474		–		5,474
Options written		–		–		–		2,894		–		2,894
		130,997		–		130,997		169,958		–		169,958
Over-the-counter:
Forward rate agreements		11,407		–		11,407		208		–		208
Swaps		403,061		30,480		433,541		441,607		18,609		460,216
Options purchased		29,617		–		29,617		34,190		–		34,190
Options written		34,655		–		34,655		38,099		–		38,099
		478,740		30,480		509,220		514,104		18,609		532,713
Over-the-counter (settled through central counterparties):
Forward rate agreements		319,026		–		319,026		329,853		–		329,853
Swaps		3,028,670		136,188		3,164,858		2,236,148		106,979		2,343,127
Options purchased		–		–		–		–		–		–
Options written		–		–		–		–		–		–
		3,347,696		136,188		3,483,884		2,566,001		106,979		2,672,980
Total	$	3,957,433	$	166,668	$	4,124,101	$	3,250,063	$	125,588	$	3,375,651
Foreign exchange and gold contracts
Exchange-traded:
Futures	$	7,476	$	–	$	7,476	$	32,452	$	–	$	32,452
Options purchased		48		–		48		16		–		16
Options written		36		–		36		481		–		481
		7,560		–		7,560		32,949		–		32,949
Over-the-counter:
Spot and forwards		412,229		26,433		438,662		427,112		21,623		448,735
Swaps		340,614		57,380		397,994		321,567		63,300		384,867
Options purchased		42,497		–		42,497		39,100		–		39,100
Options written		41,768		–		41,768		39,547		–		39,547
		837,108		83,813		920,921		827,326		84,923		912,249
Over-the-counter (settled through central counterparties):
Spot and forwards		27,886		–		27,886		–		–		–
Swaps		–		–		–		–		–		–
Options purchased		–		–		–		–		–		–
Options written		–		–		–		–		–		–
		27,886		–		27,886		–		–		–
Total	$	872,554	$	83,813	$	956,367	$	860,275	$	84,923	$	945,198
Other derivative contracts
Exchange-traded:
Equity	$	43,323	$	–	$	43,323	$	33,287	$	–	$	33,287
Credit		–		–		–		–		–		–
Commodity and other contracts		55,076		–		55,076		45,938		–		45,938
		98,399		–		98,399		79,225		–		79,225
Over-the-counter:
Equity		79,226		756		79,982		64,444		796		65,240
Credit		18,902		–		18,902		26,737		–		26,737
Commodity and other contracts		45,174		–		45,174		34,715		–		34,715
		143,302		756		144,058		125,896		796		126,692
Over-the-counter (settled through central counterparties):
Equity		–		–		–		2,863		–		2,863
Credit		10,964		–		10,964		10,855		–		10,855
Commodity and other contracts		326		–		326		6,762		–		6,762
		11,290		–		11,290		20,480		–		20,480
Total	$	252,991	$	756	$	253,747	$	225,601	$	796	$	226,397
Total notional amounts outstanding	$	5,082,978	$	251,237	$	5,334,215	$	4,335,939	$	211,307	$	4,547,246

(1) The notional amounts represent the amount to which a rate or price is applied to determine the amount of cash flows to be exchanged.

(b) Remaining term to maturity

The following table summarizes the remaining term to maturity of the notional amounts of the Bank’s derivative financial instruments by type:

As at October 31, 2018 ($ millions)	Within one year		One to five years		Over five years		Total
Interest rate contracts
Futures	$	72,068	$	55,519	$	8	$	127,595
Forward rate agreements		227,761		92,717		9,955		330,433
Swaps		1,316,741		1,448,580		833,078		3,598,399
Options purchased		6,644		22,985		3,390		33,019
Options written		4,211		24,718		5,726		34,655
		1,627,425		1,644,519		852,157		4,124,101
Foreign exchange and gold contracts
Futures		3,005		4,100		371		7,476
Spot and forwards		438,760		26,241		1,547		466,548
Swaps		90,987		195,484		111,523		397,994
Options purchased		39,505		2,851		189		42,545
Options written		39,395		2,199		210		41,804
		611,652		230,875		113,840		956,367
Other derivative contracts
Equity		84,333		34,890		4,082		123,305
Credit		13,056		13,798		3,012		29,866
Commodity and other contracts		70,292		29,958		326		100,576
		167,681		78,646		7,420		253,747
Total	$	2,406,758	$	1,954,040	$	973,417	$	5,334,215
As at October 31, 2017 ($ millions)	Within one year		One to five years		Over five years		Total
Interest rate contracts
Futures	$	62,152	$	98,731	$	707	$	161,590
Forward rate agreements		282,062		47,999		–		330,061
Swaps		971,003		1,172,422		659,918		2,803,343
Options purchased		10,690		17,036		11,938		39,664
Options written		5,809		23,800		11,384		40,993
		1,331,716		1,359,988		683,947		3,375,651
Foreign exchange and gold contracts
Futures		4,810		27,474		168		32,452
Spot and forwards		401,461		47,210		64		448,735
Swaps		96,767		185,747		102,353		384,867
Options purchased		36,291		2,825		–		39,116
Options written		37,309		2,719		–		40,028
		576,638		265,975		102,585		945,198
Other derivative contracts
Equity		73,983		26,514		893		101,390
Credit		18,249		15,272		4,071		37,592
Commodity and other contracts		50,253		37,021		141		87,415
		142,485		78,807		5,105		226,397
Total	$	2,050,839	$	1,704,770	$	791,637	$	4,547,246

(c) Credit risk

As with other financial assets, derivative instruments are subject to credit risk. Credit risk arises from the possibility that counterparties may default on their obligations to the Bank. However, whereas the credit risk of other financial assets is represented by the principal amount net of any applicable allowance for credit losses, the credit risk associated with derivatives is normally a small fraction of the notional amount of the derivative instrument.

Derivative contracts generally expose the Bank to credit loss if changes in market rates affect a counterparty’s position unfavourably and the counterparty defaults on payment. Accordingly, exposure to credit risk of derivatives is represented by the positive fair value of the instrument.

Negotiated over-the-counter derivatives generally present greater credit exposure than exchange-traded contracts. The net change in the exchange-traded contracts is normally settled daily in cash with the exchange. Holders of these contracts look to the exchange for performance under the contract.

The Bank strives to limit credit risk by dealing with counterparties that it believes are creditworthy, and investment grade counterparties account for a significant portion of the credit risk exposure arising from the Bank’s derivative transactions as at October 31, 2018. To control credit risk associated with derivatives, the Bank uses the same credit risk management activities and procedures that are used in the lending business in assessing and adjudicating potential credit exposure. The Bank applies limits to each counterparty, measures exposure as the current positive fair value plus potential future exposure, and uses credit mitigation techniques, such as netting and collateralization.

The Bank obtains the benefit of netting by entering into master netting arrangements with counterparties (typically industry standard International Swaps and Derivatives Association (ISDA) agreements), which allow for a single net settlement of all transactions covered by that agreement in the event of a default or early termination of the transactions. In this manner, the credit risk associated with favourable contracts is eliminated by the master netting arrangement to the extent that unfavourable contracts with the same counterparty are not settled before favourable contracts.

Collateralization is typically documented by way of an ISDA Credit Support Annex (CSA), the terms of which may vary according to each party’s view of the other party’s creditworthiness. CSAs can require one party to post initial margin at the onset of each transaction. CSAs also allow for variation margin to be called if total uncollateralized mark-to-market exposure exceeds an agreed upon threshold. Such variation margin provisions can be one way (only one party will ever post collateral) or bi-lateral (either party may post collateral depending upon which party is in-the-money). The CSA will also detail the types of collateral that are acceptable to each party, and the adjustments that will be applied against each collateral type. The terms of the ISDA master netting agreements and CSAs are taken into consideration in the calculation of counterparty credit risk exposure (see also page 85 of the 2018 Annual Report).

Derivatives instruments used by the Bank include credit derivatives in its investment and loan portfolios: credit protection is sold as an alternative to acquiring exposure to bond or loan assets, while credit protection is bought to manage or mitigate credit exposures.

The following table summarizes the credit exposure of the Bank’s derivative financial instruments. The credit risk amount (CRA) represents the estimated replacement cost, or positive fair value, for all contracts taking into account master netting or collateral arrangements that have been made. The CRA does not reflect actual or expected losses.

The credit equivalent amount (CEA) is the CRA plus an add-on for potential future exposure. The add-on amount is based on a formula prescribed in the Capital Adequacy Requirements (CAR) Guideline of the Superintendent. The risk-weighted balance is calculated by multiplying the CEA by the capital requirement (K) times 12.5, where K is a function of the probability of default (PD), loss given default (LGD), maturity and prescribed correlation factors. Other derivative contracts – other includes precious metals other than gold, and other commodities, including energy and base metal derivatives.

	2018								2017
As at October 31 ($ millions)	Notional amount		Credit risk amount (CRA)(1)		Credit equivalent amount (CEA)(1)		CET1 Risk Weighted Assets(2)		Notional amount		Credit risk amount (CRA)(1)		Credit equivalent amount (CEA)(1)		CET1 Risk Weighted Assets(2)
Interest rate contracts
Futures	$	127,595	$	–	$	93	$	–	$	161,590	$	–	$	65	$	–
Forward rate agreements		330,433		36		157		82		330,061		20		30		20
Swaps		3,598,399		96		4,436		1,125		2,803,343		250		5,459		1,341
Options purchased		33,019		36		138		63		39,664		5		105		57
Options written		34,655		–		2		1		40,993		–		15		3
		4,124,101		168		4,826		1,271		3,375,651		275		5,674		1,421
Foreign exchange and gold contracts
Futures		7,476		–		85		–		32,452		–		56		–
Spot and forwards		466,548		2,571		5,440		2,006		448,735		2,370		6,311		1,765
Swaps		397,994		4,297		8,232		2,604		384,867		4,023		7,297		1,898
Options purchased		42,545		712		240		76		39,116		523		515		113
Options written		41,804		–		20		5		40,028		–		83		12
		956,367		7,580		14,017		4,691		945,198		6,916		14,262		3,788
Other derivative contracts
Equity		123,305		455		4,927		1,505		101,390		45		5,123		1,575
Credit		29,866		239		420		119		37,592		12		1,421		174
Commodity and other contracts		100,576		1,182		8,052		830		87,415		9		10,953		807
		253,747		1,876		13,399		2,454		226,397		66		17,497		2,556
Credit Valuation Adjustment(2)		–		–		–		4,616		–		–		–		2,988
Total derivatives	$	5,334,215	$	9,624	$	32,242	$	13,032	$	4,547,246	$	7,257	$	37,433	$	10,753
Amount settled through central counterparties(3)
Exchange-traded		236,956		–		7,300		153		282,132		–		10,385		208
Over-the-counter		3,523,060		–		781		16		2,693,460		–		1,334		27
	$	3,760,016	$	–	$	8,081	$	169	$	2,975,592	$	–	$	11,719	$	235

(1) The amounts presented are net of collateral and master netting agreements at the product level. The total amounts relating to netting and collateral were $27,934 (2017 – $28,107) for CRA, and $63,831 (2017 – $51,623) for CEA.

(2) As per OSFI guideline, effective 2014, Credit Valuation Adjustment (CVA) to CET1 RWA for derivatives was phased-in. In 2018, the CVA was 0.80 (2017 – 0.72).

(3) Amounts are included under total derivatives above. Amounts include exposures settled directly through central counterparties and exposures settled through clearing members of central counterparties.

(d) Fair value

The following table summarizes the fair value of derivatives segregated by type and segregated between trading and those derivatives designated in hedging relationships.

As at October 31 ($ millions)	2018				2018				2017
	Average fair value				Year-end fair value				Year-end fair value(1)
	Favourable		Unfavourable		Favourable		Unfavourable		Favourable		Unfavourable
Trading
Interest rate contracts
Forward rate agreements	$	83	$	17	$	57	$	–	$	27	$	1
Swaps		8,193		10,130		8,158		8,956		8,895		10,330
Options		84		107		104		128		53		75
		8,360		10,254		8,319		9,084		8,975		10,406
Foreign exchange and gold contracts
Forwards		5,213		5,232		6,611		5,800		5,973		5,223
Swaps		10,660		8,570		11,864		10,292		10,945		8,774
Options		765		691		826		831		730		681
		16,638		14,493		19,301		16,923		17,648		14,678
Other derivative contracts
Equity		2,451		3,380		2,361		2,895		2,274		3,233
Credit		299		128		349		70		175		179
Commodity and other contracts		2,829		2,765		3,607		3,328		1,576		2,049
		5,579		6,273		6,317		6,293		4,025		5,461
Trading derivatives’ market valuation	$	30,577	$	31,020	$	33,937	$	32,300	$	30,648	$	30,545
Hedging
Interest rate contracts
Swaps					$	720	$	2,002	$	803	$	684
Foreign exchange and gold contracts
Forwards						331		310		634		215
Swaps						2,570		3,304		3,218		2,756
					$	2,901	$	3,614	$	3,852	$	2,971
Other derivative contracts
Equity					$	–	$	51	$	61	$	–
Hedging derivatives’ market valuation					$	3,621	$	5,667	$	4,716	$	3,655
Total derivative financial instruments as per Statement of Financial Position					$	37,558	$	37,967	$	35,364	$	34,200
Less: impact of master netting and collateral(2)						27,934		27,934		28,107		28,107
Net derivative financial instruments(2)					$	9,624	$	10,033	$	7,257	$	6,093

(1) The average fair value of trading derivatives’ market valuation for the year ended October 31, 2017 was: favourable $30,780 and unfavourable $34,032. Average fair value amounts are based on the latest 13 month-end balances.

(2) Master netting agreement amounts are based on the capital adequacy criteria of the Basel Committee on Banking Supervision (BCBS) and OSFI. These criteria allow netting where there are legally enforceable contracts which enable net settlement in the event of a default, bankruptcy, liquidation or similar circumstances.

(e) Hedging activities

The Bank manages interest rate risk, foreign currency risk and equity risk through hedge accounting transactions.

Interest rate risk

Single-currency interest rate swaps are used to hedge interest rate risk exposure. In fair value hedges of interest rate risk, the interest rate exposure from fixed rate assets and liabilities is converted from a fixed to floating exposure. In cash flow hedges of interest rate risk, the interest rate exposure from floating rate assets and liabilities is converted from floating to fixed. The Bank generally hedges interest rate risk only to the extent of benchmark interest rates. The total interest cash flows usually comprise a spread in addition to the benchmark rate.

Foreign currency risk

In fair value hedges, cross-currency interest rate swaps and single-currency interest rate swaps are used to manage foreign currency exposure in conjunction with interest rate exposure. Cross-currency interest rate swaps or a combination of cross-currency and single-currency interest rate swaps are mainly used to convert a foreign currency fixed rate exposure to a functional currency floating rate exposure The Bank generally hedges interest rate risk only to the extent of benchmark interest rates. The total interest cash flows usually comprise a spread in addition to the benchmark rate.

In cash flow hedges, cross-currency interest rate swaps, single-currency interest rate swaps, foreign currency forwards and foreign currency assets or liabilities are used to manage foreign currency exposure, or a combined foreign currency and interest rate exposure. Cross-currency interest rate swaps are used to offset the foreign currency exposure by exchanging the interest cash flows in one currency for interest cash flows in another currency. Single-currency interest rate swaps may be used in conjunction with cross-currency interest rate swaps to convert the foreign currency exposure or resulting functional currency exposure from floating to fixed. Foreign currency forwards and foreign currency denominated assets and liabilities are used to offset the exposure arising from highly probable future cash flows and purchase considerations for business acquisitions denominated in a foreign currency. In hedges of both foreign currency and interest rate exposure, the interest rate risk is generally hedged only to the extent of the

benchmark interest rate. The total interest cash flows usually comprise a spread in addition to the benchmark rate.

In net investment hedges, the Bank designates foreign currency liabilities and foreign currency forwards as hedging instruments to manage foreign currency exposure. The designated non-derivative liabilities are denominated in the functional currency of the net investment, such that the foreign exchange translation impact from the net investment will be offset by the foreign exchange impact from the designated liabilities. The foreign currency forward contracts are structured to sell the functional currency of the net investment in return for the Bank’s functional currency.

Equity risk

Equity risk is created by the Bank’s share-based compensation plans awarded to employees. In cash flow hedges, total return swaps are mainly used to offset the equity exposure by exchanging interest payments for payments based on the returns on the underlying shares.

For all of the risks identified above, the economic relationship and hedge ratio are determined using a qualitative and quantitative assessment. This assessment incorporates comparison of critical terms of the hedged and hedging item, and regression analysis. For regression analysis, a hedging relationship is considered highly effective when all of the following criteria are met: correlation between the variables in the regression is at least 0.8 or greater; slope of the regression is within a 0.8-1.25 range; and confidence level of the slope is at least 95%.The main sources of hedge ineffectiveness include the following:

• The use of different discount curves to value the hedged item and the hedging derivative in fair value hedges, in order to reflect the reduced credit risk of collateralized derivatives;

• Differences in the underlying reference interest rate tenor and reset/settlement frequency between the hedging instruments and the hedged item.

The Bank has elected to continue to apply the hedge accounting requirements of IAS 39. However, the Bank has implemented the additional hedge accounting disclosures that are required by the IFRS 9 related amendments to IFRS 7 “Financial Instruments: Disclosures”. The following tables present current fiscal year information in accordance with these new disclosure requirements. Prior year comparatives have not been restated and are presented in accordance with the prior IFRS 7 disclosure requirements at the end of this section.

The following table summarizes the notional amounts of derivatives and carrying amounts of cash and deposit liabilities designated as hedging instruments.

	Notional amounts(1)
	Remaining term to maturity						No specific
As at October 31, 2018 ($ millions)	Within one year		One to five years		Over five years		maturity		Total
Fair value hedges
Interest rate risk – swaps	$	16,006	$	78,236	$	11,270	$	–	$	105,512
Foreign currency/interest rate risk – swaps		–		689		–		–		689
Cash flow hedges
Interest rate risk – swaps		12,257		21,908		9,713		–		43,878
Foreign currency/interest rate risk – swaps		5,539		19,193		2,489		–		27,221
Foreign currency risk
Swaps		20,983		63,697		8,465		–		93,145
Foreign currency forwards		8,999		–		–		–		8,999
Cash		–		–		–		92		92
Equity risk – total return swaps		298		458		–		–		756
Net investment hedges
Foreign currency risk
Foreign currency forwards		17,434		–		–		–		17,434
Deposit liabilities – carrying amount		–		–		–		6,077		6,077
Total	$	81,516	$	184,181	$	31,937	$	6,169	$	303,803

(1) Notional amounts relating to derivatives that are hedging multiple risks in both assets and liabilities are included in more than one category.

The following table shows the average rate or price of significant hedging instruments.

	Average rate or price(1)
As at October 31, 2018	Fixed interest rate			FX rate		Price
Fair value hedges
Interest rate risk – swaps		2.04	%		n/a		n/a
Foreign currency/interest rate risk – swaps
CAD-USD		2.22	%		1.29		n/a
CAD-EUR		3.02	%		1.33		n/a
Cash flow hedges
Interest rate risk – swaps		2.37	%		n/a		n/a
Foreign currency/ interest rate risk – swaps
CAD-USD		1.75	%		1.27		n/a
Foreign currency risk
Swaps
CAD-USD		n/a			1.30		n/a
CAD-EUR		n/a			1.48		n/a
CAD-GBP		n/a			1.74		n/a
Foreign currency forwards
CAD-USD		n/a			1.30		n/a
Equity price risk – total return swaps		n/a			n/a	$	73.87
Net investment hedges
Foreign currency risk – foreign currency forwards
CAD-USD		n/a			1.29		n/a
CAD-MXN		n/a			15.77		n/a
CAD-PEN		n/a			2.59		n/a

(1) The average rate or price is calculated in aggregate for all of the Bank’s hedge relationships, including hedges of assets and liabilities. The majority of the Bank’s hedges have a remaining term of maturity of less than 5 years.

For fair value hedges, the following table contains information related to items designated as hedging instruments, hedged items and ineffectiveness.

For the year ended October 31, 2018 ($ millions)	Carrying amount of the hedging instruments(1)					Hedge Ineffectiveness(2)												Accumulated amount of fair value hedge adjustment gains/ (losses) on the hedged item(4)
	Assets		Liabilities			Gains/(losses) on hedging instrument used to calculate hedge ineffectiveness			Gains/(losses) on hedged item used to calculate hedge ineffectiveness			Ineffectiveness recorded in non-interest income – other			Carrying amount of the hedged item(3)			Active hedges			Discontinued hedges
Fair value hedges
Interest rate risk – swaps	$	448	$	(1,454	)	$	(475	)	$	469		$	(6	)
Investment securities							360			(367	)		(7	)	$	16,286		$	(149	)	$	63
Loans							260			(265	)		(5	)		23,763			(246	)		(149	)
Deposit liabilities							(1,037	)		1,043			6			(58,026	)		1,065			186
Subordinated debentures							(58	)		58			–			(3,923	)		37			40
Foreign currency/interest rate risk – swaps		7		(31	)		–			(1	)		(1	)
Investment securities							5			(5	)		–			814			6			–
Deposit liabilities							(4	)		4			–			(466	)		3			–
Subordinated debentures							(1	)		–			(1	)		–			–			–
Total	$	455		$  (1,485	)		$  (475	)	$	468			$  (7	)		$  (21,552	)	$	716		$	140

(1) Comprises unrealized gains/losses and are recorded within derivative financial instruments in assets and liabilities, respectively in the Consolidated Statement of Financial Position.

(2) Includes ineffectiveness related to hedges discontinued during the year ended October 31, 2018.

(3) This represents the carrying value on the Consolidated Statement of Financial Position and comprises amortized cost before allowance for credit losses, plus fair value hedge adjustment, except for investment securities which are carried at fair value.

(4) This represents the accumulated fair value hedge adjustment and is a component of the carrying amount of the hedged item.

For cash flow hedges and net investment hedges, the following table contains information related to items designated as hedging instruments, hedged items and ineffectiveness.

	Carrying amount of the hedging instruments(1)					Hedge Ineffectiveness(2)
For the year ended October 31, 2018 ($ millions)	Assets		Liabilities			Gains/(losses) on hedging instrument used to calculate hedge ineffectiveness			Gains/(losses) on hypothetical derivative used to calculate hedge ineffectiveness(3)			Ineffectiveness recorded in non-interest income – other(4)
Cash flow hedges
Interest rate risk – swaps	$	961	$	(1,350	)	$	(339	)	$	(341	)	$	2
Foreign currency/interest rate risk – swaps		101		(955	)		(530	)		(549	)		(6	)
Foreign currency risk
Swaps		1,773		(1,516	)		(563	)		(562	)		(6	)
Foreign currency forwards		143		(14	)		332			332			–
Cash		92		–			1			1			–
Equity risk – total return swaps		–		(51	)		(92	)		(92	)		–
		3,070		(3,886	)		(1,191	)		(1,211	)		(10	)
Net investment hedges
Foreign currency risk
Foreign currency forwards		188		(296	)		(160	)		(160	)		–
Deposit liabilities		–		(6,077	)		(121	)		(121	)		–
		188		(6,373	)		(281	)		(281	)		–
Total	$	3,258		$  (10,259	)		$  (1,472	)		$  (1,492	)		$  (10	)

(1) Comprises unrealized gains/losses for derivative instruments and are recorded within derivative financial instruments in assets and liabilities, respectively in the Consolidated Statement of Financial Position.

(2) Includes ineffectiveness related to hedges discontinued during the year ended October 31, 2018.

(3) For cash flow hedges, hypothetical derivatives having critical terms which match those of the underlying hedged item are used to assess hedge ineffectiveness.

(4) For cash flow hedges, ineffectiveness is only recognized in the Consolidated Statement of Income when the life-to-date cumulative change in the hedging instrument exceeds the cumulative change in the hypothetical derivative.

For cash flow hedges and net investment hedges, the following table contains information regarding the impacts on the Consolidated Statement of Other Comprehensive Income on a pre-tax basis.

	AOCI as at November 1, 2017			Net gains/ (losses) recognized in OCI			Amount reclassified to net income as the hedged item affects net income(1)		Amount reclassified to net income for hedges of forecasted transactions that are no longer expected to occur(1)			Net gains (losses) included in non-financial asset/liability as a result of a hedged forecasted transaction			AOCI as at October 31, 2018			Balance in cash flow hedge reserve/unrealized foreign currency translation account as at October 31, 2018
For the year ended October 31, 2018 ($ millions)																		Active hedges			Discountinued hedges
Cash flow hedges
Interest rate risk	$	104		$	(341	)	$	83	$	–		$	–		$	(154	)	$	(262	)	$	108
Foreign currency/interest rate risk		(151	)		(524	)		225		–			–			(450	)		(352	)		(98	)
Foreign currency risk		321			(224	)		464		(22	)		(94	)		445			433			12
Equity risk		46			(92	)		39		–			–			(7	)		(7	)		–
		320			(1,181	)		811		(22	)		(94	)		(166	)		(188	)		22
Net investment hedges
Foreign currency risk		(2,970	)		(281	)		–		–			–			(3,251	)		(3,199	)		(52	)
Total	$	(2,650	)	$	(1,462	)	$	811		$  (22	)		$  (94	)		$  (3,417	)		$  (3,387	)	$	(30	)

(1) Amounts reclassified from the cash flow hedge reserve to net income are recorded in non-interest income-other.

Comparative year information under prior IFRS 7 disclosure requirements

Ineffectiveness of hedge relationships

Due to the ineffective portion of designated hedges, the Bank recorded the following amounts in non-interest income – other:

For the year ended October 31 ($ millions)	2017
Fair value hedges
Gain (loss) recorded on hedged items	$	574
Gain (loss) recorded on hedging instruments		(588	)
Ineffectiveness	$	(14	)
Cash flow hedges
Ineffectiveness	$	24

Hedging instruments

Market valuation is disclosed by the type of relationship:

	2017
As at October 31 ($ millions)	Favourable		Unfavourable
Derivatives designated in fair value hedging relationships(1)	$	687	$	751
Derivatives designated in cash flow hedging relationships		3,746		2,749
Derivatives designated in net investment hedging relationships(1)		283		155
Total derivatives designated in hedging relationships	$	4,716	$	3,655

(1) As at October 31, 2017, the fair value of non-derivative instruments designated as net investment hedges and fair value hedges was $6,183 (2016 – $6,905). These non-derivative hedging instruments are presented as deposits – financial institutions on the Consolidated Statement of Financial Position.

Cash flow hedges

The period when cash flows of designated hedged items are expected to occur and impact the Consolidated Statement of Income are as follows:

As at October 31, 2017 ($ millions)	Within one year			Within one to five years			More than five years
Cash inflows from assets	$	11,235		$	19,866		$	4,178
Cash outflows from liabilities		(31,542	)		(26,863)			(4,746)
Net cash flows	$	(20,307)		$	(6,997	)	$	(568	)

Income related to interest cash flows is recognized using the effective interest method over the life of the underlying instrument. Foreign currency gains and losses related to future cash flows of on-balance sheet monetary items are recognized as incurred. Forecasted revenue is recognized over the period to which it relates.

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Offsetting Financial Assets and Financial Liabilities

12 Months Ended

Oct. 31, 2018

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Offsetting Financial Assets and Financial Liabilities

11 Offsetting Financial Assets and Financial Liabilities

The Bank is eligible to present certain financial assets and financial liabilities as listed in the table below on a net basis on the Consolidated Statement of Financial Position pursuant to criteria described in Note 3 – Significant accounting policies.

The following tables provide information on the impact of offsetting on the Bank’s Consolidated Statement of Financial Position, as well as the financial impact of netting for instruments that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for offsetting in the Consolidated Statement of Financial Position, as well as available cash and financial instrument collateral.

As at October 31, 2018 ($ millions)
Types of financial assets	Gross amounts of recognized financial assets			Gross amounts of recognized financial liabilities offset in the  consolidated statement of financial position			Net amounts of financial assets presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position						Net amount(3)
									Impact of master netting arrangements or similar agreements(1)			Collateral(2)
Derivative financial instruments	$	37,887	(4)	$	(329	)(4)	$	37,558	$	(24,568	)	$	(4,085	)	$	8,905
Securities purchased under resale agreements and securities borrowed		116,375			(12,357	)		104,018		(6,849	)		(91,347	)		5,822
Total	$	154,262		$	(12,686	)	$	141,576	$	(31,417	)	$	(95,432	)	$	14,727

As at October 31, 2018 ($ millions)
Types of financial liabilities	Gross amounts of recognized financial liabilities			Gross amounts of recognized financial assets offset in the consolidated statement  of financial position			Net amounts of financial liabilities presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position						Net amount
									Impact of master netting arrangements or similar agreements(1)			Collateral(2)
Derivative financial instruments	$	38,296	(4)	$	(329	)(4)	$	37,967	$	(24,568	)	$	(5,051	)	$	8,348
Obligations related to securities sold under repurchase agreements and securities lent		113,614			(12,357	)		101,257		(6,849	)		(88,154	)		6,254
Total	$	151,910		$	(12,686	)	$	139,224	$	(31,417	)	$	(93,205	)	$	14,602

(1) Amounts that are subject to master netting arrangements or similar agreements but were not offset in the Consolidated Statement of Financial Position because they did not meet the net settlement/simultaneous settlement criteria; or because the rights of set off are conditional upon the default of the counterparty only.

(2) Cash and financial instrument collateral amounts received or pledged in relation to the total amounts of financial assets and financial liabilities, including those that were not offset in the Consolidated Statement of Financial Position. These amounts are disclosed at fair value and the rights of set off are conditional upon the default of the counterparty.

(3) Not intended to represent the Bank’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to offsetting and collateral arrangements.

(4) During 2018, the Bank adopted the settlement-to-market (STM) model for derivatives cleared through a clearing organization. Under this model, the legal characterization of variation margin is considered to be settled at the end of each day. As such, the balances in the Gross amounts of recognized financial assets/liabilities and the Gross amounts offset in the consolidated statement of financial position decreased by approximately $18 billion each.

As at October 31, 2017 ($ millions)
Types of financial assets	Gross amounts of recognized financial assets		Gross amounts of recognized financial liabilities offset in the consolidated statement  of financial position			Net amounts of financial assets presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position
								Impact of master netting arrangements or similar agreements(1)			Collateral(2)			Net amount(3)
Derivative financial instruments(4)	$	49,512	$	(14,148	)	$	35,364	$	(22,400	)	$	(5,915	)	$	7,049
Securities purchased under resale agreements and securities borrowed		106,721		(11,402	)		95,319		(11,649	)		(75,675	)		7,995
Total	$	156,233	$	(25,550)		$	130,683	$	(34,049)		$	(81,590)		$	15,044

As at October 31, 2017 ($ millions)
Types of financial liabilities	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial assets offset in the consolidated statement  of financial position			Net amounts of financial liabilities presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position
								Impact of master netting arrangements or similar agreements(1)			Collateral(2)			Net amount
Derivative financial instruments(4)	$	48,348	$	(14,148	)	$	34,200	$	(22,400	)	$	(4,700	)	$	7,100
Obligations related to securities sold under repurchase agreements and securities lent		107,245		(11,402	)		95,843		(11,649	)		(72,311	)		11,883
Total	$	155,593	$	(25,550)		$	130,043	$	(34,049)		$	(77,011)		$	18,983

(1) Amounts that are subject to master netting arrangements or similar agreements but were not offset in the Consolidated Statement of Financial Position because they did not meet the net settlement/simultaneous settlement criteria; or because the rights of set off are conditional upon the default of the counterparty only.

(2) Cash and financial instrument collateral amounts received or pledged in relation to the total amounts of financial assets and financial liabilities, including those that were not offset in the Consolidated Statement of Financial Position. These amounts are disclosed at fair value and the rights of set off are conditional upon the default of the counterparty.

(3) Not intended to represent the Bank’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to offsetting and collateral arrangements.

(4) For fiscal 2017, the cash collateral received against the positive market values of derivative financial instruments of $793 and the cash collateral pledged towards the negative mark to market of derivative financial instruments of $1,112 are recorded within other liabilities and other assets, respectively.

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Investment Securities

12 Months Ended

Oct. 31, 2018

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Investment Securities

12 Investment Securities

The following table presents the carrying amounts of the Bank’s investment securities per measurement category.

As at October 31, 2018 ($ millions)	2018(1)		2017
Debt investment securities measured at FVOCI	$	55,843	$	n/a
Debt investment securities measured at amortized cost		20,743		n/a
Equity investment securities designated as at FVOCI		1,305		n/a
Equity investment securities measured at FVTPL		505		n/a
Available-for-sale investment securities		n/a		50,504
Held-to-maturity investment securities		n/a		18,765
Total investment securities		78,396		69,269

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(a) Debt investment securities measured at fair value through other comprehensive income (FVOCI)

As at October 31, 2018 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Canadian federal government issued or guaranteed debt	$	8,903	$	38	$	50	$	8,891
Canadian provincial and municipal debt		4,403		3		54		4,352
U.S. treasury and other U.S. agency debt		19,298		6		163		19,141
Other foreign government debt		20,022		49		81		19,990
Other debt		3,503		6		40		3,469
Total debt securities measured at FVOCI	$	56,129	$	102	$	388	$	55,843

(b) Debt investment securities measured at amortized cost

As at October 31, 2018 ($ millions)	Fair Value		Carrying value(1)
Canadian federal and provincial government issued or guaranteed debt	$	6,530	$	6,681
U.S. treasury and other U.S. agency debt		4,321		4,462
Other foreign government debt		3,086		3,131
Corporate debt		6,379		6,469
Total debt investment securities measured at amortized cost	$	20,316	$	20,743

(1) Balances are net of impairment allowances of $(1).

(c) Equity investment securities designated at fair value through other comprehensive income (FVOCI)

The Bank has designated certain instruments shown in the following table as equity securities FVOCI as these investments are expected to be held for the long-term for strategic purposes, effective November 1, 2017. In prior years, these instruments were classified as available-for-sale and measured at fair value with changes to carrying value recognized in other comprehensive income.

As at October 31, 2018 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Preferred equity instruments	$	334	$	–	$	54	$	280
Common shares		937		126		38		1,025
Total equity investment securities designated at FVOCI	$	1,271	$	126	$	92	$	1,305

(d) Available-for-sale investment securities

An analysis of unrealized gains and losses on available-for-sale securities is as follows:

As at October 31, 2017 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Canadian federal government issued or guaranteed debt	$	12,069	$	119	$	95	$	12,093
Canadian provincial and municipal debt		4,839		13		29		4,823
U.S. treasury and other U.S. agency debt		6,761		1		90		6,672
Other foreign government debt		19,788		49		34		19,803
Other debt		5,792		34		24		5,802
Preferred shares		397		1		87		311
Common shares		899		164		63		1,000
Total available-for-sale securities	$	50,545	$	381	$	422	$	50,504

The net unrealized loss on available-for-sale securities of $41 million increases to a net unrealized loss of $48 million after the impact of qualifying hedges is taken into account. The net unrealized loss on available-for-sale securities is recorded in Accumulated Other Comprehensive Income.

(e) Held-to-maturity investment securities

An analysis of the fair value and carrying value of held-to-maturity securities is presented below:

As at October 31, 2017 ($ millions)	Fair value		Carrying value
Canadian federal and provincial government issued or guaranteed debt	$	5,748	$	5,779
U.S. treasury and other U.S. agency debt		3,991		3,993
Other foreign government debt		2,690		2,705
Corporate debt		6,287		6,288
Total held-to-maturity securities	$	18,716	$	18,765

(f) An analysis of the carrying value of investment securities is as follows:

	Remaining term to maturity
As at October 31, 2018 ($ millions)	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Fair value through other comprehensive income
Debt instruments
Canadian federal government issued or guaranteed debt	$	1,439	$	407	$	5,878	$	105	$	1,062	$	–	$	8,891
Yield(1) %		0.6		1.5		2.0		2.6		3.5		–		1.9
Canadian provincial and municipal debt		1,092		1,107		2,084		64		5		–		4,352
Yield(1) %		1.7		1.8		1.8		3.2		2.9		–		1.8
U.S. treasury and other U.S. agency debt		322		3,517		13,485		1,654		163		–		19,141
Yield(1) %		1.8		2.0		2.4		3.1		3.2		–		2.4
Other foreign government debt		6,884		6,379		5,349		1,053		325		–		19,990
Yield(1) %		1.3		1.7		3.7		3.8		4.3		–		2.3
Other debt		718		872		1,553		141		185		–		3,469
Yield(1) %		1.5		1.8		2.0		2.6		2.6		–		1.9
		10,455		12,282		28,349		3,017		1,740		–		55,843
Equity instruments
Preferred equity instruments		–		–		–		–		–		280		280
Common shares		–		–		–		–		–		1,025		1,025
												1,305		1,305
Total FVOCI		10,455		12,282		28,349		3,017		1,740		1,305		57,148
Amortized cost
Canadian federal and provincial government issued or guaranteed debt		692		868		5,121		–		–		–		6,681
U.S. treasury and other U.S. agency debt		197		988		3,266		–		11		–		4,462
Other foreign government debt		354		1,193		966		502		116		–		3,131
Corporate debt		637		1,113		4,414		246		59		–		6,469
		1,880		4,162		13,767		748		186		–		20,743
Fair value through profit or loss
Equity instruments		–		–		–		–		–		505		505
Total investment securities	$	12,335	$	16,444	$	42,116	$	3,765	$	1,926	$	1,810	$	78,396
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,918	$	1,828	$	11,478	$	357	$	1,102	$	967	$	18,650
U.S. dollar		1,797		8,384		26,137		2,053		354		366		39,091
Mexican peso		640		541		892		282		–		15		2,370
Other currencies		6,980		5,691		3,609		1,073		470		462		18,285
Total investment securities	$	12,335	$	16,444	$	42,116	$	3,765	$	1,926	$	1,810	$	78,396

(1) Represents the weighted-average yield of fixed income securities.

	Remaining term to maturity
As at October 31, 2017 ($ millions)	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Available-for-sale
Canadian federal government issued or guaranteed debt	$	8	$	291	$	9,780	$	905	$	1,109	$	–	$	12,093
Yield(1) %		0.9		1.1		1.1		2.7		3.2		–		1.4
Canadian provincial and municipal debt		99		737		3,698		284		5		–		4,823
Yield(1) %		0.6		1.5		1.7		2.4		2.9		–		1.7
U.S. treasury and other U.S. agency debt		106		1,260		2,374		2,704		228		–		6,672
Yield(1) %		1.0		1.5		1.0		1.6		1.5		–		1.3
Other foreign government debt		7,810		5,283		5,313		1,259		138		–		19,803
Yield(1) %		0.6		2.8		4.1		5.7		6.2		–		2.5
Other debt		1,082		1,541		2,784		210		185		–		5,802
Yield(1) %		0.6		0.8		1.6		2.5		2.5		–		1.2
Preferred shares		–		–		–		–		–		311		311
Common shares		–		–		–		–		–		1,000		1,000
Total available-for-sale securities		9,105		9,112		23,949		5,362		1,665		1,311		50,504
Held-to-maturity
Canadian federal and provincial government issued or guaranteed debt		65		860		4,854		–		–		–		5,779
U.S. treasury and other U.S. agency debt		1,290		–		2,703		–		–		–		3,993
Other foreign government debt		–		683		1,914		102		6		–		2,705
Corporate debt		167		821		5,300		–		–		–		6,288
Total held-to-maturity assets		1,522		2,364		14,771		102		6		–		18,765
Total investment securities	$	10,627	$	11,476	$	38,720	$	5,464	$	1,671	$	1,311	$	69,269
Total by currency (in Canadian equivalent):
Canadian dollar	$	76	$	1,165	$	15,500	$	1,276	$	1,130	$	539	$	19,686
U.S. dollar		1,961		4,178		19,344		3,023		419		372		29,297
Mexican peso		420		579		1,568		285		–		9		2,861
Other currencies		8,170		5,554		2,308		880		122		391		17,425
Total investment securities	$	10,627	$	11,476	$	38,720	$	5,464	$	1,671	$	1,311	$	69,269

(1) Represents the weighted-average yield of fixed income securities.

(g) Net gain on sale of investment securities

The following table presents the net gain on sale of investment securities:

For the year ended October 31 ($ millions)	2018(1)		2017			2016
Net realized gains	$	n/a	$	399		$	570
Debt investment securities measured at fair value through other comprehensive income (FVOCI)		146		n/a			n/a
Total net realized gains on investment securities		146		399			570
Impairment losses		–		19	(2)		36	(2)
Net gain on sale of investment securities	$	146	$	380		$	534

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Impairment losses are comprised of (2017 – $14; 2016 – $36) from equity securities and (2017 –$5; 2016 – nil) from other debt securities.

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Loans, Impaired Loans and Allowance for Credit Losses

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Loans, Impaired Loans and Allowance for Credit Losses

13 Loans, Impaired Loans and Allowance for Credit Losses

(a) Loans at amortized cost

	IFRS 9						IAS 39
	2018(1)						2017
As at October 31 ($ millions)	Gross loans		Allowance for credit losses		Net carrying amount		Gross loans		Allowance for credit losses		Net carrying amount
Residential mortgages	$	253,357	$	678	$	252,679	$	236,916	$	551	$	236,365
Personal loans		96,019		2,109		93,910		89,227		1,502		87,725
Credit cards		16,485		1,213		15,272		14,104		802		13,302
Business and government		191,038		1,065		189,973		168,449		1,472		166,977
Total	$	556,899	$	5,065	$	551,834	$	508,696	$	4,327	$	504,369

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

(b) Loans and acceptances outstanding by geography⁽¹⁾

As at October 31 ($ millions)	2018			2017
Canada:
Residential mortgages	$	213,083		$	205,793
Personal loans		72,935			64,295
Credit cards		7,361			13,495
Business and government		57,918			52,935
		351,297			336,518
United States:
Personal loans		1,193			1,228
Business and government		40,613			35,702
		41,806			36,930
Mexico:
Residential mortgages		7,651			6,911
Personal loans		3,298			3,064
Credit cards		674			520
Business and government		15,399			13,635
		27,022			24,130
Chile:
Residential mortgages		15,313			7,302
Personal loans		6,023			3,587
Credit cards		2,592			1,744
Business and government		19,876			10,109
		43,804			22,742
Peru:
Residential mortgages		2,947			2,735
Personal loans		3,888			3,682
Credit cards		1,575			1,410
Business and government		11,707			10,617
		20,117			18,444
Colombia:
Residential mortgages		2,189			1,999
Personal loans		3,138			1,845
Credit cards		2,255			1,746
Business and government		3,996			3,838
		11,578			9,428
Other International:
Residential mortgages		12,174			12,176
Personal loans		5,544			4,471
Credit cards		2,028			2,244
Business and government		41,529			41,613
		61,275			60,504
Total loans		556,899			508,696
Acceptances(2)		16,329			13,560
Total loans and acceptances(3)		573,228			522,256
Allowance for credit losses(4)		(5,073	)		(4,327	)
Total loans and acceptances net of allowances for loan losses	$	568,155		$	517,929

(1) Geographic segmentation is based on the location of the property for residential mortgages; otherwise, the residence of the borrower.

(2) 1.6% of borrowers reside outside Canada.

(3) Loans and acceptances denominated in US dollars were $107,944 (2017 – $100,452), in Chilean pesos $37,515 (2017 – $17,824), Mexican pesos $21,561 (2017 – $18,857), and in other foreign currencies $49,223 (2017 – $44,176).

(4) Allowance for credit losses for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amount have not been restated (refer to Notes 2, 3, 4).

(c) Loan maturities

As at October 31, 2018	Remaining term to maturity														Rate sensitivity
($ millions)	Within one year		One to five years		Five to ten years		Over ten years		No specific maturity			Total			Floating		Fixed rate		Non-rate sensitive			Total
Residential mortgages	$	49,762	$	180,563	$	10,326	$	11,040	$	1,666		$	253,357		$	59,351	$	191,802	$	2,204		$	253,357
Personal loans		17,422		35,050		4,775		693		38,079			96,019			37,003		58,007		1,009			96,019
Credit cards		–		–		–		–		16,485			16,485			5,334		11,151		–			16,485
Business and government		85,090		91,595		7,378		773		6,202			191,038			138,510		50,606		1,922			191,038
Total	$	152,274	$	307,208	$	22,479	$	12,506	$	62,432		$	556,899		$	240,198	$	311,566	$	5,135		$	556,899
Allowance for credit losses		–		–		–		–		(5,065	)		(5,065	)		–		–		(5,065	)		(5,065	)
Total loans net of allowance for credit losses	$	152,274	$	307,208	$	22,479	$	12,506	$	57,367		$	551,834		$	240,198	$	311,566	$	70		$	551,834
As at October 31, 2017	Remaining term to maturity														Rate sensitivity
($ millions)	Within one year		One to five years		Five to ten years		Over ten years		No specific maturity			Total			Floating		Fixed rate		Non-rate sensitive			Total
Residential mortgages	$	45,462	$	171,908	$	9,098	$	8,919	$	1,529		$	236,916		$	56,862	$	178,044	$	2,010		$	236,916
Personal loans		15,952		31,500		4,478		815		36,482			89,227			39,004		49,137		1,086			89,227
Credit cards		–		–		–		–		14,104			14,104			4,733		9,371		–			14,104
Business and government		77,724		80,124		4,597		760		5,244			168,449			119,515		47,162		1,772			168,449
Total loans	$	139,138	$	283,532	$	18,173	$	10,494	$	57,359		$	508,696		$	220,114	$	283,714	$	4,868		$	508,696
Allowance for credit losses		–		–		–		–		(4,327	)		(4,327	)		–		–		(4,327	)		(4,327	)
Total loans net of allowance for credit losses	$	139,138	$	283,532	$	18,173	$	10,494	$	53,032		$	504,369		$	220,114	$	283,714	$	541		$	504,369

(d) Impaired loans⁽¹⁾⁽²⁾

	IFRS 9							IAS 39
	2018(4)							2017(3)
As at October 31 ($ millions)	Gross impaired loans(1)		Allowance for credit losses			Net		Gross impaired loans(1)		Allowance for credit losses			Net
Residential mortgages	$	1,797	$	360	(5)	$	1,437	$	1,445	$	326	(5)	$	1,119
Personal loans		1,069		644	(5)		425		1,067		1,040	(5)		27
Credit cards		–		–	(5)		–		543		543	(5)		–
Business and government		2,264		673	(6)		1,591		1,810		713	(6)		1,097
Total	$	5,130	$	1,677		$	3,453	$	4,865	$	2,622	(7)	$	2,243
By geography:
Canada	$	999		381			618	$	1,049
United States		80		25			55		140
Mexico		359		164			195		303
Peru		581		317			264		704
Chile		753		158			595		565
Colombia		619		159			460		462
Other International		1,739		473			1,266		1,642
Total	$	5,130		1,677			3,453	$	4,865

(1) Interest income recognized on impaired loans during the year ended October 31, 2018 was $49 (2017 – $23).

(2) Additional interest income of approximately $370 million would have been recorded if the above loans had not been classified as impaired (2017 – $363 million).

(3) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico. For loans where the guarantee has expired, the total amount of loans considered impaired is $59 for 2017.

(4) Amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 2, 3 and 4).

(5) Allowance for credit losses for residential mortgages, personal loans and credit card loans is assessed on a collective basis.

(6) Allowance for credit losses for business and government loans is individually assessed.

(7) A portion of the existing allowance for credit losses on impaired loans as at October 31, 2017, was reclassified against performing loans with the adoption of IFRS 9 effective November 1, 2017, to conform with current period presentation.

(e) Allowance for credit losses

Key inputs and assumptions

The Bank’s allowance calculations are outputs of complex models with a number of underlying assumptions regarding the choice of variable inputs. Some of the key drivers include the following:

• Changes in risk ratings of the borrower or instrument reflecting changes in their credit quality;

• Changes in the volumes of transactions;

• Changes in the forward-looking macroeconomic environment reflected in the variables used in the models such as GDP growth, unemployment rates, commodity prices, and house price indices, which are most closely related with credit losses in the relevant portfolio;

• Changes in macroeconomic scenarios and the probability weights assigned to each scenario; and

• Borrower migration between the three stages which can result from changes to any of the above inputs and assumptions.

(i) Key macroeconomic variables

(i)(a) The following table shows certain key macroeconomic variables used in modelling the allowance for credit losses for Stages 1 and 2. For the base case, optimistic and pessimistic scenarios, the projections are provided for the next 12 months and for the remaining forecast period, which represents a medium-term view.

	Base Case Scenario				Alternative Scenario – Optimistic				Alternative Scenario – Pessimistic
	Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period
Canada
Real GDP growth, y/y % change		2.2		1.7		2.6		2.1		1.7		1.2
Unemployment rate, average %		5.9		5.9		5.7		5.0		6.2		6.8
Bank of Canada overnight rate target, average %		2.13		2.87		2.25		3.66		1.98		2.10
HPI – Housing Price Index, y/y % change		5.1		3.7		5.4		4.1		4.9		3.3
CPI – Consumer Price Index, y/y % change		2.7		2.1		2.7		2.6		2.7		1.5
USDCAD exchange rate, average		1.24		1.24		1.24		1.20		1.25		1.27
US
Real GDP growth, y/y % change		2.7		1.7		3.3		2.4		1.9		1.0
Unemployment rate, average %		4.0		4.1		3.7		3.2		4.3		5.0
Mexico
Real GDP growth, y/y % change		2.0		2.3		2.7		3.2		1.3		1.4
Unemployment rate, average %		3.7		4.2		3.5		3.4		4.0		4.9
Chile
Real GDP growth, y/y % change		3.9		3.5		5.0		4.8		2.7		2.3
Unemployment rate, average %		6.2		6.4		5.8		4.5		6.7		8.3
Peru
Real GDP growth, y/y % change		3.9		3.7		4.8		4.7		3.1		2.5
Unemployment rate, average %		6.3		6.1		5.7		4.5		6.8		7.7
Colombia
Real GDP growth, y/y % change		3.3		3.2		4.0		4.2		3.0		2.2
Unemployment rate, average %		9.1		8.8		8.7		7.4		9.3		10.0
Caribbean
Real GDP growth, y/y % change		4.0		4.1		5.2		5.4		2.8		2.9
Global
WTI oil price, average USD/bbl		71		67		75		84		67		54
Copper price, average USD/lb		2.91		3.11		2.98		3.44		2.84		2.84

(i)(b) The table below provides a comparison between the reported Allowance for Credit Losses (ACL) for financial assets in Stage 1 and Stage 2, and the ACL under the base, optimistic and pessimistic scenarios for such assets.

	Reported under IFRS 9		Base case scenario		Optimistic scenario		Pessimistic scenario
ACL (Stage 1 and Stage 2)		3,475		3,467		3,345		3,618

(i)(c) The following table illustrates the impact of staging on the Bank’s ACL by comparing the allowance if all performing financial assets were in Stage 1 or if all such assets were in Stage 2 to the actual ACL recorded on these assets.

	Stage 1 and 2 ACL under IFRS 9	ACL – All performing loans in Stage 1	Impact of staging
Financial assets	3,475	3,022		(453)
	Stage 1 and 2 ACL under IFRS 9	ACL – All performing loans in Stage 2	Impact of staging
Financial assets	3,475	5,361		1,886

(ii) Allowance for credit losses on loans

	IFRS 9
($ millions)	Balance as at November 1, 2017		Provision for credit losses		Net write-offs			Other, including foreign currency adjustment			Balance as at October 31, 2018
Residential mortgages	$	717	$	104	$	(123	)	$	(20	)	$	678
Personal loans		1,879		1,411		(1,166	)		(15	)		2,109
Credit cards		1,163		898		(854	)		6			1,213
Business and government		1,261		166		(208	)		(72	)		1,147
	$	5,020	$	2,579	$	(2,351	)	$	(101	)	$	5,147
Presented as:
Allowance for credit losses on loans	$	4,920									$	5,065
Allowance for credit losses on acceptances		16										8
Allowance for credit losses on off-balance sheet exposures		84										74

Allowance for credit losses on loans

	IFRS 9
As at October 31, 2018 ($ millions)	Stage 1		Stage 2		Stage 3		Total
Residential mortgages	$	112	$	206	$	360	$	678
Personal loans		578		887		644		2,109
Credit cards		401		812		–		1,213
Business and government		132		260		673		1,065
Total(1)	$	1,223	$	2,165	$	1,677	$	5,065

(1) Excludes, allowance for credit losses for other financial assets including acceptances, investment securities, deposits with banks and off-balance sheet credit risks which amounted to $89.

The following table presents the changes to the allowance for credit losses on loans.    

	IFRS 9
As at October 31, 2018 ($ millions)	Stage 1			Stage 2			Stage 3			Total
Residential mortgages
Balance at beginning of the year	$	103		$	214		$	400		$	717
Provision for credit losses
Remeasurement(1)		(131	)		5			151			25
Newly originated or purchased financial assets		88			–			–			88
Derecognition of financial assets and maturities		(2	)		(7	)		–			(9	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		77			(65	)		(12	)		–
Stage 2		(18	)		106			(88	)		–
Stage 3		–			(39	)		39			–
Gross write-offs		–			–			(219	)		(219	)
Recoveries		–			–			96			96
Foreign exchange and other movements		(5	)		(8	)		(7	)		(20	)
Balance at end of year(2)	$	112		$	206		$	360		$	678
Personal loans
Balance at beginning of the year	$	477		$	802		$	600		$	1,879
Provision for credit losses
Remeasurement(1)		(670	)		629			1,015			974
Newly originated or purchased financial assets		615			–			–			615
Derecognition of financial assets and maturities		(82	)		(96	)		–			(178	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		453			(442	)		(11	)		–
Stage 2		(189	)		284			(95	)		–
Stage 3		(4	)		(286	)		290			–
Gross write-offs		–			–			(1,441	)		(1,441	)
Recoveries		–			–			275			275
Foreign exchange and other movements		(22	)		(4	)		11			(15	)
Balance at end of year(2)	$	578		$	887		$	644		$	2,109
Credit cards
Balance at beginning of the year	$	364		$	799		$	–		$	1,163
Provision for credit losses
Remeasurement(1)		(276	)		448			593			765
Newly originated or purchased financial assets		329			–			–			329
Derecognition of financial assets and maturities		(91	)		(105	)		–			(196	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		259			(259	)		–			–
Stage 2		(162	)		162			–			–
Stage 3		(1	)		(239	)		240			–
Gross write-offs		–			–			(1,104	)		(1,104	)
Recoveries		–			–			250			250
Foreign exchange and other movements		(21	)		6			21			6
Balance at end of year(2)	$	401		$	812		$	–		$	1,213
Business and government
Balance at beginning of the year	$	178		$	307		$	760		$	1,245
Provision for credit losses
Remeasurement(1)		(93	)		6			264			177
Newly originated or purchased financial assets		322			–			–			322
Derecognition of financial assets and maturities		(108	)		(164	)		(68	)		(340	)
Changes in models and methodologies		3			14			–			17
Transfer to (from):		–			–			–			–
Stage 1		63			(58	)		(5	)		–
Stage 2		(187	)		218			(31	)		–
Stage 3		(2	)		(30	)		32			–
Gross write-offs		–			–			(276	)		(276	)
Recoveries		–			–			68			68
Foreign exchange and other movements		(3	)		(2	)		(69	)		(74	)
Balance at end of period including off-balance sheet exposures(2)	$	173		$	291		$	675		$	1,139
Less: Allowance for credits losses on off-balance sheet exposures(2)(3)		41			31			2			74
Balance at end of year(2)	$	132		$	260		$	673		$	1,065

(1) Includes credit risk changes as a result of significant increases in credit risk, changes in credit risk that did not result in a transfer between stages, changes in model inputs and assumptions and changes due to drawdowns of undrawn commitments.

(2) Interest income on impaired loans for residential mortgages, personal loans, credit cards, and business and government loans totaled $370.

(3) Allowance for credit losses on off-balance sheet exposures is recorded in other liabilities in the Consolidated Statement of Financial Position.

(4) Allowance for credit losses on acceptances are recorded against the financial asset in the Consolidated Statement of Financial Position.

(5) There are no accumulated credit losses on purchased or originated credit impaired loans.

(6) During the year ended October 31, 2018, the contractual terms of certain financial assets were modified where the modification did not result in derecognition. The amortized cost of such loans that were modified in Stage 3 before the modification was $185.

The following table presents the allowance for credit losses under IAS 39 as at October 31, 2017.

	IAS 39
	As at and for the year ended October 31, 2017
($ millions)	Balance at beginning of year		Write-offs			Recoveries		Provision for credit losses			Other, including foreign currency adjustment			Balance at end of year
Individual	$	894	$	(501	)	$	55	$	304		$	(39	)	$	713
Collective		3,498		(2,658	)		571		1,952			(8	)		3,355
Total before loans acquired under FDIC guarantee		4,392		(3,159	)		626		2,256			(47	)		4,068
Loans acquired under FDIC guarantee(1)		234		(14	)		54		(7	)		(8	)		259
	$	4,626	$	(3,173	)	$	680	$	2,249		$	(55	)	$	4,327
Represented by:
Allowance against impaired loans														$	2,622
Allowance against performing loans(2)															1,446
Total before loans acquired under FDIC guarantee															4,068
Loans acquired under FDIC guarantee(1)															259
														$	4,327

(1) This represents the gross amount of allowance for credit losses as the receivable from FDIC is separately recorded in other assets.

(2) The allowance against performing loans is attributable to business and government loans $625 with the remainder allocated to personal and credit card loans $720 and residential mortgages $101.

(f) Carrying value of exposures by risk rating

Residential mortgages	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	146,461	$	307	$	–	$	146,768
Low		58,154		378		–		58,532
Medium		11,689		972		–		12,661
High		1,615		3,515		–		5,130
Very high		25		1,779		–		1,804
Loans not graded(1)		23,139		3,526		–		26,665
Default		–		–		1,797		1,797
Total		241,083		10,477		1,797		253,357
Allowance for credit losses		112		206		360		678
Carrying value	$	240,971	$	10,271	$	1,437	$	252,679

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Personal loans	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	30,660	$	66	$	–	$	30,726
Low		26,039		151		–		26,190
Medium		8,315		402		–		8,717
High		6,686		3,647		–		10,333
Very high		58		1,362		–		1,420
Loans not graded(1)		15,452		2,112		–		17,564
Default		–		–		1,069		1,069
Total		87,210		7,740		1,069		96,019
Allowance for credit losses		578		887		644		2,109
Carrying value	$	86,632	$	6,853	$	425	$	93,910

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Credit cards	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	1,418	$	5	$	–	$	1,423
Low		2,436		14		–		2,450
Medium		3,358		71		–		3,429
High		2,929		1,455		–		4,384
Very high		37		697		–		734
Loans not graded(1)		2,905		1,159		–		4,064
Default		–		–		–		–
Total		13,083		3,401		–		16,484
Allowance for credit losses		401		812		–		1,213
Carrying value	$	12,682	$	2,589	$	–	$	15,271

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Undrawn loan commitments – Retail	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	72,321	$	–	$	–	$	72,321
Low		16,531		2		–		16,533
Medium		6,029		79		–		6,108
High		2,631		670		–		3,301
Very high		26		367		–		393
Loans not graded(1)		14,774		3,364		–		18,138
Default		–		–		–		–
Total		112,312		4,482		–		116,794
Allowance for credit losses		–		–		–		–
Carrying value	$	112,312	$	4,482	$	–	$	116,794

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Business and government loans	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Investment grade	$	87,047	$	3,770	$	–	$	90,817
Non-Investment grade		83,730		9,706		–		93,436
Watch list		130		2,689		–		2,819
Loans not graded(1)		1,050		652		–		1,702
Default		–		–		2,264		2,264
Total		171,957		16,817		2,264		191,038
Allowance for credit losses		132		260		673		1,065
Carrying value	$	171,825	$	16,557	$	1,591	$	189,973

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Undrawn loan commitments – Business and government	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Investment grade	$	159,880	$	1,663	$	–	$	161,543
Non-Investment grade		56,001		3,445		–		59,446
Watch list		81		977		–		1,058
Loans not graded(1)		2,178		28		–		2,206
Default		–		–		4		4
Total		218,140		6,113		4		224,257
Allowance for credit losses		41		31		2		74
Carrying value	$	218,099	$	6,082	$	2	$	224,183

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

(g) Loans acquired under FDIC guarantee

Loans purchased as part of the acquisition of R-G Premier Bank of Puerto Rico are subject to loss share agreements with the FDIC. Under this agreement, the FDIC guarantees 80% of net loan losses. As at October 31, 2018, the carrying value of the loans covered by the FDIC guarantee was $1.3 billion (October 31, 2017 – $1.4 billion).

A net receivable of $77 million (2017 – $106 million) from the FDIC is included in Other assets in the Consolidated Statement of Financial Position. The remaining guarantee on single family home loans will expire in April 2020.

(h) Loans past due but not impaired⁽¹⁾

A loan is considered past due when a counterparty has not made a payment by the contractual due date. The following table presents the carrying value of loans that are contractually past due but not classified as impaired because they are either less than 90 days past due or fully secured and collection efforts are reasonably expected to result in repayment, or restoring it to a current status in accordance with the Bank’s policy.

	2018								2017(3)
As at October 31 ($ millions)	31 – 60 days		61 – 90 days		91 days and greater(2)		Total		31 – 60 days		61 – 90 days		91 days and greater		Total
Residential mortgages	$	1,290	$	521	$	–	$	1,811	$	1,035	$	446	$	122	$	1,603
Personal loans		609		322		–		931		522		284		–		806
Credit cards		231		154		353		738		202		139		75		416
Business and government		167		40		–		207		215		55		187		457
Total	$	2,297	$	1,037	$	353	$	3,687	$	1,974	$	924	$	384	$	3,282

(1) Loans past due 30 days or less are not presented in this analysis as they are not administratively considered past due.

(2) Under IFRS 9, all loans that are 90 days past due are considered impaired with the exception of credit card receivables which are considered impaired when 180 days past due. Prior amounts have not been restated (refer to Notes 3 and 4).

(3) Excludes loans acquired under the FDIC guarantee related to the acquisition of R-G Premier Bank of Puerto Rico.

(i) Purchased credit-impaired loans

Certain financial assets including loans are credit-impaired on initial recognition either through acquisition or origination.

The following table provides details of such assets:

As at October 31 ($ millions)	2018
Unpaid principal balance(1)	$	548
Credit related fair value adjustments		(168	)
Carrying value		380
Stage 3 allowance		–
Carrying value net of related allowance	$	380

(1) Represents principal amount owed net of write-offs.

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Derecognition of Financial Assets

12 Months Ended

Oct. 31, 2018

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Derecognition of Financial Assets

14 Derecognition of Financial Assets

Securitization of residential mortgage loans

The Bank securitizes fully insured residential mortgage loans, Bank originated and others, through the creation of mortgage backed securities (MBS) under the National Housing Act (NHA) MBS program, sponsored by Canada Mortgage Housing Corporation (CMHC). MBS created under the program are sold to Canada Housing Trust (the Trust), a government sponsored entity, under the Canada Mortgage Bond (CMB) program and/or third-party investors. The Trust issues securities to third-party investors.

The sale of mortgages under the above programs does not meet the derecognition requirements, as the Bank retains the pre-payment and interest rate risk associated with the mortgages, which represents substantially all the risk and rewards associated with the transferred assets.

The transferred mortgages continue to be recognized on the Consolidated Statement of Financial Position as residential mortgage loans. Cash proceeds from the transfer are treated as secured borrowings and included in Deposits – Business and government on the Consolidated Statement of Financial Position.

The following table provides the carrying amount of transferred assets that do not qualify for derecognition and the associated liabilities:

As at October 31 ($ millions)	2018(1)		2017(1)
Assets
Carrying value of residential mortgage loans	$	20,498	$	18,178
Other related assets(2)		2,679		2,293
Liabilities
Carrying value of associated liabilities		21,459		19,278

(1) The fair value of the transferred assets is $23,237 (2017 – $20,580) and the fair value of the associated liabilities is $22,468 (2017 – $19,863), for a net position of $769 (2017 – $717).

(2) These include cash held in trust and trust permitted investment assets acquired as part of principal reinvestment account that the Bank is required to maintain in order to participate in the programs.

Securitization of personal lines of credit, credit cards and auto loans

The Bank securitizes a portion of its unsecured personal lines of credit, credit card and auto loan receivables through consolidated structured entities. These receivables continue to be recognized on the Consolidated Statement of Financial Position as personal loans and credit cards loans. For further details, refer to Note 15.

Securities sold under repurchase agreements and securities lent

The Bank enters into transactions, such as repurchase agreements and securities lending agreements, where the Bank transfers assets under agreements to repurchase them on a future date and retains all the substantial risks and rewards associated with the assets. The transferred assets remain on the Consolidated Statement of Financial Position.

The following table provides the carrying amount of the transferred assets and the associated liabilities:

As at October 31 ($ millions)	2018(1)		2017(1)
Carrying value of assets associated with:
Repurchase agreements(2)	$	82,816	$	86,789
Securities lending agreements		49,718		40,535
Total		132,534		127,324
Carrying value of associated liabilities(3)	$	101,257	$	95,843

(1) The fair value of transferred assets is $132,534 (2017 – $127,324) and the fair value of the associated liabilities is $101,257 (2017 – $95,843), for a net position of $31,277 (2017 – $31,481).

(2) Does not include over-collateralization of assets pledged.

(3) Liabilities for securities lending arrangements only include amounts related to cash collateral received. In most cases, securities are received as collateral.

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Structured Entities

12 Months Ended

Oct. 31, 2018

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Structured Entities

15 Structured Entities

(a) Consolidated structured entities

U.S. multi-seller conduit

The Bank-sponsored U.S. multi-seller conduit purchases high-quality financial assets from independent third parties (the sellers) funded by the issuance of highly rated asset-backed commercial paper. The sellers continue to service the financial assets and provide credit enhancements through overcollateralization protection and cash reserves.

Each asset purchased by the conduit has a deal-specific liquidity facility provided by the Bank in the form of a Liquidity Asset Purchase Agreement (LAPA). The primary purpose of the backstop liquidity facility is to provide an alternative source of financing in the event the conduit is unable to access the asset-backed commercial paper market. The administration agent can require the Bank in its capacity as liquidity provider to perform under its asset-specific LAPA agreements, in which case the Bank is obliged to purchase an interest in the related assets owned by the conduit. The Bank is not obligated to perform under the LAPA agreements in the event the conduit itself is insolvent.

The Bank’s liquidity agreements with the conduit call for the Bank to fund full par value of the assets, including defaulted assets, if any, of the conduit. This facility is available to absorb the losses on defaulted assets, if any, in excess of losses absorbed by deal-specific seller credit enhancements. Further, the Bank holds the subordinated note issued by the conduit.

The Bank’s exposure from the U.S. conduit through the LAPA, including the obligation to purchase defaulted assets and investment in the conduit’s subordinated note, give the Bank the obligation to absorb losses that could potentially be significant to the conduit, which in conjunction with power to direct the conduit’s activities, result in the Bank consolidating the U.S. multi-seller conduit.

The conduit’s assets are primarily included in business and government loans on the Bank’s Consolidated Statement of Financial Position.

There are contractual restrictions on the ability of the Bank’s consolidated U.S. multi-seller conduit to transfer funds to the Bank. The Bank is restricted from accessing the conduit’s assets under the relevant arrangements. The Bank has no rights to the assets owned by the conduit. In the normal course of business, the assets of the conduit can only be used to settle the obligations of the conduit.

Bank funding vehicles

The Bank uses funding vehicles to facilitate cost-efficient financing of its own operations, including the issuance of covered bonds and notes. These vehicles include Scotiabank Covered Bond Guarantor Limited Partnership, Halifax Receivables Trust, Trillium Credit Card Trust II and Securitized Term Auto Receivables Trust 2016-1, 2017-1, 2017-2, 2018-1 and 2018-2.

Activities of these structured entities are generally limited to holding an interest in a pool of assets or receivables generated by the Bank.

These structured entities are consolidated due to the Bank’s decision-making power and ability to use the power to affect the Bank’s returns.

Scotiabank Covered Bond Guarantor Limited Partnership

The Bank has a registered covered bond program through which it issues debt that is guaranteed by Scotiabank Covered Bond Guarantor Limited Partnership (the “LP”). Under this program, the LP purchases uninsured residential mortgages from the Bank, which it acquires with funding provided by the Bank.

As at October 31, 2018, $29.1 billion (2017 – $25.7 billion) covered bonds were outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position. The Bank’s outstanding covered bonds are denominated in U.S. dollars, Australian dollars, British pounds and Euros. As at October 31, 2018, assets pledged in relation to these covered bonds were uninsured residential mortgages denominated in Canadian dollars of $30.7 billion (2017 – $27.8 billion).

Personal line of credit securitization trust

The Bank securitizes a portion of its Canadian unsecured personal line of credit receivables (receivables) through Halifax Receivables Trust (Halifax), a Bank-sponsored structured entity. Halifax issues notes to third-party investors and the Bank, proceeds of which are used to purchase co-ownership interests in receivables originated by the Bank. Recourse of the note holders is limited to the purchased interests.

The Bank is responsible for servicing the transferred receivables as well as performing administrative functions for Halifax. The subordinated notes issued by Halifax are held by the Bank. As at October 31, 2018, $1 billion notes (2017 – $1 billion) were outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position. As at October 31, 2018, assets pledged in relation to these notes were $1.3 billion (2017 – $1.3 billion).

Credit card receivables securitization trust

The Bank securitizes a portion of its Canadian credit card receivables (receivables) through Trillium Credit Card Trust II (Trillium), a Bank-sponsored structured entity. Trillium issues notes to third-party investors and the Bank, and the proceeds of such issuance are used to purchase co-ownership interests in receivables originated by the Bank. Recourse of the note holders is limited to the purchased interest.

The Bank is responsible for servicing the transferred receivables as well as performing administrative functions for Trillium. The subordinated notes issued by Trillium are held by the Bank. As at October 31, 2018, US $1.2 billion ($1.6 billion Canadian dollars) (2017 – US $0.9 billion, $1.2 billion Canadian dollars) Class A notes were outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position. As at October 31, 2018 assets pledged in relation to these notes were credit card receivables, denominated in Canadian dollars, of $1.8 billion (2017 – $1.3 billion).

Auto loan receivables securitization trusts

The Bank securitizes a portion of its Canadian auto loan receivables (receivables) through Securitized Term Auto Receivables Trust 2016-1, 2017-1, 2017-2, 2018-1 and 2018-2 (START entities). Each entity is a Bank-sponsored structured entity. START entities issue multiple series of Class A notes to third-party investors and may issue Class A and/or subordinated notes to the Bank, and the proceeds of such issuances are used to purchase discrete pools of retail indirect auto loan receivables from the Bank on a fully serviced basis. Recourse of the note holders is limited to the receivables.

The Bank is responsible for servicing the transferred receivables as well as performing administrative functions for START. The subordinated notes and certain Class A notes issued by START are held by the Bank. As at October 31, 2018, the aggregate Class A notes issued to third parties outstanding and included in Deposits – Business and government on the Consolidated Statement of Financial Position were US $1.8 billion ($2.4 billion Canadian dollars) (2017 – US $1.6 billion, $2.1 billion Canadian dollars). As at October 31, 2018, assets pledged in relation to these notes were Canadian auto loan receivables denominated in Canadian dollars of $3 billion (2017 – $2.3 billion).

Other

Assets of other consolidated structured entities are comprised of securities, deposits with banks and other assets to meet the Bank’s and customer needs.

(b) Unconsolidated structured entities

The following table provides information about other structured entities in which the Bank has a significant interest but does not control and therefore does not consolidate. A significant interest is generally considered to exist where the Bank is exposed to 10% or more of the unconsolidated structured entities’ maximum exposure to loss.

	As at October 31, 2018
($ millions)		Canadian multi-seller conduits that the Bank administers		Structured finance entities		Capital funding vehicles		Total
Total assets (on structured entity’s financial statements)	$	3,216	$	4,488	$	1,520	$	9,224
Assets recognized on the Bank’s financial statements
Trading assets		3		–		–		3
Investment securities		–		1,054		17		1,071
Loans(1)		–		978		45		1,023
		3		2,032		62		2,097
Liabilities recognized on the Bank’s financial statements
Deposits – Business and government		–		–		1,458		1,458
Derivative financial instruments		6		–		–		6
		6		–		1,458		1,464
Bank’s maximum exposure to loss	$	3,219	$	2,032	$	62	$	5,313
		As at October 31, 2017
($ millions)		Canadian multi-seller conduits that the Bank administers		Structured finance entities		Capital funding vehicles		Total
Total assets (on structured entity’s financial statements)	$	3,127	$	3,991	$	1,520	$	8,638
Assets recognized on the Bank’s financial statements
Trading assets		–		5		–		5
Investment securities		–		1,091		15		1,106
Loans(1)		–		731		40		771
		–		1,827		55		1,882
Liabilities recognized on the Bank’s financial statements
Deposits – Business and government		–		–		1,465		1,465
Derivative financial instruments		6		–		–		6
		6		–		1,465		1,471
Bank’s maximum exposure to loss	$	3,127	$	1,827	$	55	$	5,009

(1) Loan balances are presented net of allowance for credit losses.

The Bank’s maximum exposure to loss represents the notional amounts of guarantees, liquidity facilities, and other credit support relationships with the structured entities, the credit risk amount for certain derivative contracts with the entities and the amount invested where the Bank holds an ownership interest in the structured entities. Of the aggregate amount of maximum exposure to loss as at October 31, 2018, the Bank has recorded $2 billion (2017 – $1.8 billion), primarily its interest in the structured entities, on its Consolidated Statement of Financial Position.

Canadian multi-seller conduits that the Bank administers

The Bank sponsors two Canadian multi-seller conduits. The conduits purchase assets from independent third parties (the sellers) funded by the issuance of asset-backed commercial paper. The sellers continue to service the assets and provide credit enhancements through overcollateralization protection and cash reserves. The Bank has no rights to these assets as they are available to support the obligations of the respective programs, but manages for a fee the commercial paper selling programs. To ensure timely repayment of the commercial paper, each asset pool financed by the multi-seller conduits has a deal-specific LAPA with the Bank. Pursuant to the terms of the LAPA, the Bank as the liquidity provider is obligated to purchase non-defaulted assets, transferred by the conduit at the conduit’s original cost as reflected in the table above. In most cases, the liquidity agreements do not require the Bank to purchase defaulted assets. Additionally, the Bank has not provided any program-wide credit enhancement to these conduits. The Bank provides additional liquidity facilities to these multi-seller conduits to a maximum amount of $0.8 billion (2017 – $1.9 billion) based on future asset purchases by these conduits.

Although the Bank has power over the relevant activities of the conduits, it has limited exposure to variability in returns, which results in the Bank not consolidating the two Canadian conduits.

Structured finance entities

The Bank has interests in structured entities used to assist corporate clients in accessing cost-efficient financing through their securitization structures. The Bank may act as an administrator, an investor or a combination of both in these types of structures.

Capital funding vehicles

These entities are designed to pass the Bank’s credit risk to the holders of the securities. Therefore the Bank does not have exposure or rights to variable returns from these entities.

(c) Other unconsolidated Bank-sponsored entities

The Bank sponsors unconsolidated structured entities including mutual funds, in which it has insignificant or no interest at the reporting date. The Bank is a sponsor when it is significantly involved in the design and formation at inception of the structured entities, and the Bank’s name is used by the structured entities to create an awareness of the instruments being backed by the Bank’s reputation and obligation. The Bank also considers other factors, such as its continuing involvement and obligations to determine if, in substance, the Bank is a sponsor. The Bank considers mutual funds and managed companies as sponsored entities.

The following table provides information on revenue from unconsolidated Bank-sponsored entities.

As at October 31 ($ millions)	2018						2017
	Funds(1)		Scotia Managed Companies		Total		Funds(1)		Scotia Managed Companies		Total
Revenue	$	2,118	$	3	$	2,121	$	2,016	$	5	$	2,021

(1) Includes mutual funds, other funds and trusts.

The Bank earned revenue of $2,121 million (2017 – $2,021 million) from its involvement with the unconsolidated Bank-sponsored structured entities including mutual funds, for the year ended October 31, 2018, which was comprised of interest income of $1 million (2017 – $1 million), non-interest income – banking of $137 million (2017 – $134 million) and non-interest income – wealth management of $1,983 million (2017 – $1,886 million), including mutual fund, brokerage and investment management and trust fees.

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Property and Equipment

12 Months Ended

Oct. 31, 2018

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Property and Equipment

16 Property and Equipment

($ millions)	Land & Building			Equipment			Technology Assets			Leasehold Improvements			Total
Cost
Balance as at October 31, 2016	$	2,071		$	1,728		$	1,983		$	1,357		$	7,139
Additions		169			147			161			126			603
Disposals		(224	)		(52	)		(41	)		(28	)		(345	)
Foreign currency adjustments and other		(294	)		69			(15	)		(45	)		(285	)
Balance as at October 31, 2017	$	1,722		$	1,892		$	2,088		$	1,410		$	7,112
Acquisitions		214			96			186			97			593
Additions		142			56			141			148			487
Disposals		(231	)		(38	)		(33	)		(49	)		(351	)
Foreign currency adjustments and other		36			95			(86	)		(21	)		24
Balance as at October 31, 2018	$	1,883		$	2,101		$	2,296		$	1,585		$	7,865
Accumulated depreciation
Balance as at October 31, 2016	$	766		$	1,362		$	1,653		$	838		$	4,619
Depreciation		47			91			131			71			340
Disposals		(58	)		(37	)		(40	)		(17	)		(152	)
Foreign currency adjustments and other		(69	)		34			(25	)		(16	)		(76	)
Balance as at October 31, 2017	$	686		$	1,450		$	1,719		$	876		$	4,731
Depreciation		62			80			143			69			354
Disposals		(56	)		(35	)		(24	)		(17	)		(132	)
Foreign currency adjustments and other		13			174			10			31			228
Balance as at October 31, 2018	$	705		$	1,669		$	1,848		$	959		$	5,181
Net book value
Balance as at October 31, 2017	$	1,036		$	442		$	369		$	534		$	2,381	(1)
Balance as at October 31, 2018	$	1,178		$	432		$	448		$	626		$	2,684	(1)

(1) Includes $36 (2017 – $16) of investment property.

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Investments in Associates

12 Months Ended

Oct. 31, 2018

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Investments in Associates

17 Investments in Associates

The Bank had significant investments in the following associates:

					2018							2017
As at October 31 ($ millions)	Country of incorporation		Nature of business		Ownership percentage			Date of financial statements(1)		Carrying value		Carrying value
Thanachart Bank Public Company Limited		Thailand		Banking		49.0	%		October 31, 2018	$	2,961	$	2,789
Canadian Tire’s Financial Services business (CTFS)(2)		Canada		Financial Services		20.0	%		September 30, 2018		518		542
Bank of Xi’an Co. Ltd.		China		Banking		19.9	%		September 30, 2018		772		711
Maduro & Curiel’s Bank N.V.(3)		Curacao		Banking		48.1	%		September 30, 2018		304		284

(1) Represents the date of the most recent financial statements. Where available, financial statements prepared by the associates’ management or other published information is used to estimate the change in the Bank’s interest since the most recent financial statements.

(2) Canadian Tire has an option to sell to the Bank up to an additional 29% equity interest within the next 10 years at the then fair value, that can be settled, at the Bank’s discretion, by issuance of common shares or cash. After 10 years, for a period of six months, the Bank has the option to sell its equity interest back to Canadian Tire at the then fair value. As at October 1, 2014 CTFS had total assets of $5,351 and total liabilities of $4,387.

(3) The local regulator requires financial institutions to set aside reserves for general banking risks. These reserves are not required under IFRS, and represent undistributed retained earnings related to a foreign associated corporation, which are subject to local regulatory restrictions. As of October 31, 2018 these reserves amounted to $62 (2017 – $61).

Summarized financial information of the Bank’s significant associates are as follows.

	For the twelve months ended(1)				As at
($ millions)	Revenue		Net income		Total assets		Total liabilities
Thanachart Bank Public Company Limited	$	1,871	$	590	$	39,875	$	34,289
Canadian Tire’s Financial Services business (CTFS)		1,143		348		6,256		5,279
Bank of Xi’an Co. Ltd.		1,123		456		45,261		41,595
Maduro & Curiel’s Bank N.V.		348		92		5,832		5,165
	For the twelve months ended and as at September 30, 2017(1)
($ millions)	Revenue		Net income		Total assets		Total liabilities
Thanachart Bank Public Company Limited	$	1,718	$	508	$	38,050	$	32,902
Canadian Tire’s Financial Services business (CTFS)		1,040		334		6,233		5,235
Bank of Xi’an Co. Ltd.		915		411		41,170		37,821
Maduro & Curiel’s Bank N.V.		343		80		5,501		4,896

(1) Based on the most recent available financial statements.

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Goodwill and Other Intangible Assets

12 Months Ended

Oct. 31, 2018

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Goodwill and Other Intangible Assets

18 Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amounts of goodwill by cash-generating unit (CGU) are as follows:

($ millions)	Canadian Banking			Global Banking and Markets			Latin America			Caribbean and Central America			Total
Balance as at October 31, 2016	$	3,403		$	265		$	2,461		$	1,255		$	7,384
Acquisitions		–			–			–			–			–
Dispositions		(36	)		–			–			–			(36	)
Foreign currency adjustments and other		18			(10	)		(61	)		(52	)		(105	)
Balance as at October 31, 2017		3,385			255			2,400			1,203			7,243
Acquisitions		1,710			–			1,164			–			2,874
Dispositions		–			–			–			–			–
Foreign currency adjustments and other		–			5			(110	)		(5	)		(110	)
Balance as at October 31, 2018	$	5,095		$	260		$	3,454		$	1,198		$	10,007

Impairment testing of goodwill

Goodwill acquired in business combinations is allocated to each of the Bank’s group of CGUs that are expected to benefit from the synergies of the particular acquisition. Goodwill is assessed for impairment annually or more frequently if events or circumstances occur that may result in the recoverable amount of the CGU falling below its carrying value.

The Bank determines the carrying value of the CGU using a regulatory capital approach based on credit, market, and operational risks, and leverage, consistent with the Bank’s capital attribution for business line performance measurement. The recoverable amount is the higher of fair value less costs of disposal and value in use. The recoverable amount for the CGU has been determined using the fair value less costs of disposal method. In arriving at such value for the CGU, the Bank has used price earnings (P/E) multiples applied to normalized net income for the last four quarters as of the test date, a control premium is added based on a five year weighted average acquisition premium paid for comparable companies, and costs of disposal are deducted from the fair value of the CGU. The resulting recoverable amount determined is then compared to its respective carrying amount to identify any impairment. P/E multiples ranging from 11 to 13.5 times (2017 – 11 to 12.5 times) have been used.

The fair value less costs of disposal of the CGU is sensitive to changes in net income, P/E multiples and control premiums.

Goodwill was assessed for annual impairment as at July 31, 2018 and July 31, 2017 and no impairment was determined to exist.

Management believes that reasonable negative changes in any one key assumption used to determine the recoverable amount of the CGU would not result in an impairment. No significant negative changes were noted as of October 31, 2018.

Intangible assets

Intangible assets consist of assets with indefinite and finite useful lives. Indefinite life intangible assets consist substantially of fund management contracts. The fund management contracts are for the management of open-ended funds. Finite life intangible assets include assets such as computer software, customer relationships and core deposit intangibles.

		Finite life						Indefinite life
($ millions)	Computer software			Other intangibles			Fund management contracts(1)		Other intangibles		Total
Cost
Balance as at October 31, 2016	$	2,737		$	1,631		$	2,325	$	68	$	6,761
Acquisitions		–			–			–		–		–
Additions		584			5			–		–		589
Disposals		(3	)		(56	)		–		–		(59	)
Foreign currency adjustments and other		(40	)		(17	)		–		–		(57	)
Balance as at October 31, 2017	$	3,278		$	1,563		$	2,325	$	68	$	7,234
Acquisitions		47			480			2,090		98		2,715
Additions		673			3			–		–		676
Disposals		(8	)		–			–		–		(8	)
Foreign currency adjustments and other		(44	)		(30	)		–		–		(74	)
Balance as at October 31, 2018	$	3,946		$	2,016		$	4,415	$	166	$	10,543
Accumulated amortization
Balance as at October 31, 2016	$	1,009		$	995		$	–	$	–	$	2,004
Amortization		339			82			–		–		421
Disposals		(2	)		(18	)		–		–		(20	)
Foreign currency adjustments and other		(25	)		(9	)		–		–		(34	)
Balance as at October 31, 2017	$	1,321		$	1,050		$	–	$	–	$	2,371
Amortization		409			85			–		–		494
Disposals		(8	)		–			–		–		(8	)
Foreign currency adjustments and other		(17	)		(9	)		–		–		(26	)
Balance as at October 31, 2018	$	1,705		$	1,126		$	–	$	–	$	2,831
Net book value
As at October 31, 2017	$	1,957	(2)	$	513		$	2,325	$	68	$	4,863
As at October 31, 2018	$	2,241	(2)	$	890		$	4,415	$	166	$	7,712

(1) Fund management contracts are attributable to HollisWealth Inc. (formerly DundeeWealth Inc.).

(2) Computer software comprises of purchased software of $483 (2017 – $500), internally generated software of $1,208 (2017 – $981), and in process software not subject to amortization of $550 (2017 – $476).

Impairment testing of indefinite life intangible assets

Indefinite life intangible assets are not amortized and are assessed for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired. Impairment is assessed by comparing the carrying value of the indefinite life intangible asset to its recoverable amount. The recoverable amount of the fund management contracts is based on a value in use approach using the multi-period excess earnings method. This approach uses cash flow projections from management-approved financial budgets which include key assumptions related to market appreciation, net sales of funds, and operating margins taking into consideration past experience and market expectations. The forecast cash flows cover a 5-year period, with a terminal growth rate of 4.5% (2017 – 4.5%) applied thereafter. These cash flows have been discounted at a rate of 10% (2017 – 10%).

Indefinite life intangible assets were assessed for annual impairment as at July 31, 2018 and July 31, 2017 and no impairment was determined to exist.

Management believes that reasonable negative changes in any one key assumption used to determine the recoverable amount would not result in an impairment. No significant negative changes were noted as of October 31, 2018.

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Other Assets

12 Months Ended

Oct. 31, 2018

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Other Assets

19 Other Assets

As at October 31 ($ millions)	2018		2017
Accrued interest	$	2,800	$	2,176
Accounts receivable and prepaids		1,878		1,674
Current tax assets		657		327
Margin deposit derivatives		3,247		3,041
Segregated fund assets		2,736		–
Pension assets (Note 28)		360		256
Receivable from brokers, dealers and clients		2,061		913
Receivable from the Federal Deposit Insurance Corporation (Note 13)		77		106
Other		3,617		4,256
Total	$	17,433	$	12,749

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Deposits

12 Months Ended

Oct. 31, 2018

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Deposits

20 Deposits

		2018												2017
		Payable on demand(1)
As at October 31 ($ millions)		Interest- bearing		Non-interest bearing		Payable after notice	(2)		Payable on a fixed date	(3)		Total
Personal	$	7,517	$	7,488	$	123,302		$	76,238		$	214,545	$	200,030
Business and government		94,812		24,310		34,600			268,280			422,002		384,988
Financial institutions		6,510		2,804		1,895			28,778			39,987		40,349
Total	$	108,839	$	34,602	$	159,797	(4)	$	373,296		$	676,534	$	625,367
Recorded in:
Canada	$	84,638	$	17,825	$	122,974		$	247,361		$	472,798	$	445,487
United States		14,080		128		8,950			36,780			59,938		58,070
United Kingdom		–		–		152			16,695			16,847		12,041
Mexico		14		4,362		5,382			11,393			21,151		19,419
Peru		2,738		1,284		4,129			7,062			15,213		15,216
Chile		3,392		3,029		146			17,613			24,180		11,574
Colombia		37		507		3,963			5,036			9,543		7,587
Other International		3,940		7,467		14,101			31,356			56,864		55,973
Total(5)	$	108,839	$	34,602	$	159,797		$	373,296		$	676,534	$	625,367

(1) Deposits payable on demand include all deposits for which we do not have the right to notice of withdrawal, generally chequing accounts.

(2) Deposits payable after notice include all deposits for which we require notice of withdrawal, generally savings accounts.

(3) All deposits that mature on a specified date, generally term deposits, guaranteed investments certificates and similar instruments.

(4) Includes $141 (2017 – $141) of non-interest bearing deposits.

(5) Deposits denominated in U.S. dollars amount to $219,195 (2017 – $216,018), deposits denominated in Chilean pesos amount to $22,731 (2017 – $11,066), deposits denominated in Mexican pesos amount to $18,341 (2017 – $17,156) and deposits denominated in other foreign currencies amount to $79,582 (2017 – $70,217).

The following table presents the maturity schedule for term deposits in Canada greater than $100,000⁽¹⁾.

($ millions)	Within three months		Three to six months		Six to twelve months		One to five years		Over five years		Total
As at October 31, 2018	$	36,670	$	23,913	$	42,830	$	99,734	$	19,872	$	223,019
As at October 31, 2017	$	33,678	$	26,579	$	31,190	$	94,563	$	16,073	$	202,083

(1) The majority of foreign term deposits are in excess of $100,000.

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Subordinated Debentures

12 Months Ended

Oct. 31, 2018

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Subordinated Debentures

21 Subordinated Debentures

These debentures are direct, unsecured obligations of the Bank and are subordinate to the claims of the Bank’s depositors and other creditors. The Bank, where appropriate, enters into interest rate and cross-currency swaps to hedge the related risks.

As at October 31 ($ millions)				2018		2017
Maturity date	Interest rate (%)		Terms(1)	Carrying value(2)		Carrying value(2)
October 2024		3.036	Redeemable on or after October 18, 2017. After October 18, 2019, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.14%.	$	1,740	$	1,756
June 2025		8.90	Redeemable at any time.		259		260
December 2025(3)		3.367	Redeemable on or after December 8, 2020. After December 8, 2020, interest will be payable at an annual rate equal to the 90 day bankers’ acceptance rate plus 2.19%.		729		737
December 2025(3)		4.50	US$1,250 million. Interest will be payable semi-annually in arrears on June 16 and December 16 of each year.		1,645		1,613
March 2027(3)		2.58	Redeemable on or after March 30, 2022. After March 30, 2022, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.19%.		1,195		1,219
November 2037(4)		3.015	JPY 10 billion. Redeemed on November 20, 2017.		–		113
April 2038(5)		3.37	JPY 10 billion. Redeemed on April 9, 2018.		–		110
August 2085		Floating	US$99 million bearing interest at a floating rate of the offered rate for six-month Eurodollar deposits plus 0.125%. Redeemable on any interest payment date.		130		127
				$	5,698	$	5,935

(1) In accordance with the provisions of the Capital Adequacy Guideline of the Superintendent, all redemptions are subject to regulatory approval and subject to the terms in the relevant prospectus.

(2) The carrying value of subordinated debentures may differ from par value due to adjustments related to hedge accounting.

(3) These debentures contain non-viability contingent capital (NVCC) provisions. Under such NVCC provisions, the debentures are convertible into a variable number of common shares if OSFI announces that the Bank has ceased, or is about to cease, to be viable, or if a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent thereof without which the Bank would have been determined by OSFI to be non-viable. If such a conversion were to occur, the debentures would be converted into common shares pursuant to an automatic conversion formula defined as 150% of the par value plus accrued and unpaid interest divided by the conversion price. The conversion price is based on the greater of: (i) a floor price of $5.00 or, where applicable, the US dollar equivalent of $5.00 (subject to, in each case, adjustments in certain events as set out in the respective prospectus supplements), and (ii) the current market price of the Bank’s common shares at the time of the trigger event (10-day weighted average), where applicable converted from CAD to USD.

(4) On November 29, 2017, the Bank redeemed all outstanding 3.015% subordinated debentures due November 30, 2038 at their par value of JPY 10 billion plus accrued interest.

(5) On April 9, 2018, the Bank redeemed all outstanding 3.370% subordinated debentures due April 9, 2038 at their par value of JPY 10 billion plus accrued interest.

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Other Liabilities

12 Months Ended

Oct. 31, 2018

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Other Liabilities

22 Other Liabilities

As at October 31 ($ millions)	2018		2017
Accrued interest	$	2,634	$	2,172
Accounts payable and accrued expenses		6,198		5,867
Current tax liabilities		435		408
Deferred tax liabilities (Note 27)		1,205		697
Gold and silver certificates and bullion		5,019		6,819
Margin and collateral accounts		6,523		7,129
Segregated fund liabilities		2,736		–
Payables to brokers, dealers and clients		564		796
Provisions (Note 23)(1)		181		213
Allowance for credit losses on off-balance sheet exposures - IFRS 9 (Note 13)		74		n/a
Allowance for credit losses on off-balance sheet exposures - IAS 39(1)		n/a		120
Pension liabilities (Note 28)		593		808
Other liabilities of subsidiaries and structured entities		19,933		12,954
Other		6,649		5,331
Total	$	52,744	$	43,314

(1) Prior year amounts have been reclassified to conform with current period presentation.

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Provisions

12 Months Ended

Oct. 31, 2018

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Provisions

23 Provisions

($ millions)	Restructuring			Litigation & other			Total
As at November 1, 2016	$	277		$	121		$	398
Provisions made during the year		–			27			27
Provisions utilized / released during the year		(174	)		(38	)		(212	)
Balance as at October 31, 2017	$	103		$	110		$	213
Provisions made during the year		–			79			79
Provisions utilized / released during the year		(79	)		(32	)		(111	)
Balance as at October 31, 2018	$	24		$	157		$	181

Restructuring charge

During fiscal 2016, the Bank recorded a restructuring provision of $378 million ($278 million after tax) as part of the Bank’s efforts to enhance customer experience, reduce costs in a sustainable manner, to achieve greater operational efficiencies, and to simplify the organization. The restructuring charge primarily related to employee severance and was recorded within non-interest expenses. As at October 31, 2018, $24 million of the restructuring provision remains.

Litigation and Other

Other primarily includes provisions related to litigation. In the ordinary course of business, the Bank and its subsidiaries are routinely defendants in, or parties to a number of pending and threatened legal actions and regulatory proceedings, including actions brought on behalf of various classes of claimants. In view of the inherent difficulty of predicting the outcome of such matters, the Bank cannot state what the eventual outcome of such matters will be. However, based on current knowledge, management does not believe that liabilities, if any, arising from pending litigation or regulatory proceedings will have a material adverse effect on the Consolidated Statement of Financial Position or results of operations of the Bank.

Legal provisions are established when it becomes probable that the Bank will incur an expense related to a legal action and the amount can be reliably estimated. Such provisions are recorded at the best estimate of the amount required to settle any obligation related to these legal actions as at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Management and internal and external experts are involved in estimating any amounts that may be required. The actual costs of resolving these claims may vary significantly from the amount of the legal provisions. The Bank’s estimate involves significant judgement, given the varying stages of the proceedings, the fact that the Bank’s liability, if any, has yet to be determined and the fact that the underlying matters will change from time to time. As such, there is a possibility that the ultimate resolution of those legal actions may be material to the Bank’s consolidated results of operations for any particular reporting period.

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Common shares, preferred shares and other equity instruments

12 Months Ended

Oct. 31, 2018

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Common shares, preferred shares and other equity instruments

24 Common shares, preferred shares and other equity instruments

(a) Common shares

Authorized:

An unlimited number of common shares without nominal or par value.

Issued and fully paid:

	2018						2017
As at October 31 ($ millions)	Number of shares			Amount			Number of shares			Amount
Outstanding at beginning of year		1,199,231,715		$	15,644			1,207,893,604		$	15,513
Issued in relation to share-based payments, net (Note 26)		2,238,468			135			5,338,111			313
Issued in relation to the acquisition of a subsidiary or associated corporation		33,788,141			2,573			–			–
Repurchased for cancellation under the Normal Course Issuer Bid		(8,230,700	)		(118	)		(14,000,000	)		(182	)
Outstanding at end of year		1,227,027,624	(1)	$	18,234			1,199,231,715	(1)	$	15,644

(1) In the normal course of business, the Bank’s regulated Dealer subsidiary purchases and sells the Bank’s common shares to facilitate trading/institutional client activity. During fiscal 2018, the number of such shares bought and sold was 14,667,143 (2017 – 15,856,738).

Dividend

The dividends paid on common shares in fiscal 2018 and 2017 were $3,985 million ($3.28 per share) and $3,668 million ($3.05 per share), respectively. The Board of Directors approved a quarterly dividend of 85 cents per common share at its meeting on November 26, 2018. This quarterly dividend applies to shareholders of record at the close of business on January 2, 2019, and is payable January 29, 2019.

Common shares issued

On May 1, 2018, the Bank issued 11,133,141 common shares at a price of $78.86 per common share in connection with the acquisition of Jarislowsky Fraser. As a result of the issuance, the Bank recorded an increase to equity – common shares of $878 million.

On June 8, 2018, the Bank completed its public offering of 22,655,000 common shares, at a price of $76.15 per common share. As a result of the public offering, the Bank recorded an increase to equity – common shares of $1,696 million, net of transaction costs of $29 million. The Bank has used the proceeds of the public offering to partially fund the acquisition of MD Financial Management.

Normal Course Issuer Bid

On May 29, 2018, the Bank announced that OSFI and TSX approved a normal course issuer bid (the “2018 NCIB”) pursuant to which it may repurchase for cancellation up to 24 million of the Bank’s common shares. Purchases under the 2018 NCIB will terminate upon earlier of: (i) the Bank purchasing the maximum number of common shares under the 2018 NCIB, (ii) the Bank providing a notice of termination, or (iii) June 3, 2019. On a quarterly basis, the Bank will notify OSFI prior to making purchases. Under the 2018 NCIB, the Bank has cumulatively repurchased and cancelled approximately 5.98 million common shares at an average price of $75.85 per share.

On May 30, 2017, the Bank announced that OSFI and the Toronto Stock Exchange (TSX) approved a normal course issuer bid (the “2017 NCIB”) pursuant to which it may repurchase for cancellation up to 24 million of the Bank’s common shares. The 2017 NCIB terminated on June 1, 2018. Under the 2017 NCIB, the Bank cumulatively repurchased and cancelled approximately 6.25 million common shares at an average price of $76.41 per share.

During the year ended October 31, 2018, under normal course issuer bids, the Bank repurchased and cancelled approximately 8.23 million common shares (2017 – 14 million) at a volume weighted average price of $76.77 per share (2017 – $72.09) for a total amount of $632 million (2017 – $1,009 million). Approximately 2 million of the common shares purchased were pursuant to a private agreement with an arm’s length third party seller and at a discount to the prevailing market price of the Bank’s common shares on the TSX at the time of the purchases.

Non-viability Contingent Capital

The maximum number of common shares issuable on conversion of NVCC subordinated debentures, NVCC subordinated additional tier 1 capital securities and NVCC preferred shares as at October 31, 2018 would be 1,835 million common shares (2017 – 1,757 million common shares) based on the floor price and excluding the impact of any accrued and unpaid interest and any declared but unpaid dividends (refer to Note 21 – Subordinated debentures and Note 24(b) – Preferred shares and Other Equity Instruments for further details).

(b) Preferred shares and other equity instruments

Preferred shares

Authorized:

An unlimited number of preferred shares without nominal or par value.

Issued and fully paid:

	2018								2017
As at October 31 ($ millions)	Number of shares		Amount		Dividends declared per share		Conversion feature		Number of shares		Amount		Dividends declared per share		Conversion feature
Preferred shares:(a)
Series 18(b)		–		–		0.418750		–		7,497,663		187		0.837500		Series 19
Series 19(b)		–		–		0.374547		–		6,302,337		158		0.642626		Series 18
Series 20(c)		–		–		0.902500		–		8,039,268		201		0.902500		Series 21
Series 21(c)		–		–		0.691967		–		5,960,732		149		0.554501		Series 20
Series 22(d)(e)		9,376,944		234		0.957500		Series 23		9,376,944		234		0.957500		Series 23
Series 23(d)(e)		2,623,056		66		0.736967		Series 22		2,623,056		66		0.600126		Series 22
Series 30(d)(f)		6,142,738		154		0.455000		Series 31		6,142,738		154		0.455000		Series 31
Series 31(d)(f)		4,457,262		111		0.516968		Series 30		4,457,262		111		0.380126		Series 30
Series 32(d)(g)		11,161,422		279		0.515752		Series 33		11,161,422		279		0.515752		Series 33
Series 33(d)(g)		5,184,345		130		0.601968		Series 32		5,184,345		130		0.465159		Series 32
Series 34(d)(h)(i)		14,000,000		350		1.375000		Series 35		14,000,000		350		1.375000		Series 35
Series 36(d)(h)(j)		20,000,000		500		1.375000		Series 37		20,000,000		500		1.375000		Series 37
Series 38(d)(h)(k)		20,000,000		500		1.212500		Series 39		20,000,000		500		1.351175		Series 39
Series 40(d)(h)(l)		12,000,000		300		–		Series 41		–		–		–		–
Total preferred shares		104,945,767	$	2,624						120,745,767	$	3,019

Terms of preferred shares

	First issue date		Issue price		Initial dividend		Initial dividend payment date		Rate reset spread			Redemption date		Redemption price
Preferred shares(a):
Series 18(b)		March 25, 2008		25.00		0.431500		July 29, 2008		0.00	%		April 26, 2018		25.00
Series 19(b)		April 26, 2013		25.00		0.189250		July 29, 2013		0.00	%		April 26, 2018		25.00
Series 20(c)		June 10, 2008		25.00		0.167800		July 29, 2008		0.00	%		October 26, 2018		25.00
Series 21(c)		October 26, 2013		25.00		0.167875		January 29, 2014		0.00	%		October 26, 2018		25.00
Series 22(d)(e)		September 9, 2008		25.00		0.482900		January 28, 2009		1.88	%		January 26, 2019		25.00
Series 23(d)(e)		January 26, 2014		25.00		0.173875		April 28, 2014		1.88	%		January 26, 2014 to January 26, 2019		25.50
Series 30(d)(f)		April 12, 2010		25.00		0.282200		July 28, 2010		1.00	%		April 26, 2020		25.00
Series 31(d)(f)		April 26, 2015		25.00		0.095500		July 29, 2015		1.00	%		April 26, 2015 to April 26, 2020		25.50
Series 32(d)(g)		February 28, 2011		25.00		0.215410		April 27, 2011		1.34	%		February 2, 2021		25.00
Series 33(d)(g)		February 2, 2016		25.00		0.105690		April 27, 2016		1.34	%		February 2, 2016 to February 2, 2021		25.50
Series 34(d)(h)(i)		December 17, 2015		25.00		0.497300		April 27, 2016		4.51	%		April 26, 2021		25.00
Series 36(d)(h)(j)		March 14, 2016		25.00		0.508600		July 27, 2016		4.72	%		July 26, 2021		25.00
Series 38(d)(h)(k)		September 16, 2016		25.00		0.441800		January 27, 2017		4.19	%		January 27, 2022		25.00
Series 40(d)(h)(l)		October 12, 2018		25.00		0.362100		January 29, 2019		2.43	%		January 27, 2024		25.00

(a) Non-cumulative preferential cash dividends on all series are payable quarterly, as and when declared by the Board. Dividends on the Non-cumulative 5-Year Rate Reset Preferred Shares (Series 22, 30 and 32) and the Non-cumulative 5-Year Rate Reset Preferred Shares Non Viability Contingent Capital (NVCC) (Series 34, 36, 38, and 40) are payable at the applicable rate for the initial five-year fixed rate period ending one day prior to the redemption date. Subsequent to the initial five-year fixed rate period, and resetting every five years thereafter, the dividend on such Rate Reset Preferred Shares will be determined by the sum of the 5-year Government of Canada Yield plus the indicated rate reset spread, multiplied by $25.00. If outstanding, non-cumulative preferential cash dividends on the Series 23, 31, 33, 35, 37, 39, and 41 are payable quarterly, as and when declared by the Board. Dividends on the Non-cumulative 5-Year Rate Reset Preferred Shares (Series 23, 31 and 33) and the Non-cumulative 5-Year Rate Reset Preferred Shares NVCC (Series 35, 37, 39, and 41) are payable, at a rate equal to the sum of the three month Government of Canada Treasury Bill rate plus the rate reset spread of the converted preferred shares, multiplied by $25.00. For each of the years presented, the Bank paid all of the non-cumulative preferred share dividends.

(b) On April 26, 2018, the Bank redeemed all outstanding Non-cumulative Preferred Shares Series 18 and Series 19 and paid dividends of $0.209375 and $0.181788 per share, respectively.

(c) On October 26, 2018, the Bank redeemed all outstanding Non-Cumulative Preferred Shares 20 and 21 and paid a dividend of $0.225625 and $0.187403, respectively, per share.

(d) Holders of Fixed Rate Reset Preferred Shares will have the option to convert shares into an equal number of the relevant series of Floating Rate Preferred Shares on the applicable Rate Reset Series conversion date and every five years thereafter. Holders of Floating Rate Reset Preferred Shares have reciprocal conversion options into the relevant series of Fixed Rate Reset Preferred Shares. With respect to Series 22 and 23, 30 and 31, 32 and 33, 34 and 35, 36 and 37, 38 and 39, and 40 and 41, if the Bank determines that, after giving effect to any Election Notices received, there would be less than 1,000,000 Fixed Rate or Floating Rate Preferred Shares of such Series issued and outstanding on an applicable conversion date, then all of the issued and outstanding preferred shares of such Series will automatically be converted into an equal number of the preferred shares of the other relevant Series.

(e) Holders of Series 22 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 23 non-cumulative floating rate preferred shares on January 26, 2019, and on January 26 every five years thereafter. With regulatory approval, the Series 22 preferred shares may be redeemed by the Bank on January 26, 2019, and every five years thereafter, respectively, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 23 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on January 26, 2019 and on January 26 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed for redemption on any other date after January 26, 2014.

(f) Holders of Series 30 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 31 non-cumulative floating rate preferred shares on April 26, 2020, and on April 26 every five years thereafter. With regulatory approval, the Series 30 preferred shares may be redeemed by the Bank on April 26, 2020, and every five years thereafter, respectively, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 31 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on April 26, 2020 and on April 26 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed for redemption on any other date after April 26, 2015.

(g) Holders of Series 32 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 33 non-cumulative floating rate preferred shares on February 2, 2021 and on February 2 every five years thereafter. With regulatory approval, the Series 32 preferred shares may be redeemed by the Bank on February 2, 2021, and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 33 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on February 2, 2021 and on February 2 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed redemption on any other date after February 2, 2016.

(h) These preferred shares contain NVCC provisions necessary for the shares to qualify as Tier 1 regulatory capital under Basel III.

(i) Holders of Series 34 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 35 non-cumulative floating rate preferred shares on April 26, 2021, and on April 26 every five years thereafter. With regulatory approval, Series 34 preferred shares may be redeemed by the Bank on April 26, 2021 and every five years thereafter, and for Series 35 preferred shares (NVCC), if applicable, on April 26, 2026 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(j) Holders of Series 36 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 37 non-cumulative floating rate preferred shares (NVCC) on July 26, 2021, and on July 26 every five years thereafter. With regulatory approval, Series 36 preferred shares may be redeemed by the Bank on July 26, 2021 and every five years thereafter, and for Series 37 preferred shares, if applicable, on July 26, 2026 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(k) Holders of Series 38 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 39 non-cumulative floating rate preferred shares (NVCC) on January 27, 2022, and on January 27 every five years thereafter. With regulatory approval, Series 38 preferred shares may be redeemed by the Bank on January 27, 2022 and every five years thereafter, and for Series 39 preferred shares, if applicable, on January 27, 2027 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(l) On October 12, 2018, the Bank issued 12 million Non-Cumulative 5-year Rate Reset Preferred Shares Series 40 (NVCC) for $300 million. The initial dividend, if declared, will be payable on January 29, 2019. Holder of Series 40, Non-Cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into equal number of Non-Cumulative Floating Rate Preferred Shares Series 41 (NVCC), on January 27, 2024 and on January 27 every five years thereafter. With regulatory approval, Series 40 may be redeemed by the Bank on January 27, 2024 and every five years thereafter, and for Series 41, if applicable, on January 27, 2029 and every five years thereafter, at $25.00 per share together with declared and unpaid dividends.

Under NVCC provisions, NVCC preferred shares Series 34, 35, 36, 37, 38, 39, 40 and 41, if outstanding, are convertible into a variable number of common shares if OSFI announces that the Bank has ceased, or is about to cease, to be viable, or if a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent thereof without which the Bank would have been determined by OSFI to be non-viable. If such a conversion were to occur, NVCC preferred shares Series 34, 35, 36, 37, 38, 39, 40 and 41, if outstanding, would be converted into common shares pursuant to an automatic conversion formula defined as 100% times the share value of $25.00 plus declared and unpaid dividends divided by the conversion price. The conversion price is based on the greater of: (i) a floor price of $5.00 or (subject to adjustments in certain events as set out in their respective prospectus supplements), and (ii) the current market price of the Bank’s common shares at the time of the trigger event (10-day weighted average).

Other equity instruments

Other equity instruments of $1,560 million (US$1.25 billion) include USD-denominated perpetual fixed to floating rate non-cumulative subordinated additional Tier 1 capital securities (NVCC).

The terms of the notes are described below:

• The price per note is USD $1,000, with interest paid semi-annually in arrears at 4.65% per annum, for the initial five years. Thereafter, the interest will reset quarterly and accrue at a rate per annum equal to three-month LIBOR plus 2.648%.

• While interest is payable on a semi-annual basis for the initial five year period, and quarterly thereafter, the Bank may, at its discretion, with notice, cancel the payments. If the Bank does not pay the interest in full to the note holders, the Bank will not declare dividends on its common or preferred shares or redeem, purchase or otherwise retire such shares until the month commencing after the Bank resumes full interest payments on the notes.

• The notes are redeemable at par 5 years after issuance solely at the option of the Bank, or following a regulatory or tax event, as described in the offering documents. All redemptions are subject to regulatory consent.

• The notes are the Bank’s direct unsecured obligations, ranking subordinate to all of the Bank’s subordinated indebtedness.

• NVCC provisions require the conversion of these capital instruments into a variable number of common shares if OSFI announces that the Bank has ceased, or is about to cease, to be viable, or if a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent thereof without which the Bank would have been determined by OSFI to be non-viable. If such a conversion were to occur, outstanding NVCC subordinated additional Tier 1 capital securities, would be converted into common shares pursuant to an automatic conversion formula defined as 125% of the par value plus accrued and unpaid interest divided by the conversion price. The conversion price is based on the greater of: (i) the U.S. dollar equivalent of $5.00 (subject to adjustments in certain events as set out in their respective prospectus supplements), and (ii) the U.S. dollar equivalent of the current market price of the Bank’s common shares at the time of the trigger event (10-day weighted average). The U.S. dollar equivalents of the floor price and the current market price are based on the mid-day CAD/USD exchange rate on the day prior to the trigger event.

The notes have been determined to be compound instruments that have both equity and liability features. At inception, the fair value of the liability component is initially measured with any residual amount assigned to the equity component. On the date of issuance, the Bank has assigned an insignificant value to the liability component of the notes and, as a result, the proceeds received upon issuance of the notes have been presented as equity. The Bank will continue to monitor events that could impact the value of the liability component.

During the year ended October 31, 2018, the Bank paid interest of US$58 million (2017 - nil) in respect of these notes.

(c) Restrictions on dividend payments

Under the Bank Act, the Bank is prohibited from declaring any dividends on its common or preferred shares when the Bank is, or would be placed by such a declaration, in contravention of the capital adequacy, liquidity or any other regulatory directives issued under the Bank Act. In addition, common share dividends cannot be paid unless all dividends to which preferred shareholders are then entitled have been paid or sufficient funds have been set aside to do so.

In the event that applicable cash distributions on any of the Scotiabank Trust Securities are not paid on a regular distribution date, the Bank has undertaken not to declare dividends of any kind on its preferred or common shares. Similarly, should the Bank fail to declare regular dividends on any of its directly issued outstanding preferred or common shares, cash distributions will also not be made on any of the Scotiabank Trust Securities.

In the event that distributions on the Bank’s subordinated additional Tier 1 capital securities (NVCC) are not paid in full, the Bank has undertaken not to declare dividends on its common or preferred shares until the month commencing after such distributions have been made in full.

Currently, these limitations do not restrict the payment of dividends on preferred or common shares.

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Capital Management

12 Months Ended

Oct. 31, 2018

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Capital Management

25 Capital Management

The primary regulator over the Bank’s consolidated capital adequacy is the Office of the Superintendent of Financial Institutions, Canada (OSFI). The capital adequacy regulations in Canada are largely consistent with international standards set by the Basel Committee on Banking Supervision (BCBS). OSFI requires Canadian deposit-taking institutions to fully implement the 2019 Basel III reforms, without the transitional phase-in provisions for capital deductions (referred to as ‘all-in’), and achieve minimums of 7%, 8.5% and 10.5% for CET1, Tier 1 and Total Capital, respectively. OSFI has also designated the Bank as a domestic systemically important bank (D-SIB), increasing its minimum capital ratio requirements by 1% across all tiers of capital effective January 1, 2016, in line with the requirements for global systemically important banks.

In addition to risk-based capital requirements, the Basel III reforms introduced a simpler, non risk-based Leverage ratio requirement to act as a supplementary measure to its risk-based capital requirements. Institutions are expected to maintain a material operating buffer above the 3% minimum.

The Bank’s regulatory capital ratios were as follows:

	2018(3)			2017
As at October 31 ($ millions)	All-in			All-in			Transitional
Capital
Common Equity Tier 1 Capital	$	44,443		$	43,352		$	46,051
Net Tier 1 Capital		50,187			49,473			50,623
Total regulatory capital		57,364			56,113			57,222
Risk-weighted assets/exposures used in calculation of capital ratios
CET1 risk-weighted assets(1)(2)	$	400,507		$	376,379		$	387,292
Tier 1 risk-weighted assets(1)(2)		400,680			376,379			387,292
Total risk-weighted assets(1)(2)		400,853			376,379			387,292
Leverage exposures		1,119,099			1,052,891			1,053,928
Capital ratios
Common Equity Tier 1 Capital ratio		11.1	%		11.5	%		11.9	%
Tier 1 capital ratio		12.5	%		13.1	%		13.1	%
Total capital ratio		14.3	%		14.9	%		14.8	%
Leverage ratio		4.5	%		4.7	%		4.8	%

(1) In accordance with OSFI’s requirements, scalars for CVA risk-weighted assets of 0.80, 0.83 and 0.86 (0.72, 0.77 and 0.81 in 2017) were used to compute the CET1 capital ratio, Tier 1 capital ratio and Total capital ratio, respectively.

(2) Since the introduction of Basel II in 2008, OSFI has prescribed a minimum capital floor for institutions that use the advanced internal ratings-based approach for credit risk. The Basel I capital floor add-on is determined by comparing a capital requirement calculated by reference to Basel I against the Basel III calculation, as specified by OSFI. A shortfall in the Basel III capital requirement as compared with the Basel I floor is added to RWA. OSFI replaced the Basel I regulatory capital floor with a capital floor based on the Basel II standardized approach for credit risk, effective April 30, 2018. Revised capital floor requirements also include risk-weighted assets for market risk and CVA. Under this new Basel II regulatory capital floor requirement, the Bank does not have a capital floor add-on as at October 31, 2018 (as at October 31, 2017 – Basel I floor add-on: CET1 $12.8 billion, Tier 1 $12.6 billion, and Total Capital $12.4 billion).

(3) The Transitional approach is no longer applicable effective Fiscal 2018.

The Bank substantially exceeded the OSFI minimum capital ratios as at October 31, 2018, including the Domestic Stability Buffer requirement.

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Share-Based Payments

12 Months Ended

Oct. 31, 2018

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Share-Based Payments

26 Share-Based Payments

(a) Stock option plans

The Bank grants stock options and stand-alone stock appreciation rights (SARs) as part of the Employee Stock Option Plan. Options to purchase common shares and/or to receive an equivalent cash payment, as applicable, may be granted to selected employees at an exercise price of the higher of the closing price of the Bank’s common shares on the Toronto Stock Exchange (TSX) on the trading day prior to the grant date or the volume weighted average trading price for the five trading days immediately preceding the grant date.

Stock Options granted since December 2014 vest 50% at the end of the third year and 50% at the end of the fourth year. This change is prospective and does not impact prior period grants. Stock Options are exercisable no later than 10 years after the grant date. In the event that the expiry date falls within an insider trading blackout period, the expiry date will be extended for 10 business days after the end of the blackout period. As approved by the shareholders, a total of 129 million common shares have been reserved for issuance under the Bank’s Employee Stock Option Plan of which 106.8 million common shares have been issued as a result of the exercise of options and 14 million common shares are committed under outstanding options, leaving 8.2 million common shares available for issuance as options. Outstanding options expire on dates ranging from December 5, 2018 to December 7, 2027.

The cost of these options is recognized on a graded vesting basis except where the employee is eligible to retire prior to a tranche’s vesting date, in which case the cost is recognized between the grant date and the date the employee is eligible to retire.

The stock option plans include:

● Tandem stock appreciation rights

Employee stock options granted between December 2, 2005 to November 1, 2009 have Tandem SARs, which provide the employee the choice to either exercise the stock option for shares, or to exercise the Tandem SARs and thereby receive the intrinsic value of the stock option in cash. As at October 31, 2018, 3,900 Tandem SARs were outstanding (2017 – 5,900).

The share-based payment liability recognized for vested Tandem SARs as at October 31, 2018 was $0.1 million (2017 – nil). The corresponding intrinsic value of this liability as at October 31, 2018 was $0.2 million (2017 – nil).

In 2018, an expense of $0.6 million (2017 – $0.4 million expense) was recorded in salaries and employee benefits in the Consolidated Statement of Income. This expense is net of losses arising from derivatives used to manage the volatility of share-based payments of nil (2017 – $0.3 million gains).

● Stock options

Employee stock options granted beginning December 2009 are equity-classified stock options which call for settlement in shares and do not have Tandem SARs features.

The amount recorded in equity – other reserves for vested stock options as at October 31, 2018 was $164 million (2017 – $177 million).

In 2018, an expense of $7 million (2017 – $7 million) was recorded in salaries and employee benefits in the Consolidated Statement of Income. As at October 31, 2018, future unrecognized compensation cost for non-vested stock options was $4 million (2017 – $4 million) which is to be recognized over a weighted-average period of 2.07 years (2017 – 1.90 years).

● Stock appreciation rights

Stand-alone SARs are granted instead of stock options to selected employees in countries where local laws may restrict the Bank from issuing shares. When a SAR is exercised, the Bank pays the appreciation amount in cash equal to the rise in the market price of the Bank’s common shares since the grant date.

During fiscal 2018, 53,056 SARs were granted (2017 – 60,840) and as at October 31, 2018, 1,073,146 SARs were outstanding (2017 – 1,275,608), of which 1,032,495 SARs were vested (2017 – 1,229,330).

The share-based payment liability recognized for vested SARs as at October 31, 2018 was $14 million (2017 – $31 million). The corresponding intrinsic value of this liability as at October 31, 2018 was $27 million (2017 – $28 million).

In 2018, a benefit of $3 million (2017 – benefit of $2 million) was recorded in salaries and employee benefits in the Consolidated Statement of Income. This benefit is net of losses arising from derivatives used to manage the volatility of share-based payment of $8 million (2017 – $20 million gains).

Determination of fair values

The share-based payment liability and corresponding expense for SARs and options with Tandem SAR features were quantified using the Black-Scholes option pricing model with the following assumptions and resulting fair value per award:

As at October 31	2018		2017
Assumptions
Risk-free interest rate%		2.26% - 2.34%		1.38% - 1.59%
Expected dividend yield		4.58%		3.61%
Expected price volatility		13.75% - 28.12%		15.3% - 23.38%
Expected life of option		0.00 - 4.58 years		0.00 - 4.53 years
Fair value
Weighted-average fair value	$	13.39	$	25.72

The share-based payment expense for stock options, i.e., without Tandem SAR features, was quantified using the Black-Scholes option pricing model on the date of grant. The fiscal 2018 and 2017 stock option grants were fair valued using the following weighted-average assumptions and resulting fair value per award:

	2018 Grant		2017 Grant
Assumptions
Risk-free interest rate %		1.73%		1.27%
Expected dividend yield		3.62%		3.81%
Expected price volatility		15.86%		17.24%
Expected life of option		6.64 years		6.67 years
Fair value
Weighted-average fair value	$	7.68	$	6.51

The risk-free rate is based on Canadian treasury bond rates interpolated for the maturity equal to the expected life until exercise of the options. Expected dividend yield is based on historical dividend payout. Expected price volatility is determined based on the historical volatility for compensation. For accounting purposes, an average of the market consensus implied volatility for traded options on our common shares and the historical volatility is used.

Details of the Bank’s Employee Stock Option Plan are as follows⁽¹⁾:

	2018					2017
As at October 31	Number of stock options (000’s)			Weighted average exercise price		Number of stock options (000’s)			Weighted average exercise price
Outstanding at beginning of year		15,555		$	57.42		19,852		$	54.55
Granted		988			81.81		1,141			74.14
Exercised as options		(2,238	)		51.37		(5,338	)		50.25
Exercised as Tandem SARs		(19	)		41.95		(33	)		52.59
Forfeited		(146	)		65.93		(67	)		65.97
Expired		–			–		–			–
Outstanding at end of year(2)		14,140		$	60.02		15,555		$	57.42
Exercisable at end of year(2)		10,176		$	55.76		10,980		$	53.44
Available for grant		8,334					9,156

	Options Outstanding						Options Exercisable
As at October 31, 2018	Number of stock options (000’s)		Weighted average remaining contractual life (years)		Weighted average exercise price		Number of stock options (000’s)		Weighted average exercise price
Range of exercise prices
$33.89 to $47.75		1,571		0.84	$	44.02		1,571	$	44.02
$49.93 to $55.21		1,838		3.00	$	50.30		1,838	$	50.30
$55.63 to $60.67		4,794		4.18	$	56.88		3,606	$	55.63
$63.98 to $81.81		5,937		6.40	$	69.80		3,161	$	64.91
		14,140		4.59	$	60.02		10,176	$	55.76

(1) Excludes SARs.

(2) Includes options of 3,900 Tandem SARs (2017 – 5,900) and 130,000 options originally issued under HollisWealth plans (2017 – 156,520).

(b) Employee share ownership plans

Eligible employees can contribute up to a specified percentage of salary towards the purchase of common shares of the Bank. In general, the Bank matches 50% of eligible contributions, up to a maximum dollar amount, which is expensed in salaries and employee benefits. During 2018, the Bank’s contributions totalled $55 million (2017 – $54 million). Contributions, which are used to purchase common shares in the open market, do not result in a subsequent expense to the Bank from share price appreciation.

As at October 31, 2018, an aggregate of 16 million common shares were held under the employee share ownership plans (2017 – 18 million). The shares in the employee share ownership plans are considered outstanding for computing the Bank’s basic and diluted earnings per share.

(c) Other share-based payment plans

Other share-based payment plans use notional units that are valued based on the Bank’s common share price on the TSX. These units accumulate dividend equivalents in the form of additional units based on the dividends paid on the Bank’s common shares. These plans are settled in cash and, as a result, are liability-classified. Fluctuations in the Bank’s share price change the value of the units, which affects the Bank’s share-based payment expense. As described below, the value of a portion of the Performance Share Unit notional units also varies based on Bank performance. Upon exercise or redemption, payments are made to the employees with a corresponding reduction in the accrued liability.

In 2018, an aggregate expense of $188 million (2017 – $203 million) was recorded in salaries and employee benefits in the Consolidated Statement of Income for these plans. This expense includes losses from derivatives used to manage the volatility of share-based payment of $85 million (2017 – $160 million gains).

As at October 31, 2018, the share-based payment liability recognized for vested awards under these plans was $745 million (2017 – $946 million).

Details of these other share-based payment plans are as follows:

Deferred Stock Unit Plan (DSU)

Under the DSU Plan, senior executives may elect to receive all or a portion of their cash bonus under the Annual Incentive Plan (which is expensed for the year awarded in salaries and employee benefits in the Consolidated Statement of Income) in the form of deferred stock units which vest immediately. In addition the DSU plan allows for eligible executives of the Bank to participate in grants that are not allocated from the Annual Incentive Plan election. These grants are subject to specific vesting schedules. Units are redeemable in cash only when an executive ceases to be a Bank employee, and must be redeemed by December 31 of the year following that event. As at October 31, 2018, there were 939,290 units (2017 – 755,472) awarded and outstanding of which 795,783 units were vested (2017 – 684,017).

Directors’ Deferred Stock Unit Plan (DDSU)

Under the DDSU Plan, non-officer directors of the Bank may elect to receive all or a portion of their fee for that fiscal year (which is expensed by the Bank in other expenses in the Consolidated Statement of Income) in the form of deferred stock units which vest immediately. Units are redeemable in cash, only following resignation or retirement, and must be redeemed by December 31 of the year following that event. As at October 31, 2018, there were 314,424 units outstanding (2017 – 299,867).

Restricted Share Unit Plan (RSU)

Under the RSU Plan, selected employees receive an award of restricted share units which, for the majority of grants, vest at the end of three years. There are certain grants that provide for a graduated vesting schedule. Upon vesting all RSU units are paid in cash to the employee. The share-based payment expense is recognized evenly over the vesting period except where the employee is eligible to retire prior to the vesting date in which case, the expense is recognized between the grant date and the date the employee is eligible to retire. As at October 31, 2018, there were 2,639,165 units (2017 – 2,197,100) awarded and outstanding of which 1,665,885 were vested (2017 – 1,497,340).

Performance Share Unit Plan (PSU)

Eligible executives receive an award of performance share units, for the majority of grants vest at the end of three years. One grant provides for a graduated vesting schedule which includes a specific performance factor calculation. A portion of the PSU awards are subject to performance criteria measured over a three-year period whereby a multiplier factor is applied which impacts the incremental number of outstanding shares due to employees. The three-year performance measures include return on equity compared to target and total shareholder return relative to a comparator group selected prior to the granting of the award. The Bank uses a probability-weighted-average of potential outcomes to estimate the multiplier impact. The share-based payment expense is recognized over the vesting period except where the employee is eligible to retire prior to the vesting date; in which case, the expense is recognized between the grant date and the date the employee is eligible to retire. This expense varies based on changes in the Bank’s share price and the Bank’s performance compared to the performance measures. Upon vesting, the units are paid in cash to the employee. As at October 31, 2018, there were 7,813,011 units (2017 – 8,250,143) outstanding subject to performance criteria, of which 6,403,107 units were vested (2017 – 6,718,738).

Deferred Performance Plan

Under the Deferred Performance Plan, a portion of the bonus received by Global Banking and Markets employees (which is accrued and expensed in the year to which it relates) is allocated to qualifying employees in the form of units. These units are subsequently paid in cash to the employees over each of the following three years. Changes in the value of the units, which arise from fluctuations in the market price of the Bank’s common shares, are expensed in the same manner as the Bank’s other liability-classified share-based payment plans in the salaries and employee benefits expense in the Consolidated Statement of Income. As at October 31, 2018, there were 1,251,576 units outstanding (2017 – 1,587,037). November 30, 2017 was the last grant under this plan, there will be no further grants.

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Corporate Income Taxes

12 Months Ended

Oct. 31, 2018

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Corporate Income Taxes

27 Corporate Income Taxes

Corporate income taxes recorded in the Bank’s consolidated financial statements for the years ended October 31 are as follows:

(a) Components of income tax provision

For the year ended October 31 ($ millions)	2018			2017			2016
Provision for income taxes in the Consolidated Statement of Income:
Current income taxes:
Domestic:
Federal	$	797		$	533		$	467
Provincial		633			424			386
Adjustments related to prior periods		(25	)		24			4
Foreign		994			903			935
Adjustments related to prior periods		(14	)		(29	)		(19	)
		2,385			1,855			1,773
Deferred income taxes:
Domestic:
Federal		34			33			141
Provincial		16			16			70
Foreign		(53	)		129			46
		(3	)		178			257
Total provision for income taxes in the Consolidated Statement of Income	$	2,382		$	2,033		$	2,030
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Current income taxes	$	(136	)	$	82		$	(158	)
Deferred income taxes		(193	)		198			(168	)
		(329	)		280			(326	)
Reported in:
Other Comprehensive Income		(145	)		275			(322	)
Retained earnings		(194	)		(1	)		(10	)
Accumulated Other Comprehensive Income		18			–			–
Common shares		(10	)		1			1
Other reserves		2			5			5
Total provision for income taxes in the Consolidated Statement of Changes in Equity		(329	)		280			(326	)
Total provision for income taxes	$	2,053		$	2,313		$	1,704
Provision for income taxes in the Consolidated Statement of Income includes:
Deferred tax expense (benefit) relating to origination/reversal of temporary differences	$	64		$	191		$	372
Deferred tax expense (benefit) of tax rate changes		(2	)		(2	)		(4	)
Deferred tax expense (benefit) of previously unrecognized tax losses, tax credits and temporary differences		(65	)		(11	)		(111	)
	$	(3	)	$	178		$	257

(b) Reconciliation to statutory rate

Income taxes in the Consolidated Statement of Income vary from the amounts that would be computed by applying the composite federal and provincial statutory income tax rate for the following reasons:

	2018						2017						2016
For the year ended October 31 ($ millions)	Amount			Percent of pre-tax income			Amount			Percent of pre-tax income			Amount			Percent of pre-tax income
Income taxes at Canadian statutory rate	$	2,943			26.5	%	$	2,715			26.4	%	$	2,485			26.4	%
Increase (decrease) in income taxes resulting from:
Lower average tax rate applicable to subsidiaries and foreign branches		(439	)		(3.9	)		(286	)		(2.8	)		(234	)		(2.5	)
Tax-exempt income from securities		(90	)		(0.8	)		(407	)		(3.9	)		(220	)		(2.3	)
Deferred income tax effect of substantively enacted tax rate changes		(2	)		–			(2	)		–			(4	)		–
Other, net		(30	)		(0.3	)		13			0.1			3			–
Total income taxes and effective tax rate	$	2,382			21.5	%	$	2,033			19.8	%	$	2,030			21.6	%

(c) Deferred taxes

Significant components of the Bank’s deferred tax assets and liabilities are as follows:

	Statement of Income						Statement of Financial Position
	For the year ended						As at
October 31 ($ millions)	2018			2017			2018		2017
Deferred tax assets:
Loss carryforwards	$	73		$	62		$	338	$	417
Allowance for credit losses		(177	)		45			877		793
Deferred compensation		41			(25	)		178		219
Deferred income		(68	)		(124	)		476		405
Property and equipment		48			(19	)		417		133
Pension and other post-retirement benefits		16			(6	)		536		720
Securities		(17	)		(17	)		199		169
Other		(235	)		(169	)		633		640
Total deferred tax assets	$	(319	)	$	(253	)	$	3,654	$	3,496
Deferred tax liabilities:
Deferred income	$	(22	)	$	(21	)	$	156	$	133
Property and equipment		(93	)		(32	)		137		138
Pension and other post-retirement benefits		(12	)		(9	)		110		136
Securities		(8	)		111			166		126
Intangible assets		69			(53	)		1,788		1,094
Other		(250	)		(427	)		564		853
Total deferred tax liabilities	$	(316	)	$	(431	)	$	2,921	$	2,480
Net deferred tax assets (liabilities)(1)	$	(3	)	$	178		$	733	$	1,016

(1) For Consolidated Statement of Financial Position presentation, deferred tax assets and liabilities are assessed by legal entity. As a result, the net deferred tax assets of $733 (2017 – $1,016) are represented by deferred tax assets of $1,938 (2017 – $1,713), and deferred tax liabilities of $1,205 (2017 – $697) on the Consolidated Statement of Financial Position.

The major changes to net deferred taxes were as follows:

For the year ended October 31 ($ millions)	2018			2017
Balance at beginning of year	$	1,016		$	1,410
Deferred tax benefit (expense) for the year recorded in income		3			(178	)
Deferred tax benefit (expense) for the year recorded in equity		193			(198	)
Acquired in business combinations		(493	)		–
Other		14			(18	)
Balance at end of year	$	733		$	1,016

The tax related to temporary differences, unused tax losses and unused tax credits for which no deferred tax asset is recognized in the Consolidated Statement of Financial Position amounts to $14 million (October 31, 2017 – $82 million). The amount related to unrecognized losses is $7 million, which will expire as follows: $1 million in 2020 and beyond and $6 million in 2023.

Included in the net deferred tax asset are tax benefits of $92 million (2017 – $92 million) that have been recognized in certain Canadian and foreign subsidiaries that have incurred losses in either the current or the preceding year. In determining if it is appropriate to recognize these tax benefits, the Bank relied on projections of future taxable profits.

The amount of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures for which deferred tax liabilities have not been recognized at October 31, 2018 is approximately $33 billion (2017 – $27 billion).

Reassessment of dividend deductions

In November 2016, the Bank received a federal reassessment of $179 million for tax and interest as a result of the Canada Revenue Agency denying the tax deductibility of certain Canadian dividends received during the 2011 taxation year. In August 2017, the Bank received a reassessment of $185 million for tax and interest for the 2012 taxation year. The circumstances of the dividends subject to the reassessment are similar to those prospectively addressed by recently enacted rules which had been introduced in the 2015 Canadian federal budget. In June 2018, the Bank received a reassessment of $211 million for tax and interest in respect of the same circumstances for the 2013 taxation year. The Bank is confident that its tax filing position was appropriate and in accordance with the relevant provisions of the Income Tax Act (Canada), and intends to vigorously defend its position.

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Employee Benefits

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Employee Benefits

28 Employee Benefits

The Bank sponsors a number of employee benefit plans, including pensions (defined benefit and defined contribution) and other benefit plans (post-retirement benefits and other long-term employee benefits) for most of its employees globally. The information presented below relates to the Bank’s principal plans; other plans operated by certain subsidiaries of the Bank are not considered material and are not included in these disclosures.

Global pension plans

The principal pension plans include plans in Canada, the US, Mexico, the UK, Ireland, Jamaica, Trinidad & Tobago and other countries in the Caribbean in which the Bank operates. The Bank has a strong and well defined governance structure to manage these global obligations. The investment policy for each principal plan is reviewed periodically and all plans are in good standing with respect to legislation and local regulations.

Actuarial valuations for funding purposes for the Bank’s funded pension plans are conducted as required by applicable legislation. The purpose of the actuarial valuation is to determine the funded status of the plans on a going-concern and statutory basis and to determine the required contributions. The plans are funded in accordance with applicable pension legislation and the Bank’s funding policies such that future benefit promises based on plan provisions are well secured. The assumptions used for the funding valuations are set by independent plan actuaries on the basis of the requirements of the local actuarial standards of practice and statutes.

Scotiabank Pension Plan (Canada)

The most significant pension plan is the Scotiabank Pension Plan (SPP) in Canada, a defined benefit pension plan (which includes an optional defined contribution (DC) component for employees in Canada hired on or after January 1, 2016) which was recently amended to include a defined contribution pension plan for employees in Canada hired on or after May 1, 2018 (the defined benefit provision of the pension plan is closed to employees hired on or after May 1, 2018). As the administrator of the SPP, the Bank has established a well-defined governance structure and policies to maintain compliance with legislative and regulatory requirements under OSFI and the Canada Revenue Agency. The Bank appoints a number of committees to oversee and make decisions related to the administration of the SPP. Certain committees are also responsible for the investment of the assets of the SPP Fund and for monitoring the investment managers and performance.

• The Human Resources Committee (HRC) of the Board approves the charter of the Pension Administration and Investment Committee (PAIC), reviews reports, and approves the investment policy. The HRC also reviews and recommends any amendments to the SPP to the Board of Directors.

• PAIC is responsible for recommending the investment policy to the HRC, for appointing and monitoring investment managers, and for reviewing auditor and actuary reports. PAIC also monitors the administration of member pension benefits.

• The Scotiabank Master Trust Committee (MTC) invests assets in accordance with the investment policy and all applicable legislation. The MTC assigns specific mandates to investment managers. PAIC and the MTC both have independent member representation on the committees.

• The Capital Accumulation Plans (CAP) Committee is responsible for the administration and investment of the DC component of the SPP including the selection and monitoring of investment options available to DC participants.

Actuarial valuations for funding purposes for the SPP are conducted on an annual basis. The most recent funding valuation was conducted as of November 1, 2017. Contributions are being made to the SPP in accordance with this valuation and are shown in the table in b) below. The assumptions used for the funding valuation are set by independent plan actuaries on the basis of the requirements of the Canadian Institute of Actuaries and applicable regulation.

Other benefit plans

The principal other benefit plans include plans in Canada, the US, Mexico, Uruguay, the UK, Jamaica, Trinidad & Tobago, Colombia and other countries in the Caribbean in which the Bank operates. The most significant other benefit plans provided by the Bank are in Canada.

Key assumptions

The financial information reported below in respect of pension and other benefit plans is based on a number of assumptions. The most significant assumption is the discount rate used to determine the defined benefit obligation, which is set by reference to the yields on high quality corporate bonds that have durations that match the terms of the Bank’s obligations. Separate discount rates are used to determine the annual benefit expense in Canada and the US. These rates are determined with reference to the yields on high quality corporate bonds with durations that match the various components of the annual benefit expense. The discount rate used to determine the annual benefit expense for all other plans continues to be the same as the rate used to determine the defined benefit obligation at the beginning of the period. Other assumptions set by management are determined in reference to market conditions, plan-level experience, best practices and future expectations. The key weighted-average assumptions used by the Bank for the measurement of the benefit obligation and benefit expense for all of the Bank’s principal plans are summarized in the table in f) below.

Risk management

The Bank’s defined benefit pension plans and other benefit plans expose the Bank to a number of risks. Some of the more significant risks include interest rate risk, investment risk, longevity risk and health care cost increases, among others. These risks could result in higher defined benefit expense and a higher defined benefit obligation to the extent that:

• there is a decline in discount rates; and/or

• plan assets returns are less than expected; and/or

• plan members live longer than expected; and/or

• health care costs are higher than assumed.

In addition to the governance structure and policies in place, the Bank manages risks by regularly monitoring market developments and asset investment performance. The Bank also monitors regulatory and legislative changes along with demographic trends and revisits the investment strategy and/or plan design as warranted.

a) Relative size of plan obligations and assets

	Pension plans									Other benefit plans
	Canada
For the year ended October 31, 2018	SPP			Other			International			Canada			International
Percentage of total benefit obligations		70	%		14	%		16	%		58	%		42	%
Percentage of total plan assets		72	%		9	%		19	%		16	%		84	%
Percentage of total benefit expense(1)		82	%		16	%		2	%		39	%		61	%

	Pension plans									Other benefit plans
	Canada
For the year ended October 31, 2017	SPP			Other			International			Canada			International
Percentage of total benefit obligations		74	%		11	%		15	%		63	%		37	%
Percentage of total plan assets		76	%		6	%		18	%		18	%		82	%
Percentage of total benefit expense(1)		80	%		16	%		4	%		51	%		49	%

(1) Excludes non-routine benefit expense items such as past service costs, curtailment charges and settlement charges.

b) Cash contributions and payments

The table below shows the cash contributions and payments made by the Bank to its principal plans in 2018, and the two prior years.

Contributions to the principal plans for the year ended October 31 ($ millions)	2018		2017		2016
Defined benefit pension plans (cash contributions to fund the plans, including paying beneficiaries under the unfunded pension arrangements)
SPP (excluding DC provision)	$	238	$	286	$	187
All other plans		78		185		77
Other benefit plans (cash contributions mainly in the form of benefit payments to beneficiaries)		61		51		45
Defined contribution pension plans (cash contributions)		41		35		31
Total contributions(1)	$	418	$	557	$	340

(1) Based on preliminary estimates, the Bank expects to make contributions of $238 to the SPP (excluding the DC provision), $51 to all other defined benefit pension plans, $65 to other benefit plans and $63 to all other defined contribution plans for the year ending October 31, 2019.

c) Funded and unfunded plans

The excess (deficit) of the fair value of assets over the benefit obligation at the end of the year includes the following amounts for plans that are wholly unfunded and plans that are wholly or partly funded.

	Pension plans									Other benefit plans
As at October 31 ($ millions)	2018			2017			2016			2018			2017			2016
Benefit obligation
Benefit obligation of plans that are wholly unfunded	$	400		$	418		$	408		$	1,101		$	1,324		$	1,310
Benefit obligation of plans that are wholly or partly funded		7,868			8,424			8,731			273			334			372
Funded status
Benefit obligation of plans that are wholly or partly funded	$	7,868		$	8,424		$	8,731		$	273		$	334		$	372
Fair value of assets		8,037			8,329			7,770			240			266			284
Excess (deficit) of fair value of assets over benefit obligation of wholly or partly funded plans	$	169		$	(95	)	$	(961	)	$	(33	)	$	(68	)	$	(88	)
Benefit obligation of plans that are wholly unfunded		400			418			408			1,101			1,324			1,310
Excess (deficit) of fair value of assets over total benefit obligation	$	(231	)	$	(513	)	$	(1,369)		$	(1,134)		$	(1,392)		$	(1,398)
Effect of asset limitation and minimum funding requirement		(2	)		(39	)		(60	)		–			–			–
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)

d) Financial information

The following tables present financial information related to the Bank’s principal plans.

	Pension plans									Other benefit plans
For the year ended October 31 ($ millions)	2018			2017			2016			2018			2017			2016
Change in benefit obligation
Benefit obligation at beginning of year	$	8,842		$	9,139		$	8,113		$	1,658		$	1,682		$	1,639
Current service cost		334			330			284			30			39			39
Interest cost on benefit obligation		309			297			314			70			72			77
Employee contributions		22			24			24			–			–			–
Benefits paid		(1,012	)		(724	)		(593	)		(90	)		(76	)		(71	)
Actuarial loss (gain)		(495	)		(46	)		1,119			(96	)		(36	)		95
Past service cost		5			–			(16	)		(196	)(2)		4			(77	)
Business acquisition		264			–			–			6			1			9
Settlements		(2	)		(157	)		–			–			–			–
Foreign exchange		1			(21	)		(106	)		(8	)		(28	)		(29	)
Benefit obligation at end of year	$	8,268		$	8,842		$	9,139		$	1,374		$	1,658		$	1,682
Change in fair value of assets
Fair value of assets at beginning of year		8,329			7,770			7,615			266			284			307
Interest income on fair value of assets		305			273			310			20			19			22
Return on plan assets in excess of (less than) interest income on fair value of assets		(166	)		700			275			(11	)		1			5
Employer contributions		316			471			264			61			51			45
Employee contributions		22			24			24			–			–			–
Benefits paid		(1,012	)		(724	)		(593	)		(90	)		(76	)		(71	)
Administrative expenses		(14	)		(13	)		(12	)		–			–			–
Business acquisition		251			–			–			–			–			2
Settlements		(2	)		(157	)		–			–			(1	)		–
Foreign exchange		8			(15	)		(113	)		(6	)		(12	)		(26	)
Fair value of assets at end of year	$	8,037		$	8,329		$	7,770		$	240		$	266		$	284
Funded status
Excess (deficit) of fair value of assets over benefit obligation at end of year		(231	)		(513	)		(1,369	)		(1,134	)		(1,392	)		(1,398	)
Effect of asset limitation and minimum funding requirement(1)		(2	)		(39	)		(60	)		–			–			–
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)
Recorded in:
Other assets in the Bank’s Consolidated Statement of Financial Position		360			256			184			–			1			–
Other liabilities in the Bank’s Consolidated Statement of Financial Position		(593	)		(808	)		(1,613	)		(1,134	)		(1,393	)		(1,398	)
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)
Annual benefit expense
Current service cost		334			330			284			30			39			39
Net interest expense (income)		7			29			9			50			53			55
Administrative expenses		12			11			13			–			–			–
Past service costs		5			–			(16	)		(196	)(2)		4			(77	)
Amount of settlement (gain) loss recognized		–			–			–			–			–			–
Remeasurement of other long-term benefits		–			–			–			(10	)		(3	)		(20	)
Benefit expense (income) recorded in the Consolidated Statement of Income	$	358		$	370		$	290		$	(126	)	$	93		$	(3	)
Defined contribution benefit expense	$	41		$	35		$	31		$	–		$	–		$	–
Remeasurements
(Return) on plan assets in excess of interest income on fair value of assets		166			(700	)		(275	)		11			1			(3	)
Actuarial loss (gain) on benefit obligation		(495	)		(46	)		1,119			(86	)		(35	)		113
Change in the asset limitation		(40	)		(25	)		18			–			–			–
Remeasurements recorded in OCI	$	(369	)	$	(771	)	$	862		$	(75	)	$	(34	)	$	110
Total benefit cost	$	30		$	(366	)	$	1,183		$	(201	)	$	59		$	107
Additional details on actual return on assets and actuarial (gains) and losses
Actual return on assets (net of administrative expenses)	$	125		$	960		$	573		$	9		$	20		$	27
Actuarial (gains) and losses from changes in demographic assumptions		(148	)		(6	)		9			(23	)		–			(5	)
Actuarial (gains) and losses from changes in financial assumptions		(548	)		(71	)		1,116			(92	)		(13	)		133
Actuarial (gains) and losses from changes in experience		201			31			(6	)		19			(23	)		(33	)
Additional details on fair value of pension plan assets invested
In Scotiabank securities (stock, bonds)		377			457			410			3			4			–
In property occupied by Scotiabank		4			4			5			–			–			–
Change in asset ceiling/onerous liability
Asset ceiling /onerous liability at end of prior year		39			60			41			–			–			–
Interest expense		3			5			5			–			–			–
Remeasurements		(40	)		(25	)		18			–			–			–
Foreign exchange		–			(1	)		(4	)		–			–			–
Asset ceiling /onerous liability at end of year	$	2		$	39		$	60		$	–		$	–		$	–

(1) The recognized asset is limited by the present value of economic benefits available from a reduction in future contributions to a plan and from the ability to pay plan expenses from the fund.

(2) The past service cost for other benefit plans includes a decrease of $203 million in the first quarter of fiscal 2018, related to modifications to the Bank’s postretirement benefits plan.

e) Maturity profile of the defined benefit obligation

The weighted average duration of the total benefit obligation at October 31, 2018 is 14.4 years (2017 – 15.3 years, 2016 – 15.3 years).

	Pension plans									Other benefit plans
For the year ended October 31	2018			2017			2016			2018			2017			2016
Disaggregation of the benefit obligation (%)
Canada
Active members		57	%		58	%		60	%		9	%		29	%		33	%
Inactive and retired members		43	%		42	%		40	%		91	%		71	%		67	%
Total		100	%		100	%		100	%		100	%		100	%		100	%
Mexico
Active members		26	%		27	%		29	%		54	%		55	%		57	%
Inactive and retired members		74	%		73	%		71	%		46	%		45	%		43	%
Total		100	%		100	%		100	%		100	%		100	%		100	%
United States
Active members		45	%		48	%		33	%		34	%		35	%		38	%
Inactive and retired members		55	%		52	%		67	%		66	%		65	%		62	%
Total		100	%		100	%		100	%		100	%		100	%		100	%

f) Key assumptions (%)

The key weighted-average assumptions used by the Bank for the measurement of the benefit obligation and benefit expense for all of the Bank’s principal plans are summarized as follows:

	Pension plans									Other benefit plans
For the year ended October 31	2018			2017			2016			2018			2017			2016
Benefit obligation at end of year
Discount rate – all plans		4.35	%		3.90	%		3.86	%		5.54	%		4.86	%		4.74	%
Discount rate – Canadian plans only		4.10	%		3.60	%		3.60	%		3.96	%		3.53	%		3.42	%
Rate of increase in future compensation(1)		2.80	%		2.76	%		2.72	%		3.83	%		4.07	%		4.09	%
Benefit expense (income) for the year
Discount rate – All plans
Discount rate for defined benefit obligations		3.90	%		3.86	%		4.64	%		4.86	%		4.74	%		5.33	%
Discount rate for net interest cost		3.55	%		3.33	%		4.03	%		4.60	%		4.42	%		4.91	%
Discount rate for service cost		4.04	%		4.01	%		4.83	%		5.11	%		5.09	%		5.62	%
Discount rate for interest on service cost		3.77	%		3.64	%		4.31	%		5.04	%		4.94	%		5.56	%
Discount rate – Canadian plans only
Discount rate for defined benefit obligations		3.60	%		3.60	%		4.40	%		3.53	%		3.42	%		4.27	%
Discount rate for net interest cost		3.20	%		3.00	%		3.70	%		3.18	%		2.98	%		3.67	%
Discount rate for service cost		3.70	%		3.70	%		4.60	%		3.76	%		3.75	%		4.54	%
Discount rate for interest on service cost		3.40	%		3.30	%		4.00	%		3.66	%		3.56	%		4.44	%
Rate of increase in future compensation(1)		2.76	%		2.72	%		2.75	%		4.07	%		4.09	%		4.41	%
Health care cost trend rates at end of year
Initial rate		n/a			n/a			n/a			5.81	%		5.99	%		6.12	%
Ultimate rate		n/a			n/a			n/a			4.66	%		4.93	%		4.93	%
Year ultimate rate reached		n/a			n/a			n/a			2040			2030			2030
Assumed life expectancy in Canada (years)
Life expectancy at 65 for current pensioners – male		23.3			23.2			23.2			23.3			23.2			23.2
Life expectancy at 65 for current pensioners – female		24.4			24.4			24.3			24.4			24.4			24.3
Life expectancy at 65, for future pensioners currently aged 45 – male		24.3			24.2			24.2			24.3			24.2			24.2
Life expectancy at 65, for future pensioners currently aged 45 – female		25.3			25.3			25.3			25.3			25.3			25.3
Assumed life expectancy in Mexico (years)
Life expectancy at 65 for current pensioners – male		21.3			21.3			21.3			21.3			21.3			21.3
Life expectancy at 65 for current pensioners – female		23.8			23.8			23.8			23.8			23.8			23.8
Life expectancy at 65, for future pensioners currently aged 45 – male		21.7			21.7			21.7			21.7			21.7			21.7
Life expectancy at 65, for future pensioners currently aged 45 – female		24.0			24.0			24.0			24.0			24.0			24.0
Assumed life expectancy in United States (years)
Life expectancy at 65 for current pensioners – male		22.7			22.7			23.0			22.7			22.7			23.0
Life expectancy at 65 for current pensioners – female		24.4			24.4			24.7			24.4			24.4			24.7
Life expectancy at 65, for future pensioners currently aged 45 – male		24.3			24.3			23.7			24.3			24.3			23.7
Life expectancy at 65, for future pensioners currently aged 45 – female		25.9			25.9			25.6			25.9			25.9			25.6

(1) The weighted-average rates of increase in future compensation shown for other benefit plans do not include Canadian flexible post-retirement benefits plans established in fiscal 2005, as they are not impacted by future compensation increases.

g) Sensitivity analysis

The sensitivity analysis presented represents the impact of a change in a single assumption with other assumptions left unchanged. For purposes of the sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation recognized in the statement of financial position.

	Pension plans				Other benefit plans
For the year ended October 31, 2018 ($ millions)	Benefit obligation		Benefit expense		Benefit obligation			Benefit expense
Impact of the following changes:
1% decrease in discount rate	$	1,383	$	122	$	189		$	13
0.25% increase in rate of increase in future compensation		78		9		1			–
1% increase in health care cost trend rate		n/a		n/a		132			16
1% decrease in health care cost trend rate		n/a		n/a		(106	)		(12	)
1 year increase in Canadian life expectancy		151		10		20			1
1 year increase in Mexican life expectancy		2		–		2			–
1 year increase in the United States life expectancy		4		–		4			–

h) Assets

The Bank’s principal pension plans’ assets are generally invested with the long-term objective of maximizing overall expected returns, at an acceptable level of risk relative to the benefit obligation. A key factor in managing long-term investment risk is asset mix. Investing the pension assets in different asset classes and geographic regions helps to mitigate risk and to minimize the impact of declines in any single asset class, particular region or type of investment. Investment managers – including related-party managers – are typically hired and assigned specific mandates within each asset class.

Pension plan asset mix guidelines are set for the long term, and are documented in each plan’s investment policy. Asset mix policy typically also reflects the nature of the plan’s benefit obligations. Legislation places certain restrictions on asset mix – for example, there are usually limits on concentration in any one investment. Other concentration and quality limits are also set forth in the investment policies. The use of derivatives is generally prohibited without specific authorization; currently, the main use of derivatives is for currency hedging. Asset mix guidelines are reviewed at least once each year, and adjusted, where appropriate, based on market conditions and opportunities. However, large asset class shifts are not common, and typically reflect a change in the pension plan’s situation (e.g. plan amendments) and/or in the investment strategy. Actual asset mix is reviewed regularly, and rebalancing back to target asset mix is considered – as needed – generally on a semi-annual basis. The Bank’s other benefit plans are generally not funded, with the exception of certain programs in Canada and Mexico.

The tables below shows the weighted-average actual and target asset allocations for the Bank’s principal plans at October 31, by asset category.

	Pension plans									Other benefit plans
Asset category %	Actual 2018			Actual 2017			Actual 2016			Actual 2018			Actual 2017			Actual 2016
Cash and cash equivalents		4	%		2	%		2	%		1	%		1	%		2	%
Equity investments
Quoted in an active market		36	%		43	%		44	%		42	%		46	%		45	%
Non quoted		12	%		16	%		16	%		2	%		–	%		–	%
		48	%		59	%		60	%		44	%		46	%		45	%
Fixed income investments
Quoted in an active market		9	%		5	%		4	%		34	%		32	%		29	%
Non quoted		29	%		26	%		27	%		21	%		21	%		24	%
		38	%		31	%		31	%		55	%		53	%		53	%
Property
Quoted in an active market		–	%		–	%		–	%		–	%		–	%		–	%
Non quoted		1	%		–	%		–	%		–	%		–	%		–	%
		1	%		–	%		–	%		–	%		–	%		–	%
Other
Quoted in an active market		–	%		–	%		1	%		–	%		–	%		–	%
Non quoted		9	%		8	%		6	%		–	%		–	%		–	%
		9	%		8	%		7	%		–	%		–	%		–	%
Total		100	%		100	%		100	%		100	%		100	%		100	%

Target asset allocation at October 31, 2018 Asset category %	Pension plans			Other benefit plans
Cash and cash equivalents		–	%		2	%
Equity investments		48	%		45	%
Fixed income investments		42	%		53	%
Property		2	%		–	%
Other		8	%		–	%
Total		100	%		100	%

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Operating Segments

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Operating Segments

29 Operating Segments

Scotiabank is a diversified financial services institution that provides a wide range of financial products and services to retail, commercial and corporate customers around the world. The Bank’s businesses are grouped into three business lines: Canadian Banking, International Banking and Global Banking and Markets. Other smaller business segments are included in the Other segment. The results of these business segments are based upon the internal financial reporting systems of the Bank. The accounting policies used in these segments are generally consistent with those followed in the preparation of the consolidated financial statements as disclosed in Note 3. Notable accounting measurement differences are:

• tax normalization adjustments related to the gross-up of income from associated corporations. This adjustment normalizes the effective tax rate in the divisions to better present the contribution of the associated companies to the divisional results.

• the grossing up of tax-exempt net interest income and non-interest income to an equivalent before-tax basis for those affected segments.

These differences in measurement enable comparison of net interest income and non-interest income arising from taxable and tax-exempt sources.

Scotiabank’s results, and average assets and liabilities, allocated by these operating segments, are as follows:

For the year ended October 31, 2018(1)
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets			Other(2)			Total
Net interest income(3)	$	7,898	$	7,322	$	1,454		$	(483	)	$	16,191
Non-interest income(4)		5,452		4,111		3,074			(53	)		12,584
Total revenues		13,350		11,433		4,528			(536	)		28,775
Provision for credit losses		794		1,867		(50	)		–			2,611
Depreciation and amortization		460		304		69			15			848
Non-interest expenses		6,194		5,807		2,164			45			14,210
Income tax expense		1,538		706		587			(449	)		2,382
Net income	$	4,364	$	2,749	$	1,758		$	(147	)	$	8,724
Net income attributable to non-controlling interests in subsidiaries		–		176		–			–			176
Net income attributable to equity holders of the Bank		4,364		2,573		1,758			(147	)		8,548
Average assets ($ billions)		342		168		321			115			946
Average liabilities ($ billions)		254		131		265			232			882

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2018 amounting to $112 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(3) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(4) Includes net income from investments in associated corporations for Canadian Banking – $93; International Banking – $643 and Other – $(177).

For the year ended October 31, 2017
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets		Other(1)			Total
Net interest income(2)	$	7,363	$	6,726	$	1,336	$	(390	)	$	15,035
Non-interest income(3)		5,488		3,688		3,288		(344	)		12,120
Total revenues		12,851		10,414		4,624		(734	)		27,155
Provision for credit losses		913		1,294		42		–			2,249
Depreciation and amortization		412		283		55		11			761
Non-interest expenses		6,075		5,381		2,105		308			13,869
Income tax expense		1,387		828		604		(786	)		2,033
Net income	$	4,064	$	2,628	$	1,818	$	(267	)	$	8,243
Net income attributable to non-controlling interests in subsidiaries		–		238		–		–			238
Net income attributable to equity holders of the Bank		4,064		2,390		1,818		(267	)		8,005
Average assets ($ billions)		323		148		336		106			913
Average liabilities ($ billions)		244		115		267		228			854

(1) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2017 amounting to $562 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(2) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(3) Includes net income from investments in associated corporations for Canadian Banking – $66; International Banking – $482 and Other – $(141).

For the year ended October 31, 2016
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets		Other(1)			Total
Net interest income(2)	$	7,024	$	6,359	$	1,293	$	(384	)	$	14,292
Non-interest income(3)		5,164		3,482		3,139		273			12,058
Total revenues		12,188		9,841		4,432		(111	)		26,350
Provision for credit losses		832		1,281		249		50			2,412
Depreciation and amortization		340		265		68		11			684
Non-interest expenses		5,984		5,258		1,972		642			13,856
Income tax expense		1,296		707		572		(545	)		2,030
Net income	$	3,736	$	2,330	$	1,571	$	(269	)	$	7,368
Net income attributable to non-controlling interests in subsidiaries		–		251		–		–			251
Net income attributable to equity holders of the Bank		3,736		2,079		1,571		(269	)		7,117
Average assets ($ billions)		309		143		351		111			914
Average liabilities ($ billions)		232		109		270		247			858

(1) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2016 amounting to $299 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(2) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(3) Includes net income from investments in associated corporations for Canadian Banking – $78; International Banking – $473 and Other – $(137).

Geographical segmentation

The following table summarizes the Bank’s financial results by geographic region. Revenues and expenses which have not been allocated back to specific operating business lines are reflected in corporate adjustments.

For the year ended October 31, 2018 ($ millions)(1)(2)	Canada		United States			Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,823	$	691		$	1,561	$	1,378	$	1,117	$	839	$	2,825	$	16,234
Non-interest income(2)		7,040		843			613		662		565		484		2,612		12,819
Total revenues(3)		14,863		1,534			2,174		2,040		1,682		1,323		5,437		29,053
Provision for credit losses		802		(34	)		239		351		498		511		244		2,611
Non-interest expenses		7,591		701			1,196		770		837		723		3,148		14,966
Income tax expense		1,596		220			76		235		51		39		451		2,668
Subtotal		4,874		647			663		684		296		50		1,594		8,808
Net income attributable to non-controlling interests in subsidiaries		–		–			17		12		28		16		103		176
Total	$	4,874	$	647		$	646	$	672	$	268	$	34	$	1,491	$	8,632
Corporate adjustments																	(84	)
Net income attributable to equity holders of the Bank																$	8,548
Total average assets ($ billions)	$	548	$	119		$	32	$	24	$	33	$	12	$	161	$	929
Corporate adjustments																	17
Total average assets, including corporate adjustments																$	946

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Includes net income from investments in associated corporations for Canada – $93; Peru – $9 and Other International – $634.

(3) Revenues are attributed to countries based on where services are performed or assets are recorded.

For the year ended October 31, 2017 ($ millions)	Canada		United States			Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,440	$	460		$	1,380	$	1,287	$	817	$	710	$	2,999	$	15,093
Non-interest income(1)		6,924		830			536		635		409		455		2,502		12,291
Total revenues(2)		14,364		1,290			1,916		1,922		1,226		1,165		5,501		27,384
Provision for credit losses		906		(14	)		193		329		145		337		353		2,249
Non-interest expenses		7,650		606			1,123		762		630		620		3,069		14,460
Income tax expense		1,066		147			125		225		77		71		506		2,217
Subtotal		4,742		551			475		606		374		137		1,573		8,458
Net income attributable to non-controlling interests in subsidiaries		–		–			12		11		53		60		102		238
Total	$	4,742	$	551		$	463	$	595	$	321	$	77	$	1,471	$	8,220
Corporate adjustments																	(215	)
Net income attributable to equity holders of the Bank																$	8,005
Total average assets ($ billions)	$	539	$	111		$	28	$	24	$	23	$	11	$	162	$	898
Corporate adjustments																	15
Total average assets, including corporate adjustments																$	913

(1) Includes net income from investments in associated corporations for Canada – $66; Peru – $6 and Other International – $476.

(2) Revenues are attributed to countries based on where services are performed or assets are recorded.

For the year ended October 31, 2016 ($ millions)	Canada		United States		Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,022	$	479	$	1,224	$	1,231	$	763	$	674	$	2,950	$	14,343
Non-interest income(1)		6,893		871		554		600		325		419		2,409		12,071
Total revenues(2)		13,915		1,350		1,778		1,831		1,088		1,093		5,359		26,414
Provision for credit losses		876		112		225		315		113		320		401		2,362
Non-interest expenses		7,339		633		1,121		740		605		550		3,036		14,024
Income tax expense		1,235		155		69		201		45		89		497		2,291
Subtotal		4,465		450		363		575		325		134		1,425		7,737
Net income attributable to non-controlling interests in subsidiaries		–		–		9		12		38		93		99		251
Total	$	4,465	$	450	$	354	$	563	$	287	$	41	$	1,326	$	7,486
Corporate adjustments																(369	)
Net income attributable to equity holders of the Bank															$	7,117
Total average assets ($ billions)	$	529	$	126	$	27	$	23	$	20	$	10	$	165	$	900
Corporate adjustments																14
Total average assets, including corporate adjustments															$	914

(1) Includes net income from investments in associated corporations for Canada – $78; Peru – $5 and Other International – $468.

(2) Revenues are attributed to countries based on where services are performed or assets are recorded.

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Related Party Transactions

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Related Party Transactions

30 Related Party Transactions

Compensation of key management personnel of the Bank

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Bank, directly or indirectly, and comprise the directors of the Bank, the President and Chief Executive Officer, certain direct reports of the President and Chief Executive Officer and Group Heads.

For the year ended October 31 ($ millions)	2018		2017
Salaries and cash incentives(1)	$	18	$	17
Equity-based payment(2)		27		25
Pension and other benefits(1)		4		3
Total	$	49	$	45

(1) Expensed during the year.

(2) Awarded during the year.

Directors can use some or all of their director fees earned to buy common shares of the Bank at market rates through the Director’s Share Purchase Plan. Non-officer directors may elect to receive all or a portion of their fees in the form of deferred stock units which vest immediately. Refer to Note 26 for further details of these plans.

Loans and deposits of key management personnel

As at October 31 ($ millions)	2018		2017
Loans	$	13	$	6
Deposits	$	6	$	8

The Bank’s committed credit exposure to companies controlled by directors totaled $132.4 million as at October 31, 2018 (2017 – $145.2 million), while actual utilized amounts were $23.9 million (2017 – $11.5 million).

Transactions with associates and joint ventures

In the ordinary course of business, the Bank provides normal banking services and enters into transactions with its associated and other related corporations on terms similar to those offered to non-related parties. If these transactions are eliminated on consolidation, they are not disclosed as related party transactions. Transactions between the Bank and its associated companies and joint ventures also qualify as related party transactions and were recorded as follows:

As at and for the year ended October 31 ($ millions)	2018			2017			2016
Net income / (loss)	$	(64	)	$	(46	)	$	(45	)
Loans		702			703			788
Deposits		151			217			338
Guarantees and commitments		123			114			99

Scotiabank principal pension plan

The Bank manages assets of $3.8 billion (2017 – $3.0 billion) which is a portion of the Scotiabank principal pension plan assets and earned $5.0 million (2017 – $3.7 million) in fees.

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Principal Subsidiaries and Non-Controlling Interests in Subsidiaries

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Principal Subsidiaries and Non-Controlling Interests in Subsidiaries

31 Principal Subsidiaries and Non-Controlling Interests in Subsidiaries

(a) Principal subsidiaries⁽¹⁾

The following table presents the major operating subsidiaries the Bank owns, directly or indirectly. All of these subsidiaries are included in the Bank’s consolidated financial statements.

			Carrying value of shares
As at October 31 ($ millions)	Principal office		2018		2017
Canadian
1832 Asset Management L.P.		Toronto, Ontario	$	1,524	$	2,006
BNS Investments Inc.		Toronto, Ontario		13,870		13,551
Montreal Trust Company of Canada		Montreal, Quebec
National Trust Company(2)		Stratford, Ontario		415		449
Roynat Inc.		Calgary, Alberta		432		239
Scotia Capital Inc.		Toronto, Ontario		1,391		1,024
Scotia Dealer Advantage Inc.		Burnaby, British Columbia		592		567
Scotia Life Insurance Company		Toronto, Ontario		219		189
Scotia Mortgage Corporation		Toronto, Ontario		588		615
Scotia Securities Inc.		Toronto, Ontario		40		34
Tangerine Bank		Toronto, Ontario		3,525		3,488
Jarislowsky, Fraser Limited		Montreal, Quebec		947		–
MD Financial Management Inc.		Ottawa, Ontario		2,612		–
International
Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) (51%)(3)		Bogota, Colombia		1,221		1,160
The Bank of Nova Scotia Berhad		Kuala Lumpur, Malaysia		318		303
The Bank of Nova Scotia International Limited		Nassau, Bahamas		19,312		18,223
BNS Asia Limited		Singapore
The Bank of Nova Scotia Trust Company (Bahamas) Limited		Nassau, Bahamas
Grupo BNS de Costa Rica, S.A.		San Jose, Costa Rica
Scotiabank & Trust (Cayman) Ltd.		Grand Cayman, Cayman Islands
Scotiabank (Bahamas) Limited		Nassau, Bahamas
Scotiabank (British Virgin Islands) Limited		Road Town, Tortola, B.V.I.
Scotiabank (Hong Kong) Limited		Hong Kong, China
Scotiabank (Ireland) Designated Activity Company		Dublin, Ireland
Scotiabank (Turks and Caicos) Ltd.		Providenciales, Turks and Caicos Islands
BNS International (Panama) S.A.		Panama City, Panama
Grupo Financiero Scotiabank Inverlat, S.A. de C.V. (97.4%)		Mexico City, Mexico		3,901		3,544
Nova Scotia Inversiones Limitada		Santiago, Chile		5,100		3,325
Scotiabank Chile S.A. (75.5%)		Santiago, Chile
Scotia Holdings (US) Inc.(4)		New York, New York
Scotiabanc Inc.		Houston, Texas
Scotia Capital (USA) Inc.(4)(5)		New York, New York
Scotia International Limited		Nassau, Bahamas		635		642
Scotiabank Anguilla Limited		The Valley, Anguilla
Scotiabank Brasil S.A. Banco Multiplo		Sao Paulo, Brazil		386		223
Scotiabank Caribbean Holdings Ltd.		Bridgetown, Barbados		1,847		1,710
Scotia Group Jamaica Limited (71.8%)		Kingston, Jamaica
The Bank of Nova Scotia Jamaica Limited		Kingston, Jamaica
Scotia Investments Jamaica Limited		Kingston, Jamaica
Scotiabank (Belize) Ltd.		Belize City, Belize
Scotiabank Trinidad and Tobago Limited (50.9%)		Port of Spain, Trinidad and Tobago
Scotiabank (Panama) S.A.		Panama City, Panama
Scotiabank Uruguay S.A.		Montevideo, Uruguay		490		496
Scotiabank de Puerto Rico		San Juan, Puerto Rico		1,555		1,395
Scotiabank El Salvador, S.A. (99.6%)		San Salvador, El Salvador		686		659
Scotiabank Europe plc		London, United Kingdom		2,432		2,400
Scotiabank Peru S.A.A. (98.05%)		Lima, Peru		4,877		4,518

(1) The Bank (or immediate parent of an entity) owns 100% of the outstanding voting shares of each subsidiary unless otherwise noted.

(2) Effective October 29, 2018, National Trustco Inc. was dissolved and National Trust Company is held by the Bank.

(3) Effective June 15, 2018, the name was changed to Scotiabank Colpatria S.A.

(4) The carrying value of this subsidiary is included with that of its parent, BNS Investments Inc.

(5) The carrying value of this subsidiary is included with that of its parent, Scotia Holdings (US) Inc.

Subsidiaries may have a different reporting date from that of the Bank of October 31. Dates may differ for a variety of reasons including local reporting requirements or tax laws. In accordance with our accounting policies, for the purpose of inclusion in the consolidated financial statements of the Bank, adjustments are made where significant for subsidiaries with different reporting dates.

(b) Non-controlling interests in subsidiaries

The Bank’s significant non-controlling interests in subsidiaries are comprised of the following entities:

	As at and for the year ended
	2018							2017
	Non-controlling interest %			Non-controlling interests in subsidiaries		Dividends paid to non-controlling interest		Non-controlling interests in subsidiaries		Dividends paid to non-controlling interest
Scotiabank Chile S.A.(1)		24.5%		$	917	$	115	$	191	$	14
Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) (51%)(2)		49.0%			519		–		445		38
Scotia Group Jamaica Limited		28.2%			340		17		300		17
Scotiabank Trinidad and Tobago Limited		49.1%			365		49		354		56
Other		0.1% - 49.0%	(3)		311		18		302		8
Total				$	2,452	$	199	$	1,592	$	133

(1) Non-controlling interest holders for Scotiabank Chile S.A. have a right to sell their holding to the Bank at fair market value that can be settled at the Bank’s discretion, by issuance of common shares or cash.

(2) Non-controlling interest holders for Scotiabank Colpatria S.A. have a right to sell their holding to the Bank after the end of 7th anniversary (January 17, 2019) and at subsequent pre-agreed intervals, into the future, at fair market value that can be settled at the Bank’s discretion, by issuance of common shares or cash.

(3) Range of non-controlling interest % for other subsidiaries.

Summarized financial information of the Bank’s subsidiaries with significant non-controlling interests are as follows:

	As at and for the year ended October 31, 2018								As at and for the year ended October 31, 2017
($ millions)	Revenue		Total comprehensive income		Total assets		Total liabilities		Revenue		Total comprehensive income		Total assets		Total liabilities
Total	$	3,615	$	173	$	80,352	$	73,449	$	2,978	$	567	$	49,077	$	42,943

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Interest Income and Expense

12 Months Ended

Oct. 31, 2018

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Interest Income and Expense

32 Interest Income and Expense

The following table presents details of interest income from financial assets.

For the year ended October 31 ($ millions)	2018
Loans at amortized cost(1)	$	24,991
Securities
Amortized cost(1)		353
FVOCI(1)		1,205
Other		213
Securities purchased under resale agreements and securities borrowed not at FVTPL(1)		446
Deposit with financial institutions(1)		859
Interest income	$	28,067

(1) The interest income on the financial assets measured at amortized cost and FVOCI is calculated using the effective interest method.

The following table presents details of interest expense from financial liabilities.

For the year ended October 31 ($ millions)	2018
Deposits
Amortized cost(1)	$	10,460
FVTPL		84
Subordinated debentures(1)		214
Other
Amortized cost(1)		1,084
FVTPL		34
Interest expense	$	11,876

(1) The interest expense on the financial liabilities measured at amortized cost is calculated using the effective interest method.

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Non-InterestIncome

12 Months Ended

Oct. 31, 2018

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Non-InterestIncome

33 Non-Interest Income

The following table presents details of banking revenues and wealth management revenues in non-interest income.

For the year ended October 31 ($ millions)	2018		2017		2016
Banking
Card revenues	$	1,656	$	1,514	$	1,359
Deposit and payment services		1,366		1,324		1,279
Credit fees		1,191		1,153		1,154
Other		466		472		436
		4,679		4,463		4,228
Banking fee related expenses		678		608		559
Total banking	$	4,001	$	3,855	$	3,669
Wealth management
Mutual funds	$	1,714	$	1,639	$	1,624
Brokerage fees(1)		895		1,047		1,034
Investment management and trust(1)		732		632		624
Total wealth management	$	3,341	$	3,318	$	3,282

(1) Prior period amounts have been reclassified to conform with current period presentation.

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Trading Revenues

12 Months Ended

Oct. 31, 2018

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Trading Revenues

34 Trading Revenues

The following table presents details of trading revenues.

For the year ended October 31 ($ millions)	2018		2017(1)			2016(1)
Interest rate and credit	$	272	$	474		$	559
Equities		441		(125	)		(20	)
Commodities		231		295			376
Foreign exchange		295		250			262
Other		181		92			51
Total	$	1,420	$	986		$	1,228

(1) Certain comparative amounts have been restated to conform with current period presentation.

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Earnings Per Share

12 Months Ended

Oct. 31, 2018

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Earnings Per Share

35 Earnings Per Share

For the year ended October 31 ($ millions)	2018		2017		2016
Basic earnings per common share
Net income attributable to common shareholders	$	8,361	$	7,876	$	6,987
Weighted average number of common shares outstanding (millions)		1,213		1,203		1,204
Basic earnings per common share(1) (in dollars)	$	6.90	$	6.55	$	5.80
Diluted earnings per common share
Net income attributable to common shareholders	$	8,361	$	7,876	$	6,987
Dilutive impact of share-based payment options and others(2)		16		59		83
Net income attributable to common shareholders (diluted)	$	8,377	$	7,935	$	7,070
Weighted average number of common shares outstanding (millions)		1,213		1,203		1,204
Dilutive impact of share-based payment options and others(2) (millions)		16		20		22
Weighted average number of diluted common shares outstanding (millions)		1,229		1,223		1,226
Diluted earnings per common share(1) (in dollars)	$	6.82	$	6.49	$	5.77

(1) Earnings per share calculations are based on full dollar and share amounts.

(2) Certain tandem stock appreciation rights or options as well as acquisition related put/call options that the Bank may settle at its own discretion by issuing common shares were not included in the calculation of diluted earnings per share as they were anti-dilutive.

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Guarantees, Commitments and Pledged Assets

12 Months Ended

Oct. 31, 2018

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Guarantees, Commitments and Pledged Assets

36 Guarantees, Commitments and Pledged Assets

(a) Guarantees

The Bank enters into various types of guarantees and indemnifications in the normal course of business. Guarantees represent an undertaking to another party to make a payment to that party when certain specified events occur. The various guarantees and indemnifications that the Bank provides with respect to its customers and other third parties are presented below:

	2018		2017
As at October 31 ($ millions)	Maximum potential amount of future payments(1)		Maximum potential amount of future payments(1)
Standby letters of credit and letters of guarantee	$	35,376	$	35,523
Liquidity facilities		4,043		4,996
Derivative instruments		6,969		5,398
Indemnifications		571		587

(1) The maximum potential amount of future payments represents those guarantees that can be quantified and excludes other guarantees that cannot be quantified. As many of these guarantees will not be drawn upon and the maximum potential amount of future payments listed above does not consider the possibility of recovery under recourse or collateral provisions, the above amounts are not indicative of future cash requirements, credit risk, or the Bank’s expected losses from these arrangements.

(i) Standby letters of credit and letters of guarantee

Standby letters of credit and letters of guarantee are irrevocable undertakings by the Bank on behalf of a customer, to make payments to a third party in the event that the customer is unable to meet its obligations to the third party. Generally, the term of these guarantees does not exceed four years. The types and amounts of collateral security held by the Bank for these guarantees is generally the same as for loans. As at October 31, 2018, $4 million (2017 – $4 million) was included in other liabilities in the Consolidated Statement of Financial Position with respect to these guarantees.

(ii) Liquidity facilities

The Bank’s backstop liquidity facilities are committed liquidity and provided to asset-backed commercial paper conduits, administered by the Bank. These facilities generally provide an alternative source of financing in the event market disruption prevents the conduit from issuing commercial paper or, in some cases, when certain specified conditions or performance measures are not met. These facilities generally have a term of up to three years.

(iii) Derivative instruments

The Bank enters into written credit derivative contracts under which a counterparty is compensated for losses on a specified referenced asset, typically a loan or bond, if certain events occur. The Bank also enters into written option contracts under which a counterparty is granted the right, but not the obligation, to sell a specified quantity of a financial instrument at a pre-determined price on or before a set date. These written option contracts are normally referenced to interest rates, foreign exchange rates, commodity prices or equity prices. Typically, a corporate or government entity is the counterparty to the written credit derivative and option contracts that meet the characteristics of guarantees described above. The maximum potential amount of future payments disclosed in the table above relates to written credit derivatives, puts and floors. However, these amounts exclude certain derivatives contracts, such as written caps, as the nature of these contracts prevents quantification of the maximum potential amount of future payments. As at October 31, 2018, $377 million (2017 – $274 million) was included in derivative instrument liabilities in the Consolidated Statement of Financial Position with respect to these derivative instruments.

(iv) Indemnifications

In the ordinary course of business, the Bank enters into many contracts which contain indemnification provisions, such as purchase contracts, service agreements, trademark licensing agreements, director / officer contracts, escrow arrangements, sales of assets or businesses, outsourcing agreements, leasing arrangements, clearing system arrangements, securities lending agency agreements and structured transactions. The Bank cannot estimate the maximum potential future amount that may be payable. The Bank has not made any significant payments under such indemnifications. Historically, the Bank has not made any significant payments under these indemnities. As at October 31, 2018, $2 million (2017 – $2 million) was included in other liabilities in the Consolidated Statement of Financial Position with respect to indemnifications.

(b) Other indirect commitments

In the normal course of business, various other indirect commitments are outstanding which are not reflected on the Consolidated Statement of Financial Position. These may include:

• Commercial letters of credit which require the Bank to honour drafts presented by a third-party when specific activities are completed;

• Commitments to extend credit which represent undertakings to make credit available in the form of loans or other financings for specific amounts and maturities, subject to specific conditions;

• Securities lending transactions under which the Bank, acting as principal or agent, agrees to lend securities to a borrower. The borrower must fully collateralize the security loan at all times. The market value of the collateral is monitored relative to the amounts due under the agreements, and where necessary, additional collateral is obtained; and

• Security purchase commitments which require the Bank to fund future investments.

These financial instruments are subject to normal credit standards, financial controls and monitoring procedures.

The table below provides a detailed breakdown of the Bank’s other indirect commitments expressed in terms of the contractual amounts of the related commitment or contract which are not reflected on the Consolidated Statement of Financial Position.

As at October 31 ($ millions)	2018		2017
Commercial letters of credit	$	1,046	$	821
Commitments to extend credit(1)
Original term to maturity of one year or less		75,033		57,321
Original term to maturity of more than one year		122,407		128,345
Securities lending		51,723		40,535
Securities purchase and other commitments		888		614
Total	$	251,097	$	227,636

(1) Includes liquidity facilities.

(c) Lease commitments

Operating lease commitments

The Bank leases various offices, branches and other premises under non-cancellable operating lease arrangements. The leases have various terms, escalation and renewal rights. There are no contingent rents payable. The Bank also leases equipment under non-cancellable lease arrangements. Where the Bank is the lessee, the future minimum lease payment under non-cancellable operating leases are as follows:

As at October 31 ($ millions)	2018		2017
Within one year	$	420	$	349
After one year but not more than five years		1,196		967
More than five years		880		593
Total	$	2,496	$	1,909

Building rent expense, included in premises and technology expense in the Consolidated Statement of Income, was $477 million (2017 – $444 million).

(d) Assets pledged and repurchase agreements

In the ordinary course of business, securities and other assets are pledged against liabilities. As well, securities are sold under repurchase agreements. The carrying value of pledged assets and details of related activities are shown below.

As at October 31 ($ millions)	2018		2017
Assets pledged to:
Bank of Canada(1)	$	118	$	25
Foreign governments and central banks(1)		3,147		2,653
Clearing systems, payment systems and depositories(1)		1,629		1,195
Assets pledged in relation to exchange-traded derivative transactions		3,127		2,181
Assets pledged in relation to over-the-counter derivative transactions		7,246		8,126
Assets pledged as collateral related to securities borrowing and lending		128,383		115,987
Assets pledged in relation to covered bond program (Note 15)		30,725		27,806
Assets pledged in relation to other securitization programs (Note 15)		6,085		4,801
Assets pledged under CMHC programs (Note 14)		23,178		20,471
Other		963		643
Total assets pledged	$	204,601	$	183,888
Obligations related to securities sold under repurchase agreements		82,816		86,789
Total(2)	$	287,417	$	270,677

(1) Includes assets pledged in order to participate in clearing and payment systems and depositories, or pledged to have access to the facilities of central banks in foreign jurisdictions.

(2) Includes assets that have been received from counterparties through normal course of business in securities financing and derivative transactions.

(e) Other executory contracts

Effective July 2018, the Bank has entered into an $800 million contract for naming rights of an arena for 20 years.

The Bank and its subsidiaries have also entered into other long-term executory contracts, relating to outsourced services. The significant outsourcing arrangements have variable pricing based on utilization and are cancellable with notice.

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Financial Instruments - Risk Management

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Financial Instruments - Risk Management

37 Financial Instruments – Risk Management

The Bank’s principal business activities result in a balance sheet that consists primarily of financial instruments. In addition, the Bank uses derivative financial instruments for both trading and hedging purposes. The principal financial risks that arise from transacting financial instruments include credit risk, liquidity risk and market risk. The Bank’s framework to monitor, evaluate and manage these risks is consistent with that in place as at October 31, 2018:

• extensive risk management policies define the Bank’s risk appetite, set the limits and controls within which the Bank and its subsidiaries can operate, and reflect the requirements of regulatory authorities. These policies are approved by the Bank’s Board of Directors, either directly or through the Risk Committee of the Board, (the Board);

• guidelines are developed to clarify risk limits and conditions under which the Bank’s risk policies are implemented;

• processes are implemented to identify, evaluate, document, report and control risk. Standards define the breadth and quality of information required to make a decision; and

• compliance with risk policies, limits and guidelines is measured, monitored and reported to ensure consistency against defined goals.

Further details on the fair value of financial instruments and how these amounts were determined are provided in Note 7. Note 10 provides details on the terms and conditions of the Bank’s derivative financial instruments including notional amounts, remaining term to maturity, credit risk, and fair values of derivatives used in trading and hedging activities.

(a) Credit risk

Credit risk is the risk of loss resulting from the failure of a borrower or counterparty to honour its financial or contractual obligations to the Bank. The Bank’s Credit Risk Appetite and Credit Risk Policy are developed by its Global Risk Management (GRM) department and limits are reviewed and approved by the Board on an annual and biennial basis, respectively. The Credit Risk Appetite defines target markets and risk tolerances that are developed at an all-Bank level, and then further refined at the business line level. The objectives of the Credit Risk Appetite are to ensure that, for the Bank, including the individual business lines:

• target markets and product offerings are well defined;

• the risk parameters for new underwritings and for the portfolios as a whole are clearly specified; and

• transactions, including origination, syndication, loan sales and hedging, are managed in a manner to ensure the goals for the overall portfolio are met.

The Credit Risk Policy sets out, among other things, the credit risk rating systems and associated parameter estimates, the delegation of authority for granting credit, and the calculation of allowance for credit losses. It forms an integral part of enterprise-wide policies and procedures that encompass governance, risk management and control structure.

The Bank’s credit risk rating systems are designed to support the determination of key credit risk parameter estimates which measure credit and transaction risk. For non-retail exposures, parameters are associated with each credit facility through the assignment of borrower and transaction ratings. Borrower risk is evaluated using methodologies that are specific to particular industry sectors and/or business lines. The risk associated with facilities of a given borrower is assessed by considering the facilities’ structural and collateral-related elements. For retail portfolios, product specific models assign accounts into homogeneous segments using internal and external borrower/facility-level credit experience. This process provides for a meaningful differentiation of risk, and allows for appropriate and consistent estimation of loss characteristics at the model and segment level. Further details on credit risk relating to derivatives are provided in Note 10(c).

(i) Credit risk exposures

Credit risk exposures disclosed below are presented based on the Basel framework utilized by the Bank i.e. exposures subject to credit risk capital. The Bank uses the Advanced Internal Ratings Based approach (AIRB) for all material Canadian, U.S., European portfolios, and effective 2011 for a significant portion of all international corporate and commercial portfolios. The remaining portfolios, including other individual portfolios, are treated under the standardized approach. Under the AIRB approach, the Bank uses internal risk parameter estimates, based on historical experience, for probability of default (PD), loss given default (LGD) and exposure at default (EAD), as defined below:

• EAD: Generally represents the expected gross exposure – outstanding amount for on-balance sheet exposure and loan equivalent amount for off-balance sheet exposure.

• PD: Measures the likelihood that a borrower will default within a 1-year time horizon, expressed as a percentage.

• LGD: Measures the severity of loss on a facility in the event of a borrower’s default, expressed as a percentage of exposure at default.

Under the standardized approach, credit risk is estimated using the risk weights as prescribed by the Basel framework either based on credit assessments by external rating agencies or based on the counterparty type for non-retail exposures and product type for retail exposures. Standardized risk weights also takes into account other factors such as specific provisions for defaulted exposures, eligible collateral, and loan-to-value for real estate secured retail exposures.

As at October 31 ($ millions)	2018								2017
	Exposure at default(1)
Category	Drawn(2)		Undrawn commitments		Other exposures(3)		Total		Total
By counterparty type
Non-retail
AIRB portfolio
Corporate	$	146,324	$	83,885	$	77,751	$	307,960	$	285,191
Bank		22,680		2,146		16,676		41,502		40,903
Sovereign		188,480		768		6,854		196,102		195,429
		357,484		86,799		101,281		545,564		521,523
Standardized portfolio
Corporate		59,018		5,313		3,802		68,133		59,164
Bank		3,208		160		143		3,511		2,619
Sovereign		5,299		31		6		5,336		6,337
		67,525		5,504		3,951		76,980		68,120
Total non-retail	$	425,009	$	92,303	$	105,232	$	622,544	$	589,643
Retail
AIRB portfolio
Real estate secured		143,475		17,864		–		161,339		143,160
Qualifying revolving		17,337		28,550		–		45,887		44,384
Other retail		31,176		1,671		–		32,847		31,672
	$	191,988	$	48,085	$	–	$	240,073	$	219,216
Standardized portfolio
Real estate secured		44,517		–		–		44,517		34,002
Other retail		42,100		–		–		42,100		35,552
		86,617		–		–		86,617		69,554
Total retail	$	278,605	$	48,085	$	–	$	326,690	$	288,770
Total	$	703,614	$	140,388	$	105,232	$	949,234	$	878,413
By geography(4)
Canada	$	394,279	$	89,776	$	37,748	$	521,803	$	502,224
United States		102,265		33,103		42,771		178,139		157,386
Chile		47,048		1,038		5,066		53,152		27,190
Mexico		29,344		1,339		2,611		33,294		30,528
Peru		23,997		1,506		2,992		28,495		28,733
Colombia		12,729		486		434		13,649		10,859
Other International
Europe		25,357		7,041		10,215		42,613		43,030
Caribbean		35,716		1,676		910		38,302		39,358
Latin America (other)		10,232		909		227		11,368		9,035
All other		22,647		3,514		2,258		28,419		30,070
Total	$	703,614	$	140,388	$	105,232	$	949,234	$	878,413

(1) Exposure at default is presented after credit risk mitigation. Exposures exclude equity securities and other assets.

(2) Non-retail drawn includes loans, acceptances, deposits with financial institutions and FVOCI debt securities. Retail drawn includes residential mortgages, credit cards, lines of credit, and other personal loans.

(3) Non-retail other exposures include off-balance sheet lending instruments such as letters of credit, letters of guarantees, securitizations including nil first loss protection (2017 – nil), derivatives and repo-style transactions (reverse repurchase agreements, repurchase agreements, securities lending and securities borrowing), net of related collateral. Not applicable for retail exposures.

(4) Geographic segmentation is based upon the location of the ultimate risk of the credit exposure.

Consolidated Statement of Financial Position asset categories cross-referenced to credit risk exposures

The table below provides mapping of on-balance sheet asset categories that are included in the various Basel III exposure categories as presented in the credit risk exposure summary table of these consolidated financial statements. In addition, it also provides other exposures which are subject to market risk and/or other assets which are not subject to market and credit risk with a reconciliation to the Consolidated Statement of Financial Position. The credit risk exposures on certain assets such as cash, precious metals, investment securities (equities) and other assets are not included on the credit risk exposure summary table. Also excluded from the credit risk exposures are certain trading assets and all assets of the Bank’s insurance subsidiaries.

Credit Risk Exposures

Other Exposures

Drawn

Other Exposures

Market Risk Exposures

As at October 31, 2018 ($ millions)

Non-retail

Retail

Securitization

Repo-style Transactions

OTC Derivatives

Equity

Also subject to Credit Risk

All Other(1)

Total

Cash and deposits with financial institutions

$

58,728

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

3,541

$

62,269

Precious metals

–

–

–

–

–

–

–

3,191

–

3,191

Trading assets

Securities

24

–

–

–

–

–

–

85,450

–

85,474

Loans

7,183

12

–

–

–

–

6,606

7,139

–

14,334

Other

–

–

–

–

–

–

–

454

–

454

Financial assets designated at fair value through profit or loss

12

–

–

–

–

–

–

–

–

12

Securities purchased under resale agreements and securities borrowed

–

–

–

104,010

–

–

–

–

8

104,018

Derivative financial instruments

–

–

–

–

37,558

–

33,937

–

–

37,558

Investment securities

75,837

–

–

–

–

1,754

–

–

805

78,396

Loans:

Residential mortgages(2)

86,417

166,752

–

–

–

–

–

–

188

253,357

Personal loans

–

94,392

1,613

–

–

–

–

–

14

96,019

Credit cards

–

14,331

687

–

–

–

–

–

1,467

16,485

Business & government

180,164

3,193

7,748

–

–

–

–

–

(67

)

191,038

Allowances for credit losses(3)

(560

)

(786

)

–

–

–

–

–

–

(3,719

)

(5,065

)

Customers’ liability under acceptances

16,338

–

–

–

–

–

–

–

(9

)

16,329

Property and equipment

–

–

–

–

–

–

–

–

2,684

2,684

Investment in associates

–

–

–

–

–

–

–

–

4,850

4,850

Goodwill and other intangibles assets

–

–

–

–

–

–

–

–

17,719

17,719

Other (including Deferred tax assets)

866

711

–

–

–

–

–

–

17,794

19,371

Total

$

425,009

$

278,605

$

10,048

$

104,010

$

37,558

$

1,754

$

40,543

$

96,234

$

45,275

$

998,493

(1) Includes the Bank’s insurance subsidiaries’ assets and all other assets which are not subject to credit and market risks.

(2) Includes $82.2 billion in mortgages guaranteed by Canada Mortgage Housing Corporation including 90% of privately insured mortgages.

(3) Amounts for AIRB exposures are reported gross of allowances and amounts for standardized exposures are reported net of allowances.

Credit Risk Exposures

Other Exposures

Drawn

Other Exposures

Market Risk Exposures

As at October 31, 2017 ($ millions)

Non-retail

Retail

Securitization

Repo-style Transactions

OTC Derivatives

Equity

Also subject to Credit Risk

All Other(1)

Total

Cash and deposits with financial institutions

$

57,104

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

2,559

$

59,663

Precious metals

–

–

–

–

–

–

–

5,717

–

5,717

Trading assets

Securities

–

–

–

–

–

–

–

78,652

–

78,652

Loans

9,087

–

–

–

–

–

9,087

8,225

–

17,312

Other

–

–

–

–

–

–

–

2,500

–

2,500

Financial assets designated at fair value through profit or loss

13

–

–

–

–

–

–

–

–

13

Securities purchased under resale agreements and securities borrowed

–

–

–

95,319

–

–

–

–

–

95,319

Derivative financial instruments

–

–

–

–

35,364

–

30,648

–

–

35,364

Investment securities

67,255

–

–

–

–

1,281

–

–

733

69,269

Loans:

Residential mortgages(2)

95,692

141,066

–

–

–

–

–

–

158

236,916

Personal loans(3)

–

87,892

1,314

–

–

–

–

–

21

89,227

Credit cards(3)

–

12,289

724

–

–

–

–

–

1,091

14,104

Business & government

158,510

2,878

7,032

–

–

–

–

–

29

168,449

Allowances for credit losses(4)

(649

)

–

–

–

–

–

–

–

(3,678

)

(4,327

)

Customers’ liability under acceptances

13,560

–

–

–

–

–

–

–

–

13,560

Property and equipment

–

–

–

–

–

–

–

–

2,381

2,381

Investment in associates

–

–

–

–

–

–

–

–

4,586

4,586

Goodwill and other intangibles assets

–

–

–

–

–

–

–

–

12,106

12,106

Other (including Deferred tax assets)

1,805

545

–

–

–

–

–

–

12,112

14,462

Total

$

402,377

$

244,670

$

9,070

$

95,319

$

35,364

$

1,281

$

39,735

$

95,094

$

32,098

$

915,273

(1) Includes the Bank’s insurance subsidiaries’ assets and all other assets which are not subject to credit and market risks.

(2) Includes $91.7 billion in mortgages guaranteed by Canada Mortgage Housing Corporation including 90% of privately insured mortgages.

(3) Restated to reflect the current period presentation.

(4) Amounts for AIRB exposures are reported gross of allowances and amounts for standardized exposures are reported net of allowances.

(ii) Credit quality of non-retail exposures

Credit decisions are made based upon an assessment of the credit risk of the individual borrower or counterparty. Key factors considered in the assessment include: the borrower’s management; the borrower’s current and projected financial results and credit statistics; the industry in which the borrower operates; economic trends; and geopolitical risk. Banking units and Global Risk Management also review the credit quality of the credit portfolio across the organization on a regular basis to assess whether economic trends or specific events may affect the performance of the portfolio.

The Bank’s non-retail portfolio is well diversified by industry. As at October 31, 2018, and October 31, 2017, a significant portion of the authorized corporate and commercial lending portfolio was internally assessed at a grade that would generally equate to an investment grade rating by external rating agencies. There has not been a significant change in concentrations of credit risk since October 31, 2017.

Internal grades (IG) are used to differentiate the risk of default of a borrower. The following table cross references the Bank’s internal borrower grades with equivalent ratings categories utilized by external rating agencies:

Cross referencing of internal ratings to external ratings(1)
Equivalent External Rating
S&P	Moody’s	DBRS	Internal Grade	Internal Grade Code	PD Range(2)
AAA to AA+	Aaa to Aa1	AAA to AA (high)		99 – 98	0.0000% – 0.0448%
AA to A+	Aa2 to A1	AA to A (high)		95	0.0448% – 0.1304%
A to A-	A2 to A3	A to A (low)	Investment grade	90	0.0552% – 0.1402%
BBB+	Baa1	BBB (high)		87	0.0876% – 0.2187%
BBB	Baa2	BBB		85	0.1251% – 0.3176%
BBB-	Baa3	BBB (low)		83	0.1788% – 0.4610%
BB+	Ba1	BB (high)		80	0.2886% – 0.5134%
BB	Ba2	BB		77	0.4658% – 0.5716%
BB-	Ba3	BB (low)	Non-Investment grade	75	0.5716% – 0.7518%
B+	B1	B (high)		73	0.7518% – 1.4444%
B to B-	B2 to B3	B to B (low)		70	1.4444% – 2.7749%
CCC+	Caa1	–		65	2.7749% – 10.1814%
CCC	Caa2	–	Watch list	60	10.1814% – 19.4452%
CCC- to CC	Caa3 to Ca	–		40	19.4452% – 35.4088%
–	–	–		30	35.4088% – 59.5053%
Default			Default	21	100%

(1) Applies to non-retail portfolio.

(2) PD ranges overlap across IG codes as the Bank utilizes two risk rating systems for its AIRB portfolios, and each risk rating system has its own separate IG to PD mapping.

Non-retail AIRB portfolio

The credit quality of the non-retail AIRB portfolio, expressed in terms of risk categories of borrower internal grades is shown in the table below:

			2018								2017
			Exposure at Default(1)
As at October 31 ($ millions) Category of internal grades	IG Code		Drawn		Undrawn commitments		Other exposures(2)		Total		Total
Investment grade		99 – 98	$	77,598	$	2,758	$	17,456	$	97,812	$	91,159
		95		35,694		9,315		19,661		64,670		53,618
		90		25,281		15,394		25,234		65,909		61,508
		87		21,318		13,714		12,513		47,545		44,533
		85		21,472		12,861		9,992		44,325		40,478
		83		22,544		13,230		7,054		42,828		41,600
Non-Investment grade		80		26,618		10,019		2,993		39,630		36,235
		77		20,005		4,944		1,945		26,894		23,058
		75		13,267		2,717		3,296		19,280		20,418
		73		5,905		1,049		566		7,520		7,271
		70		2,157		432		228		2,817		3,758
Watch list		65		892		105		146		1,143		2,167
		60		936		90		78		1,104		761
		40		526		41		9		576		1,311
		30		141		–		–		141		159
Default		21		938		130		110		1,178		1,752
Total			$	275,292	$	86,799	$	101,281	$	463,372	$	429,786
Government guaranteed residential mortgages(3)				82,192		–		–		82,192		91,737
Total			$	357,484	$	86,799	$	101,281	$	545,564	$	521,523

(1) After credit risk mitigation.

(2) Includes off-balance sheet lending instruments such as letters of credit, letters of guarantee, securitizations, excluding nil first loss protection (2017 – nil), derivatives and repo-style transactions (reverse repurchase agreements, repurchase agreements and securities lending and borrowing), net of related collateral.

(3) These exposures are classified as sovereign exposures and are included in the non-retail category.

Non-retail standardized portfolio

The non-retail standardized portfolio relies on external credit ratings (e.g. S&P, Moody’s, DBRS, etc.,) of the borrower, if available, to compute regulatory capital for credit risk. Exposures are risk-weight based on prescribed percentages and a mapping process as defined within OSFI’s Capital Adequacy Requirements Guideline. Non-retail standardized portfolio as at October 31, 2018 comprised of drawn, undrawn and other exposures to corporate, bank and sovereign counterparties amounted to $77 billion (October 31, 2017 – $68 billion). Within this portfolio, the majority of Corporate/Commercial exposures are to unrated counterparties, mainly in the Caribbean and Latin American region.

(iii) Credit quality of retail exposures

The Bank’s retail portfolios consist of a number of relatively small loans to a large number of borrowers. The portfolios are distributed across Canada and a wide range of countries. As such, the portfolios inherently have a high degree of diversification. In addition, as of October 31, 2018, 43% of the Canadian banking residential mortgage portfolio is insured and the average loan-to-value ratio of the uninsured portion of the portfolio is 54%.

Retail AIRB portfolio

The data in the table below provides a distribution of the retail AIRB exposure within each PD range by asset class:

As at October 31 ($ millions)	2018												2017
	Exposure at default(1)
			Real estate secured
Category of (PD) grades	PD range		Mortgages		HELOC		Qualifying revolving		Other retail		Total		Total
Exceptionally Low		0.0000% – 0.0499%		$              –	$	–	$	11,657	$	498	$	12,155	$	16,026
Very Low		0.0500% – 0.1999%		41,146		32,079		9,348		6,971		89,544		80,507
Low		0.2000% – 0.9999%		73,094		5,130		12,091		16,721		107,036		94,081
Medium Low		1.0000% – 2.9999%		6,494		1,068		7,893		5,123		20,578		17,070
Medium		3.0000% – 9.9999%		738		310		3,594		2,569		7,211		8,583
High		10.0000% – 19.9999%		345		185		354		486		1,370		889
Extremely High		20.0000% – 99.9999%		416		69		803		303		1,591		1,453
Default		100%		195		70		147		176		588		607
Total				$  122,428	$	38,911	$	45,887	$	32,847	$	240,073	$	219,216

(1) After credit risk mitigation.

Retail standardized portfolio

The retail standardized portfolio of $87 billion as at October 31, 2018 (2017 – $70 billion) was comprised of residential mortgages, personal loans, credit cards and lines of credit to individuals, mainly in the Latin American and Caribbean region. Of the total retail standardized exposures, $45 billion (2017 –$34 billion) was represented by mortgages and loans secured by residential real estate, mostly with a loan-to-value ratio of below 80%.

(iv) Collateral

Collateral held

In the normal course of business, to reduce its exposure to counterparty credit risk, the Bank receives collateral for capital markets related activities. The following are examples of the terms and conditions customary to collateral for these types of transactions:

• The risks and rewards of the pledged assets reside with the pledgor.

• Additional collateral is required when the market value of the transaction exceeds thresholds agreed upon with the pledgor.

• The Bank is normally permitted to sell or repledge the collateral it receives, although this right is specific to each agreement under which the collateral is pledged.

• Upon satisfaction of the obligation, the Bank must return the pledged assets, unless the Bank has the right to sell or repledge the collateral it receives, in which case the Bank must return comparable collateral to the pledgor.

As at October 31, 2018, the approximate market value of cash and securities collateral accepted that may be sold or repledged by the Bank was $136 billion (2017 – $115 billion). This collateral is held primarily in connection with reverse repurchase agreements, margin loans, securities lending and derivative transactions. The Bank also borrows securities under standard securities borrowing agreements that it is able to re-pledge. Including these borrowed securities, the approximate market value of securities collateral accepted that may be sold or re-pledged was $183 billion (2017 – $169 billion), of which approximately $29 billion was not sold or re-pledged (2017 – $24 billion).

Collateral pledged

In the normal course of business, securities and other assets are pledged to secure an obligation, participate in clearing or settlement systems, or operate in a foreign jurisdiction. Note 36(d) details the nature and extent of the Bank’s asset pledging activities. Asset pledging transactions are conducted under terms that are common and customary to standard derivative, securities financing, and other borrowing activities. Standard risk management controls are applied with respect to asset pledging.

Assets acquired in exchange for loans

The carrying value of assets acquired in exchange for loans as at October 31, 2018 was $426 million (2017 – $412 million) mainly comprised of real estate and was classified as either held for sale or held for use as appropriate.

(b) Liquidity risk

Liquidity risk is the risk that the Bank is unable to meet its financial obligations in a timely manner at reasonable prices. The Bank’s liquidity risk is subject to extensive risk management controls and is managed within the framework of policies and limits approved by the Board. The Board receives reports on risk exposures and performance against approved limits. The Asset-Liability Committee (ALCO) provides senior management oversight of liquidity risk.

The key elements of the Bank’s liquidity risk management framework include:

• liquidity risk measurement and management limits, including limits on maximum net cash outflow by currency over specified short-term horizons;

• prudent diversification of its wholesale funding activities by using a number of different funding programs to access the global financial markets and manage its maturity profile, as appropriate;

• large holdings of liquid assets to support its operations, which can generally be sold or pledged to meet the Bank’s obligations;

• liquidity stress testing, including Bank-specific, global-systemic, and combination systemic/Bank-specific scenarios; and

• liquidity contingency planning.

The Bank’s foreign operations have liquidity management frameworks that are similar to the Bank’s framework. Local deposits are managed from a liquidity risk perspective based on the local management frameworks and regulatory requirements.

(i) Commitments to extend credit

In the normal course of business, the Bank enters into commitments to extend credit in the form of loans or other financings for specific amounts and maturities, subject to specific conditions. These commitments, which are not reflected on the Consolidated Statement of Financial Position, are subject to normal credit standards, financial controls and monitoring procedures.

(ii) Derivative instruments

The Bank is subject to liquidity risk relating to its use of derivatives to meet customer needs, generate revenues from trading activities, manage market and credit risks arising from its lending, funding and investment activities, and lower its cost of capital. The maturity profile of the notional amounts of the Bank’s derivative instruments is summarized in Note 10(b).

(c) Market risk

Market risk arises from changes in market prices and rates (including interest rates, credit spreads, equity prices, foreign exchange rates and commodity prices), the correlations between them, and their levels of volatility. Market risk is subject to extensive risk management controls, and is managed within the framework of market risk policies and limits approved by the Board. The ALCO and Market Risk Management and Policy Committee oversee the application of the framework set by the Board, and monitor the Bank’s market risk exposures and the activities that give rise to these exposures.

The Bank uses a variety of metrics and models to measure and control market risk exposures. The measurements used are selected based on an assessment of the nature of risks in a particular activity. The principal measurement techniques are Value at Risk (VaR), stress testing, sensitivity analysis and simulation modeling, and gap analysis. The Board reviews results from these metrics quarterly. Models are independently validated internally prior to implementation and are subject to formal periodic review.

VaR is a statistical measure that estimates the potential loss in value of the Bank’s trading positions due to adverse market movements over a defined time horizon with a specified confidence level. The quality of the Bank’s VaR is validated by regular back testing analysis, in which the VaR is compared to theoretical and actual profit and loss results. To complement VaR, the Bank also uses stress testing to examine the impact that abnormally large swings in market factors and periods of prolonged inactivity might have on trading portfolios. The stress testing program is designed to identify key risks and ensure that the Bank’s capital can absorb potential losses from abnormal events. The Bank subjects its trading portfolios to a series of stress tests on a daily, weekly and monthly basis.

In trading portfolios, sensitivity analysis is used to measure the effect of changes in risk factors, including prices and volatility, on financial products and portfolios. In non-trading portfolios, sensitivity analysis assesses the effect of changes in interest rates on current earnings and on the economic value of shareholders’ equity. Simulation modeling under various scenarios is particularly important for managing risk in the deposit, lending and investment products the Bank offers to its retail customers. Gap analysis is used to assess the interest rate sensitivity of the Bank’s retail, wholesale banking and international operations. Under gap analysis, interest rate-sensitive assets, liabilities and derivative instruments are assigned to defined time periods, on the earlier of contractual repricing or maturity dates on the basis of expected repricing dates.

(i) Non-trading interest rate risk

Interest rate risk, inclusive of credit spread risk, is the risk of loss due to the following: changes in the level, slope and curvature of the yield curve; the volatility of interest rates; mortgage prepayment rates; changes in the market price of credit; and the creditworthiness of a particular issuer. The Bank actively manages its interest rate exposures with the objective of protecting and enhancing net interest income within established risk tolerances. Interest rate risk arising from the Bank’s funding and investment activities is managed in accordance with Board-approved policies and global limits, which are designed to control the risk to net interest income and economic value of shareholders’ equity. The income limit measures the effect of a specified shift in interest rates on the Bank’s annual net income over the next twelve months, while the economic value limit measures the impact of a specified change in interest rates on the present value of the Bank’s net assets. These calculations are based on a constant balance sheet and make no assumptions for management actions that may mitigate the risk.

Interest rate sensitivity

Based on the Bank’s interest rate positions, the following table shows the pro-forma after-tax impact on the Bank’s net interest income over the next twelve months and economic value of shareholders’ equity of an immediate and sustained 100 basis point increase and decrease in interest rates across major currencies as defined by the Bank.

As at October 31 ($ millions)	2018																		2017
	Net income									Economic value of equity
	Canadian dollar			Other currencies			Total			Canadian dollar			Other currencies			Total			Net income			Economic value of equity
100 bp increase	$	(181	)	$	76		$	(105	)	$	(458	)	$	(412	)	$	(870	)	$	64		$	(354	)
100 bp decrease	$	177		$	(76	)	$	101		$	291		$	506		$	797		$	(67	)	$	183

(ii) Non-trading foreign currency risk

Foreign currency risk is the risk of loss due to changes in spot and forward rates, and the volatility of currency exchange rates. Non-trading foreign currency risk, also referred to as structural foreign exchange risk, arises primarily from the Bank’s net investments in self-sustaining foreign operations and is controlled by a Board-approved limit. This limit considers potential volatility to shareholders’ equity as well as the potential impact on capital ratios from foreign exchange fluctuations. On a quarterly basis, the Asset-Liability Committee (ALCO) reviews the Bank’s exposures to these net investments. The Bank may fully or partially hedge this exposure by funding the investments in the same currency, or by using other financial instruments, including derivatives.

The Bank is subject to foreign currency risk on the earnings of its foreign operations. To manage this risk, foreign currency revenues and expenses, which are primarily denominated in U.S. dollars, are projected over a number of future fiscal quarters. The ALCO assesses economic data and forecasts to decide on the portion of the estimated future foreign currency revenues and expenses to hedge. Hedging instruments normally include foreign currency spot and forward contracts, as well as foreign currency options and swaps.

As at October 31, 2018, a one percent increase (decrease) in the Canadian dollar against all currencies in which the Bank operates decreases (increases) the Bank’s before-tax annual earnings by approximately $65 million (October 31, 2017 – $58 million) in the absence of hedging activity, primarily from exposure to U.S. dollars. A similar change in the Canadian dollar as at October 31, 2018 would increase (decrease) the unrealized foreign currency translation losses in the accumulated other comprehensive income in equity by approximately $384 million (2017 – $345 million), net of hedging.

(iii) Non-trading equity risk

Equity risk is the risk of loss due to adverse movements in equity prices. Equity price risk is often classified into two categories: general equity risk, which refers to the sensitivity of an instrument or portfolio’s value to changes in the overall level of equity prices, and specific equity risk, which refers to that portion of an individual equity instrument’s price volatility that is determined by entity-specific characteristics.

The Bank is exposed to equity risk through its equity investment portfolios, which are controlled by Board-approved portfolio, VaR, and stress-test limits. Equity investments include common and preferred shares, as well as a diversified portfolio of third-party managed funds.

The majority of the Bank’s equity investment portfolios are managed by Group Treasury under the strategic direction of the ALCO. Group Treasury delegates the management of a portion of equity and equity-related portfolios to other external fund managers to take advantage of these fund managers’ expertise in particular market niches and products.

The fair value of equity securities designated at FVOCI is shown in Note 12.

(iv) Trading portfolio risk management

The Bank’s policies, processes and controls for trading activities are designed to achieve a balance between pursuing profitable trading opportunities and managing earnings volatility within a framework of sound and prudent practices. Trading activities are primarily customer focused.

Market risk arising from the Bank’s trading activities is managed in accordance with Board-approved policies and limits, including aggregate VaR and stress testing limits.

Trading portfolios are marked-to-market in accordance with the Bank’s valuation policies. Positions are marked-to-market daily and valuations are independently reviewed by back office, GRM or finance units on a regular basis. These units also provide profit and loss reporting, as well as VaR and limit compliance reporting to business unit management and executive management for evaluation and action as appropriate. VaR is calculated daily using a 99% confidence level, and a one-day holding period. This means that, once in every 100 days, the trading positions are expected to lose more than the VaR estimate. The Bank calculates general market risk VaR using historical simulation based on 300 days of market data. For debt specific risk VaR, the Bank uses historical resampling. The table below shows the Bank’s VaR by risk factor:

				For the year ended October 31, 2018
($ millions)	As at October 31, 2018			Average			High		Low		As at October 31, 2017
Credit spread plus interest rate	$	11.0		$	11.6		$	17.8	$	6.9	$	10.1
Credit spread		6.2			7.8			12.2		4.8		6.9
Interest rate		7.7			9.5			17.2		4.3		8.4
Equities		5.8			3.0			15.5		1.2		3.2
Foreign exchange		2.8			3.3			5.8		1.1		2.9
Commodities		1.7			1.6			2.1		1.0		1.3
Debt specific		3.6			3.4			4.2		2.6		3.3
Diversification effect		(11.7	)		(10.0	)		n/a		n/a		(10.3	)
All-Bank VaR	$	13.2		$	12.9		$	18.4	$	8.6	$	10.6
All-Bank stressed VaR	$	44.6		$	42.7		$	59.0	$	26.3	$	34.7

Below are the market risk capital requirements as at October 31, 2018.

($ millions)
All-Bank VaR	$	124
All-Bank stressed VaR		419
Incremental risk charge		95
Standardized approach		31
Total market risk capital	$	669	(1)

(1) Equates to $8,357 million of risk-weighted assets (2017 – $7,839 million).

(d) Operational risk

Operational risk is the risk of loss, whether direct or indirect, to which the Bank is exposed due to inadequate or failed internal processes or systems, human error, or external events. Operational risk includes legal and regulatory risk, business process and change risk, fiduciary or disclosure breaches, technology failure, financial crime and environmental risk. Operational risk, in some form, exists in each of the Bank’s businesses and support activities, and can result in financial loss, regulatory sanctions and damage to the Bank’s reputation. The Bank has developed policies, processes and assessment methodologies to ensure that operational risk is appropriately identified and managed with effective controls with a view to safeguarding client assets and preserving shareholder value.

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Business Combinations

12 Months Ended

Oct. 31, 2018

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Business Combinations

38 Business Combinations

Acquisitions that closed in 2018

Jarislowsky, Fraser Limited, Canada

On May 1, 2018, the Bank completed the acquisition of Jarislowsky, Fraser Limited, an independent investment firm with approximately $40 billion in assets under management on behalf of institutional and high net worth clients. The purchase price of $978 million was satisfied primarily by the issuance of 11.1 million common shares valued at $878 million and cash of $44 million. The fair value of the common shares issued is based on the quoted price of the shares of the Bank as at May 1, 2018 which was $78.86. Included in this purchase price is an earn-out of an amount of $56 million in additional common shares which may be paid based on achieving future growth targets. The acquired business forms part of the Canadian Banking business segment.

The fair value of the identifiable net assets of Jarislowsky, Fraser Limited at the date of acquisition was:

($ million)
Total net assets acquired	$	9
Intangible assets
Finite life intangible asset arising on acquisition(1)		255
Indefinite life intangible assets arising on acquisition(2)		308
Deferred tax liability		(150	)
Goodwill arising on acquisition		556
Purchase consideration transferred	$	978

(1) Comprised of customer relationship intangible of $255.

(2) Comprised of fund management contracts of $290 and trademark of $18.

Goodwill of $556 million largely reflects the value of synergies expected by combining certain operations within the Bank’s asset management businesses as well as Jarislowsky Fraser’s strong market presence and future growth prospects.

Citibank’s consumer and small and medium enterprise operations, Colombia

On June 30, 2018, the Bank’s Colombian subsidiary, Scotiabank Colpatria S.A., completed the previously announced acquisition of Citibank’s consumer (retail and credit cards) and small and medium enterprise operations in Colombia. The acquired business forms part of the Bank’s International Banking business segment.

The Bank has not finalized its initial accounting for the acquisition as it is still completing its valuation of the assets acquired and liabilities assumed. As at October 31, 2018, $2.0 billion of assets (mainly loans of $1.9 billion) and $1.4 billion of liabilities (mainly deposits of $1.3 billion) have been recorded. Subsequent adjustment during the measurement period will occur as the Bank completes its estimation of fair values of assets acquired and liabilities assumed.

BBVA, Chile

On July 6, 2018, the Bank acquired 68.2% of Banco Bilbao Vizcaya Argentaria, Chile, 100% of BBVA Seguros Vida S.A., 100% of Servicios Corporativos S.A., 68.1% of Inmobiliaria e Inversiones S.A. and 4.1% of Inversiones DCV S.A. (together “BBVA Chile”) in Chile for cash consideration of US$ 2.2 billion, following receipt of regulatory approvals in Chile and Canada. The Bank consolidated 100% of BBVA Chile’s assets and liabilities and recorded a non-controlling interest of 31.8%. The acquired business forms part of the International Banking business segment.

On September 1, 2018, BBVA Chile merged with Scotiabank Chile. The minority shareholder in BBVA Chile paid the Bank US$ 0.4 billion to increase their pro forma ownership of the merged entity. Subsequent to these transactions, the Bank retained control over the combined entity with 75.5% of the total shares. Under this agreement, the non-controlling shareholders have the option to sell all or a portion of their shares to the Bank at the then fair value, which can be settled, at the Bank’s discretion, by the issuance of common shares or cash.

Based on the current estimates of acquisition date fair values, the Bank has estimated and recorded loans of $19.9 billion, other assets of $8.4 billion and an aggregate amount of goodwill and intangibles of $1.3 billion. Simultaneously, the Bank has recorded deposits of $13.4 billion and other liabilities of $12.8 billion. The Bank had recorded a non-controlling interest in BBVA Chile of approximately $0.6 billion at the time of the acquisition, which changed to approximately $0.8 billion at the time of the merger of BBVA Chile with Scotiabank Chile. The purchase price allocation is considered to be preliminary and subsequent adjustments during the measurement period will occur as the Bank completes its estimation of fair values of assets acquired and liabilities assumed.

MD Financial Management, Canada

On October 3, 2018, the Bank completed the previously announced acquisition of MD Financial Management (“MD Financial”) from the Canadian Medical Association, (“CMA”), for approximately $2.7 billion, payable in cash. MD Financial is Canada’s leading provider of financial services to physicians and their families, with approximately $49 billion in assets under management and administration. The acquired business forms part of the Canadian Banking business segment.

On closing, the Bank and the CMA entered into a 10- year affinity agreement under which the Bank has committed to pay $115 million over the next 10 years to support the advancement of the medical profession and health care in Canada.

Based on current estimates of acquisition date fair values, the Bank has estimated and recorded approximately $1.9 billion of indefinite life intangibles, goodwill of $1.2 billion, $70 million of finite life intangibles, $0.5 billion of deferred tax liabilities and $0.1 billion of other net assets acquired. The purchase price allocation is considered to be preliminary and will be refined as the Bank completes its valuation of the fair value of assets acquired and liabilities assumed.

Aggregate impact to Consolidated Income

For the year ended October 31, 2018, all four acquisitions contributed revenue of $394 million in aggregate and a net loss of $257 million in aggregate.

The primary reason for the net loss is the recording of a provision for credit losses of $404 million ($285 million after-tax) on acquired performing financial assets, as required under IFRS 9.

Acquisition costs directly related to the four acquisitions of $44 million are included in non-interest expenses in the Consolidated Statement of Income.

Acquisitions announced but not closed

Banco Cencosud, Peru

On May 9, 2018, the Bank announced that Scotiabank Peru, its wholly owned subsidiary, has reached an agreement to acquire a 51% controlling interest in Banco Cencosud, which offers credit cards and consumer loans in Peru, for approximately $130 million. Under the terms of the agreement, the two companies will also enter into a 15-year partnership to manage the credit card business and provide additional products and services to customers.

Subject to regulatory approvals and closing conditions the acquisition is expected to close in the first quarter of 2019.

Banco Dominicano del Progreso, Dominican Republic

On August 14, 2018, the Bank announced that it has reached an agreement to acquire Banco Dominicano del Progreso, S.A. – Banco Múltiple (Banco Dominicano del Progreso), a bank with operations in the Dominican Republic, subject to regulatory approval. The transaction is not considered financially material to the Bank.

Subject to regulatory approvals and closing conditions the acquisition is expected to close in the first quarter of 2019.

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Significant Accounting Policies (Policies)

12 Months Ended

Oct. 31, 2018

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Basis of consolidation

Basis of consolidation

The consolidated financial statements include the assets, liabilities, financial performance and cash flows of the Bank and all of its subsidiaries, after elimination of intercompany transactions and balances. Subsidiaries are defined as entities controlled by the Bank and exclude associates and joint arrangements. The Bank’s subsidiaries can be classified as entities controlled through voting interests or structured entities. The Bank consolidates a subsidiary from the date it obtains control. The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. For the Bank to control an entity, all of the three elements of control should be in existence:

• power over the investee;

• exposure, or rights, to variable returns from involvement with the investee; and

• the ability to use power over the investee to affect the amount of the Bank’s returns.

The Bank does not control an investee when it is acting as an agent. The Bank assesses whether it is an agent by determining whether it is primarily engaged to act on behalf of and for the benefit of another party or parties. The Bank reassesses whether it controls an investee if facts and circumstances indicate that one or more of the elements of control has changed. Non-controlling interests are presented within equity in the Consolidated Statement of Financial Position separate from equity attributable to equity holders of the Bank. Partial sales and incremental purchases of interests in subsidiaries that do not result in a change of control are accounted for as equity transactions with non-controlling interest holders. Any difference between the carrying amount of the interest and the transaction amount is recorded as an adjustment to retained earnings.

Voting-interest subsidiaries

Control is presumed with an ownership interest of more than 50% of the voting rights in an entity unless there are other factors that indicate that the Bank does not control the entity despite having more than 50% of voting rights.

The Bank may consolidate an entity when it owns less than 50% of the voting rights when it has one or more other attributes of power:

• by virtue of an agreement, over more than half of the voting rights;

• to govern the financial and operating policies of the entity under a statute or an agreement;

• to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body; or

• to govern the financial and operating policies of the entity through the size of its holding of voting rights relative to the size and dispersion of holding of the other vote holders and voting patterns at shareholder meetings (i.e., de facto control).

Structured entities

Structured entities are designed to accomplish certain well-defined objectives and for which voting or similar rights are not the dominant factor in deciding who controls the entity. The Bank may become involved with structured entities either at the formation stage or at a later date. The Bank controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Bank consolidates all structured entities that it controls.

Investments in associates

An associate is an entity in which the Bank has significant influence, but not control, over the operating and financial policies of the entity. Significant influence is ordinarily presumed to exist when the Bank holds between 20% and 50% of the voting rights. The Bank may also be able to exercise significant influence through board representation. The effects of potential voting rights that are currently exercisable or convertible are considered in assessing whether the Bank has significant influence.

Investments in associates are recognized initially at cost, which includes the purchase price and other costs directly attributable to the purchase. Associates are accounted for using the equity method which reflects the Bank’s share of the increase or decrease of the post-acquisition earnings and other movements in the associate’s equity.

If there is a loss of significant influence and the investment ceases to be an associate, equity accounting is discontinued from the date of loss of significant influence. If the retained interest on the date of loss of significant influence is a financial asset, it is measured at fair value and the difference between the fair value and the carrying value is recorded as an unrealized gain or loss in the Consolidated Statement of Income.

Investments in associates are evaluated for impairment at the end of each financial reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

For purposes of applying the equity method for an investment that has a different reporting period from the Bank, adjustments are made for the effects of any significant events or transactions that occur between the reporting date of the investment and the reporting date of the Bank.

Joint arrangements

A joint arrangement is an arrangement over which two or more parties have joint control. Joint control exists only when decisions about the relevant activities (i.e., those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing the control of the arrangement. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.

Similar to accounting for investment in associates, for joint ventures, investments are recognized initially at cost and accounted for using the equity method which reflects the Bank’s share of the increase or decrease of the post-acquisition earnings and other movements in the joint venture’s equity. Investments in joint ventures are evaluated for impairment at the end of each financial reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

If there is a loss of joint control and it does not result in the Bank having significant influence over the joint venture, equity accounting is discontinued from the date of loss of joint control. If the retained interest in the former joint venture on the date of loss of joint control is a financial asset, it is measured at fair value and the difference between the fair value and the carrying value is recorded as an unrealized gain or loss in the Consolidated Statement of Income.

Translation of foreign currencies

Translation of foreign currencies

The financial statements of each of the Bank’s foreign operations are measured using its functional currency, being the currency of the primary economic environment of the foreign operation.

Translation gains and losses related to the Bank’s monetary items are recognized in non-interest income in the Consolidated Statement of Income. Revenues and expenses denominated in foreign currencies are translated using average exchange rates, except for depreciation and amortization of buildings, equipment and leasehold improvements of the Bank, purchased in foreign currency, which are translated using historical rates. Foreign currency non-monetary items that are measured at historical cost are translated into the functional currency at historical rates. Foreign currency non-monetary items measured at fair value are translated into functional currency using the rate of exchange at the date the fair value was determined. Foreign currency gains and losses on non-monetary items are recognized in the Consolidated Statement of Income or Consolidated Statement of Comprehensive Income consistent with the gain or loss on the non-monetary item.

Unrealized gains and losses arising upon translation of foreign operations, together with any gains or losses arising from hedges of those net investment positions to the extent effective, are credited or charged to net change in unrealized foreign currency translation gains/losses in other comprehensive income in the Consolidated Statement of Comprehensive Income. On disposal or partial disposal of a foreign operation, an appropriate portion of the translation differences previously recognized in other comprehensive income are recognized in the Consolidated Statement of Income.

Financial assets and liabilities

Financial assets and liabilities

Recognition and initial measurement

The Bank, on the date of origination or purchase, recognizes loans, debt and equity securities, deposits and subordinated debentures at the fair value of consideration paid. Regular-way purchases and sales of financial assets are recognized on the settlement date. All other financial assets and liabilities, including derivatives, are initially recognized on the trade date at which the Bank becomes a party to the contractual provisions of the instrument.

The initial measurement of a financial asset or liability is at fair value plus transaction costs that are directly attributable to its purchase or issuance. For instruments measured at fair value through profit or loss, transaction costs are recognized immediately in profit or loss.

Classification and measurement, derecognition, and impairment of financial instruments effective November 1, 2017

Classification and measurement

Classification and measurement of financial assets

Financial assets are classified into one of the following measurement categories:

• Amortized cost;

• Fair value through other comprehensive income (FVOCI);

• Fair value through profit or loss (FVTPL);

• Elected at fair value through other comprehensive income (Equities only); or

• Designated at FVTPL

Financial assets include both debt and equity instruments.

Debt instruments

Debt instruments, including loans and debt securities, are classified into one of the following measurement categories:

• Amortized cost;

• Fair value through other comprehensive income (FVOCI);

• Fair value through profit or loss (FVTPL); or

• Designated at FVTPL

Classification of debt instruments is determined based on:

(i) The business model under which the asset is held; and

(ii) The contractual cash flow characteristics of the instrument.

Business model assessment

Business model assessment involves determining how financial assets are managed in order to generate cash flows. The Bank’s business model assessment is based on the following categories:

• Held to collect: The objective of the business model is to hold assets and collect contractual cash flows. Any sales of the asset are incidental to the objective of the model.

• Held to collect and for sale: Both collecting contractual cash flows and sales are integral to achieving the objectives of the business model.

• Other business model: The business model is neither held-to-collect nor held-to-collect and for sale.

The Bank assesses business model at a portfolio level reflective of how groups of assets are managed together to achieve a particular business objective. For the assessment of a business model, the Bank takes into consideration the following factors:

• How the performance of assets in a portfolio is evaluated and reported to group heads and other key decision makers within the Bank’s business lines;

• How compensation is determined for the Bank’s business lines’ management that manages the assets;

• Whether the assets are held for trading purposes i.e., assets that the Bank acquires or incurs principally for the purpose of selling or repurchasing in the near term, or holds as part of a portfolio that is managed together for short-term profit or position taking;

• The risks that affect the performance of assets held within a business model and how those risks are managed; and

• The frequency and volume of sales in prior periods and expectations about future sales activity.

Contractual cash flow characteristics assessment

The contractual cash flow characteristics assessment involves assessing the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest on the principal amount outstanding (SPPI).

Principal is defined as the fair value of the instrument at initial recognition. Principal may change over the life of the instrument due to repayments or amortization of premium/discount.

Interest is defined as the consideration for the time value of money and the credit risk associated with the principal amount outstanding and for other basic lending risks and costs (liquidity risk and administrative costs), and a profit margin.

If the Bank identifies any contractual features that could significantly modify the cash flows of the instrument such that they are no longer consistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.

Debt instruments measured at amortized cost

Debt instruments are measured at amortized cost if they are held within a business model whose objective is to hold for collection of contractual cash flows where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are carried at amortized cost. Interest income on these instruments is recognized in interest income using the effective interest rate method. The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. Amortized cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the effective interest rate.

Impairment on debt instruments measured at amortized cost is calculated using the expected credit loss approach. Loans and debt securities measured at amortized cost are presented net of the allowance for credit losses (ACL) in the statement of financial position.

Debt instruments measured at FVOCI

Debt instruments are measured at FVOCI if they are held within a business model whose objective is to hold for collection of contractual cash flows and for selling financial assets, where the assets’ cash flows represent payments that are solely payments of principal and interest. Subsequent to initial recognition, unrealized gains and losses on debt instruments measured at FVOCI are recorded in other comprehensive income (OCI), unless the instrument is designated in a fair value hedge relationship. When designated in a fair value hedge relationship, any changes in fair value due to changes in the hedged risk are recognized in Non-interest income in the Consolidated Statement of Income. Upon derecognition, realized gains and losses are reclassified from OCI and recorded in Non-interest income in the Consolidated Statement of Income on an average cost basis. Foreign exchange gains and losses that relate to the amortized cost of the debt instrument are recognized in the Consolidated Statement of Income. Premiums, discounts and related transaction costs are amortized over the expected life of the instrument to Interest income in the Consolidated Statement of Income using the effective interest rate method.

Impairment on debt instruments measured at FVOCI is calculated using the expected credit loss approach. The ACL on debt instruments measured at FVOCI does not reduce the carrying amount of the asset in the Consolidated Statement of Financial Position, which remains at its fair value. Instead, an amount equal to the allowance that would arise if the assets were measured at amortised cost is recognised in OCI with a corresponding charge to Provision for credit losses in the Consolidated Statement of Income. The accumulated allowance recognised in OCI is recycled to the Consolidated Statement of Income upon derecognition of the debt instrument.

Debt instruments measured at FVTPL

Debt instruments are measured at FVTPL if assets:

i) Are held for trading purposes;

ii) Are held as part of a portfolio managed on a fair value basis; or

iii) Whose cash flows do not represent payments that are solely payments of principal and interest.

These instruments are measured at fair value in the Consolidated Statement of Financial Position, with transaction costs recognized immediately in the Consolidated Statement of Income as part of Non-interest income. Realized and unrealized gains and losses are recognized as part of Non-interest income in the Consolidated Statement of Income.

Debt instruments designated at FVTPL

Financial assets classified in this category are those that have been designated by the Bank upon initial recognition, and once designated, the designation is irrevocable. The FVTPL designation is available only for those financial assets for which a reliable estimate of fair value can be obtained. Financial assets are designated at FVTPL if doing so eliminates or significantly reduces an accounting mismatch which would otherwise arise.

Financial assets designated at FVTPL are recorded in the Consolidated Statement of Financial Position at fair value. Changes in fair value are recognized in Non-interest income in the Consolidated Statement of Income.

Equity instruments

Equity instruments are classified into one of the following measurement categories:

• Fair value through profit or loss (FVTPL); or

• Elected at fair value through other comprehensive income (FVOCI).

Equity instruments measured at FVTPL

Equity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase, with transaction costs recognized immediately in the Consolidated Statement of Income as part of Non-interest income. Subsequent to initial recognition the changes in fair value are recognized as part of Non-interest income in the Consolidated Statement of Income.

Equity instruments measured at FVOCI

At initial recognition, there is an irrevocable option for the Bank to classify non-trading equity instruments at FVOCI. This election is used for certain equity investments for strategic or longer term investment purposes. This election is made on an instrument-by-instrument basis and is not available to equity instruments that are held for trading purposes.

Gains and losses on these instruments including when derecognized/sold are recorded in OCI and are not subsequently reclassified to the Consolidated Statement of Income. As such, there is no specific impairment requirement. Dividends received are recorded in Interest income in the Consolidated Statement of Income. Any transaction costs incurred upon purchase of the security are added to the cost basis of the security and are not reclassified to the Consolidated Statement of Income on sale of the security.

Classification and measurement of financial liabilities

Financial liabilities are classified into one of the following measurement categories:

• Fair value through profit or loss (FVTPL);

• Amortized cost; or

• Designated at FVTPL.

Financial liabilities measured at FVTPL

Financial liabilities measured at FVTPL are held principally for the purpose of repurchasing in the near term, or form part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. Financial liabilities are recognized on a trade date basis and are accounted for at fair value, with changes in fair value and any gains or losses recognized in the Consolidated Statement of Income as part of the non-interest income. Transaction costs are expensed as incurred.

Financial liabilities measured at amortized cost

Deposits, subordinated notes and debentures are accounted for at amortized cost. Interest on deposits, calculated using the effective interest rate method, is recognized as interest expense. Interest on subordinated notes and debentures, including capitalized transaction costs, is recognized using the effective interest rate method as interest expense.

Financial liabilities designated at FVTPL

Financial liabilities classified in this category are those that have been designated by the Bank upon initial recognition, and once designated, the designation is irrevocable. The FVTPL designation is available only for those financial liabilities for which a reliable estimate of fair value can be obtained.

Financial liabilities are designated at FVTPL when one of the following criteria is met:

• The designation eliminates or significantly reduces an accounting mismatch which would otherwise arise; or

• A group of financial liabilities are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management strategy; or

• The financial liability contains one or more embedded derivatives which significantly modify the cash flows otherwise required.

Financial liabilities designated at FVTPL are recorded in the Consolidated Statement of Financial Position at fair value. Any changes in fair value are recognized in Non-interest income in the Consolidated Statement of Income, except for changes in fair value arising from changes in the Bank’s own credit risk which are recognized in the OCI. Changes in fair value due to changes in the Bank’s own credit risk are not subsequently reclassified to Consolidated Statement of Income upon derecognition/extinguishment of the liabilities.

Determination of fair value

Fair value of a financial asset or liability is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal, or in its absence, the most advantageous market to which the Bank has access at the measurement date.

The Bank values instruments carried at fair value using quoted market prices, where available. Unadjusted quoted market prices for identical instruments represent a Level 1 valuation. When quoted market prices are not available, the Bank maximizes the use of observable inputs within valuation models. When all significant inputs are observable, the valuation is classified as Level 2. Valuations that require the significant use of unobservable inputs are considered Level 3.

Inception gains and losses are only recognized where the valuation is dependent only on observable market data, otherwise, they are deferred and amortized over the life of the related contract or until the valuation inputs become observable.

IFRS 13 permits 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 has adopted this exception through an accounting policy choice. Consequently, the fair values of certain portfolios of financial instruments are determined based on the net exposure of those instruments to particular market, credit or funding risk.

In determining fair value for certain instruments or portfolios of instruments, valuation adjustments or reserves may be required to arrive at a more accurate representation of fair value. These adjustments include those made for credit risk, bid-offer spreads, unobservable parameters, constraints on prices in inactive or illiquid markets and when applicable funding costs.

Derecognition of financial assets and liabilities

Derecognition of financial assets

The derecognition criteria are applied to the transfer of part of an asset, rather than the asset as a whole, only if such part comprises specifically identified cash flows from the asset, a fully proportionate share of the cash flows from the asset, or a fully proportionate share of specifically identified cash flows from the asset.

A financial asset is derecognized when the contractual rights to the cash flows from the asset has expired; or the Bank transfers the contractual rights to receive the cash flows from the financial asset; or has assumed an obligation to pay those cash flows to an independent third-party; or the Bank has transferred substantially all the risks and rewards of ownership of that asset to an independent third-party. Management determines whether substantially all the risk and rewards of ownership have been transferred by quantitatively comparing the variability in cash flows before and after the transfer. If the variability in cash flows remains significantly similar subsequent to the transfer, the Bank has retained substantially all of the risks and rewards of ownership.

Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Bank derecognizes the transferred asset only if it has lost control over that asset. Control over the asset is represented by the practical ability to sell the transferred asset. If the Bank retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement. At times such continuing involvement may be in the form of investment in senior or subordinated tranches of notes issued by non-consolidated structured entities.

On derecognition of a financial asset, the difference between the carrying amount and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in other comprehensive income is recognized in the Consolidated Statement of Income.

Transfers of financial assets that do not qualify for derecognition are reported as secured financings in the Consolidated Statement of Financial Position.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, canceled or expires. If an existing financial liability is replaced by another from the same counterparty on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability at fair value. The difference in the respective carrying amount of the existing liability and the new liability is recognized as a gain/loss in the Consolidated Statement of Income.

Impairment

Scope

The Bank applies a three-stage approach to measure allowance for credit losses, using an expected credit loss approach as required under IFRS 9, for the following categories of financial instruments that are not measured at fair value through profit or loss:

• Amortized cost financial assets;

• Debt securities classified as at FVOCI;

• Off-balance sheet loan commitments; and

• Financial guarantee contracts.

Expected credit loss impairment model

The Bank’s allowance for credit losses calculations are outputs of models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. The expected credit loss impairment model reflects the present value of all cash shortfalls related to default events either (i) over the following twelve months or (ii) over the expected life of a financial instrument depending on credit deterioration from inception. The allowance for credit losses reflects an unbiased, probability-weighted outcome which considers multiple scenarios based on reasonable and supportable forecasts.

This impairment model measures credit loss allowances using a three-stage approach based on the extent of credit deterioration since origination:

• Stage 1 – Where there has not been a significant increase in credit risk (SIR) since initial recognition of a financial instrument, an amount equal to 12 months expected credit loss is recorded. The expected credit loss is computed using a probability of default occurring over the next 12 months. For those instruments with a remaining maturity of less than 12 months, a probability of default corresponding to remaining term to maturity is used.

• Stage 2 – When a financial instrument experiences a SIR subsequent to origination but is not considered to be in default, it is included in Stage 2. This requires the computation of expected credit loss based on the probability of default over the remaining estimated life of the financial instrument.

• Stage 3 – Financial instruments that are considered to be in default are included in this stage. Similar to Stage 2, the allowance for credit losses captures the lifetime expected credit losses.

Measurement of expected credit loss

The probability of default (PD), exposure at default (EAD), and loss given default (LGD) inputs used to estimate expected credit losses are modelled based on macroeconomic variables that are most closely related with credit losses in the relevant portfolio.

Details of these statistical parameters/inputs are as follows:

• PD – The probability of default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the remaining estimated life, if the facility has not been previously derecognized and is still in the portfolio.

• EAD – The exposure at default is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments.

• LGD – The loss given default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realization of any collateral. It is usually expressed as a percentage of the EAD.

Forward-looking information

The estimation of expected credit losses for each stage and the assessment of significant increases in credit risk consider information about past events and current conditions as well as reasonable and supportable forecasts of future events and economic conditions. The estimation and application of forward-looking information may require significant judgment.

Macroeconomic factors

In its models, the Bank relies on a broad range of forward-looking economic information as inputs, such as: GDP growth, unemployment rates, central-bank interest rates, and house-price indices. The inputs and models used for calculating expected credit losses may not always capture all characteristics of the market at the date of the financial statements. To reflect this, qualitative adjustments or overlays may be made as temporary adjustments using expert credit judgment.

Multiple forward-looking scenarios

The Bank determines its allowance for credit losses using three probability-weighted forward-looking scenarios. The Bank considers both internal and external sources of information and data in order to achieve an unbiased projections and forecasts. The Bank prepares the scenarios using forecasts generated by Scotiabank Economics (SE). The forecasts are created using internal and external models which are modified by SE as necessary to formulate a ‘base case’ view of the most probable future direction of relevant economic variables as well as a representative range of other possible forecast scenarios. The process involves the development of two additional economic scenarios and consideration of the relative probabilities of each outcome.

The ‘base case’ represents the most likely outcome and is aligned with information used by the Bank for other purposes such as strategic planning and budgeting. The other scenarios represent more optimistic and more pessimistic outcomes. The Bank has identified and documented key drivers of credit risk and credit losses for each portfolio of financial instruments and, using an analysis of historical data, has estimated relationships between macroeconomic variables, credit risk, and credit losses.

Assessment of significant increase in credit risk (SIR)

At each reporting date, the Bank assesses whether there has been a significant increase in credit risk for exposures since initial recognition by comparing the risk of default occurring over the remaining expected life from the reporting date and the date of initial recognition. The assessment considers borrower-specific quantitative and qualitative information without consideration of collateral, and the impact of forward-looking macroeconomic factors.

The common assessments for SIR on retail and non-retail portfolios include macroeconomic outlook, management judgement, and delinquency and monitoring. Forward-looking macroeconomic factors are a key component of the macroeconomic outlook. The importance and relevance of each specific macroeconomic factor depends on the type of product, characteristics of the financial instruments and the borrower and the geographical region. Quantitative models may not always be able to capture all reasonable and supportable information that may indicate a significant increase in credit risk. Qualitative factors may be assessed to supplement the gap. Examples of situations include changes in adjudication criteria for a particular group of borrowers; changes in portfolio composition; and natural disasters impacting certain portfolios. With regards to delinquency and monitoring, there is a rebuttable presumption that the credit risk of the financial instrument has increased since initial recognition when contractual payments are more than 30 days overdue.

Retail portfolio – For retail exposures, a significant increase in credit risk cannot be assessed using forward looking information at an individual account level. Therefore, the assessment must be done at the segment level. Segment migration thresholds exist for each PD model by product which considers the proportionate change in PD as well as the absolute change in PD. The thresholds used for PD migration are reviewed and assessed at least annually, unless there is a significant change in credit risk management practices in which case the review is brought forward.

Non-retail portfolio – The Bank uses a risk rating scale (IG codes) for its non-retail exposures. All non-retail exposures have an IG code assigned that reflects the probability of default of the borrower. Both borrower specific and non-borrower specific (i.e. macroeconomic) forward looking information is considered and reflected in the IG rating. Significant increase in credit risk is evaluated based on the migration of the exposures among IG codes.

Expected life

When measuring expected credit loss, the Bank considers the maximum contractual period over which the Bank is exposed to credit risk. All contractual terms are considered when determining the expected life, including prepayment, and extension and rollover options. For certain revolving credit facilities, such as credit cards, the expected life is estimated based on the period over which the Bank is exposed to credit risk and how the credit losses are mitigated by management actions.

Presentation of allowance for credit losses in the Statement of Financial Position

• Financial assets measured at amortized cost: as a deduction from the gross carrying amount of the financial assets;

• Debt instruments measured at fair value through other comprehensive income: no allowance is recognized in the Statement of Financial Position because the carrying value of these assets is their fair value. However, the allowance determined is presented in the accumulated other comprehensive income;

• Off-balance sheet credit risks include undrawn lending commitments, letters of credit and letters of guarantee: as a provision in other liabilities.

Modified financial assets

If the terms of a financial asset are modified or an existing financial asset is replaced with a new one, an assessment is made to determine if the existing financial asset should be derecognized. Where a modification does not result in derecognition, the date of origination continues to be used to determine SIR. Where a modification results in derecognition, the new financial asset is recognized at its fair value on the modification date. The modification date is also the date of origination for this new asset.

The Bank may modify the contractual terms of loans for either commercial or credit reasons. The terms of a loan in good standing may be modified for commercial reasons to provide competitive pricing to borrowers. Loans are also modified for credit reasons where the contractual terms are modified to grant a concession to a borrower that may be experiencing financial difficulty.

For all financial assets modifications of the contractual terms may result in derecognition of the original asset when the changes to the terms of the loans are considered substantial. These terms include interest rate, authorized amount, term, or type of underlying collateral. The original loan is derecognized and the new loan is recognized at its fair value. The difference between the carrying value of the derecognized asset and the fair value of the new asset is recognized in the Income Statement.

For all loans, performing and credit-impaired, where the modification of terms did not result in the derecognition of the loan, the gross carrying amount of the modified loan is recalculated based on the present value of the modified cash flows discounted at the original effective interest rate and any gain or loss from the modification is recorded in the provision for credit losses line in the income statement.

Definition of default

The Bank considers a financial instrument to be in default as a result of one or more loss events that occurred after the date of initial recognition of the instrument and the loss event has a negative impact on the estimated future cash flows of the instrument that can be reliably estimated. This includes events that indicate:

• significant financial difficulty of the borrower;

• default or delinquency in interest or principal payments;

• high probability of the borrower entering a phase of bankruptcy or a financial reorganization;

• measurable decrease in the estimated future cash flows from the loan or the underlying assets that back the loan.

The Bank considers that default has occurred and classifies the financial asset as impaired when it is more than 90 days past due, with the exception of credit card receivables that are treated as defaulted when 180 days past due, unless reasonable and supportable information demonstrates that a more lagging default criterion is appropriate.

Write-off policy

The Bank writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. Where financial assets are secured, write-off is generally after receipt of any proceeds from the realization of security. In circumstances where the net realizable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier. Credit card receivables 180 days past due are written-off. In subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the Consolidated Statement of Income.

Purchased loans

All purchased loans are initially measured at fair value on the date of acquisition. As a result no allowance for credit losses would be recorded in the Consolidated Statement of Financial Position on the date of acquisition. Purchased loans may fit into either of the two categories: Performing loans or Purchased Credit Impaired (PCI) loans.

Purchased performing loans follow the same accounting as originated performing loans and are reflected in Stage 1 on the date of the acquisition. They will be subject to a 12-month allowance for credit losses which is recorded as a provision for credit losses in the Consolidated Statement of Income. The fair value adjustment set up for these loans on the date of acquisition is amortized into interest income over the life of these loans.

PCI loans are reflected in Stage 3 and are always subject to lifetime allowance for credit losses. Any changes in the expected cash flows since the date of acquisition are recorded as a charge/recovery in the provision for credit losses in the Consolidated Statement of Income at the end of all reporting periods subsequent to the date of acquisition.

Classification and measurement, derecognition, and impairment of financial instruments effective prior to November 1, 2017

Trading assets and liabilities

Trading assets and liabilities are measured at fair value in the Consolidated Statement of Financial Position, with transaction costs recognized immediately in the Consolidated Statement of Income as part of non-interest income – trading revenues. Gains and losses realized on disposal and unrealized gains and losses due to fair value changes on trading assets and liabilities, other than certain derivatives, are recognized as part of non-interest income – trading revenues in the Consolidated Statement of Income. Trading assets and liabilities are not reclassified subsequent to their initial recognition.

Investment securities

Investment securities are comprised of available-for-sale and held-to-maturity securities.

Available-for-sale investment securities

Available-for-sale investment securities include equity and debt securities. Equity investments classified as available-for-sale are those which are neither classified as held-for-trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

Available-for-sale investment securities are recorded at fair value with unrealized gains and losses recorded in other comprehensive income. When realized, these gains and losses are reclassified from the Consolidated Statement of Comprehensive Income and recorded in the Consolidated Statement of Income on an average cost basis. For non-monetary investment securities designated as available-for-sale, the gain or loss recognized in other comprehensive income includes any related foreign exchange gains or losses. Foreign exchange gains and losses that relate to the amortized cost of an available-for-sale debt security are recognized in the Consolidated Statement of Income.

Premiums, discounts and related transaction costs on available-for-sale debt securities are amortized over the expected life of the instrument to interest income – securities in the Consolidated Statement of Income using the effective interest method.

Transaction costs on available-for-sale equity securities are initially capitalized and then recognized as part of the net realized gain/loss on subsequent sale of the instrument in the Consolidated Statement of Income.

Held-to-maturity investment securities

Held-to-maturity investment securities are non-derivative assets with fixed or determinable payments and fixed maturity that the Bank has the positive intent and ability to hold to maturity, and which do not meet the definition of a loan, are not held-for-trading, and are not designated at fair value through profit or loss or as available-for-sale. After initial measurement, held-to-maturity investment securities are carried at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the effective interest rate. The amortization is included in interest income – securities in the Consolidated Statement of Income.

A sale or reclassification of a more than an insignificant amount of held-to-maturity investments would result in the reclassification of all held-to-maturity investments as available-for-sale, and would prevent the Bank from classifying investment securities as held-to-maturity for the current and the following two financial years. However, sales and reclassifications in any of the following circumstances would not trigger a reclassification:

• Sales or reclassifications that are so close to maturity that changes in the market rate of interest would not have a significant effect on the financial asset’s fair value;

• Sales or reclassifications after the Bank has collected substantially all of the asset’s original principal; or

• Sales or reclassifications attributable to non-recurring isolated events beyond the Bank’s control that could not have been reasonably anticipated.

Impairment of investment securities

Investment securities are evaluated for impairment at the end of each reporting period, or more frequently if events or changes in circumstances indicate the existence of objective evidence of impairment.

In the case of equity instruments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its original cost is objective evidence of impairment. In the case of debt instruments classified as available-for-sale and held-to-maturity investment securities, impairment is assessed based on the same criteria as impairment of loans.

When a decline in value of available-for-sale debt or equity instrument is due to impairment, the carrying value of the security continues to reflect fair value. Losses arising from impairment are reclassified from accumulated other comprehensive income and included in net gain on investment securities within non-interest income in the Consolidated Statement of Income.

The losses arising from impairment of held-to-maturity investment securities are recognized in net gain on investment securities within non-interest income in the Consolidated Statement of Income.

Reversals of impairment losses on available-for-sale debt instruments resulting from increases in fair value related to events occurring after the date of impairment are included in net gain on investment securities within non-interest income in the Consolidated Statement of Income, to a maximum of the original impairment charge. Reversals of impairment on available-for-sale equity instruments are not recognized in the Consolidated Statement of Income; increases in fair value of such instruments after impairment are recognized in accumulated other comprehensive income.

Reversals of impairment losses on held-to-maturity investment securities are included in net gain on investment securities within non-interest income in the Consolidated Statement of Income, to a maximum of the amortized cost of the investment before the original impairment charge.

Financial assets and liabilities designated at fair value through profit or loss

Financial assets and financial liabilities classified in this category are those that have been designated by the Bank on initial recognition. The Bank may only designate an instrument at fair value through profit or loss when one of the following criteria is met, and designation is determined on an instrument by instrument basis:

• The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or liabilities on a different basis; or

• The assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed together and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy and the information about the group is provided to key management personnel and it can be demonstrated that significant financial risks are eliminated or significantly reduced; or

• The financial instrument contains one or more embedded derivatives which significantly modify the cash flows otherwise required.

Financial assets and financial liabilities designated at fair value through profit or loss are recorded in the Consolidated Statement of Financial Position at fair value. For assets designated at fair value through profit or loss, changes in fair value are recognized in the Consolidated Statement of Income. For liabilities designated at fair value through profit or loss, changes in fair value arising from changes in the Bank’s own credit risk are recognized in the Consolidated Statement of Comprehensive Income (OCI), without subsequent reclassification to the Consolidated Statement of Income, unless doing so would create or increase an accounting mismatch. All other changes in fair value are recognized in the Consolidated Statement of Income.

Loans

Loans include loans and advances originated or purchased by the Bank which are not classified as held-for-trading, held-to-maturity or designated at fair value. Debt securities, which are not trading securities or have not been designated as available-for-sale securities and that are not quoted in an active market, are also classified as loans.

Loans originated by the Bank are recognized when cash is advanced to a borrower. Loans purchased are recognized when cash consideration is paid by the Bank. Loans are measured at amortized cost using the effective interest method, less any impairment losses. Loans are stated net of allowance for credit losses.

Derecognition of financial assets and liabilities

Derecognition of financial assets and liabilities

Derecognition of financial assets

The derecognition criteria are applied to the transfer of part of an asset, rather than the asset as a whole, only if such part comprises specifically identified cash flows from the asset, a fully proportionate share of the cash flows from the asset, or a fully proportionate share of specifically identified cash flows from the asset.

A financial asset is derecognized when the contractual rights to the cash flows from the asset has expired; or the Bank transfers the contractual rights to receive the cash flows from the financial asset; or has assumed an obligation to pay those cash flows to an independent third-party; or the Bank has transferred substantially all the risks and rewards of ownership of that asset to an independent third-party. Management determines whether substantially all the risk and rewards of ownership have been transferred by quantitatively comparing the variability in cash flows before and after the transfer. If the variability in cash flows remains significantly similar subsequent to the transfer, the Bank has retained substantially all of the risks and rewards of ownership.

Where substantially all the risks and rewards of ownership of the financial asset are neither retained nor transferred, the Bank derecognizes the transferred asset only if it has lost control over that asset. Control over the asset is represented by the practical ability to sell the transferred asset. If the Bank retains control over the asset, it will continue to recognize the asset to the extent of its continuing involvement. At times such continuing involvement may be in the form of investment in senior or subordinated tranches of notes issued by non-consolidated structured entities.

On derecognition of a financial asset, the difference between the carrying amount and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognized in other comprehensive income is recognized in the Consolidated Statement of Income.

Transfers of financial assets that do not qualify for derecognition are reported as secured financings in the Consolidated Statement of Financial Position.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged, canceled or expires. If an existing financial liability is replaced by another from the same counterparty on substantially different terms, or the terms of the existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability at fair value. The difference in the respective carrying amount of the existing liability and the new liability is recognized as a gain/loss in the Consolidated Statement of Income.

Loan impairment and allowance for credit losses:

The Bank considers a loan to be impaired when there is objective evidence of impairment as a result of one or more loss events that occurred after the date of initial recognition of the loan and the loss event has an impact on the estimated future cash flows of the loan that can be reliably estimated.

Objective evidence is represented by observable data that comes to the attention of the Bank and includes events that indicate:

• significant financial difficulty of the borrower;

• a default or delinquency in interest or principal payments;

• a high probability of the borrower entering a phase of bankruptcy or a financial reorganization;

• a measurable decrease in the estimated future cash flows from the loan or the underlying assets that back the loan.

If a payment on a loan is contractually 90 days in arrears, the loan will be classified as impaired, if not already classified as such, unless the loan is fully secured, the collection of the debt is in process, and the collection efforts are reasonably expected to result in repayment of the loan or in restoring it to a current status within 180 days from the date a payment has become contractually in arrears. Finally, a loan that is contractually 180 days in arrears is classified as impaired in all situations, except when it is guaranteed or insured by the Canadian government, the provinces or a Canadian government agency; such loans are classified as impaired if the loan is contractually in arrears for 365 days. Any credit card loan that has a payment that is contractually 180 days in arrears is written off.

Losses expected as a result of future events are not recognized.

The Bank considers evidence of impairment for loans and advances at both an individual and collective level.

Individual impairment allowance

For all loans that are considered individually significant, the Bank assesses on a case-by-case basis at each reporting period whether an individual allowance for loan losses is required.

For those loans where objective evidence of impairment exists and the Bank has determined the loan to be impaired, impairment losses are determined based on the Bank’s aggregate exposure to the customer considering the following factors:

• the customer’s ability to generate sufficient cash flow to service debt obligations;

• the extent of other creditors’ commitments ranking ahead of, or pari passu with, the Bank and the likelihood of other creditors continuing to support the company;

• the complexity of determining the aggregate amount and ranking of all creditor claims and the extent to which legal and insurance uncertainties are evident; and

• the realizable value of security (or other credit mitigants) and likelihood of successful repossession.

Impairment losses are calculated by discounting the expected future cash flows of a loan at its original effective interest rate, and comparing the resultant present value with the loan’s current carrying amount. This results in interest income being recognized using the original effective interest rate.

Collective impairment allowance

For loans that have not been individually assessed as being impaired, the Bank pools them into groups to assess them on a collective basis. Collective allowances are calculated for impaired loans and performing loans. Allowances related to performing loans estimate probable incurred losses that are inherent in the portfolio but have not yet been specifically identified as impaired.

Internal risk rating parameters are used in the calculation of the collective impairment allowance. For non-retail loan portfolios, internal risk rating parameters form the basis for calculating the quantitative portion of the collective allowance for performing loans:

• Probability of Default rates (PD) which are based upon the internal risk rating for each borrower;

• Loss Given Default rates (LGD); and

• Exposure at Default factors (EAD).

Funded exposures are multiplied by the borrower’s PD and by the relevant LGD parameter.

Committed but undrawn exposures are multiplied by the borrower’s PD, by the relevant LGD parameter, and by the relevant EAD parameter. A model stress component is also applied to recognize uncertainty in the credit risk parameters and the fact that current actual loss rates may differ from the long-term averages included in the model.

Retail loans

Retail loans represented by residential mortgages, credit cards and other personal loans are considered by the Bank to be homogeneous groups of loans that are not considered individually significant. All homogeneous groups of loans are assessed for impairment on a collective basis.

Mortgages are collectively assessed for impairment, taking into account number of days past due, historical loss experience and incorporating both quantitative and qualitative factors including the current business and economic environment and the realizable value of collateral to determine the appropriate level of the collective impairment allowance.

A roll rate methodology is used to determine impairment losses on a collective basis for credit cards and other personal loans because individual loan assessment is impracticable. Under this methodology, loans with similar credit characteristics are grouped into ranges according to the number of days past due and statistical analysis is used to estimate the likelihood that loans in each range will progress through the various stages of delinquency and ultimately prove irrecoverable. This methodology employs statistical analyses of historical data and experience of delinquency and default to estimate the amount of loans that will eventually be written off as a result of the events not identifiable on an individual loan basis. When the portfolio size is small or when information is insufficient or not reliable enough to adopt a roll rate methodology, the Bank adopts a basic formulaic approach based on historical loss rate experience.

Performing loans

Over and above the individually assessed and retail roll rate allowances, loans that were subject to individual assessment for which no evidence of impairment existed, are grouped together according to their credit risk characteristics for the purpose of reassessing them on a collective basis. This reflects impairment losses that the Bank has incurred as a result of events that have occurred but where the individual loss has not been identified.

The collective impairment allowance for such loans is determined after taking into account:

• historical loss experience in portfolios of similar credit risk characteristics (for example, by industry sector, loan grade or product);

• the estimated period between impairment occurring and the loss being identified and evidenced by the establishment of an appropriate allowance against the individual loan; and

• management’s experienced judgment as to whether current economic and credit conditions are such that the actual level of inherent losses at the reporting date is likely to be greater or less than that suggested by historical experience. As soon as information becomes available which identifies losses on individual loans within the group, those loans are removed from the group and assessed on an individual basis for impairment.

Provision for credit losses on off-balance sheet positions

A provision is set up for the Bank’s off-balance sheet positions and recorded in other liabilities on the Consolidated Statement of Financial Position. The process to determine the provision for off-balance sheet positions is similar to the methodology used for loans. Any change in the provision is recorded in the Consolidated Statement of Income as provision for credit losses.

Write-off of loans

Loans (and the related impairment allowance accounts) are normally written off, either partially or in full, when there is no realistic prospect of recovery. Where loans are secured, write-off is generally after receipt of any proceeds from the realization of security. In circumstances where the net realizable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier.

Reversals of impairment

If the amount of an impairment loss related to loans decreases in a subsequent period, and the decrease can be related objectively to an event occurring after the impairment was recognized, the excess is written back by reducing the loan impairment allowance account accordingly. The write-back is recognized in the provision for credit losses in the Consolidated Statement of Income.

Restructured loans

Restructured loans include loans where the Bank has renegotiated the original terms of a loan by granting a concession to the borrower (concessions). These concessions include interest rate adjustments, deferral or extension of principal or interest payments and forgiveness of a portion of principal or interest. Once the terms of the loan have been renegotiated and agreed upon with the borrower the loan is considered a restructured loan. The investment in the loan is reduced as of the date of the restructuring to the amount of the net expected cash flows receivable under the modified terms, discounted at the original effective interest rate inherent in the loan. The loan is no longer considered past due and the reduction in the carrying value of the loan is recognized as a charge for loan impairment in the Consolidated Statement of Income in the period in which the loan is restructured. In other cases, restructuring may be considered substantial enough to result in recognition of a new loan.

Offsetting of financial instruments

Financial assets and financial liabilities with the same counterparty are offset, with the net amount reported in the Consolidated Statement of Financial Position, only if there is currently a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. When financial assets and financial liabilities are offset in the Consolidated Statement of Financial Position, the related income and expense items will also be offset in the Consolidated Statement of Income, unless specifically prohibited by an applicable accounting standard.

Cash and deposits with financial institutions

Cash and deposits with financial institutions comprises cash, cash equivalents, demand deposits with banks and other financial institutions, highly liquid investments that are readily convertible to cash, subject to insignificant risk of changes in value. These investments are those with less than three months’ maturity from the date of acquisition.

Precious metals

Precious metals are carried at fair value less costs to sell, and any changes in fair value less costs to sell are credited or charged to non-interest income – trading revenues in the Consolidated Statement of Income.

Securities purchased and sold under resale agreements

Securities purchased under resale agreements (reverse repurchase agreements) involve the Bank to purchase securities from a counterparty with an agreement entered to resell the securities at a fixed price at a future date. Since the Bank is reselling the securities at a fixed price at a future date, the risks and rewards have not been transferred to the Bank. The Bank has the right to liquidate the securities purchased in the event of counterparty default.

Whereas, securities sold under agreements to repurchase (repurchase agreements) involve the Bank to sell securities to a counterparty with an agreement entered simultaneously to purchase the securities back at a fixed price at a future date. Since the Bank is purchasing the securities back at a fixed price at a future date, the risks and rewards have not been transferred from the Bank. The counterparty has the right to use the collateral pledged by the Bank in the event of default.

These agreements are treated as collateralized financing arrangements and are initially recognized at amortized cost. The party disbursing the cash takes possession of the securities serving as collateral for the financing and having a market value equal to, or in excess of, the principal amount loaned. The securities received under reverse repurchase agreements and securities delivered under repurchase agreements are not recognized on, or derecognized from, the Consolidated Statement of Financial Position, unless the risks and rewards of ownership are obtained or relinquished. The related interest income and interest expense are recorded on an accrual basis using the effective interest rate method in interest income on the Consolidated Statement of Income.

Obligations related to securities sold short

Obligations related to securities sold short arise in dealing and market-making activities where debt securities and equity shares are sold without possessing such securities.

Similarly, if securities purchased under an agreement to resell are subsequently sold to third parties, the obligation to return the securities is recorded as a short sale within obligations related to securities sold short in the Consolidated Statement of Financial Position. These trading liabilities are measured at fair value with any gains or losses included in non-interest income – trading revenues in the Consolidated Statement of Income. Interest expense accruing on debt securities sold short is recorded in interest expense – other, in the Consolidated Statement of Income.

Securities lending and borrowing

Securities lending and borrowing transactions are usually collateralized by securities or cash. The transfer of the securities to counterparties is only reflected on the Consolidated Statement of Financial Position if the risks and rewards of ownership are also transferred. For cash collateral advanced or received, the Bank presents these transactions as securities sold under repurchase agreement or securities purchased under reverse repurchase agreement, respectively. Interest on cash collateral advanced or received is presented in interest income – securities purchased under resale agreements and securities borrowed or interest expense – other, respectively. Fees received and paid are reported as fee and commission revenues and expenses in the Consolidated Statement of Income, respectively.

Securities borrowed are not recognized on the Consolidated Statement of Financial Position, unless they are then sold to third parties, in which case the obligation to return the securities is recorded as a trading liability and measured at fair value with any gains or losses included in non-interest income – trading revenues, in the Consolidated Statement of Income.

Derivative instruments

Derivative instruments are contracts whose value is derived from interest rates, foreign exchange rates, commodities, equity prices or other financial variables. Most derivative instruments can be characterized as interest rate contracts, foreign exchange and gold contracts, commodity contracts, equity contracts or credit contracts. Derivative instruments are either exchange-traded contracts or negotiated over-the-counter contracts. Negotiated over-the-counter contracts include swaps, forwards and options.

The Bank enters into these derivative contracts for trading purposes, as well as to manage its risk exposures (i.e., to manage the Bank’s non-trading interest rate, foreign currency and other exposures). Trading activities are undertaken to meet the needs of the Bank’s customers, as well as for the Bank’s own account to generate income from trading operations.

Derivatives embedded in other financial liabilities or host contracts are treated as separate derivatives when the following conditions are met:

• their economic characteristics and risks are not closely related to those of the host contract;

• a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and

• the combined contract is not held for trading or designated at fair value through profit or loss.

Where an embedded derivative is separable from the host contract but the fair value, as at the acquisition or reporting date, cannot be reliably measured separately, the entire combined contract is measured at fair value. All embedded derivatives are presented on a combined basis with the host contracts although they are separated for measurement purposes when conditions requiring separation are met. Subsequent changes in fair value of embedded derivatives are recognized in non-interest income in the Consolidated Statement of Income.

All derivatives, including embedded derivatives that must be separately accounted for, are recorded at fair value in the Consolidated Statement of Financial Position. The determination of the fair value of derivatives includes consideration of credit risk, estimated funding costs and ongoing direct costs over the life of the instruments. Inception gains or losses on derivatives are only recognized where the valuation is dependent only on observable market data, otherwise, they are deferred and amortized over the life of the related contract, or until the valuation inputs become observable.

The gains and losses resulting from changes in fair values of trading derivatives are included in non-interest income – trading revenues in the Consolidated Statement of Income.

Changes in the fair value of non-trading derivatives that do not qualify for hedge accounting are recorded in the Consolidated Statement of Income in non-interest income – other. Where derivative instruments are used to manage the volatility of share-based payment expense, these derivatives are carried at fair value with changes in the fair value in relation to units hedged included in non-interest expenses – salaries and employee benefits in the Consolidated Statement of Income.

Changes in the fair value of derivatives that qualify for hedge accounting are recorded as non-interest income – other in the Consolidated Statement of Income for fair value hedges and other comprehensive income in the Consolidated Statement of Comprehensive Income for cash flow hedges and net investment hedges.

Hedge accounting

Hedge accounting

The Bank has elected to continue to apply the hedge accounting requirements of IAS 39. However, the Bank has implemented the additional hedge accounting disclosures that are required by the IFRS 9 related amendments to IFRS 7 “Financial Instruments: Disclosures”.

The Bank formally documents all hedging relationships and its risk management objective and strategy for undertaking these hedge transactions at inception. The hedge documentation includes identification of the asset, liability, firm commitment or highly probable forecasted transaction being hedged, the nature of the risk being hedged, the hedging instrument used and the method used to assess the effectiveness of the hedge. The Bank also formally assesses, both at each hedge’s inception and on an ongoing basis, whether the hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items. Hedge ineffectiveness is measured and recorded in non-interest income – other in the Consolidated Statement of Income.

There are three types of hedges: (i) fair value hedges, (ii) cash flow hedges and (iii) net investment hedges.

Fair value hedges

For fair value hedges, the change in fair value of the hedging instrument is offset in the Consolidated Statement of Income by the change in fair value of the hedged item attributable to the hedged risk. For hedges that are discontinued, the hedged item is no longer adjusted for changes in fair value. The cumulative fair value adjustment of the hedged item is amortized to non-interest income over its remaining term to maturity or written off to non-interest income directly if the hedged item ceases to exist. The Bank utilizes fair value hedges primarily to convert fixed rate financial instruments to floating rate financial instruments. Hedged items include debt securities, loans, deposit liabilities and subordinated debentures. Hedging instruments include single-currency interest rate swaps and cross-currency interest rate swaps.

Cash flow hedges

For cash flow hedges, the change in fair value of the hedging instrument, to the extent effective, is recorded in other comprehensive income until the corresponding gains and losses on the hedged item is recognized in income. For hedges that are discontinued, the cumulative unrealized gain or loss recognized in other comprehensive income is reclassified to non-interest income and/or salaries and employee benefits as the variability in the cash flows of hedged item affects income. However, if the hedged item is derecognized or the forecasted transaction is no longer expected to occur, the unrealized gain or loss is reclassified immediately to non-interest income and/or salaries and employee benefits. The Bank utilizes cash flow hedges primarily to hedge the variability in cash flows relating to floating rate financial instruments and highly probable forecasted revenues and expenses. Hedged items include debt securities, loans, deposit liabilities and highly probable forecasted transactions. Hedging instruments include single-currency interest rate swaps, cross-currency interest rate swaps, total return swaps, foreign currency forwards and foreign currency assets or liabilities.

Net investment hedges

For net investment hedges, the change in fair value of the hedging instrument, to the extent effective, is recorded in other comprehensive income until the corresponding cumulative translation adjustments on the hedged net investment are recognized in income. The Bank designates foreign currency liabilities and foreign currency forwards as hedging instruments to manage the foreign currency exposure and impact on capital ratios arising from foreign operations.

Property and equipment

Property and equipment

Land, buildings and equipment

Land is carried at cost. Buildings (including building fittings), equipment, and leasehold improvements are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset. Depreciation is calculated using the straight-line method over the estimated useful life of the related asset less any residual value as follows: buildings – 40 years, building fittings – 15 years, equipment 3 to 10 years, and leasehold improvements – lease term determined by the Bank. Depreciation expense is included in the Consolidated Statement of Income under non-interest expenses – depreciation and amortization. Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted as appropriate.

When major components of building and equipment have different useful lives, they are accounted for separately and depreciated over each component’s estimated useful life.

Net gains and losses on disposal are included in non-interest income – other in the Consolidated Statement of Income in the year of disposal.

Investment property

Investment property is property held either for rental income or for capital appreciation or for both. The Bank holds certain investment properties which are presented in property and equipment on the Consolidated Statement of Financial Position.

Investment property is carried at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated using the straight-line method over the estimated useful life of 40 years. Depreciation methods, useful lives and residual values are reassessed at each financial year-end and adjusted as appropriate.

Assets held-for-sale

Assets held-for-sale

Non-current non-financial assets (and disposal groups) are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. These assets meet the criteria for classification as held-for-sale if they are available for immediate sale in their present condition and their sale is considered highly probable to occur within one year.

Non-current non-financial assets classified as held-for-sale are measured at the lower of their carrying amount and fair value (less costs to sell) and are presented within other assets in the Consolidated Statement of Financial Position. Any subsequent write-down to fair value less costs to sell is recognized in the Consolidated Statement of Income, in non-interest income. Any subsequent increase in the fair value less costs to sell, to the extent this does not exceed the cumulative write-down, is also recognized in non-interest income, together with any realized gains or losses on disposal.

Non-financial assets acquired in exchange for loans as part of an orderly realization are recorded as assets held-for-sale or assets held-for-use. If the acquired asset does not meet the requirement to be considered held-for-sale, the asset is considered held-for-use, measured initially at cost which equals the carrying value of the loan and accounted for in the same manner as a similar asset acquired in the normal course of business.

Business combinations and goodwill

Business combinations and goodwill

The Bank follows the acquisition method of accounting for the acquisition of subsidiaries. The Bank considers the date on which control is obtained and it legally transfers the consideration for the acquired assets and assumed liabilities of the subsidiary to be the date of acquisition. The cost of an acquisition is measured at the fair value of the consideration paid. The fair value of the consideration transferred by the Bank in a business combination is calculated as the sum of the acquisition date fair value of the assets transferred by the Bank, the liabilities incurred by the Bank to former owners of the acquiree, and the equity interests, including any options, issued by the Bank. The Bank recognizes the acquisition date fair values of any previously held investment in the subsidiary and contingent consideration as part of the consideration transferred in exchange for the acquisition. A gain or loss on any previously held investments of an acquiree is recognized in non-interest income – other in the Consolidated Statement of Income.

In general, all identifiable assets acquired (including intangible assets) and liabilities assumed (including any contingent liabilities) are measured at the acquisition date fair value. The Bank records identifiable intangible assets irrespective of whether the assets have been recognized by the acquiree before the business combination. Non-controlling interests, if any, are recognized at their proportionate share of the fair value of identifiable assets and liabilities, unless otherwise indicated. Where the Bank has an obligation to purchase a non-controlling interest for cash or another financial asset, a portion of the non-controlling interest is recognized as a financial liability based on management’s best estimate of the present value of the redemption amount. Where the Bank has a corresponding option to settle the purchase of a non-controlling interest by issuing its own common shares, no financial liability is recorded.

Any excess of the cost of acquisition over the Bank’s share of the net fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill. If the cost of acquisition is less than the fair value of the Bank’s share of the identifiable assets acquired and liabilities assumed, the resulting gain is recognized immediately in non-interest income – other in the Consolidated Statement of Income.

During the measurement period (which is within one year from the acquisition date), the Bank may, on a retrospective basis, adjust the amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.

The Bank accounts for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received.

Subsequent to acquisition, the Bank accounts for the following assets and liabilities recognized in a business combination as described below:

• Contingent liabilities, until resolved, are measured at the higher of the amount that would be recognized as a provision or the amount initially recognized, with any change recognized in the Consolidated Statement of Income.

• Indemnification assets are measured on the same basis as the item to which the indemnification relates.

• Contingent consideration classified as a liability is measured at fair value, with any change recognized in the Consolidated Statement of Income.

• Liabilities to non-controlling interest holders when remeasured at the end of each reporting period, a corresponding change is recorded in equity.

After initial recognition of goodwill in a business combination, goodwill in aggregate is measured at cost less any accumulated impairment losses. Goodwill is not amortized but tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Goodwill is reviewed at each reporting date to determine whether there is any indication of impairment. For the purpose of impairment testing, goodwill acquired in a business combination is, on the acquisition date, allocated to each of the Bank’s group of cash-generating units (CGUs) that is expected to benefit from the combination. CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal management purposes. Goodwill impairment, at a standalone subsidiary level, may not in itself result in an impairment at the consolidated Bank level.

The Bank determines the carrying value of the CGU using a regulatory capital approach based on credit, market, and operational risks, and leverage, consistent with the Bank’s capital attribution for business line performance measurement. The recoverable amount is the greater of fair value less costs of disposal and value in use. If either fair value less costs of disposal or value in use exceeds the carrying amount, there is no need to determine the other. The recoverable amount of the CGU has been determined using the fair value less costs of disposal method. The estimation of fair value less costs of disposal involves significant judgment in the determination of inputs. In determining fair value less costs of disposal, an appropriate valuation model is used which considers various factors including normalized net income, control premiums and price earnings multiples. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators. An impairment loss is recognized if the carrying amount of the CGU exceeds the recoverable amount. An impairment loss, in respect of goodwill, is not reversed.

Intangible assets

Intangible assets

Intangible assets represent identifiable non-monetary assets and are acquired either separately or through a business combination or generated internally. The Bank’s intangible assets are mainly comprised of computer software, customer relationships, contract intangibles, core deposit intangibles and fund management contracts.

The cost of a separately acquired intangible asset includes its purchase price and directly attributable costs of preparing the asset for its intended use. Intangibles acquired as part of a business combination are initially recognized at fair value.

In respect of internally generated intangible assets, cost includes all directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by management.

After initial recognition, an intangible asset is carried at its cost less any accumulated amortization and accumulated impairment losses.

Intangible assets that have finite useful lives are initially measured at cost and are amortized on a straight-line basis over their useful lives as follows: computer software – 5 to 10 years; and other intangible assets – 5 to 20 years. Amortization expense is included in the Consolidated Statement of Income under operating expenses – depreciation and amortization. As intangible assets are considered to be non-financial assets, the impairment model for non-financial assets is applied. Intangible assets with indefinite useful lives are not amortized but are tested for impairment annually and when circumstances indicate that the carrying value may be impaired.

Impairment of non-financial assets

Impairment of non-financial assets

The carrying amount of the Bank’s non-financial assets, other than goodwill and indefinite life intangible assets and deferred tax assets which are separately addressed, is reviewed at each reporting date to determine whether there is any indication of impairment. For the purpose of impairment testing, non-financial assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent from the cash inflows of other assets or groups of assets.

If any indication of impairment exists then the asset’s recoverable amount is estimated. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. The Bank’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses of continuing operations are recognized in the Consolidated Statement of Income in those expense categories consistent with the nature of the impaired asset. Impairment losses recognized in prior periods are reassessed at each reporting date for any indication that the loss had decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Such reversal is recognized in the Consolidated Statement of Income.

Significant judgment is applied in determining the non-financial asset’s recoverable amount and assessing whether certain events or circumstances constitute objective evidence of impairment.

Corporate income taxes

Corporate income taxes

The Bank follows the balance sheet liability method for corporate income taxes. Under this method, deferred tax assets and liabilities represent the cumulative amount of tax applicable to temporary differences which are the differences between the carrying amount of the assets and liabilities, and their values for tax purposes. Deferred tax assets are recognized only to the extent it is probable that sufficient taxable profits will be available against which the benefit of these deferred tax assets can be utilized.

Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred and current tax assets and liabilities are only offset when they arise in the same tax reporting group and where the Bank has both the legal right and the intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

The Bank maintains provisions for uncertain tax positions that it believes appropriately reflect the risk of tax positions under discussion, audit, dispute, or appeal with tax authorities, or which are otherwise considered to involve uncertainty. These provisions are made using the Bank’s best estimate of the amount expected to be paid based on an assessment of all relevant factors, which are reviewed at the end of each reporting period.

Income tax is recognized in the Consolidated Statement of Income except where it relates to items recognized in other comprehensive income or directly in equity, in which case income tax is recognized in the same line as the related item.

Leases

Leases

Bank as a lessor

Assets leased to customers under agreements which transfer substantially all the risks and rewards of ownership, with or without ultimate legal title, are classified as finance leases and presented within loans in the Consolidated Statement of Financial Position. When assets held are subject to a finance lease, the leased assets are derecognized and a receivable is recognized which is equal to the present value of the minimum lease payments, discounted at the interest rate implicit in the lease. Initial direct costs incurred in negotiating and arranging a finance lease are incorporated into the receivable through the discount rate applied to the lease. Finance lease income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease. Finance lease income is included in the Consolidated Statement of Income under interest income from loans.

Assets leased to customers under agreements which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. The leased assets are included within property and equipment on the Bank’s Consolidated Statement of Financial Position. Rental income is recognized on a straight-line basis over the period of the lease in non-interest income – other in the Consolidated Statement of Income. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized as an expense on a straight-line basis over the lease term.

Bank as a lessee

Assets held under finance leases are initially recognized as property and equipment in the Consolidated Statement of Financial Position at an amount equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The corresponding finance lease obligation is included in other liabilities in the Consolidated Statement of Financial Position. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease. Contingent rentals are recognized as expense in the periods in which they are incurred.

Operating lease rentals payable are recognized as an expense on a straight-line basis over the lease term, which commences when the lessee controls the physical use of the asset. Lease incentives are treated as a reduction of rental expense and are also recognized over the lease term on a straight-line basis. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

Sale and lease-back

Where the Bank enters into a sale leaseback transaction for a non-financial asset at fair market value that results in the Bank retaining an operating lease (where the buyer/lessor retains substantially all risks and rewards of ownership), any gains and losses are recognized immediately in net income. Where the sale leaseback transaction results in a finance lease, any gain on sale is deferred and recognized in net income over the remaining term of the lease.

Leasehold improvements

Leasehold improvements are investments made to customize buildings and offices occupied under operating lease contracts to make them suitable for their intended purpose. The present value of estimated reinstatement costs to bring a leased property into its original condition at the end of the lease, if required, is capitalized as part of the total leasehold improvements costs. At the same time, a corresponding liability is recognized to reflect the obligation incurred. Reinstatement costs are recognized in net income through depreciation of the capitalized leasehold improvements over their estimated useful life.

Provisions

Provisions

A provision, including for restructuring, is recognized if, as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

The amount recognized as a provision is the Bank’s best estimate of the consideration required to settle the present obligation, taking into account the risks and uncertainties surrounding the obligation. If the effect of the time value of money is considered material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The increase in the provision due to the passage of time is recorded as interest expense – other in the Consolidated Statement of Income.

Insurance contracts

Insurance contracts

Gross premiums for life insurance contracts are recognized as income when due. Gross premiums for non-life insurance business, primarily property and casualty, are recognized as income over the term of the insurance contracts. Unearned premiums represent the portion of premiums written in the current year that relate to the period of risk after the reporting date. Insurance claims recoveries are accounted as income in the same period as the related claims.

Gross insurance claims for life insurance contracts reflect the cost of all claims arising during the year. Gross insurance claims for property and casualty insurance contracts include paid claims and movements in outstanding claim liabilities. Insurance premiums ceded to reinsurers are accounted as an expense in the same period as the premiums for the direct insurance contracts to which they relate.

Guarantees

Guarantees

A guarantee is a contract that contingently requires the Bank to make specified payments to reimburse the holder for a loss it incurs because a specified debtor failed to make payment when due in accordance with the original or modified terms of a debt instrument. Guarantees include standby letters of credit, letters of guarantee, indemnifications, credit enhancements and other similar contracts. Guarantees that qualify as a derivative are accounted for in accordance with the policy for derivative instruments. For guarantees that do not qualify as a derivative, a liability is recorded for the fair value of the obligation assumed at inception. The fair value of the obligation at inception is generally based on the discounted cash flow of the premium to be received for the guarantee, resulting in a corresponding asset. Subsequent to initial recognition, such guarantees are measured at the higher of the initial amount, less amortization to recognize any fee income earned over the period, and the best estimate of the amount required to settle any financial obligation arising as a result of the guarantee. Any increase in the liability is reported in the Consolidated Statement of Income.

Employee benefits

Employee benefits

The Bank provides pension and other benefit plans for eligible employees in Canada and internationally. Pension benefits are offered in the form of defined benefit pension plans (generally based on an employee’s length of service and average earnings at retirement), and in the form of defined contribution pension plans (where the Bank’s contribution is fixed and there is no legal or constructive obligation to pay further amounts). Other benefits provided include post-retirement health care, dental care and life insurance, along with other long-term employee benefits such as long-term disability benefits.

Defined benefit pension plans and other post-retirement benefit plans

The cost of these employee benefits is actuarially determined each year using the projected unit credit method. The calculation uses management’s best estimate of a number of assumptions – including the discount rate, future compensation, health care costs, mortality, as well as the retirement age of employees. The most significant assumption is the discount rate used to determine the defined benefit obligation, which is set by reference to the yields on high quality corporate bonds that have durations that match the terms of the Bank’s obligations. Separate discount rates are used to determine the annual benefit expense in Canada and the US. These rates are determined with reference to the yields on high quality corporate bonds with durations that match the various components of the annual benefit expense. The discount rate used to determine the annual benefit expense for all other plans is the same as the rate used to determine the defined benefit obligation at the beginning of the period.

The Bank’s net asset or liability in respect of employee benefit plans is calculated separately for each plan as the difference between the present value of future benefits earned in respect of service for prior periods and the fair value of plan assets. The net asset or liability is included in other assets and other liabilities, as appropriate, in the Consolidated Statement of Financial Position. When the net amount in the Consolidated Statement of Financial Position is an asset, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.

The current service cost, net interest expense (income), past service cost, and administrative expense are recognized in net income. Net interest expense (income) is calculated by applying the discount rate at the beginning of the annual period to the net defined benefit asset or liability. When the benefits of a plan are improved (reduced), a past service cost (credit) is recognized immediately in net income.

Remeasurements comprising of actuarial gains and losses, the effect of the asset ceiling and the return on plan assets in excess of the interest income on the fair value of assets are recognized immediately in the Consolidated Statement of Financial Position with a charge or credit to the Statement of Comprehensive Income (OCI) in the period in which they occur. Amounts recorded in OCI are not recycled to the Consolidated Statement of Income.

Other long-term employee benefits

Other long-term employee benefits are accounted for similarly to defined benefit pension plans and other post-retirement benefit plans described above, except that remeasurements are recognized in the Consolidated Statement of Income in the period in which they arise.

Defined contribution plans

The cost of such plans are equal to contributions payable by the Bank to employees’ accounts for service rendered during the period and expensed.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided and a liability is measured on an undiscounted basis net of payments made.

Recognition of income and expenses

Recognition of income and expenses

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Bank and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognized:

Interest and similar income and expenses

For all non-trading interest-bearing financial instruments, interest income or expense is recorded in net interest income using the effective interest rate. This is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into account all the contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses.

For trading financial instruments, mark-to-market changes including related interest income or expense are recorded in non-interest income – trading revenues.

The carrying amount of interest-bearing financial instruments, measured at amortized cost or classified as FVOCI, is adjusted if the Bank revises its estimates of payments or receipts. The adjusted carrying amount is calculated based on the original effective interest rate and the change in carrying amount is recorded as non-interest income in the Consolidated Statement of Income.

Once the carrying value of a financial asset or a group of similar financial assets has been reduced due to an impairment loss, interest income continues to be recognized based on net effective interest rate inherent in the investment.

Loan origination costs are deferred and amortized into interest income using the effective interest method over the expected term of the loan. Loan fees are recognized in interest income over the appropriate lending or commitment period. Mortgage prepayment fees are recognized in interest income when received, unless they relate to a minor modification to the terms of the mortgage, in which case the fees are deferred and amortized using the effective interest method over the remaining period of the original mortgage.

Loan syndication fees are recognized when no other services are required of the Bank and the fees are non-refundable unless the yield we retain is less than that of comparable lenders in the syndicate. In such cases, an appropriate portion will be deferred and amortized in interest income over the term of the loan.

Loan commitment fees for loans that are likely to be drawn down and other credit related fees are deferred (together with any incremental costs) and recognized as part of the effective interest on the loan. When it is unlikely that a loan will be drawn down, the loan commitment fees are recognized over the commitment period on a straight-line basis.

Fee and commission revenues

The Bank earns fee and commission revenues from a diverse range of services it provides to its customers. Fee income can be divided into the following two categories:

Fees earned for the provision of services over a period of time are accrued over that period the services are provided. These fees include commission income, investment management, custody and other management and advisory fees. Investment management fees and custodial fees are mainly calculated as a percentage of daily or period-end market value of the assets under management (AUM) or assets under administration (AUA) and are received monthly, quarterly, semi-annually, or annually based on the underlying investment management contracts. Performance-based fees related to AUM are earned based on exceeding certain benchmarks or other performance targets, and are recognized at the end of the performance period in which the target is met.

Fees arising from negotiating or participating in the negotiation of a transaction for a third-party, such as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses, are recognized on completion of the underlying transaction. Fees or components of fees that are linked to a certain performance are recognized after fulfilling the corresponding criteria.

Fee and commission expenses

Fee and commission expenses relate to transaction and service fees which are expensed as the services are received.

Dividend income

Dividend income on equity securities is recognized in Interest income when the Bank’s right to receive payment is established.

Share-based payments

Share-based payments awarded to employees are recognized as compensation expense in the Consolidated Statement of Income over the vesting period based on the number of awards expected to vest including the impact of expected forfeitures. For awards that are delivered in tranches, each tranche is considered a separate award and accounted for separately.

Stock appreciation rights and other awards that must be settled for cash are classified as liabilities. Liability-classified awards are re-measured to fair value at each reporting date while they remain outstanding, with any changes in fair value recognized in compensation expense in the period. The liability is expensed over the vesting period which incorporates the re-measurement of the fair value and a revised forfeiture rate that anticipates units expected to vest.

Employee stock options with tandem stock appreciation rights give the employee the right to exercise for shares or settle in cash. These options are classified as liabilities and are re-measured to fair value at each reporting date while they remain outstanding. If an option is exercised, thereby cancelling the tandem stock appreciation right, both the exercise price proceeds together with the accrued liability and associated taxes are credited to equity – common shares in the Consolidated Statement of Financial Position.

Plain vanilla options and other awards that must be settled for shares are classified as equity awards. Equity-classified awards are expensed based on the grant date fair value with a corresponding increase to equity – other reserves in the Consolidated Statement of Financial Position. If an option is exercised, both the exercise price proceeds together with the amount recorded in other reserves is credited to equity – common shares in the Consolidated Statement of Financial Position.

For tandem stock appreciation rights, stock appreciation rights and plain vanilla options, the Bank estimates fair value using an option pricing model. The option pricing model requires inputs such as the exercise price of the option, the current share price, the risk free interest rate, expected dividends, expected volatility (calculated using an equal weighting of implied and historical volatility) and specific employee exercise behaviour patterns based on statistical data. For other awards, fair value is the quoted market price of the Bank’s common shares at the reporting date.

Where derivatives are used to economically hedge share-based payment expense, related mark-to-market gains and losses are included in non-interest expenses – salaries and employee benefits in the Consolidated Statement of Income.

A voluntary renouncement of a tandem stock appreciation right where an employee retains the corresponding option for shares with no change in the overall fair value of the award, results in a reclassification of the accrued liability and associated tax to equity – other reserves in the Consolidated Statement of Financial Position. This reclassification is measured at the fair value of the renounced awards as of the renouncement date. Subsequent to the voluntary renouncement, these awards are accounted for as plain vanilla options, based on the fair value as of the renouncement date.

Customer loyalty programs

The Bank operates loyalty points programs, which allow customers to accumulate points when they use the Bank’s products and services. The points can then be redeemed for free or discounted products or services, subject to certain conditions.

Consideration received is allocated between the products sold or services rendered and points issued, with the consideration allocated to points equal to their fair value. The fair value of points is generally based on equivalent retail prices for the mix of awards expected to be redeemed. The fair value of the points issued is deferred in other liabilities and recognized as banking revenues when the points are redeemed or lapsed. Management judgment is involved in determining the redemption rate to be used in the estimate of points to be redeemed.

Dividends on shares

Dividends on shares

Dividends on common and preferred shares and other equity instruments are recognized as a liability and deducted from equity when they are declared and no longer at the discretion of the Bank.

Segment reporting

Segment reporting

Management’s internal view is the basis for the determination of operating segments. The operating segments are those whose operating results are regularly reviewed by the Bank’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance. The Bank has three operating segments: Canadian Banking, International Banking, and Global Banking and Markets. The other category represents smaller operating segments, including Group Treasury and other corporate items, which are not allocated to an operating segment. These segments offer different products and services and are managed separately based on the Bank’s management and internal reporting structure.

The results of these business segments are based upon the internal financial reporting systems of the Bank. The accounting policies used in these segments are generally consistent with those followed in the preparation of the consolidated financial statements by the Bank. The only notable accounting measurement difference is the grossing up of revenues which are tax-exempt and income from associate corporations to an equivalent before-tax basis for those affected segments. This change in measurement enables comparison of income arising from taxable and tax-exempt sources.

Because of the complexity of the Bank, various estimates and allocation methodologies are used in the preparation of the business segment financial information. The funding value of assets and liabilities is transfer-priced at wholesale market rates, and corporate expenses are allocated to each segment on an equitable basis using various parameters. As well, capital is apportioned to the business segments on a risk-based methodology. Transactions between segments are recorded within segment results as if conducted with a third-party and are eliminated on consolidation.

Earnings per share (EPS)

Earnings per share (EPS)

Basic EPS is computed by dividing net income for the period attributable to the Bank’s common shareholders by the weighted-average number of common shares outstanding during the period.

Diluted EPS is calculated by dividing adjusted net income for the period attributable to common shareholders by the weighted-average number of diluted common shares outstanding for the period. In the calculation of diluted earnings per share, earnings are adjusted for changes in income or expenses that would result from the issuance of dilutive shares. The weighted-average number of diluted common shares outstanding for the period reflects the potential dilution that would occur if options, securities or other contracts that entitle their holders to obtain common shares had been outstanding from the beginning of the period (or a later date) to the end of the period (or an earlier date). Instruments determined to have an antidilutive impact for the period are excluded from the calculation of diluted EPS.

Earnings are adjusted by the after-tax amount of distributions related to dilutive capital instruments recognized in the period. For tandem stock appreciation rights that are carried as liabilities, the after-tax re-measurement included in salaries and employee benefits expense, net of related hedges, is adjusted to reflect the expense had these rights been equity-classified.

The number of additional shares for inclusion in diluted EPS for share-based payment options is determined using the treasury share method. Under this method, the net number of incremental common shares is determined by assuming that in-the-money stock options are exercised and the proceeds are used to purchase common shares at the average market price during the period.

The number of additional shares associated with capital instruments that potentially result in the issuance of common shares is based on the terms of the contract. On occurrence of contingencies as specified in the Non-Viability Contingent Capital (NVCC) Instruments, the number of additional common shares associated with the NVCC subordinated debentures, NVCC subordinated additional Tier 1 capital securities and NVCC preferred shares is based on an automatic conversion formula as set out in the respective prospectus supplements.

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Transition to IFRS 9 (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary Result in a Change to the Carrying Value of the Item on the Statement of Financial Position

These adjustments, which include expected credit loss, result in a change to the carrying value of the item on the Statement of Financial Position with an impact to shareholders’ equity net of tax.

			IAS 39		IAS 39									IFRS 9			IFRS 9
As at November 1, 2017 ($ millions)	Note		Measurement basis		Carrying amount			Reclassification			Remeasurement			Carrying amount			Measurement basis		IFRS 9
Assets
Cash and deposits with financial institutions				Amortized cost	$	59,663		$	–		$	(3	)	$	59,660			Amortized cost		Cash and deposits with financial institutions	*
Precious metals				FVTPL		5,717			–			–			5,717			FVTPL		Precious metals
Trading Assets																				Trading assets
Debt securities		1		FVTPL		39,333			76			–			39,409			FVTPL		Debt securities
Equity securities				FVTPL		39,319			–			–			39,319			FVTPL		Equity securities
Loans		3		FVTPL		17,312			660			1			17,973			FVTPL		Loans
Other				FVTPL		2,500			–			–			2,500			FVTPL		Other
						98,464			736			1			99,201
Financial assets designated at FVTPL																				Financial assets designated at FVTPL
Debt securities				FVTPL (Designated)		13			–			–			13			FVTPL (Designated)		Debt securities
Securities purchased under resale agreements and securities borrowed				Amortized cost		95,319			–			–			95,319			Amortized cost		Securities purchased under resale agreements and securities borrowed	*
Derivative financial instruments		3		FVTPL		35,364			(2	)		–			35,362			FVTPL		Derivative financial instruments
Investment securities																				Investment securities
Debt securities		1,5,8		Amortized cost		18,765			4,205			118			23,088			Amortized cost		Debt securities	*
Debt securities		1		FVOCI		49,193			(4,281	)		–			44,912			FVOCI		Debt securities
Equity securities		2		FVOCI		1,311			(301	)		–			1,010			FVOCI		Equity securities
Equity securities		2		FVOCI		–			301			–			301			FVTPL		Equity securities
						69,269			(76	)		118			69,311
Loans																				Loans
Residential mortgages		3,4		Loans & receivables		236,916			(33	)		(134	)		236,749			Amortized cost		Residential mortgages
Personal loans		4		Loans & receivables		89,227			–			2			89,229			Amortized cost		Personal loans
Credit cards		4		Loans & receivables		14,104			–			–			14,104			Amortized cost		Credit cards
Business and government		3		Loans & receivables		168,449			(623	)		–			167,826			Amortized cost		Business and government
						508,696			(656	)		(132	)		507,908
Allowance for credit loss		5		Loans & receivables		(4,327	)		–			(593	)		(4,920	)		Amortized cost		Allowance for credit loss
Other																				Other
Customers’ liability under acceptances		5		Amortized cost		13,560			–			(16	)		13,544			Amortized cost		Customer’s liability under acceptances	*
Property and equipment						2,381			–			–			2,381					Property and equipment
Investment in associates		5				4,586			–			(184	)		4,402					Investment in associates
Goodwill and other intangible assets						12,106			–			–			12,106					Goodwill and other intangible assets
Deferred tax assets		1,6				1,713			–			50			1,763					Deferred tax assets
Other assets		5				12,749			–			(2	)		12,747					Other assets
						47,095			–			(152	)		46,943
Total assets					$	915,273		$	2			$  (761	)	$	914,514
Liabilities
Deposits				Amortized cost	$	625,367		$	–		$	–		$	625,367			Amortized cost		Deposits
Financial instruments designated at fair value through profit or loss				FVTPL		4,663			–			–			4,663			FVTPL		Financial instruments designated at fair value through profit or loss
Other																				Other
Acceptances				Amortized cost		13,560			–			–			13,560			Amortized cost		Acceptances
Obligations related to securities sold short				Amortized cost		30,766			–			–			30,766			Amortized cost		Obligations related to securities sold short
Derivative financial instruments		3		FVTPL		34,200			(2	)		–			34,198			FVTPL		Derivative financial instruments
Obligations related to securities sold under repurchase agreements and securities lent				Amortized cost		95,843			–			–			95,843			Amortized cost		Obligations related to securities sold under repurchase agreements and securities lent
Subordinated debentures				Amortized cost		5,935			–			–			5,935			Amortized cost		Subordinated debentures
Other liabilities		7				43,314			4			(151	)		43,167					Other liabilities
Total liabilities						853,648			2			(151	)		853,499
Equity
Common equity																				Common equity
Common shares						15,644			–			–			15,644					Common shares
Retained earnings		1,2				38,117			49			(613	)		37,553					Retained earnings
Accumulated other comprehensive income		1,2				1,577			(49	)		100			1,628					Accumulated other comprehensive income
Other reserves						116			–			–			116					Other reserves
Total common equity						55,454			–			(513	)		54,941					Total common equity
Preferred shares						4,579			–			–			4,579					Preferred shares
Total equity attributable to equity holders to the Bank						60,033			–			(513	)		59,520					Total equity attributable to equity holders to the Bank
Non-controlling interests in subsidiaries						1,592			–			(97	)		1,495					Non-controlling interests in subsidiaries
						61,625			–			(610	)		61,015
Total liabilities and equity					$	915,273		$	2			$  (761	)	$	914,514

* Net of applicable allowance for credit losses.

(1) AFS Debt instruments of $4,281 measured at fair value through other comprehensive income (FVOCI) were reclassified to amortized cost in the amount of $4,205 and $76 to fair value through profit or loss (FVTPL). The reclassifications were due to the business model being “held-to-collect” and the cash flows that did not represent payments that are solely payments of principal and interest (SPPI). The reclassification of debt instruments to amortized cost resulted in remeasurement of $118 with an offset to other comprehensive income (AOCI) and deferred tax assets. The reclassification of AOCI to retained earnings related to FVTPL classification.

(2) AFS Equity instruments of $301 previously fair valued through OCI are now classified as FVTPL, which resulted in reclassification of AOCI to retained earnings.

(3) Certain precious metal loans of $627 and the related derivatives that failed the SPPI test were classified to FVTPL, and $33 of residential mortgages were reclassified to trading to reflect the business model.

(4) Adjustments to certain balances against allowance for credit losses.

(5) Expected credit loss on financial assets and the Bank’s share of associated corporations.

(6) The increase in deferred tax assets relates to the impact of the IFRS 9 related adjustments to retained earnings.

(7) The decrease in remeasurement of $151 is comprised of a reduction in deferred tax liabilities of $129, a net decrease of $22 which includes allowance for credit losses related to undrawn commitments, letters of credit and letters of guarantee.

(8) Debt securities managed under a business model of held-to-collect were reclassifed from available-for-sale to amortized cost. As of October 31, 2018, the fair value of these securities was $3,951. For the year ended October 31, 2018, $67 of losses would have been recognized in other comprehensive income if the securities had not been reclassified.

Summary of Reconciliation of Impairment Allowance Balance from IAS 39 to IFRS 9

The following table reconciles the closing impairment allowance for financial assets in accordance with IAS 39 and provisions for loan commitments and financial guarantee contracts in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets as at October 31, 2017 to the opening impairment allowance under IFRS 9 as at November 1, 2017.

($ millions)	Impairment allowance under IAS 39 as at October 31, 2017		Remeasurement			Impairment allowance under IFRS 9 as at November 1, 2017
Loans and acceptances(1)	$	4,327	$	611		$	4,938
Investment securities (Debt) at amortized cost		–		1			1
Investment securities (Debt) at FVOCI(2)		–		13			13
Deposits with financial institutions		–		3			3
Off-balance sheet credit risks(3)		120		(36	)		84
Total	$	4,447	$	592		$	5,039

(1) The remeasurement impact of $611 is comprised of loans $593, acceptances $16 and accrued interest of $2.

(2) The allowance for credit losses of $13 is recorded in accumulated other comprehensive income. These debt securities remain at fair value on the balance sheet.

(3) Off-balance sheet credit risks include credit risks such as undrawn lending commitments, letters of credit and letters of guarantee.

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Cash and Deposits with Financial Institutions (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Cash and Deposits with Financial Institutions

As at October 31 ($ millions)	2018			2017
Cash and non-interest-bearing deposits with financial institutions	$	8,997		$	7,825
Interest-bearing deposits with financial institutions		53,272			51,838
Total	$	62,269	(1)	$	59,663

(1) Net of impairment allowances of $3.

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Fair Values of Financial Instruments of Bank Using Valuation Methods and Assumption

The following table sets out the fair values of financial instruments of the Bank using the valuation methods and assumptions described above. The fair values disclosed do not include non-financial assets, such as property and equipment, investments in associates, precious metals, goodwill and other intangible assets.

	2018				2017
As at October 31 ($ millions)	Total fair value		Total carrying value		Total fair value		Total carrying value
Assets:
Cash and deposits with financial institutions	$	62,269	$	62,269	$	59,663	$	59,663
Trading assets		100,262		100,262		98,464		98,464
Financial instruments designated at fair value through profit or loss		12		12		13		13
Securities purchased under resale agreements and securities borrowed		104,018		104,018		95,319		95,319
Derivative financial instruments		37,558		37,558		35,364		35,364
Investment securities – other		57,653		57,653		50,504		50,504
Investment securities – amortized cost		20,316		20,743		18,716		18,765
Loans		553,758		551,834		507,276		504,369
Customers’ liability under acceptances		16,329		16,329		13,560		13,560
Other financial assets		10,913		10,913		9,314		9,314
Liabilities:
Deposits		674,535		676,534		625,964		625,367
Financial instruments designated at fair value through profit or loss		8,188		8,188		4,663		4,663
Acceptances		16,338		16,338		13,560		13,560
Obligations related to securities sold short		32,087		32,087		30,766		30,766
Derivative financial instruments		37,967		37,967		34,200		34,200
Obligations related to securities sold under repurchase agreements and securities lent		101,257		101,257		95,843		95,843
Subordinated debentures		5,627		5,698		6,105		5,935
Other financial liabilities		35,432		34,805		27,531		27,118

Summary of Fair Value Hierarchy of Instruments Carried at Fair Value on a Recurring Basis

The following table outlines the fair value hierarchy of instruments carried at fair value on a recurring basis and of instruments not carried at fair value.

	2018(1)												2017
As at October 31 ($ millions)	Level 1			Level 2			Level 3			Total			Level 1		Level 2			Level 3		Total
Instruments carried at fair value on a recurring basis:
Assets:
Precious metals(2)	$	–		$	3,175		$	16		$	3,191		$	–	$	5,717		$	–	$	5,717
Trading assets
Loans		–			14,334			–			14,334			–		17,312			–		17,312
Canadian federal government and government guaranteed debt		13,003			–			–			13,003			10,343		–			–		10,343
Canadian provincial and municipal debt		–			10,159			–			10,159			–		7,325			–		7,325
US treasury and other US agencies’ debt		7,164			–			–			7,164			6,894		–			–		6,894
Other foreign governments’ debt		4,610			1,833			–			6,443			5,680		1,149			–		6,829
Corporate and other debt		3			8,984			18	(3)		9,005			44		7,920			22		7,986
Income funds		29			–			–			29			180		165			–		345
Equity securities		39,513			158			–			39,671			38,760		170			–		38,930
Other(4)		454			–			–			454			2,500		–			–		2,500
	$	64,776		$	38,643		$	34		$	103,453		$	64,401	$	39,758		$	22	$	104,181
Financial assets designated at fair value through profit or loss	$	12		$	–		$	–		$	12		$	13	$	–		$	–	$	13
Investment securities(5)
Canadian federal government and government guaranteed debt		6,373			2,518			–			8,891			9,677		2,416			–		12,093
Canadian provincial and municipal debt		366			3,986			–			4,352			593		4,230			–		4,823
US treasury and other US agencies’ debt		18,472			669			–			19,141			6,305		367			–		6,672
Other foreign governments’ debt		10,457			9,485			48	(6)		19,990			10,944		8,746			113		19,803
Corporate and other debt		732			1,818			13	(3)		2,563			750		3,584			53		4,387
Mortgage-backed securities		–	(7)		906			–			906			539		876			–		1,415
Equity securities		838			263			709			1,810			590		177			544		1,311
	$	37,238		$	19,645		$	770		$	57,653		$	29,398	$	20,396		$	710	$	50,504
Derivative financial instruments
Interest rate contracts	$	–		$	8,927		$	112		$	9,039		$	–	$	9,742		$	36	$	9,778
Foreign exchange and gold contracts		5			22,197			–			22,202			4		21,496			–		21,500
Equity contracts		797			1,556			8			2,361			615		1,720			–		2,335
Credit contracts		–			349			–			349			–		175			–		175
Commodity contracts		92			3,515			–			3,607			133		1,443			–		1,576
	$	894		$	36,544		$	120		$	37,558		$	752	$	34,576		$	36	$	35,364
Liabilities:
Deposits(8)	$	–		$	(401	)	$	–		$	(401	)	$	–	$	(7	)	$	–	$	(7	)
Financial liabilities designated at fair value through profit or loss		–			8,188			–			8,188			–		4,663			–		4,663
Obligations related to securities sold short		24,563			7,524			–			32,087			27,796		2,970			–		30,766
Derivative financial instruments
Interest rate contracts		–			11,012			74			11,086			–		10,823			267		11,090
Foreign exchange and gold contracts		–			20,537			–			20,537			3		17,646			–		17,649
Equity contracts		1,057			1,884			5			2,946			502		2,724			7		3,233
Credit contracts		–			70			–			70			–		179			–		179
Commodity contracts		34			3,294			–			3,328			268		1,781			–		2,049
	$	1,091		$	36,797		$	79		$	37,967		$	773	$	33,153		$	274	$	34,200
Instruments not carried at fair value(9):
Assets:
Investment securities – amortized cost	$	7,392	(7)	$	12,815		$	109	(6)	$	20,316		$	4,240	$	14,476		$	–	$	18,716
Loans(10)		–			313,490			–			313,490			–		–			286,621		286,621
Liabilities:
Deposits(10)(11)		–			293,898			–			293,898			–		266,995			–		266,995
Subordinated debentures		–			5,627			–			5,627			–		6,105			–		6,105
Other liabilities		–			20,383			–			20,383			–		13,363			–		13,363

(1) The amounts for October 31, 2018 have been prepared in accordance with IFRS 9, prior periods have not been restated (refer to Notes 3 and 4).

(2) The fair value of precious metals is determined based on quoted market prices and forward spot prices, where applicable.

(3) IFRS 9 adoption resulted in reclassification of $17 million of corporate and other debt to trading assets in Level 3 from available-for-sale debt securities (refer to Note 4).

(4) Represents energy related assets for the year ended October 31, 2018 (October 31, 2017 – represents base metal positions).

(5) Excludes debt investment securities measured at amortized cost of $20,743 (held-to-maturity as at October 31, 2017 – $18,765).

(6) IFRS 9 adoption resulted in reclassification of $104 million of other foreign governments’ debt in Level 3 to debt securities measured at amortized cost (refer to Note 4).

(7) IFRS 9 adoption resulted in reclassification of $539 million of mortgage backed securities in Level 1 to debt securities measured at amortized cost (refer to Note 4).

(8) These amounts represent embedded derivatives bifurcated from structured notes.

(9) Represents the fair value of financial assets and liabilities where the carrying amount is not a reasonable approximation of fair value.

(10) Excludes floating rate instruments as carrying value approximates fair value.

(11) Excludes embedded derivatives bifurcated from structured notes.

Summary of Changes in Level 3 Instruments Carried at Fair Value

The following table summarizes the changes in Level 3 instruments carried at fair value for the year ended October 31, 2018.

All positive balances represent assets and negative balances represent liabilities. Consequently, positive amounts indicate purchases of assets or settlements of liabilities and negative amounts indicate sales of assets or issuances of liabilities.

	As at October 31, 2018(1)
($ millions)	Fair value November 1 2017			Gains/(losses) recorded in income			Gains/(losses) recorded in OCI			Purchases/ Issuances			Sales/ Settlements			Transfers into/out of Level 3			Fair value October 31 2018			Change in unrealized gains/(losses) recorded in income for instruments still held(2)
Precious metals	$	–		$	–		$	–		$	5		$	(8	)	$	19		$	16		$	–
		–			–			–			5			(8	)		19			16			–
Trading assets
Loans		–			–			–			–			(2)			2			–			–
Corporate and other debt		39			(10	)		–			–			(16	)		5			18			–
		39			(10	)		–			–			(18	)		7			18			–
Investment securities
Other foreign governments’ debt		9			–			–			61			(22	)		–			48			n/a
Corporate and other debt		36			–			(5	)		–			(18	)		–			13			n/a
Equity securities		544			16			18			218	(3)		(67	)		(20	)		709			14
		589			16			13			279			(107	)		(20	)		770			14
Derivative financial instruments – assets
Interest rate contracts		36			67			–			31			(22	)		–			112			58
Equity contracts		–			(2	)		–			4			–			6			8			(2	)(4)
Derivative financial instruments – liabilities
Interest rate contracts		(267	)		(108	)		–			(24	)		22			303			(74	)		(26	)(5)
Foreign exchange and gold contracts		–			–			–			(6	)		–			6			–			–
Equity contracts		(7	)		–			–			(5	)		–			7			(5	)		–
		(238	)		(43	)		–			–			–			322			41			30
Total	$	390		$	(37	)	$	13		$	284			$  (133)		$	328		$	845		$	44

(1) The amounts for November 1, 2017 and October 31, 2018 have been prepared in accordance with IFRS 9, prior period amounts have not been restated (refer to Notes 3 and 4).

(2) These amounts represent the gains and losses from fair value changes of Level 3 instruments still held at the end of the period that are recorded in the Consolidated Statement of Income.

(3) Includes amount related to BBVA Chile acquisition of $45 million.

(4) Certain unrealized gains and losses on derivative assets and liabilities are largely offset by mark-to-market changes on other instruments included in trading revenues in the Consolidated Statement of Income, since these instruments act as an economic hedge to certain derivative assets and liabilities.

(5) Certain unrealized losses on interest rate derivative contracts are largely offset by mark-to-market changes on embedded derivatives on certain deposit liabilities in the Consolidated Statement of Income.

The following table summarizes the changes in Level 3 instruments carried at fair value for the year ended October 31, 2017.

	As at October 31, 2017
($ millions)	Fair value November 1 2016			Gains/(losses) recorded in income(1)			Gains/(losses) recorded in OCI		Purchases/ Issuances			Sales/ Settlements			Transfers into/out of Level 3			Fair value October 31 2017
Trading assets	$	1,222		$	(20	)	$	–	$	–		$	(1,180	)	$	–		$	22
Investment securities(2)		909			(24	)		38		122			(332	)		(3	)		710
Derivative financial instruments		(236	)		10			–		(6	)		3			(9	)		(238	)
Deposits(3)		(1,163	)		6			–		–			1,157			–			–

(1) Gains or losses for items in Level 3 may be offset with losses or gains on related hedges in Level 1 or Level 2.

(2) Investment securities include financial assets designated as available-for-sale.

(3) These amounts represent embedded derivatives bifurcated from certain deposit liabilities.

Summary of Significant Unobservable Inputs Used in Measuring Financial Instruments Categorized as Level 3

The table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.

	Valuation technique	Significant unobservable inputs	Range of estimates for unobservable inputs(1)		Changes in fair value from reasonably possible alternatives ($ millions)
Derivative financial instruments
Interest rate contracts	Option pricing	Interest rate		7% - 93%	–
	model	volatility
Equity contracts	Option pricing	Equity volatility		2% - 124%	(9)/9
	model	Single stock correlation		(70)% - 97%

(1) The range of estimates represents the actual lowest and highest level inputs used to fair value financial instruments within each financial statement category.

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Trading Assets (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Analysis of Carrying Value of Trading Securities

(a) Trading securities

An analysis of the carrying value of trading securities is as follows:

As at October 31, 2018 ($ millions)	Remaining term to maturity
	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Trading securities:
Canadian federal government issued or guaranteed debt	$	1,500	$	4,040	$	4,781	$	863	$	1,819	$	–	$	13,003
Canadian provincial and municipal debt		859		876		2,122		3,425		2,877		–		10,159
U.S. treasury and other U.S. agency debt		514		1,574		3,348		1,602		126		–		7,164
Other foreign government debt		1,353		1,042		2,452		1,155		441		–		6,443
Common shares		–		–		–		–		–		39,700		39,700
Other		595		1,650		4,888		1,203		585		84		9,005
Total	$	4,821	$	9,182	$	17,591	$	8,248	$	5,848	$	39,784	$	85,474
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,711	$	5,222	$	5,901	$	4,798	$	4,972	$	9,730	$	33,334
U.S. dollar		620		2,414		7,105		2,377		523		16,695		29,734
Mexican peso		322		119		538		21		4		405		1,409
Other currencies		1,168		1,427		4,047		1,052		349		12,954		20,997
Total trading securities	$	4,821	$	9,182	$	17,591	$	8,248	$	5,848	$	39,784	$	85,474
As at October 31, 2017 ($ millions)	Remaining term to maturity
	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Trading securities:
Canadian federal government issued or guaranteed debt	$	950	$	1,696	$	4,283	$	1,333	$	2,081	$	–	$	10,343
Canadian provincial and municipal debt		1,230		1,127		1,536		1,269		2,163		–		7,325
U.S. treasury and other U.S. agency debt		113		980		3,301		2,214		286		–		6,894
Other foreign government debt		1,172		819		2,716		1,132		990		–		6,829
Common shares		–		–		–		–		–		39,275		39,275
Other		530		1,134		4,702		1,088		532		–		7,986
Total	$	3,995	$	5,756	$	16,538	$	7,036	$	6,052	$	39,275	$	78,652
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,368	$	3,064	$	5,130	$	3,068	$	4,524	$	8,619	$	26,773
U.S. dollar		372		1,771		6,807		2,777		526		12,016		24,269
Mexican peso		249		235		488		1		1		997		1,971
Other currencies		1,006		686		4,113		1,190		1,001		17,643		25,639
Total trading securities	$	3,995	$	5,756	$	16,538	$	7,036	$	6,052	$	39,275	$	78,652

Summary of Geographic Breakdown Trading Loans

(b) Trading loans

The following table provides the geographic breakdown of trading loans:

As at October 31 ($ millions)	2018		2017
Trading loans(1)(2)
U.S.(3)	$	9,080	$	10,654
Europe(4)		3,066		3,824
Asia Pacific(4)		1,077		1,605
Canada(4)		280		376
Other(4)		831		853
Total	$	14,334	$	17,312

(1) Geographic segmentation of trading loans is based upon the location of the ultimate risk of the underlying asset.

(2) Loans are denominated in U.S. dollars.

(3) Includes trading loans that serve as a hedge to loan-based credit total return swaps of $6,071 (2017 – $7,390), while the remaining relates to short-term precious metals trading and lending activities.

(4) These loans are primarily related to short-term precious metals trading and lending activities.

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Financial Instruments Designated at Fair Value Through Profit or Loss (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Fair Value of Financial Assets and Liabilities Designated at Fair Value Through Profit or Loss and Changes in Fair Value

The following table presents the fair value of financial assets and liabilities designated at fair value through profit or loss and their changes in fair value.

	Fair value				Change in fair value					Cumulative change in FV(1)
	As at				For the year ended
October 31 ($ millions)	2018		2017		2018		2017			2018		2017
Assets
Investment securities(2)	$	12	$	13	$	–	$	–		$	–	$	11
Loans(3)		–		–		–		(205	)		–		(197	)
Liabilities
Senior note liabilities(4)		8,188		4,663		869		103			778		(91	)

(1) The cumulative change in fair value is measured from the instruments’ date of initial recognition.

(2) Changes in fair value are recorded in non-interest income – other.

(3) Changes in fair value are recorded in non-interest income – trading revenues.

(4) Changes in fair value attributable to changes in the Bank’s own credit risk are recorded in other comprehensive income. Other changes in fair value are recorded in non-interest income – trading revenues.

Changes in Fair Value Attributable to Changes in Bank'S Own Credit Risk for Financial Liabilities Designated at Fair Value

The following tables present the changes in fair value attributable to changes in the Bank’s own credit risk for financial liabilities designated at fair value through profit or loss as well as their contractual maturity and carrying amounts.

	Senior Note Liabilities
	Contractual maturity amount(1)		Carrying Value		Difference between carrying value and contractual maturity amount			Changes in fair value for the period attributable to changes in own credit risk recorded in other comprehensive income			Cumulative changes in fair value attributable to changes in own credit risk(1)
As at October 31, 2018	$	8,966	$	8,188	$	778		$	(30	)	$(66)
As at October 31, 2017	$	4,572	$	4,663	$	(91	)	$	(28	)	$(36)

(1) The cumulative change in fair value is measured from the instruments’ date of initial recognition.

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Derivative Financial Instruments (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Derivative Financial Instruments at Notional Value

The following table provides the aggregate notional amounts of derivative financial instruments outstanding by type and segregated between those used by the Bank in its dealer capacity (Trading) and those derivatives designated in hedging relationships. The notional amounts of these contracts represent the derivatives volume outstanding and do not represent the potential gain or loss associated with the market risk or credit risk of such instruments. Credit derivatives within other derivative contracts are comprised primarily of purchased and sold credit default swap transactions. To a lesser extent, this category also includes total return swaps referenced to loans and debt securities. Other derivative contracts – other includes precious metals other than gold, and other commodities including energy and base metal derivatives.

	2018						2017
As at October 31 ($ millions)	Trading		Hedging		Total		Trading		Hedging		Total
Interest rate contracts
Exchange-traded:
Futures	$	127,595	$	–	$	127,595	$	161,590	$	–	$	161,590
Options purchased		3,402		–		3,402		5,474		–		5,474
Options written		–		–		–		2,894		–		2,894
		130,997		–		130,997		169,958		–		169,958
Over-the-counter:
Forward rate agreements		11,407		–		11,407		208		–		208
Swaps		403,061		30,480		433,541		441,607		18,609		460,216
Options purchased		29,617		–		29,617		34,190		–		34,190
Options written		34,655		–		34,655		38,099		–		38,099
		478,740		30,480		509,220		514,104		18,609		532,713
Over-the-counter (settled through central counterparties):
Forward rate agreements		319,026		–		319,026		329,853		–		329,853
Swaps		3,028,670		136,188		3,164,858		2,236,148		106,979		2,343,127
Options purchased		–		–		–		–		–		–
Options written		–		–		–		–		–		–
		3,347,696		136,188		3,483,884		2,566,001		106,979		2,672,980
Total	$	3,957,433	$	166,668	$	4,124,101	$	3,250,063	$	125,588	$	3,375,651
Foreign exchange and gold contracts
Exchange-traded:
Futures	$	7,476	$	–	$	7,476	$	32,452	$	–	$	32,452
Options purchased		48		–		48		16		–		16
Options written		36		–		36		481		–		481
		7,560		–		7,560		32,949		–		32,949
Over-the-counter:
Spot and forwards		412,229		26,433		438,662		427,112		21,623		448,735
Swaps		340,614		57,380		397,994		321,567		63,300		384,867
Options purchased		42,497		–		42,497		39,100		–		39,100
Options written		41,768		–		41,768		39,547		–		39,547
		837,108		83,813		920,921		827,326		84,923		912,249
Over-the-counter (settled through central counterparties):
Spot and forwards		27,886		–		27,886		–		–		–
Swaps		–		–		–		–		–		–
Options purchased		–		–		–		–		–		–
Options written		–		–		–		–		–		–
		27,886		–		27,886		–		–		–
Total	$	872,554	$	83,813	$	956,367	$	860,275	$	84,923	$	945,198
Other derivative contracts
Exchange-traded:
Equity	$	43,323	$	–	$	43,323	$	33,287	$	–	$	33,287
Credit		–		–		–		–		–		–
Commodity and other contracts		55,076		–		55,076		45,938		–		45,938
		98,399		–		98,399		79,225		–		79,225
Over-the-counter:
Equity		79,226		756		79,982		64,444		796		65,240
Credit		18,902		–		18,902		26,737		–		26,737
Commodity and other contracts		45,174		–		45,174		34,715		–		34,715
		143,302		756		144,058		125,896		796		126,692
Over-the-counter (settled through central counterparties):
Equity		–		–		–		2,863		–		2,863
Credit		10,964		–		10,964		10,855		–		10,855
Commodity and other contracts		326		–		326		6,762		–		6,762
		11,290		–		11,290		20,480		–		20,480
Total	$	252,991	$	756	$	253,747	$	225,601	$	796	$	226,397
Total notional amounts outstanding	$	5,082,978	$	251,237	$	5,334,215	$	4,335,939	$	211,307	$	4,547,246

(1) The notional amounts represent the amount to which a rate or price is applied to determine the amount of cash flows to be exchanged.

Summary of Remaining Term to Maturity of Notional Amounts of Bank's Derivative Financial Instruments

The following table summarizes the remaining term to maturity of the notional amounts of the Bank’s derivative financial instruments by type:

As at October 31, 2018 ($ millions)	Within one year		One to five years		Over five years		Total
Interest rate contracts
Futures	$	72,068	$	55,519	$	8	$	127,595
Forward rate agreements		227,761		92,717		9,955		330,433
Swaps		1,316,741		1,448,580		833,078		3,598,399
Options purchased		6,644		22,985		3,390		33,019
Options written		4,211		24,718		5,726		34,655
		1,627,425		1,644,519		852,157		4,124,101
Foreign exchange and gold contracts
Futures		3,005		4,100		371		7,476
Spot and forwards		438,760		26,241		1,547		466,548
Swaps		90,987		195,484		111,523		397,994
Options purchased		39,505		2,851		189		42,545
Options written		39,395		2,199		210		41,804
		611,652		230,875		113,840		956,367
Other derivative contracts
Equity		84,333		34,890		4,082		123,305
Credit		13,056		13,798		3,012		29,866
Commodity and other contracts		70,292		29,958		326		100,576
		167,681		78,646		7,420		253,747
Total	$	2,406,758	$	1,954,040	$	973,417	$	5,334,215
As at October 31, 2017 ($ millions)	Within one year		One to five years		Over five years		Total
Interest rate contracts
Futures	$	62,152	$	98,731	$	707	$	161,590
Forward rate agreements		282,062		47,999		–		330,061
Swaps		971,003		1,172,422		659,918		2,803,343
Options purchased		10,690		17,036		11,938		39,664
Options written		5,809		23,800		11,384		40,993
		1,331,716		1,359,988		683,947		3,375,651
Foreign exchange and gold contracts
Futures		4,810		27,474		168		32,452
Spot and forwards		401,461		47,210		64		448,735
Swaps		96,767		185,747		102,353		384,867
Options purchased		36,291		2,825		–		39,116
Options written		37,309		2,719		–		40,028
		576,638		265,975		102,585		945,198
Other derivative contracts
Equity		73,983		26,514		893		101,390
Credit		18,249		15,272		4,071		37,592
Commodity and other contracts		50,253		37,021		141		87,415
		142,485		78,807		5,105		226,397
Total	$	2,050,839	$	1,704,770	$	791,637	$	4,547,246

Summary of Credit Exposure of Derivative Financial Instruments

	2018								2017
As at October 31 ($ millions)	Notional amount		Credit risk amount (CRA)(1)		Credit equivalent amount (CEA)(1)		CET1 Risk Weighted Assets(2)		Notional amount		Credit risk amount (CRA)(1)		Credit equivalent amount (CEA)(1)		CET1 Risk Weighted Assets(2)
Interest rate contracts
Futures	$	127,595	$	–	$	93	$	–	$	161,590	$	–	$	65	$	–
Forward rate agreements		330,433		36		157		82		330,061		20		30		20
Swaps		3,598,399		96		4,436		1,125		2,803,343		250		5,459		1,341
Options purchased		33,019		36		138		63		39,664		5		105		57
Options written		34,655		–		2		1		40,993		–		15		3
		4,124,101		168		4,826		1,271		3,375,651		275		5,674		1,421
Foreign exchange and gold contracts
Futures		7,476		–		85		–		32,452		–		56		–
Spot and forwards		466,548		2,571		5,440		2,006		448,735		2,370		6,311		1,765
Swaps		397,994		4,297		8,232		2,604		384,867		4,023		7,297		1,898
Options purchased		42,545		712		240		76		39,116		523		515		113
Options written		41,804		–		20		5		40,028		–		83		12
		956,367		7,580		14,017		4,691		945,198		6,916		14,262		3,788
Other derivative contracts
Equity		123,305		455		4,927		1,505		101,390		45		5,123		1,575
Credit		29,866		239		420		119		37,592		12		1,421		174
Commodity and other contracts		100,576		1,182		8,052		830		87,415		9		10,953		807
		253,747		1,876		13,399		2,454		226,397		66		17,497		2,556
Credit Valuation Adjustment(2)		–		–		–		4,616		–		–		–		2,988
Total derivatives	$	5,334,215	$	9,624	$	32,242	$	13,032	$	4,547,246	$	7,257	$	37,433	$	10,753
Amount settled through central counterparties(3)
Exchange-traded		236,956		–		7,300		153		282,132		–		10,385		208
Over-the-counter		3,523,060		–		781		16		2,693,460		–		1,334		27
	$	3,760,016	$	–	$	8,081	$	169	$	2,975,592	$	–	$	11,719	$	235

(1) The amounts presented are net of collateral and master netting agreements at the product level. The total amounts relating to netting and collateral were $27,934 (2017 – $28,107) for CRA, and $63,831 (2017 – $51,623) for CEA.

(2) As per OSFI guideline, effective 2014, Credit Valuation Adjustment (CVA) to CET1 RWA for derivatives was phased-in. In 2018, the CVA was 0.80 (2017 – 0.72).

(3) Amounts are included under total derivatives above. Amounts include exposures settled directly through central counterparties and exposures settled through clearing members of central counterparties.

Summary of Financial Derivatives at Fair Value

The following table summarizes the fair value of derivatives segregated by type and segregated between trading and those derivatives designated in hedging relationships.

As at October 31 ($ millions)	2018				2018				2017
	Average fair value				Year-end fair value				Year-end fair value(1)
	Favourable		Unfavourable		Favourable		Unfavourable		Favourable		Unfavourable
Trading
Interest rate contracts
Forward rate agreements	$	83	$	17	$	57	$	–	$	27	$	1
Swaps		8,193		10,130		8,158		8,956		8,895		10,330
Options		84		107		104		128		53		75
		8,360		10,254		8,319		9,084		8,975		10,406
Foreign exchange and gold contracts
Forwards		5,213		5,232		6,611		5,800		5,973		5,223
Swaps		10,660		8,570		11,864		10,292		10,945		8,774
Options		765		691		826		831		730		681
		16,638		14,493		19,301		16,923		17,648		14,678
Other derivative contracts
Equity		2,451		3,380		2,361		2,895		2,274		3,233
Credit		299		128		349		70		175		179
Commodity and other contracts		2,829		2,765		3,607		3,328		1,576		2,049
		5,579		6,273		6,317		6,293		4,025		5,461
Trading derivatives’ market valuation	$	30,577	$	31,020	$	33,937	$	32,300	$	30,648	$	30,545
Hedging
Interest rate contracts
Swaps					$	720	$	2,002	$	803	$	684
Foreign exchange and gold contracts
Forwards						331		310		634		215
Swaps						2,570		3,304		3,218		2,756
					$	2,901	$	3,614	$	3,852	$	2,971
Other derivative contracts
Equity					$	–	$	51	$	61	$	–
Hedging derivatives’ market valuation					$	3,621	$	5,667	$	4,716	$	3,655
Total derivative financial instruments as per Statement of Financial Position					$	37,558	$	37,967	$	35,364	$	34,200
Less: impact of master netting and collateral(2)						27,934		27,934		28,107		28,107
Net derivative financial instruments(2)					$	9,624	$	10,033	$	7,257	$	6,093

(1) The average fair value of trading derivatives’ market valuation for the year ended October 31, 2017 was: favourable $30,780 and unfavourable $34,032. Average fair value amounts are based on the latest 13 month-end balances.

(2) Master netting agreement amounts are based on the capital adequacy criteria of the Basel Committee on Banking Supervision (BCBS) and OSFI. These criteria allow netting where there are legally enforceable contracts which enable net settlement in the event of a default, bankruptcy, liquidation or similar circumstances.

Summary of Notional Amount of Derivatives and Carrying Amount of Deposit Liabilities

The following table summarizes the notional amounts of derivatives and carrying amounts of cash and deposit liabilities designated as hedging instruments.

	Notional amounts(1)
	Remaining term to maturity						No specific
As at October 31, 2018 ($ millions)	Within one year		One to five years		Over five years		maturity		Total
Fair value hedges
Interest rate risk – swaps	$	16,006	$	78,236	$	11,270	$	–	$	105,512
Foreign currency/interest rate risk – swaps		–		689		–		–		689
Cash flow hedges
Interest rate risk – swaps		12,257		21,908		9,713		–		43,878
Foreign currency/interest rate risk – swaps		5,539		19,193		2,489		–		27,221
Foreign currency risk
Swaps		20,983		63,697		8,465		–		93,145
Foreign currency forwards		8,999		–		–		–		8,999
Cash		–		–		–		92		92
Equity risk – total return swaps		298		458		–		–		756
Net investment hedges
Foreign currency risk
Foreign currency forwards		17,434		–		–		–		17,434
Deposit liabilities – carrying amount		–		–		–		6,077		6,077
Total	$	81,516	$	184,181	$	31,937	$	6,169	$	303,803

(1) Notional amounts relating to derivatives that are hedging multiple risks in both assets and liabilities are included in more than one category.

Summary of Average Price or Rate of Hedging Instruments

The following table shows the average rate or price of significant hedging instruments.

	Average rate or price(1)
As at October 31, 2018	Fixed interest rate			FX rate		Price
Fair value hedges
Interest rate risk – swaps		2.04	%		n/a		n/a
Foreign currency/interest rate risk – swaps
CAD-USD		2.22	%		1.29		n/a
CAD-EUR		3.02	%		1.33		n/a
Cash flow hedges
Interest rate risk – swaps		2.37	%		n/a		n/a
Foreign currency/ interest rate risk – swaps
CAD-USD		1.75	%		1.27		n/a
Foreign currency risk
Swaps
CAD-USD		n/a			1.30		n/a
CAD-EUR		n/a			1.48		n/a
CAD-GBP		n/a			1.74		n/a
Foreign currency forwards
CAD-USD		n/a			1.30		n/a
Equity price risk – total return swaps		n/a			n/a	$	73.87
Net investment hedges
Foreign currency risk – foreign currency forwards
CAD-USD		n/a			1.29		n/a
CAD-MXN		n/a			15.77		n/a
CAD-PEN		n/a			2.59		n/a

(1) The average rate or price is calculated in aggregate for all of the Bank’s hedge relationships, including hedges of assets and liabilities. The majority of the Bank’s hedges have a remaining term of maturity of less than 5 years.

Summary of Items designated as Hedging Instruments, Hedged Items and Ineffectiveness for Fair Value Hedges

For fair value hedges, the following table contains information related to items designated as hedging instruments, hedged items and ineffectiveness.

For the year ended October 31, 2018 ($ millions)	Carrying amount of the hedging instruments(1)					Hedge Ineffectiveness(2)												Accumulated amount of fair value hedge adjustment gains/ (losses) on the hedged item(4)
	Assets		Liabilities			Gains/(losses) on hedging instrument used to calculate hedge ineffectiveness			Gains/(losses) on hedged item used to calculate hedge ineffectiveness			Ineffectiveness recorded in non-interest income – other			Carrying amount of the hedged item(3)			Active hedges			Discontinued hedges
Fair value hedges
Interest rate risk – swaps	$	448	$	(1,454	)	$	(475	)	$	469		$	(6	)
Investment securities							360			(367	)		(7	)	$	16,286		$	(149	)	$	63
Loans							260			(265	)		(5	)		23,763			(246	)		(149	)
Deposit liabilities							(1,037	)		1,043			6			(58,026	)		1,065			186
Subordinated debentures							(58	)		58			–			(3,923	)		37			40
Foreign currency/interest rate risk – swaps		7		(31	)		–			(1	)		(1	)
Investment securities							5			(5	)		–			814			6			–
Deposit liabilities							(4	)		4			–			(466	)		3			–
Subordinated debentures							(1	)		–			(1	)		–			–			–
Total	$	455		$  (1,485	)		$  (475	)	$	468			$  (7	)		$  (21,552	)	$	716		$	140

(1) Comprises unrealized gains/losses and are recorded within derivative financial instruments in assets and liabilities, respectively in the Consolidated Statement of Financial Position.

(2) Includes ineffectiveness related to hedges discontinued during the year ended October 31, 2018.

(3) This represents the carrying value on the Consolidated Statement of Financial Position and comprises amortized cost before allowance for credit losses, plus fair value hedge adjustment, except for investment securities which are carried at fair value.

(4) This represents the accumulated fair value hedge adjustment and is a component of the carrying amount of the hedged item.

Summary of Items designated as Hedging Instruments, Hedged Items and Ineffectiveness for Fair Value Hedges for Cash Flow Hedges and Net Investment Hedges

For cash flow hedges and net investment hedges, the following table contains information related to items designated as hedging instruments, hedged items and ineffectiveness.

	Carrying amount of the hedging instruments(1)					Hedge Ineffectiveness(2)
For the year ended October 31, 2018 ($ millions)	Assets		Liabilities			Gains/(losses) on hedging instrument used to calculate hedge ineffectiveness			Gains/(losses) on hypothetical derivative used to calculate hedge ineffectiveness(3)			Ineffectiveness recorded in non-interest income – other(4)
Cash flow hedges
Interest rate risk – swaps	$	961	$	(1,350	)	$	(339	)	$	(341	)	$	2
Foreign currency/interest rate risk – swaps		101		(955	)		(530	)		(549	)		(6	)
Foreign currency risk
Swaps		1,773		(1,516	)		(563	)		(562	)		(6	)
Foreign currency forwards		143		(14	)		332			332			–
Cash		92		–			1			1			–
Equity risk – total return swaps		–		(51	)		(92	)		(92	)		–
		3,070		(3,886	)		(1,191	)		(1,211	)		(10	)
Net investment hedges
Foreign currency risk
Foreign currency forwards		188		(296	)		(160	)		(160	)		–
Deposit liabilities		–		(6,077	)		(121	)		(121	)		–
		188		(6,373	)		(281	)		(281	)		–
Total	$	3,258		$  (10,259	)		$  (1,472	)		$  (1,492	)		$  (10	)

(1) Comprises unrealized gains/losses for derivative instruments and are recorded within derivative financial instruments in assets and liabilities, respectively in the Consolidated Statement of Financial Position.

(2) Includes ineffectiveness related to hedges discontinued during the year ended October 31, 2018.

(3) For cash flow hedges, hypothetical derivatives having critical terms which match those of the underlying hedged item are used to assess hedge ineffectiveness.

(4) For cash flow hedges, ineffectiveness is only recognized in the Consolidated Statement of Income when the life-to-date cumulative change in the hedging instrument exceeds the cumulative change in the hypothetical derivative.

Summary of Effectiveness of Cash Flow and Net Investment Hedges on Consolidated Statement of Other Comprehensive Income

For cash flow hedges and net investment hedges, the following table contains information regarding the impacts on the Consolidated Statement of Other Comprehensive Income on a pre-tax basis.

	AOCI as at November 1, 2017			Net gains/ (losses) recognized in OCI			Amount reclassified to net income as the hedged item affects net income(1)		Amount reclassified to net income for hedges of forecasted transactions that are no longer expected to occur(1)			Net gains (losses) included in non-financial asset/liability as a result of a hedged forecasted transaction			AOCI as at October 31, 2018			Balance in cash flow hedge reserve/unrealized foreign currency translation account as at October 31, 2018
For the year ended October 31, 2018 ($ millions)																		Active hedges			Discountinued hedges
Cash flow hedges
Interest rate risk	$	104		$	(341	)	$	83	$	–		$	–		$	(154	)	$	(262	)	$	108
Foreign currency/interest rate risk		(151	)		(524	)		225		–			–			(450	)		(352	)		(98	)
Foreign currency risk		321			(224	)		464		(22	)		(94	)		445			433			12
Equity risk		46			(92	)		39		–			–			(7	)		(7	)		–
		320			(1,181	)		811		(22	)		(94	)		(166	)		(188	)		22
Net investment hedges
Foreign currency risk		(2,970	)		(281	)		–		–			–			(3,251	)		(3,199	)		(52	)
Total	$	(2,650	)	$	(1,462	)	$	811		$  (22	)		$  (94	)		$  (3,417	)		$  (3,387	)	$	(30	)

(1) Amounts reclassified from the cash flow hedge reserve to net income are recorded in non-interest income-other.

Summary of Ineffectiveness of Hedge Relationships

Due to the ineffective portion of designated hedges, the Bank recorded the following amounts in non-interest income – other:

For the year ended October 31 ($ millions)	2017
Fair value hedges
Gain (loss) recorded on hedged items	$	574
Gain (loss) recorded on hedging instruments		(588	)
Ineffectiveness	$	(14	)
Cash flow hedges
Ineffectiveness	$	24

Summary of Hedging Instruments

	2017
As at October 31 ($ millions)	Favourable		Unfavourable
Derivatives designated in fair value hedging relationships(1)	$	687	$	751
Derivatives designated in cash flow hedging relationships		3,746		2,749
Derivatives designated in net investment hedging relationships(1)		283		155
Total derivatives designated in hedging relationships	$	4,716	$	3,655

(1) As at October 31, 2017, the fair value of non-derivative instruments designated as net investment hedges and fair value hedges was $6,183 (2016 – $6,905). These non-derivative hedging instruments are presented as deposits – financial institutions on the Consolidated Statement of Financial Position.

Schedule of Period When Cash Flows of Designated Hedged Items are Expected to Occur and Impact Consolidated Statement of Income

The period when cash flows of designated hedged items are expected to occur and impact the Consolidated Statement of Income are as follows:

As at October 31, 2017 ($ millions)	Within one year			Within one to five years			More than five years
Cash inflows from assets	$	11,235		$	19,866		$	4,178
Cash outflows from liabilities		(31,542	)		(26,863)			(4,746)
Net cash flows	$	(20,307)		$	(6,997	)	$	(568	)

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Offsetting Financial Assets and Financial Liabilities (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Financial Assets and Liabilities Offsetting, Enforceable Master Netting or Similar Arrangement

The following tables provide information on the impact of offsetting on the Bank’s Consolidated Statement of Financial Position, as well as the financial impact of netting for instruments that are subject to enforceable master netting arrangements or similar agreements, but do not qualify for offsetting in the Consolidated Statement of Financial Position, as well as available cash and financial instrument collateral.

As at October 31, 2018 ($ millions)
Types of financial assets	Gross amounts of recognized financial assets			Gross amounts of recognized financial liabilities offset in the  consolidated statement of financial position			Net amounts of financial assets presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position						Net amount(3)
									Impact of master netting arrangements or similar agreements(1)			Collateral(2)
Derivative financial instruments	$	37,887	(4)	$	(329	)(4)	$	37,558	$	(24,568	)	$	(4,085	)	$	8,905
Securities purchased under resale agreements and securities borrowed		116,375			(12,357	)		104,018		(6,849	)		(91,347	)		5,822
Total	$	154,262		$	(12,686	)	$	141,576	$	(31,417	)	$	(95,432	)	$	14,727

As at October 31, 2018 ($ millions)
Types of financial liabilities	Gross amounts of recognized financial liabilities			Gross amounts of recognized financial assets offset in the consolidated statement  of financial position			Net amounts of financial liabilities presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position						Net amount
									Impact of master netting arrangements or similar agreements(1)			Collateral(2)
Derivative financial instruments	$	38,296	(4)	$	(329	)(4)	$	37,967	$	(24,568	)	$	(5,051	)	$	8,348
Obligations related to securities sold under repurchase agreements and securities lent		113,614			(12,357	)		101,257		(6,849	)		(88,154	)		6,254
Total	$	151,910		$	(12,686	)	$	139,224	$	(31,417	)	$	(93,205	)	$	14,602

(1) Amounts that are subject to master netting arrangements or similar agreements but were not offset in the Consolidated Statement of Financial Position because they did not meet the net settlement/simultaneous settlement criteria; or because the rights of set off are conditional upon the default of the counterparty only.

(2) Cash and financial instrument collateral amounts received or pledged in relation to the total amounts of financial assets and financial liabilities, including those that were not offset in the Consolidated Statement of Financial Position. These amounts are disclosed at fair value and the rights of set off are conditional upon the default of the counterparty.

(3) Not intended to represent the Bank’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to offsetting and collateral arrangements.

(4) During 2018, the Bank adopted the settlement-to-market (STM) model for derivatives cleared through a clearing organization. Under this model, the legal characterization of variation margin is considered to be settled at the end of each day. As such, the balances in the Gross amounts of recognized financial assets/liabilities and the Gross amounts offset in the consolidated statement of financial position decreased by approximately $18 billion each.

As at October 31, 2017 ($ millions)
Types of financial assets	Gross amounts of recognized financial assets		Gross amounts of recognized financial liabilities offset in the consolidated statement  of financial position			Net amounts of financial assets presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position
								Impact of master netting arrangements or similar agreements(1)			Collateral(2)			Net amount(3)
Derivative financial instruments(4)	$	49,512	$	(14,148	)	$	35,364	$	(22,400	)	$	(5,915	)	$	7,049
Securities purchased under resale agreements and securities borrowed		106,721		(11,402	)		95,319		(11,649	)		(75,675	)		7,995
Total	$	156,233	$	(25,550)		$	130,683	$	(34,049)		$	(81,590)		$	15,044

As at October 31, 2017 ($ millions)
Types of financial liabilities	Gross amounts of recognized financial liabilities		Gross amounts of recognized financial assets offset in the consolidated statement  of financial position			Net amounts of financial liabilities presented in the consolidated statement of financial position		Related amounts not offset in the consolidated statement of financial position
								Impact of master netting arrangements or similar agreements(1)			Collateral(2)			Net amount
Derivative financial instruments(4)	$	48,348	$	(14,148	)	$	34,200	$	(22,400	)	$	(4,700	)	$	7,100
Obligations related to securities sold under repurchase agreements and securities lent		107,245		(11,402	)		95,843		(11,649	)		(72,311	)		11,883
Total	$	155,593	$	(25,550)		$	130,043	$	(34,049)		$	(77,011)		$	18,983

(1) Amounts that are subject to master netting arrangements or similar agreements but were not offset in the Consolidated Statement of Financial Position because they did not meet the net settlement/simultaneous settlement criteria; or because the rights of set off are conditional upon the default of the counterparty only.

(2) Cash and financial instrument collateral amounts received or pledged in relation to the total amounts of financial assets and financial liabilities, including those that were not offset in the Consolidated Statement of Financial Position. These amounts are disclosed at fair value and the rights of set off are conditional upon the default of the counterparty.

(3) Not intended to represent the Bank’s actual exposure to credit risk, as a variety of credit mitigation strategies are employed in addition to offsetting and collateral arrangements.

(4) For fiscal 2017, the cash collateral received against the positive market values of derivative financial instruments of $793 and the cash collateral pledged towards the negative mark to market of derivative financial instruments of $1,112 are recorded within other liabilities and other assets, respectively.

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Investment Securities (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Disclosure of Carrying Value Of Banks Investment Securities Per Measurement Category

The following table presents the carrying amounts of the Bank’s investment securities per measurement category.

As at October 31, 2018 ($ millions)	2018(1)		2017
Debt investment securities measured at FVOCI	$	55,843	$	n/a
Debt investment securities measured at amortized cost		20,743		n/a
Equity investment securities designated as at FVOCI		1,305		n/a
Equity investment securities measured at FVTPL		505		n/a
Available-for-sale investment securities		n/a		50,504
Held-to-maturity investment securities		n/a		18,765
Total investment securities		78,396		69,269

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

Disclosure of Unrealized gains and losses on fair value through other comprehensive income securities

As at October 31, 2018 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Canadian federal government issued or guaranteed debt	$	8,903	$	38	$	50	$	8,891
Canadian provincial and municipal debt		4,403		3		54		4,352
U.S. treasury and other U.S. agency debt		19,298		6		163		19,141
Other foreign government debt		20,022		49		81		19,990
Other debt		3,503		6		40		3,469
Total debt securities measured at FVOCI	$	56,129	$	102	$	388	$	55,843

Summary of Analysis of Fair Value and Carrying Value of Investment Securities Measured at Amortized Cost

As at October 31, 2018 ($ millions)	Fair Value		Carrying value(1)
Canadian federal and provincial government issued or guaranteed debt	$	6,530	$	6,681
U.S. treasury and other U.S. agency debt		4,321		4,462
Other foreign government debt		3,086		3,131
Corporate debt		6,379		6,469
Total debt investment securities measured at amortized cost	$	20,316	$	20,743

(1) Balances are net of impairment allowances of $(1).

Summary of Equity Investment Securities Designated as at Fair Value Through Other Comprehensive Income

The Bank has designated certain instruments shown in the following table as equity securities FVOCI as these investments are expected to be held for the long-term for strategic purposes, effective November 1, 2017. In prior years, these instruments were classified as available-for-sale and measured at fair value with changes to carrying value recognized in other comprehensive income.

As at October 31, 2018 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Preferred equity instruments	$	334	$	–	$	54	$	280
Common shares		937		126		38		1,025
Total equity investment securities designated at FVOCI	$	1,271	$	126	$	92	$	1,305

Schedule of Unrealized Gains and Losses on Available-for-sale Securities

An analysis of unrealized gains and losses on available-for-sale securities is as follows:

As at October 31, 2017 ($ millions)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Canadian federal government issued or guaranteed debt	$	12,069	$	119	$	95	$	12,093
Canadian provincial and municipal debt		4,839		13		29		4,823
U.S. treasury and other U.S. agency debt		6,761		1		90		6,672
Other foreign government debt		19,788		49		34		19,803
Other debt		5,792		34		24		5,802
Preferred shares		397		1		87		311
Common shares		899		164		63		1,000
Total available-for-sale securities	$	50,545	$	381	$	422	$	50,504

Summary of Analysis of Fair Value and Carrying Value of Held-to-Maturity Securities

An analysis of the fair value and carrying value of held-to-maturity securities is presented below:

As at October 31, 2017 ($ millions)	Fair value		Carrying value
Canadian federal and provincial government issued or guaranteed debt	$	5,748	$	5,779
U.S. treasury and other U.S. agency debt		3,991		3,993
Other foreign government debt		2,690		2,705
Corporate debt		6,287		6,288
Total held-to-maturity securities	$	18,716	$	18,765

Summary of Residual Term to Contractual Maturity of Financial Instruments

(f) An analysis of the carrying value of investment securities is as follows:

	Remaining term to maturity
As at October 31, 2018 ($ millions)	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Fair value through other comprehensive income
Debt instruments
Canadian federal government issued or guaranteed debt	$	1,439	$	407	$	5,878	$	105	$	1,062	$	–	$	8,891
Yield(1) %		0.6		1.5		2.0		2.6		3.5		–		1.9
Canadian provincial and municipal debt		1,092		1,107		2,084		64		5		–		4,352
Yield(1) %		1.7		1.8		1.8		3.2		2.9		–		1.8
U.S. treasury and other U.S. agency debt		322		3,517		13,485		1,654		163		–		19,141
Yield(1) %		1.8		2.0		2.4		3.1		3.2		–		2.4
Other foreign government debt		6,884		6,379		5,349		1,053		325		–		19,990
Yield(1) %		1.3		1.7		3.7		3.8		4.3		–		2.3
Other debt		718		872		1,553		141		185		–		3,469
Yield(1) %		1.5		1.8		2.0		2.6		2.6		–		1.9
		10,455		12,282		28,349		3,017		1,740		–		55,843
Equity instruments
Preferred equity instruments		–		–		–		–		–		280		280
Common shares		–		–		–		–		–		1,025		1,025
												1,305		1,305
Total FVOCI		10,455		12,282		28,349		3,017		1,740		1,305		57,148
Amortized cost
Canadian federal and provincial government issued or guaranteed debt		692		868		5,121		–		–		–		6,681
U.S. treasury and other U.S. agency debt		197		988		3,266		–		11		–		4,462
Other foreign government debt		354		1,193		966		502		116		–		3,131
Corporate debt		637		1,113		4,414		246		59		–		6,469
		1,880		4,162		13,767		748		186		–		20,743
Fair value through profit or loss
Equity instruments		–		–		–		–		–		505		505
Total investment securities	$	12,335	$	16,444	$	42,116	$	3,765	$	1,926	$	1,810	$	78,396
Total by currency (in Canadian equivalent):
Canadian dollar	$	2,918	$	1,828	$	11,478	$	357	$	1,102	$	967	$	18,650
U.S. dollar		1,797		8,384		26,137		2,053		354		366		39,091
Mexican peso		640		541		892		282		–		15		2,370
Other currencies		6,980		5,691		3,609		1,073		470		462		18,285
Total investment securities	$	12,335	$	16,444	$	42,116	$	3,765	$	1,926	$	1,810	$	78,396

(1) Represents the weighted-average yield of fixed income securities.

	Remaining term to maturity
As at October 31, 2017 ($ millions)	Within three months		Three to twelve months		One to five years		Five to ten years		Over ten years		No specific maturity		Carrying value
Available-for-sale
Canadian federal government issued or guaranteed debt	$	8	$	291	$	9,780	$	905	$	1,109	$	–	$	12,093
Yield(1) %		0.9		1.1		1.1		2.7		3.2		–		1.4
Canadian provincial and municipal debt		99		737		3,698		284		5		–		4,823
Yield(1) %		0.6		1.5		1.7		2.4		2.9		–		1.7
U.S. treasury and other U.S. agency debt		106		1,260		2,374		2,704		228		–		6,672
Yield(1) %		1.0		1.5		1.0		1.6		1.5		–		1.3
Other foreign government debt		7,810		5,283		5,313		1,259		138		–		19,803
Yield(1) %		0.6		2.8		4.1		5.7		6.2		–		2.5
Other debt		1,082		1,541		2,784		210		185		–		5,802
Yield(1) %		0.6		0.8		1.6		2.5		2.5		–		1.2
Preferred shares		–		–		–		–		–		311		311
Common shares		–		–		–		–		–		1,000		1,000
Total available-for-sale securities		9,105		9,112		23,949		5,362		1,665		1,311		50,504
Held-to-maturity
Canadian federal and provincial government issued or guaranteed debt		65		860		4,854		–		–		–		5,779
U.S. treasury and other U.S. agency debt		1,290		–		2,703		–		–		–		3,993
Other foreign government debt		–		683		1,914		102		6		–		2,705
Corporate debt		167		821		5,300		–		–		–		6,288
Total held-to-maturity assets		1,522		2,364		14,771		102		6		–		18,765
Total investment securities	$	10,627	$	11,476	$	38,720	$	5,464	$	1,671	$	1,311	$	69,269
Total by currency (in Canadian equivalent):
Canadian dollar	$	76	$	1,165	$	15,500	$	1,276	$	1,130	$	539	$	19,686
U.S. dollar		1,961		4,178		19,344		3,023		419		372		29,297
Mexican peso		420		579		1,568		285		–		9		2,861
Other currencies		8,170		5,554		2,308		880		122		391		17,425
Total investment securities	$	10,627	$	11,476	$	38,720	$	5,464	$	1,671	$	1,311	$	69,269

(1) Represents the weighted-average yield of fixed income securities.

Schdule of Analysis of Net Gain on Sale of Investment Securities

The following table presents the net gain on sale of investment securities:

For the year ended October 31 ($ millions)	2018(1)		2017			2016
Net realized gains	$	n/a	$	399		$	570
Debt investment securities measured at fair value through other comprehensive income (FVOCI)		146		n/a			n/a
Total net realized gains on investment securities		146		399			570
Impairment losses		–		19	(2)		36	(2)
Net gain on sale of investment securities	$	146	$	380		$	534

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Impairment losses are comprised of (2017 – $14; 2016 – $36) from equity securities and (2017 –$5; 2016 – nil) from other debt securities.

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Loans, Impaired Loans and Allowance for Credit Losses (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Disclosure of loans at amortized cost

(a) Loans at amortized cost

	IFRS 9						IAS 39
	2018(1)						2017
As at October 31 ($ millions)	Gross loans		Allowance for credit losses		Net carrying amount		Gross loans		Allowance for credit losses		Net carrying amount
Residential mortgages	$	253,357	$	678	$	252,679	$	236,916	$	551	$	236,365
Personal loans		96,019		2,109		93,910		89,227		1,502		87,725
Credit cards		16,485		1,213		15,272		14,104		802		13,302
Business and government		191,038		1,065		189,973		168,449		1,472		166,977
Total	$	556,899	$	5,065	$	551,834	$	508,696	$	4,327	$	504,369

(1) The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

Schedule of Loans and Acceptances Outstanding by Geography

(b) Loans and acceptances outstanding by geography⁽¹⁾

As at October 31 ($ millions)	2018			2017
Canada:
Residential mortgages	$	213,083		$	205,793
Personal loans		72,935			64,295
Credit cards		7,361			13,495
Business and government		57,918			52,935
		351,297			336,518
United States:
Personal loans		1,193			1,228
Business and government		40,613			35,702
		41,806			36,930
Mexico:
Residential mortgages		7,651			6,911
Personal loans		3,298			3,064
Credit cards		674			520
Business and government		15,399			13,635
		27,022			24,130
Chile:
Residential mortgages		15,313			7,302
Personal loans		6,023			3,587
Credit cards		2,592			1,744
Business and government		19,876			10,109
		43,804			22,742
Peru:
Residential mortgages		2,947			2,735
Personal loans		3,888			3,682
Credit cards		1,575			1,410
Business and government		11,707			10,617
		20,117			18,444
Colombia:
Residential mortgages		2,189			1,999
Personal loans		3,138			1,845
Credit cards		2,255			1,746
Business and government		3,996			3,838
		11,578			9,428
Other International:
Residential mortgages		12,174			12,176
Personal loans		5,544			4,471
Credit cards		2,028			2,244
Business and government		41,529			41,613
		61,275			60,504
Total loans		556,899			508,696
Acceptances(2)		16,329			13,560
Total loans and acceptances(3)		573,228			522,256
Allowance for credit losses(4)		(5,073	)		(4,327	)
Total loans and acceptances net of allowances for loan losses	$	568,155		$	517,929

(1) Geographic segmentation is based on the location of the property for residential mortgages; otherwise, the residence of the borrower.

(2) 1.6% of borrowers reside outside Canada.

(3) Loans and acceptances denominated in US dollars were $107,944 (2017 – $100,452), in Chilean pesos $37,515 (2017 – $17,824), Mexican pesos $21,561 (2017 – $18,857), and in other foreign currencies $49,223 (2017 – $44,176).

(4) Allowance for credit losses for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amount have not been restated (refer to Notes 2, 3, 4).

Schedule of Loans Maturities

(c) Loan maturities

As at October 31, 2018	Remaining term to maturity														Rate sensitivity
($ millions)	Within one year		One to five years		Five to ten years		Over ten years		No specific maturity			Total			Floating		Fixed rate		Non-rate sensitive			Total
Residential mortgages	$	49,762	$	180,563	$	10,326	$	11,040	$	1,666		$	253,357		$	59,351	$	191,802	$	2,204		$	253,357
Personal loans		17,422		35,050		4,775		693		38,079			96,019			37,003		58,007		1,009			96,019
Credit cards		–		–		–		–		16,485			16,485			5,334		11,151		–			16,485
Business and government		85,090		91,595		7,378		773		6,202			191,038			138,510		50,606		1,922			191,038
Total	$	152,274	$	307,208	$	22,479	$	12,506	$	62,432		$	556,899		$	240,198	$	311,566	$	5,135		$	556,899
Allowance for credit losses		–		–		–		–		(5,065	)		(5,065	)		–		–		(5,065	)		(5,065	)
Total loans net of allowance for credit losses	$	152,274	$	307,208	$	22,479	$	12,506	$	57,367		$	551,834		$	240,198	$	311,566	$	70		$	551,834
As at October 31, 2017	Remaining term to maturity														Rate sensitivity
($ millions)	Within one year		One to five years		Five to ten years		Over ten years		No specific maturity			Total			Floating		Fixed rate		Non-rate sensitive			Total
Residential mortgages	$	45,462	$	171,908	$	9,098	$	8,919	$	1,529		$	236,916		$	56,862	$	178,044	$	2,010		$	236,916
Personal loans		15,952		31,500		4,478		815		36,482			89,227			39,004		49,137		1,086			89,227
Credit cards		–		–		–		–		14,104			14,104			4,733		9,371		–			14,104
Business and government		77,724		80,124		4,597		760		5,244			168,449			119,515		47,162		1,772			168,449
Total loans	$	139,138	$	283,532	$	18,173	$	10,494	$	57,359		$	508,696		$	220,114	$	283,714	$	4,868		$	508,696
Allowance for credit losses		–		–		–		–		(4,327	)		(4,327	)		–		–		(4,327	)		(4,327	)
Total loans net of allowance for credit losses	$	139,138	$	283,532	$	18,173	$	10,494	$	53,032		$	504,369		$	220,114	$	283,714	$	541		$	504,369

Schedule of Impaired Loans

(d) Impaired loans⁽¹⁾⁽²⁾

	IFRS 9							IAS 39
	2018(4)							2017(3)
As at October 31 ($ millions)	Gross impaired loans(1)		Allowance for credit losses			Net		Gross impaired loans(1)		Allowance for credit losses			Net
Residential mortgages	$	1,797	$	360	(5)	$	1,437	$	1,445	$	326	(5)	$	1,119
Personal loans		1,069		644	(5)		425		1,067		1,040	(5)		27
Credit cards		–		–	(5)		–		543		543	(5)		–
Business and government		2,264		673	(6)		1,591		1,810		713	(6)		1,097
Total	$	5,130	$	1,677		$	3,453	$	4,865	$	2,622	(7)	$	2,243
By geography:
Canada	$	999		381			618	$	1,049
United States		80		25			55		140
Mexico		359		164			195		303
Peru		581		317			264		704
Chile		753		158			595		565
Colombia		619		159			460		462
Other International		1,739		473			1,266		1,642
Total	$	5,130		1,677			3,453	$	4,865

(1) Interest income recognized on impaired loans during the year ended October 31, 2018 was $49 (2017 – $23).

(2) Additional interest income of approximately $370 million would have been recorded if the above loans had not been classified as impaired (2017 – $363 million).

(3) Excludes loans acquired under the Federal Deposit Insurance Corporation (FDIC) guarantee related to the acquisition of R-G Premier Bank of Puerto Rico. For loans where the guarantee has expired, the total amount of loans considered impaired is $59 for 2017.

(4) Amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 2, 3 and 4).

(5) Allowance for credit losses for residential mortgages, personal loans and credit card loans is assessed on a collective basis.

(6) Allowance for credit losses for business and government loans is individually assessed.

(7) A portion of the existing allowance for credit losses on impaired loans as at October 31, 2017, was reclassified against performing loans with the adoption of IFRS 9 effective November 1, 2017, to conform with current period presentation.

Summary of Key Macroeconomic Variables Used for Allowance for Credit Losses Calculations

The following table shows certain key macroeconomic variables used in modelling the allowance for credit losses for Stages 1 and 2. For the base case, optimistic and pessimistic scenarios, the projections are provided for the next 12 months and for the remaining forecast period, which represents a medium-term view.

	Base Case Scenario				Alternative Scenario – Optimistic				Alternative Scenario – Pessimistic
	Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period
Canada
Real GDP growth, y/y % change		2.2		1.7		2.6		2.1		1.7		1.2
Unemployment rate, average %		5.9		5.9		5.7		5.0		6.2		6.8
Bank of Canada overnight rate target, average %		2.13		2.87		2.25		3.66		1.98		2.10
HPI – Housing Price Index, y/y % change		5.1		3.7		5.4		4.1		4.9		3.3
CPI – Consumer Price Index, y/y % change		2.7		2.1		2.7		2.6		2.7		1.5
USDCAD exchange rate, average		1.24		1.24		1.24		1.20		1.25		1.27
US
Real GDP growth, y/y % change		2.7		1.7		3.3		2.4		1.9		1.0
Unemployment rate, average %		4.0		4.1		3.7		3.2		4.3		5.0
Mexico
Real GDP growth, y/y % change		2.0		2.3		2.7		3.2		1.3		1.4
Unemployment rate, average %		3.7		4.2		3.5		3.4		4.0		4.9
Chile
Real GDP growth, y/y % change		3.9		3.5		5.0		4.8		2.7		2.3
Unemployment rate, average %		6.2		6.4		5.8		4.5		6.7		8.3
Peru
Real GDP growth, y/y % change		3.9		3.7		4.8		4.7		3.1		2.5
Unemployment rate, average %		6.3		6.1		5.7		4.5		6.8		7.7
Colombia
Real GDP growth, y/y % change		3.3		3.2		4.0		4.2		3.0		2.2
Unemployment rate, average %		9.1		8.8		8.7		7.4		9.3		10.0
Caribbean
Real GDP growth, y/y % change		4.0		4.1		5.2		5.4		2.8		2.9
Global
WTI oil price, average USD/bbl		71		67		75		84		67		54
Copper price, average USD/lb		2.91		3.11		2.98		3.44		2.84		2.84

Comparison Between the Allowance for Credit Losses for Financial Assets and ACL Under the Base, Optimistic and Pessimistic Scenarios

The table below provides a comparison between the reported Allowance for Credit Losses (ACL) for financial assets in Stage 1 and Stage 2, and the ACL under the base, optimistic and pessimistic scenarios for such assets.

	Reported under IFRS 9		Base case scenario		Optimistic scenario		Pessimistic scenario
ACL (Stage 1 and Stage 2)		3,475		3,467		3,345		3,618

Iimpact of Staging on the Bank's ACL

(i)(c) The following table illustrates the impact of staging on the Bank’s ACL by comparing the allowance if all performing financial assets were in Stage 1 or if all such assets were in Stage 2 to the actual ACL recorded on these assets.

	Stage 1 and 2 ACL under IFRS 9	ACL – All performing loans in Stage 1	Impact of staging
Financial assets	3,475	3,022		(453)
	Stage 1 and 2 ACL under IFRS 9	ACL – All performing loans in Stage 2	Impact of staging
Financial assets	3,475	5,361		1,886

Schedule of Allowance for Credit Losses

(ii) Allowance for credit losses on loans

	IFRS 9
($ millions)	Balance as at November 1, 2017		Provision for credit losses		Net write-offs			Other, including foreign currency adjustment			Balance as at October 31, 2018
Residential mortgages	$	717	$	104	$	(123	)	$	(20	)	$	678
Personal loans		1,879		1,411		(1,166	)		(15	)		2,109
Credit cards		1,163		898		(854	)		6			1,213
Business and government		1,261		166		(208	)		(72	)		1,147
	$	5,020	$	2,579	$	(2,351	)	$	(101	)	$	5,147
Presented as:
Allowance for credit losses on loans	$	4,920									$	5,065
Allowance for credit losses on acceptances		16										8
Allowance for credit losses on off-balance sheet exposures		84										74

Allowance for credit losses on loans

	IFRS 9
As at October 31, 2018 ($ millions)	Stage 1		Stage 2		Stage 3		Total
Residential mortgages	$	112	$	206	$	360	$	678
Personal loans		578		887		644		2,109
Credit cards		401		812		–		1,213
Business and government		132		260		673		1,065
Total(1)	$	1,223	$	2,165	$	1,677	$	5,065

(1) Excludes, allowance for credit losses for other financial assets including acceptances, investment securities, deposits with banks and off-balance sheet credit risks which amounted to $89.

The following table presents the changes to the allowance for credit losses on loans.    

	IFRS 9
As at October 31, 2018 ($ millions)	Stage 1			Stage 2			Stage 3			Total
Residential mortgages
Balance at beginning of the year	$	103		$	214		$	400		$	717
Provision for credit losses
Remeasurement(1)		(131	)		5			151			25
Newly originated or purchased financial assets		88			–			–			88
Derecognition of financial assets and maturities		(2	)		(7	)		–			(9	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		77			(65	)		(12	)		–
Stage 2		(18	)		106			(88	)		–
Stage 3		–			(39	)		39			–
Gross write-offs		–			–			(219	)		(219	)
Recoveries		–			–			96			96
Foreign exchange and other movements		(5	)		(8	)		(7	)		(20	)
Balance at end of year(2)	$	112		$	206		$	360		$	678
Personal loans
Balance at beginning of the year	$	477		$	802		$	600		$	1,879
Provision for credit losses
Remeasurement(1)		(670	)		629			1,015			974
Newly originated or purchased financial assets		615			–			–			615
Derecognition of financial assets and maturities		(82	)		(96	)		–			(178	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		453			(442	)		(11	)		–
Stage 2		(189	)		284			(95	)		–
Stage 3		(4	)		(286	)		290			–
Gross write-offs		–			–			(1,441	)		(1,441	)
Recoveries		–			–			275			275
Foreign exchange and other movements		(22	)		(4	)		11			(15	)
Balance at end of year(2)	$	578		$	887		$	644		$	2,109
Credit cards
Balance at beginning of the year	$	364		$	799		$	–		$	1,163
Provision for credit losses
Remeasurement(1)		(276	)		448			593			765
Newly originated or purchased financial assets		329			–			–			329
Derecognition of financial assets and maturities		(91	)		(105	)		–			(196	)
Changes in models and methodologies		–			–			–			–
Transfer to (from):		–			–			–			–
Stage 1		259			(259	)		–			–
Stage 2		(162	)		162			–			–
Stage 3		(1	)		(239	)		240			–
Gross write-offs		–			–			(1,104	)		(1,104	)
Recoveries		–			–			250			250
Foreign exchange and other movements		(21	)		6			21			6
Balance at end of year(2)	$	401		$	812		$	–		$	1,213
Business and government
Balance at beginning of the year	$	178		$	307		$	760		$	1,245
Provision for credit losses
Remeasurement(1)		(93	)		6			264			177
Newly originated or purchased financial assets		322			–			–			322
Derecognition of financial assets and maturities		(108	)		(164	)		(68	)		(340	)
Changes in models and methodologies		3			14			–			17
Transfer to (from):		–			–			–			–
Stage 1		63			(58	)		(5	)		–
Stage 2		(187	)		218			(31	)		–
Stage 3		(2	)		(30	)		32			–
Gross write-offs		–			–			(276	)		(276	)
Recoveries		–			–			68			68
Foreign exchange and other movements		(3	)		(2	)		(69	)		(74	)
Balance at end of period including off-balance sheet exposures(2)	$	173		$	291		$	675		$	1,139
Less: Allowance for credits losses on off-balance sheet exposures(2)(3)		41			31			2			74
Balance at end of year(2)	$	132		$	260		$	673		$	1,065

(1) Includes credit risk changes as a result of significant increases in credit risk, changes in credit risk that did not result in a transfer between stages, changes in model inputs and assumptions and changes due to drawdowns of undrawn commitments.

(2) Interest income on impaired loans for residential mortgages, personal loans, credit cards, and business and government loans totaled $370.

(3) Allowance for credit losses on off-balance sheet exposures is recorded in other liabilities in the Consolidated Statement of Financial Position.

(4) Allowance for credit losses on acceptances are recorded against the financial asset in the Consolidated Statement of Financial Position.

(5) There are no accumulated credit losses on purchased or originated credit impaired loans.

(6) During the year ended October 31, 2018, the contractual terms of certain financial assets were modified where the modification did not result in derecognition. The amortized cost of such loans that were modified in Stage 3 before the modification was $185.

The following table presents the allowance for credit losses under IAS 39 as at October 31, 2017.

	IAS 39
	As at and for the year ended October 31, 2017
($ millions)	Balance at beginning of year		Write-offs			Recoveries		Provision for credit losses			Other, including foreign currency adjustment			Balance at end of year
Individual	$	894	$	(501	)	$	55	$	304		$	(39	)	$	713
Collective		3,498		(2,658	)		571		1,952			(8	)		3,355
Total before loans acquired under FDIC guarantee		4,392		(3,159	)		626		2,256			(47	)		4,068
Loans acquired under FDIC guarantee(1)		234		(14	)		54		(7	)		(8	)		259
	$	4,626	$	(3,173	)	$	680	$	2,249		$	(55	)	$	4,327
Represented by:
Allowance against impaired loans														$	2,622
Allowance against performing loans(2)															1,446
Total before loans acquired under FDIC guarantee															4,068
Loans acquired under FDIC guarantee(1)															259
														$	4,327

(1) This represents the gross amount of allowance for credit losses as the receivable from FDIC is separately recorded in other assets.

(2) The allowance against performing loans is attributable to business and government loans $625 with the remainder allocated to personal and credit card loans $720 and residential mortgages $101.

Summary of Carrying Value of Exposures by Risk Rating

(f) Carrying value of exposures by risk rating

Residential mortgages	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	146,461	$	307	$	–	$	146,768
Low		58,154		378		–		58,532
Medium		11,689		972		–		12,661
High		1,615		3,515		–		5,130
Very high		25		1,779		–		1,804
Loans not graded(1)		23,139		3,526		–		26,665
Default		–		–		1,797		1,797
Total		241,083		10,477		1,797		253,357
Allowance for credit losses		112		206		360		678
Carrying value	$	240,971	$	10,271	$	1,437	$	252,679

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Personal loans	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	30,660	$	66	$	–	$	30,726
Low		26,039		151		–		26,190
Medium		8,315		402		–		8,717
High		6,686		3,647		–		10,333
Very high		58		1,362		–		1,420
Loans not graded(1)		15,452		2,112		–		17,564
Default		–		–		1,069		1,069
Total		87,210		7,740		1,069		96,019
Allowance for credit losses		578		887		644		2,109
Carrying value	$	86,632	$	6,853	$	425	$	93,910

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Credit cards	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	1,418	$	5	$	–	$	1,423
Low		2,436		14		–		2,450
Medium		3,358		71		–		3,429
High		2,929		1,455		–		4,384
Very high		37		697		–		734
Loans not graded(1)		2,905		1,159		–		4,064
Default		–		–		–		–
Total		13,083		3,401		–		16,484
Allowance for credit losses		401		812		–		1,213
Carrying value	$	12,682	$	2,589	$	–	$	15,271

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Undrawn loan commitments – Retail	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Very low	$	72,321	$	–	$	–	$	72,321
Low		16,531		2		–		16,533
Medium		6,029		79		–		6,108
High		2,631		670		–		3,301
Very high		26		367		–		393
Loans not graded(1)		14,774		3,364		–		18,138
Default		–		–		–		–
Total		112,312		4,482		–		116,794
Allowance for credit losses		–		–		–		–
Carrying value	$	112,312	$	4,482	$	–	$	116,794

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Business and government loans	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Investment grade	$	87,047	$	3,770	$	–	$	90,817
Non-Investment grade		83,730		9,706		–		93,436
Watch list		130		2,689		–		2,819
Loans not graded(1)		1,050		652		–		1,702
Default		–		–		2,264		2,264
Total		171,957		16,817		2,264		191,038
Allowance for credit losses		132		260		673		1,065
Carrying value	$	171,825	$	16,557	$	1,591	$	189,973

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Undrawn loan commitments – Business and government	As at October 31, 2018
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3(2)		Total
Investment grade	$	159,880	$	1,663	$	–	$	161,543
Non-Investment grade		56,001		3,445		–		59,446
Watch list		81		977		–		1,058
Loans not graded(1)		2,178		28		–		2,206
Default		–		–		4		4
Total		218,140		6,113		4		224,257
Allowance for credit losses		41		31		2		74
Carrying value	$	218,099	$	6,082	$	2	$	224,183

(1) Portfolios where the customer account level ‘Probability of Default’ has not been determined have been included in the ‘Loans not graded’ category.

(2) Stage 3 includes purchased or originated credit impaired loans.

Schedule of Loans Past Due But Not Impaired

(h) Loans past due but not impaired⁽¹⁾

A loan is considered past due when a counterparty has not made a payment by the contractual due date. The following table presents the carrying value of loans that are contractually past due but not classified as impaired because they are either less than 90 days past due or fully secured and collection efforts are reasonably expected to result in repayment, or restoring it to a current status in accordance with the Bank’s policy.

	2018								2017(3)
As at October 31 ($ millions)	31 – 60 days		61 – 90 days		91 days and greater(2)		Total		31 – 60 days		61 – 90 days		91 days and greater		Total
Residential mortgages	$	1,290	$	521	$	–	$	1,811	$	1,035	$	446	$	122	$	1,603
Personal loans		609		322		–		931		522		284		–		806
Credit cards		231		154		353		738		202		139		75		416
Business and government		167		40		–		207		215		55		187		457
Total	$	2,297	$	1,037	$	353	$	3,687	$	1,974	$	924	$	384	$	3,282

(1) Loans past due 30 days or less are not presented in this analysis as they are not administratively considered past due.

(2) Under IFRS 9, all loans that are 90 days past due are considered impaired with the exception of credit card receivables which are considered impaired when 180 days past due. Prior amounts have not been restated (refer to Notes 3 and 4).

(3) Excludes loans acquired under the FDIC guarantee related to the acquisition of R-G Premier Bank of Puerto Rico.

Summary of Purchased Credit Impaired Loans

The following table provides details of such assets:

As at October 31 ($ millions)	2018
Unpaid principal balance(1)	$	548
Credit related fair value adjustments		(168	)
Carrying value		380
Stage 3 allowance		–
Carrying value net of related allowance	$	380

(1) Represents principal amount owed net of write-offs.

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Derecognition of Financial Assets (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Carrying Amount of Transferred Assets Do Not Qualify for Derecognition and Associated Liabilities

The following table provides the carrying amount of transferred assets that do not qualify for derecognition and the associated liabilities:

As at October 31 ($ millions)	2018(1)		2017(1)
Assets
Carrying value of residential mortgage loans	$	20,498	$	18,178
Other related assets(2)		2,679		2,293
Liabilities
Carrying value of associated liabilities		21,459		19,278

(1) The fair value of the transferred assets is $23,237 (2017 – $20,580) and the fair value of the associated liabilities is $22,468 (2017 – $19,863), for a net position of $769 (2017 – $717).

(2) These include cash held in trust and trust permitted investment assets acquired as part of principal reinvestment account that the Bank is required to maintain in order to participate in the programs.

Securitization of personal lines of credit, credit cards and auto loans

The Bank securitizes a portion of its unsecured personal lines of credit, credit card and auto loan receivables through consolidated structured entities. These receivables continue to be recognized on the Consolidated Statement of Financial Position as personal loans and credit cards loans. For further details, refer to Note 15.

Securities sold under repurchase agreements and securities lent

The Bank enters into transactions, such as repurchase agreements and securities lending agreements, where the Bank transfers assets under agreements to repurchase them on a future date and retains all the substantial risks and rewards associated with the assets. The transferred assets remain on the Consolidated Statement of Financial Position.

The following table provides the carrying amount of the transferred assets and the associated liabilities:

As at October 31 ($ millions)	2018(1)		2017(1)
Carrying value of assets associated with:
Repurchase agreements(2)	$	82,816	$	86,789
Securities lending agreements		49,718		40,535
Total		132,534		127,324
Carrying value of associated liabilities(3)	$	101,257	$	95,843

(1) The fair value of transferred assets is $132,534 (2017 – $127,324) and the fair value of the associated liabilities is $101,257 (2017 – $95,843), for a net position of $31,277 (2017 – $31,481).

(2) Does not include over-collateralization of assets pledged.

(3) Liabilities for securities lending arrangements only include amounts related to cash collateral received. In most cases, securities are received as collateral.

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Structured Entities (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Unconsolidated Structured Entities

The following table provides information about other structured entities in which the Bank has a significant interest but does not control and therefore does not consolidate. A significant interest is generally considered to exist where the Bank is exposed to 10% or more of the unconsolidated structured entities’ maximum exposure to loss.

	As at October 31, 2018
($ millions)		Canadian multi-seller conduits that the Bank administers		Structured finance entities		Capital funding vehicles		Total
Total assets (on structured entity’s financial statements)	$	3,216	$	4,488	$	1,520	$	9,224
Assets recognized on the Bank’s financial statements
Trading assets		3		–		–		3
Investment securities		–		1,054		17		1,071
Loans(1)		–		978		45		1,023
		3		2,032		62		2,097
Liabilities recognized on the Bank’s financial statements
Deposits – Business and government		–		–		1,458		1,458
Derivative financial instruments		6		–		–		6
		6		–		1,458		1,464
Bank’s maximum exposure to loss	$	3,219	$	2,032	$	62	$	5,313
		As at October 31, 2017
($ millions)		Canadian multi-seller conduits that the Bank administers		Structured finance entities		Capital funding vehicles		Total
Total assets (on structured entity’s financial statements)	$	3,127	$	3,991	$	1,520	$	8,638
Assets recognized on the Bank’s financial statements
Trading assets		–		5		–		5
Investment securities		–		1,091		15		1,106
Loans(1)		–		731		40		771
		–		1,827		55		1,882
Liabilities recognized on the Bank’s financial statements
Deposits – Business and government		–		–		1,465		1,465
Derivative financial instruments		6		–		–		6
		6		–		1,465		1,471
Bank’s maximum exposure to loss	$	3,127	$	1,827	$	55	$	5,009

Summary of Other Unconsolidated Bank Sponsored Entities

The following table provides information on revenue from unconsolidated Bank-sponsored entities.

As at October 31 ($ millions)	2018						2017
	Funds(1)		Scotia Managed Companies		Total		Funds(1)		Scotia Managed Companies		Total
Revenue	$	2,118	$	3	$	2,121	$	2,016	$	5	$	2,021

(1) Includes mutual funds, other funds and trusts.

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Property and Equipment (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Property, Plant And Equipment

($ millions)	Land & Building			Equipment			Technology Assets			Leasehold Improvements			Total
Cost
Balance as at October 31, 2016	$	2,071		$	1,728		$	1,983		$	1,357		$	7,139
Additions		169			147			161			126			603
Disposals		(224	)		(52	)		(41	)		(28	)		(345	)
Foreign currency adjustments and other		(294	)		69			(15	)		(45	)		(285	)
Balance as at October 31, 2017	$	1,722		$	1,892		$	2,088		$	1,410		$	7,112
Acquisitions		214			96			186			97			593
Additions		142			56			141			148			487
Disposals		(231	)		(38	)		(33	)		(49	)		(351	)
Foreign currency adjustments and other		36			95			(86	)		(21	)		24
Balance as at October 31, 2018	$	1,883		$	2,101		$	2,296		$	1,585		$	7,865
Accumulated depreciation
Balance as at October 31, 2016	$	766		$	1,362		$	1,653		$	838		$	4,619
Depreciation		47			91			131			71			340
Disposals		(58	)		(37	)		(40	)		(17	)		(152	)
Foreign currency adjustments and other		(69	)		34			(25	)		(16	)		(76	)
Balance as at October 31, 2017	$	686		$	1,450		$	1,719		$	876		$	4,731
Depreciation		62			80			143			69			354
Disposals		(56	)		(35	)		(24	)		(17	)		(132	)
Foreign currency adjustments and other		13			174			10			31			228
Balance as at October 31, 2018	$	705		$	1,669		$	1,848		$	959		$	5,181
Net book value
Balance as at October 31, 2017	$	1,036		$	442		$	369		$	534		$	2,381	(1)
Balance as at October 31, 2018	$	1,178		$	432		$	448		$	626		$	2,684	(1)

(1) Includes $36 (2017 – $16) of investment property.

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Investments in Associates (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Significant Investments in Associates

The Bank had significant investments in the following associates:

					2018							2017
As at October 31 ($ millions)	Country of incorporation		Nature of business		Ownership percentage			Date of financial statements(1)		Carrying value		Carrying value
Thanachart Bank Public Company Limited		Thailand		Banking		49.0	%		October 31, 2018	$	2,961	$	2,789
Canadian Tire’s Financial Services business (CTFS)(2)		Canada		Financial Services		20.0	%		September 30, 2018		518		542
Bank of Xi’an Co. Ltd.		China		Banking		19.9	%		September 30, 2018		772		711
Maduro & Curiel’s Bank N.V.(3)		Curacao		Banking		48.1	%		September 30, 2018		304		284

(1) Represents the date of the most recent financial statements. Where available, financial statements prepared by the associates’ management or other published information is used to estimate the change in the Bank’s interest since the most recent financial statements.

(2) Canadian Tire has an option to sell to the Bank up to an additional 29% equity interest within the next 10 years at the then fair value, that can be settled, at the Bank’s discretion, by issuance of common shares or cash. After 10 years, for a period of six months, the Bank has the option to sell its equity interest back to Canadian Tire at the then fair value. As at October 1, 2014 CTFS had total assets of $5,351 and total liabilities of $4,387.

(3) The local regulator requires financial institutions to set aside reserves for general banking risks. These reserves are not required under IFRS, and represent undistributed retained earnings related to a foreign associated corporation, which are subject to local regulatory restrictions. As of October 31, 2018 these reserves amounted to $62 (2017 – $61).

Summarized Financial Information of Significant Associates

Summarized financial information of the Bank’s significant associates are as follows.

	For the twelve months ended(1)				As at
($ millions)	Revenue		Net income		Total assets		Total liabilities
Thanachart Bank Public Company Limited	$	1,871	$	590	$	39,875	$	34,289
Canadian Tire’s Financial Services business (CTFS)		1,143		348		6,256		5,279
Bank of Xi’an Co. Ltd.		1,123		456		45,261		41,595
Maduro & Curiel’s Bank N.V.		348		92		5,832		5,165
	For the twelve months ended and as at September 30, 2017(1)
($ millions)	Revenue		Net income		Total assets		Total liabilities
Thanachart Bank Public Company Limited	$	1,718	$	508	$	38,050	$	32,902
Canadian Tire’s Financial Services business (CTFS)		1,040		334		6,233		5,235
Bank of Xi’an Co. Ltd.		915		411		41,170		37,821
Maduro & Curiel’s Bank N.V.		343		80		5,501		4,896

(1) Based on the most recent available financial statements.

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Oct. 31, 2018

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Summary of Changes in Carrying Amount of Goodwill by Cash Generating Units

The changes in the carrying amounts of goodwill by cash-generating unit (CGU) are as follows:

($ millions)	Canadian Banking			Global Banking and Markets			Latin America			Caribbean and Central America			Total
Balance as at October 31, 2016	$	3,403		$	265		$	2,461		$	1,255		$	7,384
Acquisitions		–			–			–			–			–
Dispositions		(36	)		–			–			–			(36	)
Foreign currency adjustments and other		18			(10	)		(61	)		(52	)		(105	)
Balance as at October 31, 2017		3,385			255			2,400			1,203			7,243
Acquisitions		1,710			–			1,164			–			2,874
Dispositions		–			–			–			–			–
Foreign currency adjustments and other		–			5			(110	)		(5	)		(110	)
Balance as at October 31, 2018	$	5,095		$	260		$	3,454		$	1,198		$	10,007

Summary of Intangible Assets

		Finite life						Indefinite life
($ millions)	Computer software			Other intangibles			Fund management contracts(1)		Other intangibles		Total
Cost
Balance as at October 31, 2016	$	2,737		$	1,631		$	2,325	$	68	$	6,761
Acquisitions		–			–			–		–		–
Additions		584			5			–		–		589
Disposals		(3	)		(56	)		–		–		(59	)
Foreign currency adjustments and other		(40	)		(17	)		–		–		(57	)
Balance as at October 31, 2017	$	3,278		$	1,563		$	2,325	$	68	$	7,234
Acquisitions		47			480			2,090		98		2,715
Additions		673			3			–		–		676
Disposals		(8	)		–			–		–		(8	)
Foreign currency adjustments and other		(44	)		(30	)		–		–		(74	)
Balance as at October 31, 2018	$	3,946		$	2,016		$	4,415	$	166	$	10,543
Accumulated amortization
Balance as at October 31, 2016	$	1,009		$	995		$	–	$	–	$	2,004
Amortization		339			82			–		–		421
Disposals		(2	)		(18	)		–		–		(20	)
Foreign currency adjustments and other		(25	)		(9	)		–		–		(34	)
Balance as at October 31, 2017	$	1,321		$	1,050		$	–	$	–	$	2,371
Amortization		409			85			–		–		494
Disposals		(8	)		–			–		–		(8	)
Foreign currency adjustments and other		(17	)		(9	)		–		–		(26	)
Balance as at October 31, 2018	$	1,705		$	1,126		$	–	$	–	$	2,831
Net book value
As at October 31, 2017	$	1,957	(2)	$	513		$	2,325	$	68	$	4,863
As at October 31, 2018	$	2,241	(2)	$	890		$	4,415	$	166	$	7,712

(1) Fund management contracts are attributable to HollisWealth Inc. (formerly DundeeWealth Inc.).

(2) Computer software comprises of purchased software of $483 (2017 – $500), internally generated software of $1,208 (2017 – $981), and in process software not subject to amortization of $550 (2017 – $476).

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Other Assets (Tables)

12 Months Ended

Oct. 31, 2018

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Schedule of Other Assets

As at October 31 ($ millions)	2018		2017
Accrued interest	$	2,800	$	2,176
Accounts receivable and prepaids		1,878		1,674
Current tax assets		657		327
Margin deposit derivatives		3,247		3,041
Segregated fund assets		2,736		–
Pension assets (Note 28)		360		256
Receivable from brokers, dealers and clients		2,061		913
Receivable from the Federal Deposit Insurance Corporation (Note 13)		77		106
Other		3,617		4,256
Total	$	17,433	$	12,749

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Deposits (Tables)

12 Months Ended

Oct. 31, 2018

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Summary of Deposits

		2018												2017
		Payable on demand(1)
As at October 31 ($ millions)		Interest- bearing		Non-interest bearing		Payable after notice	(2)		Payable on a fixed date	(3)		Total
Personal	$	7,517	$	7,488	$	123,302		$	76,238		$	214,545	$	200,030
Business and government		94,812		24,310		34,600			268,280			422,002		384,988
Financial institutions		6,510		2,804		1,895			28,778			39,987		40,349
Total	$	108,839	$	34,602	$	159,797	(4)	$	373,296		$	676,534	$	625,367
Recorded in:
Canada	$	84,638	$	17,825	$	122,974		$	247,361		$	472,798	$	445,487
United States		14,080		128		8,950			36,780			59,938		58,070
United Kingdom		–		–		152			16,695			16,847		12,041
Mexico		14		4,362		5,382			11,393			21,151		19,419
Peru		2,738		1,284		4,129			7,062			15,213		15,216
Chile		3,392		3,029		146			17,613			24,180		11,574
Colombia		37		507		3,963			5,036			9,543		7,587
Other International		3,940		7,467		14,101			31,356			56,864		55,973
Total(5)	$	108,839	$	34,602	$	159,797		$	373,296		$	676,534	$	625,367

(1) Deposits payable on demand include all deposits for which we do not have the right to notice of withdrawal, generally chequing accounts.

(2) Deposits payable after notice include all deposits for which we require notice of withdrawal, generally savings accounts.

(3) All deposits that mature on a specified date, generally term deposits, guaranteed investments certificates and similar instruments.

(4) Includes $141 (2017 – $141) of non-interest bearing deposits.

(5) Deposits denominated in U.S. dollars amount to $219,195 (2017 – $216,018), deposits denominated in Chilean pesos amount to $22,731 (2017 – $11,066), deposits denominated in Mexican pesos amount to $18,341 (2017 – $17,156) and deposits denominated in other foreign currencies amount to $79,582 (2017 – $70,217).

Summary of Maturity Schedule for Term Deposits

The following table presents the maturity schedule for term deposits in Canada greater than $100,000⁽¹⁾.

($ millions)	Within three months		Three to six months		Six to twelve months		One to five years		Over five years		Total
As at October 31, 2018	$	36,670	$	23,913	$	42,830	$	99,734	$	19,872	$	223,019
As at October 31, 2017	$	33,678	$	26,579	$	31,190	$	94,563	$	16,073	$	202,083

(1) The majority of foreign term deposits are in excess of $100,000.

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Subordinated Debentures (Tables)

12 Months Ended

Oct. 31, 2018

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Schedule of Net of Holdings in Debentures

As at October 31 ($ millions)				2018		2017
Maturity date	Interest rate (%)		Terms(1)	Carrying value(2)		Carrying value(2)
October 2024		3.036	Redeemable on or after October 18, 2017. After October 18, 2019, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.14%.	$	1,740	$	1,756
June 2025		8.90	Redeemable at any time.		259		260
December 2025(3)		3.367	Redeemable on or after December 8, 2020. After December 8, 2020, interest will be payable at an annual rate equal to the 90 day bankers’ acceptance rate plus 2.19%.		729		737
December 2025(3)		4.50	US$1,250 million. Interest will be payable semi-annually in arrears on June 16 and December 16 of each year.		1,645		1,613
March 2027(3)		2.58	Redeemable on or after March 30, 2022. After March 30, 2022, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.19%.		1,195		1,219
November 2037(4)		3.015	JPY 10 billion. Redeemed on November 20, 2017.		–		113
April 2038(5)		3.37	JPY 10 billion. Redeemed on April 9, 2018.		–		110
August 2085		Floating	US$99 million bearing interest at a floating rate of the offered rate for six-month Eurodollar deposits plus 0.125%. Redeemable on any interest payment date.		130		127
				$	5,698	$	5,935

(1) In accordance with the provisions of the Capital Adequacy Guideline of the Superintendent, all redemptions are subject to regulatory approval and subject to the terms in the relevant prospectus.

(2) The carrying value of subordinated debentures may differ from par value due to adjustments related to hedge accounting.

(3) These debentures contain non-viability contingent capital (NVCC) provisions. Under such NVCC provisions, the debentures are convertible into a variable number of common shares if OSFI announces that the Bank has ceased, or is about to cease, to be viable, or if a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent thereof without which the Bank would have been determined by OSFI to be non-viable. If such a conversion were to occur, the debentures would be converted into common shares pursuant to an automatic conversion formula defined as 150% of the par value plus accrued and unpaid interest divided by the conversion price. The conversion price is based on the greater of: (i) a floor price of $5.00 or, where applicable, the US dollar equivalent of $5.00 (subject to, in each case, adjustments in certain events as set out in the respective prospectus supplements), and (ii) the current market price of the Bank’s common shares at the time of the trigger event (10-day weighted average), where applicable converted from CAD to USD.

(4) On November 29, 2017, the Bank redeemed all outstanding 3.015% subordinated debentures due November 30, 2038 at their par value of JPY 10 billion plus accrued interest.

(5) On April 9, 2018, the Bank redeemed all outstanding 3.370% subordinated debentures due April 9, 2038 at their par value of JPY 10 billion plus accrued interest.

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Other Liabilities (Tables)

12 Months Ended

Oct. 31, 2018

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Summary of Other Liabilities

As at October 31 ($ millions)	2018		2017
Accrued interest	$	2,634	$	2,172
Accounts payable and accrued expenses		6,198		5,867
Current tax liabilities		435		408
Deferred tax liabilities (Note 27)		1,205		697
Gold and silver certificates and bullion		5,019		6,819
Margin and collateral accounts		6,523		7,129
Segregated fund liabilities		2,736		–
Payables to brokers, dealers and clients		564		796
Provisions (Note 23)(1)		181		213
Allowance for credit losses on off-balance sheet exposures - IFRS 9 (Note 13)		74		n/a
Allowance for credit losses on off-balance sheet exposures - IAS 39(1)		n/a		120
Pension liabilities (Note 28)		593		808
Other liabilities of subsidiaries and structured entities		19,933		12,954
Other		6,649		5,331
Total	$	52,744	$	43,314

(1) Prior year amounts have been reclassified to conform with current period presentation.

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Provisions (Tables)

12 Months Ended

Oct. 31, 2018

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Summary of Provisions

($ millions)	Restructuring			Litigation & other			Total
As at November 1, 2016	$	277		$	121		$	398
Provisions made during the year		–			27			27
Provisions utilized / released during the year		(174	)		(38	)		(212	)
Balance as at October 31, 2017	$	103		$	110		$	213
Provisions made during the year		–			79			79
Provisions utilized / released during the year		(79	)		(32	)		(111	)
Balance as at October 31, 2018	$	24		$	157		$	181

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Common shares, preferred shares and other equity instruments (Tables)

12 Months Ended

Oct. 31, 2018

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Schedule of Common Shares (Detail)

An unlimited number of common shares without nominal or par value.

Issued and fully paid:

	2018						2017
As at October 31 ($ millions)	Number of shares			Amount			Number of shares			Amount
Outstanding at beginning of year		1,199,231,715		$	15,644			1,207,893,604		$	15,513
Issued in relation to share-based payments, net (Note 26)		2,238,468			135			5,338,111			313
Issued in relation to the acquisition of a subsidiary or associated corporation		33,788,141			2,573			–			–
Repurchased for cancellation under the Normal Course Issuer Bid		(8,230,700	)		(118	)		(14,000,000	)		(182	)
Outstanding at end of year		1,227,027,624	(1)	$	18,234			1,199,231,715	(1)	$	15,644

(1) In the normal course of business, the Bank’s regulated Dealer subsidiary purchases and sells the Bank’s common shares to facilitate trading/institutional client activity. During fiscal 2018, the number of such shares bought and sold was 14,667,143 (2017 – 15,856,738).

Schedule of Preferred Shares (Detail)

An unlimited number of preferred shares without nominal or par value.

Issued and fully paid:

	2018								2017
As at October 31 ($ millions)	Number of shares		Amount		Dividends declared per share		Conversion feature		Number of shares		Amount		Dividends declared per share		Conversion feature
Preferred shares:(a)
Series 18(b)		–		–		0.418750		–		7,497,663		187		0.837500		Series 19
Series 19(b)		–		–		0.374547		–		6,302,337		158		0.642626		Series 18
Series 20(c)		–		–		0.902500		–		8,039,268		201		0.902500		Series 21
Series 21(c)		–		–		0.691967		–		5,960,732		149		0.554501		Series 20
Series 22(d)(e)		9,376,944		234		0.957500		Series 23		9,376,944		234		0.957500		Series 23
Series 23(d)(e)		2,623,056		66		0.736967		Series 22		2,623,056		66		0.600126		Series 22
Series 30(d)(f)		6,142,738		154		0.455000		Series 31		6,142,738		154		0.455000		Series 31
Series 31(d)(f)		4,457,262		111		0.516968		Series 30		4,457,262		111		0.380126		Series 30
Series 32(d)(g)		11,161,422		279		0.515752		Series 33		11,161,422		279		0.515752		Series 33
Series 33(d)(g)		5,184,345		130		0.601968		Series 32		5,184,345		130		0.465159		Series 32
Series 34(d)(h)(i)		14,000,000		350		1.375000		Series 35		14,000,000		350		1.375000		Series 35
Series 36(d)(h)(j)		20,000,000		500		1.375000		Series 37		20,000,000		500		1.375000		Series 37
Series 38(d)(h)(k)		20,000,000		500		1.212500		Series 39		20,000,000		500		1.351175		Series 39
Series 40(d)(h)(l)		12,000,000		300		–		Series 41		–		–		–		–
Total preferred shares		104,945,767	$	2,624						120,745,767	$	3,019

Terms of preferred shares

	First issue date		Issue price		Initial dividend		Initial dividend payment date		Rate reset spread			Redemption date		Redemption price
Preferred shares(a):
Series 18(b)		March 25, 2008		25.00		0.431500		July 29, 2008		0.00	%		April 26, 2018		25.00
Series 19(b)		April 26, 2013		25.00		0.189250		July 29, 2013		0.00	%		April 26, 2018		25.00
Series 20(c)		June 10, 2008		25.00		0.167800		July 29, 2008		0.00	%		October 26, 2018		25.00
Series 21(c)		October 26, 2013		25.00		0.167875		January 29, 2014		0.00	%		October 26, 2018		25.00
Series 22(d)(e)		September 9, 2008		25.00		0.482900		January 28, 2009		1.88	%		January 26, 2019		25.00
Series 23(d)(e)		January 26, 2014		25.00		0.173875		April 28, 2014		1.88	%		January 26, 2014 to January 26, 2019		25.50
Series 30(d)(f)		April 12, 2010		25.00		0.282200		July 28, 2010		1.00	%		April 26, 2020		25.00
Series 31(d)(f)		April 26, 2015		25.00		0.095500		July 29, 2015		1.00	%		April 26, 2015 to April 26, 2020		25.50
Series 32(d)(g)		February 28, 2011		25.00		0.215410		April 27, 2011		1.34	%		February 2, 2021		25.00
Series 33(d)(g)		February 2, 2016		25.00		0.105690		April 27, 2016		1.34	%		February 2, 2016 to February 2, 2021		25.50
Series 34(d)(h)(i)		December 17, 2015		25.00		0.497300		April 27, 2016		4.51	%		April 26, 2021		25.00
Series 36(d)(h)(j)		March 14, 2016		25.00		0.508600		July 27, 2016		4.72	%		July 26, 2021		25.00
Series 38(d)(h)(k)		September 16, 2016		25.00		0.441800		January 27, 2017		4.19	%		January 27, 2022		25.00
Series 40(d)(h)(l)		October 12, 2018		25.00		0.362100		January 29, 2019		2.43	%		January 27, 2024		25.00

(a) Non-cumulative preferential cash dividends on all series are payable quarterly, as and when declared by the Board. Dividends on the Non-cumulative 5-Year Rate Reset Preferred Shares (Series 22, 30 and 32) and the Non-cumulative 5-Year Rate Reset Preferred Shares Non Viability Contingent Capital (NVCC) (Series 34, 36, 38, and 40) are payable at the applicable rate for the initial five-year fixed rate period ending one day prior to the redemption date. Subsequent to the initial five-year fixed rate period, and resetting every five years thereafter, the dividend on such Rate Reset Preferred Shares will be determined by the sum of the 5-year Government of Canada Yield plus the indicated rate reset spread, multiplied by $25.00. If outstanding, non-cumulative preferential cash dividends on the Series 23, 31, 33, 35, 37, 39, and 41 are payable quarterly, as and when declared by the Board. Dividends on the Non-cumulative 5-Year Rate Reset Preferred Shares (Series 23, 31 and 33) and the Non-cumulative 5-Year Rate Reset Preferred Shares NVCC (Series 35, 37, 39, and 41) are payable, at a rate equal to the sum of the three month Government of Canada Treasury Bill rate plus the rate reset spread of the converted preferred shares, multiplied by $25.00. For each of the years presented, the Bank paid all of the non-cumulative preferred share dividends.

(b) On April 26, 2018, the Bank redeemed all outstanding Non-cumulative Preferred Shares Series 18 and Series 19 and paid dividends of $0.209375 and $0.181788 per share, respectively.

(c) On October 26, 2018, the Bank redeemed all outstanding Non-Cumulative Preferred Shares 20 and 21 and paid a dividend of $0.225625 and $0.187403, respectively, per share.

(d) Holders of Fixed Rate Reset Preferred Shares will have the option to convert shares into an equal number of the relevant series of Floating Rate Preferred Shares on the applicable Rate Reset Series conversion date and every five years thereafter. Holders of Floating Rate Reset Preferred Shares have reciprocal conversion options into the relevant series of Fixed Rate Reset Preferred Shares. With respect to Series 22 and 23, 30 and 31, 32 and 33, 34 and 35, 36 and 37, 38 and 39, and 40 and 41, if the Bank determines that, after giving effect to any Election Notices received, there would be less than 1,000,000 Fixed Rate or Floating Rate Preferred Shares of such Series issued and outstanding on an applicable conversion date, then all of the issued and outstanding preferred shares of such Series will automatically be converted into an equal number of the preferred shares of the other relevant Series.

(e) Holders of Series 22 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 23 non-cumulative floating rate preferred shares on January 26, 2019, and on January 26 every five years thereafter. With regulatory approval, the Series 22 preferred shares may be redeemed by the Bank on January 26, 2019, and every five years thereafter, respectively, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 23 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on January 26, 2019 and on January 26 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed for redemption on any other date after January 26, 2014.

(f) Holders of Series 30 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 31 non-cumulative floating rate preferred shares on April 26, 2020, and on April 26 every five years thereafter. With regulatory approval, the Series 30 preferred shares may be redeemed by the Bank on April 26, 2020, and every five years thereafter, respectively, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 31 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on April 26, 2020 and on April 26 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed for redemption on any other date after April 26, 2015.

(g) Holders of Series 32 Non-cumulative 5-Year Rate Reset Preferred Shares will have the option to convert shares into an equal number of Series 33 non-cumulative floating rate preferred shares on February 2, 2021 and on February 2 every five years thereafter. With regulatory approval, the Series 32 preferred shares may be redeemed by the Bank on February 2, 2021, and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends. With regulatory approval, the Series 33 Non-cumulative Preferred Shares may be redeemed by the Bank at (i) $25.00 together with all declared and unpaid dividends to the date fixed for redemption in the case of redemptions on February 2, 2021 and on February 2 every five years thereafter, or (ii) $25.50 together with all declared and unpaid dividends to the date fixed redemption on any other date after February 2, 2016.

(h) These preferred shares contain NVCC provisions necessary for the shares to qualify as Tier 1 regulatory capital under Basel III.

(i) Holders of Series 34 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 35 non-cumulative floating rate preferred shares on April 26, 2021, and on April 26 every five years thereafter. With regulatory approval, Series 34 preferred shares may be redeemed by the Bank on April 26, 2021 and every five years thereafter, and for Series 35 preferred shares (NVCC), if applicable, on April 26, 2026 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(j) Holders of Series 36 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 37 non-cumulative floating rate preferred shares (NVCC) on July 26, 2021, and on July 26 every five years thereafter. With regulatory approval, Series 36 preferred shares may be redeemed by the Bank on July 26, 2021 and every five years thereafter, and for Series 37 preferred shares, if applicable, on July 26, 2026 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(k) Holders of Series 38 Non-cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into an equal number of Series 39 non-cumulative floating rate preferred shares (NVCC) on January 27, 2022, and on January 27 every five years thereafter. With regulatory approval, Series 38 preferred shares may be redeemed by the Bank on January 27, 2022 and every five years thereafter, and for Series 39 preferred shares, if applicable, on January 27, 2027 and every five years thereafter, at $25.00 per share, together with declared and unpaid dividends.

(l) On October 12, 2018, the Bank issued 12 million Non-Cumulative 5-year Rate Reset Preferred Shares Series 40 (NVCC) for $300 million. The initial dividend, if declared, will be payable on January 29, 2019. Holder of Series 40, Non-Cumulative 5-Year Rate Reset Preferred Shares (NVCC) will have the option to convert shares into equal number of Non-Cumulative Floating Rate Preferred Shares Series 41 (NVCC), on January 27, 2024 and on January 27 every five years thereafter. With regulatory approval, Series 40 may be redeemed by the Bank on January 27, 2024 and every five years thereafter, and for Series 41, if applicable, on January 27, 2029 and every five years thereafter, at $25.00 per share together with declared and unpaid dividends.

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Capital Management (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Regulatory Capital and Capital Ratios

The Bank’s regulatory capital ratios were as follows:

	2018(3)			2017
As at October 31 ($ millions)	All-in			All-in			Transitional
Capital
Common Equity Tier 1 Capital	$	44,443		$	43,352		$	46,051
Net Tier 1 Capital		50,187			49,473			50,623
Total regulatory capital		57,364			56,113			57,222
Risk-weighted assets/exposures used in calculation of capital ratios
CET1 risk-weighted assets(1)(2)	$	400,507		$	376,379		$	387,292
Tier 1 risk-weighted assets(1)(2)		400,680			376,379			387,292
Total risk-weighted assets(1)(2)		400,853			376,379			387,292
Leverage exposures		1,119,099			1,052,891			1,053,928
Capital ratios
Common Equity Tier 1 Capital ratio		11.1	%		11.5	%		11.9	%
Tier 1 capital ratio		12.5	%		13.1	%		13.1	%
Total capital ratio		14.3	%		14.9	%		14.8	%
Leverage ratio		4.5	%		4.7	%		4.8	%

(1) In accordance with OSFI’s requirements, scalars for CVA risk-weighted assets of 0.80, 0.83 and 0.86 (0.72, 0.77 and 0.81 in 2017) were used to compute the CET1 capital ratio, Tier 1 capital ratio and Total capital ratio, respectively.

(2) Since the introduction of Basel II in 2008, OSFI has prescribed a minimum capital floor for institutions that use the advanced internal ratings-based approach for credit risk. The Basel I capital floor add-on is determined by comparing a capital requirement calculated by reference to Basel I against the Basel III calculation, as specified by OSFI. A shortfall in the Basel III capital requirement as compared with the Basel I floor is added to RWA. OSFI replaced the Basel I regulatory capital floor with a capital floor based on the Basel II standardized approach for credit risk, effective April 30, 2018. Revised capital floor requirements also include risk-weighted assets for market risk and CVA. Under this new Basel II regulatory capital floor requirement, the Bank does not have a capital floor add-on as at October 31, 2018 (as at October 31, 2017 – Basel I floor add-on: CET1 $12.8 billion, Tier 1 $12.6 billion, and Total Capital $12.4 billion).

(3) The Transitional approach is no longer applicable effective Fiscal 2018.

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Share-Based Payments (Tables)

12 Months Ended

Oct. 31, 2018

Schedule of Bank's Employee Stock Option Plan

Details of the Bank’s Employee Stock Option Plan are as follows⁽¹⁾:

	2018					2017
As at October 31	Number of stock options (000’s)			Weighted average exercise price		Number of stock options (000’s)			Weighted average exercise price
Outstanding at beginning of year		15,555		$	57.42		19,852		$	54.55
Granted		988			81.81		1,141			74.14
Exercised as options		(2,238	)		51.37		(5,338	)		50.25
Exercised as Tandem SARs		(19	)		41.95		(33	)		52.59
Forfeited		(146	)		65.93		(67	)		65.97
Expired		–			–		–			–
Outstanding at end of year(2)		14,140		$	60.02		15,555		$	57.42
Exercisable at end of year(2)		10,176		$	55.76		10,980		$	53.44
Available for grant		8,334					9,156

Summary of Bank's Employee Stock Option Plan Outstanding and Exercisable by Range of Exercise Price

	Options Outstanding						Options Exercisable
As at October 31, 2018	Number of stock options (000’s)		Weighted average remaining contractual life (years)		Weighted average exercise price		Number of stock options (000’s)		Weighted average exercise price
Range of exercise prices
$33.89 to $47.75		1,571		0.84	$	44.02		1,571	$	44.02
$49.93 to $55.21		1,838		3.00	$	50.30		1,838	$	50.30
$55.63 to $60.67		4,794		4.18	$	56.88		3,606	$	55.63
$63.98 to $81.81		5,937		6.40	$	69.80		3,161	$	64.91
		14,140		4.59	$	60.02		10,176	$	55.76

(1) Excludes SARs.

(2) Includes options of 3,900 Tandem SARs (2017 – 5,900) and 130,000 options originally issued under HollisWealth plans (2017 – 156,520).

Stock appreciation rights and tandem stock appreciation rights [member]

Schedule of Weighted-average Assumptions Used to Determine Fair Value of Options Granted

As at October 31	2018		2017
Assumptions
Risk-free interest rate%		2.26% - 2.34%		1.38% - 1.59%
Expected dividend yield		4.58%		3.61%
Expected price volatility		13.75% - 28.12%		15.3% - 23.38%
Expected life of option		0.00 - 4.58 years		0.00 - 4.53 years
Fair value
Weighted-average fair value	$	13.39	$	25.72

Employee stock options [member]

Schedule of Weighted-average Assumptions Used to Determine Fair Value of Options Granted

	2018 Grant		2017 Grant
Assumptions
Risk-free interest rate %		1.73%		1.27%
Expected dividend yield		3.62%		3.81%
Expected price volatility		15.86%		17.24%
Expected life of option		6.64 years		6.67 years
Fair value
Weighted-average fair value	$	7.68	$	6.51

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Corporate Income Taxes (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Components of income tax provision

(a) Components of income tax provision

For the year ended October 31 ($ millions)	2018			2017			2016
Provision for income taxes in the Consolidated Statement of Income:
Current income taxes:
Domestic:
Federal	$	797		$	533		$	467
Provincial		633			424			386
Adjustments related to prior periods		(25	)		24			4
Foreign		994			903			935
Adjustments related to prior periods		(14	)		(29	)		(19	)
		2,385			1,855			1,773
Deferred income taxes:
Domestic:
Federal		34			33			141
Provincial		16			16			70
Foreign		(53	)		129			46
		(3	)		178			257
Total provision for income taxes in the Consolidated Statement of Income	$	2,382		$	2,033		$	2,030
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Current income taxes	$	(136	)	$	82		$	(158	)
Deferred income taxes		(193	)		198			(168	)
		(329	)		280			(326	)
Reported in:
Other Comprehensive Income		(145	)		275			(322	)
Retained earnings		(194	)		(1	)		(10	)
Accumulated Other Comprehensive Income		18			–			–
Common shares		(10	)		1			1
Other reserves		2			5			5
Total provision for income taxes in the Consolidated Statement of Changes in Equity		(329	)		280			(326	)
Total provision for income taxes	$	2,053		$	2,313		$	1,704
Provision for income taxes in the Consolidated Statement of Income includes:
Deferred tax expense (benefit) relating to origination/reversal of temporary differences	$	64		$	191		$	372
Deferred tax expense (benefit) of tax rate changes		(2	)		(2	)		(4	)
Deferred tax expense (benefit) of previously unrecognized tax losses, tax credits and temporary differences		(65	)		(11	)		(111	)
	$	(3	)	$	178		$	257

Reconciliation to Statutory Tax Rate

Income taxes in the Consolidated Statement of Income vary from the amounts that would be computed by applying the composite federal and provincial statutory income tax rate for the following reasons:

	2018						2017						2016
For the year ended October 31 ($ millions)	Amount			Percent of pre-tax income			Amount			Percent of pre-tax income			Amount			Percent of pre-tax income
Income taxes at Canadian statutory rate	$	2,943			26.5	%	$	2,715			26.4	%	$	2,485			26.4	%
Increase (decrease) in income taxes resulting from:
Lower average tax rate applicable to subsidiaries and foreign branches		(439	)		(3.9	)		(286	)		(2.8	)		(234	)		(2.5	)
Tax-exempt income from securities		(90	)		(0.8	)		(407	)		(3.9	)		(220	)		(2.3	)
Deferred income tax effect of substantively enacted tax rate changes		(2	)		–			(2	)		–			(4	)		–
Other, net		(30	)		(0.3	)		13			0.1			3			–
Total income taxes and effective tax rate	$	2,382			21.5	%	$	2,033			19.8	%	$	2,030			21.6	%

Significant Components of Deferred Tax Assets and Liabilities

Significant components of the Bank’s deferred tax assets and liabilities are as follows:

	Statement of Income						Statement of Financial Position
	For the year ended						As at
October 31 ($ millions)	2018			2017			2018		2017
Deferred tax assets:
Loss carryforwards	$	73		$	62		$	338	$	417
Allowance for credit losses		(177	)		45			877		793
Deferred compensation		41			(25	)		178		219
Deferred income		(68	)		(124	)		476		405
Property and equipment		48			(19	)		417		133
Pension and other post-retirement benefits		16			(6	)		536		720
Securities		(17	)		(17	)		199		169
Other		(235	)		(169	)		633		640
Total deferred tax assets	$	(319	)	$	(253	)	$	3,654	$	3,496
Deferred tax liabilities:
Deferred income	$	(22	)	$	(21	)	$	156	$	133
Property and equipment		(93	)		(32	)		137		138
Pension and other post-retirement benefits		(12	)		(9	)		110		136
Securities		(8	)		111			166		126
Intangible assets		69			(53	)		1,788		1,094
Other		(250	)		(427	)		564		853
Total deferred tax liabilities	$	(316	)	$	(431	)	$	2,921	$	2,480
Net deferred tax assets (liabilities)(1)	$	(3	)	$	178		$	733	$	1,016

(1) For Consolidated Statement of Financial Position presentation, deferred tax assets and liabilities are assessed by legal entity. As a result, the net deferred tax assets of $733 (2017 – $1,016) are represented by deferred tax assets of $1,938 (2017 – $1,713), and deferred tax liabilities of $1,205 (2017 – $697) on the Consolidated Statement of Financial Position.

Changes to Net Deferred Taxes

The major changes to net deferred taxes were as follows:

For the year ended October 31 ($ millions)	2018			2017
Balance at beginning of year	$	1,016		$	1,410
Deferred tax benefit (expense) for the year recorded in income		3			(178	)
Deferred tax benefit (expense) for the year recorded in equity		193			(198	)
Acquired in business combinations		(493	)		–
Other		14			(18	)
Balance at end of year	$	733		$	1,016

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Employee Benefits (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Schedule of Relative Size of Plan Obligation and Assets

a) Relative size of plan obligations and assets

	Pension plans									Other benefit plans
	Canada
For the year ended October 31, 2018	SPP			Other			International			Canada			International
Percentage of total benefit obligations		70	%		14	%		16	%		58	%		42	%
Percentage of total plan assets		72	%		9	%		19	%		16	%		84	%
Percentage of total benefit expense(1)		82	%		16	%		2	%		39	%		61	%

	Pension plans									Other benefit plans
	Canada
For the year ended October 31, 2017	SPP			Other			International			Canada			International
Percentage of total benefit obligations		74	%		11	%		15	%		63	%		37	%
Percentage of total plan assets		76	%		6	%		18	%		18	%		82	%
Percentage of total benefit expense(1)		80	%		16	%		4	%		51	%		49	%

(1) Excludes non-routine benefit expense items such as past service costs, curtailment charges and settlement charges.

Summary of Cash Contributions and Payments made by Bank to Principal Plans

The table below shows the cash contributions and payments made by the Bank to its principal plans in 2018, and the two prior years.

Contributions to the principal plans for the year ended October 31 ($ millions)	2018		2017		2016
Defined benefit pension plans (cash contributions to fund the plans, including paying beneficiaries under the unfunded pension arrangements)
SPP (excluding DC provision)	$	238	$	286	$	187
All other plans		78		185		77
Other benefit plans (cash contributions mainly in the form of benefit payments to beneficiaries)		61		51		45
Defined contribution pension plans (cash contributions)		41		35		31
Total contributions(1)	$	418	$	557	$	340

(1) Based on preliminary estimates, the Bank expects to make contributions of $238 to the SPP (excluding the DC provision), $51 to all other defined benefit pension plans, $65 to other benefit plans and $63 to all other defined contribution plans for the year ending October 31, 2019.

Summary of Excess (deficit) of Fair Value of Assets Over Benefit Obligation for wholly Unfunded Plans and Wholly or Partly Funded Plans

	Pension plans									Other benefit plans
As at October 31 ($ millions)	2018			2017			2016			2018			2017			2016
Benefit obligation
Benefit obligation of plans that are wholly unfunded	$	400		$	418		$	408		$	1,101		$	1,324		$	1,310
Benefit obligation of plans that are wholly or partly funded		7,868			8,424			8,731			273			334			372
Funded status
Benefit obligation of plans that are wholly or partly funded	$	7,868		$	8,424		$	8,731		$	273		$	334		$	372
Fair value of assets		8,037			8,329			7,770			240			266			284
Excess (deficit) of fair value of assets over benefit obligation of wholly or partly funded plans	$	169		$	(95	)	$	(961	)	$	(33	)	$	(68	)	$	(88	)
Benefit obligation of plans that are wholly unfunded		400			418			408			1,101			1,324			1,310
Excess (deficit) of fair value of assets over total benefit obligation	$	(231	)	$	(513	)	$	(1,369)		$	(1,134)		$	(1,392)		$	(1,398)
Effect of asset limitation and minimum funding requirement		(2	)		(39	)		(60	)		–			–			–
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)

Summary of Financial Information related to Principal Plans

The following tables present financial information related to the Bank’s principal plans.

	Pension plans									Other benefit plans
For the year ended October 31 ($ millions)	2018			2017			2016			2018			2017			2016
Change in benefit obligation
Benefit obligation at beginning of year	$	8,842		$	9,139		$	8,113		$	1,658		$	1,682		$	1,639
Current service cost		334			330			284			30			39			39
Interest cost on benefit obligation		309			297			314			70			72			77
Employee contributions		22			24			24			–			–			–
Benefits paid		(1,012	)		(724	)		(593	)		(90	)		(76	)		(71	)
Actuarial loss (gain)		(495	)		(46	)		1,119			(96	)		(36	)		95
Past service cost		5			–			(16	)		(196	)(2)		4			(77	)
Business acquisition		264			–			–			6			1			9
Settlements		(2	)		(157	)		–			–			–			–
Foreign exchange		1			(21	)		(106	)		(8	)		(28	)		(29	)
Benefit obligation at end of year	$	8,268		$	8,842		$	9,139		$	1,374		$	1,658		$	1,682
Change in fair value of assets
Fair value of assets at beginning of year		8,329			7,770			7,615			266			284			307
Interest income on fair value of assets		305			273			310			20			19			22
Return on plan assets in excess of (less than) interest income on fair value of assets		(166	)		700			275			(11	)		1			5
Employer contributions		316			471			264			61			51			45
Employee contributions		22			24			24			–			–			–
Benefits paid		(1,012	)		(724	)		(593	)		(90	)		(76	)		(71	)
Administrative expenses		(14	)		(13	)		(12	)		–			–			–
Business acquisition		251			–			–			–			–			2
Settlements		(2	)		(157	)		–			–			(1	)		–
Foreign exchange		8			(15	)		(113	)		(6	)		(12	)		(26	)
Fair value of assets at end of year	$	8,037		$	8,329		$	7,770		$	240		$	266		$	284
Funded status
Excess (deficit) of fair value of assets over benefit obligation at end of year		(231	)		(513	)		(1,369	)		(1,134	)		(1,392	)		(1,398	)
Effect of asset limitation and minimum funding requirement(1)		(2	)		(39	)		(60	)		–			–			–
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)
Recorded in:
Other assets in the Bank’s Consolidated Statement of Financial Position		360			256			184			–			1			–
Other liabilities in the Bank’s Consolidated Statement of Financial Position		(593	)		(808	)		(1,613	)		(1,134	)		(1,393	)		(1,398	)
Net asset (liability) at end of year	$	(233	)	$	(552	)	$	(1,429	)	$	(1,134	)	$	(1,392	)	$	(1,398	)
Annual benefit expense
Current service cost		334			330			284			30			39			39
Net interest expense (income)		7			29			9			50			53			55
Administrative expenses		12			11			13			–			–			–
Past service costs		5			–			(16	)		(196	)(2)		4			(77	)
Amount of settlement (gain) loss recognized		–			–			–			–			–			–
Remeasurement of other long-term benefits		–			–			–			(10	)		(3	)		(20	)
Benefit expense (income) recorded in the Consolidated Statement of Income	$	358		$	370		$	290		$	(126	)	$	93		$	(3	)
Defined contribution benefit expense	$	41		$	35		$	31		$	–		$	–		$	–
Remeasurements
(Return) on plan assets in excess of interest income on fair value of assets		166			(700	)		(275	)		11			1			(3	)
Actuarial loss (gain) on benefit obligation		(495	)		(46	)		1,119			(86	)		(35	)		113
Change in the asset limitation		(40	)		(25	)		18			–			–			–
Remeasurements recorded in OCI	$	(369	)	$	(771	)	$	862		$	(75	)	$	(34	)	$	110
Total benefit cost	$	30		$	(366	)	$	1,183		$	(201	)	$	59		$	107
Additional details on actual return on assets and actuarial (gains) and losses
Actual return on assets (net of administrative expenses)	$	125		$	960		$	573		$	9		$	20		$	27
Actuarial (gains) and losses from changes in demographic assumptions		(148	)		(6	)		9			(23	)		–			(5	)
Actuarial (gains) and losses from changes in financial assumptions		(548	)		(71	)		1,116			(92	)		(13	)		133
Actuarial (gains) and losses from changes in experience		201			31			(6	)		19			(23	)		(33	)
Additional details on fair value of pension plan assets invested
In Scotiabank securities (stock, bonds)		377			457			410			3			4			–
In property occupied by Scotiabank		4			4			5			–			–			–
Change in asset ceiling/onerous liability
Asset ceiling /onerous liability at end of prior year		39			60			41			–			–			–
Interest expense		3			5			5			–			–			–
Remeasurements		(40	)		(25	)		18			–			–			–
Foreign exchange		–			(1	)		(4	)		–			–			–
Asset ceiling /onerous liability at end of year	$	2		$	39		$	60		$	–		$	–		$	–

(1) The recognized asset is limited by the present value of economic benefits available from a reduction in future contributions to a plan and from the ability to pay plan expenses from the fund.

(2) The past service cost for other benefit plans includes a decrease of $203 million in the first quarter of fiscal 2018, related to modifications to the Bank’s postretirement benefits plan.

Summary of Disaggregation of Defined Benefit Obligation

	Pension plans									Other benefit plans
For the year ended October 31	2018			2017			2016			2018			2017			2016
Disaggregation of the benefit obligation (%)
Canada
Active members		57	%		58	%		60	%		9	%		29	%		33	%
Inactive and retired members		43	%		42	%		40	%		91	%		71	%		67	%
Total		100	%		100	%		100	%		100	%		100	%		100	%
Mexico
Active members		26	%		27	%		29	%		54	%		55	%		57	%
Inactive and retired members		74	%		73	%		71	%		46	%		45	%		43	%
Total		100	%		100	%		100	%		100	%		100	%		100	%
United States
Active members		45	%		48	%		33	%		34	%		35	%		38	%
Inactive and retired members		55	%		52	%		67	%		66	%		65	%		62	%
Total		100	%		100	%		100	%		100	%		100	%		100	%

Summary of Key Weighted-Average Assumptions used by Bank for Measurement of Benefit Obligation and Benefit Expense for All of Bank's Principal Plans

The key weighted-average assumptions used by the Bank for the measurement of the benefit obligation and benefit expense for all of the Bank’s principal plans are summarized as follows:

	Pension plans									Other benefit plans
For the year ended October 31	2018			2017			2016			2018			2017			2016
Benefit obligation at end of year
Discount rate – all plans		4.35	%		3.90	%		3.86	%		5.54	%		4.86	%		4.74	%
Discount rate – Canadian plans only		4.10	%		3.60	%		3.60	%		3.96	%		3.53	%		3.42	%
Rate of increase in future compensation(1)		2.80	%		2.76	%		2.72	%		3.83	%		4.07	%		4.09	%
Benefit expense (income) for the year
Discount rate – All plans
Discount rate for defined benefit obligations		3.90	%		3.86	%		4.64	%		4.86	%		4.74	%		5.33	%
Discount rate for net interest cost		3.55	%		3.33	%		4.03	%		4.60	%		4.42	%		4.91	%
Discount rate for service cost		4.04	%		4.01	%		4.83	%		5.11	%		5.09	%		5.62	%
Discount rate for interest on service cost		3.77	%		3.64	%		4.31	%		5.04	%		4.94	%		5.56	%
Discount rate – Canadian plans only
Discount rate for defined benefit obligations		3.60	%		3.60	%		4.40	%		3.53	%		3.42	%		4.27	%
Discount rate for net interest cost		3.20	%		3.00	%		3.70	%		3.18	%		2.98	%		3.67	%
Discount rate for service cost		3.70	%		3.70	%		4.60	%		3.76	%		3.75	%		4.54	%
Discount rate for interest on service cost		3.40	%		3.30	%		4.00	%		3.66	%		3.56	%		4.44	%
Rate of increase in future compensation(1)		2.76	%		2.72	%		2.75	%		4.07	%		4.09	%		4.41	%
Health care cost trend rates at end of year
Initial rate		n/a			n/a			n/a			5.81	%		5.99	%		6.12	%
Ultimate rate		n/a			n/a			n/a			4.66	%		4.93	%		4.93	%
Year ultimate rate reached		n/a			n/a			n/a			2040			2030			2030
Assumed life expectancy in Canada (years)
Life expectancy at 65 for current pensioners – male		23.3			23.2			23.2			23.3			23.2			23.2
Life expectancy at 65 for current pensioners – female		24.4			24.4			24.3			24.4			24.4			24.3
Life expectancy at 65, for future pensioners currently aged 45 – male		24.3			24.2			24.2			24.3			24.2			24.2
Life expectancy at 65, for future pensioners currently aged 45 – female		25.3			25.3			25.3			25.3			25.3			25.3
Assumed life expectancy in Mexico (years)
Life expectancy at 65 for current pensioners – male		21.3			21.3			21.3			21.3			21.3			21.3
Life expectancy at 65 for current pensioners – female		23.8			23.8			23.8			23.8			23.8			23.8
Life expectancy at 65, for future pensioners currently aged 45 – male		21.7			21.7			21.7			21.7			21.7			21.7
Life expectancy at 65, for future pensioners currently aged 45 – female		24.0			24.0			24.0			24.0			24.0			24.0
Assumed life expectancy in United States (years)
Life expectancy at 65 for current pensioners – male		22.7			22.7			23.0			22.7			22.7			23.0
Life expectancy at 65 for current pensioners – female		24.4			24.4			24.7			24.4			24.4			24.7
Life expectancy at 65, for future pensioners currently aged 45 – male		24.3			24.3			23.7			24.3			24.3			23.7
Life expectancy at 65, for future pensioners currently aged 45 – female		25.9			25.9			25.6			25.9			25.9			25.6

(1) The weighted-average rates of increase in future compensation shown for other benefit plans do not include Canadian flexible post-retirement benefits plans established in fiscal 2005, as they are not impacted by future compensation increases.

Summary of Sensitivity Analysis of Key Assumptions

	Pension plans				Other benefit plans
For the year ended October 31, 2018 ($ millions)	Benefit obligation		Benefit expense		Benefit obligation			Benefit expense
Impact of the following changes:
1% decrease in discount rate	$	1,383	$	122	$	189		$	13
0.25% increase in rate of increase in future compensation		78		9		1			–
1% increase in health care cost trend rate		n/a		n/a		132			16
1% decrease in health care cost trend rate		n/a		n/a		(106	)		(12	)
1 year increase in Canadian life expectancy		151		10		20			1
1 year increase in Mexican life expectancy		2		–		2			–
1 year increase in the United States life expectancy		4		–		4			–

Summary of weighted-average actual and target asset allocations

The tables below shows the weighted-average actual and target asset allocations for the Bank’s principal plans at October 31, by asset category.

	Pension plans									Other benefit plans
Asset category %	Actual 2018			Actual 2017			Actual 2016			Actual 2018			Actual 2017			Actual 2016
Cash and cash equivalents		4	%		2	%		2	%		1	%		1	%		2	%
Equity investments
Quoted in an active market		36	%		43	%		44	%		42	%		46	%		45	%
Non quoted		12	%		16	%		16	%		2	%		–	%		–	%
		48	%		59	%		60	%		44	%		46	%		45	%
Fixed income investments
Quoted in an active market		9	%		5	%		4	%		34	%		32	%		29	%
Non quoted		29	%		26	%		27	%		21	%		21	%		24	%
		38	%		31	%		31	%		55	%		53	%		53	%
Property
Quoted in an active market		–	%		–	%		–	%		–	%		–	%		–	%
Non quoted		1	%		–	%		–	%		–	%		–	%		–	%
		1	%		–	%		–	%		–	%		–	%		–	%
Other
Quoted in an active market		–	%		–	%		1	%		–	%		–	%		–	%
Non quoted		9	%		8	%		6	%		–	%		–	%		–	%
		9	%		8	%		7	%		–	%		–	%		–	%
Total		100	%		100	%		100	%		100	%		100	%		100	%

Target asset allocation at October 31, 2018 Asset category %	Pension plans			Other benefit plans
Cash and cash equivalents		–	%		2	%
Equity investments		48	%		45	%
Fixed income investments		42	%		53	%
Property		2	%		–	%
Other		8	%		–	%
Total		100	%		100	%

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Operating Segments (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Schedule of Operating Segments

Scotiabank’s results, and average assets and liabilities, allocated by these operating segments, are as follows:

For the year ended October 31, 2018(1)
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets			Other(2)			Total
Net interest income(3)	$	7,898	$	7,322	$	1,454		$	(483	)	$	16,191
Non-interest income(4)		5,452		4,111		3,074			(53	)		12,584
Total revenues		13,350		11,433		4,528			(536	)		28,775
Provision for credit losses		794		1,867		(50	)		–			2,611
Depreciation and amortization		460		304		69			15			848
Non-interest expenses		6,194		5,807		2,164			45			14,210
Income tax expense		1,538		706		587			(449	)		2,382
Net income	$	4,364	$	2,749	$	1,758		$	(147	)	$	8,724
Net income attributable to non-controlling interests in subsidiaries		–		176		–			–			176
Net income attributable to equity holders of the Bank		4,364		2,573		1,758			(147	)		8,548
Average assets ($ billions)		342		168		321			115			946
Average liabilities ($ billions)		254		131		265			232			882

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2018 amounting to $112 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(3) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(4) Includes net income from investments in associated corporations for Canadian Banking – $93; International Banking – $643 and Other – $(177).

For the year ended October 31, 2017
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets		Other(1)			Total
Net interest income(2)	$	7,363	$	6,726	$	1,336	$	(390	)	$	15,035
Non-interest income(3)		5,488		3,688		3,288		(344	)		12,120
Total revenues		12,851		10,414		4,624		(734	)		27,155
Provision for credit losses		913		1,294		42		–			2,249
Depreciation and amortization		412		283		55		11			761
Non-interest expenses		6,075		5,381		2,105		308			13,869
Income tax expense		1,387		828		604		(786	)		2,033
Net income	$	4,064	$	2,628	$	1,818	$	(267	)	$	8,243
Net income attributable to non-controlling interests in subsidiaries		–		238		–		–			238
Net income attributable to equity holders of the Bank		4,064		2,390		1,818		(267	)		8,005
Average assets ($ billions)		323		148		336		106			913
Average liabilities ($ billions)		244		115		267		228			854

(1) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2017 amounting to $562 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(2) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(3) Includes net income from investments in associated corporations for Canadian Banking – $66; International Banking – $482 and Other – $(141).

For the year ended October 31, 2016
Taxable equivalent basis ($ millions)	Canadian Banking		International Banking		Global Banking and Markets		Other(1)			Total
Net interest income(2)	$	7,024	$	6,359	$	1,293	$	(384	)	$	14,292
Non-interest income(3)		5,164		3,482		3,139		273			12,058
Total revenues		12,188		9,841		4,432		(111	)		26,350
Provision for credit losses		832		1,281		249		50			2,412
Depreciation and amortization		340		265		68		11			684
Non-interest expenses		5,984		5,258		1,972		642			13,856
Income tax expense		1,296		707		572		(545	)		2,030
Net income	$	3,736	$	2,330	$	1,571	$	(269	)	$	7,368
Net income attributable to non-controlling interests in subsidiaries		–		251		–		–			251
Net income attributable to equity holders of the Bank		3,736		2,079		1,571		(269	)		7,117
Average assets ($ billions)		309		143		351		111			914
Average liabilities ($ billions)		232		109		270		247			858

(1) Includes all other smaller operating segments and corporate adjustments, such as the elimination of the tax-exempt income gross-up reported in net interest income and non-interest income and provision for income taxes for the year ended October 31, 2016 amounting to $299 to arrive at the amounts reported in the Consolidated Statement of Income, differences in the actual amount of costs incurred and charged to the operating segments.

(2) Interest income is reported net of interest expense as management relies primarily on net interest income as a performance measure.

(3) Includes net income from investments in associated corporations for Canadian Banking – $78; International Banking – $473 and Other – $(137).

Summary of Bank's Financial Results by Geographic Region

The following table summarizes the Bank’s financial results by geographic region. Revenues and expenses which have not been allocated back to specific operating business lines are reflected in corporate adjustments.

For the year ended October 31, 2018 ($ millions)(1)(2)	Canada		United States			Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,823	$	691		$	1,561	$	1,378	$	1,117	$	839	$	2,825	$	16,234
Non-interest income(2)		7,040		843			613		662		565		484		2,612		12,819
Total revenues(3)		14,863		1,534			2,174		2,040		1,682		1,323		5,437		29,053
Provision for credit losses		802		(34	)		239		351		498		511		244		2,611
Non-interest expenses		7,591		701			1,196		770		837		723		3,148		14,966
Income tax expense		1,596		220			76		235		51		39		451		2,668
Subtotal		4,874		647			663		684		296		50		1,594		8,808
Net income attributable to non-controlling interests in subsidiaries		–		–			17		12		28		16		103		176
Total	$	4,874	$	647		$	646	$	672	$	268	$	34	$	1,491	$	8,632
Corporate adjustments																	(84	)
Net income attributable to equity holders of the Bank																$	8,548
Total average assets ($ billions)	$	548	$	119		$	32	$	24	$	33	$	12	$	161	$	929
Corporate adjustments																	17
Total average assets, including corporate adjustments																$	946

(1) The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

(2) Includes net income from investments in associated corporations for Canada – $93; Peru – $9 and Other International – $634.

(3) Revenues are attributed to countries based on where services are performed or assets are recorded.

For the year ended October 31, 2017 ($ millions)	Canada		United States			Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,440	$	460		$	1,380	$	1,287	$	817	$	710	$	2,999	$	15,093
Non-interest income(1)		6,924		830			536		635		409		455		2,502		12,291
Total revenues(2)		14,364		1,290			1,916		1,922		1,226		1,165		5,501		27,384
Provision for credit losses		906		(14	)		193		329		145		337		353		2,249
Non-interest expenses		7,650		606			1,123		762		630		620		3,069		14,460
Income tax expense		1,066		147			125		225		77		71		506		2,217
Subtotal		4,742		551			475		606		374		137		1,573		8,458
Net income attributable to non-controlling interests in subsidiaries		–		–			12		11		53		60		102		238
Total	$	4,742	$	551		$	463	$	595	$	321	$	77	$	1,471	$	8,220
Corporate adjustments																	(215	)
Net income attributable to equity holders of the Bank																$	8,005
Total average assets ($ billions)	$	539	$	111		$	28	$	24	$	23	$	11	$	162	$	898
Corporate adjustments																	15
Total average assets, including corporate adjustments																$	913

(1) Includes net income from investments in associated corporations for Canada – $66; Peru – $6 and Other International – $476.

(2) Revenues are attributed to countries based on where services are performed or assets are recorded.

For the year ended October 31, 2016 ($ millions)	Canada		United States		Mexico		Peru		Chile		Colombia		Other International		Total
Net interest income	$	7,022	$	479	$	1,224	$	1,231	$	763	$	674	$	2,950	$	14,343
Non-interest income(1)		6,893		871		554		600		325		419		2,409		12,071
Total revenues(2)		13,915		1,350		1,778		1,831		1,088		1,093		5,359		26,414
Provision for credit losses		876		112		225		315		113		320		401		2,362
Non-interest expenses		7,339		633		1,121		740		605		550		3,036		14,024
Income tax expense		1,235		155		69		201		45		89		497		2,291
Subtotal		4,465		450		363		575		325		134		1,425		7,737
Net income attributable to non-controlling interests in subsidiaries		–		–		9		12		38		93		99		251
Total	$	4,465	$	450	$	354	$	563	$	287	$	41	$	1,326	$	7,486
Corporate adjustments																(369	)
Net income attributable to equity holders of the Bank															$	7,117
Total average assets ($ billions)	$	529	$	126	$	27	$	23	$	20	$	10	$	165	$	900
Corporate adjustments																14
Total average assets, including corporate adjustments															$	914

(1) Includes net income from investments in associated corporations for Canada – $78; Peru – $5 and Other International – $468.

(2) Revenues are attributed to countries based on where services are performed or assets are recorded.

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Related Party Transactions (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Compensation of Key Management Personnel of Bank

For the year ended October 31 ($ millions)	2018		2017
Salaries and cash incentives(1)	$	18	$	17
Equity-based payment(2)		27		25
Pension and other benefits(1)		4		3
Total	$	49	$	45

(1) Expensed during the year.

(2) Awarded during the year.

Summary of Loans and Deposits of Key Management Personnel

Loans and deposits of key management personnel

As at October 31 ($ millions)	2018		2017
Loans	$	13	$	6
Deposits	$	6	$	8

Summary of Transaction With Joint Ventures and Associates

Transactions between the Bank and its associated companies and joint ventures also qualify as related party transactions and were recorded as follows:

As at and for the year ended October 31 ($ millions)	2018			2017			2016
Net income / (loss)	$	(64	)	$	(46	)	$	(45	)
Loans		702			703			788
Deposits		151			217			338
Guarantees and commitments		123			114			99

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Principal Subsidiaries and Non-Controlling Interests in Subsidiaries (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Subsidiaries

The following table presents the major operating subsidiaries the Bank owns, directly or indirectly. All of these subsidiaries are included in the Bank’s consolidated financial statements.

			Carrying value of shares
As at October 31 ($ millions)	Principal office		2018		2017
Canadian
1832 Asset Management L.P.		Toronto, Ontario	$	1,524	$	2,006
BNS Investments Inc.		Toronto, Ontario		13,870		13,551
Montreal Trust Company of Canada		Montreal, Quebec
National Trust Company(2)		Stratford, Ontario		415		449
Roynat Inc.		Calgary, Alberta		432		239
Scotia Capital Inc.		Toronto, Ontario		1,391		1,024
Scotia Dealer Advantage Inc.		Burnaby, British Columbia		592		567
Scotia Life Insurance Company		Toronto, Ontario		219		189
Scotia Mortgage Corporation		Toronto, Ontario		588		615
Scotia Securities Inc.		Toronto, Ontario		40		34
Tangerine Bank		Toronto, Ontario		3,525		3,488
Jarislowsky, Fraser Limited		Montreal, Quebec		947		–
MD Financial Management Inc.		Ottawa, Ontario		2,612		–
International
Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) (51%)(3)		Bogota, Colombia		1,221		1,160
The Bank of Nova Scotia Berhad		Kuala Lumpur, Malaysia		318		303
The Bank of Nova Scotia International Limited		Nassau, Bahamas		19,312		18,223
BNS Asia Limited		Singapore
The Bank of Nova Scotia Trust Company (Bahamas) Limited		Nassau, Bahamas
Grupo BNS de Costa Rica, S.A.		San Jose, Costa Rica
Scotiabank & Trust (Cayman) Ltd.		Grand Cayman, Cayman Islands
Scotiabank (Bahamas) Limited		Nassau, Bahamas
Scotiabank (British Virgin Islands) Limited		Road Town, Tortola, B.V.I.
Scotiabank (Hong Kong) Limited		Hong Kong, China
Scotiabank (Ireland) Designated Activity Company		Dublin, Ireland
Scotiabank (Turks and Caicos) Ltd.		Providenciales, Turks and Caicos Islands
BNS International (Panama) S.A.		Panama City, Panama
Grupo Financiero Scotiabank Inverlat, S.A. de C.V. (97.4%)		Mexico City, Mexico		3,901		3,544
Nova Scotia Inversiones Limitada		Santiago, Chile		5,100		3,325
Scotiabank Chile S.A. (75.5%)		Santiago, Chile
Scotia Holdings (US) Inc.(4)		New York, New York
Scotiabanc Inc.		Houston, Texas
Scotia Capital (USA) Inc.(4)(5)		New York, New York
Scotia International Limited		Nassau, Bahamas		635		642
Scotiabank Anguilla Limited		The Valley, Anguilla
Scotiabank Brasil S.A. Banco Multiplo		Sao Paulo, Brazil		386		223
Scotiabank Caribbean Holdings Ltd.		Bridgetown, Barbados		1,847		1,710
Scotia Group Jamaica Limited (71.8%)		Kingston, Jamaica
The Bank of Nova Scotia Jamaica Limited		Kingston, Jamaica
Scotia Investments Jamaica Limited		Kingston, Jamaica
Scotiabank (Belize) Ltd.		Belize City, Belize
Scotiabank Trinidad and Tobago Limited (50.9%)		Port of Spain, Trinidad and Tobago
Scotiabank (Panama) S.A.		Panama City, Panama
Scotiabank Uruguay S.A.		Montevideo, Uruguay		490		496
Scotiabank de Puerto Rico		San Juan, Puerto Rico		1,555		1,395
Scotiabank El Salvador, S.A. (99.6%)		San Salvador, El Salvador		686		659
Scotiabank Europe plc		London, United Kingdom		2,432		2,400
Scotiabank Peru S.A.A. (98.05%)		Lima, Peru		4,877		4,518

(1) The Bank (or immediate parent of an entity) owns 100% of the outstanding voting shares of each subsidiary unless otherwise noted.

(2) Effective October 29, 2018, National Trustco Inc. was dissolved and National Trust Company is held by the Bank.

(3) Effective June 15, 2018, the name was changed to Scotiabank Colpatria S.A.

(4) The carrying value of this subsidiary is included with that of its parent, BNS Investments Inc.

(5) The carrying value of this subsidiary is included with that of its parent, Scotia Holdings (US) Inc.

Summary of Non-controlling Interests

The Bank’s significant non-controlling interests in subsidiaries are comprised of the following entities:

	As at and for the year ended
	2018							2017
	Non-controlling interest %			Non-controlling interests in subsidiaries		Dividends paid to non-controlling interest		Non-controlling interests in subsidiaries		Dividends paid to non-controlling interest
Scotiabank Chile S.A.(1)		24.5%		$	917	$	115	$	191	$	14
Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) (51%)(2)		49.0%			519		–		445		38
Scotia Group Jamaica Limited		28.2%			340		17		300		17
Scotiabank Trinidad and Tobago Limited		49.1%			365		49		354		56
Other		0.1% - 49.0%	(3)		311		18		302		8
Total				$	2,452	$	199	$	1,592	$	133

(1) Non-controlling interest holders for Scotiabank Chile S.A. have a right to sell their holding to the Bank at fair market value that can be settled at the Bank’s discretion, by issuance of common shares or cash.

(2) Non-controlling interest holders for Scotiabank Colpatria S.A. have a right to sell their holding to the Bank after the end of 7th anniversary (January 17, 2019) and at subsequent pre-agreed intervals, into the future, at fair market value that can be settled at the Bank’s discretion, by issuance of common shares or cash.

(3) Range of non-controlling interest % for other subsidiaries.

Summary of financial information of Bank's subsidiaries with significant non-controlling interests

Summarized financial information of the Bank’s subsidiaries with significant non-controlling interests are as follows:

	As at and for the year ended October 31, 2018								As at and for the year ended October 31, 2017
($ millions)	Revenue		Total comprehensive income		Total assets		Total liabilities		Revenue		Total comprehensive income		Total assets		Total liabilities
Total	$	3,615	$	173	$	80,352	$	73,449	$	2,978	$	567	$	49,077	$	42,943

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Interest Income and Expense (Tables)

12 Months Ended

Oct. 31, 2018

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Details of Interest Income from Financial Assets

The following table presents details of interest income from financial assets.

For the year ended October 31 ($ millions)	2018
Loans at amortized cost(1)	$	24,991
Securities
Amortized cost(1)		353
FVOCI(1)		1,205
Other		213
Securities purchased under resale agreements and securities borrowed not at FVTPL(1)		446
Deposit with financial institutions(1)		859
Interest income	$	28,067

(1) The interest income on the financial assets measured at amortized cost and FVOCI is calculated using the effective interest method.

Details of Interest Expense from Financial Liabilities

The following table presents details of interest expense from financial liabilities.

For the year ended October 31 ($ millions)	2018
Deposits
Amortized cost(1)	$	10,460
FVTPL		84
Subordinated debentures(1)		214
Other
Amortized cost(1)		1,084
FVTPL		34
Interest expense	$	11,876

(1) The interest expense on the financial liabilities measured at amortized cost is calculated using the effective interest method.

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Non-InterestIncome (Tables)

12 Months Ended

Oct. 31, 2018

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Summary of Non-Interest Income

The following table presents details of banking revenues and wealth management revenues in non-interest income.

For the year ended October 31 ($ millions)	2018		2017		2016
Banking
Card revenues	$	1,656	$	1,514	$	1,359
Deposit and payment services		1,366		1,324		1,279
Credit fees		1,191		1,153		1,154
Other		466		472		436
		4,679		4,463		4,228
Banking fee related expenses		678		608		559
Total banking	$	4,001	$	3,855	$	3,669
Wealth management
Mutual funds	$	1,714	$	1,639	$	1,624
Brokerage fees(1)		895		1,047		1,034
Investment management and trust(1)		732		632		624
Total wealth management	$	3,341	$	3,318	$	3,282

(1) Prior period amounts have been reclassified to conform with current period presentation.

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Trading Revenues (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Trading Revenue

The following table presents details of trading revenues.

For the year ended October 31 ($ millions)	2018		2017(1)			2016(1)
Interest rate and credit	$	272	$	474		$	559
Equities		441		(125	)		(20	)
Commodities		231		295			376
Foreign exchange		295		250			262
Other		181		92			51
Total	$	1,420	$	986		$	1,228

(1) Certain comparative amounts have been restated to conform with current period presentation.

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Earnings Per Share (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Earnings Per Share

For the year ended October 31 ($ millions)	2018		2017		2016
Basic earnings per common share
Net income attributable to common shareholders	$	8,361	$	7,876	$	6,987
Weighted average number of common shares outstanding (millions)		1,213		1,203		1,204
Basic earnings per common share(1) (in dollars)	$	6.90	$	6.55	$	5.80
Diluted earnings per common share
Net income attributable to common shareholders	$	8,361	$	7,876	$	6,987
Dilutive impact of share-based payment options and others(2)		16		59		83
Net income attributable to common shareholders (diluted)	$	8,377	$	7,935	$	7,070
Weighted average number of common shares outstanding (millions)		1,213		1,203		1,204
Dilutive impact of share-based payment options and others(2) (millions)		16		20		22
Weighted average number of diluted common shares outstanding (millions)		1,229		1,223		1,226
Diluted earnings per common share(1) (in dollars)	$	6.82	$	6.49	$	5.77

(1) Earnings per share calculations are based on full dollar and share amounts.

(2) Certain tandem stock appreciation rights or options as well as acquisition related put/call options that the Bank may settle at its own discretion by issuing common shares were not included in the calculation of diluted earnings per share as they were anti-dilutive.

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Guarantees, Commitments and Pledged Assets (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Schedule of Various Guarantees and Indemnifications

The various guarantees and indemnifications that the Bank provides with respect to its customers and other third parties are presented below:

	2018		2017
As at October 31 ($ millions)	Maximum potential amount of future payments(1)		Maximum potential amount of future payments(1)
Standby letters of credit and letters of guarantee	$	35,376	$	35,523
Liquidity facilities		4,043		4,996
Derivative instruments		6,969		5,398
Indemnifications		571		587

(1) The maximum potential amount of future payments represents those guarantees that can be quantified and excludes other guarantees that cannot be quantified. As many of these guarantees will not be drawn upon and the maximum potential amount of future payments listed above does not consider the possibility of recovery under recourse or collateral provisions, the above amounts are not indicative of future cash requirements, credit risk, or the Bank’s expected losses from these arrangements.

Summary of Other Indirect Commitments

The table below provides a detailed breakdown of the Bank’s other indirect commitments expressed in terms of the contractual amounts of the related commitment or contract which are not reflected on the Consolidated Statement of Financial Position.

As at October 31 ($ millions)	2018		2017
Commercial letters of credit	$	1,046	$	821
Commitments to extend credit(1)
Original term to maturity of one year or less		75,033		57,321
Original term to maturity of more than one year		122,407		128,345
Securities lending		51,723		40,535
Securities purchase and other commitments		888		614
Total	$	251,097	$	227,636

Summary of Future Minimum Lease Payment Under Non-Cancellable Operating Leases

also leases equipment under non-cancellable lease arrangements. Where the Bank is the lessee, the future minimum lease payment under non-cancellable operating leases are as follows:

As at October 31 ($ millions)	2018		2017
Within one year	$	420	$	349
After one year but not more than five years		1,196		967
More than five years		880		593
Total	$	2,496	$	1,909

Summary of Carrying Value Of Pledged Assets and Details of Related Activities

The carrying value of pledged assets and details of related activities are shown below.

As at October 31 ($ millions)	2018		2017
Assets pledged to:
Bank of Canada(1)	$	118	$	25
Foreign governments and central banks(1)		3,147		2,653
Clearing systems, payment systems and depositories(1)		1,629		1,195
Assets pledged in relation to exchange-traded derivative transactions		3,127		2,181
Assets pledged in relation to over-the-counter derivative transactions		7,246		8,126
Assets pledged as collateral related to securities borrowing and lending		128,383		115,987
Assets pledged in relation to covered bond program (Note 15)		30,725		27,806
Assets pledged in relation to other securitization programs (Note 15)		6,085		4,801
Assets pledged under CMHC programs (Note 14)		23,178		20,471
Other		963		643
Total assets pledged	$	204,601	$	183,888
Obligations related to securities sold under repurchase agreements		82,816		86,789
Total(2)	$	287,417	$	270,677

(1) Includes assets pledged in order to participate in clearing and payment systems and depositories, or pledged to have access to the facilities of central banks in foreign jurisdictions.

(2) Includes assets that have been received from counterparties through normal course of business in securities financing and derivative transactions.

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Financial Instruments - Risk Management (Tables)

12 Months Ended

Oct. 31, 2018

Summary of Credit Risk Exposures

As at October 31 ($ millions)	2018								2017
	Exposure at default(1)
Category	Drawn(2)		Undrawn commitments		Other exposures(3)		Total		Total
By counterparty type
Non-retail
AIRB portfolio
Corporate	$	146,324	$	83,885	$	77,751	$	307,960	$	285,191
Bank		22,680		2,146		16,676		41,502		40,903
Sovereign		188,480		768		6,854		196,102		195,429
		357,484		86,799		101,281		545,564		521,523
Standardized portfolio
Corporate		59,018		5,313		3,802		68,133		59,164
Bank		3,208		160		143		3,511		2,619
Sovereign		5,299		31		6		5,336		6,337
		67,525		5,504		3,951		76,980		68,120
Total non-retail	$	425,009	$	92,303	$	105,232	$	622,544	$	589,643
Retail
AIRB portfolio
Real estate secured		143,475		17,864		–		161,339		143,160
Qualifying revolving		17,337		28,550		–		45,887		44,384
Other retail		31,176		1,671		–		32,847		31,672
	$	191,988	$	48,085	$	–	$	240,073	$	219,216
Standardized portfolio
Real estate secured		44,517		–		–		44,517		34,002
Other retail		42,100		–		–		42,100		35,552
		86,617		–		–		86,617		69,554
Total retail	$	278,605	$	48,085	$	–	$	326,690	$	288,770
Total	$	703,614	$	140,388	$	105,232	$	949,234	$	878,413
By geography(4)
Canada	$	394,279	$	89,776	$	37,748	$	521,803	$	502,224
United States		102,265		33,103		42,771		178,139		157,386
Chile		47,048		1,038		5,066		53,152		27,190
Mexico		29,344		1,339		2,611		33,294		30,528
Peru		23,997		1,506		2,992		28,495		28,733
Colombia		12,729		486		434		13,649		10,859
Other International
Europe		25,357		7,041		10,215		42,613		43,030
Caribbean		35,716		1,676		910		38,302		39,358
Latin America (other)		10,232		909		227		11,368		9,035
All other		22,647		3,514		2,258		28,419		30,070
Total	$	703,614	$	140,388	$	105,232	$	949,234	$	878,413

(1) Exposure at default is presented after credit risk mitigation. Exposures exclude equity securities and other assets.

(2) Non-retail drawn includes loans, acceptances, deposits with financial institutions and FVOCI debt securities. Retail drawn includes residential mortgages, credit cards, lines of credit, and other personal loans.

(3) Non-retail other exposures include off-balance sheet lending instruments such as letters of credit, letters of guarantees, securitizations including nil first loss protection (2017 – nil), derivatives and repo-style transactions (reverse repurchase agreements, repurchase agreements, securities lending and securities borrowing), net of related collateral. Not applicable for retail exposures.

(4) Geographic segmentation is based upon the location of the ultimate risk of the credit exposure.

Summary of Subject to Market and Credit Risk With a Reconcilation

The table below provides mapping of on-balance sheet asset categories that are included in the various Basel III exposure categories as presented in the credit risk exposure summary table of these consolidated financial statements. In addition, it also provides other exposures which are subject to market risk and/or other assets which are not subject to market and credit risk with a reconciliation to the Consolidated Statement of Financial Position. The credit risk exposures on certain assets such as cash, precious metals, investment securities (equities) and other assets are not included on the credit risk exposure summary table. Also excluded from the credit risk exposures are certain trading assets and all assets of the Bank’s insurance subsidiaries.

Credit Risk Exposures

Other Exposures

Drawn

Other Exposures

Market Risk Exposures

As at October 31, 2018 ($ millions)

Non-retail

Retail

Securitization

Repo-style Transactions

OTC Derivatives

Equity

Also subject to Credit Risk

All Other(1)

Total

Cash and deposits with financial institutions

$

58,728

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

3,541

$

62,269

Precious metals

–

–

–

–

–

–

–

3,191

–

3,191

Trading assets

Securities

24

–

–

–

–

–

–

85,450

–

85,474

Loans

7,183

12

–

–

–

–

6,606

7,139

–

14,334

Other

–

–

–

–

–

–

–

454

–

454

Financial assets designated at fair value through profit or loss

12

–

–

–

–

–

–

–

–

12

Securities purchased under resale agreements and securities borrowed

–

–

–

104,010

–

–

–

–

8

104,018

Derivative financial instruments

–

–

–

–

37,558

–

33,937

–

–

37,558

Investment securities

75,837

–

–

–

–

1,754

–

–

805

78,396

Loans:

Residential mortgages(2)

86,417

166,752

–

–

–

–

–

–

188

253,357

Personal loans

–

94,392

1,613

–

–

–

–

–

14

96,019

Credit cards

–

14,331

687

–

–

–

–

–

1,467

16,485

Business & government

180,164

3,193

7,748

–

–

–

–

–

(67

)

191,038

Allowances for credit losses(3)

(560

)

(786

)

–

–

–

–

–

–

(3,719

)

(5,065

)

Customers’ liability under acceptances

16,338

–

–

–

–

–

–

–

(9

)

16,329

Property and equipment

–

–

–

–

–

–

–

–

2,684

2,684

Investment in associates

–

–

–

–

–

–

–

–

4,850

4,850

Goodwill and other intangibles assets

–

–

–

–

–

–

–

–

17,719

17,719

Other (including Deferred tax assets)

866

711

–

–

–

–

–

–

17,794

19,371

Total

$

425,009

$

278,605

$

10,048

$

104,010

$

37,558

$

1,754

$

40,543

$

96,234

$

45,275

$

998,493

(1) Includes the Bank’s insurance subsidiaries’ assets and all other assets which are not subject to credit and market risks.

(2) Includes $82.2 billion in mortgages guaranteed by Canada Mortgage Housing Corporation including 90% of privately insured mortgages.

(3) Amounts for AIRB exposures are reported gross of allowances and amounts for standardized exposures are reported net of allowances.

Credit Risk Exposures

Other Exposures

Drawn

Other Exposures

Market Risk Exposures

As at October 31, 2017 ($ millions)

Non-retail

Retail

Securitization

Repo-style Transactions

OTC Derivatives

Equity

Also subject to Credit Risk

All Other(1)

Total

Cash and deposits with financial institutions

$

57,104

$

–

$

–

$

–

$

–

$

–

$

–

$

–

$

2,559

$

59,663

Precious metals

–

–

–

–

–

–

–

5,717

–

5,717

Trading assets

Securities

–

–

–

–

–

–

–

78,652

–

78,652

Loans

9,087

–

–

–

–

–

9,087

8,225

–

17,312

Other

–

–

–

–

–

–

–

2,500

–

2,500

Financial assets designated at fair value through profit or loss

13

–

–

–

–

–

–

–

–

13

Securities purchased under resale agreements and securities borrowed

–

–

–

95,319

–

–

–

–

–

95,319

Derivative financial instruments

–

–

–

–

35,364

–

30,648

–

–

35,364

Investment securities

67,255

–

–

–

–

1,281

–

–

733

69,269

Loans:

Residential mortgages(2)

95,692

141,066

–

–

–

–

–

–

158

236,916

Personal loans(3)

–

87,892

1,314

–

–

–

–

–

21

89,227

Credit cards(3)

–

12,289

724

–

–

–

–

–

1,091

14,104

Business & government

158,510

2,878

7,032

–

–

–

–

–

29

168,449

Allowances for credit losses(4)

(649

)

–

–

–

–

–

–

–

(3,678

)

(4,327

)

Customers’ liability under acceptances

13,560

–

–

–

–

–

–

–

–

13,560

Property and equipment

–

–

–

–

–

–

–

–

2,381

2,381

Investment in associates

–

–

–

–

–

–

–

–

4,586

4,586

Goodwill and other intangibles assets

–

–

–

–

–

–

–

–

12,106

12,106

Other (including Deferred tax assets)

1,805

545

–

–

–

–

–

–

12,112

14,462

Total

$

402,377

$

244,670

$

9,070

$

95,319

$

35,364

$

1,281

$

39,735

$

95,094

$

32,098

$

915,273

(1) Includes the Bank’s insurance subsidiaries’ assets and all other assets which are not subject to credit and market risks.

(2) Includes $91.7 billion in mortgages guaranteed by Canada Mortgage Housing Corporation including 90% of privately insured mortgages.

(3) Restated to reflect the current period presentation.

(4) Amounts for AIRB exposures are reported gross of allowances and amounts for standardized exposures are reported net of allowances.

Summary of Cross Referencing of Internal Ratings to External Ratings

The following table cross references the Bank’s internal borrower grades with equivalent ratings categories utilized by external rating agencies:

Cross referencing of internal ratings to external ratings(1)
Equivalent External Rating
S&P	Moody’s	DBRS	Internal Grade	Internal Grade Code	PD Range(2)
AAA to AA+	Aaa to Aa1	AAA to AA (high)		99 – 98	0.0000% – 0.0448%
AA to A+	Aa2 to A1	AA to A (high)		95	0.0448% – 0.1304%
A to A-	A2 to A3	A to A (low)	Investment grade	90	0.0552% – 0.1402%
BBB+	Baa1	BBB (high)		87	0.0876% – 0.2187%
BBB	Baa2	BBB		85	0.1251% – 0.3176%
BBB-	Baa3	BBB (low)		83	0.1788% – 0.4610%
BB+	Ba1	BB (high)		80	0.2886% – 0.5134%
BB	Ba2	BB		77	0.4658% – 0.5716%
BB-	Ba3	BB (low)	Non-Investment grade	75	0.5716% – 0.7518%
B+	B1	B (high)		73	0.7518% – 1.4444%
B to B-	B2 to B3	B to B (low)		70	1.4444% – 2.7749%
CCC+	Caa1	–		65	2.7749% – 10.1814%
CCC	Caa2	–	Watch list	60	10.1814% – 19.4452%
CCC- to CC	Caa3 to Ca	–		40	19.4452% – 35.4088%
–	–	–		30	35.4088% – 59.5053%
Default			Default	21	100%

(1) Applies to non-retail portfolio.

(2) PD ranges overlap across IG codes as the Bank utilizes two risk rating systems for its AIRB portfolios, and each risk rating system has its own separate IG to PD mapping.

Summary of Interest Rate Sensitivity

Based on the Bank’s interest rate positions, the following table shows the pro-forma after-tax impact on the Bank’s net interest income over the next twelve months and economic value of shareholders’ equity of an immediate and sustained 100 basis point increase and decrease in interest rates across major currencies as defined by the Bank.

As at October 31 ($ millions)	2018																		2017
	Net income									Economic value of equity
	Canadian dollar			Other currencies			Total			Canadian dollar			Other currencies			Total			Net income			Economic value of equity
100 bp increase	$	(181	)	$	76		$	(105	)	$	(458	)	$	(412	)	$	(870	)	$	64		$	(354	)
100 bp decrease	$	177		$	(76	)	$	101		$	291		$	506		$	797		$	(67	)	$	183

Summary of VaR by Risk Factor

The table below shows the Bank’s VaR by risk factor:

				For the year ended October 31, 2018
($ millions)	As at October 31, 2018			Average			High		Low		As at October 31, 2017
Credit spread plus interest rate	$	11.0		$	11.6		$	17.8	$	6.9	$	10.1
Credit spread		6.2			7.8			12.2		4.8		6.9
Interest rate		7.7			9.5			17.2		4.3		8.4
Equities		5.8			3.0			15.5		1.2		3.2
Foreign exchange		2.8			3.3			5.8		1.1		2.9
Commodities		1.7			1.6			2.1		1.0		1.3
Debt specific		3.6			3.4			4.2		2.6		3.3
Diversification effect		(11.7	)		(10.0	)		n/a		n/a		(10.3	)
All-Bank VaR	$	13.2		$	12.9		$	18.4	$	8.6	$	10.6
All-Bank stressed VaR	$	44.6		$	42.7		$	59.0	$	26.3	$	34.7

Summary of Market Risk Capital Requirements

Below are the market risk capital requirements as at October 31, 2018.

($ millions)
All-Bank VaR	$	124
All-Bank stressed VaR		419
Incremental risk charge		95
Standardized approach		31
Total market risk capital	$	669	(1)

(1) Equates to $8,357 million of risk-weighted assets (2017 – $7,839 million).

Non retail [member] | AIRB portfolio [member]

Summary of Credit Risk Exposures

The credit quality of the non-retail AIRB portfolio, expressed in terms of risk categories of borrower internal grades is shown in the table below:

			2018								2017
			Exposure at Default(1)
As at October 31 ($ millions) Category of internal grades	IG Code		Drawn		Undrawn commitments		Other exposures(2)		Total		Total
Investment grade		99 – 98	$	77,598	$	2,758	$	17,456	$	97,812	$	91,159
		95		35,694		9,315		19,661		64,670		53,618
		90		25,281		15,394		25,234		65,909		61,508
		87		21,318		13,714		12,513		47,545		44,533
		85		21,472		12,861		9,992		44,325		40,478
		83		22,544		13,230		7,054		42,828		41,600
Non-Investment grade		80		26,618		10,019		2,993		39,630		36,235
		77		20,005		4,944		1,945		26,894		23,058
		75		13,267		2,717		3,296		19,280		20,418
		73		5,905		1,049		566		7,520		7,271
		70		2,157		432		228		2,817		3,758
Watch list		65		892		105		146		1,143		2,167
		60		936		90		78		1,104		761
		40		526		41		9		576		1,311
		30		141		–		–		141		159
Default		21		938		130		110		1,178		1,752
Total			$	275,292	$	86,799	$	101,281	$	463,372	$	429,786
Government guaranteed residential mortgages(3)				82,192		–		–		82,192		91,737
Total			$	357,484	$	86,799	$	101,281	$	545,564	$	521,523

(1) After credit risk mitigation.

(2) Includes off-balance sheet lending instruments such as letters of credit, letters of guarantee, securitizations, excluding nil first loss protection (2017 – nil), derivatives and repo-style transactions (reverse repurchase agreements, repurchase agreements and securities lending and borrowing), net of related collateral.

(3) These exposures are classified as sovereign exposures and are included in the non-retail category.

Retail [member] | AIRB portfolio [member]

Summary of Risk Categories of Borrower by Probability Of default

The data in the table below provides a distribution of the retail AIRB exposure within each PD range by asset class:

As at October 31 ($ millions)	2018												2017
	Exposure at default(1)
			Real estate secured
Category of (PD) grades	PD range		Mortgages		HELOC		Qualifying revolving		Other retail		Total		Total
Exceptionally Low		0.0000% – 0.0499%		$              –	$	–	$	11,657	$	498	$	12,155	$	16,026
Very Low		0.0500% – 0.1999%		41,146		32,079		9,348		6,971		89,544		80,507
Low		0.2000% – 0.9999%		73,094		5,130		12,091		16,721		107,036		94,081
Medium Low		1.0000% – 2.9999%		6,494		1,068		7,893		5,123		20,578		17,070
Medium		3.0000% – 9.9999%		738		310		3,594		2,569		7,211		8,583
High		10.0000% – 19.9999%		345		185		354		486		1,370		889
Extremely High		20.0000% – 99.9999%		416		69		803		303		1,591		1,453
Default		100%		195		70		147		176		588		607
Total				$  122,428	$	38,911	$	45,887	$	32,847	$	240,073	$	219,216

(1) After credit risk mitigation.

XML

Business Combinations (Tables)

12 Months Ended

Oct. 31, 2018

Text block1 [abstract]

Summary of Fair Value of Identifiable Net Assets at Acquisition Date

The fair value of the identifiable net assets of Jarislowsky, Fraser Limited at the date of acquisition was:

($ million)
Total net assets acquired	$	9
Intangible assets
Finite life intangible asset arising on acquisition(1)		255
Indefinite life intangible assets arising on acquisition(2)		308
Deferred tax liability		(150	)
Goodwill arising on acquisition		556
Purchase consideration transferred	$	978

(1) Comprised of customer relationship intangible of $255.

(2) Comprised of fund management contracts of $290 and trademark of $18.

XML

Significant Accounting Policies - Additional Information (Detail)	12 Months Ended
	Oct. 31, 2018 CAD ($) Segments
Accounting Policies [Line Items]
Description for entity ownership in consolidated entities whenless that half voting power	The Bank may consolidate an entity when it owns less than 50% of the voting rights when it has one or more other attributes of power by virtue of an agreement, over more than half of the voting rights; to govern the financial and operating policies of the entity under a statute or an agreement;to appoint or remove the majority of the members of the board of directors or equivalent governing body and control of the entity is by that board or body;or to govern the financial and operating policies of the entity through the size of its holding of voting rights relative to the size and dispersion of holding of the other vote holders and voting patterns at shareholder meetings (i.e.,de facto control).
Number of operating segments | Segments	3
Investment property [member]
Accounting Policies [Line Items]
Estimated useful lives of assets	40 years
Purchased loans [member]
Accounting Policies [Line Items]
Allowances for credit losses | $	$ 0
Top of range [member]
Accounting Policies [Line Items]
Cash and deposits with financial institutions maturity period	3 months
Top of range [member] | Computer software [member]
Accounting Policies [Line Items]
Useful lives of intangible assets other than goodwill	10 years
Top of range [member] | Other intangible assets [member]
Accounting Policies [Line Items]
Useful lives of intangible assets other than goodwill	20 years
Bottom of range [member] | Computer software [member]
Accounting Policies [Line Items]
Useful lives of intangible assets other than goodwill	5 years
Bottom of range [member] | Other intangible assets [member]
Accounting Policies [Line Items]
Useful lives of intangible assets other than goodwill	5 years
Buildings [member]
Accounting Policies [Line Items]
Estimated useful lives of assets	40 years
Building fittings [member]
Accounting Policies [Line Items]
Estimated useful lives of assets	15 years
Equipment [member] | Top of range [member]
Accounting Policies [Line Items]
Estimated useful lives of assets	10 years
Equipment [member] | Bottom of range [member]
Accounting Policies [Line Items]
Estimated useful lives of assets	3 years
Leasehold improvements [member]
Accounting Policies [Line Items]
Estimated useful lives of assets	Lease term determined by the Bank

XML

Recently Adopted Accounting Standards - Summary Result in a Change to the Carrying Value of the Item on the Statement of Financial Position (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Nov. 01, 2017	Oct. 31, 2017	Oct. 31, 2016	Oct. 31, 2015
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Cash and deposits with financial institutions	$ 62,269	[1]		$ 59,663
Precious metals	3,191	[1]		5,717
Loans	14,334	[1]		17,312
Other	454	[1]		2,500
Trading assets	100,262	[1]		98,464
Loans
Residential mortgages	253,357	[1]		236,916
Personal loans	96,019	[1]		89,227
Credit cards	16,485	[1]		14,104
Business and government	191,038	[1]		168,449
Gross impaired loans	556,899	[1]		508,696
Customers' liability under acceptances, net of allowance	16,329	[1]		13,560
Property and equipment	2,684	[1]		2,381
Investment in associates	4,850	[1]		4,586
Goodwill and other intangible assets	17,719	[1]		12,106
Deferred tax assets	1,938	[1]		1,713
Other assets	17,433	[1]		12,749
Other Assets	60,953	[1]		47,095
Total assets	998,493	[1]		915,273
Deposits	676,534	[1]		625,367
Financial instruments designated at fair value through profit or loss	8,188	[1]		4,663
Acceptances	16,338	[1]		13,560
Obligations related to securities sold short	32,087	[1]		30,766
Derivative financial instruments	37,967	[1]		34,200
Obligations related to securities sold under repurchase agreements and securities lent	101,257	[1]		95,843
Subordinated debentures	5,698	[1]		5,935
Other liabilities	52,744	[1]		43,314
Total liabilities	930,813	[1]		853,648
Common equity
Retained earnings	41,414	[1]		38,117
Accumulated other comprehensive income (loss)	992	[1]		1,577
Other reserves	404	[1]		116
Total common equity	61,044	[1]		55,454
Total equity attributable to equity holders to the Bank	65,228	[1]		60,033
Non-controlling interests in subsidiaries	2,452	[1]		1,592
Total equity	67,680	[1]		61,625	$ 57,821	$ 53,479
Total liabilities and equity	998,493	[1]		915,273
Reclassification			$ 2
Remeasurement	151		(761)
Securities	85,474	[1]		78,652
Cash And Deposits With Financial Institutions [Member]
Common equity
Remeasurement			(3)
Debt securities [member]
Common equity
Reclassification			76
Debt securities [member] | Financial assets at amortised cost, category [member]
Common equity
Reclassification			4,205
Remeasurement			118
Debt securities [member] | Financial assets at fair value through other comprehensive income, category [member]
Common equity
Reclassification			(4,281)
Equity securities [member] | Financial assets at fair value through profit or loss, category [member]
Common equity
Reclassification			301
Equity securities [member] | Financial assets at fair value through other comprehensive income, category [member]
Common equity
Reclassification			(301)
Loans assets [member]
Common equity
Reclassification			660
Remeasurement			1
Trading assets [member]
Common equity
Reclassification			736
Remeasurement			1
Derivative financial instruments [member] | Financial assets at fair value through profit or loss, category [member]
Common equity
Reclassification			(2)
Securities [member]
Common equity
Reclassification			(76)
Remeasurement			118
Residential mortgages [member]
Common equity
Reclassification	(33)		(33)
Remeasurement			(134)
Personal loan [Member]
Common equity
Remeasurement			2
Business and government [member]
Common equity
Reclassification			(623)
Loan [member]
Common equity
Reclassification			(656)
Remeasurement			(132)
Allowance for Credit Loss [Member]
Common equity
Remeasurement			(593)
Customers' liability under acceptances [member]
Common equity
Remeasurement			(16)
Investments in associates [member]
Common equity
Remeasurement			(184)
Deferred tax assets [member]
Common equity
Remeasurement			50
Other assets [member]
Common equity
Remeasurement			(2)
Other Financial Assets1 [Member]
Common equity
Remeasurement			(152)
Asset [Member]
Common equity
Reclassification			2
Remeasurement			(761)
Common shares [member]
Common equity
Common shares	18,234	[1]		15,644
Total equity	18,234			15,644	$ 15,513
IAS 39 [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Cash and deposits with financial institutions			59,663
Precious metals			5,717
Loans			17,312
Other			2,500
Trading assets			98,464
Investment securities
Investment securities			69,269
Loans
Residential mortgages			236,916
Personal loans			89,227
Credit cards			14,104
Business and government			168,449
Gross impaired loans			508,696
Allowance for credit loss			(4,327)
Customers' liability under acceptances, net of allowance			13,560
Property and equipment			2,381
Investment in associates			4,586
Goodwill and other intangible assets			12,106
Deferred tax assets			1,713
Other assets			12,749
Other Assets			47,095
Total assets			915,273
Deposits			625,367
Financial instruments designated at fair value through profit or loss			4,663
Acceptances			13,560
Obligations related to securities sold short			30,766
Derivative financial instruments			34,200
Obligations related to securities sold under repurchase agreements and securities lent			95,843
Subordinated debentures			5,935
Other liabilities			43,314
Total liabilities			853,648
Common equity
Retained earnings			38,117
Accumulated other comprehensive income (loss)			1,577
Other reserves			116
Total common equity			55,454
Preferred shares			4,579
Total equity attributable to equity holders to the Bank			60,033
Non-controlling interests in subsidiaries			1,592
Total equity			61,625
Total liabilities and equity			915,273
IAS 39 [member] | Debt securities [member]
Investment securities
Debt / Equity securities			49,193
Debt / Equity securities			13
Common equity
Securities			39,333
Debt securities			18,765
IAS 39 [member] | Equity securities [member]
Investment securities
Debt / Equity securities			1,311
Common equity
Securities			39,319
IAS 39 [member] | Securities purchased under resale agreements and securities borrowed [member]
Common equity
Debt securities			95,319
IAS 39 [member] | Derivative financial instruments [member]
Investment securities
Debt / Equity securities			35,364
IAS 39 [member] | Common shares [member]
Common equity
Common shares			15,644
In accordance with IFRS 9 [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Cash and deposits with financial institutions			59,660
Precious metals			5,717
Loans			17,973
Other			2,500
Trading assets			99,201
Investment securities
Investment securities			69,311
Loans
Residential mortgages			236,749
Personal loans			89,229
Credit cards			14,104
Business and government			167,826
Gross impaired loans			507,908
Allowance for credit loss	$ (5,065)		(4,920)	$ (4,920)
Customers' liability under acceptances, net of allowance			13,544
Property and equipment			2,381
Investment in associates			4,402
Goodwill and other intangible assets			12,106
Deferred tax assets			1,763
Other assets			12,747
Other Assets			46,943
Total assets			914,514
Deposits			625,367
Financial instruments designated at fair value through profit or loss			4,663
Acceptances			13,560
Obligations related to securities sold short			30,766
Derivative financial instruments			34,198
Obligations related to securities sold under repurchase agreements and securities lent			95,843
Subordinated debentures			5,935
Other liabilities			43,167
Total liabilities			853,499
Common equity
Retained earnings			37,553
Accumulated other comprehensive income (loss)			1,628
Other reserves			116
Total common equity			54,941
Preferred shares			4,579
Total equity attributable to equity holders to the Bank			59,520
Non-controlling interests in subsidiaries			1,495
Total equity			61,015
Total liabilities and equity			914,514
In accordance with IFRS 9 [member] | Debt securities [member]
Investment securities
Debt / Equity securities			44,912
Debt / Equity securities			13
Common equity
Securities			39,409
Debt securities			23,088
In accordance with IFRS 9 [member] | Equity securities [member]
Investment securities
Debt / Equity securities			1,010
Debt / Equity securities			301
Common equity
Securities			39,319
In accordance with IFRS 9 [member] | Securities purchased under resale agreements and securities borrowed [member]
Common equity
Debt securities			95,319
In accordance with IFRS 9 [member] | Derivative financial instruments [member]
Investment securities
Debt / Equity securities			35,362
In accordance with IFRS 9 [member] | Common shares [member]
Common equity
Common shares			15,644
Derivative financial instruments [member]
Common equity
Reclassification			(2)
Other liabilities [member]
Common equity
Reclassification			4
Remeasurement			(151)
Liabilities [member]
Common equity
Reclassification			2
Remeasurement			(151)
Retained earnings [member]
Common equity
Reclassification			49
Remeasurement			(613)
Accumulated other comprehensive income (loss) [member]
Common equity
Reclassification			(49)
Remeasurement			100
Total common equity [member]
Common equity
Remeasurement			(513)
Total common and preferred equity [member]
Common equity
Remeasurement			(513)
Non-controlling interests in subsidiaries [member]
Common equity
Remeasurement			(97)
Equity [member]
Common equity
Remeasurement			$ (610)

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Recently Adopted Accounting Standards - Summary Result in a Change to the Carrying Value of the Item on the Statement of Financial Position (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Nov. 01, 2017
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Residential mortgages reclassified to trading		$ 2
Decrease in debt securities remeasurements	$ 151	(761)
Decrease in Deferred tax liability	129
Allowance for credit losses related to undrawn commitments, letters of credit and letters of guarantee	22
Fair value of debt securities	3,951
Other comprehensive income net of tax gains losses from debt securities	(67)
Financial assets available-for-sale [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Available for sale securities debt instruments measured at fair value through other comprehensive income	4,281
Available for sale securities amortised cost	4,205
Fair value through profit or loss	76
Reclassification of debt instruments to amortized cost resulted in remeasurement	118
Available for sales Equity instruments	301
Precious metals [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Precious metal loans	627
Residential mortgages [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Residential mortgages reclassified to trading	$ (33)	(33)
Decrease in debt securities remeasurements		$ (134)

XML

Recently Adopted Accounting Standards - Summary of Reconciliation of Impairment Allowance Balance from IAS 39 to IFRS 9 (Detail) - CAD ($) $ in Millions	Nov. 01, 2017	Oct. 31, 2017
Impairment allowance under IAS 39 [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Loans and acceptances		$ 4,327
Off-balance sheet credit risks		120
Total		$ 4,447
Remeasurement [Member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Loans and acceptances	$ 611
Investment securities (Debt) at amortized cost	1
Investment securities (Debt) at FVOCI	13
Deposits with financial institutions	3
Off-balance sheet credit risks	(36)
Total	592
Impairment allowance under IFRS 9 [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Loans and acceptances	4,938
Investment securities (Debt) at amortized cost	1
Investment securities (Debt) at FVOCI	13
Deposits with financial institutions	3
Off-balance sheet credit risks	84
Total	$ 5,039

XML

Recently Adopted Accounting Standards - Summary of Reconciliation of Impairment Allowance Balance from IAS 39 to IFRS 9 (Parenthetical) (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2017 CAD ($)
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Remeasurement of Impairment allowance for financial assets	$ 611
Allowance for credit losses	13
Loan [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Remeasurement of Impairment allowance for financial assets	593
Acceptances [Member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Remeasurement of Impairment allowance for financial assets	16
Accrued interest [member]
Disclosure of reconciliation of carrying amounts of financial assets and financial liabilities on the date of initial application of IFRS 9 [line items]
Remeasurement of Impairment allowance for financial assets	$ 2

XML

Future Accounting Developments - Additional Information (Detail)	Nov. 01, 2018 CAD ($)
Increase (decrease) due to application of IFRS 15 [member] | Announcing or commencing implementation of major restructuring [member]
Disclosure of expected impact of initial application of new standards or interpretations [line items]
Decrease in retained earnings	$ 60

XML

Cash and Deposits with Financial Institutions - Summary of Cash and Deposits with Financial Institutions (Detail) - CAD ($) $ in Millions		Oct. 31, 2018		Oct. 31, 2017		Oct. 31, 2016	Oct. 31, 2015
Disclosure Of Cash And Cash Equivalents [Abstract]
Cash and non-interest-bearing deposits with financial institutions	[1]	$ 8,997	[2]	$ 7,825	[2]	$ 6,855	$ 6,724
Interest-bearing deposits with financial institutions		53,272		51,838
Total		$ 62,269	[3]	$ 59,663

[1] Represents cash and non-interest bearing deposits with financial institutions (refer to Note 6).

[2] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

[3] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Cash and Deposits with Financial Institutions - Summary of Cash and Deposits with Financial Institutions (Parenthetical) (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)
Disclosure Of Cash And Cash Equivalents [Abstract]
Net of impairment allowances	$ 3

XML

Cash and Deposits with Financial Institutions - Additional Information (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Mandatory Reserve Deposits At Central Banks [Abstract]
Cash balances required to maintain with central banks, other regulatory authorities and certain counterparties	$ 8,886	$ 7,282

XML

Fair Value of Financial Instruments - Summary of Fair Values of Financial Instruments of Bank Using Valuation Methods and Assumption (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Assets:
Cash and deposits with financial institutions	$ 62,269	[1]	$ 59,663
Trading assets	100,262	[1]	98,464
Financial instruments designated at fair value through profit or loss	12	[1]	13
Securities purchased under resale agreements and securities borrowed	104,018	[1]	95,319
Derivative financial instruments	37,558	[1]	35,364
Customers' liability under acceptances	16,329	[1]	13,560
Liabilities:
Deposits	676,534	[1]	625,367
Financial instruments designated at fair value through profit or loss	8,188	[1]	4,663
Acceptances	16,338	[1]	13,560
Obligations related to securities sold short	32,087	[1]	30,766
Derivative financial instruments	37,967	[1]	34,200
Obligations related to securities sold under repurchase agreements and securities lent	101,257	[1]	95,843
Subordinated debentures	5,698	[1]	5,935
Gross carrying amount [member]
Assets:
Cash and deposits with financial institutions	62,269		59,663
Trading assets	100,262		98,464
Financial instruments designated at fair value through profit or loss	12		13
Securities purchased under resale agreements and securities borrowed	104,018		95,319
Derivative financial instruments	37,558		35,364
Investment securities - other	57,653		50,504
Investment securities - amortized cost	20,743		18,765
Loans	551,834		504,369
Customers' liability under acceptances	16,329		13,560
Other financial assets	10,913		9,314
Liabilities:
Deposits	676,534		625,367
Financial instruments designated at fair value through profit or loss	8,188		4,663
Acceptances	16,338		13,560
Obligations related to securities sold short	32,087		30,766
Derivative financial instruments	37,967		34,200
Obligations related to securities sold under repurchase agreements and securities lent	101,257		95,843
Subordinated debentures	5,698		5,935
Other financial liabilities	34,805		27,118
At fair value [member]
Assets:
Cash and deposits with financial institutions	62,269		59,663
Trading assets	100,262		98,464
Financial instruments designated at fair value through profit or loss	12		13
Securities purchased under resale agreements and securities borrowed	104,018		95,319
Derivative financial instruments	37,558		35,364
Investment securities - other	57,653		50,504
Investment securities - amortized cost	20,316		18,716
Loans	553,758		507,276
Customers' liability under acceptances	16,329		13,560
Other financial assets	10,913		9,314
Liabilities:
Deposits	674,535		625,964
Financial instruments designated at fair value through profit or loss	8,188		4,663
Acceptances	16,338		13,560
Obligations related to securities sold short	32,087		30,766
Derivative financial instruments	37,967		34,200
Obligations related to securities sold under repurchase agreements and securities lent	101,257		95,843
Subordinated debentures	5,627		6,105
Other financial liabilities	$ 35,432		$ 27,531

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Fair Value of Financial Instruments - Summary of Fair Value Hierarchy of Instruments Carried at Fair Value on a Recurring Basis (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Assets:
Precious metals	$ 3,191	[1]	$ 5,717
Trading assets
Loans	14,334	[1]	17,312
Securities	85,474	[1]	78,652
Other	454	[1]	2,500
Derivative financial instruments
Derivative Financial Assets	37,558	[1]	35,364
Liabilities:
Deposits	676,534	[1]	625,367
Financial liabilities designated at fair value through profit or loss	8,188	[1]	4,663
Subordinated debentures	5,698	[1]	5,935
Obligations related to securities sold short	32,087	[1]	30,766
Other liabilities	52,744	[1]	43,314
Derivative financial instruments
Derivative Financial Liabilities	37,967	[1]	34,200
Canadian provincial and municipal debt [member]
Trading assets
Securities	10,159		7,325
Recurring fair value measurement [member]
Assets:
Precious metals			5,717
Trading assets
Assets			104,181
Financial assets designated at fair value through profit or loss			13
Investment securities
Investment securities			50,504
Derivative financial instruments
Derivative Financial Assets			35,364
Liabilities:
Deposits			(7)
Financial liabilities designated at fair value through profit or loss			4,663
Obligations related to securities sold short			30,766
Derivative financial instruments
Derivative Financial Liabilities			34,200
Recurring fair value measurement [member] | IFRS9 [member]
Assets:
Precious metals	3,191
Trading assets
Assets	103,453
Financial assets designated at fair value through profit or loss	12
Investment securities
Investment securities	57,653
Derivative financial instruments
Derivative Financial Assets	37,558
Liabilities:
Deposits	(401)
Financial liabilities designated at fair value through profit or loss	8,188
Obligations related to securities sold short	32,087
Derivative financial instruments
Derivative Financial Liabilities	37,967
Recurring fair value measurement [member] | Trading loans [member]
Trading assets
Loans			17,312
Recurring fair value measurement [member] | Trading loans [member] | IFRS9 [member]
Trading assets
Loans	14,334
Recurring fair value measurement [member] | Canadian federal government and government guaranteed debt [member]
Trading assets
Securities			10,343
Investment securities
Investment securities			12,093
Recurring fair value measurement [member] | Canadian federal government and government guaranteed debt [member] | IFRS9 [member]
Trading assets
Securities	13,003
Investment securities
Investment securities	8,891
Recurring fair value measurement [member] | Canadian provincial and municipal debt [member]
Trading assets
Securities			7,325
Investment securities
Investment securities			4,823
Recurring fair value measurement [member] | Canadian provincial and municipal debt [member] | IFRS9 [member]
Trading assets
Securities	10,159
Investment securities
Investment securities	4,352
Recurring fair value measurement [member] | U.S. treasury and other U.S. agency debt [member]
Trading assets
Securities			6,894
Investment securities
Investment securities			6,672
Recurring fair value measurement [member] | U.S. treasury and other U.S. agency debt [member] | IFRS9 [member]
Trading assets
Securities	7,164
Investment securities
Investment securities	19,141
Recurring fair value measurement [member] | Other foreign governments debt [member]
Trading assets
Securities			6,829
Investment securities
Investment securities			19,803
Recurring fair value measurement [member] | Other foreign governments debt [member] | IFRS9 [member]
Trading assets
Securities	6,443
Investment securities
Investment securities	19,990
Recurring fair value measurement [member] | Corporate and other debt [member]
Trading assets
Securities			7,986
Investment securities
Investment securities			4,387
Recurring fair value measurement [member] | Corporate and other debt [member] | IFRS9 [member]
Trading assets
Securities	9,005
Investment securities
Investment securities	2,563
Recurring fair value measurement [member] | Income funds [Member]
Trading assets
Securities			345
Recurring fair value measurement [member] | Income funds [Member] | IFRS9 [member]
Trading assets
Securities	29
Recurring fair value measurement [member] | Equity securities [member]
Trading assets
Securities			38,930
Recurring fair value measurement [member] | Equity securities [member] | IFRS9 [member]
Trading assets
Securities	39,671
Recurring fair value measurement [member] | Other trading assets [member]
Trading assets
Other			2,500
Recurring fair value measurement [member] | Other trading assets [member] | IFRS9 [member]
Trading assets
Other	454
Recurring fair value measurement [member] | Mortgage backed securities [member]
Investment securities
Investment securities			1,415
Recurring fair value measurement [member] | Mortgage backed securities [member] | IFRS9 [member]
Investment securities
Investment securities	906
Recurring fair value measurement [member] | Equity securities [member]
Investment securities
Investment securities			1,311
Recurring fair value measurement [member] | Equity securities [member] | IFRS9 [member]
Investment securities
Investment securities	1,810
Recurring fair value measurement [member] | Interest rate contracts [member]
Derivative financial instruments
Derivative Financial Assets			9,778
Recurring fair value measurement [member] | Interest rate contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	9,039
Recurring fair value measurement [member] | Foreign exchange and gold contracts [member]
Derivative financial instruments
Derivative Financial Assets			21,500
Recurring fair value measurement [member] | Foreign exchange and gold contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	22,202
Recurring fair value measurement [member] | Equity contracts [member]
Derivative financial instruments
Derivative Financial Assets			2,335
Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	2,361
Recurring fair value measurement [member] | Credit contracts [member]
Derivative financial instruments
Derivative Financial Assets			175
Recurring fair value measurement [member] | Credit contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	349
Recurring fair value measurement [member] | Commodity Contracts [member]
Derivative financial instruments
Derivative Financial Assets			1,576
Recurring fair value measurement [member] | Commodity Contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	3,607
Recurring fair value measurement [member] | Interest rate contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			11,090
Recurring fair value measurement [member] | Interest rate contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	11,086
Recurring fair value measurement [member] | Foreign exchange and gold contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			17,649
Recurring fair value measurement [member] | Foreign exchange and gold contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	20,537
Recurring fair value measurement [member] | Equity contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			3,233
Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	2,946
Recurring fair value measurement [member] | Credit contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			179
Recurring fair value measurement [member] | Credit contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	70
Recurring fair value measurement [member] | Commodity Contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			2,049
Recurring fair value measurement [member] | Commodity Contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	3,328
Not measured at fair value in statement of financial position but for which fair value is disclosed [member]
Derivative financial instruments
Loans			286,621
Liabilities:
Deposits			266,995
Subordinated debentures			6,105
Other liabilities			13,363
Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | IFRS9 [member]
Derivative financial instruments
Loans	313,490
Liabilities:
Deposits	293,898
Subordinated debentures	5,627
Other liabilities	20,383
Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | Financial assets at amortised cost, category [member]
Derivative financial instruments
Investment securities - amortized cost			18,716
Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | Financial assets at amortised cost, category [member] | IFRS9 [member]
Derivative financial instruments
Investment securities - amortized cost	20,316
Level 1 [member] | Recurring fair value measurement [member]
Trading assets
Assets			64,401
Financial assets designated at fair value through profit or loss			13
Investment securities
Investment securities			29,398
Derivative financial instruments
Derivative Financial Assets			752
Liabilities:
Obligations related to securities sold short			27,796
Derivative financial instruments
Derivative Financial Liabilities			773
Level 1 [member] | Recurring fair value measurement [member] | IFRS9 [member]
Trading assets
Assets	64,776
Financial assets designated at fair value through profit or loss	12
Investment securities
Investment securities	37,238
Derivative financial instruments
Derivative Financial Assets	894
Liabilities:
Obligations related to securities sold short	24,563
Derivative financial instruments
Derivative Financial Liabilities	1,091
Level 1 [member] | Recurring fair value measurement [member] | Canadian federal government and government guaranteed debt [member]
Trading assets
Securities			10,343
Investment securities
Investment securities			9,677
Level 1 [member] | Recurring fair value measurement [member] | Canadian federal government and government guaranteed debt [member] | IFRS9 [member]
Trading assets
Securities	13,003
Investment securities
Investment securities	6,373
Level 1 [member] | Recurring fair value measurement [member] | Canadian provincial and municipal debt [member]
Investment securities
Investment securities			593
Level 1 [member] | Recurring fair value measurement [member] | Canadian provincial and municipal debt [member] | IFRS9 [member]
Investment securities
Investment securities	366
Level 1 [member] | Recurring fair value measurement [member] | U.S. treasury and other U.S. agency debt [member]
Trading assets
Securities			6,894
Investment securities
Investment securities			6,305
Level 1 [member] | Recurring fair value measurement [member] | U.S. treasury and other U.S. agency debt [member] | IFRS9 [member]
Trading assets
Securities	7,164
Investment securities
Investment securities	18,472
Level 1 [member] | Recurring fair value measurement [member] | Other foreign governments debt [member]
Trading assets
Securities			5,680
Investment securities
Investment securities			10,944
Level 1 [member] | Recurring fair value measurement [member] | Other foreign governments debt [member] | IFRS9 [member]
Trading assets
Securities	4,610
Investment securities
Investment securities	10,457
Level 1 [member] | Recurring fair value measurement [member] | Corporate and other debt [member]
Trading assets
Securities			44
Investment securities
Investment securities			750
Level 1 [member] | Recurring fair value measurement [member] | Corporate and other debt [member] | IFRS9 [member]
Trading assets
Securities	3
Investment securities
Investment securities	732
Level 1 [member] | Recurring fair value measurement [member] | Income funds [Member]
Trading assets
Securities			180
Level 1 [member] | Recurring fair value measurement [member] | Income funds [Member] | IFRS9 [member]
Trading assets
Securities	29
Level 1 [member] | Recurring fair value measurement [member] | Equity securities [member]
Trading assets
Securities			38,760
Level 1 [member] | Recurring fair value measurement [member] | Equity securities [member] | IFRS9 [member]
Trading assets
Securities	39,513
Level 1 [member] | Recurring fair value measurement [member] | Other trading assets [member]
Trading assets
Other			2,500
Level 1 [member] | Recurring fair value measurement [member] | Other trading assets [member] | IFRS9 [member]
Trading assets
Other	454
Level 1 [member] | Recurring fair value measurement [member] | Mortgage backed securities [member]
Investment securities
Investment securities			539
Level 1 [member] | Recurring fair value measurement [member] | Equity securities [member]
Investment securities
Investment securities			590
Level 1 [member] | Recurring fair value measurement [member] | Equity securities [member] | IFRS9 [member]
Investment securities
Investment securities	838
Level 1 [member] | Recurring fair value measurement [member] | Foreign exchange and gold contracts [member]
Derivative financial instruments
Derivative Financial Assets			4
Level 1 [member] | Recurring fair value measurement [member] | Foreign exchange and gold contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	5
Level 1 [member] | Recurring fair value measurement [member] | Equity contracts [member]
Derivative financial instruments
Derivative Financial Assets			615
Level 1 [member] | Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	797
Level 1 [member] | Recurring fair value measurement [member] | Commodity Contracts [member]
Derivative financial instruments
Derivative Financial Assets			133
Level 1 [member] | Recurring fair value measurement [member] | Commodity Contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	92
Level 1 [member] | Recurring fair value measurement [member] | Foreign exchange and gold contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			3
Level 1 [member] | Recurring fair value measurement [member] | Equity contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			502
Level 1 [member] | Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	1,057
Level 1 [member] | Recurring fair value measurement [member] | Commodity Contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			268
Level 1 [member] | Recurring fair value measurement [member] | Commodity Contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	34
Level 1 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | Financial assets at amortised cost, category [member]
Derivative financial instruments
Investment securities - amortized cost			4,240
Level 1 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | Financial assets at amortised cost, category [member] | IFRS9 [member]
Derivative financial instruments
Investment securities - amortized cost	7,392
Level 2 [member] | Recurring fair value measurement [member]
Assets:
Precious metals			5,717
Trading assets
Assets			39,758
Investment securities
Investment securities			20,396
Derivative financial instruments
Derivative Financial Assets			34,576
Liabilities:
Deposits			(7)
Financial liabilities designated at fair value through profit or loss			4,663
Obligations related to securities sold short			2,970
Derivative financial instruments
Derivative Financial Liabilities			33,153
Level 2 [member] | Recurring fair value measurement [member] | IFRS9 [member]
Assets:
Precious metals	3,175
Trading assets
Assets	38,643
Investment securities
Investment securities	19,645
Derivative financial instruments
Derivative Financial Assets	36,544
Liabilities:
Deposits	(401)
Financial liabilities designated at fair value through profit or loss	8,188
Obligations related to securities sold short	7,524
Derivative financial instruments
Derivative Financial Liabilities	36,797
Level 2 [member] | Recurring fair value measurement [member] | Trading loans [member]
Trading assets
Loans			17,312
Level 2 [member] | Recurring fair value measurement [member] | Trading loans [member] | IFRS9 [member]
Trading assets
Loans	14,334
Level 2 [member] | Recurring fair value measurement [member] | Canadian federal government and government guaranteed debt [member]
Investment securities
Investment securities			2,416
Level 2 [member] | Recurring fair value measurement [member] | Canadian federal government and government guaranteed debt [member] | IFRS9 [member]
Investment securities
Investment securities	2,518
Level 2 [member] | Recurring fair value measurement [member] | Canadian provincial and municipal debt [member]
Trading assets
Securities			7,325
Investment securities
Investment securities			4,230
Level 2 [member] | Recurring fair value measurement [member] | Canadian provincial and municipal debt [member] | IFRS9 [member]
Trading assets
Securities	10,159
Investment securities
Investment securities	3,986
Level 2 [member] | Recurring fair value measurement [member] | U.S. treasury and other U.S. agency debt [member]
Investment securities
Investment securities			367
Level 2 [member] | Recurring fair value measurement [member] | U.S. treasury and other U.S. agency debt [member] | IFRS9 [member]
Investment securities
Investment securities	669
Level 2 [member] | Recurring fair value measurement [member] | Other foreign governments debt [member]
Trading assets
Securities			1,149
Investment securities
Investment securities			8,746
Level 2 [member] | Recurring fair value measurement [member] | Other foreign governments debt [member] | IFRS9 [member]
Trading assets
Securities	1,833
Investment securities
Investment securities	9,485
Level 2 [member] | Recurring fair value measurement [member] | Corporate and other debt [member]
Trading assets
Securities			7,920
Investment securities
Investment securities			3,584
Level 2 [member] | Recurring fair value measurement [member] | Corporate and other debt [member] | IFRS9 [member]
Trading assets
Securities	8,984
Investment securities
Investment securities	1,818
Level 2 [member] | Recurring fair value measurement [member] | Income funds [Member]
Trading assets
Securities			165
Level 2 [member] | Recurring fair value measurement [member] | Equity securities [member]
Trading assets
Securities			170
Level 2 [member] | Recurring fair value measurement [member] | Equity securities [member] | IFRS9 [member]
Trading assets
Securities	158
Level 2 [member] | Recurring fair value measurement [member] | Mortgage backed securities [member]
Investment securities
Investment securities			876
Level 2 [member] | Recurring fair value measurement [member] | Mortgage backed securities [member] | IFRS9 [member]
Investment securities
Investment securities	906
Level 2 [member] | Recurring fair value measurement [member] | Equity securities [member]
Investment securities
Investment securities			177
Level 2 [member] | Recurring fair value measurement [member] | Equity securities [member] | IFRS9 [member]
Investment securities
Investment securities	263
Level 2 [member] | Recurring fair value measurement [member] | Interest rate contracts [member]
Derivative financial instruments
Derivative Financial Assets			9,742
Level 2 [member] | Recurring fair value measurement [member] | Interest rate contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	8,927
Level 2 [member] | Recurring fair value measurement [member] | Foreign exchange and gold contracts [member]
Derivative financial instruments
Derivative Financial Assets			21,496
Level 2 [member] | Recurring fair value measurement [member] | Foreign exchange and gold contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	22,197
Level 2 [member] | Recurring fair value measurement [member] | Equity contracts [member]
Derivative financial instruments
Derivative Financial Assets			1,720
Level 2 [member] | Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	1,556
Level 2 [member] | Recurring fair value measurement [member] | Credit contracts [member]
Derivative financial instruments
Derivative Financial Assets			175
Level 2 [member] | Recurring fair value measurement [member] | Credit contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	349
Level 2 [member] | Recurring fair value measurement [member] | Commodity Contracts [member]
Derivative financial instruments
Derivative Financial Assets			1,443
Level 2 [member] | Recurring fair value measurement [member] | Commodity Contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	3,515
Level 2 [member] | Recurring fair value measurement [member] | Interest rate contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			10,823
Level 2 [member] | Recurring fair value measurement [member] | Interest rate contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	11,012
Level 2 [member] | Recurring fair value measurement [member] | Foreign exchange and gold contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			17,646
Level 2 [member] | Recurring fair value measurement [member] | Foreign exchange and gold contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	20,537
Level 2 [member] | Recurring fair value measurement [member] | Equity contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			2,724
Level 2 [member] | Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	1,884
Level 2 [member] | Recurring fair value measurement [member] | Credit contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			179
Level 2 [member] | Recurring fair value measurement [member] | Credit contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	70
Level 2 [member] | Recurring fair value measurement [member] | Commodity Contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			1,781
Level 2 [member] | Recurring fair value measurement [member] | Commodity Contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	3,294
Level 2 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member]
Liabilities:
Deposits			266,995
Subordinated debentures			6,105
Other liabilities			13,363
Level 2 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | IFRS9 [member]
Derivative financial instruments
Loans	313,490
Liabilities:
Deposits	293,898
Subordinated debentures	5,627
Other liabilities	20,383
Level 2 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | Financial assets at amortised cost, category [member]
Derivative financial instruments
Investment securities - amortized cost			14,476
Level 2 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | Financial assets at amortised cost, category [member] | IFRS9 [member]
Derivative financial instruments
Investment securities - amortized cost	12,815
Level 3 [member] | Recurring fair value measurement [member]
Trading assets
Assets			22
Investment securities
Investment securities			710
Derivative financial instruments
Derivative Financial Assets			36
Derivative financial instruments
Derivative Financial Liabilities			274
Level 3 [member] | Recurring fair value measurement [member] | IFRS9 [member]
Assets:
Precious metals	16
Trading assets
Assets	34
Investment securities
Investment securities	770
Derivative financial instruments
Derivative Financial Assets	120
Derivative financial instruments
Derivative Financial Liabilities	79
Level 3 [member] | Recurring fair value measurement [member] | Other foreign governments debt [member]
Investment securities
Investment securities			113
Level 3 [member] | Recurring fair value measurement [member] | Other foreign governments debt [member] | IFRS9 [member]
Investment securities
Investment securities	48
Level 3 [member] | Recurring fair value measurement [member] | Corporate and other debt [member]
Trading assets
Securities			22
Investment securities
Investment securities			53
Level 3 [member] | Recurring fair value measurement [member] | Corporate and other debt [member] | IFRS9 [member]
Trading assets
Securities	18
Investment securities
Investment securities	13
Level 3 [member] | Recurring fair value measurement [member] | Equity securities [member]
Investment securities
Investment securities			544
Level 3 [member] | Recurring fair value measurement [member] | Equity securities [member] | IFRS9 [member]
Investment securities
Investment securities	709
Level 3 [member] | Recurring fair value measurement [member] | Interest rate contracts [member]
Derivative financial instruments
Derivative Financial Assets			36
Level 3 [member] | Recurring fair value measurement [member] | Interest rate contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	112
Level 3 [member] | Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Assets	8
Level 3 [member] | Recurring fair value measurement [member] | Interest rate contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			267
Level 3 [member] | Recurring fair value measurement [member] | Interest rate contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	74
Level 3 [member] | Recurring fair value measurement [member] | Equity contracts [member]
Derivative financial instruments
Derivative Financial Liabilities			7
Level 3 [member] | Recurring fair value measurement [member] | Equity contracts [member] | IFRS9 [member]
Derivative financial instruments
Derivative Financial Liabilities	5
Level 3 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member]
Derivative financial instruments
Loans			$ 286,621
Level 3 [member] | Not measured at fair value in statement of financial position but for which fair value is disclosed [member] | Financial assets at amortised cost, category [member] | IFRS9 [member]
Derivative financial instruments
Investment securities - amortized cost	$ 109

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Fair Value of Financial Instruments - Summary of Fair Value Hierarchy of Instruments Carried at Fair Value on a Recurring Basis (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Financial assets available-for-sale [member]
Disclosure of fair value measurement of assets [line items]
Investment securities measured at amortized cost		$ 50,545
Other foreign governments debt [member] | IFRS9 [member] | Level 3 [member]
Disclosure of fair value measurement of assets [line items]
Reclassification of other foreign governments' debt to debt securities measured at amortized cost	$ 104
Corporate and other debt [member] | Level 3 [member]
Disclosure of fair value measurement of assets [line items]
Reclassification of corporate and other debt from available for sale securities to trading assets	17
Mortgage backed securities [member] | IFRS9 [member] | Level 1 [member]
Disclosure of fair value measurement of assets [line items]
Reclassification of other foreign governments' debt to debt securities measured at amortized cost	539
Gross carrying amount [member]
Disclosure of fair value measurement of assets [line items]
Investment securities measured at amortized cost	20,743	18,765
Gross carrying amount [member] | Financial assets available-for-sale [member]
Disclosure of fair value measurement of assets [line items]
Investment securities measured at amortized cost	$ 20,743
Gross carrying amount [member] | Held-to-maturity investments, category [member]
Disclosure of fair value measurement of assets [line items]
Investment securities measured at amortized cost		$ 18,765

XML

Fair Value of Financial Instruments - Summary of Changes in Level 3 Instruments Carried at Fair Value (Detail) - Level 3 [member] - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	$ 390
Gains/(losses) recorded in income	(37)
Gains/(losses) recorded in OCI	13
Purchases/ Issuances	284
Sales/ Settlements	(133)
Transfers into/out of Level 3	328
Fair value, ending balance	845	$ 390
Change in unrealized gains/(losses)recorded in income for instruments still held	44
Precious metals [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Purchases/ Issuances	5
Sales/ Settlements	(8)
Transfers into/out of Level 3	19
Fair value, ending balance	16
Trading assets [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	39
Gains/(losses) recorded in income	(10)
Sales/ Settlements	(18)
Transfers into/out of Level 3	7
Fair value, ending balance	18	39
Trading assets [member] | Trading loans [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Sales/ Settlements	(2)
Transfers into/out of Level 3	2
Trading assets [member] | Corporate debt and other debt [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	39
Gains/(losses) recorded in income	(10)
Sales/ Settlements	(16)
Transfers into/out of Level 3	5
Fair value, ending balance	18	39
Investment Securities [Member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	589
Gains/(losses) recorded in income	16
Gains/(losses) recorded in OCI	13
Purchases/ Issuances	279
Sales/ Settlements	(107)
Transfers into/out of Level 3	(20)
Fair value, ending balance	770	589
Change in unrealized gains/(losses)recorded in income for instruments still held	14
Investment Securities [Member] | Other foreign governments debt [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	9
Purchases/ Issuances	61
Sales/ Settlements	(22)
Fair value, ending balance	48	9
Investment Securities [Member] | Corporate and other debt [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	36
Gains/(losses) recorded in OCI	(5)
Sales/ Settlements	(18)
Fair value, ending balance	13	36
Investment Securities [Member] | Equity securities [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	544
Gains/(losses) recorded in income	16
Gains/(losses) recorded in OCI	18
Purchases/ Issuances	218
Sales/ Settlements	(67)
Transfers into/out of Level 3	(20)
Fair value, ending balance	709	544
Change in unrealized gains/(losses)recorded in income for instruments still held	14
Derivative Financial Assets [member] | Interest rate contracts [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	36
Gains/(losses) recorded in income	67
Purchases/ Issuances	31
Sales/ Settlements	(22)
Fair value, ending balance	112	36
Change in unrealized gains/(losses)recorded in income for instruments still held	58
Derivative Financial Assets [member] | Equity contracts [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Gains/(losses) recorded in income	(2)
Purchases/ Issuances	4
Transfers into/out of Level 3	6
Fair value, ending balance	8
Change in unrealized gains/(losses)recorded in income for instruments still held	(2)
Derivative financial instruments [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	(238)
Gains/(losses) recorded in income	(43)
Gains/(losses) recorded in OCI	0
Transfers into/out of Level 3	322
Fair value, ending balance	41	(238)
Change in unrealized gains/(losses)recorded in income for instruments still held	30
Interest rate contracts [member] | Derivative financial liabilities [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	(267)
Gains/(losses) recorded in income	(108)
Gains/(losses) recorded in OCI	0
Purchases/ Issuances	(24)
Sales/ Settlements	22
Transfers into/out of Level 3	303
Fair value, ending balance	(74)	(267)
Change in unrealized gains/(losses)recorded in income for instruments still held	(26)
Foreign exchange and gold contracts [member] | Derivative financial liabilities [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Gains/(losses) recorded in OCI	0
Purchases/ Issuances	(6)
Transfers into/out of Level 3	6
Equity contracts [member] | Derivative financial liabilities [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	(7)
Gains/(losses) recorded in OCI	0
Purchases/ Issuances	(5)
Transfers into/out of Level 3	7
Fair value, ending balance	(5)	(7)
IAS 39 [member] | Trading assets [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	22	1,222
Gains/(losses) recorded in income		(20)
Sales/ Settlements		(1,180)
Fair value, ending balance		22
IAS 39 [member] | Investment Securities [Member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	710	909
Gains/(losses) recorded in income		(24)
Gains/(losses) recorded in OCI		38
Purchases/ Issuances		122
Sales/ Settlements		(332)
Transfers into/out of Level 3		(3)
Fair value, ending balance		710
IAS 39 [member] | Derivative financial instruments [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance	$ (238)	(236)
Gains/(losses) recorded in income		10
Gains/(losses) recorded in OCI		0
Purchases/ Issuances		(6)
Sales/ Settlements		3
Transfers into/out of Level 3		(9)
Fair value, ending balance		(238)
IAS 39 [member] | Deposits [Member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value, beginning balance		(1,163)
Gains/(losses) recorded in income		6
Gains/(losses) recorded in OCI		0
Sales/ Settlements		$ 1,157

XML

Fair Value of Financial Instruments - Summary of Changes in Level 3 Instruments Carried at Fair Value (Parenthetical) (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)
BBVA Chile [member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Purchases of assets	$ 45

XML

Fair Value of Financial Instruments - Additional Information (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [abstract]
Derivative liabilities transferred out of Level 3 into Level 2	$ 316	$ 126
Derivative asset transferred out of Level 3 into Level 2		$ 135

XML

Fair Value of Financial Instruments - Summary of Significant Unobservable Inputs Used in Measuring Financial Instruments Categorized as Level 3 (Detail) - Level 3 [member] - Option pricing model [member]	12 Months Ended
	Oct. 31, 2018
Interest rate contracts [member]
Disclosure of detailed information about financial instruments [line items]
Valuation technique	Option pricing model
Significant unobservable inputs	Interest rate volatility
Range of estimates	7% - 93%
Equity contracts [member]
Disclosure of detailed information about financial instruments [line items]
Valuation technique	Option pricing model
Significant unobservable inputs	Equity volatility
Range of estimates	2% - 124%
Equity contracts 1 [member]
Disclosure of detailed information about financial instruments [line items]
Significant unobservable inputs	Single stock correlation
Range of estimates	(70)% - 97%
Changes in fair value from reasonably possible alternatives	(9)/9 millions

XML

Trading Assets - Summary of Analysis of Carrying Value of Trading Securities (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of financial assets [line items]
Total trading securities	$ 85,474	[1]	$ 78,652
Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Total trading securities	13,003		10,343
Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Total trading securities	10,159		7,325
United states treasury and other united states agency debt [member]
Disclosure of financial assets [line items]
Total trading securities	7,164		6,894
Other foreign government debt [member]
Disclosure of financial assets [line items]
Total trading securities	6,443		6,829
Common shares [member]
Disclosure of financial assets [line items]
Total trading securities	39,700		39,275
Other trading securities [member]
Disclosure of financial assets [line items]
Total trading securities	9,005		7,986
Canadian dollar [member]
Disclosure of financial assets [line items]
Total trading securities	33,334		26,773
U.S. dollar [member]
Disclosure of financial assets [line items]
Total trading securities	29,734		24,269
Mexico, Pesos [member]
Disclosure of financial assets [line items]
Total trading securities	1,409		1,971
Other currencies [member]
Disclosure of financial assets [line items]
Total trading securities	20,997		25,639
Within 3 months [member]
Disclosure of financial assets [line items]
Total trading securities	4,821		3,995
Within 3 months [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Total trading securities	1,500		950
Within 3 months [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Total trading securities	859		1,230
Within 3 months [member] | United states treasury and other united states agency debt [member]
Disclosure of financial assets [line items]
Total trading securities	514		113
Within 3 months [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Total trading securities	1,353		1,172
Within 3 months [member] | Other trading securities [member]
Disclosure of financial assets [line items]
Total trading securities	595		530
Within 3 months [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Total trading securities	2,711		2,368
Within 3 months [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Total trading securities	620		372
Within 3 months [member] | Mexico, Pesos [member]
Disclosure of financial assets [line items]
Total trading securities	322		249
Within 3 months [member] | Other currencies [member]
Disclosure of financial assets [line items]
Total trading securities	1,168		1,006
Three to 12 months [member]
Disclosure of financial assets [line items]
Total trading securities	9,182		5,756
Three to 12 months [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Total trading securities	4,040		1,696
Three to 12 months [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Total trading securities	876		1,127
Three to 12 months [member] | United states treasury and other united states agency debt [member]
Disclosure of financial assets [line items]
Total trading securities	1,574		980
Three to 12 months [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Total trading securities	1,042		819
Three to 12 months [member] | Other trading securities [member]
Disclosure of financial assets [line items]
Total trading securities	1,650		1,134
Three to 12 months [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Total trading securities	5,222		3,064
Three to 12 months [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Total trading securities	2,414		1,771
Three to 12 months [member] | Mexico, Pesos [member]
Disclosure of financial assets [line items]
Total trading securities	119		235
Three to 12 months [member] | Other currencies [member]
Disclosure of financial assets [line items]
Total trading securities	1,427		686
One to 5 years [member]
Disclosure of financial assets [line items]
Total trading securities	17,591		16,538
One to 5 years [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Total trading securities	4,781		4,283
One to 5 years [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Total trading securities	2,122		1,536
One to 5 years [member] | United states treasury and other united states agency debt [member]
Disclosure of financial assets [line items]
Total trading securities	3,348		3,301
One to 5 years [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Total trading securities	2,452		2,716
One to 5 years [member] | Other trading securities [member]
Disclosure of financial assets [line items]
Total trading securities	4,888		4,702
One to 5 years [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Total trading securities	5,901		5,130
One to 5 years [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Total trading securities	7,105		6,807
One to 5 years [member] | Mexico, Pesos [member]
Disclosure of financial assets [line items]
Total trading securities	538		488
One to 5 years [member] | Other currencies [member]
Disclosure of financial assets [line items]
Total trading securities	4,047		4,113
Five to ten years [member]
Disclosure of financial assets [line items]
Total trading securities	8,248		7,036
Five to ten years [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Total trading securities	863		1,333
Five to ten years [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Total trading securities	3,425		1,269
Five to ten years [member] | United states treasury and other united states agency debt [member]
Disclosure of financial assets [line items]
Total trading securities	1,602		2,214
Five to ten years [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Total trading securities	1,155		1,132
Five to ten years [member] | Other trading securities [member]
Disclosure of financial assets [line items]
Total trading securities	1,203		1,088
Five to ten years [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Total trading securities	4,798		3,068
Five to ten years [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Total trading securities	2,377		2,777
Five to ten years [member] | Mexico, Pesos [member]
Disclosure of financial assets [line items]
Total trading securities	21		1
Five to ten years [member] | Other currencies [member]
Disclosure of financial assets [line items]
Total trading securities	1,052		1,190
Over ten years [member]
Disclosure of financial assets [line items]
Total trading securities	5,848		6,052
Over ten years [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Total trading securities	1,819		2,081
Over ten years [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Total trading securities	2,877		2,163
Over ten years [member] | United states treasury and other united states agency debt [member]
Disclosure of financial assets [line items]
Total trading securities	126		286
Over ten years [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Total trading securities	441		990
Over ten years [member] | Other trading securities [member]
Disclosure of financial assets [line items]
Total trading securities	585		532
Over ten years [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Total trading securities	4,972		4,524
Over ten years [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Total trading securities	523		526
Over ten years [member] | Mexico, Pesos [member]
Disclosure of financial assets [line items]
Total trading securities	4		1
Over ten years [member] | Other currencies [member]
Disclosure of financial assets [line items]
Total trading securities	349		1,001
No specific maturity [member]
Disclosure of financial assets [line items]
Total trading securities	39,784		39,275
No specific maturity [member] | Common shares [member]
Disclosure of financial assets [line items]
Total trading securities	39,700		39,275
No specific maturity [member] | Other trading securities [member]
Disclosure of financial assets [line items]
Total trading securities	84
No specific maturity [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Total trading securities	9,730		8,619
No specific maturity [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Total trading securities	16,695		12,016
No specific maturity [member] | Mexico, Pesos [member]
Disclosure of financial assets [line items]
Total trading securities	405		997
No specific maturity [member] | Other currencies [member]
Disclosure of financial assets [line items]
Total trading securities	$ 12,954		$ 17,643

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Trading Assets - Summary of Geographic Breakdown Trading Loans (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of financial assets [line items]
Trading loans	$ 14,334	[1]	$ 17,312
United States [member]
Disclosure of financial assets [line items]
Trading loans	9,080		10,654
Europe [member]
Disclosure of financial assets [line items]
Trading loans	3,066		3,824
Asia Pacific [member]
Disclosure of financial assets [line items]
Trading loans	1,077		1,605
Canada [member]
Disclosure of financial assets [line items]
Trading loans	280		376
Other Countries [member]
Disclosure of financial assets [line items]
Trading loans	$ 831		$ 853

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Trading Assets - Summary of Geographic Breakdown Trading Loans (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of financial assets [line items]
Trading loans	$ 14,334	[1]	$ 17,312
Hedge To Loan-based Credit Total Return Swaps [Member]
Disclosure of financial assets [line items]
Trading loans	$ 6,071		$ 7,390

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Financial Instruments Designated at Fair Value Through Profit or Loss - Fair Value Of Financial Assets And Liabilities Designated At Fair Value Through Profit Or Loss And Their Changes In Fair Value (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Fair value	$ 12	[1]	$ 13
Investment Securities [Member]
Disclosure of detailed information about financial instruments [line items]
Fair value	12		13
Cumulative change in FV			11
Loans assets [member]
Disclosure of detailed information about financial instruments [line items]
Change in Fair value			(205)
Cumulative change in FV			(197)
Senior note liabilities [member]
Disclosure of detailed information about financial instruments [line items]
Fair value	8,188		4,663
Change in Fair value	869		103
Cumulative change in FV	$ 778		$ (91)

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Financial Instruments Designated at Fair Value Through Profit or Loss - Changes In Fair Value Attributable To Changes In The Bank'S Own Credit Risk For Financial Liabilities Designated At Fair Value (Detail) - Senior note liabilities [member] - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Contractual maturity amount	$ 8,966	$ 4,572
Carrying value	8,188	4,663
Difference between carrying value and contractual maturity amount	778	(91)
Changes in fair value for the period attributable to changes in own credit risk recorded in other comprehensive income	(30)	(28)
Cumulative changes in fair value attributable to changes in own credit risk	$ (66)	$ (36)

XML

Derivative Financial Instruments - Summary of Derivative Financial Instruments at Notional Value (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of financial assets [line items]
Notional amounts outstanding	$ 5,334,215	$ 4,547,246
Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	4,124,101	3,375,651
Interest rate contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	127,595	161,590
Interest rate contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	33,019	39,664
Interest rate contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	34,655	40,993
Interest rate contracts [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	330,433	330,061
Interest rate contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,598,399	2,803,343
Interest rate contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amounts outstanding	130,997	169,958
Interest rate contracts [member] | Exchange Traded 1 [Member] | Futures [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	127,595	161,590
Interest rate contracts [member] | Exchange Traded 1 [Member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,402	5,474
Interest rate contracts [member] | Exchange Traded 1 [Member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding		2,894
Interest rate contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	509,220	532,713
Interest rate contracts [member] | Over the Counter1 [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	29,617	34,190
Interest rate contracts [member] | Over the Counter1 [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	34,655	38,099
Interest rate contracts [member] | Over the Counter1 [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	11,407	208
Interest rate contracts [member] | Over the Counter1 [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	433,541	460,216
Interest rate contracts [member] | Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,483,884	2,672,980
Interest rate contracts [member] | Settled through central counterparties [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	319,026	329,853
Interest rate contracts [member] | Settled through central counterparties [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,164,858	2,343,127
Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	956,367	945,198
Foreign exchange and gold contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	7,476	32,452
Foreign exchange and gold contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	42,545	39,116
Foreign exchange and gold contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	41,804	40,028
Foreign exchange and gold contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	397,994	384,867
Foreign exchange and gold contracts [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	466,548	448,735
Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amounts outstanding	7,560	32,949
Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member] | Futures [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	7,476	32,452
Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	48	16
Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	36	481
Foreign exchange and gold contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	920,921	912,249
Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	42,497	39,100
Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	41,768	39,547
Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	397,994	384,867
Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	438,662	448,735
Foreign exchange and gold contracts [member] | Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	27,886
Foreign exchange and gold contracts [member] | Settled through central counterparties [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	27,886
Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	253,747	226,397
Other derivative contracts [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	123,305	101,390
Other derivative contracts [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	29,866	37,592
Other derivative contracts [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	100,576	87,415
Other derivative contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amounts outstanding	98,399	79,225
Other derivative contracts [member] | Exchange Traded 1 [Member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	43,323	33,287
Other derivative contracts [member] | Exchange Traded 1 [Member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	55,076	45,938
Other derivative contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	144,058	126,692
Other derivative contracts [member] | Over the Counter1 [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	79,982	65,240
Other derivative contracts [member] | Over the Counter1 [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	18,902	26,737
Other derivative contracts [member] | Over the Counter1 [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	45,174	34,715
Other derivative contracts [member] | Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	11,290	20,480
Other derivative contracts [member] | Settled through central counterparties [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding		2,863
Other derivative contracts [member] | Settled through central counterparties [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	10,964	10,855
Other derivative contracts [member] | Settled through central counterparties [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	326	6,762
Trading derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	5,082,978	4,335,939
Trading derivatives [member] | Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,957,433	3,250,063
Trading derivatives [member] | Interest rate contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amounts outstanding	130,997	169,958
Trading derivatives [member] | Interest rate contracts [member] | Exchange Traded 1 [Member] | Futures [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	127,595	161,590
Trading derivatives [member] | Interest rate contracts [member] | Exchange Traded 1 [Member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,402	5,474
Trading derivatives [member] | Interest rate contracts [member] | Exchange Traded 1 [Member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding		2,894
Trading derivatives [member] | Interest rate contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	478,740	514,104
Trading derivatives [member] | Interest rate contracts [member] | Over the Counter1 [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	29,617	34,190
Trading derivatives [member] | Interest rate contracts [member] | Over the Counter1 [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	34,655	38,099
Trading derivatives [member] | Interest rate contracts [member] | Over the Counter1 [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	11,407	208
Trading derivatives [member] | Interest rate contracts [member] | Over the Counter1 [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	403,061	441,607
Trading derivatives [member] | Interest rate contracts [member] | Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,347,696	2,566,001
Trading derivatives [member] | Interest rate contracts [member] | Settled through central counterparties [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	319,026	329,853
Trading derivatives [member] | Interest rate contracts [member] | Settled through central counterparties [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	3,028,670	2,236,148
Trading derivatives [member] | Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	872,554	860,275
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amounts outstanding	7,560	32,949
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member] | Futures [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	7,476	32,452
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	48	16
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	36	481
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	837,108	827,326
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	42,497	39,100
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	41,768	39,547
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	340,614	321,567
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	412,229	427,112
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	27,886
Trading derivatives [member] | Foreign exchange and gold contracts [member] | Settled through central counterparties [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	27,886
Trading derivatives [member] | Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	252,991	225,601
Trading derivatives [member] | Other derivative contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amounts outstanding	98,399	79,225
Trading derivatives [member] | Other derivative contracts [member] | Exchange Traded 1 [Member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	43,323	33,287
Trading derivatives [member] | Other derivative contracts [member] | Exchange Traded 1 [Member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	55,076	45,938
Trading derivatives [member] | Other derivative contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	143,302	125,896
Trading derivatives [member] | Other derivative contracts [member] | Over the Counter1 [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	79,226	64,444
Trading derivatives [member] | Other derivative contracts [member] | Over the Counter1 [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	18,902	26,737
Trading derivatives [member] | Other derivative contracts [member] | Over the Counter1 [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	45,174	34,715
Trading derivatives [member] | Other derivative contracts [member] | Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	11,290	20,480
Trading derivatives [member] | Other derivative contracts [member] | Settled through central counterparties [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding		2,863
Trading derivatives [member] | Other derivative contracts [member] | Settled through central counterparties [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	10,964	10,855
Trading derivatives [member] | Other derivative contracts [member] | Settled through central counterparties [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	326	6,762
Hedging derivative [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	251,237	211,307
Hedging derivative [member] | Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	166,668	125,588
Hedging derivative [member] | Interest rate contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	30,480	18,609
Hedging derivative [member] | Interest rate contracts [member] | Over the Counter1 [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	30,480	18,609
Hedging derivative [member] | Interest rate contracts [member] | Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	136,188	106,979
Hedging derivative [member] | Interest rate contracts [member] | Settled through central counterparties [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	136,188	106,979
Hedging derivative [member] | Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	83,813	84,923
Hedging derivative [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	83,813	84,923
Hedging derivative [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	57,380	63,300
Hedging derivative [member] | Foreign exchange and gold contracts [member] | Over the Counter1 [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	26,433	21,623
Hedging derivative [member] | Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	756	796
Hedging derivative [member] | Other derivative contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	756	796
Hedging derivative [member] | Other derivative contracts [member] | Over the Counter1 [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amounts outstanding	$ 756	$ 796

XML

Derivative Financial Instruments - Summary of Remaining Term to Maturity of Notional Amounts of Bank's Derivative Financial Instruments (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of financial assets [line items]
Notional amount	$ 5,334,215	$ 4,547,246
Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amount	4,124,101	3,375,651
Interest rate contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	127,595	161,590
Interest rate contracts [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amount	330,433	330,061
Interest rate contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	3,598,399	2,803,343
Interest rate contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	33,019	39,664
Interest rate contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	34,655	40,993
Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amount	956,367	945,198
Foreign exchange and gold contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	7,476	32,452
Foreign exchange and gold contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	397,994	384,867
Foreign exchange and gold contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	42,545	39,116
Foreign exchange and gold contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	41,804	40,028
Foreign exchange and gold contracts [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amount	466,548	448,735
Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amount	253,747	226,397
Other derivative contracts [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amount	123,305	101,390
Other derivative contracts [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amount	29,866	37,592
Other derivative contracts [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amount	100,576	87,415
Within one year [member]
Disclosure of financial assets [line items]
Notional amount	2,406,758	2,050,839
Within one year [member] | Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amount	1,627,425	1,331,716
Within one year [member] | Interest rate contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	72,068	62,152
Within one year [member] | Interest rate contracts [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amount	227,761	282,062
Within one year [member] | Interest rate contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	1,316,741	971,003
Within one year [member] | Interest rate contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	6,644	10,690
Within one year [member] | Interest rate contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	4,211	5,809
Within one year [member] | Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amount	611,652	576,638
Within one year [member] | Foreign exchange and gold contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	3,005	4,810
Within one year [member] | Foreign exchange and gold contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	90,987	96,767
Within one year [member] | Foreign exchange and gold contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	39,505	36,291
Within one year [member] | Foreign exchange and gold contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	39,395	37,309
Within one year [member] | Foreign exchange and gold contracts [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amount	438,760	401,461
Within one year [member] | Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amount	167,681	142,485
Within one year [member] | Other derivative contracts [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amount	84,333	73,983
Within one year [member] | Other derivative contracts [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amount	13,056	18,249
Within one year [member] | Other derivative contracts [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amount	70,292	50,253
One to 5 years [member]
Disclosure of financial assets [line items]
Notional amount	1,954,040	1,704,770
One to 5 years [member] | Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amount	1,644,519	1,359,988
One to 5 years [member] | Interest rate contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	55,519	98,731
One to 5 years [member] | Interest rate contracts [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amount	92,717	47,999
One to 5 years [member] | Interest rate contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	1,448,580	1,172,422
One to 5 years [member] | Interest rate contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	22,985	17,036
One to 5 years [member] | Interest rate contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	24,718	23,800
One to 5 years [member] | Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amount	230,875	265,975
One to 5 years [member] | Foreign exchange and gold contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	4,100	27,474
One to 5 years [member] | Foreign exchange and gold contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	195,484	185,747
One to 5 years [member] | Foreign exchange and gold contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	2,851	2,825
One to 5 years [member] | Foreign exchange and gold contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	2,199	2,719
One to 5 years [member] | Foreign exchange and gold contracts [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amount	26,241	47,210
One to 5 years [member] | Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amount	78,646	78,807
One to 5 years [member] | Other derivative contracts [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amount	34,890	26,514
One to 5 years [member] | Other derivative contracts [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amount	13,798	15,272
One to 5 years [member] | Other derivative contracts [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amount	29,958	37,021
Over 5 years [member]
Disclosure of financial assets [line items]
Notional amount	973,417	791,637
Over 5 years [member] | Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amount	852,157	683,947
Over 5 years [member] | Interest rate contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	8	707
Over 5 years [member] | Interest rate contracts [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amount	9,955
Over 5 years [member] | Interest rate contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	833,078	659,918
Over 5 years [member] | Interest rate contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	3,390	11,938
Over 5 years [member] | Interest rate contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	5,726	11,384
Over 5 years [member] | Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amount	113,840	102,585
Over 5 years [member] | Foreign exchange and gold contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	371	168
Over 5 years [member] | Foreign exchange and gold contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	111,523	102,353
Over 5 years [member] | Foreign exchange and gold contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	189
Over 5 years [member] | Foreign exchange and gold contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	210
Over 5 years [member] | Foreign exchange and gold contracts [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amount	1,547	64
Over 5 years [member] | Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amount	7,420	5,105
Over 5 years [member] | Other derivative contracts [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amount	4,082	893
Over 5 years [member] | Other derivative contracts [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amount	3,012	4,071
Over 5 years [member] | Other derivative contracts [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amount	$ 326	$ 141

XML

Derivative Financial Instruments - Summary of Credit Exposure of Derivative Financial Instruments (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of financial assets [line items]
Notional amount	$ 5,334,215	$ 4,547,246
Credit risk amount	9,624	7,257
Credit equivalent amount	32,242	37,433
CET1 Risk Weighted Assets	13,032	10,753
Credit valuation adjustment [member]
Disclosure of financial assets [line items]
CET1 Risk Weighted Assets	4,616	2,988
Interest rate contracts [member]
Disclosure of financial assets [line items]
Notional amount	4,124,101	3,375,651
Credit risk amount	168	275
Credit equivalent amount	4,826	5,674
CET1 Risk Weighted Assets	1,271	1,421
Interest rate contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	130,997	169,958
Interest rate contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	509,220	532,713
Interest rate contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	127,595	161,590
Credit equivalent amount	93	65
Interest rate contracts [member] | Futures [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	127,595	161,590
Interest rate contracts [member] | Forward contract [member]
Disclosure of financial assets [line items]
Notional amount	330,433	330,061
Credit risk amount	36	20
Credit equivalent amount	157	30
CET1 Risk Weighted Assets	82	20
Interest rate contracts [member] | Forward contract [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	11,407	208
Interest rate contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	3,598,399	2,803,343
Credit risk amount	96	250
Credit equivalent amount	4,436	5,459
CET1 Risk Weighted Assets	1,125	1,341
Interest rate contracts [member] | Swaps [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	433,541	460,216
Interest rate contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	33,019	39,664
Credit risk amount	36	5
Credit equivalent amount	138	105
CET1 Risk Weighted Assets	63	57
Interest rate contracts [member] | Options purchased [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	3,402	5,474
Interest rate contracts [member] | Options purchased [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	29,617	34,190
Interest rate contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	34,655	40,993
Credit equivalent amount	2	15
CET1 Risk Weighted Assets	1	3
Interest rate contracts [member] | Options written [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount		2,894
Interest rate contracts [member] | Options written [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	34,655	38,099
Foreign exchange and gold contracts [member]
Disclosure of financial assets [line items]
Notional amount	956,367	945,198
Credit risk amount	7,580	6,916
Credit equivalent amount	14,017	14,262
CET1 Risk Weighted Assets	4,691	3,788
Foreign exchange and gold contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	7,560	32,949
Foreign exchange and gold contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	920,921	912,249
Foreign exchange and gold contracts [member] | Futures [member]
Disclosure of financial assets [line items]
Notional amount	7,476	32,452
Credit equivalent amount	85	56
Foreign exchange and gold contracts [member] | Futures [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	7,476	32,452
Foreign exchange and gold contracts [member] | Swaps [member]
Disclosure of financial assets [line items]
Notional amount	397,994	384,867
Credit risk amount	4,297	4,023
Credit equivalent amount	8,232	7,297
CET1 Risk Weighted Assets	2,604	1,898
Foreign exchange and gold contracts [member] | Swaps [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	397,994	384,867
Foreign exchange and gold contracts [member] | Options purchased [member]
Disclosure of financial assets [line items]
Notional amount	42,545	39,116
Credit risk amount	712	523
Credit equivalent amount	240	515
CET1 Risk Weighted Assets	76	113
Foreign exchange and gold contracts [member] | Options purchased [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	48	16
Foreign exchange and gold contracts [member] | Options purchased [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	42,497	39,100
Foreign exchange and gold contracts [member] | Options written [member]
Disclosure of financial assets [line items]
Notional amount	41,804	40,028
Credit equivalent amount	20	83
CET1 Risk Weighted Assets	5	12
Foreign exchange and gold contracts [member] | Options written [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	36	481
Foreign exchange and gold contracts [member] | Options written [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	41,768	39,547
Foreign exchange and gold contracts [member] | Spot and forwards [member]
Disclosure of financial assets [line items]
Notional amount	466,548	448,735
Credit risk amount	2,571	2,370
Credit equivalent amount	5,440	6,311
CET1 Risk Weighted Assets	2,006	1,765
Foreign exchange and gold contracts [member] | Spot and forwards [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	438,662	448,735
Other derivative contracts [member]
Disclosure of financial assets [line items]
Notional amount	253,747	226,397
Credit risk amount	1,876	66
Credit equivalent amount	13,399	17,497
CET1 Risk Weighted Assets	2,454	2,556
Other derivative contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	98,399	79,225
Other derivative contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	144,058	126,692
Other derivative contracts [member] | Equity derivatives [member]
Disclosure of financial assets [line items]
Notional amount	123,305	101,390
Credit risk amount	455	45
Credit equivalent amount	4,927	5,123
CET1 Risk Weighted Assets	1,505	1,575
Other derivative contracts [member] | Equity derivatives [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	43,323	33,287
Other derivative contracts [member] | Equity derivatives [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	79,982	65,240
Other derivative contracts [member] | Credit Derivative [member]
Disclosure of financial assets [line items]
Notional amount	29,866	37,592
Credit risk amount	239	12
Credit equivalent amount	420	1,421
CET1 Risk Weighted Assets	119	174
Other derivative contracts [member] | Credit Derivative [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	18,902	26,737
Other derivative contracts [member] | Commodity and other contracts [member]
Disclosure of financial assets [line items]
Notional amount	100,576	87,415
Credit risk amount	1,182	9
Credit equivalent amount	8,052	10,953
CET1 Risk Weighted Assets	830	807
Other derivative contracts [member] | Commodity and other contracts [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	55,076	45,938
Other derivative contracts [member] | Commodity and other contracts [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	45,174	34,715
Settled through central counterparties [member]
Disclosure of financial assets [line items]
Notional amount	3,760,016	2,975,592
Credit equivalent amount	8,081	11,719
CET1 Risk Weighted Assets	169	235
Settled through central counterparties [member] | Exchange Traded 1 [Member]
Disclosure of financial assets [line items]
Notional amount	236,956	282,132
Credit equivalent amount	7,300	10,385
CET1 Risk Weighted Assets	153	208
Settled through central counterparties [member] | Over the Counter1 [member]
Disclosure of financial assets [line items]
Notional amount	3,523,060	2,693,460
Credit equivalent amount	781	1,334
CET1 Risk Weighted Assets	$ 16	$ 27

XML

Derivative Financial Instruments - Summary of Credit Exposure of Derivative Financial Instruments (Parenthetical) (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)	Oct. 31, 2017 CAD ($)
Disclosure of financial assets [line items]
Credit valuation adjustment for derivatives	0.80	0.72
CRA [member]
Disclosure of financial assets [line items]
Amounts relating to netting and collateral	$ 27,934	$ 28,107
CEA [member]
Disclosure of financial assets [line items]
Amounts relating to netting and collateral	$ 63,831	$ 51,623

XML

Derivative Financial Instruments - Summary of Financial Derivatives at Fair Value (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable			$ 30,780
Average fair value of trading derivatives, Unfavourable			34,032
Year-end fair value, Favourable	$ 37,558	[1]	35,364
Year-end fair value, Unfavourable	37,967	[1]	34,200
Net derivative financial instruments, Year-end fair value, Favourable	14,727		15,044
Net derivative financial instruments, Year-end fair value, Unfavourable	14,602		18,983
Derivatives [member]
Disclosure of detailed information about financial instruments [line items]
Year-end fair value, Favourable	37,558		35,364
Year-end fair value, Unfavourable	37,967		34,200
Less impact of master netting and collateral Year-end fair value, Favourable	27,934		28,107
Less impact of master netting and collateral Year-end fair value, Unfavourable	27,934		28,107
Net derivative financial instruments, Year-end fair value, Favourable	9,624		7,257
Net derivative financial instruments, Year-end fair value, Unfavourable	10,033		6,093
Derivatives [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	30,577
Average fair value of trading derivatives, Unfavourable	31,020
Year-end fair value, Favourable	33,937		30,648
Year-end fair value, Unfavourable	32,300		30,545
Derivatives [member] | Hedging [member]
Disclosure of detailed information about financial instruments [line items]
Year-end fair value, Favourable	3,621		4,716
Year-end fair value, Unfavourable	5,667		3,655
Interest rate contracts [member] | Derivatives [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	8,360
Average fair value of trading derivatives, Unfavourable	10,254
Year-end fair value, Favourable	8,319		8,975
Year-end fair value, Unfavourable	9,084		10,406
Interest rate contracts [member] | Derivatives [member] | Forward contract [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	83
Average fair value of trading derivatives, Unfavourable	17
Year-end fair value, Favourable	57		27
Year-end fair value, Unfavourable			1
Interest rate contracts [member] | Derivatives [member] | Swaps [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	8,193
Average fair value of trading derivatives, Unfavourable	10,130
Year-end fair value, Favourable	8,158		8,895
Year-end fair value, Unfavourable	8,956		10,330
Interest rate contracts [member] | Derivatives [member] | Swaps [member] | Hedging [member]
Disclosure of detailed information about financial instruments [line items]
Year-end fair value, Favourable	720		803
Year-end fair value, Unfavourable	2,002		684
Interest rate contracts [member] | Derivatives [member] | Option contract [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	84
Average fair value of trading derivatives, Unfavourable	107
Year-end fair value, Favourable	104		53
Year-end fair value, Unfavourable	128		75
Foreign exchange and gold contracts [member] | Derivatives [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	16,638
Average fair value of trading derivatives, Unfavourable	14,493
Year-end fair value, Favourable	19,301		17,648
Year-end fair value, Unfavourable	16,923		14,678
Foreign exchange and gold contracts [member] | Derivatives [member] | Hedging [member]
Disclosure of detailed information about financial instruments [line items]
Year-end fair value, Favourable	2,901		3,852
Year-end fair value, Unfavourable	3,614		2,971
Foreign exchange and gold contracts [member] | Derivatives [member] | Forward contract [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	5,213
Average fair value of trading derivatives, Unfavourable	5,232
Year-end fair value, Favourable	6,611		5,973
Year-end fair value, Unfavourable	5,800		5,223
Foreign exchange and gold contracts [member] | Derivatives [member] | Forward contract [member] | Hedging [member]
Disclosure of detailed information about financial instruments [line items]
Year-end fair value, Favourable	331		634
Year-end fair value, Unfavourable	310		215
Foreign exchange and gold contracts [member] | Derivatives [member] | Swaps [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	10,660
Average fair value of trading derivatives, Unfavourable	8,570
Year-end fair value, Favourable	11,864		10,945
Year-end fair value, Unfavourable	10,292		8,774
Foreign exchange and gold contracts [member] | Derivatives [member] | Swaps [member] | Hedging [member]
Disclosure of detailed information about financial instruments [line items]
Year-end fair value, Favourable	2,570		3,218
Year-end fair value, Unfavourable	3,304		2,756
Foreign exchange and gold contracts [member] | Derivatives [member] | Option contract [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	765
Average fair value of trading derivatives, Unfavourable	691
Year-end fair value, Favourable	826		730
Year-end fair value, Unfavourable	831		681
Other derivative contracts [member] | Derivatives [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	5,579
Average fair value of trading derivatives, Unfavourable	6,273
Year-end fair value, Favourable	6,317		4,025
Year-end fair value, Unfavourable	6,293		5,461
Other derivative contracts [member] | Derivatives [member] | Equity derivatives [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	2,451
Average fair value of trading derivatives, Unfavourable	3,380
Year-end fair value, Favourable	2,361		2,274
Year-end fair value, Unfavourable	2,895		3,233
Other derivative contracts [member] | Derivatives [member] | Equity derivatives [member] | Hedging [member]
Disclosure of detailed information about financial instruments [line items]
Year-end fair value, Favourable			61
Year-end fair value, Unfavourable	51
Other derivative contracts [member] | Derivatives [member] | Credit Derivative [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	299
Average fair value of trading derivatives, Unfavourable	128
Year-end fair value, Favourable	349		175
Year-end fair value, Unfavourable	70		179
Other derivative contracts [member] | Derivatives [member] | Commodity and other contracts [member] | Trading [member]
Disclosure of detailed information about financial instruments [line items]
Average fair value of trading derivatives, Favourable	2,829
Average fair value of trading derivatives, Unfavourable	2,765
Year-end fair value, Favourable	3,607		1,576
Year-end fair value, Unfavourable	$ 3,328		$ 2,049

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Derivative Financial Instruments - Additional Information (Detail) - Equity risk [member]	12 Months Ended
	Oct. 31, 2018
Bottom of range [member]
Disclosure of detailed information about financial instruments [line items]
Correlation between the variables in regression	0.8
Slope of regression range	0.80
Confidence level of the slope	95.00%
Top of range [member]
Disclosure of detailed information about financial instruments [line items]
Slope of regression range	1.25

XML

Derivative Financial Instruments - Summary of Notional Amount of Derivatives and Carrying Amount of Cash and Deposit Liabilities Designated as Hedging Instruments (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	$ 5,334,215	$ 4,547,246
Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	303,803
Deposit liabilities - carrying amount [member] | Fair value hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	105,512
Deposit liabilities - carrying amount [member] | Fair value hedges [member] | Currency or interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	689
Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	43,878
Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency or interest rate risk [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	27,221
Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	93,145
Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Foreign currency forward contracts [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	8,999
Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Cash [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	92
Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Equity price risk [member] | Total return swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	756
Deposit liabilities - carrying amount [member] | Hedges of net investment in foreign operations [member] | Equity price risk [member] | Foreign Currency Deposit Liabilities [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	6,077
Deposit liabilities - carrying amount [member] | Hedges of net investment in foreign operations [member] | Equity price risk [member] | Foreign currency forward contracts [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	17,434
Within one year [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	2,406,758	2,050,839
Within one year [member] | Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	81,516
Within one year [member] | Deposit liabilities - carrying amount [member] | Fair value hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	16,006
Within one year [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	12,257
Within one year [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency or interest rate risk [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	5,539
Within one year [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	20,983
Within one year [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Foreign currency forward contracts [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	8,999
Within one year [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Equity price risk [member] | Total return swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	298
Within one year [member] | Deposit liabilities - carrying amount [member] | Hedges of net investment in foreign operations [member] | Equity price risk [member] | Foreign currency forward contracts [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	17,434
One to 5 years [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	1,954,040	1,704,770
One to 5 years [member] | Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	184,181
One to 5 years [member] | Deposit liabilities - carrying amount [member] | Fair value hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	78,236
One to 5 years [member] | Deposit liabilities - carrying amount [member] | Fair value hedges [member] | Currency or interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	689
One to 5 years [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	21,908
One to 5 years [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency or interest rate risk [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	19,193
One to 5 years [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	63,697
One to 5 years [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Equity price risk [member] | Total return swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	458
Over 5 years [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	973,417	$ 791,637
Over 5 years [member] | Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	31,937
Over 5 years [member] | Deposit liabilities - carrying amount [member] | Fair value hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	11,270
Over 5 years [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	9,713
Over 5 years [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency or interest rate risk [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	2,489
Over 5 years [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	8,465
No specific maturity [member] | Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	6,169
No specific maturity [member] | Deposit liabilities - carrying amount [member] | Cash flow hedges [member] | Currency risk [member] | Cash [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	92
No specific maturity [member] | Deposit liabilities - carrying amount [member] | Hedges of net investment in foreign operations [member] | Equity price risk [member] | Foreign Currency Deposit Liabilities [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	$ 6,077

XML

Derivative Financial Instruments - Summary of Notional Amount of Derivatives and Carrying Amount of Cash and Deposit Liabilities Designated as Hedging Instruments (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	$ 5,334,215	$ 4,547,246
Hedging [member]
Disclosure of detailed information about hedging instruments [line items]
Derivative notional amount	$ 0

XML

Derivative Financial Instruments - Summary of Average Price or Rate of Hedging Instruments (Detail)	Oct. 31, 2018
Fair value hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Fixed interest rate	2.04%
Fair value hedges [member] | Currency or interest rate risk [member] | Swaps [member] | CAD-USD [Member]
Disclosure of detailed information about hedging instruments [line items]
Fixed interest rate	2.22%
FX rate	1.29%
Fair value hedges [member] | Currency or interest rate risk [member] | Swaps [member] | CAD-EUR [Member]
Disclosure of detailed information about hedging instruments [line items]
Fixed interest rate	3.02%
FX rate	1.33%
Cash flow hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Fixed interest rate	2.37%
Cash flow hedges [member] | Currency or interest rate risk [member] | Swaps [member] | CAD-USD [Member]
Disclosure of detailed information about hedging instruments [line items]
Fixed interest rate	1.75%
FX rate	1.27%
Cash flow hedges [member] | Currency risk [member] | Swaps [member] | CAD-USD [Member]
Disclosure of detailed information about hedging instruments [line items]
FX rate	1.30%
Cash flow hedges [member] | Currency risk [member] | Swaps [member] | CAD-EUR [Member]
Disclosure of detailed information about hedging instruments [line items]
FX rate	1.48%
Cash flow hedges [member] | Currency risk [member] | Swaps [member] | CAD-GBP [Member]
Disclosure of detailed information about hedging instruments [line items]
FX rate	1.74%
Cash flow hedges [member] | Currency risk [member] | Foreign currency forward contracts [member] | CAD-USD [Member]
Disclosure of detailed information about hedging instruments [line items]
FX rate	1.30%
Cash flow hedges [member] | Equity price risk [member] | Total return swaps [member]
Disclosure of detailed information about hedging instruments [line items]
Price	73.87
Hedges of net investment in foreign operations [member] | Currency risk [member] | Foreign currency forward contracts [member] | CAD-USD [Member]
Disclosure of detailed information about hedging instruments [line items]
FX rate	1.29%
Hedges of net investment in foreign operations [member] | Currency risk [member] | Foreign currency forward contracts [member] | C- A- D- M- X- N- [Member]
Disclosure of detailed information about hedging instruments [line items]
FX rate	15.77%
Hedges of net investment in foreign operations [member] | Currency risk [member] | Foreign currency forward contracts [member] | C- A- D- P- E- N- [Member]
Disclosure of detailed information about hedging instruments [line items]
FX rate	2.59%

XML

Derivative Financial Instruments - Summary of Average Price or Rate of Hedging Instruments (Parenthetical) (Detail)	12 Months Ended
	Oct. 31, 2018
Top of range [member]
Disclosure of detailed information about hedging instruments [line items]
Remaining term of maturity for hedges	5 years

XML

Derivative Financial Instruments - Summary of Items designated as Hedging Instruments, Hedged Items and Ineffectiveness for Fair Value Hedge (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	$ 3,258
Carrying amount of the hedging instruments, Liabilities	(10,259)
Gain (loss) on hedged item used to calculate hedge ineffectiveness	(1,492)
Ineffectiveness recorded in non-interest income-other	(10)
Fair value hedges [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	455
Carrying amount of the hedging instruments, Liabilities	(1,485)
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	(475)
Gain (loss) on hedged item used to calculate hedge ineffectiveness	468
Ineffectiveness recorded in non-interest income-other	(7)
Carrying amount of the hedged item	(21,552)
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item Active hedges	716
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item discontinued hedges	140
Fair value hedges [member] | Interest rate risk [member] | Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	(1,037)
Gain (loss) on hedged item used to calculate hedge ineffectiveness	1,043
Ineffectiveness recorded in non-interest income-other	6
Carrying amount of the hedged item, Liabilities	(58,026)
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item Active hedges, Liabilities	1,065
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item discontinued hedges, Liabilities	186
Fair value hedges [member] | Interest rate risk [member] | Subordinated debenture [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	(58)
Gain (loss) on hedged item used to calculate hedge ineffectiveness	58
Carrying amount of the hedged item, Liabilities	(3,923)
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item Active hedges, Liabilities	37
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item discontinued hedges, Liabilities	40
Fair value hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	448
Carrying amount of the hedging instruments, Liabilities	(1,454)
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	(475)
Gain (loss) on hedged item used to calculate hedge ineffectiveness	469
Ineffectiveness recorded in non-interest income-other	(6)
Fair value hedges [member] | Interest rate risk [member] | Investment Securities [Member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	360
Gain (loss) on hedged item used to calculate hedge ineffectiveness	(367)
Ineffectiveness recorded in non-interest income-other	(7)
Carrying amount of the hedged item, Assets	16,286
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item Active hedges, Assets	(149)
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item discontinued hedges, Assets	63
Fair value hedges [member] | Interest rate risk [member] | Loan commitments [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	260
Gain (loss) on hedged item used to calculate hedge ineffectiveness	(265)
Ineffectiveness recorded in non-interest income-other	(5)
Carrying amount of the hedged item, Assets	23,763
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item Active hedges, Assets	(246)
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item discontinued hedges, Assets	(149)
Fair value hedges [member] | Currency or interest rate risk [member] | Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	(4)
Gain (loss) on hedged item used to calculate hedge ineffectiveness	4
Carrying amount of the hedged item, Liabilities	(466)
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item Active hedges, Liabilities	3
Fair value hedges [member] | Currency or interest rate risk [member] | Subordinated debenture [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	(1)
Ineffectiveness recorded in non-interest income-other	(1)
Fair value hedges [member] | Currency or interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	7
Carrying amount of the hedging instruments, Liabilities	(31)
Gain (loss) on hedged item used to calculate hedge ineffectiveness	(1)
Ineffectiveness recorded in non-interest income-other	(1)
Fair value hedges [member] | Currency or interest rate risk [member] | Investment Securities [Member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Gain (loss) on hedging instrument used to calculate hedge ineffectiveness	5
Gain (loss) on hedged item used to calculate hedge ineffectiveness	(5)
Carrying amount of the hedged item, Assets	814
Accumulated amount of fair value hedge adjustments gains/(losses) on the hedged item Active hedges, Assets	$ 6

XML

Derivative Financial Instruments - Summary of Items designated as Hedging Instruments, Hedged Items and Ineffectiveness for Fair Value Hedges for Cash Flow Hedges and Net Investment Hedges (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	$ 3,258
Carrying amount of the hedging instruments, Liabilities	(10,259)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(1,472)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(1,492)
Ineffectiveness recorded in non-interest income-other	(10)
Cash flow hedges [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	3,070
Carrying amount of the hedging instruments, Liabilities	(3,886)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(1,191)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(1,211)
Ineffectiveness recorded in non-interest income-other	(10)
Cash flow hedges [member] | Interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	961
Carrying amount of the hedging instruments, Liabilities	(1,350)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(339)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(341)
Ineffectiveness recorded in non-interest income-other	2
Cash flow hedges [member] | Currency or interest rate risk [member] | Swaps [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	101
Carrying amount of the hedging instruments, Liabilities	(955)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(530)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(549)
Ineffectiveness recorded in non-interest income-other	(6)
Cash flow hedges [member] | Currency or interest rate risk [member] | Foreign currency forward contracts [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	143
Carrying amount of the hedging instruments, Liabilities	(14)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	332
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	332
Cash flow hedges [member] | Currency or interest rate risk [member] | Cash [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	92
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	1
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	1
Cash flow hedges [member] | Currency risk [member] | Swaps [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	1,773
Carrying amount of the hedging instruments, Liabilities	(1,516)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(563)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(562)
Ineffectiveness recorded in non-interest income-other	(6)
Cash flow hedges [member] | Equity price risk return swap [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Liabilities	(51)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(92)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(92)
Net investment hedges [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	188
Carrying amount of the hedging instruments, Liabilities	(6,373)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(281)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(281)
Net investment hedges [member] | Currency risk [member] | Deposit liabilities - carrying amount [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Liabilities	(6,077)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(121)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	(121)
Net investment hedges [member] | Currency risk [member] | Foreign currency forward contracts [member]
Disclosure of detailed information about hedged items and hedging instruments [line items]
Carrying amount of the hedging instruments, Assets	188
Carrying amount of the hedging instruments, Liabilities	(296)
Gains/(losses) on hedging instrument recognized in Other Comprehensive Income	(160)
Gains/(losses) on hedged item used to calculate hedge ineffectiveness	$ (160)

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Derivative Financial Instruments - Summary of Effectiveness of Cash Flow and Net Investment Hedges on Consolidated Statement of Income and Consolidated Statement of Other Comprehensive Income (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)
Disclosure of information about amounts that affected statement of income and statement of comprehensive income as result of hedge accounting [line items]
AOCI as at November 1, 2017	$ (2,650)
Net gains (losses) recognized in OCI	(1,462)
Amount reclassified to net income as the hedged item affects net income	811
Amount reclassified to net income for hedges of forecasted transactions that are no longer expected to occur	(22)
Net gains (losses) included in non-financial asset/liability as a result of a hedged forecasted transaction	(94)
AOCI as at October 31, 2018	(3,417)
Active hedges	(3,387)
Discountinued hedges	(30)
Cash flow hedges [member]
Disclosure of information about amounts that affected statement of income and statement of comprehensive income as result of hedge accounting [line items]
AOCI as at November 1, 2017	320
Net gains (losses) recognized in OCI	(1,181)
Amount reclassified to net income as the hedged item affects net income	811
Amount reclassified to net income for hedges of forecasted transactions that are no longer expected to occur	(22)
Net gains (losses) included in non-financial asset/liability as a result of a hedged forecasted transaction	(94)
AOCI as at October 31, 2018	(166)
Active hedges	(188)
Discountinued hedges	22
Cash flow hedges [member] | Interest rate risk [member]
Disclosure of information about amounts that affected statement of income and statement of comprehensive income as result of hedge accounting [line items]
AOCI as at November 1, 2017	104
Net gains (losses) recognized in OCI	(341)
Amount reclassified to net income as the hedged item affects net income	83
AOCI as at October 31, 2018	(154)
Active hedges	(262)
Discountinued hedges	108
Cash flow hedges [member] | Currency or interest rate risk [member]
Disclosure of information about amounts that affected statement of income and statement of comprehensive income as result of hedge accounting [line items]
AOCI as at November 1, 2017	(151)
Net gains (losses) recognized in OCI	(524)
Amount reclassified to net income as the hedged item affects net income	225
AOCI as at October 31, 2018	(450)
Active hedges	(352)
Discountinued hedges	(98)
Cash flow hedges [member] | Currency risk [member]
Disclosure of information about amounts that affected statement of income and statement of comprehensive income as result of hedge accounting [line items]
AOCI as at November 1, 2017	321
Net gains (losses) recognized in OCI	(224)
Amount reclassified to net income as the hedged item affects net income	464
Amount reclassified to net income for hedges of forecasted transactions that are no longer expected to occur	(22)
Net gains (losses) included in non-financial asset/liability as a result of a hedged forecasted transaction	(94)
AOCI as at October 31, 2018	445
Active hedges	433
Discountinued hedges	12
Cash flow hedges [member] | Equity price risk [member]
Disclosure of information about amounts that affected statement of income and statement of comprehensive income as result of hedge accounting [line items]
AOCI as at November 1, 2017	46
Net gains (losses) recognized in OCI	(92)
Amount reclassified to net income as the hedged item affects net income	39
AOCI as at October 31, 2018	(7)
Active hedges	(7)
Hedges of net investment in foreign operations [member] | Currency risk [member]
Disclosure of information about amounts that affected statement of income and statement of comprehensive income as result of hedge accounting [line items]
AOCI as at November 1, 2017	(2,970)
Net gains (losses) recognized in OCI	(281)
AOCI as at October 31, 2018	(3,251)
Active hedges	(3,199)
Discountinued hedges	$ (52)

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Derivative Financial Instruments - Summary of Ineffectiveness of Hedge Relationships (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2017 CAD ($)
Fair value hedges [member]
Disclosure of information about amounts that affected statement of income as result of hedge accounting [line items]
Gain (loss) recorded on hedged items	$ 574
Gain (loss) recorded on hedging instruments	(588)
Ineffectiveness	(14)
Cash flow hedges [member]
Disclosure of information about amounts that affected statement of income as result of hedge accounting [line items]
Ineffectiveness	$ 24

XML

Derivative Financial Instruments - Summary of Hedging Instruments (Detail) $ in Millions	Oct. 31, 2017 CAD ($)
Disclosure of detailed information about hedging instruments [abstract]
Derivatives designated in fair value hedging relationships, Favourable	$ 687
Derivatives designated in fair value hedging relationships, Unfavourable	751
Derivatives designated in cash flow hedging relationships, Favourable	3,746
Derivatives designated in cash flow hedging relationships, Unfavourable	2,749
Derivatives designated in net investment hedging relationships, Favourable	283
Derivatives designated in net investment hedging relationships, Unfavourable	155
Total derivatives designated in hedging relationships, Favourable	4,716
Total derivatives designated in hedging relationships, Unfavourable	$ 3,655

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Derivative Financial Instruments - Summary of Hedging Instruments (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2017	Oct. 31, 2016
Disclosure of detailed information about hedging instruments [abstract]
Fair value of non derivative instruments designated as hedging	$ 6,183	$ 6,905

XML

Derivative Financial Instruments - Schedule of Period When Cash Flows of Designated Hedged Items are Expected to Occur and Impact Consolidated Statement of Income (Detail) - Cash flow hedges [member] $ in Millions	12 Months Ended
	Oct. 31, 2017 CAD ($)
Within one year [member]
Disclosure of detailed information about hedged items [line items]
Cash inflows from assets	$ 11,235
Cash outflows from liabilities	(31,542)
Net cash flows	(20,307)
One to 5 years [member]
Disclosure of detailed information about hedged items [line items]
Cash inflows from assets	19,866
Cash outflows from liabilities	(26,863)
Net cash flows	(6,997)
Over 5 years [member]
Disclosure of detailed information about hedged items [line items]
Cash inflows from assets	4,178
Cash outflows from liabilities	(4,746)
Net cash flows	$ (568)

XML

Offsetting Financial Assets and Financial Liabilities - Summary of Financial Assets and Liabilities Offsetting, Enforceable Master Netting or Similar Arrangement (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of offsetting of financial assets liabilities [line items]
Gross amounts of recognized financial assets	$ 154,262	$ 156,233
Gross amounts of recognized financial liabilities offset in the consolidated statement of financial position	(12,686)	(25,550)
Net amounts of financial assets presented in the consolidated statement of financial position	141,576	130,683
Impact of master netting arrangements or similar agreements	(31,417)	(34,049)
Collateral	(95,432)	(81,590)
Net amount	14,727	15,044
Gross amounts of recognized financial liabilities	151,910	155,593
Gross amounts of recognized financial assets offset in the consolidated statement of financial position	(12,686)	(25,550)
Net amounts of financial liabilities presented in the consolidated statement of financial position	139,224	130,043
Impact of master netting arrangements or similar agreements	(31,417)	(34,049)
Collateral	(93,205)	(77,011)
Net amount	14,602	18,983
Derivative financial instruments liabilities [member]
Disclosure of offsetting of financial assets liabilities [line items]
Gross amounts of recognized financial liabilities	38,296	48,348
Gross amounts of recognized financial assets offset in the consolidated statement of financial position	(329)	(14,148)
Net amounts of financial liabilities presented in the consolidated statement of financial position	37,967	34,200
Impact of master netting arrangements or similar agreements	(24,568)	(22,400)
Collateral	(5,051)	(4,700)
Net amount	8,348	7,100
Obligations related to securities sold under repurchase agreements and securities lent [member]
Disclosure of offsetting of financial assets liabilities [line items]
Gross amounts of recognized financial liabilities	113,614	107,245
Gross amounts of recognized financial assets offset in the consolidated statement of financial position	(12,357)	(11,402)
Net amounts of financial liabilities presented in the consolidated statement of financial position	101,257	95,843
Impact of master netting arrangements or similar agreements	(6,849)	(11,649)
Collateral	(88,154)	(72,311)
Net amount	6,254	11,883
Derivative financial instruments [member]
Disclosure of offsetting of financial assets liabilities [line items]
Gross amounts of recognized financial assets	37,887	49,512
Gross amounts of recognized financial liabilities offset in the consolidated statement of financial position	(329)	(14,148)
Net amounts of financial assets presented in the consolidated statement of financial position	37,558	35,364
Impact of master netting arrangements or similar agreements	(24,568)	(22,400)
Collateral	(4,085)	(5,915)
Net amount	8,905	7,049
Securities purchased under resale agreements and securities borrowed [member]
Disclosure of offsetting of financial assets liabilities [line items]
Gross amounts of recognized financial assets	116,375	106,721
Gross amounts of recognized financial liabilities offset in the consolidated statement of financial position	(12,357)	(11,402)
Net amounts of financial assets presented in the consolidated statement of financial position	104,018	95,319
Impact of master netting arrangements or similar agreements	(6,849)	(11,649)
Collateral	(91,347)	(75,675)
Net amount	$ 5,822	$ 7,995

XML

Offsetting Financial Assets and Financial Liabilities - Summary of Financial Assets and Liabilities Offsetting, Enforceable Master Netting or Similar Arrangement (Parenthetical) (Detail) $ in Millions, $ in Billions	Oct. 31, 2018 USD ($)	Oct. 31, 2017 CAD ($)
Disclosure of offsetting of financial assets liabilities [line items]
Decrease in margin	$ 18
Derivative instruments [member]
Disclosure of offsetting of financial assets liabilities [line items]
Cash collateral of financial assets		$ 793
Cash collateral of financial liabilities		$ 1,112

XML

Investment Securities - Disclosure of Carrying Value of Banks Investment Securities Per Measurement Category (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of financial assets [line items]
Investment securities	$ 78,396	[1]	$ 69,269
Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Investment securities	0		50,504
Held-to-maturity investments, category [member]
Disclosure of financial assets [line items]
Investment securities	0		18,765
Debt Investments [member] | Financial assets measured at fair value through other comprehensive income, category [member]
Disclosure of financial assets [line items]
Investment securities	55,843		0
Debt Investments [member] | Financial assets at amortised cost, category [member]
Disclosure of financial assets [line items]
Investment securities	20,743		0
Equity securities [member] | Investments in equity instruments designated at fair value through other comprehensive income [member]
Disclosure of financial assets [line items]
Investment securities	1,305		0
Equity securities [member] | Financial assets at fair value through profit or loss, category [member]
Disclosure of financial assets [line items]
Investment securities	$ 505		$ 0

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Investment Securities - Disclosure of Unrealized Gains and Losses on Fair Value Through Other Comprehensive Income Securities (Detail) - Financial assets measured at fair value through other comprehensive income, category [member] $ in Millions	Oct. 31, 2018 CAD ($)
Disclosure of financial assets [line items]
Cost	$ 56,129
Gross unrealized gains	102
Gross unrealized losses	388
Fair value	55,843
Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Cost	8,903
Gross unrealized gains	38
Gross unrealized losses	50
Fair value	8,891
Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Cost	4,403
Gross unrealized gains	3
Gross unrealized losses	54
Fair value	4,352
U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Cost	19,298
Gross unrealized gains	6
Gross unrealized losses	163
Fair value	19,141
Other foreign government debt [member]
Disclosure of financial assets [line items]
Cost	20,022
Gross unrealized gains	49
Gross unrealized losses	81
Fair value	19,990
Other debt [member]
Disclosure of financial assets [line items]
Cost	3,503
Gross unrealized gains	6
Gross unrealized losses	40
Fair value	$ 3,469

XML

Investment Securities - Summary of Analysis of Fair Value and Carrying Value of Investment Securities Measured at Amortized Cost (Detail) $ in Millions	Oct. 31, 2018 CAD ($)
Financial assets at fair value, investment securities [member]
Disclosure of financial assets [line items]
Cost	$ 20,316
Financial assets at fair value, investment securities [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Cost	6,530
Financial assets at fair value, investment securities [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Cost	4,321
Financial assets at fair value, investment securities [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Cost	3,086
Financial assets at fair value, investment securities [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Cost	6,379
Financial assets at carrying value, investment securities [member]
Disclosure of financial assets [line items]
Cost	20,743
Financial assets at carrying value, investment securities [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Cost	6,681
Financial assets at carrying value, investment securities [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Cost	4,462
Financial assets at carrying value, investment securities [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Cost	3,131
Financial assets at carrying value, investment securities [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Cost	$ 6,469

XML

Investment Securities - Summary of Analysis of Fair Value and Carrying Value of Investment Securities Measured at Amortized Cost (Parenthetical) (Detail) $ in Millions	Oct. 31, 2018 CAD ($)
Disclosure of financial assets [abstract]
Net impairment allowances	$ (1)

XML

Investment Securities - Summary of Equity Investment Securities Designated as at Fair Value Through Other Comprehensive Income (Detail) - Investments in equity instruments designated at fair value through other comprehensive income [member] $ in Millions	Oct. 31, 2018 CAD ($)
Disclosure of financial assets [line items]
Cost	$ 1,271
Gross unrealized gains	126
Gross unrealized losses	92
Fair value	1,305
Preferred equity instruments [member]
Disclosure of financial assets [line items]
Cost	334
Gross unrealized losses	54
Fair value	280
Common shares [member]
Disclosure of financial assets [line items]
Cost	937
Gross unrealized gains	126
Gross unrealized losses	38
Fair value	$ 1,025

XML

Investment Securities - Schedule of Unrealized Gains and Losses on Available-for-sale Securities (Detail) - Financial assets available-for-sale [member] $ in Millions	Oct. 31, 2017 CAD ($)
Disclosure of financial assets [line items]
Cost	$ 50,545
Gross unrealized gains	381
Gross unrealized losses	422
Fair value	50,504
Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Cost	12,069
Gross unrealized gains	119
Gross unrealized losses	95
Fair value	12,093
Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Cost	4,839
Gross unrealized gains	13
Gross unrealized losses	29
Fair value	4,823
U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Cost	6,761
Gross unrealized gains	1
Gross unrealized losses	90
Fair value	6,672
Other foreign government debt [member]
Disclosure of financial assets [line items]
Cost	19,788
Gross unrealized gains	49
Gross unrealized losses	34
Fair value	19,803
Other debt [member]
Disclosure of financial assets [line items]
Cost	5,792
Gross unrealized gains	34
Gross unrealized losses	24
Fair value	5,802
Preferred equity instruments [member]
Disclosure of financial assets [line items]
Cost	397
Gross unrealized gains	1
Gross unrealized losses	87
Fair value	311
Common shares [member]
Disclosure of financial assets [line items]
Cost	899
Gross unrealized gains	164
Gross unrealized losses	63
Fair value	$ 1,000

XML

Investment Securities - Additional Information (Detail) $ in Millions	Oct. 31, 2017 CAD ($)
Disclosure of detailed information about financial instruments [line items]
Net unrealized loss on available-for-sale securities	$ 41
Qualifying hedges [member]
Disclosure of detailed information about financial instruments [line items]
Net unrealized loss on available-for-sale securities	$ 48

XML

Investment Securities - Summary of Analysis of Fair Value and Carrying Value of Held-to-Maturity Securities (Detail) $ in Millions	Oct. 31, 2017 CAD ($)
Disclosure of financial assets [line items]
Fair value	$ 18,716
Carrying value	18,765
Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Fair value	5,748
Carrying value	5,779
U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Fair value	3,991
Carrying value	3,993
Other foreign government debt [member]
Disclosure of financial assets [line items]
Fair value	2,690
Carrying value	2,705
Corporate debt [member]
Disclosure of financial assets [line items]
Fair value	6,287
Carrying value	$ 6,288

XML

Investment Securities - Analysis of the Carrying Value of Investment Securities (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 78,396	$ 69,269
Canadian dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	18,650	19,686
U.S. dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	39,091	29,297
Mexican peso [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	2,370	2,861
Other currencies [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	18,285	17,425
Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		50,504
Financial assets available-for-sale [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 12,093
Yield %		1.40%
Financial assets available-for-sale [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 4,823
Yield %		1.70%
Financial assets available-for-sale [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 6,672
Yield %		1.30%
Financial assets available-for-sale [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 19,803
Yield %		2.50%
Financial assets available-for-sale [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 5,802
Yield %		1.20%
Financial assets available-for-sale [member] | Preferred equity instruments [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 311
Financial assets available-for-sale [member] | Common shares [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		1,000
Held-to-maturity investments, category [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		18,765
Held-to-maturity investments, category [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		3,993
Held-to-maturity investments, category [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		2,705
Held-to-maturity investments, category [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		5,779
Held-to-maturity investments, category [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		6,288
Fair Value Through Other Comprehensive Income [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	57,148
Fair Value Through Other Comprehensive Income [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 8,891
Yield %	1.90%
Fair Value Through Other Comprehensive Income [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 4,352
Yield %	1.80%
Fair Value Through Other Comprehensive Income [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 19,141
Yield %	2.40%
Fair Value Through Other Comprehensive Income [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 19,990
Yield %	2.30%
Fair Value Through Other Comprehensive Income [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 3,469
Yield %	1.90%
Fair Value Through Other Comprehensive Income [member] | Preferred equity instruments [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 280
Fair Value Through Other Comprehensive Income [member] | Common shares [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,025
Financial assets at amortised cost, class [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	20,743
Financial assets at amortised cost, class [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	4,462
Financial assets at amortised cost, class [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	3,131
Financial assets at amortised cost, class [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	6,681
Financial assets at amortised cost, class [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	6,469
Fair value through profit and loss [member] | Equity instruments [Member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	505
Within 3 months [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	12,335	10,627
Within 3 months [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	2,918	76
Within 3 months [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,797	1,961
Within 3 months [member] | Mexican peso [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	640	420
Within 3 months [member] | Other currencies [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	6,980	8,170
Within 3 months [member] | Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		9,105
Within 3 months [member] | Financial assets available-for-sale [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 8
Yield %		0.90%
Within 3 months [member] | Financial assets available-for-sale [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 99
Yield %		0.60%
Within 3 months [member] | Financial assets available-for-sale [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 106
Yield %		1.00%
Within 3 months [member] | Financial assets available-for-sale [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 7,810
Yield %		0.60%
Within 3 months [member] | Financial assets available-for-sale [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 1,082
Yield %		0.60%
Within 3 months [member] | Held-to-maturity investments, category [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 1,522
Within 3 months [member] | Held-to-maturity investments, category [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		1,290
Within 3 months [member] | Held-to-maturity investments, category [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		65
Within 3 months [member] | Held-to-maturity investments, category [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		167
Within 3 months [member] | Fair Value Through Other Comprehensive Income [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	10,455
Within 3 months [member] | Fair Value Through Other Comprehensive Income [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,439
Yield %	0.60%
Within 3 months [member] | Fair Value Through Other Comprehensive Income [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,092
Yield %	1.70%
Within 3 months [member] | Fair Value Through Other Comprehensive Income [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 322
Yield %	1.80%
Within 3 months [member] | Fair Value Through Other Comprehensive Income [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 6,884
Yield %	1.30%
Within 3 months [member] | Fair Value Through Other Comprehensive Income [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 718
Yield %	1.50%
Within 3 months [member] | Financial assets at amortised cost, class [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,880
Within 3 months [member] | Financial assets at amortised cost, class [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	197
Within 3 months [member] | Financial assets at amortised cost, class [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	354
Within 3 months [member] | Financial assets at amortised cost, class [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	692
Within 3 months [member] | Financial assets at amortised cost, class [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	637
Three to 12 months [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	16,444	11,476
Three to 12 months [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,828	1,165
Three to 12 months [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	8,384	4,178
Three to 12 months [member] | Mexican peso [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	541	579
Three to 12 months [member] | Other currencies [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	5,691	5,554
Three to 12 months [member] | Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		9,112
Three to 12 months [member] | Financial assets available-for-sale [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 291
Yield %		1.10%
Three to 12 months [member] | Financial assets available-for-sale [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 737
Yield %		1.50%
Three to 12 months [member] | Financial assets available-for-sale [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 1,260
Yield %		1.50%
Three to 12 months [member] | Financial assets available-for-sale [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 5,283
Yield %		2.80%
Three to 12 months [member] | Financial assets available-for-sale [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 1,541
Yield %		0.80%
Three to 12 months [member] | Held-to-maturity investments, category [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 2,364
Three to 12 months [member] | Held-to-maturity investments, category [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		683
Three to 12 months [member] | Held-to-maturity investments, category [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		860
Three to 12 months [member] | Held-to-maturity investments, category [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		821
Three to 12 months [member] | Fair Value Through Other Comprehensive Income [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	12,282
Three to 12 months [member] | Fair Value Through Other Comprehensive Income [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 407
Yield %	1.50%
Three to 12 months [member] | Fair Value Through Other Comprehensive Income [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,107
Yield %	1.80%
Three to 12 months [member] | Fair Value Through Other Comprehensive Income [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 3,517
Yield %	2.00%
Three to 12 months [member] | Fair Value Through Other Comprehensive Income [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 6,379
Yield %	1.70%
Three to 12 months [member] | Fair Value Through Other Comprehensive Income [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 872
Yield %	1.80%
Three to 12 months [member] | Financial assets at amortised cost, class [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 4,162
Three to 12 months [member] | Financial assets at amortised cost, class [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	988
Three to 12 months [member] | Financial assets at amortised cost, class [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,193
Three to 12 months [member] | Financial assets at amortised cost, class [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	868
Three to 12 months [member] | Financial assets at amortised cost, class [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,113
One to 5 years [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	42,116	38,720
One to 5 years [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	11,478	15,500
One to 5 years [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	26,137	19,344
One to 5 years [member] | Mexican peso [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	892	1,568
One to 5 years [member] | Other currencies [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	3,609	2,308
One to 5 years [member] | Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		23,949
One to 5 years [member] | Financial assets available-for-sale [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 9,780
Yield %		1.10%
One to 5 years [member] | Financial assets available-for-sale [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 3,698
Yield %		1.70%
One to 5 years [member] | Financial assets available-for-sale [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 2,374
Yield %		1.00%
One to 5 years [member] | Financial assets available-for-sale [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 5,313
Yield %		4.10%
One to 5 years [member] | Financial assets available-for-sale [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 2,784
Yield %		1.60%
One to 5 years [member] | Held-to-maturity investments, category [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 14,771
One to 5 years [member] | Held-to-maturity investments, category [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		2,703
One to 5 years [member] | Held-to-maturity investments, category [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		1,914
One to 5 years [member] | Held-to-maturity investments, category [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		4,854
One to 5 years [member] | Held-to-maturity investments, category [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		5,300
One to 5 years [member] | Fair Value Through Other Comprehensive Income [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	28,349
One to 5 years [member] | Fair Value Through Other Comprehensive Income [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 5,878
Yield %	2.00%
One to 5 years [member] | Fair Value Through Other Comprehensive Income [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 2,084
Yield %	1.80%
One to 5 years [member] | Fair Value Through Other Comprehensive Income [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 13,485
Yield %	2.40%
One to 5 years [member] | Fair Value Through Other Comprehensive Income [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 5,349
Yield %	3.70%
One to 5 years [member] | Fair Value Through Other Comprehensive Income [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,553
Yield %	2.00%
One to 5 years [member] | Financial assets at amortised cost, class [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 13,767
One to 5 years [member] | Financial assets at amortised cost, class [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	3,266
One to 5 years [member] | Financial assets at amortised cost, class [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	966
One to 5 years [member] | Financial assets at amortised cost, class [member] | Canadian federal and provincial government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	5,121
One to 5 years [member] | Financial assets at amortised cost, class [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	4,414
Five to ten years [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	3,765	5,464
Five to ten years [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	357	1,276
Five to ten years [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	2,053	3,023
Five to ten years [member] | Mexican peso [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	282	285
Five to ten years [member] | Other currencies [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,073	880
Five to ten years [member] | Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		5,362
Five to ten years [member] | Financial assets available-for-sale [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 905
Yield %		2.70%
Five to ten years [member] | Financial assets available-for-sale [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 284
Yield %		2.40%
Five to ten years [member] | Financial assets available-for-sale [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 2,704
Yield %		1.60%
Five to ten years [member] | Financial assets available-for-sale [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 1,259
Yield %		5.70%
Five to ten years [member] | Financial assets available-for-sale [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 210
Yield %		2.50%
Five to ten years [member] | Held-to-maturity investments, category [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 102
Five to ten years [member] | Held-to-maturity investments, category [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		102
Five to ten years [member] | Fair Value Through Other Comprehensive Income [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	3,017
Five to ten years [member] | Fair Value Through Other Comprehensive Income [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 105
Yield %	2.60%
Five to ten years [member] | Fair Value Through Other Comprehensive Income [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 64
Yield %	3.20%
Five to ten years [member] | Fair Value Through Other Comprehensive Income [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,654
Yield %	3.10%
Five to ten years [member] | Fair Value Through Other Comprehensive Income [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,053
Yield %	3.80%
Five to ten years [member] | Fair Value Through Other Comprehensive Income [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 141
Yield %	2.60%
Five to ten years [member] | Financial assets at amortised cost, class [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 748
Five to ten years [member] | Financial assets at amortised cost, class [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	502
Five to ten years [member] | Financial assets at amortised cost, class [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	246
Over ten years [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,926	1,671
Over ten years [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,102	1,130
Over ten years [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	354	419
Over ten years [member] | Other currencies [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	470	122
Over ten years [member] | Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		1,665
Over ten years [member] | Financial assets available-for-sale [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 1,109
Yield %		3.20%
Over ten years [member] | Financial assets available-for-sale [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 5
Yield %		2.90%
Over ten years [member] | Financial assets available-for-sale [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 228
Yield %		1.50%
Over ten years [member] | Financial assets available-for-sale [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 138
Yield %		6.20%
Over ten years [member] | Financial assets available-for-sale [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 185
Yield %		2.50%
Over ten years [member] | Held-to-maturity investments, category [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 6
Over ten years [member] | Held-to-maturity investments, category [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		6
Over ten years [member] | Fair Value Through Other Comprehensive Income [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,740
Over ten years [member] | Fair Value Through Other Comprehensive Income [member] | Canadian federal government issued or guaranteed debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 1,062
Yield %	3.50%
Over ten years [member] | Fair Value Through Other Comprehensive Income [member] | Canadian provincial and municipal debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 5
Yield %	2.90%
Over ten years [member] | Fair Value Through Other Comprehensive Income [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 163
Yield %	3.20%
Over ten years [member] | Fair Value Through Other Comprehensive Income [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 325
Yield %	4.30%
Over ten years [member] | Fair Value Through Other Comprehensive Income [member] | Other debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 185
Yield %	2.60%
Over ten years [member] | Financial assets at amortised cost, class [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 186
Over ten years [member] | Financial assets at amortised cost, class [member] | U.S. treasury and other U.S. agency debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	11
Over ten years [member] | Financial assets at amortised cost, class [member] | Other foreign government debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	116
Over ten years [member] | Financial assets at amortised cost, class [member] | Corporate debt [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	59
No specific maturity [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,810	1,311
No specific maturity [member] | Canadian dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	967	539
No specific maturity [member] | U.S. dollar [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	366	372
No specific maturity [member] | Mexican peso [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	15	9
No specific maturity [member] | Other currencies [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	462	391
No specific maturity [member] | Financial assets available-for-sale [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		1,311
No specific maturity [member] | Financial assets available-for-sale [member] | Preferred equity instruments [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		311
No specific maturity [member] | Financial assets available-for-sale [member] | Common shares [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value		$ 1,000
No specific maturity [member] | Fair Value Through Other Comprehensive Income [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,305
No specific maturity [member] | Fair Value Through Other Comprehensive Income [member] | Preferred equity instruments [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	280
No specific maturity [member] | Fair Value Through Other Comprehensive Income [member] | Common shares [member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	1,025
No specific maturity [member] | Fair value through profit and loss [member] | Equity instruments [Member]
Disclosure of financial assets [line items]
Financial instruments at carrying value	$ 505

XML

Investment Securities - Schedule of Analysis of Net Gain on Sale of Investment Securities (Detail) - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of financial assets [abstract]
Net realized gains			$ 399	$ 570
Debt investment securities measured at fair value through other comprehensive income (FVOCI)		$ 146
Total net realized gains on investment securities		146	399	570
Impairment losses			19	36
Net gain on sale of investment securities	[1]	$ 146	$ 380	$ 534

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

XML

Investment Securities - Schedule of Analysis of Net Gain on Sale of Investment Securities (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2017	Oct. 31, 2016
Disclosure of financial assets [line items]
Impairment losses	$ 19	$ 36
Equity securities [member]
Disclosure of financial assets [line items]
Impairment losses	14	36
Other debt securities [member]
Disclosure of financial assets [line items]
Impairment losses	$ 5

XML

Loans, Impaired Loans and Allowance for Credit Losses - Schedule of Loans at Amortized Cost (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
In accordance with IFRS 9 [member] | Net Carrying Amount [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	$ 551,834
In accordance with IFRS 9 [member] | Net Carrying Amount [member] | Residential mortgages [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	252,679
In accordance with IFRS 9 [member] | Net Carrying Amount [member] | Loans to consumers [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	93,910
In accordance with IFRS 9 [member] | Net Carrying Amount [member] | Credit Card [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	15,272
In accordance with IFRS 9 [member] | Net Carrying Amount [member] | Business and government [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	189,973
In Accordance With IAS 39 [member] | Net Carrying Amount [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		$ 504,369
In Accordance With IAS 39 [member] | Net Carrying Amount [member] | Residential mortgages [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		236,365
In Accordance With IAS 39 [member] | Net Carrying Amount [member] | Loans to consumers [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		87,725
In Accordance With IAS 39 [member] | Net Carrying Amount [member] | Credit Card [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		13,302
In Accordance With IAS 39 [member] | Net Carrying Amount [member] | Business and government [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		166,977
Impaired loans [member] | In accordance with IFRS 9 [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	556,899
Impaired loans [member] | In accordance with IFRS 9 [member] | Residential mortgages [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	253,357
Impaired loans [member] | In accordance with IFRS 9 [member] | Loans to consumers [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	96,019
Impaired loans [member] | In accordance with IFRS 9 [member] | Credit Card [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	16,485
Impaired loans [member] | In accordance with IFRS 9 [member] | Business and government [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	191,038
Impaired loans [member] | In Accordance With IAS 39 [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		508,696
Impaired loans [member] | In Accordance With IAS 39 [member] | Residential mortgages [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		236,916
Impaired loans [member] | In Accordance With IAS 39 [member] | Loans to consumers [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		89,227
Impaired loans [member] | In Accordance With IAS 39 [member] | Credit Card [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		14,104
Impaired loans [member] | In Accordance With IAS 39 [member] | Business and government [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		168,449
Financial assets individually assessed for credit losses [member] | In accordance with IFRS 9 [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	5,065
Financial assets individually assessed for credit losses [member] | In accordance with IFRS 9 [member] | Residential mortgages [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	678
Financial assets individually assessed for credit losses [member] | In accordance with IFRS 9 [member] | Loans to consumers [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	2,109
Financial assets individually assessed for credit losses [member] | In accordance with IFRS 9 [member] | Credit Card [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	1,213
Financial assets individually assessed for credit losses [member] | In accordance with IFRS 9 [member] | Business and government [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets	$ 1,065
Financial assets individually assessed for credit losses [member] | In Accordance With IAS 39 [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		4,327
Financial assets individually assessed for credit losses [member] | In Accordance With IAS 39 [member] | Residential mortgages [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		551
Financial assets individually assessed for credit losses [member] | In Accordance With IAS 39 [member] | Loans to consumers [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		1,502
Financial assets individually assessed for credit losses [member] | In Accordance With IAS 39 [member] | Credit Card [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		802
Financial assets individually assessed for credit losses [member] | In Accordance With IAS 39 [member] | Business and government [member]
Disclosure of financial assets that are either past due or impaired [line items]
Financial assets		$ 1,472

XML

Loans, Impaired Loans and Allowance for Credit Losses - Loans And Acceptances Outstanding By Geography (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	$ 556,899	[1]	$ 508,696
Acceptances	16,329	[1]	13,560
Total loans and acceptances	573,228		522,256
Allowance for credit losses	(5,065)	[1]	(4,327)
Total loans and acceptances net of allowances for loan losses	568,155		517,929
Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	253,357		236,916
Allowance for credit losses	(678)
Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	96,019		89,227
Allowance for credit losses	(2,109)
Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	16,485		14,104
Allowance for credit losses	(1,213)
Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	191,038		168,449
Allowance for credit losses	(1,065)
Canada [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	351,297		336,518
Canada [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	213,083		205,793
Canada [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	72,935		64,295
Canada [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	7,361		13,495
Canada [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	57,918		52,935
United States [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	41,806		36,930
United States [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	1,193		1,228
United States [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	40,613		35,702
Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	27,022		24,130
Mexico [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	7,651		6,911
Mexico [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	3,298		3,064
Mexico [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	674		520
Mexico [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	15,399		13,635
Chile [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	43,804		22,742
Chile [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	15,313		7,302
Chile [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	6,023		3,587
Chile [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	2,592		1,744
Chile [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	19,876		10,109
Peru [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	20,117		18,444
Peru [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	2,947		2,735
Peru [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	3,888		3,682
Peru [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	1,575		1,410
Peru [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	11,707		10,617
Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	11,578		9,428
Colombia [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	2,189		1,999
Colombia [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	3,138		1,845
Colombia [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	2,255		1,746
Colombia [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	3,996		3,838
Other International [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	61,275		60,504
Other International [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	12,174		12,176
Other International [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	5,544		4,471
Other International [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	2,028		2,244
Other International [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	$ 41,529		$ 41,613

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Loans, Impaired Loans and Allowance for Credit Losses - Loans And Acceptances Outstanding By Geography (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Percentage of foreign borrowers	1.60%	1.60%
Total loans and acceptances	$ 573,228	$ 522,256
U.S. dollar [member]
Disclosure of detailed information about financial instruments [line items]
Total loans and acceptances	107,944	100,452
Mexico, Pesos [member]
Disclosure of detailed information about financial instruments [line items]
Total loans and acceptances	37,515	17,824
Chile, Pesos
Disclosure of detailed information about financial instruments [line items]
Total loans and acceptances	21,561	18,857
Other Foreign Currencies [member]
Disclosure of detailed information about financial instruments [line items]
Total loans and acceptances	$ 49,223	$ 44,176

XML

Loans, Impaired Loans and Allowance for Credit Losses - Loans Maturities (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Total loans	$ 556,899	[1]	$ 508,696
Allowance for credit losses	(5,065)	[1]	(4,327)
Total loans net of allowance for credit losses	551,834	[1]	504,369
Within one year [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	152,274		139,138
Total loans net of allowance for credit losses	152,274		139,138
One to 5 years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	307,208		283,532
Total loans net of allowance for credit losses	307,208		283,532
Five to ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	22,479		18,173
Total loans net of allowance for credit losses	22,479		18,173
Over ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	12,506		10,494
Total loans net of allowance for credit losses	12,506		10,494
No Stated Maturity [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	62,432		57,359
Allowance for credit losses	(5,065)		(4,327)
Total loans net of allowance for credit losses	57,367		53,032
Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	253,357		236,916
Allowance for credit losses	(678)
Total loans net of allowance for credit losses	252,679
Residential mortgages [member] | Within one year [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	49,762		45,462
Residential mortgages [member] | One to 5 years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	180,563		171,908
Residential mortgages [member] | Five to ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	10,326		9,098
Residential mortgages [member] | Over ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	11,040		8,919
Residential mortgages [member] | No Stated Maturity [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	1,666		1,529
Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	96,019		89,227
Allowance for credit losses	(2,109)
Total loans net of allowance for credit losses	93,910
Loans to consumers [member] | Within one year [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	17,422		15,952
Loans to consumers [member] | One to 5 years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	35,050		31,500
Loans to consumers [member] | Five to ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	4,775		4,478
Loans to consumers [member] | Over ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	693		815
Loans to consumers [member] | No Stated Maturity [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	38,079		36,482
Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	16,485		14,104
Allowance for credit losses	(1,213)
Total loans net of allowance for credit losses	15,271
Credit Card [member] | No Stated Maturity [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	16,485		14,104
Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	191,038		168,449
Allowance for credit losses	(1,065)
Total loans net of allowance for credit losses	189,973
Business and government [member] | Within one year [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	85,090		77,724
Business and government [member] | One to 5 years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	91,595		80,124
Business and government [member] | Five to ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	7,378		4,597
Business and government [member] | Over ten years [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	773		760
Business and government [member] | No Stated Maturity [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	6,202		5,244
Floating interest rate [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	240,198		220,114
Total loans net of allowance for credit losses	240,198		220,114
Floating interest rate [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	59,351		56,862
Floating interest rate [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	37,003		39,004
Floating interest rate [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	5,334		4,733
Floating interest rate [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	138,510		119,515
Fixed interest rate [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	311,566		283,714
Total loans net of allowance for credit losses	311,566		283,714
Fixed interest rate [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	191,802		178,044
Fixed interest rate [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	58,007		49,137
Fixed interest rate [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	11,151		9,371
Fixed interest rate [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	50,606		47,162
Non-rate sensitive [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	5,135		4,868
Allowance for credit losses	(5,065)		(4,327)
Total loans net of allowance for credit losses	70		541
Non-rate sensitive [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	2,204		2,010
Non-rate sensitive [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	1,009		1,086
Non-rate sensitive [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Total loans	$ 1,922		$ 1,772

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Loans, Impaired Loans and Allowance for Credit Losses - Impaired Loans (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Nov. 01, 2017	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	$ 556,899	[1]		$ 508,696
Allowance for credit losses	5,065	[1]		4,327
Net	551,834	[1]		504,369
Canada [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	351,297			336,518
United States [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	41,806			36,930
Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	27,022			24,130
Peru [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	20,117			18,444
Chile [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	43,804			22,742
Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	11,578			9,428
Other International [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	61,275			60,504
Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	253,357			236,916
Allowance for credit losses	678
Net	252,679
Residential mortgages [member] | Canada [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	213,083			205,793
Residential mortgages [member] | Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	7,651			6,911
Residential mortgages [member] | Peru [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	2,947			2,735
Residential mortgages [member] | Chile [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	15,313			7,302
Residential mortgages [member] | Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	2,189			1,999
Residential mortgages [member] | Other International [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	12,174			12,176
Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	96,019			89,227
Allowance for credit losses	2,109
Net	93,910
Loans to consumers [member] | Canada [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	72,935			64,295
Loans to consumers [member] | United States [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	1,193			1,228
Loans to consumers [member] | Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	3,298			3,064
Loans to consumers [member] | Peru [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	3,888			3,682
Loans to consumers [member] | Chile [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	6,023			3,587
Loans to consumers [member] | Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	3,138			1,845
Loans to consumers [member] | Other International [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	5,544			4,471
Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	16,485			14,104
Allowance for credit losses	1,213
Net	15,271
Credit Card [member] | Canada [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	7,361			13,495
Credit Card [member] | Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	674			520
Credit Card [member] | Peru [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	1,575			1,410
Credit Card [member] | Chile [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	2,592			1,744
Credit Card [member] | Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	2,255			1,746
Credit Card [member] | Other International [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	2,028			2,244
Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	191,038			168,449
Allowance for credit losses	1,065
Net	189,973
Business and government [member] | Canada [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	57,918			52,935
Business and government [member] | United States [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	40,613			35,702
Business and government [member] | Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	15,399			13,635
Business and government [member] | Peru [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	11,707			10,617
Business and government [member] | Chile [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	19,876			10,109
Business and government [member] | Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	3,996			3,838
Business and government [member] | Other International [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	41,529			41,613
In accordance with IFRS 9 [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans			$ 507,908
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	5,130
Allowance for credit losses	1,677
Net	3,453
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Canada [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	999
Allowance for credit losses	381
Net	618
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | United States [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	80
Allowance for credit losses	25
Net	55
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	359
Allowance for credit losses	164
Net	195
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Peru [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	581
Allowance for credit losses	317
Net	264
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Chile [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	753
Allowance for credit losses	158
Net	595
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	619
Allowance for credit losses	159
Net	460
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Other International [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	1,739
Allowance for credit losses	473
Net	1,266
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	1,797
Allowance for credit losses	360
Net	1,437
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	1,069
Allowance for credit losses	644
Net	425
Financial instruments credit-impaired [member] | In accordance with IFRS 9 [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans	2,264
Allowance for credit losses	673
Net	$ 1,591
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				4,865
Allowance for credit losses				2,622
Net				2,243
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Canada [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				1,049
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | United States [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				140
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				303
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Peru [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				704
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Chile [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				565
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				462
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Other International [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				1,642
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				1,445
Allowance for credit losses				326
Net				1,119
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				1,067
Allowance for credit losses				1,040
Net				27
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				543
Allowance for credit losses				543
Financial instruments credit-impaired [member] | In Accordance With IAS 39 [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Gross impaired loans				1,810
Allowance for credit losses				713
Net				$ 1,097

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Loans, Impaired Loans and Allowance for Credit Losses - Impaired Loans (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Impaired loans [abstract]
Interest income recognized on impaired loans	$ 49	$ 23
Interest income, not classified as impaired loans	$ 370	363
Total amount of impaired loans after guarantee expired		$ 59

XML

Loans, Impaired Loans and Allowance for Credit Losses - Summary of Key Macroeconomic Variables Used for Allowance for Credit Losses Calculations (Detail)	12 Months Ended
	Oct. 31, 2018 $ / lb $ / bbl
Base case scenario [member] | Canada [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.20%
Unemployment rate, average %	5.90%
Bank of Canada overnight rate target, average %	2.13%
HPI - Housing Price Index, y/y % change	5.10%
CPI - Consumer Price Index, y/y % change	2.70%
USDCAD exchange rate, average	1.24
Base case scenario [member] | Canada [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.70%
Unemployment rate, average %	5.90%
Bank of Canada overnight rate target, average %	2.87%
HPI - Housing Price Index, y/y % change	3.70%
CPI - Consumer Price Index, y/y % change	2.10%
USDCAD exchange rate, average	1.24
Base case scenario [member] | United States [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.70%
Unemployment rate, average %	4.00%
Base case scenario [member] | United States [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.70%
Unemployment rate, average %	4.10%
Base case scenario [member] | Mexico [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.00%
Unemployment rate, average %	3.70%
Base case scenario [member] | Mexico [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.30%
Unemployment rate, average %	4.20%
Base case scenario [member] | Chile [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.90%
Unemployment rate, average %	6.20%
Base case scenario [member] | Chile [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.50%
Unemployment rate, average %	6.40%
Base case scenario [member] | Peru [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.90%
Unemployment rate, average %	6.30%
Base case scenario [member] | Peru [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.70%
Unemployment rate, average %	6.10%
Base case scenario [member] | Colombia [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.30%
Unemployment rate, average %	9.10%
Base case scenario [member] | Colombia [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.20%
Unemployment rate, average %	8.80%
Base case scenario [member] | Caribbean [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	4.00%
Base case scenario [member] | Caribbean [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	4.10%
Base case scenario [member] | Global WTI oil price [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / bbl	71
Base case scenario [member] | Global WTI oil price [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / bbl	67
Base case scenario [member] | Global Copper price [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / lb	2.91
Base case scenario [member] | Global Copper price [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / lb	3.11
Optimistic scenario [member] | Canada [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.60%
Unemployment rate, average %	5.70%
Bank of Canada overnight rate target, average %	2.25%
HPI - Housing Price Index, y/y % change	5.40%
CPI - Consumer Price Index, y/y % change	2.70%
USDCAD exchange rate, average	1.24
Optimistic scenario [member] | Canada [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.10%
Unemployment rate, average %	5.00%
Bank of Canada overnight rate target, average %	3.66%
HPI - Housing Price Index, y/y % change	4.10%
CPI - Consumer Price Index, y/y % change	2.60%
USDCAD exchange rate, average	1.20
Optimistic scenario [member] | United States [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.30%
Unemployment rate, average %	3.70%
Optimistic scenario [member] | United States [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.40%
Unemployment rate, average %	3.20%
Optimistic scenario [member] | Mexico [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.70%
Unemployment rate, average %	3.50%
Optimistic scenario [member] | Mexico [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.20%
Unemployment rate, average %	3.40%
Optimistic scenario [member] | Chile [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	5.00%
Unemployment rate, average %	5.80%
Optimistic scenario [member] | Chile [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	4.80%
Unemployment rate, average %	4.50%
Optimistic scenario [member] | Peru [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	4.80%
Unemployment rate, average %	5.70%
Optimistic scenario [member] | Peru [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	4.70%
Unemployment rate, average %	4.50%
Optimistic scenario [member] | Colombia [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	4.00%
Unemployment rate, average %	8.70%
Optimistic scenario [member] | Colombia [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	4.20%
Unemployment rate, average %	7.40%
Optimistic scenario [member] | Caribbean [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	5.20%
Optimistic scenario [member] | Caribbean [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	5.40%
Optimistic scenario [member] | Global WTI oil price [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / bbl	75
Optimistic scenario [member] | Global WTI oil price [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / bbl	84
Optimistic scenario [member] | Global Copper price [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / lb	2.98
Optimistic scenario [member] | Global Copper price [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / lb	3.44
Pessimistic scenario [member] | Canada [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.70%
Unemployment rate, average %	6.20%
Bank of Canada overnight rate target, average %	1.98%
HPI - Housing Price Index, y/y % change	4.90%
CPI - Consumer Price Index, y/y % change	2.70%
USDCAD exchange rate, average	1.25
Pessimistic scenario [member] | Canada [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.20%
Unemployment rate, average %	6.80%
Bank of Canada overnight rate target, average %	2.10%
HPI - Housing Price Index, y/y % change	3.30%
CPI - Consumer Price Index, y/y % change	1.50%
USDCAD exchange rate, average	1.27
Pessimistic scenario [member] | United States [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.90%
Unemployment rate, average %	4.30%
Pessimistic scenario [member] | United States [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.00%
Unemployment rate, average %	5.00%
Pessimistic scenario [member] | Mexico [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.30%
Unemployment rate, average %	4.00%
Pessimistic scenario [member] | Mexico [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	1.40%
Unemployment rate, average %	4.90%
Pessimistic scenario [member] | Chile [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.70%
Unemployment rate, average %	6.70%
Pessimistic scenario [member] | Chile [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.30%
Unemployment rate, average %	8.30%
Pessimistic scenario [member] | Peru [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.10%
Unemployment rate, average %	6.80%
Pessimistic scenario [member] | Peru [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.50%
Unemployment rate, average %	7.70%
Pessimistic scenario [member] | Colombia [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	3.00%
Unemployment rate, average %	9.30%
Pessimistic scenario [member] | Colombia [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.20%
Unemployment rate, average %	10.00%
Pessimistic scenario [member] | Caribbean [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.80%
Pessimistic scenario [member] | Caribbean [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Real GDP growth, y/y % change	2.90%
Pessimistic scenario [member] | Global WTI oil price [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / bbl	67
Pessimistic scenario [member] | Global WTI oil price [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / bbl	54
Pessimistic scenario [member] | Global Copper price [member] | Next 12 Months [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / lb	2.84
Pessimistic scenario [member] | Global Copper price [member] | Remaining forecast period [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
Average price of hedging instrument | $ / lb	2.84

XML

Loans, Impaired Loans and Allowance for Credit Losses - Comparison Between the Allowance for Credit Losses for Financial Assets and ACL Under the Base, Optimistic and Pessimistic Scenarios (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
ACL (Stage 1 and Stage 2)	$ 3,475	$ 3,475
In accordance with IFRS 9 [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
ACL (Stage 1 and Stage 2)	3,475
Base case scenario [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
ACL (Stage 1 and Stage 2)	3,467
Optimistic scenario [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
ACL (Stage 1 and Stage 2)	3,345
Pessimistic scenario [member]
Disclosure of Primary Macroeconomic Drivers of Credit Losses [Line Items]
ACL (Stage 1 and Stage 2)	$ 3,618

XML

Loans, Impaired Loans and Allowance for Credit Losses - Impact of Staging on the Bank's ACL (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure Of Impact Of Staging On Allowance For Credit Losses [Abstract]
Stage 1 and 2 ACL under IFRS 9	$ 3,475	$ 3,475
ACL - All performing loans in Stage 1	3,022	5,361
Impact of staging	$ (453)	$ 1,886

XML

Loans, Impaired Loans and Allowance for Credit Losses - Allowance For Credit Losses under IFRS 9 (Detail) - In accordance with IFRS 9 [member] - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Beginning balance	$ 5,020
Provision for credit losses	2,579
Net write-offs	(2,351)
Other, including foreign currency adjustment	(101)
Ending balance	5,147	$ 5,020
Balance at beginning of the year	4,920
Provision for credit losses
Balance at end of year	5,065	4,920
Allowance for credit losses on acceptances	8	16
Allowance for credit losses on off-balance sheet exposures	74	84
Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	717
Provision for credit losses	104
Net write-offs	(123)
Other, including foreign currency adjustment	(20)
Ending balance	678	717
Balance at beginning of the year	717
Provision for credit losses
Remeasurement	25
Newly originated or purchased financial assets	88
Derecognition of financial assets and maturities	(9)
Gross write-offs	(219)
Recoveries	96
Foreign exchange and other movements	(20)
Balance at end of year	678	717
Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	1,261
Provision for credit losses	166
Net write-offs	(208)
Other, including foreign currency adjustment	(72)
Ending balance	1,147	1,261
Balance at beginning of the year	1,245
Provision for credit losses
Remeasurement	177
Newly originated or purchased financial assets	322
Derecognition of financial assets and maturities	(340)
Changes in models and methodologies	17
Gross write-offs	(276)
Recoveries	68
Foreign exchange and other movements	(74)
Balance at end of period including off-balance sheet exposures	1,139
Less: Allowance for credits losses on off-balance sheet exposures	74
Balance at end of year	1,065	1,245
Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	1,879
Provision for credit losses	1,411
Net write-offs	(1,166)
Other, including foreign currency adjustment	(15)
Ending balance	2,109	1,879
Balance at beginning of the year	1,879
Provision for credit losses
Remeasurement	974
Newly originated or purchased financial assets	615
Derecognition of financial assets and maturities	(178)
Gross write-offs	(1,441)
Recoveries	275
Foreign exchange and other movements	(15)
Balance at end of year	2,109	1,879
Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Beginning balance	1,163
Provision for credit losses	898
Net write-offs	(854)
Other, including foreign currency adjustment	6
Ending balance	1,213	1,163
Balance at beginning of the year	1,163
Provision for credit losses
Remeasurement	765
Newly originated or purchased financial assets	329
Derecognition of financial assets and maturities	(196)
Gross write-offs	(1,104)
Recoveries	250
Foreign exchange and other movements	6
Balance at end of year	1,213	1,163
Stage 1 [member]
Provision for credit losses
Balance at end of year	1,223
Stage 1 [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	103
Provision for credit losses
Remeasurement	(131)
Newly originated or purchased financial assets	88
Derecognition of financial assets and maturities	(2)
Transfer to (from)stage 1	77
Transfer to (from)stage 2	(18)
Foreign exchange and other movements	(5)
Balance at end of year	112	103
Stage 1 [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	178
Provision for credit losses
Remeasurement	(93)
Newly originated or purchased financial assets	322
Derecognition of financial assets and maturities	(108)
Changes in models and methodologies	3
Transfer to (from)stage 1	63
Transfer to (from)stage 2	(187)
Transfer to (from)stage 3	(2)
Foreign exchange and other movements	(3)
Balance at end of period including off-balance sheet exposures	173
Less: Allowance for credits losses on off-balance sheet exposures	41
Balance at end of year	132	178
Stage 1 [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	477
Provision for credit losses
Remeasurement	(670)
Newly originated or purchased financial assets	615
Derecognition of financial assets and maturities	(82)
Transfer to (from)stage 1	453
Transfer to (from)stage 2	(189)
Transfer to (from)stage 3	(4)
Foreign exchange and other movements	(22)
Balance at end of year	578	477
Stage 1 [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	364
Provision for credit losses
Remeasurement	(276)
Newly originated or purchased financial assets	329
Derecognition of financial assets and maturities	(91)
Transfer to (from)stage 1	259
Transfer to (from)stage 2	(162)
Transfer to (from)stage 3	(1)
Foreign exchange and other movements	(21)
Balance at end of year	401	364
Stage 2 [member]
Provision for credit losses
Balance at end of year	2,165
Stage 2 [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	214
Provision for credit losses
Remeasurement	5
Derecognition of financial assets and maturities	(7)
Transfer to (from)stage 1	(65)
Transfer to (from)stage 2	106
Transfer to (from)stage 3	(39)
Foreign exchange and other movements	(8)
Balance at end of year	206	214
Stage 2 [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	307
Provision for credit losses
Remeasurement	6
Derecognition of financial assets and maturities	(164)
Changes in models and methodologies	14
Transfer to (from)stage 1	(58)
Transfer to (from)stage 2	218
Transfer to (from)stage 3	(30)
Foreign exchange and other movements	(2)
Balance at end of period including off-balance sheet exposures	291
Less: Allowance for credits losses on off-balance sheet exposures	31
Balance at end of year	260	307
Stage 2 [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	802
Provision for credit losses
Remeasurement	629
Derecognition of financial assets and maturities	(96)
Transfer to (from)stage 1	(442)
Transfer to (from)stage 2	284
Transfer to (from)stage 3	(286)
Foreign exchange and other movements	(4)
Balance at end of year	887	802
Stage 2 [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	799
Provision for credit losses
Remeasurement	448
Derecognition of financial assets and maturities	(105)
Transfer to (from)stage 1	(259)
Transfer to (from)stage 2	162
Transfer to (from)stage 3	(239)
Foreign exchange and other movements	6
Balance at end of year	812	799
Stage 3 [member]
Provision for credit losses
Balance at end of year	1,677
Stage 3 [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	400
Provision for credit losses
Remeasurement	151
Transfer to (from)stage 1	(12)
Transfer to (from)stage 2	(88)
Transfer to (from)stage 3	39
Gross write-offs	(219)
Recoveries	96
Foreign exchange and other movements	(7)
Balance at end of year	360	400
Stage 3 [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	760
Provision for credit losses
Remeasurement	264
Derecognition of financial assets and maturities	(68)
Transfer to (from)stage 1	(5)
Transfer to (from)stage 2	(31)
Transfer to (from)stage 3	32
Gross write-offs	(276)
Recoveries	68
Foreign exchange and other movements	(69)
Balance at end of period including off-balance sheet exposures	675
Less: Allowance for credits losses on off-balance sheet exposures	2
Balance at end of year	673	760
Stage 3 [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	600
Provision for credit losses
Remeasurement	1,015
Transfer to (from)stage 1	(11)
Transfer to (from)stage 2	(95)
Transfer to (from)stage 3	290
Gross write-offs	(1,441)
Recoveries	275
Foreign exchange and other movements	11
Balance at end of year	644	$ 600
Stage 3 [member] | Credit Card [member]
Provision for credit losses
Remeasurement	593
Transfer to (from)stage 3	240
Gross write-offs	(1,104)
Recoveries	250
Foreign exchange and other movements	$ 21

XML

Loans, Impaired Loans and Allowance for Credit Losses - Allowance For Credit Losses under IFRS 9 (Parenthetical) (Detail) - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Allowance for credit losses for other financial assets		$ 89
Interest income on impaired loans	[1],[2]	24,991	$ 21,719	$ 20,419
Amortized cost of financial assets before modification		185
Gross impaired loans [member]
Disclosure of detailed information about financial instruments [line items]
Interest income on impaired loans		$ 370

[1] Interest income on financial assets measured at amortized cost and FVOCI is calculated using the effective interest method. Includes interest income of $27,854 for the year ended October 31, 2018 from these financial assets.

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

XML

Loans, Impaired Loans and Allowance for Credit Losses - Allowance For Credit Losses under IAS 39 (Detail) - IAS 39 [member] $ in Millions	12 Months Ended
	Oct. 31, 2017 CAD ($)
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	$ 4,626
Write-offs	(3,173)
Recoveries	680
Provision for credit losses	2,249
Other, including foreign currency adjustment	(55)
Balance at end of year	4,327
Financial assets individually assessed for credit losses [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	894
Write-offs	(501)
Recoveries	55
Provision for credit losses	304
Other, including foreign currency adjustment	(39)
Balance at end of year	713
Impaired loans [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year
Balance at end of year	2,622
Financial assets collectively assessed for credit losses [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	3,498
Write-offs	(2,658)
Recoveries	571
Provision for credit losses	1,952
Other, including foreign currency adjustment	(8)
Balance at end of year	3,355
Financial assets past due but not impaired [member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year
Balance at end of year	1,446
Before Loans Acquired Under Guarantee [Member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	4,392
Write-offs	(3,159)
Recoveries	626
Provision for credit losses	2,256
Other, including foreign currency adjustment	(47)
Balance at end of year	4,068
Loans Acquired Under Guarantee [Member]
Disclosure of detailed information about financial instruments [line items]
Balance at beginning of the year	234
Write-offs	(14)
Recoveries	54
Provision for credit losses	(7)
Other, including foreign currency adjustment	(8)
Balance at end of year	$ 259

XML

Loans, Impaired Loans and Allowance for Credit Losses - Allowance For Credit Losses under IAS 39 (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Allowance for credit losses on loans	$ 5,065	[1]	$ 4,327
Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Allowance for credit losses on loans	1,065
Business and government [member] | Performing loans [Member]
Disclosure of detailed information about financial instruments [line items]
Allowance for credit losses on loans			625
Personal and credit cards [member] | Performing loans [Member]
Disclosure of detailed information about financial instruments [line items]
Allowance for credit losses on loans			720
Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Allowance for credit losses on loans	$ 678
Residential mortgages [member] | Performing loans [Member]
Disclosure of detailed information about financial instruments [line items]
Allowance for credit losses on loans			$ 101

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Loans, Impaired Loans and Allowance for Credit Losses -Summary of Carrying Value of Exposures by Risk Rating (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	$ 556,899	[1]	$ 508,696
Allowance for credit losses	5,065	[1]	4,327
Carrying value of loans net of ACL	551,834	[1]	504,369
Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	253,357		236,916
Allowance for credit losses	678
Carrying value of loans net of ACL	252,679
Residential mortgages [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	146,768
Residential mortgages [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	58,532
Residential mortgages [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	12,661
Residential mortgages [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	5,130
Residential mortgages [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,804
Residential mortgages [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	26,665
Residential mortgages [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,797
Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	96,019		89,227
Allowance for credit losses	2,109
Carrying value of loans net of ACL	93,910
Loans to consumers [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	30,726
Loans to consumers [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	26,190
Loans to consumers [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	8,717
Loans to consumers [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	10,333
Loans to consumers [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,420
Loans to consumers [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	17,564
Loans to consumers [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,069
Undrawn loan commitments retail [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	116,794
Carrying value of undrawn loan commitments net of ACL	116,794
Undrawn loan commitments retail [Member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	72,321
Undrawn loan commitments retail [Member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	16,533
Undrawn loan commitments retail [Member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	6,108
Undrawn loan commitments retail [Member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	3,301
Undrawn loan commitments retail [Member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	393
Undrawn loan commitments retail [Member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	18,138
Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	191,038		168,449
Allowance for credit losses	1,065
Carrying value of loans net of ACL	189,973
Business and government [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,702
Business and government [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,264
Business and government [member] | Investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	90,817
Business and government [member] | Non investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	93,436
Business and government [member] | Watch list [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,819
Undrawn loan commitments business and government [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	224,257
Allowance for credit losses	74
Carrying value of undrawn loan commitments net of ACL	224,183
Undrawn loan commitments business and government [Member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	2,206
Undrawn loan commitments business and government [Member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	4
Undrawn loan commitments business and government [Member] | Investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	161,543
Undrawn loan commitments business and government [Member] | Non investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	59,446
Undrawn loan commitments business and government [Member] | Watch list [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	1,058
Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	16,485		$ 14,104
Allowance for credit losses	1,213
Carrying value of loans net of ACL	15,271
Credit Card [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,423
Credit Card [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,450
Credit Card [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	3,429
Credit Card [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	4,384
Credit Card [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	734
Credit Card [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	4,064
Stage one exposure [Member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	241,083
Allowance for credit losses	112
Carrying value of loans net of ACL	240,971
Stage one exposure [Member] | Residential mortgages [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	146,461
Stage one exposure [Member] | Residential mortgages [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	58,154
Stage one exposure [Member] | Residential mortgages [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	11,689
Stage one exposure [Member] | Residential mortgages [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,615
Stage one exposure [Member] | Residential mortgages [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	25
Stage one exposure [Member] | Residential mortgages [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	23,139
Stage one exposure [Member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	87,210
Allowance for credit losses	578
Carrying value of loans net of ACL	86,632
Stage one exposure [Member] | Loans to consumers [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	30,660
Stage one exposure [Member] | Loans to consumers [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	26,039
Stage one exposure [Member] | Loans to consumers [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	8,315
Stage one exposure [Member] | Loans to consumers [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	6,686
Stage one exposure [Member] | Loans to consumers [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	58
Stage one exposure [Member] | Loans to consumers [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	15,452
Stage one exposure [Member] | Undrawn loan commitments retail [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	112,312
Carrying value of undrawn loan commitments net of ACL	112,312
Stage one exposure [Member] | Undrawn loan commitments retail [Member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	72,321
Stage one exposure [Member] | Undrawn loan commitments retail [Member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	16,531
Stage one exposure [Member] | Undrawn loan commitments retail [Member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	6,029
Stage one exposure [Member] | Undrawn loan commitments retail [Member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	2,631
Stage one exposure [Member] | Undrawn loan commitments retail [Member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	26
Stage one exposure [Member] | Undrawn loan commitments retail [Member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	14,774
Stage one exposure [Member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	171,957
Allowance for credit losses	132
Carrying value of loans net of ACL	171,825
Stage one exposure [Member] | Business and government [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,050
Stage one exposure [Member] | Business and government [member] | Investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	87,047
Stage one exposure [Member] | Business and government [member] | Non investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	83,730
Stage one exposure [Member] | Business and government [member] | Watch list [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	130
Stage one exposure [Member] | Undrawn loan commitments business and government [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	218,140
Allowance for credit losses	41
Carrying value of undrawn loan commitments net of ACL	218,099
Stage one exposure [Member] | Undrawn loan commitments business and government [Member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	2,178
Stage one exposure [Member] | Undrawn loan commitments business and government [Member] | Investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	159,880
Stage one exposure [Member] | Undrawn loan commitments business and government [Member] | Non investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	56,001
Stage one exposure [Member] | Undrawn loan commitments business and government [Member] | Watch list [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	81
Stage one exposure [Member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	13,083
Allowance for credit losses	401
Carrying value of loans net of ACL	12,682
Stage one exposure [Member] | Credit Card [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,418
Stage one exposure [Member] | Credit Card [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,436
Stage one exposure [Member] | Credit Card [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	3,358
Stage one exposure [Member] | Credit Card [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,929
Stage one exposure [Member] | Credit Card [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	37
Stage one exposure [Member] | Credit Card [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,905
Stage two exposure [Member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	10,477
Allowance for credit losses	206
Carrying value of loans net of ACL	10,271
Stage two exposure [Member] | Residential mortgages [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	307
Stage two exposure [Member] | Residential mortgages [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	378
Stage two exposure [Member] | Residential mortgages [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	972
Stage two exposure [Member] | Residential mortgages [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	3,515
Stage two exposure [Member] | Residential mortgages [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,779
Stage two exposure [Member] | Residential mortgages [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	3,526
Stage two exposure [Member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	7,740
Allowance for credit losses	887
Carrying value of loans net of ACL	6,853
Stage two exposure [Member] | Loans to consumers [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	66
Stage two exposure [Member] | Loans to consumers [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	151
Stage two exposure [Member] | Loans to consumers [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	402
Stage two exposure [Member] | Loans to consumers [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	3,647
Stage two exposure [Member] | Loans to consumers [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,362
Stage two exposure [Member] | Loans to consumers [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,112
Stage two exposure [Member] | Undrawn loan commitments retail [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	4,482
Carrying value of undrawn loan commitments net of ACL	4,482
Stage two exposure [Member] | Undrawn loan commitments retail [Member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	2
Stage two exposure [Member] | Undrawn loan commitments retail [Member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	79
Stage two exposure [Member] | Undrawn loan commitments retail [Member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	670
Stage two exposure [Member] | Undrawn loan commitments retail [Member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	367
Stage two exposure [Member] | Undrawn loan commitments retail [Member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	3,364
Stage two exposure [Member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	16,817
Allowance for credit losses	260
Carrying value of loans net of ACL	16,557
Stage two exposure [Member] | Business and government [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	652
Stage two exposure [Member] | Business and government [member] | Investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	3,770
Stage two exposure [Member] | Business and government [member] | Non investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	9,706
Stage two exposure [Member] | Business and government [member] | Watch list [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,689
Stage two exposure [Member] | Undrawn loan commitments business and government [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	6,113
Allowance for credit losses	31
Carrying value of undrawn loan commitments net of ACL	6,082
Stage two exposure [Member] | Undrawn loan commitments business and government [Member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	28
Stage two exposure [Member] | Undrawn loan commitments business and government [Member] | Investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	1,663
Stage two exposure [Member] | Undrawn loan commitments business and government [Member] | Non investment grade [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	3,445
Stage two exposure [Member] | Undrawn loan commitments business and government [Member] | Watch list [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	977
Stage two exposure [Member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	3,401
Allowance for credit losses	812
Carrying value of loans net of ACL	2,589
Stage two exposure [Member] | Credit Card [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	5
Stage two exposure [Member] | Credit Card [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	14
Stage two exposure [Member] | Credit Card [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	71
Stage two exposure [Member] | Credit Card [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,455
Stage two exposure [Member] | Credit Card [member] | Very High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	697
Stage two exposure [Member] | Credit Card [member] | Loans not graded [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,159
Stage three exposure [Member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,797
Allowance for credit losses	360
Carrying value of loans net of ACL	1,437
Stage three exposure [Member] | Residential mortgages [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,797
Stage three exposure [Member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,069
Allowance for credit losses	644
Carrying value of loans net of ACL	425
Stage three exposure [Member] | Loans to consumers [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	1,069
Stage three exposure [Member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,264
Allowance for credit losses	673
Carrying value of loans net of ACL	1,591
Stage three exposure [Member] | Business and government [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans before ACL	2,264
Stage three exposure [Member] | Undrawn loan commitments business and government [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	4
Allowance for credit losses	2
Carrying value of undrawn loan commitments net of ACL	2
Stage three exposure [Member] | Undrawn loan commitments business and government [Member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of undrawn loan commitments before ACL	$ 4

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Loans, Impaired Loans and Allowance for Credit Losses - Additional Information (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Receivable from the Federal Deposit Insurance Corporation	$ 77	$ 106
R-G Premier Bank [member]
Disclosure of detailed information about financial instruments [line items]
Percentage of guarantees net loan losses	80.00%
R-G Premier Bank [member] | Loans Acquired Under Guarantee [Member]
Disclosure of detailed information about financial instruments [line items]
Carrying value of loans	$ 1,300	$ 1,400

XML

Loans, Impaired Loans and Allowance for Credit Losses - Loans Past Due But Not Impaired (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	$ 556,899	[1]	$ 508,696
Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	253,357		236,916
Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	96,019		89,227
Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	16,485		14,104
Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	191,038		168,449
Financial assets past due but not impaired [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	3,687		3,282
Financial assets past due but not impaired [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	1,811		1,603
Financial assets past due but not impaired [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	931		806
Financial assets past due but not impaired [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	738		416
Financial assets past due but not impaired [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	207		457
31 - 60 days [member] | Financial assets past due but not impaired [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	2,297		1,974
31 - 60 days [member] | Financial assets past due but not impaired [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	1,290		1,035
31 - 60 days [member] | Financial assets past due but not impaired [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	609		522
31 - 60 days [member] | Financial assets past due but not impaired [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	231		202
31 - 60 days [member] | Financial assets past due but not impaired [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	167		215
61 - 90 days [member] | Financial assets past due but not impaired [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	1,037		924
61 - 90 days [member] | Financial assets past due but not impaired [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	521		446
61 - 90 days [member] | Financial assets past due but not impaired [member] | Loans to consumers [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	322		284
61 - 90 days [member] | Financial assets past due but not impaired [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	154		139
61 - 90 days [member] | Financial assets past due but not impaired [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	40		55
91 days and greater [member] | Financial assets past due but not impaired [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	353		384
91 days and greater [member] | Financial assets past due but not impaired [member] | Residential mortgages [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross			122
91 days and greater [member] | Financial assets past due but not impaired [member] | Credit Card [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross	$ 353		75
91 days and greater [member] | Financial assets past due but not impaired [member] | Business and government [member]
Disclosure of detailed information about financial instruments [line items]
Loans and receivables gross			$ 187

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Loans, Impaired Loans and Allowance for Credit Losses - Summary of Purchased Credit Impaired Loans (Detail) - Loans acquired in business combination [member] $ in Millions	Jul. 31, 2018 CAD ($)
Disclosure of detailed information about financial instruments [line items]
Unpaid principal balance	$ 548
Credit related fair value adjustments	(168)
Carrying value	380
Carrying value net of related allowance	380
Stage 3 [member]
Disclosure of detailed information about financial instruments [line items]
Stage 3 allowance	$ 0

XML

Derecognition of Financial Assets - Summary of Carrying Amount of Transferred Assets Do Not Qualify for Derecognition and Associated Liabilities (Detail) - Securitisations [member] - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Carrying value of associated liabilities	$ 21,459	$ 19,278
Residential mortgage loans [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Carrying value of assets	20,498	18,178
Other related assets [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Carrying value of assets	$ 2,679	$ 2,293

XML

Derecognition of Financial Assets - Summary of Carrying Amount of Transferred Assets Do Not Qualify for Derecognition and Associated Liabilities (Parenthetical) (Detail) - Securitisations [member] - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Fair value of transferred assets	$ 23,237	$ 20,580
Fair value of associated liabilities	22,468	19,863
Net position	$ 769	$ 717

XML

Derecognition of Financial Assets - Summary of Carrying Amount of Transferred Other Financial Assets Do Not Qualify for Derecognition and Associated Liabilities (Detail) - Other Financial Assets1 [Member] - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Carrying value of assets	$ 132,534	$ 127,324
Carrying value of associated liabilities	101,257	95,843
Repurchase agreement [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Carrying value of assets	82,816	86,789
Securities lending [member]
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Carrying value of assets	$ 49,718	$ 40,535

XML

Derecognition of Financial Assets - Summary of Carrying Amount of Transferred Other Financial Assets Do Not Qualify for Derecognition and Associated Liabilities (Parenthetical) (Detail) - Other Financial Assets1 [Member] - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of transferred financial assets that are not derecognised in their entirety [line items]
Fair value of transferred assets	$ 132,534	$ 127,324
Fair value of the associated liabilities	101,257	95,843
Net position	$ 31,277	$ 31,481

XML

Structured Entities - Consolidated Structured Entities - Additional Information (Detail) $ in Millions, $ in Billions	Oct. 31, 2018 CAD ($)	Oct. 31, 2018 USD ($)	Oct. 31, 2017 CAD ($)	Oct. 31, 2017 USD ($)
Disclosure of information about consolidated structured entities [line items]
Assets pledged	$ 204,601		$ 183,888
Deposits from business and government [member]
Disclosure of information about consolidated structured entities [line items]
Subordinated notes outstanding	2,400	$ 1.8	2,100	$ 1.6
Deposits from business and government [member] | Canadian auto loan receivables [member]
Disclosure of information about consolidated structured entities [line items]
Assets pledged	3,000		2,300
Scotiabank covered bond guarantor limited partnership [member] | Uninsured residential mortgage backed securities [member]
Disclosure of information about consolidated structured entities [line items]
Assets pledged	30,700		27,800
Scotiabank covered bond guarantor limited partnership [member] | Deposits from business and government [member]
Disclosure of information about consolidated structured entities [line items]
Covered bond outstanding	29,100		25,700
Halifax receivables trust [member] | Unsecured personal line of credit receivables [member]
Disclosure of information about consolidated structured entities [line items]
Assets pledged	1,300		1,300
Halifax receivables trust [member] | Deposits from business and government [member]
Disclosure of information about consolidated structured entities [line items]
Subordinated notes outstanding	1,000		1,000
Trillium credit card trust II [member] | Credit card receivable [member]
Disclosure of information about consolidated structured entities [line items]
Assets pledged	1,800		1,300
Trillium credit card trust II [member] | Deposits from business and government [member]
Disclosure of information about consolidated structured entities [line items]
Subordinated notes outstanding	$ 1,600	$ 1.2	$ 1,200	$ 0.9

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Structured Entities - Unconsolidated Structured Entities - Additional Information (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Top of range [member]
Disclosure of unconsolidated structured entities [line items]
Asset-backed commercial paper issued	$ 800	$ 1,900
Unconsolidated structured entities [member]
Disclosure of unconsolidated structured entities [line items]
Maximum exposure to loss	10.00%
Bank's maximum exposure to loss	$ 5,313	5,009
Unconsolidated structured entities [member] | Bank Of Nova Scotia [Member]
Disclosure of unconsolidated structured entities [line items]
Bank's maximum exposure to loss	$ 2,000	$ 1,800

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Structured Entities - Summary of Unconsolidated Structured Entities (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of unconsolidated structured entities [line items]
Trading assets	$ 100,262	[1]	$ 98,464
Investment securities	78,396	[1]	69,269
Total assets	998,493	[1]	915,273
Deposits - Business and government	422,002	[1]	384,988
Derivative financial instruments	37,967	[1]	34,200
Total liabilities	930,813	[1]	853,648
Canadian multi-seller Conduits that the bank administers [Member]
Disclosure of unconsolidated structured entities [line items]
Total assets (on structured entity's financial statements)	3,216		3,127
Trading assets	3
Total assets	3
Derivative financial instruments	6		6
Total liabilities	6		6
Bank's maximum exposure to loss	3,219		3,127
Structured finance entities [member]
Disclosure of unconsolidated structured entities [line items]
Total assets (on structured entity's financial statements)	4,488		3,991
Trading assets			5
Investment securities	1,054		1,091
Loans	978		731
Total assets	2,032		1,827
Bank's maximum exposure to loss	2,032		1,827
Capital funding vehicles [member]
Disclosure of unconsolidated structured entities [line items]
Total assets (on structured entity's financial statements)	1,520		1,520
Investment securities	17		15
Loans	45		40
Total assets	62		55
Deposits - Business and government	1,458		1,465
Total liabilities	1,458		1,465
Bank's maximum exposure to loss	62		55
Unconsolidated structured entities [member]
Disclosure of unconsolidated structured entities [line items]
Total assets (on structured entity's financial statements)	9,224		8,638
Trading assets	3		5
Investment securities	1,071		1,106
Loans	1,023		771
Total assets	2,097		1,882
Deposits - Business and government	1,458		1,465
Derivative financial instruments	6		6
Total liabilities	1,464		1,471
Bank's maximum exposure to loss	$ 5,313		$ 5,009

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Structured Entities - Summary of Other Unconsolidated Bank-Sponsored Entities (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of unconsolidated structured entities [line items]
Revenue	$ 28,775	$ 27,155	$ 26,350
Investment funds [member]
Disclosure of unconsolidated structured entities [line items]
Revenue	2,118	2,016
Scotia managed companies [member]
Disclosure of unconsolidated structured entities [line items]
Revenue	3	5
Unconsolidated bank sponsored entities [member]
Disclosure of unconsolidated structured entities [line items]
Revenue	$ 2,121	$ 2,021

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Structured Entities - Other Unconsolidated Bank-Sponsored Entities - Additional Information (Detail) - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of unconsolidated structured entities [line items]
Revenue		$ 28,775	$ 27,155	$ 26,350
Interest income	[1],[2]	28,067	23,927	22,208
Non-interest income - banking	[2]	4,001	3,855	3,669
Non-interest income - wealth management	[2]	3,341	3,318	$ 3,282
Unconsolidated bank sponsored entities [member]
Disclosure of unconsolidated structured entities [line items]
Revenue		2,121	2,021
Interest income		1	1
Non-interest income - banking		137	134
Non-interest income - wealth management		$ 1,983	$ 1,886

[1] Interest income on financial assets measured at amortized cost and FVOCI is calculated using the effective interest method. Includes interest income of $27,854 for the year ended October 31, 2018 from these financial assets.

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

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Property and Equipment - Summary of Property Plant and Equipment (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	$ 2,381
Ending balance	2,684	[1]	$ 2,381
Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	7,112		7,139
Acquisitions	593
Additions	487		603
Disposals	351		345
Foreign currency adjustments and other	24		(285)
Ending balance	7,865		7,112
Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	4,731		4,619
Depreciation	354		340
Disposals	(132)		(152)
Foreign currency adjustments and other	228		(76)
Ending balance	5,181		4,731
Land and buildings [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	1,036
Ending balance	1,178		1,036
Land and buildings [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	1,722		2,071
Acquisitions	214
Additions	142		169
Disposals	231		224
Foreign currency adjustments and other	36		(294)
Ending balance	1,883		1,722
Land and buildings [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	686		766
Depreciation	62		47
Disposals	(56)		(58)
Foreign currency adjustments and other	13		(69)
Ending balance	705		686
Equipment 1 [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	442
Ending balance	432		442
Equipment 1 [Member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	1,892		1,728
Acquisitions	96
Additions	56		147
Disposals	38		52
Foreign currency adjustments and other	95		69
Ending balance	2,101		1,892
Equipment 1 [Member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	1,450		1,362
Depreciation	80		91
Disposals	(35)		(37)
Foreign currency adjustments and other	174		34
Ending balance	1,669		1,450
Technology assets [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	369
Ending balance	448		369
Technology assets [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	2,088		1,983
Acquisitions	186
Additions	141		161
Disposals	33		41
Foreign currency adjustments and other	(86)		(15)
Ending balance	2,296		2,088
Technology assets [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	1,719		1,653
Depreciation	143		131
Disposals	(24)		(40)
Foreign currency adjustments and other	10		(25)
Ending balance	1,848		1,719
Leasehold improvements [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	534
Ending balance	626		534
Leasehold improvements [member] | Gross carrying amount [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	1,410		1,357
Acquisitions	97
Additions	148		126
Disposals	49		28
Foreign currency adjustments and other	(21)		(45)
Ending balance	1,585		1,410
Leasehold improvements [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Beginning balance	876		838
Depreciation	69		71
Disposals	(17)		(17)
Foreign currency adjustments and other	31		(16)
Ending balance	$ 959		$ 876

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Property and Equipment - Summary of Property Plant and Equipment (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about property, plant and equipment [abstract]
Investment property	$ 36	$ 16

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Investments in Associates - Summary of Significant Investments in Associates (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Thanachart bank public company limited [member]
Disclosure of associates [line items]
Country of incorporation	Thailand
Nature of business	Banking
Ownership percentage	49.00%
Date of financial statements	Oct. 31, 2018
Carrying value	$ 2,961	$ 2,789
Canadian tires financial services business [member]
Disclosure of associates [line items]
Country of incorporation	Canada
Nature of business	Financial Services
Ownership percentage	20.00%
Date of financial statements	Sep. 30, 2018
Carrying value	$ 518	542
Bank of Xian Co Ltd [member]
Disclosure of associates [line items]
Country of incorporation	China
Nature of business	Banking
Ownership percentage	19.90%
Date of financial statements	Sep. 30, 2018
Carrying value	$ 772	711
Maduro and curiels bank NV [member]
Disclosure of associates [line items]
Country of incorporation	Curacao
Nature of business	Banking
Ownership percentage	48.10%
Date of financial statements	Sep. 30, 2018
Carrying value	$ 304	$ 284

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Investments in Associates - Summary of Significant Investments in Associates (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016	Sep. 30, 2018	Sep. 30, 2017	Oct. 01, 2014
Disclosure of associates [line items]
Total assets	$ 998,493	[1]	$ 915,273
Total liabilities	930,813	[1]	853,648
Undistributed retained earnings	$ 62		61	$ 63
Canadian tires financial services business [member]
Disclosure of associates [line items]
Option to sell maximum additional equity interest within the next 10 years	29.00%
Period of option to sell back equity interest after ten years	6 months
Total assets					$ 6,256	$ 6,233	$ 5,351
Total liabilities					5,279	5,235	$ 4,387
Maduro and curiels bank NV [member]
Disclosure of associates [line items]
Total assets					5,832	5,501
Total liabilities					$ 5,165	$ 4,896
Undistributed retained earnings	$ 62		$ 61

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Investments in Associates - Summarized Financial Information of Significant Associates (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Sep. 30, 2018	Oct. 31, 2017	Sep. 30, 2017	Oct. 31, 2016	Oct. 01, 2014
Disclosure of associates [line items]
Revenue	$ 28,775			$ 27,155		$ 26,350
Net income	8,724	[1]		8,243		$ 7,368
Total assets	998,493	[2]		915,273
Total liabilities	$ 930,813	[2]		$ 853,648
Thanachart bank public company limited [member]
Disclosure of associates [line items]
Revenue			$ 1,871		$ 1,718
Net income			590		508
Total assets			39,875		38,050
Total liabilities			34,289		32,902
Canadian tires financial services business [member]
Disclosure of associates [line items]
Revenue			1,143		1,040
Net income			348		334
Total assets			6,256		6,233		$ 5,351
Total liabilities			5,279		5,235		$ 4,387
Bank of Xian Co Ltd [member]
Disclosure of associates [line items]
Revenue			1,123		915
Net income			456		411
Total assets			45,261		41,170
Total liabilities			41,595		37,821
Maduro and curiels bank NV [member]
Disclosure of associates [line items]
Revenue			348		343
Net income			92		80
Total assets			5,832		5,501
Total liabilities			$ 5,165		$ 4,896

[1] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Goodwill and Other Intangible Assets - Summary of Changes in Carrying Amount of Goodwill by Cash Generating Units (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of reconciliation of changes in goodwill [line items]
Begining balance	$ 7,243	$ 7,384
Acquisitions	2,874
Dispositions		(36)
Foreign currency adjustments and other	(110)	(105)
Ending balance	10,007	7,243
Canadian banking [member]
Disclosure of reconciliation of changes in goodwill [line items]
Begining balance	3,385	3,403
Acquisitions	1,710
Dispositions		(36)
Foreign currency adjustments and other		18
Ending balance	5,095	3,385
Global banking and markets [member]
Disclosure of reconciliation of changes in goodwill [line items]
Begining balance	255	265
Foreign currency adjustments and other	5	(10)
Ending balance	260	255
Latin America [member]
Disclosure of reconciliation of changes in goodwill [line items]
Begining balance	2,400	2,461
Acquisitions	1,164
Foreign currency adjustments and other	(110)	(61)
Ending balance	3,454	2,400
Caribbean and central america [member]
Disclosure of reconciliation of changes in goodwill [line items]
Begining balance	1,203	1,255
Foreign currency adjustments and other	(5)	(52)
Ending balance	$ 1,198	$ 1,203

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Goodwill and Other Intangible Assets - Additional Information (Detail)	12 Months Ended
	Oct. 31, 2018	Jul. 31, 2018 CAD ($)	Oct. 31, 2017	Jul. 31, 2017 CAD ($)
Disclosure of intangible assets and goodwill [Line Items]
Annual impairment of goodwill		$ 0		$ 0
Period of discounted cash flow method for calculating value in use	5-year
Terminal growth rate	4.50%		4.50%
Cash flows discounted rate	10.00%		10.00%
Annual impairment of Indefinite life intangible assets		$ 0		$ 0
Bottom of range [member]
Disclosure of intangible assets and goodwill [Line Items]
Price earnings multiples used	11.0		11.0
Top of range [member]
Disclosure of intangible assets and goodwill [Line Items]
Price earnings multiples used	13.5		12.5

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Goodwill and Other Intangible Assets - Summary of Intangible Assets (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about intangible assets [line items]
Beginning balance	$ 4,863
Ending balance	7,712	$ 4,863
Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	7,234	6,761
Acquisitions	2,715
Additions	676	589
Disposals	(8)	(59)
Foreign currency adjustments and other	(74)	(57)
Ending balance	10,543	7,234
Accumulated depreciation and amortisation [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	2,371	2,004
Amortization	494	421
Disposals	(8)	(20)
Foreign currency adjustments and other	(26)	(34)
Ending balance	2,831	2,371
Fund management contracts [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	2,325
Ending balance	4,415	2,325
Fund management contracts [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	2,325	2,325
Acquisitions	2,090
Ending balance	4,415	2,325
Indefinite life intangible assets [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	68
Ending balance	166	68
Indefinite life intangible assets [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	68	68
Acquisitions	98
Ending balance	166	68
Computer software [member] | Finite life intangible assets [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	1,957
Ending balance	2,241	1,957
Computer software [member] | Finite life intangible assets [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	3,278	2,737
Acquisitions	47
Additions	673	584
Disposals	(8)	(3)
Foreign currency adjustments and other	(44)	(40)
Ending balance	3,946	3,278
Computer software [member] | Finite life intangible assets [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	1,321	1,009
Amortization	409	339
Disposals	(8)	(2)
Foreign currency adjustments and other	(17)	(25)
Ending balance	1,705	1,321
Other intangible assets [member] | Finite life intangible assets [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	513
Ending balance	890	513
Other intangible assets [member] | Finite life intangible assets [member] | Gross carrying amount [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	1,563	1,631
Acquisitions	480
Additions	3	5
Disposals		(56)
Foreign currency adjustments and other	(30)	(17)
Ending balance	2,016	1,563
Other intangible assets [member] | Finite life intangible assets [member] | Accumulated depreciation and amortisation [member]
Disclosure of detailed information about intangible assets [line items]
Beginning balance	1,050	995
Amortization	85	82
Disposals		(18)
Foreign currency adjustments and other	(9)	(9)
Ending balance	$ 1,126	$ 1,050

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Goodwill and Other Intangible Assets - Summary of Intangible Assets (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Purchased software [member]
Disclosure of detailed information about intangible assets [line items]
Computer software	$ 483	$ 500
Internally generated software [member]
Disclosure of detailed information about intangible assets [line items]
Computer software	1,208	981
In process software not subject to amortization [member]
Disclosure of detailed information about intangible assets [line items]
Computer software	$ 500	$ 476

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Other Assets - Summary of Other Assets (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of other assets [abstract]
Accrued interest	$ 2,800		$ 2,176
Accounts receivable and prepaids	1,878		1,674
Current tax assets	657		327
Margin deposit derivatives	3,247		3,041
Segregated fund assets	2,736
Pension assets	360		256
Receivable from brokers, dealers and clients	2,061		913
Receivable from the Federal Deposit Insurance Corporation	77		106
Other	3,617		4,256
Total	$ 17,433	[1]	$ 12,749

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Deposits - Summary of Deposits (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure Of Deposits [Line Items]
Payable after notice	$ 159,797
Payable on a fixed date	373,296
Total	676,534	[1]	$ 625,367
Canada [member]
Disclosure Of Deposits [Line Items]
Payable after notice	122,974
Payable on a fixed date	247,361
Total	472,798		445,487
United States [member]
Disclosure Of Deposits [Line Items]
Payable after notice	8,950
Payable on a fixed date	36,780
Total	59,938		58,070
United Kingdom [member]
Disclosure Of Deposits [Line Items]
Payable after notice	152
Payable on a fixed date	16,695
Total	16,847		12,041
Mexico [member]
Disclosure Of Deposits [Line Items]
Payable after notice	5,382
Payable on a fixed date	11,393
Total	21,151		19,419
Peru [member]
Disclosure Of Deposits [Line Items]
Payable after notice	4,129
Payable on a fixed date	7,062
Total	15,213		15,216
Chile [member]
Disclosure Of Deposits [Line Items]
Payable after notice	146
Payable on a fixed date	17,613
Total	24,180		11,574
Colombia [member]
Disclosure Of Deposits [Line Items]
Payable after notice	3,963
Payable on a fixed date	5,036
Total	9,543		7,587
Other International [member]
Disclosure Of Deposits [Line Items]
Payable after notice	14,101
Payable on a fixed date	31,356
Total	56,864		55,973
Personal [member]
Disclosure Of Deposits [Line Items]
Payable after notice	123,302
Payable on a fixed date	76,238
Total	214,545		200,030
Business and government [member]
Disclosure Of Deposits [Line Items]
Payable after notice	34,600
Payable on a fixed date	268,280
Total	422,002		384,988
Financial institution [member]
Disclosure Of Deposits [Line Items]
Payable after notice	1,895
Payable on a fixed date	28,778
Total	39,987		$ 40,349
Interest bearing [member]
Disclosure Of Deposits [Line Items]
Payable on demand	108,839
Interest bearing [member] | Canada [member]
Disclosure Of Deposits [Line Items]
Payable on demand	84,638
Interest bearing [member] | United States [member]
Disclosure Of Deposits [Line Items]
Payable on demand	14,080
Interest bearing [member] | Mexico [member]
Disclosure Of Deposits [Line Items]
Payable on demand	14
Interest bearing [member] | Peru [member]
Disclosure Of Deposits [Line Items]
Payable on demand	2,738
Interest bearing [member] | Chile [member]
Disclosure Of Deposits [Line Items]
Payable on demand	3,392
Interest bearing [member] | Colombia [member]
Disclosure Of Deposits [Line Items]
Payable on demand	37
Interest bearing [member] | Other International [member]
Disclosure Of Deposits [Line Items]
Payable on demand	3,940
Interest bearing [member] | Personal [member]
Disclosure Of Deposits [Line Items]
Payable on demand	7,517
Interest bearing [member] | Business and government [member]
Disclosure Of Deposits [Line Items]
Payable on demand	94,812
Interest bearing [member] | Financial institution [member]
Disclosure Of Deposits [Line Items]
Payable on demand	6,510
Non- interest bearing [member]
Disclosure Of Deposits [Line Items]
Payable on demand	34,602
Non- interest bearing [member] | Canada [member]
Disclosure Of Deposits [Line Items]
Payable on demand	17,825
Non- interest bearing [member] | United States [member]
Disclosure Of Deposits [Line Items]
Payable on demand	128
Non- interest bearing [member] | Mexico [member]
Disclosure Of Deposits [Line Items]
Payable on demand	4,362
Non- interest bearing [member] | Peru [member]
Disclosure Of Deposits [Line Items]
Payable on demand	1,284
Non- interest bearing [member] | Chile [member]
Disclosure Of Deposits [Line Items]
Payable on demand	3,029
Non- interest bearing [member] | Colombia [member]
Disclosure Of Deposits [Line Items]
Payable on demand	507
Non- interest bearing [member] | Other International [member]
Disclosure Of Deposits [Line Items]
Payable on demand	7,467
Non- interest bearing [member] | Personal [member]
Disclosure Of Deposits [Line Items]
Payable on demand	7,488
Non- interest bearing [member] | Business and government [member]
Disclosure Of Deposits [Line Items]
Payable on demand	24,310
Non- interest bearing [member] | Financial institution [member]
Disclosure Of Deposits [Line Items]
Payable on demand	$ 2,804

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Deposits - Summary of Deposits (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure Of Deposits [Line Items]
Deposits	$ 159,797
Deposits	676,534	[1]	$ 625,367
Non interest bearing deposits [member]
Disclosure Of Deposits [Line Items]
Deposits	141		141
U.S. dollar [member]
Disclosure Of Deposits [Line Items]
Deposits	219,195		216,018
Chile, Pesos
Disclosure Of Deposits [Line Items]
Deposits	22,731		11,066
Mexico, Pesos [member]
Disclosure Of Deposits [Line Items]
Deposits	18,341		17,156
Other Foreign Currencies [member]
Disclosure Of Deposits [Line Items]
Deposits	$ 79,582		$ 70,217

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Deposits - Summary of Maturity Schedule for Term Deposits (Detail) - Canada [member] - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure Of Deposits [Line Items]
Term deposit	$ 223,019	$ 202,083
Within three months [member]
Disclosure Of Deposits [Line Items]
Term deposit	36,670	33,678
Three to six months [member]
Disclosure Of Deposits [Line Items]
Term deposit	23,913	26,579
Six to twelve months [member]
Disclosure Of Deposits [Line Items]
Term deposit	42,830	31,190
One to 5 years [member]
Disclosure Of Deposits [Line Items]
Term deposit	99,734	94,563
Over 5 years [member]
Disclosure Of Deposits [Line Items]
Term deposit	$ 19,872	$ 16,073

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Subordinated Debentures-Schedule of Net of Holdings in Debentures (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about borrowings [line items]
Interest rate	4.65%
Carrying value	$ 5,698	$ 5,935
October 2024 [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	October 2024
Interest rate	3.036%
Description of Term	Redeemable on or after October 18, 2017. After October 18, 2019, interest will be payable at an annual rate equal to the 90-daybankers' acceptance rate plus 1.14%.
Carrying value	$ 1,740	1,756
June 2025 [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	June 2025
Interest rate	8.90%
Description of Term	Redeemable at any time.
Carrying value	$ 259	260
December 2025 [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	December 2025
Interest rate	3.367%
Description of Term	Redeemable on or after December 8, 2020. After December 8, 2020, interest will be payable at an annual rate equal to the 90 day bankers' acceptance rate plus 2.19%.
Carrying value	$ 729	737
December 2025 [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	December 2025
Interest rate	4.50%
Description of Term	US$1,250 million. Interest will be payable semi-annually in arrears on June 16 and December 16 of each year.
Carrying value	$ 1,645	1,613
March 2027 [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	March 2027
Interest rate	2.58%
Description of Term	Redeemable on or after March 30, 2022. After March 30, 2022, interest will be payable at an annual rate equal to the 90-daybankers' acceptance rate plus 1.19%.
Carrying value	$ 1,195	1,219
November 2037 [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	November 2037
Interest rate	3.015%
Description of Term	JPY 10 billion. Redeemed on November 20, 2017.
Carrying value		113
April 2038 [member] | Fixed interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	April 2038
Interest rate	3.37%
Description of Term	JPY 10 billion. Redeemed on April 9, 2018.
Carrying value		110
August 2085 [member] | Floating interest rate [member]
Disclosure of detailed information about borrowings [line items]
Maturity date	August 2085
Description of Term	US$99 million bearing interest at a floating rate of the offered rate for six-month Eurodollar deposits plus 0.125%. Redeemable on any interest payment date.
Carrying value	$ 130	$ 127

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Subordinated Debentures-Schedule of Net of Holdings in Debentures (Parenthetical) (Detail) $ in Millions, ¥ in Billions	12 Months Ended
	Oct. 31, 2018 USD ($)	Oct. 31, 2017 USD ($)	Oct. 31, 2018 JPY (¥)	Apr. 09, 2018 JPY (¥)	Nov. 29, 2017 JPY (¥)	Oct. 31, 2017 JPY (¥)
Disclosure of detailed information about borrowings [line items]
Borrowings, adjustment to interest rate basis	2.648%		2.648%
Borrowings interest rate	4.65%		4.65%
October 2024 [member]
Disclosure of detailed information about borrowings [line items]
Redemption Date	Oct. 18, 2017	Oct. 18, 2017
Borrowings interest rate basis	After October 18, 2019, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.14%.
Borrowings, adjustment to interest rate basis	1.14%	1.14%	1.14%			1.14%
June 2025 [member]
Disclosure of detailed information about borrowings [line items]
Borrowings interest rate basis	Redeemable at any time.
December 2025 [member]
Disclosure of detailed information about borrowings [line items]
Redemption Date	Dec. 08, 2020	Dec. 08, 2020
Borrowings interest rate basis	After December 8, 2020, interest will be payable at an annual rate equal to the 90 day bankers’ acceptance rate plus 2.19%.
Borrowings, adjustment to interest rate basis	2.19%	2.19%	2.19%			2.19%
December 2025 [member]
Disclosure of detailed information about borrowings [line items]
Borrowings interest rate basis	US$1,250 million. Interest will be payable semi-annually in arrears on June 16 and December 16 of each year
Carrying value | $	$ 1,250	$ 1,250
March 2027 [member]
Disclosure of detailed information about borrowings [line items]
Redemption Date	Mar. 30, 2022	Mar. 30, 2022
Borrowings interest rate basis	After March 30, 2022, interest will be payable at an annual rate equal to the 90-day bankers’ acceptance rate plus 1.19%.
Borrowings, adjustment to interest rate basis	1.19%	1.19%	1.19%			1.19%
November 2037 [member]
Disclosure of detailed information about borrowings [line items]
Redemption Date	Nov. 20, 2017	Nov. 20, 2017
Borrowings interest rate basis	JPY 10 billion. Redeemed on November 20, 2017.
Carrying value			¥ 10			¥ 10
April 2038 [member]
Disclosure of detailed information about borrowings [line items]
Redemption Date	Apr. 09, 2018	Apr. 09, 2018
Borrowings interest rate basis	JPY 10 billion. Redeemed on April 9, 2018.
Carrying value			¥ 10			¥ 10
April 2038 [member] | Redemption of notes [Member]
Disclosure of detailed information about borrowings [line items]
Borrowings interest rate				3.37%
Subordinated debentures at par value				¥ 10
August 2085 [member]
Disclosure of detailed information about borrowings [line items]
Borrowings interest rate basis	US$99 million bearing interest at a floating rate of the offered rate for six-month Eurodollar deposits plus 0.125%. Redeemable on any interest payment date.
Borrowings, adjustment to interest rate basis	0.125%	0.125%	0.125%			0.125%
Carrying value | $	$ 99	$ 99
November 2038 [Member] | Redemption of notes [Member]
Disclosure of detailed information about borrowings [line items]
Borrowings interest rate					3.015%
Subordinated debentures at par value					¥ 10

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Other LIabilities - Summary of Other Liabilities (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of financial liabilities [line items]
Accrued interest	$ 2,634	$ 2,172
Accounts payable and accrued expenses	6,198	5,867
Current tax liabilities	435	408
Deferred tax liabilities	1,205	697
Gold and silver certificates and bullion	5,019	6,819
Margin and collateral accounts	6,523	7,129
Segregated fund liabilities	2,736
Payables to brokers, dealers and clients	564	796
Provisions	181	213
Pension liabilities	593	808
Other liabilities of subsidiaries and structured entities	19,933	12,954
Other	6,649	5,331
Total	52,744	43,314
IFRS9 [member]
Disclosure of financial liabilities [line items]
Allowance for credit losses on off-balance sheet exposures	$ 74
IAS 39 [member]
Disclosure of financial liabilities [line items]
Allowance for credit losses on off-balance sheet exposures		$ 120

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Provisions - Summary of Provisions (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of other provisions [line items]
Beginning balance	$ 213	$ 398
Provisions made during the year	79	27
Provisions utilized / released during the year	(111)	(212)
Ending balance	181	213
Restructuring provision [member]
Disclosure of other provisions [line items]
Beginning balance	103	277
Provisions utilized / released during the year	(79)	(174)
Ending balance	24	103
Litigation and other [member]
Disclosure of other provisions [line items]
Beginning balance	110	121
Provisions made during the year	79	27
Provisions utilized / released during the year	(32)	(38)
Ending balance	$ 157	$ 110

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Provisions - Additional Information (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2016
Disclosure Of Provisions [Abstract]
Restructuring provision	$ 24	$ 378
Restructuring provision after tax		$ 278

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Common and Preferred Shares - Schedule of Common Shares (Detail) - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016
Disclosure of classes of share capital [line items]
Beginning Balance		$ 61,625		$ 57,821	$ 53,479
Issued in relation to share-based payments, net	[1]	6		8	7
Ending Balance		$ 67,680	[2]	$ 61,625	$ 57,821
Common shares [member]
Disclosure of classes of share capital [line items]
Outstanding at beginning of year		1,199,231,715		1,207,893,604
Issued in relation to share-based payments, net		2,238,468		5,338,111
Issued in relation to the acquisition of a subsidiary or associated corporation		33,788,141
Repurchased for cancellation under the Normal Course Issuer Bid		(8,230,700)		(14,000,000)
Outstanding at end of year		1,227,027,624		1,199,231,715	1,207,893,604
Beginning Balance		$ 15,644		$ 15,513
Issued in relation to share-based payments, net		135		313
Issued in relation to the acquisition of a subsidiary or associated corporation		2,573
Repurchased for cancellation under the Normal Course Issuer Bid		(118)		(182)
Ending Balance		$ 18,234		$ 15,644	$ 15,513

[1] Represents amounts on account of share-based payments (refer to Note 26).

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Common and Preferred Shares - Schedule of Common Shares (Parenthetical) (Detail) - shares	Oct. 31, 2018	Oct. 31, 2017
Common shares [member]
Disclosure of classes of share capital [line items]
Number of shares bought and sold to facilitate trading/institutional client activity	14,667,143	15,856,738

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Common and Preferred Shares - Additional Information (Detail) $ / shares in Units, $ in Millions, $ in Millions						12 Months Ended
	Nov. 27, 2018 $ / shares	Jun. 08, 2018 CAD ($) $ / shares shares	May 29, 2018 shares	May 01, 2018 CAD ($) $ / shares shares	May 30, 2017 shares	Oct. 31, 2018 CAD ($) $ / Note $ / shares shares	Oct. 31, 2018 USD ($) $ / Note shares	Oct. 31, 2017 CAD ($) $ / shares shares	Oct. 31, 2017 USD ($) shares	Oct. 31, 2016 $ / shares	Oct. 12, 2017 CAD ($)	Oct. 12, 2017 USD ($)
Disclosure of classes of share capital [line items]
Dividend paid | $						$ 3,985		$ 3,668
Dividend paid per share | $ / shares						$ 3.28		$ 3.05		$ 2.88
Quarterly dividend payable declared | $ / shares	$ 0.85
Dividend recorded date	Jan. 02, 2019
Dividend payable date	Jan. 29, 2019
Common shares issued		22,655,000
Shares issued price per share | $ / shares		$ 76.15
Increase to equity | $		$ 1,696
Public offering transaction costs | $		$ 29
Stock issuable on conversion of instruments						1,835,000,000	1,835,000,000	1,757,000,000	1,757,000,000
Floor price of common shares | $ / shares						$ 5.00
Other equity instruments											$ 1,560	$ 1,250
Price per note | $ / Note						1,000	1,000
Interest rate per annum						4.65%
Interest adjusted to three-month LIBOR						2.648%
Conversion rate for outstanding NVCC subordinated						125.00%	125.00%
Conversion price outstanding NVCC subordinated | $ / shares						$ 5.00
Interest paid | $							$ 58		$ 0
NCIB[member]
Disclosure of classes of share capital [line items]
Maximum number of shares approved for repurchase			24,000,000		24,000,000
Shares repurchased and cancelled, shares			5,980,000		6,250,000
Shares repurchased and cancelled, per share			75.85		76.41
Common shares [member]
Disclosure of classes of share capital [line items]
Shares repurchased and cancelled, shares						8,230,700	8,230,700	14,000,000	14,000,000
Shares repurchased and cancelled, per share						76.77	76.77	72.09	72.09
Shares repurchased and cancelled, value | $						$ 632		$ 1,009
Common shares purchased under private agreement						2,000,000	2,000,000
Jarislowsky Fraser [member]
Disclosure of classes of share capital [line items]
Common shares issued				11,133,141
Shares issued price per share | $ / shares				$ 78.86
Increase to equity | $				$ 878

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Common and Preferred Shares - Schedule of Preferred Shares (Detail) (Detail) - CAD ($) $ / shares in Units, $ in Millions				12 Months Ended
	Nov. 27, 2018	Oct. 26, 2018	Apr. 26, 2018	Oct. 31, 2018		Oct. 31, 2017
Disclosure of classes of share capital [line items]
Initial dividend payment date	Jan. 29, 2019
Series 18 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares						7,497,663
Amount						$ 187
Dividends declared per share				$ 0.418750		$ 0.837500
Conversion feature				-		Series 19
Initial dividend			$ 0.209375
Series 19 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares						6,302,337
Amount						$ 158
Dividends declared per share				$ 0.374547		$ 0.642626
Conversion feature				-		Series 18
Initial dividend			$ 0.181788
Series 20 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares						8,039,268
Amount						$ 201
Dividends declared per share				$ 0.902500		$ 0.902500
Conversion feature				-		Series 21
Initial dividend		$ 0.225625
Series 21 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares						5,960,732
Amount						$ 149
Dividends declared per share				$ 0.691967		$ 0.554501
Conversion feature				-		Series 20
Initial dividend		$ 0.187403
Series 22 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				9,376,944		9,376,944
Amount				$ 234		$ 234
Dividends declared per share				$ 0.957500		$ 0.957500
Conversion feature				Series 23		Series 23
Series 23 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				2,623,056		2,623,056
Amount				$ 66		$ 66
Dividends declared per share				$ 0.736967		$ 0.600126
Conversion feature				Series 22		Series 22
Series 30 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				6,142,738		6,142,738
Amount				$ 154		$ 154
Dividends declared per share				$ 0.455000		$ 0.455000
Conversion feature				Series 31		Series 31
Series 31 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				4,457,262		4,457,262
Amount				$ 111		$ 111
Dividends declared per share				$ 0.516968		$ 0.380126
Conversion feature				Series 30		Series 30
Series 32 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				11,161,422		11,161,422
Amount				$ 279		$ 279
Dividends declared per share				$ 0.515752		$ 0.515752
Conversion feature				Series 33		Series 33
Series 33 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				5,184,345		5,184,345
Amount				$ 130		$ 130
Dividends declared per share				$ 0.601968		$ 0.465159
Conversion feature				Series 32		Series 32
Series 34 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				14,000,000		14,000,000
Amount				$ 350		$ 350
Dividends declared per share				$ 1.375000		$ 1.375000
Conversion feature				Series 35		Series 35
Series 36 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				20,000,000		20,000,000
Amount				$ 500		$ 500
Dividends declared per share				$ 1.375000		$ 1.375000
Conversion feature				Series 37		Series 37
Series 38 preferred shares [member]
Disclosure of classes of share capital [line items]
Number of shares				20,000,000		20,000,000
Amount				$ 500		$ 500
Dividends declared per share				$ 1.212500		$ 1.351175
Conversion feature				Series 39		Series 39
Series 40 preferred stock [member]
Disclosure of classes of share capital [line items]
Number of shares				12,000,000
Amount				$ 300
Conversion feature				Series 41		-
Preference shares [member]
Disclosure of classes of share capital [line items]
Number of shares				104,945,767		120,745,767
Amount				$ 4,184	[1]	$ 4,579
Series 18 non-cumulative preferred shares issued on March 25,2008 [member]
Disclosure of classes of share capital [line items]
First issue date				Mar. 25, 2008
Issue price				$ 25.00
Initial dividend				$ 0.431500
Initial dividend payment date				Jul. 29, 2008
Rate reset spread				0.00%
Redemption date				Apr. 26, 2018
Redemption price				$ 25.00
Series 19 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Apr. 26, 2013
Issue price				$ 25.00
Initial dividend				$ 0.189250
Initial dividend payment date				Jul. 29, 2013
Rate reset spread				0.00%
Redemption date				Apr. 26, 2018
Redemption price				$ 25.00
Series 20 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Jun. 10, 2008
Issue price				$ 25.00
Initial dividend				$ 0.167800
Initial dividend payment date				Jul. 29, 2008
Rate reset spread				0.00%
Redemption date				Oct. 26, 2018
Redemption price				$ 25.00
Series 21 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Oct. 26, 2013
Issue price				$ 25.00
Initial dividend				$ 0.167875
Initial dividend payment date				Jan. 29, 2014
Rate reset spread				0.00%
Redemption date				Oct. 26, 2018
Redemption price				$ 25.00
Series 22 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Sep. 09, 2008
Issue price				$ 25.00
Initial dividend				$ 0.482900
Initial dividend payment date				Jan. 28, 2009
Rate reset spread				1.88%
Redemption date				Jan. 26, 2019
Redemption price				$ 25.00
Series 23 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Jan. 26, 2014
Issue price				$ 25.00
Initial dividend				$ 0.173875
Initial dividend payment date				Apr. 28, 2014
Rate reset spread				1.88%
Redemption date				Jan. 26, 2014
Redemption price				$ 25.50
Series 23 non-cumulative preferred shares1 [member]
Disclosure of classes of share capital [line items]
Redemption date				Jan. 26, 2019
Series 30 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Apr. 12, 2010
Issue price				$ 25.00
Initial dividend				$ 0.282200
Initial dividend payment date				Jul. 28, 2010
Rate reset spread				1.00%
Redemption date				Apr. 26, 2020
Redemption price				$ 25.00
Series 31 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Apr. 26, 2015
Issue price				$ 25.00
Initial dividend				$ 0.095500
Initial dividend payment date				Jul. 29, 2015
Rate reset spread				1.00%
Redemption date				Apr. 26, 2015
Redemption price				$ 25.50
Series 31 non cumulative preferred shares1 [member]
Disclosure of classes of share capital [line items]
Redemption date				Apr. 26, 2020
Series 32 Non-cumulative preferred shares issued on February one two thousand eleven [member]
Disclosure of classes of share capital [line items]
First issue date				Feb. 28, 2011
Issue price				$ 25.00
Initial dividend				$ 0.215410
Initial dividend payment date				Apr. 27, 2011
Rate reset spread				1.34%
Redemption date				Feb. 02, 2021
Redemption price				$ 25.00
Series thirty three non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Feb. 02, 2016
Issue price				$ 25.00
Initial dividend				$ 0.105690
Initial dividend payment date				Apr. 27, 2016
Rate reset spread				1.34%
Redemption date				Feb. 02, 2016
Redemption price				$ 25.50
Series thirty three non cumulative preferred shares member1 [member]
Disclosure of classes of share capital [line items]
Redemption date				Feb. 02, 2021
Series 34 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Dec. 17, 2015
Issue price				$ 25.00
Initial dividend				$ 0.497300
Initial dividend payment date				Apr. 27, 2016
Rate reset spread				4.51%
Redemption date				Apr. 26, 2021
Redemption price				$ 25.00
Series 36 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Mar. 14, 2016
Issue price				$ 25.00
Initial dividend				$ 0.508600
Initial dividend payment date				Jul. 27, 2016
Rate reset spread				4.72%
Redemption date				Jul. 26, 2021
Redemption price				$ 25.00
Series 38 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Sep. 16, 2016
Issue price				$ 25.00
Initial dividend				$ 0.441800
Initial dividend payment date				Jan. 27, 2017
Rate reset spread				4.19%
Redemption date				Jan. 27, 2022
Redemption price				$ 25.00
Series 40 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
First issue date				Oct. 12, 2018
Issue price				$ 25.00
Initial dividend				$ 0.362100
Initial dividend payment date				Jan. 29, 2019
Rate reset spread				2.43%
Redemption date				Jan. 27, 2024
Redemption price				$ 25.00

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Common and Preferred Shares - Schedule of Preferred Shares (Detail) (Parenthetical) (Detail) - CAD ($) $ / shares in Units, $ in Millions					12 Months Ended
	Oct. 26, 2018	Oct. 12, 2018	Jun. 08, 2018	Apr. 26, 2018	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of classes of share capital [line items]
Shares issued price per share			$ 76.15
Preferred shares issuable upon election notice received					1,000,000
Number of shares issued			22,655,000
Issue of share					$ 2,989	$ 1,829	$ 1,713
Series 18 preferred shares [member]
Disclosure of classes of share capital [line items]
Initial dividend				$ 0.209375
Series 19 preferred shares [member]
Disclosure of classes of share capital [line items]
Initial dividend				$ 0.181788
Series 20 preferred shares [member]
Disclosure of classes of share capital [line items]
Initial dividend	$ 0.225625
Series 21 preferred shares [member]
Disclosure of classes of share capital [line items]
Initial dividend	$ 0.187403
Series 40 non-cumulative preferred shares [member]
Disclosure of classes of share capital [line items]
Initial dividend					$ 0.362100
Number of shares issued		12,000,000
Issue of share		$ 300
Noncumulative Preferred Stock [member]
Disclosure of classes of share capital [line items]
Dividends payable nature					quarterly
Dividends rate reset period					5-Year
Shares issued price per share					$ 25
Non viability contingent capital preferred stock [member]
Disclosure of classes of share capital [line items]
Dividends rate reset period					5-Year
Outstanding noncumulative preferred stock [member]
Disclosure of classes of share capital [line items]
Dividends payable nature					quarterly
Dividends rate reset period					5-Year
Shares issued price per share					$ 25
Outstanding non viability contingent capital preferred stock [member]
Disclosure of classes of share capital [line items]
Dividends rate reset period					5-Year

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Capital Management - Additional Information (Detail)	12 Months Ended
	Oct. 31, 2018
Disclosure of regulatory capital [Abstract]
Minimum capital adequate ratio for Common Equity Tier 1 Capital	7.00%
Minimum capital adequate ratio for Tier 1 Capital	8.50%
Minimum capital adequate ratio for regulatory capital	10.50%
Increase in minimum capital ratio requirements across all tiers of capital	1.00%
Minimum material operating buffer percentage	3.00%

XML

Capital Management - Summary of Regulatory Capital and Capital Ratios (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
All in [member]
Capital
Common Equity Tier 1 Capital	$ 44,443	$ 43,352
Net Tier 1 Capital	50,187	49,473
Total regulatory capital	57,364	56,113
Risk-weighted assets/exposures used in calculation of capital ratios
CET1 risk-weighted assets	400,507	376,379
Tier 1 risk-weighted assets	400,680	376,379
Total risk-weighted assets	400,853	376,379
Leverage exposures	$ 1,119,099	$ 1,052,891
Capital ratios
Common Equity Tier 1 Capital ratio	11.10%	11.50%
Tier 1 capital ratio	12.50%	13.10%
Total capital ratio	14.30%	14.90%
Leverage ratio	4.50%	4.70%
Transitional [member]
Capital
Common Equity Tier 1 Capital		$ 46,051
Net Tier 1 Capital		50,623
Total regulatory capital		57,222
Risk-weighted assets/exposures used in calculation of capital ratios
CET1 risk-weighted assets		387,292
Tier 1 risk-weighted assets		387,292
Total risk-weighted assets		387,292
Leverage exposures		$ 1,053,928
Capital ratios
Common Equity Tier 1 Capital ratio		11.90%
Tier 1 capital ratio		13.10%
Total capital ratio		14.80%
Leverage ratio		4.80%

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Capital Management - Summary of Regulatory Capital and Capital Ratios (Parenthetical) (Detail) - CAD ($) $ in Billions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of regulatory capital and capital ratios [Line Items]
Common Equity Tier 1 Capital Basel I floor adjustment	$ 0.0	$ 12.8
Tier 1 Capital Basel I floor adjustment	0.0	12.6
Regulatory capital Basel I floor adjustment	$ 0.0	$ 12.4
Credit valuation adjustment [member]
Disclosure of regulatory capital and capital ratios [Line Items]
Common Equity Tier 1 Capital percentage	0.80%	0.72%
Tier 1 percentage	0.83%	0.77%
Risk-weighted assets total capital percentage	0.86%	0.81%

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Share-based Payment - Additional Information (Detail)	12 Months Ended
	Oct. 31, 2018 CAD ($) d shares	Oct. 31, 2017 CAD ($)	Jun. 08, 2018 shares	Oct. 31, 2016
Disclosure of terms and conditions of share-based payment arrangement [line items]
Stock options, exercisable period	10 years
Number of business days extended | d	10
Common shares issued as a result of the exercise of options | shares			22,655,000
Common shares [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Common shares held under employee ownership plan	16,000,000	18,000,000
Share based compensations award tranche one [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting percentage	50.00%
Share based compensations award tranche two [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting percentage	50.00%
Employee stock options [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Common shares reserved for future issuance | shares	129,000,000
Common shares issued as a result of the exercise of options | shares	106,800,000
Outstanding options	14,000,000
Available for issuance as options | shares	8,200,000
Common shares held under employee ownership plan	14,140,000	15,555,000		19,852,000
Other reserves for vested stock options recorded in equity	$ 164,000,000	$ 177,000,000
Future unrecognized compensation cost for non-vested stock options	$ 4,000,000	$ 4,000,000
Weighted-average period recognition	2 years 25 days	1 year 10 months 24 days
SARs shares granted	988,000	1,141,000
Employee stock options [member] | Salaries and employee benefits [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Compensation expense	$ 7,000,000	$ 7,000,000
Tandem stock appreciation rights [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Common shares held under employee ownership plan	3,900	5,900
Description of stock options granted	Employee stock options granted between December 2, 2005 to November 1, 2009 have Tandem SARs, which provide the employee the choice to either exercise the stock option for shares, or to exercise the Tandem SARs and thereby receive the intrinsic value of the stock option in cash.
Share-based payment liability recognized for vested awards	$ 100,000	$ 0
Intrinsic value of liability recognized for vested SARs	200,000	0
Net gains arising from derivatives	$ 0	$ 300,000
Number of units awarded and outstanding	3,900	5,900
Tandem stock appreciation rights [member] | Salaries and employee benefits [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Compensation expense	$ 600,000	$ 400,000
Stock Appreciation Rights [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Common shares held under employee ownership plan	1,073,146	1,275,608
Share-based payment liability recognized for vested awards	$ 14,000,000	$ 31,000,000
Intrinsic value of liability recognized for vested SARs	27,000,000	28,000,000
Compensation expense	3,000,000	2,000,000
Net gains arising from derivatives	$ 8,000,000	$ 20,000,000
SARs shares granted	53,056	60,840
SARs shares vested	1,032,495	1,229,330
Other share-based payment plans [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Share-based payment liability recognized for vested awards	$ 745,000,000	$ 946,000,000
Compensation expense	188,000,000	203,000,000
Net gains (loss) arising from derivatives	$ 85,000,000	$ 160,000,000
Deferred stock unit plan [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of units awarded and outstanding	939,290	755,472
Number of units vested	795,783	684,017
Directors' deferred stock unit plan [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of units awarded and outstanding	314,424	299,867
Restricted share unit plan [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of units awarded and outstanding	2,639,165	2,197,100
Number of units vested	1,665,885	1,497,340
Performance Share Unit Plan [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of share based units outstanding	7,813,011	8,250,143
Number of share based units vested	6,403,107	6,718,738
Deferred performance plan [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of units awarded and outstanding	1,251,576	1,587,037
Employee Stock Ownership Plan [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Compensation expense	$ 55,000,000	$ 54,000,000
Percentage of employer matching contribution	50.00%	50.00%
Bottom of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Outstanding options expiration date	Dec. 05, 2018
Top of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Outstanding options expiration date	Dec. 07, 2027

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Share-based Payment - Schedule of Weighted-average Assumptions Used for Determination of Fair Values of Tandem SARs and SARs (Detail) - Stock appreciation rights and tandem stock appreciation rights [member]	12 Months Ended
	Oct. 31, 2018 CAD ($) yr	Oct. 31, 2017 CAD ($) yr
Disclosure of terms and conditions of share-based payment arrangement [line items]
Expected dividend yield	4.58%	3.61%
Weighted-average fair value | $	$ 13.39	$ 25.72
Bottom of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Risk-free interest rate%	2.26%	1.38%
Expected price volatility	13.75%	15.30%
Expected life of option	0.00	0.00
Top of range [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Risk-free interest rate%	2.34%	1.59%
Expected price volatility	28.12%	23.38%
Expected life of option	4.58	4.53

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Share-based Payment - Schedule of Weighted-average Assumptions Used for Determination of Fair Values of Stock Options (Detail)	12 Months Ended
	Oct. 31, 2018 CAD ($) yr	Oct. 31, 2017 CAD ($) yr
Two thousand and eighteen stock options [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Risk-free interest rate %	1.73%
Expected dividend yield	3.62%
Expected price volatility	15.86%
Expected life of option | yr	6.64
Weighted-average fair value | $	$ 7.68
Two thousand and seventeen stock options [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Risk-free interest rate %		1.27%
Expected dividend yield		3.81%
Expected price volatility		17.24%
Expected life of option | yr		6.67
Weighted-average fair value | $		$ 6.51

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Share-based Payment - Schedule of Bank's Employee Stock Option Plan (Detail) - Employee stock options [member] shares in Thousands, pure in Thousands	12 Months Ended
	Oct. 31, 2018 CAD ($) shares	Oct. 31, 2017 CAD ($) shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of options, outstanding at beginning of year	15,555	19,852
Number of options, granted	988	1,141
Number of options, exercised	(2,238)	(5,338)
Number of options, exercised as Tandem SARs	(19)	(33)
Forfeited	(146)	(67)
Number of options, expired	0	0
Number of options, outstanding at end of year	14,140	15,555
Exercisable at end of year	10,176	10,980
Number of options, available for grant | shares	8,334	9,156
Weighted average exercise price, outstanding at beginning of year	$ 57.42	$ 54.55
Weighted average exercise price, granted	81.81	74.14
Weighted average exercise price, exercised as options	51.37	50.25
Weighted average exercise price, exercised as Tandem SARs	41.95	52.59
Weighted average exercise price, forfeited	65.93	65.97
Weighted average exercise price, expired	0	0
Weighted average exercise price, outstanding at end of year	60.02	57.42
Weighted average exercise price, exercisable at end of year	$ 55.76	$ 53.44

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Share-based Payment - Summary of Bank's Employee Stock Option Plan Outstanding and Exercisable by Range of Exercise Price (Detail) - Employee stock options [member] pure in Thousands	Oct. 31, 2018 CAD ($) yr	Oct. 31, 2017 CAD ($)	Oct. 31, 2016 CAD ($)
Disclosure of range of exercise prices of outstanding share options [line items]
Number of stock, options outstanding	14,140	15,555	19,852
Weighted average remaining contractual life, options outstanding | yr	4.59
Weighted average exercise price, options outstanding	$ 60.02	$ 57.42	$ 54.55
Number of stock, option exercisable	10,176	10,980
Weighted average exercise price, option exercisable	$ 55.76	$ 53.44
Ranges of exercise prices for outstanding share options one [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Number of stock, options outstanding	1,571
Weighted average remaining contractual life, options outstanding | yr	0.84
Weighted average exercise price, options outstanding	$ 44.02
Number of stock, option exercisable	1,571
Weighted average exercise price, option exercisable	$ 44.02
Ranges of exercise prices for outstanding share options Two [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Number of stock, options outstanding	1,838
Weighted average remaining contractual life, options outstanding | yr	3.00
Weighted average exercise price, options outstanding	$ 50.30
Number of stock, option exercisable	1,838
Weighted average exercise price, option exercisable	$ 50.30
Ranges of exercise prices for outstanding share options three [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Number of stock, options outstanding	4,794
Weighted average remaining contractual life, options outstanding | yr	4.18
Weighted average exercise price, options outstanding	$ 56.88
Number of stock, option exercisable	3,606
Weighted average exercise price, option exercisable	$ 55.63
Ranges of exercise prices for outstanding share options four [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Number of stock, options outstanding	5,937
Weighted average remaining contractual life, options outstanding | yr	6.40
Weighted average exercise price, options outstanding	$ 69.80
Number of stock, option exercisable	3,161
Weighted average exercise price, option exercisable	$ 64.91

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Share-based Payment - Summary of Bank's Employee Stock Option Plan Outstanding and Exercisable by Range of Exercise Price (Parenthetical) (Detail)	Oct. 31, 2018 CAD ($)	Oct. 31, 2017
Tandem stock appreciation rights [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding other equity instrument	3,900	5,900
Options under hollis wealth plans [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding other equity instrument	130,000	156,520
Ranges of exercise prices for outstanding share options one [member] | Bottom of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	$ 33.89
Ranges of exercise prices for outstanding share options one [member] | Top of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	47.75
Ranges of exercise prices for outstanding share options Two [member] | Bottom of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	49.93
Ranges of exercise prices for outstanding share options Two [member] | Top of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	55.21
Ranges of exercise prices for outstanding share options three [member] | Bottom of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	55.63
Ranges of exercise prices for outstanding share options three [member] | Top of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	60.67
Ranges of exercise prices for outstanding share options four [member] | Bottom of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	63.98
Ranges of exercise prices for outstanding share options four [member] | Top of range [member] | Employee stock options [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Options outstanding, exercise price	$ 81.81

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Corporate Income Taxes- Components of Income Tax Provision (Details) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Current income taxes:
Current tax expense income and adjustments for current tax of prior periods	$ 2,385	$ 1,855	$ 1,773
Deferred income taxes:
Deferred tax expense income	(3)	178	257
Total income taxes and effective tax rate	2,382	2,033	2,030
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Current income taxes	(136)	82	(158)
Deferred income taxes	(193)	198	(168)
Total provision for income taxes in the Consolidated Statement of Changes in Equity	(329)	280	(326)
Total provision for income taxes	2,053	2,313	1,704
Deferred tax expense (benefit) relating to origination/reversal of temporary differences	64	191	372
Deferred tax expense (benefit) of tax rate changes	(2)	(2)	(4)
Deferred tax expense (benefit) of previously unrecognized tax losses, tax credits and temporary differences	(65)	(11)	(111)
Deferred tax expense income recognised in profit or loss	(3)	178	257
Accumulated other comprehensive income (loss) [member]
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Total provision for income taxes in the Consolidated Statement of Changes in Equity	18
Retained earnings [member]
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Total provision for income taxes in the Consolidated Statement of Changes in Equity	(194)	(1)	(10)
Common shares [member]
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Total provision for income taxes in the Consolidated Statement of Changes in Equity	(10)	1	1
Other reserves [member]
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Total provision for income taxes in the Consolidated Statement of Changes in Equity	2	5	5
Recognized in other comprehensive income [Member]
Provision for income taxes in the Consolidated Statement of Changes in Equity:
Total provision for income taxes in the Consolidated Statement of Changes in Equity	(145)	275	(322)
Canada [member]
Current income taxes:
Federal	797	533	467
Provincial	633	424	386
Adjustments related to prior periods	(25)	24	4
Deferred income taxes:
Federal	34	33	141
Provincial	16	16	70
International [member]
Current income taxes:
Foreign	994	903	935
Adjustments related to prior periods	(14)	(29)	(19)
Deferred income taxes:
Foreign	$ (53)	$ 129	$ 46

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Corporate of Income Taxes- Reconciliation of Statutory Rate (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Reconciliation of average effective tax rate and applicable tax rate [abstract]
Income taxes at Canadian statutory rate	$ 2,943	$ 2,715	$ 2,485
Lower average tax rate applicable to subsidiaries and foreign branches	(439)	(286)	(234)
Tax-exempt income from securities	(90)	(407)	(220)
Deferred income tax effect of substantively enacted tax rate changes	(2)	(2)	(4)
Other, net	(30)	13	3
Total income taxes and effective tax rate	$ 2,382	$ 2,033	$ 2,030
Income taxes at Canadian statutory rate	26.50%	26.40%	26.40%
Lower average tax rate applicable to subsidiaries and foreign branches	(3.90%)	(2.80%)	(2.50%)
Tax-exempt income from securities	(0.80%)	(3.90%)	(2.30%)
Deferred income tax effect of substantively enacted tax rate changes	0.00%	0.00%	0.00%
Other, net	(0.30%)	0.10%
Total income taxes and effective tax rate	21.50%	19.80%	21.60%

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Corporate of Income Taxes- Significant Components of Deferred Tax Assets and Liabilities (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	$ (3)	$ 178	$ 257
Deferred tax assets	3,654	3,496
Deferred tax liabilities	2,921	2,480
Net deferred tax assets (liabilities)	733	1,016	$ 1,410
Deferred tax assets tax loss carry forwards [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	73	62
Deferred tax assets	338	417
Deferred tax assets allowance for credit losses [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(177)	45
Deferred tax assets	877	793
Deferred tax assets deferred compensation [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	41	(25)
Deferred tax assets	178	219
Deferred tax assets deferred income [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(68)	(124)
Deferred tax assets	476	405
Deferred Tax Asset Property And Equipment [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	48	(19)
Deferred tax assets	417	133
Deferred tax assets pension and other postretirement benefits [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	16	(6)
Deferred tax assets	536	720
Deferred tax assets securities [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(17)	(17)
Deferred tax assets	199	169
Deferred tax assets other [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(235)	(169)
Deferred tax assets	633	640
Deferred tax liabilities deferred income [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(22)	(21)
Deferred tax liabilities	156	133
Deferred tax liability property and equipment [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(93)	(32)
Deferred tax liabilities	137	138
Deferred tax liabilities pension and other post-retirement benefits [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(12)	(9)
Deferred tax liabilities	110	136
Deferred tax liabilities securities [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(8)	111
Deferred tax liabilities	166	126
Deferred tax liabilities intangible assets [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	69	(53)
Deferred tax liabilities	1,788	1,094
Deferred tax liabilities others [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(250)	(427)
Deferred tax liabilities	564	853
Deferred tax assets [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	(319)	(253)
Deferred tax liabilities [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax expense (benefit)for the year recorded in income	$ (316)	$ (431)

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Corporate of Income Taxes- Significant Components of Deferred Tax Assets and Liabilities (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016
Deferred tax assets and liabilities [abstract]
Net deferred tax assets	$ 733		$ 1,016	$ 1,410
Deferred tax assets	1,938	[1]	1,713
Deferred tax liabilities	$ 1,205		$ 697

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Corporate of Income Taxes-Changes to Net Deferred Taxes (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Reconciliation of changes in deferred tax liability (asset) [abstract]
Beginning balance	$ 1,016	$ 1,410
Deferred tax benefit (expense) for the year recorded in income	3	(178)	$ (257)
Deferred tax benefit (expense) for the year recorded in equity	193	(198)	168
Acquired in business combinations	(493)
Other	14	(18)
Ending balance	$ 733	$ 1,016	$ 1,410

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Corporate Income Taxes- Additional Information (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Jun. 30, 2018	Aug. 31, 2017	Nov. 30, 2016
Disclosure Of Income Taxes [Line Items]
Temporary differences, unused tax losses and unused tax credits for which no deferred tax asset is recognized	$ 14	$ 82
Unrecognized losses	7
Deferred tax asset tax benefit recognized in certain Canadian and foreign subsidiaries that have incurred loss	92	92
Amount of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures for which deferred tax liabilities have not been recognized	33,000	$ 27,000
2011 taxation year [member]
Disclosure Of Income Taxes [Line Items]
Reassessed tax by Canada Revenue Agency					$ 179
2012 taxation year [member]
Disclosure Of Income Taxes [Line Items]
Reassessed tax by Canada Revenue Agency				$ 185
2013 taxation year [member]
Disclosure Of Income Taxes [Line Items]
Reassessed tax by Canada Revenue Agency			$ 211
2020 [member]
Disclosure Of Income Taxes [Line Items]
Unrecognized losses	1
2023 [member]
Disclosure Of Income Taxes [Line Items]
Unrecognized losses	$ 6

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Employee Benefits - Schedule of Relative Size of Plan Obligation and Assets (Detail)	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
SPP [member] | Canada [member]
Disclosure of defined benefit plans [line items]
Percentage of total benefit obligations	70.00%	74.00%
Percentage of total plan assets	72.00%	76.00%
Percentage of total benefit expense	82.00%	80.00%
Other Pension Plans [Member] | Canada [member]
Disclosure of defined benefit plans [line items]
Percentage of total benefit obligations	14.00%	11.00%
Percentage of total plan assets	9.00%	6.00%
Percentage of total benefit expense	16.00%	16.00%
Pension plans [member] | International [member]
Disclosure of defined benefit plans [line items]
Percentage of total benefit obligations	16.00%	15.00%
Percentage of total plan assets	19.00%	18.00%
Percentage of total benefit expense	2.00%	4.00%
Other benefit plans [member] | Canada [member]
Disclosure of defined benefit plans [line items]
Percentage of total benefit obligations	58.00%	63.00%
Percentage of total plan assets	16.00%	18.00%
Percentage of total benefit expense	39.00%	51.00%
Other benefit plans [member] | International [member]
Disclosure of defined benefit plans [line items]
Percentage of total benefit obligations	42.00%	37.00%
Percentage of total plan assets	84.00%	82.00%
Percentage of total benefit expense	61.00%	49.00%

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Employee Benefits - Summary of Cash Contributions and Payments made by Bank to Principal Plans (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of net defined benefit liability (asset) [line items]
Contributions	$ 418	$ 557	$ 340
SPP [member]
Disclosure of net defined benefit liability (asset) [line items]
Contributions	238	286	187
All other plans [member]
Disclosure of net defined benefit liability (asset) [line items]
Contributions	78	185	77
Other benefit plans [member]
Disclosure of net defined benefit liability (asset) [line items]
Contributions	61	51	45
Defined contribution pension plans [member]
Disclosure of net defined benefit liability (asset) [line items]
Contributions	$ 41	$ 35	$ 31

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Employee Benefits - Summary of Cash Contributions and Payments made by Bank to Principal Plans (Parenthetical) (Detail) $ in Millions	12 Months Ended
	Oct. 31, 2018 CAD ($)
SPP [member]
Disclosure of net defined benefit liability (asset) [line items]
Estimate of contributions expected to be paid	$ 238
All other plans [member]
Disclosure of net defined benefit liability (asset) [line items]
Estimate of contributions expected to be paid	51
Other benefit plans [member]
Disclosure of net defined benefit liability (asset) [line items]
Estimate of contributions expected to be paid	65
Defined contribution pension plans [member]
Disclosure of net defined benefit liability (asset) [line items]
Estimate of contributions expected to be paid	$ 63

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Employee Benefits - Summary of Excess (deficit) of Fair Value of Assets Over Benefit Obligation for wholly Unfunded Plans and Wholly or Partly Funded Plans (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Pension plans [member]
Disclosure of defined benefit plans [line items]
Excess (deficit) of fair value of assets over benefit obligation	$ (231)	$ (513)	$ (1,369)
Effect of asset limitation and minimum funding requirement	(2)	(39)	(60)
Net asset (liability) at end of year	(233)	(552)	(1,429)
Pension plans [member] | Unfunded plans [member]
Disclosure of defined benefit plans [line items]
Benefit obligation	400	418	408
Pension plans [member] | Wholly Funded and Partly Funded Plans [member]
Disclosure of defined benefit plans [line items]
Benefit obligation	7,868	8,424	8,731
Fair value of assets	8,037	8,329	7,770
Excess (deficit) of fair value of assets over benefit obligation	169	(95)	(961)
Other benefit plans [member]
Disclosure of defined benefit plans [line items]
Excess (deficit) of fair value of assets over benefit obligation	(1,134)	(1,392)	(1,398)
Net asset (liability) at end of year	(1,134)	(1,392)	(1,398)
Other benefit plans [member] | Unfunded plans [member]
Disclosure of defined benefit plans [line items]
Benefit obligation	1,101	1,324	1,310
Other benefit plans [member] | Wholly Funded and Partly Funded Plans [member]
Disclosure of defined benefit plans [line items]
Benefit obligation	273	334	372
Fair value of assets	240	266	284
Excess (deficit) of fair value of assets over benefit obligation	$ (33)	$ (68)	$ (88)

XML

Employee Benefits - Summary of Financial Information related to Principal Plans (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of defined benefit plans [line items]
Employer contributions	$ (418)	$ (557)	$ (340)
Benefit expense (income) recorded in the Consolidated Statement of Income	7,455	7,375	7,025
Other comprehensive income net of tax actuarial gains (losses) on employee benefit plans	318	592	(716)
Pension plans [member]
Disclosure of defined benefit plans [line items]
Beginning of year	(552)	(1,429)
Excess (deficit) of fair value of assets over benefit obligation at end of year	231	513	1,369
Effect of asset limitation and minimum funding requirement	2	39	60
End of year	(233)	(552)	(1,429)
Pension plans [member] | Change in Benefit Obligation [member]
Disclosure of defined benefit plans [line items]
Beginning of year	8,842	9,139	8,113
Current service cost	334	330	284
Interest cost on benefit obligation	309	297	314
Employee contributions	22	24	24
Benefits paid	(1,012)	(724)	(593)
Actuarial (gains) and losses from changes in financial assumptions	495	46	(1,119)
Past service cost	5		(16)
Business acquisition	264
Settlements	(2)	(157)
Foreign exchange	1	(21)	(106)
End of year	8,268	8,842	9,139
Pension plans [member] | Changes in Fair Value [member]
Disclosure of defined benefit plans [line items]
Beginning of year	8,329	7,770	7,615
Interest cost on benefit obligation	305	273	310
Actual return on assets (net of administrative expenses)	166	(700)	(275)
Employer contributions	316	471	264
Employee contributions	22	24	24
Benefits paid	(1,012)	(724)	(593)
Administrative expenses	(14)	(13)	(12)
Business acquisition	251
Settlements	(2)	(157)
Foreign exchange	8	(15)	(113)
End of year	8,037	8,329	7,770
Pension plans [member] | Funded Status [Member]
Disclosure of defined benefit plans [line items]
Beginning of year	(552)	(1,429)
Excess (deficit) of fair value of assets over benefit obligation at end of year	(231)	(513)	(1,369)
Effect of asset limitation and minimum funding requirement	(2)	(39)	(60)
End of year	(233)	(552)	(1,429)
Pension plans [member] | Funded Status [Member] | Other assets [member]
Disclosure of defined benefit plans [line items]
Beginning of year	256	184
End of year	360	256	184
Pension plans [member] | Funded Status [Member] | Other liabilities [member]
Disclosure of defined benefit plans [line items]
Beginning of year	(808)	(1,613)
End of year	(593)	(808)	(1,613)
Pension plans [member] | Annual Benefit Expense [member]
Disclosure of defined benefit plans [line items]
Current service cost	334	330	284
Interest cost on benefit obligation	7	29	9
Administrative expenses	12	11	13
Past service cost	5		(16)
Amount of settlement (gain) loss recognized	0	0	0
Benefit expense (income) recorded in the Consolidated Statement of Income	358	370	290
Defined contribution benefit expense	41	35	31
Pension plans [member] | Remeasurements [member]
Disclosure of defined benefit plans [line items]
(Return) on plan assets in excess of interest income on fair value of assets	166	(700)	(275)
Actuarial loss (gain) on benefit obligation	(495)	(46)	1,119
Change in the asset limitation	(40)	(25)	18
Other comprehensive income net of tax actuarial gains (losses) on employee benefit plans	(369)	(771)	862
Total benefit cost	30	(366)	1,183
Pension plans [member] | Additional Details [member]
Disclosure of defined benefit plans [line items]
Actual return on assets (net of administrative expenses)	125	960	573
Actuarial (gains) and losses from changes in demographic assumptions	(148)	(6)	9
Actuarial (gains) and losses from changes in financial assumptions	(548)	(71)	1,116
Actuarial (gains) and losses from changes in experience	201	31	(6)
In Scotiabank securities (stock, bonds)	377	457	410
In property occupied by Scotiabank	4	4	5
Pension plans [member] | Effect of asset ceiling [member]
Disclosure of defined benefit plans [line items]
Beginning of year	39	60	41
Interest cost on benefit obligation	3	5	5
Remeasurement of other long-term benefits	40	25	(18)
Foreign exchange		(1)	(4)
End of year	2	39	60
Other benefit plans [member]
Disclosure of defined benefit plans [line items]
Beginning of year	(1,392)	(1,398)
Excess (deficit) of fair value of assets over benefit obligation at end of year	1,134	1,392	1,398
Employer contributions	(61)	(51)	(45)
End of year	(1,134)	(1,392)	(1,398)
Other benefit plans [member] | Change in Benefit Obligation [member]
Disclosure of defined benefit plans [line items]
Beginning of year	1,658	1,682	1,639
Current service cost	30	39	39
Interest cost on benefit obligation	70	72	77
Benefits paid	(90)	(76)	(71)
Actuarial (gains) and losses from changes in financial assumptions	96	36	(95)
Past service cost	(196)	4	(77)
Business acquisition	6	1	9
Foreign exchange	(8)	(28)	(29)
End of year	1,374	1,658	1,682
Other benefit plans [member] | Changes in Fair Value [member]
Disclosure of defined benefit plans [line items]
Beginning of year	266	284	307
Interest cost on benefit obligation	20	19	22
Actual return on assets (net of administrative expenses)	11	(1)	(5)
Employer contributions	61	51	45
Benefits paid	(90)	(76)	(71)
Business acquisition			2
Settlements		(1)
Foreign exchange	(6)	(12)	(26)
End of year	240	266	284
Other benefit plans [member] | Funded Status [Member]
Disclosure of defined benefit plans [line items]
Beginning of year	(1,392)	(1,398)
Excess (deficit) of fair value of assets over benefit obligation at end of year	(1,134)	(1,392)	(1,398)
End of year	(1,134)	(1,392)	(1,398)
Other benefit plans [member] | Funded Status [Member] | Other assets [member]
Disclosure of defined benefit plans [line items]
Beginning of year	1
End of year		1
Other benefit plans [member] | Funded Status [Member] | Other liabilities [member]
Disclosure of defined benefit plans [line items]
Beginning of year	(1,393)	(1,398)
End of year	(1,134)	(1,393)	(1,398)
Other benefit plans [member] | Annual Benefit Expense [member]
Disclosure of defined benefit plans [line items]
Current service cost	30	39	39
Interest cost on benefit obligation	50	53	55
Past service cost	(196)	4	(77)
Amount of settlement (gain) loss recognized	0	0	0
Remeasurement of other long-term benefits	(10)	(3)	(20)
Benefit expense (income) recorded in the Consolidated Statement of Income	(126)	93	(3)
Other benefit plans [member] | Remeasurements [member]
Disclosure of defined benefit plans [line items]
(Return) on plan assets in excess of interest income on fair value of assets	11	1	(3)
Actuarial loss (gain) on benefit obligation	(86)	(35)	113
Other comprehensive income net of tax actuarial gains (losses) on employee benefit plans	(75)	(34)	110
Total benefit cost	(201)	59	107
Other benefit plans [member] | Additional Details [member]
Disclosure of defined benefit plans [line items]
Actual return on assets (net of administrative expenses)	9	20	27
Actuarial (gains) and losses from changes in demographic assumptions	(23)		(5)
Actuarial (gains) and losses from changes in financial assumptions	(92)	(13)	133
Actuarial (gains) and losses from changes in experience	19	(23)	$ (33)
In Scotiabank securities (stock, bonds)	$ 3	$ 4

XML

Employee Benefits - Summary of Financial Information related to Principal Plans (Parenthetical) (Detail) $ in Millions	3 Months Ended
	Oct. 31, 2018 CAD ($)
Disclosure of defined benefit plans [abstract]
Defined benefit plan, modification	$ (203)

XML

Employee Benefits - Additional Information (Detail) - yr	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of defined benefit plans [abstract]
Weighted average duration of total benefit obligation	14.4	15.3	15.3

XML

Employee Benefits - Summary of Disaggregation of Defined Benefit Obligation (Detail)	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Pension plans [member] | Canada [member]
Disclosure of defined benefit plans [line items]
Active members	57.00%	58.00%	60.00%
Inactive and retired members	43.00%	42.00%	40.00%
Total	100.00%	100.00%	100.00%
Pension plans [member] | Mexico [member]
Disclosure of defined benefit plans [line items]
Active members	26.00%	27.00%	29.00%
Inactive and retired members	74.00%	73.00%	71.00%
Total	100.00%	100.00%	100.00%
Pension plans [member] | United States [member]
Disclosure of defined benefit plans [line items]
Active members	45.00%	48.00%	33.00%
Inactive and retired members	55.00%	52.00%	67.00%
Total	100.00%	100.00%	100.00%
Other benefit plans [member] | Canada [member]
Disclosure of defined benefit plans [line items]
Active members	9.00%	29.00%	33.00%
Inactive and retired members	91.00%	71.00%	67.00%
Total	100.00%	100.00%	100.00%
Other benefit plans [member] | Mexico [member]
Disclosure of defined benefit plans [line items]
Active members	54.00%	55.00%	57.00%
Inactive and retired members	46.00%	45.00%	43.00%
Total	100.00%	100.00%	100.00%
Other benefit plans [member] | United States [member]
Disclosure of defined benefit plans [line items]
Active members	34.00%	35.00%	38.00%
Inactive and retired members	66.00%	65.00%	62.00%
Total	100.00%	100.00%	100.00%

XML

Employee Benefits -Summary of Key Weighted-Average Assumptions used by Bank for Measurement of Benefit Obligation and Benefit Expense for All of Bank's Principal Plans (Detail)	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Pension plans [member] | Canada [member] | Retiring currently at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	23.3	23.2	23.2
Pension plans [member] | Canada [member] | Retiring currently at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.4	24.4	24.3
Pension plans [member] | Canada [member] | Currently aged 45 and retiring at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.3	24.2	24.2
Pension plans [member] | Canada [member] | Currently aged 45 and retiring at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	25.3	25.3	25.3
Pension plans [member] | Mexico [member] | Retiring currently at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	21.3	21.3	21.3
Pension plans [member] | Mexico [member] | Retiring currently at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	23.8	23.8	23.8
Pension plans [member] | Mexico [member] | Currently aged 45 and retiring at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	21.7	21.7	21.7
Pension plans [member] | Mexico [member] | Currently aged 45 and retiring at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.0	24.0	24.0
Pension plans [member] | United States [member] | Retiring currently at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	22.7	22.7	23.0
Pension plans [member] | United States [member] | Retiring currently at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.4	24.4	24.7
Pension plans [member] | United States [member] | Currently aged 45 and retiring at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.3	24.3	23.7
Pension plans [member] | United States [member] | Currently aged 45 and retiring at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	25.9	25.9	25.6
Pension plans [member] | Actuarial assumption of discount rates for all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	4.35%	3.90%	3.86%
Pension plans [member] | Actuarial assumption of discount rates for canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	4.10%	3.60%	3.60%
Pension plans [member] | Actuarial assumption of discount rates [member]
Disclosure of defined benefit plans [line items]
Discount rate	2.80%	2.76%	2.72%
Rate of increase in future compensation	2.76%	2.72%	2.75%
Pension plans [member] | Actuarial assumption of discount rates for defined benefit obligations of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.90%	3.86%	4.64%
Pension plans [member] | Actuarial assumption of discount rates for net interest cost of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.55%	3.33%	4.03%
Pension plans [member] | Actuarial assumption of discount rates for service cost of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	4.04%	4.01%	4.83%
Pension plans [member] | Actuarial assumption of discount rates for interest on service cost of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.77%	3.64%	4.31%
Pension plans [member] | Actuarial assumption of discount rates for defined benefit obligations of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.60%	3.60%	4.40%
Pension plans [member] | Actuarial assumption of discount rates for net interest cost of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.20%	3.00%	3.70%
Pension plans [member] | Actuarial assumption of discount rates for service cost of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.70%	3.70%	4.60%
Pension plans [member] | Actuarial assumption of discount rates for interest on service cost of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.40%	3.30%	4.00%
Other benefit plans [member] | Canada [member] | Retiring currently at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	23.3	23.2	23.2
Other benefit plans [member] | Canada [member] | Retiring currently at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.4	24.4	24.3
Other benefit plans [member] | Canada [member] | Currently aged 45 and retiring at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.3	24.2	24.2
Other benefit plans [member] | Canada [member] | Currently aged 45 and retiring at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	25.3	25.3	25.3
Other benefit plans [member] | Mexico [member] | Retiring currently at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	21.3	21.3	21.3
Other benefit plans [member] | Mexico [member] | Retiring currently at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	23.8	23.8	23.8
Other benefit plans [member] | Mexico [member] | Currently aged 45 and retiring at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	21.7	21.7	21.7
Other benefit plans [member] | Mexico [member] | Currently aged 45 and retiring at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.0	24.0	24.0
Other benefit plans [member] | United States [member] | Retiring currently at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	22.7	22.7	23.0
Other benefit plans [member] | United States [member] | Retiring currently at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.4	24.4	24.7
Other benefit plans [member] | United States [member] | Currently aged 45 and retiring at age 65 [member] | Male [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	24.3	24.3	23.7
Other benefit plans [member] | United States [member] | Currently aged 45 and retiring at age 65 [member] | Female [member]
Disclosure of defined benefit plans [line items]
Life expectancy for members	25.9	25.9	25.6
Other benefit plans [member] | Actuarial assumption of discount rates for all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	5.54%	4.86%	4.74%
Other benefit plans [member] | Actuarial assumption of discount rates for canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.96%	3.53%	3.42%
Other benefit plans [member] | Actuarial assumption of discount rates [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.83%	4.07%	4.09%
Rate of increase in future compensation	4.07%	4.09%	4.41%
Other benefit plans [member] | Actuarial assumption of discount rates for defined benefit obligations of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	4.86%	4.74%	5.33%
Other benefit plans [member] | Actuarial assumption of discount rates for net interest cost of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	4.60%	4.42%	4.91%
Other benefit plans [member] | Actuarial assumption of discount rates for service cost of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	5.11%	5.09%	5.62%
Other benefit plans [member] | Actuarial assumption of discount rates for interest on service cost of all plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	5.04%	4.94%	5.56%
Other benefit plans [member] | Actuarial assumption of discount rates for defined benefit obligations of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.53%	3.42%	4.27%
Other benefit plans [member] | Actuarial assumption of discount rates for net interest cost of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.18%	2.98%	3.67%
Other benefit plans [member] | Actuarial assumption of discount rates for service cost of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.76%	3.75%	4.54%
Other benefit plans [member] | Actuarial assumption of discount rates for interest on service cost of canadian plans [member]
Disclosure of defined benefit plans [line items]
Discount rate	3.66%	3.56%	4.44%
Other benefit plans [member] | Actuarial assumption of medical cost trend initial rates [member]
Disclosure of defined benefit plans [line items]
Health care cost trend rates at end of year	5.81%	5.99%	6.12%
Other benefit plans [member] | Actuarial assumption of medical cost trend ultimate rates [member]
Disclosure of defined benefit plans [line items]
Health care cost trend rates at end of year	4.66%	4.93%	4.93%
Year ultimate rate reached	2040	2030	2030

XML

Employee Benifits - Summary of Sensitivity Analysis of Key Assumptions (Detail) $ in Millions	Oct. 31, 2018 CAD ($)
Pension plans [member] | 1% Actuarial Assumption of Discount Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Decrease in assumption	$ 1,383
Decrease in assumption	122
Pension plans [member] | 0.25% Actuarial Assumption of Expected Rates of Salary Increases [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	78
Increase in assumption	9
Pension plans [member] | Canada [member] | 1 Year Actuarial Assumption of Life Expectancy Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	151
Increase in assumption	10
Pension plans [member] | Mexico [member] | 1 Year Actuarial Assumption of Life Expectancy Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	2
Pension plans [member] | United States [member] | 1 Year Actuarial Assumption of Life Expectancy Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	4
Other benefit plans [member] | 1% Actuarial Assumption of Discount Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Decrease in assumption	189
Decrease in assumption	13
Other benefit plans [member] | 0.25% Actuarial Assumption of Expected Rates of Salary Increases [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	1
Other benefit plans [member] | 1% Actuarial Assumption of Medical Cost Trend Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	132
Decrease in assumption	(106)
Increase in assumption	16
Decrease in assumption	(12)
Other benefit plans [member] | Canada [member] | 1 Year Actuarial Assumption of Life Expectancy Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	20
Increase in assumption	1
Other benefit plans [member] | Mexico [member] | 1 Year Actuarial Assumption of Life Expectancy Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	2
Other benefit plans [member] | United States [member] | 1 Year Actuarial Assumption of Life Expectancy Rates [member]
Disclosure of sensitivity analysis for actuarial assumptions [line items]
Increase in assumption	$ 4

XML

Employee Benifits - Summary of weighted-average actual and target asset allocations (Detail)	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Pension plans [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	100.00%	100.00%	100.00%
Defined benefit plan target asset allocation	100.00%
Pension plans [member] | Cash and cash equivalents [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	4.00%	2.00%	2.00%
Pension plans [member] | Equity securities [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	48.00%	59.00%	60.00%
Defined benefit plan target asset allocation	48.00%
Pension plans [member] | Equity securities [member] | Quote in an active market [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	36.00%	43.00%	44.00%
Pension plans [member] | Equity securities [member] | Non quoted [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	12.00%	16.00%	16.00%
Pension plans [member] | Fixed Income Investments 1 [Member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	38.00%	31.00%	31.00%
Defined benefit plan target asset allocation	42.00%
Pension plans [member] | Fixed Income Investments 1 [Member] | Quote in an active market [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	9.00%	5.00%	4.00%
Pension plans [member] | Fixed Income Investments 1 [Member] | Non quoted [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	29.00%	26.00%	27.00%
Pension plans [member] | Investment property [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	1.00%
Defined benefit plan target asset allocation	2.00%
Pension plans [member] | Investment property [member] | Non quoted [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	1.00%
Pension plans [member] | Other securities [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	9.00%	8.00%	7.00%
Defined benefit plan target asset allocation	8.00%
Pension plans [member] | Other securities [member] | Quote in an active market [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation			1.00%
Pension plans [member] | Other securities [member] | Non quoted [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	9.00%	8.00%	6.00%
Other benefit plans [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	100.00%	100.00%	100.00%
Defined benefit plan target asset allocation	100.00%
Other benefit plans [member] | Cash and cash equivalents [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	1.00%	1.00%	2.00%
Defined benefit plan target asset allocation	2.00%
Other benefit plans [member] | Equity securities [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	44.00%	46.00%	45.00%
Defined benefit plan target asset allocation	45.00%
Other benefit plans [member] | Equity securities [member] | Quote in an active market [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	42.00%	46.00%	45.00%
Other benefit plans [member] | Equity securities [member] | Non quoted [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	2.00%
Other benefit plans [member] | Fixed Income Investments 1 [Member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	55.00%	53.00%	53.00%
Defined benefit plan target asset allocation	53.00%
Other benefit plans [member] | Fixed Income Investments 1 [Member] | Quote in an active market [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	34.00%	32.00%	29.00%
Other benefit plans [member] | Fixed Income Investments 1 [Member] | Non quoted [member]
Disclosure of defined benefit plans [line items]
Defined benefit plan weighted average asset allocation	21.00%	21.00%	24.00%

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Operating Segments - Additional Information (Detail)	12 Months Ended
	Oct. 31, 2018
Disclosure of operating segments [abstract]
Description of reportable segments	Scotiabank is a diversified financial services institution that provides a wide range of financial products and services to retail, commercial and corporate customers around the world. The Bank’s businesses are grouped into three business lines: Canadian Banking, International Banking and Global Banking and Markets. Other smaller business segments are included in the Other segment. The results of these business segments are based upon the internal financial reporting systems of the Bank.

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Operating Segments - Schedule of Operating Segments (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016
Disclosure of operating segments [line items]
Net interest income	$ 16,191	[1]	$ 15,035	$ 14,292
Non-interest income	12,584		12,120	12,058
Total revenue	28,775		27,155	26,350
Provision for credit losses	2,611		2,249	2,412
Depreciation and amortization	848		761	684
Non-interest expenses	15,058		14,630	14,540
Income tax expense	2,382		2,033	2,030
Net income	8,724	[1]	8,243	7,368
Net income attributable to non-controlling interests in subsidiaries	176		238	251
Net income attributable to equity holders of the Bank	8,548		8,005	7,117
Average assets	946,000		913,000	914,000
Average liabilities	882,000		854,000	858,000
Operating segments [member] | Canadian banking [member]
Disclosure of operating segments [line items]
Net interest income	7,898		7,363	7,024
Non-interest income	5,452		5,488	5,164
Total revenue	13,350		12,851	12,188
Provision for credit losses	794		913	832
Depreciation and amortization	460		412	340
Non-interest expenses	6,194		6,075	5,984
Income tax expense	1,538		1,387	1,296
Net income	4,364		4,064	3,736
Net income attributable to equity holders of the Bank	4,364		4,064	3,736
Average assets	342,000		323,000	309,000
Average liabilities	254,000		244,000	232,000
Operating segments [member] | International banking [member]
Disclosure of operating segments [line items]
Net interest income	7,322		6,726	6,359
Non-interest income	4,111		3,688	3,482
Total revenue	11,433		10,414	9,841
Provision for credit losses	1,867		1,294	1,281
Depreciation and amortization	304		283	265
Non-interest expenses	5,807		5,381	5,258
Income tax expense	706		828	707
Net income	2,749		2,628	2,330
Net income attributable to non-controlling interests in subsidiaries	176		238	251
Net income attributable to equity holders of the Bank	2,573		2,390	2,079
Average assets	168,000		148,000	143,000
Average liabilities	131,000		115,000	109,000
Operating segments [member] | Global banking and markets [member]
Disclosure of operating segments [line items]
Net interest income	1,454		1,336	1,293
Non-interest income	3,074		3,288	3,139
Total revenue	4,528		4,624	4,432
Provision for credit losses	(50)		42	249
Depreciation and amortization	69		55	68
Non-interest expenses	2,164		2,105	1,972
Income tax expense	587		604	572
Net income	1,758		1,818	1,571
Net income attributable to equity holders of the Bank	1,758		1,818	1,571
Average assets	321,000		336,000	351,000
Average liabilities	265,000		267,000	270,000
Elimination of intersegment amounts [member] | Other smaller operating segments and corporate adjustments [member]
Disclosure of operating segments [line items]
Net interest income	(483)		(390)	(384)
Non-interest income	(53)		(344)	273
Total revenue	(536)		(734)	(111)
Provision for credit losses				50
Depreciation and amortization	15		11	11
Non-interest expenses	45		308	642
Income tax expense	(449)		(786)	(545)
Net income	(147)		(267)	(269)
Net income attributable to equity holders of the Bank	(147)		(267)	(269)
Average assets	115,000		106,000	111,000
Average liabilities	$ 232,000		$ 228,000	$ 247,000

[1] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

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Operating Segments - Schedule of Operating Segments (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Canadian banking [member]
Disclosure of operating segments [line items]
Net income from investments in associated corporations	$ 93	$ 66	$ 78
International banking [member]
Disclosure of operating segments [line items]
Net income from investments in associated corporations	643	482	473
Other smaller operating segments and corporate adjustments [member]
Disclosure of operating segments [line items]
Tax-exempt income	112	562	299
Net income from investments in associated corporations	$ (177)	$ (141)	$ (137)

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Operating Segments - Summary of Bank's Financial Results by Geographic Region (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016
Disclosure of geographical areas [line items]
Net interest income	$ 16,191	[1]	$ 15,035	$ 14,292
Non-interest income	12,584		12,120	12,058
Total revenues	28,775		27,155	26,350
Provision for credit losses	2,611		2,249	2,412
Non-interest expenses	15,058		14,630	14,540
Income tax expense	2,382		2,033	2,030
Net income	8,724	[1]	8,243	7,368
Net income attributable to non-controlling interests in subsidiaries	176		238	251
Net income attributable to equity holders of the Bank	8,548		8,005	7,117
Total average assets	946,000		913,000	914,000
Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	16,234		15,093	14,343
Non-interest income	12,819		12,291	12,071
Total revenues	29,053		27,384	26,414
Provision for credit losses	2,611		2,249	2,362
Non-interest expenses	14,966		14,460	14,024
Income tax expense	2,668		2,217	2,291
Net income	8,808		8,458	7,737
Net income attributable to non-controlling interests in subsidiaries	176		238	251
Net income attributable to equity holders of the Bank	8,632		8,220	7,486
Total average assets	929,000		898,000	900,000
Corporate, Non-Segment [Member]
Disclosure of geographical areas [line items]
Net income	(84)		(215)	(369)
Total average assets	17,000		15,000	14,000
Canada [member] | Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	7,823		7,440	7,022
Non-interest income	7,040		6,924	6,893
Total revenues	14,863		14,364	13,915
Provision for credit losses	802		906	876
Non-interest expenses	7,591		7,650	7,339
Income tax expense	1,596		1,066	1,235
Net income	4,874		4,742	4,465
Net income attributable to equity holders of the Bank	4,874		4,742	4,465
Total average assets	548,000		539,000	529,000
United States [member] | Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	691		460	479
Non-interest income	843		830	871
Total revenues	1,534		1,290	1,350
Provision for credit losses	(34)		(14)	112
Non-interest expenses	701		606	633
Income tax expense	220		147	155
Net income	647		551	450
Net income attributable to equity holders of the Bank	647		551	450
Total average assets	119,000		111,000	126,000
Mexico [member] | Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	1,561		1,380	1,224
Non-interest income	613		536	554
Total revenues	2,174		1,916	1,778
Provision for credit losses	239		193	225
Non-interest expenses	1,196		1,123	1,121
Income tax expense	76		125	69
Net income	663		475	363
Net income attributable to non-controlling interests in subsidiaries	17		12	9
Net income attributable to equity holders of the Bank	646		463	354
Total average assets	32,000		28,000	27,000
Peru [member] | Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	1,378		1,287	1,231
Non-interest income	662		635	600
Total revenues	2,040		1,922	1,831
Provision for credit losses	351		329	315
Non-interest expenses	770		762	740
Income tax expense	235		225	201
Net income	684		606	575
Net income attributable to non-controlling interests in subsidiaries	12		11	12
Net income attributable to equity holders of the Bank	672		595	563
Total average assets	24,000		24,000	23,000
Chile [member] | Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	1,117		817	763
Non-interest income	565		409	325
Total revenues	1,682		1,226	1,088
Provision for credit losses	498		145	113
Non-interest expenses	837		630	605
Income tax expense	51		77	45
Net income	296		374	325
Net income attributable to non-controlling interests in subsidiaries	28		53	38
Net income attributable to equity holders of the Bank	268		321	287
Total average assets	33,000		23,000	20,000
Colombia [member] | Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	839		710	674
Non-interest income	484		455	419
Total revenues	1,323		1,165	1,093
Provision for credit losses	511		337	320
Non-interest expenses	723		620	550
Income tax expense	39		71	89
Net income	50		137	134
Net income attributable to non-controlling interests in subsidiaries	16		60	93
Net income attributable to equity holders of the Bank	34		77	41
Total average assets	12,000		11,000	10,000
Other International [member] | Operating segments [member]
Disclosure of geographical areas [line items]
Net interest income	2,825		2,999	2,950
Non-interest income	2,612		2,502	2,409
Total revenues	5,437		5,501	5,359
Provision for credit losses	244		353	401
Non-interest expenses	3,148		3,069	3,036
Income tax expense	451		506	497
Net income	1,594		1,573	1,425
Net income attributable to non-controlling interests in subsidiaries	103		102	99
Net income attributable to equity holders of the Bank	1,491		1,471	1,326
Total average assets	$ 161,000		$ 162,000	$ 165,000

[1] The amounts for year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4).

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Operating Segments - Summary of Bank's Financial Results by Geographic Region (Parenthetical) (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Canada [member]
Disclosure of geographical areas [line items]
Net income from investments in associated corporations	$ 93	$ 66	$ 78
Peru [member]
Disclosure of geographical areas [line items]
Net income from investments in associated corporations	9	6	5
Other International [member]
Disclosure of geographical areas [line items]
Net income from investments in associated corporations	$ 634	$ 476	$ 468

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Related Party Transactions -Summary of Compensation of Key Management Personnel of Bank (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of amounts incurred by entity for provision of key management personnel services provided by separate management entities [abstract]
Salaries and cash incentives	$ 18	$ 17
Equity-based payment	27	25
Pension and other benefits	4	3
Total	$ 49	$ 45

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Related Party Transactions - Summary of Loans and Deposits of Key Management Personnel (Detail) - Key management personnel directors and their close family members [member] - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of amounts incurred by entity for provision of key management personnel services provided by separate management entities [line items]
Loans	$ 13	$ 6
Deposits	$ 6	$ 8

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Related Party Transactions - Additional Information (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of transactions between related parties [line items]
Wealth Management Assets	$ 3,800.0	$ 3,000.0
Revenue From Rendering Of Services Related Party Transactions	5.0	3.7
Directors [member]
Disclosure of transactions between related parties [line items]
Exposure to credit risk on loan commitments and financial guarantee contracts	132.4	145.2
Utilized credit exposure	$ 23.9	$ 11.5

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Related Party Transactions - Summary of Transaction With Joint Ventures and Associates (Detail) - Associates and joint ventures [member] - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of transactions between related parties [line items]
Net income / (loss)	$ (64)	$ (46)	$ (45)
Loans	702	703	788
Deposits	151	217	338
Guarantees and commitments	$ 123	$ 114	$ 99

XML

Principal Subsidiaries and Non-Controlling Interests in Subsidiaries - Summary of Significant Investments In Subsidiaries (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
International [member] | Scotiabank Colpatria -S- -A- [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Colpatria S.A. (formerly Banco Colpatria Multibanca Colpatria S.A.) 51%)
Principal office	Bogota, Colombia
Carrying value	$ 1,221	$ 1,160
International [member] | Grupo Financiero Scotiabank Inverlat, S.A. de C.V. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Grupo Financiero Scotiabank Inverlat, S.A. e C.V. (97.4%)
Principal office	Mexico City, Mexico
Carrying value	$ 3,901	3,544
International [member] | Scotiabank Chile S A [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Chile S.A (75.5%)
Principal office	Santiago, Chile
International [member] | Scotia Group Jamaica Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Group Jamaica Limited (71.8%)
Principal office	Kingston, Jamaica
International [member] | Scotiabank Trinidad and Tobago Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Trinidad and Tobago Limited (50.9%)
Principal office	Port of Spain, Trinidad and Tobago
International [member] | Scotiabank El Salvador, S.A. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank El Salvador, S.A. (99.6%)
Principal office	San Salvador, El Salvador
Carrying value	$ 686	659
International [member] | Scotiabank Peru S.A.A. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Peru S.A.A. (98.05%)
Principal office	Lima, Peru
Carrying value	$ 4,877	4,518
International [member] | The Bank of Nova Scotia Berhad [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	The Bank of Nova Scotia Berhad
Principal office	Kuala Lumpur, Malaysia
Carrying value	$ 318	303
International [member] | The Bank of Nova Scotia International Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	The Bank of Nova Scotia International Limited
Principal office	Nassau, Bahamas
Carrying value	$ 19,312	18,223
International [member] | BNS asia limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	BNS Asia Limited
Principal office	Singapore
International [member] | The Bank of Nova Scotia Trust Company (Bahamas) Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	The Bank of Nova Scotia Trust Company (Bahamas) Limited
Principal office	Nassau, Bahamas
International [member] | Grupo BNS de Costa Rica S.A. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Grupo BNS de Costa Rica, S.A.
Principal office	San Jose, Costa Rica
International [member] | Scotiabank & Trust (Cayman) Ltd. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank & Trust (Cayman) Ltd.
Principal office	Grand Cayman, Cayman Islands
International [member] | Scotiabank (Bahamas) Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank (Bahamas) Limited
Principal office	Nassau, Bahamas
International [member] | Scotiabank (British Virgin Islands) Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank (British Virgin Islands) Limited
Principal office	Road Town, Tortola, B.V.I.
International [member] | Scotiabank (Hong Kong) Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank (Hong Kong) Limited
Principal office	Hong Kong, China
International [member] | Scotiabank (Ireland) Designated Activity Company [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank (Ireland) Designated Activity Company
Principal office	Dublin, Ireland
International [member] | Scotiabank (Turks and Caicos) Ltd. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank (Turks and Caicos) Ltd.
Principal office	Providenciales, Turks and Caicos Islands
International [member] | BNS International Panama SA. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	BNS International (Panama) S.A.
Principal office	Panama City, Panama
International [member] | Nova Scotia Inversiones Limitada [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Nova Scotia Inversiones Limitada
Principal office	Santiago, Chile
Carrying value	$ 5,100	3,325
International [member] | Scotia Holdings (US) Inc. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Holdings (US) Inc.
Principal office	New York, New York
International [member] | Scotiabanc Inc. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabanc Inc.
Principal office	Houston, Texas
International [member] | Scotia Capital (USA) Inc. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Capital (USA) Inc.(4)(5)
Principal office	New York, New York
International [member] | Scotia International Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia International Limited
Principal office	Nassau, Bahamas
Carrying value	$ 635	642
International [member] | Scotiabank Anguilla Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Anguilla Limited
Principal office	The Valley, Anguilla
International [member] | Scotiabank Brasil S.A. Banco Multiplo [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Brasil S.A. Banco Multiplo
Principal office	Sao Paulo, Brazil
Carrying value	$ 386	223
International [member] | Scotiabank Caribbean Holdings Ltd [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Caribbean Holdings Ltd.
Principal office	Bridgetown, Barbados
Carrying value	$ 1,847	1,710
International [member] | The Bank of Nova Scotia Jamaica Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	The Bank of Nova Scotia Jamaica Limited
Principal office	Kingston, Jamaica
International [member] | Scotia Investments Jamaica Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Investments Jamaica Limited
Principal office	Kingston, Jamaica
International [member] | Scotiabank (Belize) Ltd. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank (Belize) Ltd.
Principal office	Belize City, Belize
International [member] | Scotiabank Panama SA. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank (Panama) S.A.
Principal office	Panama City, Panama
International [member] | Scotiabank Uruguay SA. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Uruguay S.A.
Principal office	Montevideo, Uruguay
Carrying value	$ 490	496
International [member] | Scotiabank de Puerto Rico [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank de Puerto Rico
Principal office	San Juan, Puerto Rico
Carrying value	$ 1,555	1,395
International [member] | Scotiabank Europe plc[member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotiabank Europe plc
Principal office	London, United Kingdom
Carrying value	$ 2,432	2,400
Canada [member] | 1832 Asset Management L.P. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	1832 Asset Management L.P.
Principal office	Toronto, Ontario
Carrying value	$ 1,524	2,006
Canada [member] | BNS Investments Inc. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	BNS Investments Inc.
Principal office	Toronto, Ontario
Carrying value	$ 13,870	13,551
Canada [member] | Montreal Trust Company of Canada [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Montreal Trust Company of Canada
Principal office	Montreal, Quebec
Canada [member] | National Trustco Inc. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	National Trustco Inc. (2)
Principal office	Stratford, Ontario
Carrying value	$ 415	449
Canada [member] | Roynat Inc. [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Roynat Inc.
Principal office	Calgary, Alberta
Carrying value	$ 432	239
Canada [member] | Scotia Capital Inc. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Capital Inc.
Principal office	Toronto, Ontario
Carrying value	$ 1,391	1,024
Canada [member] | Scotia Dealer Advantage Inc. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Dealer Advantage Inc.
Principal office	Burnaby, British Columbia
Carrying value	$ 592	567
Canada [member] | Scotia Life Insurance Company [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Life Insurance Company
Principal office	Toronto, Ontario
Carrying value	$ 219	189
Canada [member] | Scotia Mortgage Corporation [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Mortgage Corporation
Principal office	Toronto, Ontario
Carrying value	$ 588	615
Canada [member] | Scotia Securities Inc. [Member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Scotia Securities Inc.
Principal office	Toronto, Ontario
Carrying value	$ 40	34
Canada [member] | Tangerine Bank [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Tangerine Bank
Principal office	Toronto, Ontario
Carrying value	$ 3,525	$ 3,488
Canada [member] | Jarislowsky, Fraser Limited [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	Jarislowsky, Fraser Limited
Principal office	Montreal, Quebec
Carrying value	$ 947
Canada [member] | MD Financial Management Inc [member]
Disclosure of subsidiaries [line items]
Significant subsidiaries	MD Financial Management Inc.
Principal office	Ottawa, Ontario
Carrying value	$ 2,612

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Principal Subsidiaries and Non-Controlling Interests in Subsidiaries - Summary of Significant Investments In Subsidiaries (Parenthetical) (Detail)	12 Months Ended
	Oct. 31, 2018
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	100.00%
International [member] | Scotiabank Colpatria -S- -A- [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	51.00%
International [member] | Grupo Financiero Scotiabank Inverlat, S.A. de C.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	97.40%
International [member] | Scotiabank Chile S A [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	75.50%
International [member] | Scotia Group Jamaica Limited [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	71.80%
International [member] | Scotiabank Trinidad and Tobago Limited [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	50.90%
International [member] | Scotiabank El Salvador, S.A. [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	99.60%
International [member] | Scotiabank Peru S.A.A. [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	98.05%

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Principal Subsidiaries and Non-Controlling Interests in Subsidiaries - Summary of Non-controlling Interests (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Oct. 31, 2017
Disclosure of noncontrolling interests [Line Items]
Non-controlling interests in subsidiaries	$ 2,452	[1]	$ 1,592
Dividends paid to non-controlling interest	$ 199		133
Scotiabank Chile S A [Member]
Disclosure of noncontrolling interests [Line Items]
Non-controlling interest %	24.50%
Non-controlling interests in subsidiaries	$ 917		191
Dividends paid to non-controlling interest	$ 115		14
Scotiabank Colpatria -S- -A- [Member]
Disclosure of noncontrolling interests [Line Items]
Non-controlling interest %	49.00%
Non-controlling interests in subsidiaries	$ 519		445
Dividends paid to non-controlling interest			38
Scotia Group Jamaica Limited [member]
Disclosure of noncontrolling interests [Line Items]
Non-controlling interest %	28.20%
Non-controlling interests in subsidiaries	$ 340		300
Dividends paid to non-controlling interest	$ 17		17
Scotiabank Trinidad and Tobago Limited [member]
Disclosure of noncontrolling interests [Line Items]
Non-controlling interest %	49.10%
Non-controlling interests in subsidiaries	$ 365		354
Dividends paid to non-controlling interest	49		56
Other non controlling interests [member]
Disclosure of noncontrolling interests [Line Items]
Non-controlling interests in subsidiaries	311		302
Dividends paid to non-controlling interest	$ 18		$ 8
Other non controlling interests [member] | Bottom of range [member]
Disclosure of noncontrolling interests [Line Items]
Non-controlling interest %	0.10%
Other non controlling interests [member] | Top of range [member]
Disclosure of noncontrolling interests [Line Items]
Non-controlling interest %	49.00%

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

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Principal Subsidiaries and Non-Controlling Interests in Subsidiaries - Summary Of Financial Information About The Amounts Attributable To Non Controlling Interests (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018		Oct. 31, 2017	Oct. 31, 2016
Disclosure of noncontrolling interests [Line Items]
Revenue	$ 28,775		$ 27,155	$ 26,350
Total comprehensive income	7,920		7,534	$ 7,139
Total assets	998,493	[1]	915,273
Total liabilities	930,813	[1]	853,648
Minority partner [member]
Disclosure of noncontrolling interests [Line Items]
Revenue	3,615		2,978
Total comprehensive income	173		567
Total assets	80,352		49,077
Total liabilities	$ 73,449		$ 42,943

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Interest Income and Expense - Details of Interest Income from Financial Assets (Detail) - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Revenue [abstract]
Loans at amortized cost	[1],[2]	$ 24,991	$ 21,719	$ 20,419
Amortized cost		353
FVOCI		1,205
Other		213
Securities purchased under resale agreements and securities borrowed not at FVTPL	[1],[2]	446	283	158
Deposit with financial institutions	[1],[2]	859	522	394
Interest income	[1],[2]	$ 28,067	$ 23,927	$ 22,208

[1] Interest income on financial assets measured at amortized cost and FVOCI is calculated using the effective interest method. Includes interest income of $27,854 for the year ended October 31, 2018 from these financial assets.

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

XML

Interest Income and Expense - Details of Interest Expense from Financial Liabilities (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure Of Interest Expense [Line items]
Subordinated debentures	$ 214	$ 226	$ 232
Interest expense	11,876	$ 8,892	$ 7,916
Deposits [Member]
Disclosure Of Interest Expense [Line items]
Amortized cost	10,460
FVTPL	84
Other liabilities [member]
Disclosure Of Interest Expense [Line items]
Amortized cost	1,084
FVTPL	$ 34

XML

Non-Interest Income - Summary of Non-Interest Income (Detail) - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Banking
Card revenues		$ 1,656	$ 1,514	$ 1,359
Deposit and payment services		1,366	1,324	1,279
Credit fees		1,191	1,153	1,154
Other		466	472	436
Banking revenue including fee		4,679	4,463	4,228
Banking fee related expenses		678	608	559
Total banking	[1]	4,001	3,855	3,669
Wealth management
Mutual funds		1,714	1,639	1,624
Brokerage fees		895	1,047	1,034
Investment management and trust		732	632	624
Total wealth management	[1]	$ 3,341	$ 3,318	$ 3,282

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

XML

Trading Revenues - Summary of Trading Revenues (Detail) - CAD ($) $ in Millions		12 Months Ended
		Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Trading income (expense) [abstract]
Interest rate and credit		$ 272	$ 474	$ 559
Equities		441	(125)	(20)
Commodities		231	295	376
Foreign exchange		295	250	262
Other		181	92	51
Total	[1],[2]	$ 1,420	$ 986	$ 1,228

[1] Prior year amounts have been reclassified to conform with current period presentation.

[2] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior year amounts have not been restated (refer to Notes 3 and 4)

XML

Earnings Per Share - Summary of Earnings Per Share (Detail) - CAD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017	Oct. 31, 2016
Basic earnings per common share
Net income attributable to common shareholders	$ 8,361	$ 7,876	$ 6,987
Weighted average number of common shares outstanding	1,213	1,203	1,204
Basic earnings per common share	$ 6.90	$ 6.55	$ 5.80
Diluted earnings per common share
Net income attributable to common shareholders	$ 8,361	$ 7,876	$ 6,987
Dilutive impact of share-based payment options and others	16	59	83
Net income attributable to common shareholders (diluted)	$ 8,377	$ 7,935	$ 7,070
Weighted average number of common shares outstanding	1,213	1,203	1,204
Dilutive impact of share-based payment options and others	16	20	22
Weighted average number of diluted common shares outstanding	1,229	1,223	1,226
Diluted earnings per common share	$ 6.82	$ 6.49	$ 5.77

XML

Guarantees, Commitments and Pledged Assets - Schedule of Various Guarantees and Indemnifications (Detail) - CAD ($)	Oct. 31, 2017	Oct. 31, 2016
Standby letters of credit and letters of guarantee [member]
Guarantees commitments and pledged assets [Line Items]
Maximum potential amount of future payments	$ 35,376,000,000	$ 35,523,000,000
Liquidity facilities [member]
Guarantees commitments and pledged assets [Line Items]
Maximum potential amount of future payments	4,043,000,000	4,996,000,000
Derivatives [member]
Guarantees commitments and pledged assets [Line Items]
Maximum potential amount of future payments	6,969,000,000	5,398,000,000
Indemnifications [member]
Guarantees commitments and pledged assets [Line Items]
Maximum potential amount of future payments	$ 571,000,000	$ 587,000,000

XML

Guarantees, Commitments and Pledged Assets - Additional information (Detail) - CAD ($) $ in Millions	1 Months Ended	12 Months Ended
	Jul. 31, 2018	Oct. 31, 2018	Oct. 31, 2017
Guarantees commitments and pledged assets [Line Items]
Other executory contracts	$ 800
Executory contract period	20 years
Buildings [member]
Guarantees commitments and pledged assets [Line Items]
Building rent expense		$ 477	$ 444
Derivatives [member]
Guarantees commitments and pledged assets [Line Items]
Credit risk amount		377	274
Indemnifications [member]
Guarantees commitments and pledged assets [Line Items]
Credit risk amount		$ 2	2
Top of range [member]
Guarantees commitments and pledged assets [Line Items]
Liquidity facilities expiration period		3 years
Standby letters of credit and letters of guarantee [member]
Guarantees commitments and pledged assets [Line Items]
Credit risk amount		$ 4	$ 4

XML

Guarantees, Commitments and Pledged Assets - Summary of Other Indirect Commitments (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Guarantees commitments and pledged assets [Line Items]
Maximum exposure to credit risk	$ 251,097	$ 227,636
Commercial letter of credit [member]
Guarantees commitments and pledged assets [Line Items]
Maximum exposure to credit risk	1,046	821
Commitments to extend credit original term to maturity of one year or less [member]
Guarantees commitments and pledged assets [Line Items]
Maximum exposure to credit risk	75,033	57,321
Commitments to extend credit original term to maturity of more than one year [member]
Guarantees commitments and pledged assets [Line Items]
Maximum exposure to credit risk	122,407	128,345
Securities lending [member]
Guarantees commitments and pledged assets [Line Items]
Maximum exposure to credit risk	51,723	40,535
Securities purchase and other commitment [member]
Guarantees commitments and pledged assets [Line Items]
Maximum exposure to credit risk	$ 888	$ 614

XML

Guarantees, Commitments and Pledged Assets - Summary of Future Minimum Lease Payment Under Non-Cancellable Operating Leases (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of finance lease and operating lease by lessee [line items]
Minimum lease payments payable	$ 2,496	$ 1,909
Within one year [member]
Disclosure of finance lease and operating lease by lessee [line items]
Minimum lease payments payable	420	349
One to 5 years [member]
Disclosure of finance lease and operating lease by lessee [line items]
Minimum lease payments payable	1,196	967
Over 5 years [member]
Disclosure of finance lease and operating lease by lessee [line items]
Minimum lease payments payable	$ 880	$ 593

XML

Guarantees, Commitments and Pledged Assets - Summary of Carrying Value of Pledged Assets and Details of Related Activities (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	$ 204,601	$ 183,888
Obligations related to securities sold under repurchase agreements	82,816	86,789
Total	287,417	270,677
Bank of Canada [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	118	25
Foreign governments and central banks [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	3,147	2,653
Clearing system payment systems and depositories [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	1,629	1,195
Exchange traded derivative transactions [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	3,127	2,181
Over The Counter Derivatives [Member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	7,246	8,126
Securities borrowing and lending [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	128,383	115,987
Covered bonds [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	30,725	27,806
Securitization [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	6,085	4,801
Canada mortgage housing corporation program [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	23,178	20,471
Other assets [member]
Disclosure of detailed information about financial instruments [line items]
Securities and assets pledged	$ 963	$ 643

XML

Financial Instruments-Risk Management - Summary of Credit Risk Exposures (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	$ 703,614
mmitments	140,388
exposures(3)	105,232
Total	949,234	$ 878,413
Canada [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	394,279
mmitments	89,776
exposures(3)	37,748
Total	521,803	502,224
United States [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	102,265
mmitments	33,103
exposures(3)	42,771
Total	178,139	157,386
Chile [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	47,048
mmitments	1,038
exposures(3)	5,066
Total	53,152	27,190
Mexico [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	29,344
mmitments	1,339
exposures(3)	2,611
Total	33,294	30,528
Peru [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	23,997
mmitments	1,506
exposures(3)	2,992
Total	28,495	28,733
Colombia [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	12,729
mmitments	486
exposures(3)	434
Total	13,649	10,859
Europe [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	25,357
mmitments	7,041
exposures(3)	10,215
Total	42,613	43,030
Caribbean [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	35,716
mmitments	1,676
exposures(3)	910
Total	38,302	39,358
Latin America [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	10,232
mmitments	909
exposures(3)	227
Total	11,368	9,035
All other countries [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	22,647
mmitments	3,514
exposures(3)	2,258
Total	28,419	30,070
Non retail [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	425,009
mmitments	92,303
exposures(3)	105,232
Total	622,544	589,643
Non retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	357,484
mmitments	86,799
exposures(3)	101,281
Total	545,564	521,523
Non retail [member] | AIRB portfolio [member] | Corporate segment [Member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	146,324
mmitments	83,885
exposures(3)	77,751
Total	307,960	285,191
Non retail [member] | AIRB portfolio [member] | Bank [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	22,680
mmitments	2,146
exposures(3)	16,676
Total	41,502	40,903
Non retail [member] | AIRB portfolio [member] | Sovereign [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	188,480
mmitments	768
exposures(3)	6,854
Total	196,102	195,429
Non retail [member] | Standardized portfolio [Member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	67,525
mmitments	5,504
exposures(3)	3,951
Total	76,980	68,120
Non retail [member] | Standardized portfolio [Member] | Corporate segment [Member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	59,018
mmitments	5,313
exposures(3)	3,802
Total	68,133	59,164
Non retail [member] | Standardized portfolio [Member] | Bank [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	3,208
mmitments	160
exposures(3)	143
Total	3,511	2,619
Non retail [member] | Standardized portfolio [Member] | Sovereign [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	5,299
mmitments	31
exposures(3)	6
Total	5,336	6,337
Retail [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	278,605
mmitments	48,085
Total	326,690	288,770
Retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	191,988
mmitments	48,085
Total	240,073	219,216
Retail [member] | AIRB portfolio [member] | Real estate secured [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	143,475
mmitments	17,864
Total	161,339	143,160
Retail [member] | AIRB portfolio [member] | Qualifying revolving [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	17,337
mmitments	28,550
Total	45,887	44,384
Retail [member] | AIRB portfolio [member] | Other retail [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	31,176
mmitments	1,671
Total	32,847	31,672
Retail [member] | Standardized portfolio [Member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	86,617
Total	86,617	69,554
Retail [member] | Standardized portfolio [Member] | Real estate secured [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	44,517
Total	44,517	34,002
Retail [member] | Standardized portfolio [Member] | Other retail [member]
Disclosure of detailed information about financial instruments [line items]
Drawn(2)	42,100
Total	$ 42,100	$ 35,552

XML

Financial Instruments-Risk Management - Summary of Credit Risk Exposures (Parenthetical) (Detail) - CAD ($)	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [abstract]
Balance sheet offsetting lending instruments	$ 0	$ 0

XML

Financial Instruments-Risk Management - Summary of Subject to Market and Credit Risk With a Reconcilation (Detail) - CAD ($) $ in Millions	Oct. 31, 2018		Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Cash and deposits with financial institutions	$ 62,269	[1]	$ 59,663
Precious metals	3,191	[1]	5,717
Trading assets
Securities	85,474	[1]	78,652
Loans	14,334	[1]	17,312
Other	454	[1]	2,500
Financial assets designated at fair value through profit or loss	12	[1]	13
Securities purchased under resale agreements and securities borrowed	104,018	[1]	95,319
Derivative financial instruments	37,558	[1]	35,364
Investment securities	78,396	[1]	69,269
Loans:
Residential mortgages	253,357	[1]	236,916
Personal loans	96,019	[1]	89,227
Credit cards	16,485	[1]	14,104
Business & government	191,038	[1]	168,449
Allowances for credit losses			13
Property and equipment	2,684	[1]	2,381
Investment in associates	4,850	[1]	4,586
Goodwill and other intangibles assets	17,719	[1]	12,106
Total	998,493	[1]	915,273
Credit risk [member]
Disclosure of detailed information about financial instruments [line items]
Cash and deposits with financial institutions	62,269		59,663
Precious metals	3,191		5,717
Trading assets
Securities	85,474		78,652
Loans	14,334		17,312
Other	454		2,500
Financial assets designated at fair value through profit or loss	12		13
Securities purchased under resale agreements and securities borrowed	104,018		95,319
Derivative financial instruments	37,558		35,364
Investment securities	78,396		69,269
Loans:
Residential mortgages	253,357		236,916
Personal loans	96,019		89,227
Credit cards	16,485		14,104
Business & government	191,038		168,449
Allowances for credit losses	(5,065)		(4,327)
Customers' liability under acceptances	16,329		13,560
Property and equipment	2,684		2,381
Investment in associates	4,850		4,586
Goodwill and other intangibles assets	17,719		12,106
Other (including Deferred tax assets)	19,371		14,462
Total	998,493		915,273
Credit risk [member] | Credit risk exposure drawn non retail [member]
Disclosure of detailed information about financial instruments [line items]
Cash and deposits with financial institutions	58,728		57,104
Trading assets
Securities	24
Loans	7,183		9,087
Financial assets designated at fair value through profit or loss	12		13
Investment securities	75,837		67,255
Loans:
Residential mortgages	86,417		95,692
Business & government	180,164		158,510
Allowances for credit losses	(560)		(649)
Customers' liability under acceptances	16,338		13,560
Other (including Deferred tax assets)	866		1,805
Total	425,009		402,377
Credit risk [member] | Credit risk exposure drawn retail [member]
Trading assets
Loans	12
Loans:
Residential mortgages	166,752		141,066
Personal loans	94,392		87,892
Credit cards	14,331		12,289
Business & government	3,193		2,878
Allowances for credit losses	(786)
Other (including Deferred tax assets)	711		545
Total	278,605		244,670
Credit risk [member] | Other exposures securitization [member]
Loans:
Personal loans	1,613		1,314
Credit cards	687		724
Business & government	7,748		7,032
Total	10,048		9,070
Credit risk [member] | Other credit risk exposure repo-style transactions [member]
Trading assets
Securities purchased under resale agreements and securities borrowed	104,010		95,319
Loans:
Total	104,010		95,319
Credit risk [member] | Other credit risk exposure over-the-counter derivatives [member]
Trading assets
Derivative financial instruments	37,558		35,364
Loans:
Total	37,558		35,364
Credit risk [member] | Other credit risk exposure equity [member]
Trading assets
Investment securities	1,754		1,281
Loans:
Total	1,754		1,281
Credit risk [member] | Other market risk exposures also subject to credit risk [member]
Trading assets
Loans	6,606		9,087
Derivative financial instruments	33,937		30,648
Loans:
Total	40,543		39,735
Credit risk [member] | Other exposures [member]
Disclosure of detailed information about financial instruments [line items]
Precious metals	3,191		5,717
Trading assets
Securities	85,450		78,652
Loans	7,139		8,225
Other	454		2,500
Loans:
Total	96,234		95,094
Credit risk [member] | Other market risk exposures others [member]
Disclosure of detailed information about financial instruments [line items]
Cash and deposits with financial institutions	3,541		2,559
Trading assets
Securities purchased under resale agreements and securities borrowed	8
Investment securities	805		733
Loans:
Residential mortgages	188		158
Personal loans	14		21
Credit cards	1,467		1,091
Business & government	(67)		29
Allowances for credit losses	(3,719)		(3,678)
Customers' liability under acceptances	(9)
Property and equipment	2,684		2,381
Investment in associates	4,850		4,586
Goodwill and other intangibles assets	17,719		12,106
Other (including Deferred tax assets)	17,794		12,112
Total	$ 45,275		$ 32,098

[1] The amounts for the year ended October 31, 2018 have been prepared in accordance with IFRS 9; prior period amounts have not been restated (refer to Notes 3 and 4).

XML

Financial Instruments-Risk Management - Summary of Subject to Market and Credit Risk With a Reconcilation (Parenthetical) (Detail) - CAD ($) $ in Billions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [abstract]
Residential mortgage guarnteed loans	$ 82.2	$ 91.7
Percentage of amount insured on mortgage	90.00%	90.00%

XML

Financial Instruments-Risk Management - Summary of Cross Referencing of Internal Ratings to External Ratings (Detail)	12 Months Ended
	Oct. 31, 2018
Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	95
Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	90
Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	87
Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Internal grade code	85
Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Internal grade code	83
Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	80
Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Internal grade code	77
Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	75
Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	73
Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	70
Watch list [member]
Disclosure of internal credit grades [line items]
Internal grade code	30
Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	65
Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Internal grade code	60
Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Internal grade code	40
Default [member]
Disclosure of internal credit grades [line items]
Internal grade code	21
Probability of default range percentage	100.00%
Top of range [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	99
Probability of default range percentage	0.0448%
Top of range [member] | Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.1304%
Top of range [member] | Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.1402%
Top of range [member] | Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.2187%
Top of range [member] | Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.3176%
Top of range [member] | Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.461%
Top of range [member] | Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.5134%
Top of range [member] | Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.5716%
Top of range [member] | Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.7518%
Top of range [member] | Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	1.4444%
Top of range [member] | Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	2.7749%
Top of range [member] | Watch list [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	59.5053%
Top of range [member] | Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	10.1814%
Top of range [member] | Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	19.4452%
Top of range [member] | Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	35.4088%
Bottom of range [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	98
Probability of default range percentage	0.00%
Bottom of range [member] | Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.0448%
Bottom of range [member] | Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.0552%
Bottom of range [member] | Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.0876%
Bottom of range [member] | Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.1251%
Bottom of range [member] | Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.1788%
Bottom of range [member] | Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.2886%
Bottom of range [member] | Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.4658%
Bottom of range [member] | Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.5716%
Bottom of range [member] | Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	0.7518%
Bottom of range [member] | Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	1.4444%
Bottom of range [member] | Watch list [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	35.4088%
Bottom of range [member] | Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	2.7749%
Bottom of range [member] | Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	10.1814%
Bottom of range [member] | Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Probability of default range percentage	19.4452%
Equivalent external rating standard and poors default [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Description of rating	AAA to AA+
Equivalent external rating standard and poors default [member] | Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Description of rating	AA to A+
Equivalent external rating standard and poors default [member] | Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Description of rating	A to A-
Equivalent external rating standard and poors default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Description of rating	BBB+
Equivalent external rating standard and poors default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Description of rating	BBB
Equivalent external rating standard and poors default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Description of rating	BBB-
Equivalent external rating standard and poors default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Description of rating	BB+
Equivalent external rating standard and poors default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Description of rating	BB
Equivalent external rating standard and poors default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Description of rating	BB-
Equivalent external rating standard and poors default [member] | Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Description of rating	B+
Equivalent external rating standard and poors default [member] | Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Description of rating	B to B-
Equivalent external rating standard and poors default [member] | Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Description of rating	CCC+
Equivalent external rating standard and poors default [member] | Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Description of rating	CCC
Equivalent external rating standard and poors default [member] | Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Description of rating	CCC- to CC
Equivalent external rating standard and poors default [member] | Default [member]
Disclosure of internal credit grades [line items]
Description of rating	Default
Equivalent external rating Moody's default [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Description of rating	Aaa to Aa1
Equivalent external rating Moody's default [member] | Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Description of rating	Aa2 to A1
Equivalent external rating Moody's default [member] | Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Description of rating	A2 to A3
Equivalent external rating Moody's default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Description of rating	Baa1
Equivalent external rating Moody's default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Description of rating	Baa2
Equivalent external rating Moody's default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Description of rating	Baa3
Equivalent external rating Moody's default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Description of rating	Ba1
Equivalent external rating Moody's default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Description of rating	Ba2
Equivalent external rating Moody's default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Description of rating	Ba3
Equivalent external rating Moody's default [member] | Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Description of rating	B1
Equivalent external rating Moody's default [member] | Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Description of rating	B2 to B3
Equivalent external rating Moody's default [member] | Watch list [member]
Disclosure of internal credit grades [line items]
Description of rating	0
Equivalent external rating Moody's default [member] | Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Description of rating	Caa1
Equivalent external rating Moody's default [member] | Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Description of rating	Caa2
Equivalent external rating Moody's default [member] | Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Description of rating	Caa3 to Ca
Equivalent external rating Dominion Bond Rating Service default [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Description of rating	AAA to AA (high)
Equivalent external rating Dominion Bond Rating Service default [member] | Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Description of rating	AA to A (high)
Equivalent external rating Dominion Bond Rating Service default [member] | Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Description of rating	A to A (low)
Equivalent external rating Dominion Bond Rating Service default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Description of rating	BBB (high)
Equivalent external rating Dominion Bond Rating Service default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Description of rating	BBB
Equivalent external rating Dominion Bond Rating Service default [member] | Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Description of rating	BBB (low)
Equivalent external rating Dominion Bond Rating Service default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Description of rating	BB (high)
Equivalent external rating Dominion Bond Rating Service default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Description of rating	BB
Equivalent external rating Dominion Bond Rating Service default [member] | Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Description of rating	BB (low)
Equivalent external rating Dominion Bond Rating Service default [member] | Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Description of rating	B (high)
Equivalent external rating Dominion Bond Rating Service default [member] | Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Description of rating	B to B (low)
Equivalent external rating Dominion Bond Rating Service default [member] | Watch list [member]
Disclosure of internal credit grades [line items]
Description of rating	0
Equivalent external rating Dominion Bond Rating Service default [member] | Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Description of rating	0
Equivalent external rating Dominion Bond Rating Service default [member] | Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Description of rating	0
Equivalent external rating Dominion Bond Rating Service default [member] | Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Description of rating	0

XML

Financial Instruments-Risk Management - Summary of Risk Categories of Borrower Internal Grades (Detail) $ in Millions	Oct. 31, 2018 CAD ($)	Oct. 31, 2017 CAD ($)
Disclosure of internal credit grades [line items]
Credit risk exposure default amount	$ 949,234	$ 878,413
Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	95
Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	90
Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	87
Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Internal grade code	85
Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Internal grade code	83
Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	80
Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Internal grade code	77
Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	75
Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	73
Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	70
Watch list [member]
Disclosure of internal credit grades [line items]
Internal grade code	30
Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	65
Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Internal grade code	60
Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Internal grade code	40
Default [member]
Disclosure of internal credit grades [line items]
Internal grade code	21
Non retail [member]
Disclosure of internal credit grades [line items]
Credit risk exposure default amount	$ 622,544	589,643
Non retail [member] | AIRB portfolio [member]
Disclosure of internal credit grades [line items]
Credit risk exposure at default drawn	357,484
Credit risk exposure at default undrawn commitments	86,799
Credit risk exposure at default other exposure	101,281
Credit risk exposure default amount	545,564	521,523
Non retail [member] | AIRB portfolio [member] | Excluding residential mortgages [member]
Disclosure of internal credit grades [line items]
Credit risk exposure at default drawn	275,292
Credit risk exposure at default undrawn commitments	86,799
Credit risk exposure at default other exposure	101,281
Credit risk exposure default amount	463,372	429,786
Non retail [member] | AIRB portfolio [member] | Government guaranteed residential mortgages [Member]
Disclosure of internal credit grades [line items]
Credit risk exposure at default drawn	82,192
Credit risk exposure default amount	82,192	91,737
Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Credit risk exposure at default drawn	77,598
Credit risk exposure at default undrawn commitments	2,758
Credit risk exposure at default other exposure	17,456
Credit risk exposure default amount	$ 97,812	91,159
Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors AA to A plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	95
Credit risk exposure at default drawn	$ 35,694
Credit risk exposure at default undrawn commitments	9,315
Credit risk exposure at default other exposure	19,661
Credit risk exposure default amount	$ 64,670	53,618
Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors-A to-A minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	90
Credit risk exposure at default drawn	$ 25,281
Credit risk exposure at default undrawn commitments	15,394
Credit risk exposure at default other exposure	25,234
Credit risk exposure default amount	$ 65,909	61,508
Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors BBB plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	87
Credit risk exposure at default drawn	$ 21,318
Credit risk exposure at default undrawn commitments	13,714
Credit risk exposure at default other exposure	12,513
Credit risk exposure default amount	$ 47,545	44,533
Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors BBB [member]
Disclosure of internal credit grades [line items]
Internal grade code	85
Credit risk exposure at default drawn	$ 21,472
Credit risk exposure at default undrawn commitments	12,861
Credit risk exposure at default other exposure	9,992
Credit risk exposure default amount	$ 44,325	40,478
Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors BBB minus[member]
Disclosure of internal credit grades [line items]
Internal grade code	83
Credit risk exposure at default drawn	$ 22,544
Credit risk exposure at default undrawn commitments	13,230
Credit risk exposure at default other exposure	7,054
Credit risk exposure default amount	$ 42,828	41,600
Non retail [member] | AIRB portfolio [member] | Non investment grade [member] | Equivalent external rating standard and poors BB plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	80
Credit risk exposure at default drawn	$ 26,618
Credit risk exposure at default undrawn commitments	10,019
Credit risk exposure at default other exposure	2,993
Credit risk exposure default amount	$ 39,630	36,235
Non retail [member] | AIRB portfolio [member] | Non investment grade [member] | Equivalent external rating standard and poors BB [member]
Disclosure of internal credit grades [line items]
Internal grade code	77
Credit risk exposure at default drawn	$ 20,005
Credit risk exposure at default undrawn commitments	4,944
Credit risk exposure at default other exposure	1,945
Credit risk exposure default amount	$ 26,894	23,058
Non retail [member] | AIRB portfolio [member] | Non investment grade [member] | Equivalent external rating standard and poors BB minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	75
Credit risk exposure at default drawn	$ 13,267
Credit risk exposure at default undrawn commitments	2,717
Credit risk exposure at default other exposure	3,296
Credit risk exposure default amount	$ 19,280	20,418
Non retail [member] | AIRB portfolio [member] | Non investment grade [member] | Equivalent external rating standard and poors-B plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	73
Credit risk exposure at default drawn	$ 5,905
Credit risk exposure at default undrawn commitments	1,049
Credit risk exposure at default other exposure	566
Credit risk exposure default amount	$ 7,520	7,271
Non retail [member] | AIRB portfolio [member] | Non investment grade [member] | Equivalent external rating standard and poors-B to-B minus [member]
Disclosure of internal credit grades [line items]
Internal grade code	70
Credit risk exposure at default drawn	$ 2,157
Credit risk exposure at default undrawn commitments	432
Credit risk exposure at default other exposure	228
Credit risk exposure default amount	$ 2,817	3,758
Non retail [member] | AIRB portfolio [member] | Watch list [member] | Equivalent external rating standard and poors CCC plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	65
Credit risk exposure at default drawn	$ 892
Credit risk exposure at default undrawn commitments	105
Credit risk exposure at default other exposure	146
Credit risk exposure default amount	$ 1,143	2,167
Non retail [member] | AIRB portfolio [member] | Watch list [member] | Equivalent external rating standard and poors CCC [member]
Disclosure of internal credit grades [line items]
Internal grade code	60
Credit risk exposure at default drawn	$ 936
Credit risk exposure at default undrawn commitments	90
Credit risk exposure at default other exposure	78
Credit risk exposure default amount	$ 1,104	761
Non retail [member] | AIRB portfolio [member] | Watch list [member] | Equivalent external rating standard and poors CCC- to CC [Member]
Disclosure of internal credit grades [line items]
Internal grade code	40
Credit risk exposure at default drawn	$ 526
Credit risk exposure at default undrawn commitments	41
Credit risk exposure at default other exposure	9
Credit risk exposure default amount	$ 576	1,311
Non retail [member] | AIRB portfolio [member] | Watch list [member] | Equivalent external rating standard and poors default [member]
Disclosure of internal credit grades [line items]
Internal grade code	30
Credit risk exposure at default drawn	$ 141
Credit risk exposure default amount	$ 141	159
Non retail [member] | AIRB portfolio [member] | Default [member]
Disclosure of internal credit grades [line items]
Internal grade code	21
Credit risk exposure at default drawn	$ 938
Credit risk exposure at default undrawn commitments	130
Credit risk exposure at default other exposure	110
Credit risk exposure default amount	$ 1,178	$ 1,752
Top of range [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	99
Top of range [member] | Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	99
Bottom of range [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	98
Bottom of range [member] | Non retail [member] | AIRB portfolio [member] | Investment grade [member] | Equivalent external rating standard and poors AAA to AA plus [member]
Disclosure of internal credit grades [line items]
Internal grade code	98

XML

Financial Instruments-Risk Management - Summary of Risk Categories of Borrower Internal Grades (Parenthetical) (Detail) - CAD ($)	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [abstract]
Loss protection related to derivatives transactions, net of related collateral	$ 0	$ 0

XML

Financial Instruments - Additional Information (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	$ 949,234	$ 878,413
Market value of collateral accepted	287,417	270,677
Assets acquired in exchange of loans	426	412
Decreases (increases) in the Bank's before-tax annual earnings	65	58
The unrealized foreign currency translation losses	384	345
Reverse repurchase agreements [member]
Disclosure of detailed information about financial instruments [line items]
Market value of collateral accepted	136,000	115,000
Standard securities borrowing agreements [member]
Disclosure of detailed information about financial instruments [line items]
Market value of collateral accepted	183,000	169,000
Collateral not sold or re-pledged	29,000	24,000
Retail [member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	326,690	288,770
Retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	$ 240,073	219,216
Percentage of residential mortgage portfolio insured	43.00%
Percentage of residential mortgage portfolio uninsured to average loan value	54.00%
Retail [member] | AIRB portfolio [member] | Real estate secured [member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	$ 161,339	143,160
Retail [member] | Standardized portfolio [Member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	86,617	69,554
Retail [member] | Standardized portfolio [Member] | Real estate secured [member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	44,517	34,002
Non retail [member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	622,544	589,643
Non retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	545,564	521,523
Non retail [member] | Standardized portfolio [Member]
Disclosure of detailed information about financial instruments [line items]
Credit risk exposure default amount	$ 76,980	$ 68,120
Top of range [member] | Retail [member] | Standardized portfolio [Member]
Disclosure of detailed information about financial instruments [line items]
Secured mortgage loans to value ratio	80.00%

XML

Financial Instruments-Risk Management - Summary of Risk Categories of Borrower by Probability Of default (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [line items]
Total	$ 949,234	$ 878,413
Retail [member]
Disclosure of detailed information about financial instruments [line items]
Total	326,690	288,770
Retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Total	240,073	219,216
Retail [member] | AIRB portfolio [member] | Exceptionally low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Total	12,155	16,026
Retail [member] | AIRB portfolio [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Total	89,544	80,507
Retail [member] | AIRB portfolio [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Total	107,036	94,081
Retail [member] | AIRB portfolio [member] | Medium low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Total	20,578	17,070
Retail [member] | AIRB portfolio [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Total	7,211	8,583
Retail [member] | AIRB portfolio [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Total	1,370	889
Retail [member] | AIRB portfolio [member] | Extremely high probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Total	$ 1,591	1,453
Retail [member] | AIRB portfolio [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	100.00%
Total	$ 588	607
Retail [member] | Bottom of range [member] | AIRB portfolio [member] | Exceptionally low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	0.00%
Retail [member] | Bottom of range [member] | AIRB portfolio [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	0.05%
Retail [member] | Bottom of range [member] | AIRB portfolio [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	0.20%
Retail [member] | Bottom of range [member] | AIRB portfolio [member] | Medium low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	1.00%
Retail [member] | Bottom of range [member] | AIRB portfolio [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	3.00%
Retail [member] | Bottom of range [member] | AIRB portfolio [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	10.00%
Retail [member] | Bottom of range [member] | AIRB portfolio [member] | Extremely high probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	20.00%
Retail [member] | Top of range [member] | AIRB portfolio [member] | Exceptionally low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	0.0499%
Retail [member] | Top of range [member] | AIRB portfolio [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	0.1999%
Retail [member] | Top of range [member] | AIRB portfolio [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	0.9999%
Retail [member] | Top of range [member] | AIRB portfolio [member] | Medium low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	2.9999%
Retail [member] | Top of range [member] | AIRB portfolio [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	9.9999%
Retail [member] | Top of range [member] | AIRB portfolio [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	19.9999%
Retail [member] | Top of range [member] | AIRB portfolio [member] | Extremely high probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Probability of default range percentage	99.9999%
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	$ 122,428
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	41,146
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	73,094
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member] | Medium low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	6,494
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	738
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	345
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member] | Extremely high probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	416
Real estate secured mortgages [member] | Retail [member] | AIRB portfolio [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	195
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	38,911
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	32,079
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	5,130
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member] | Medium low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	1,068
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	310
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	185
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member] | Extremely high probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	69
Real estate secured home equity line of credit [member] | Retail [member] | AIRB portfolio [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	70
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	45,887
Total	45,887	44,384
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | Exceptionally low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	11,657
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	9,348
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	12,091
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | Medium low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	7,893
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	3,594
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	354
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | Extremely high probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	803
Qualifying revolving [member] | Retail [member] | AIRB portfolio [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	147
Other retail [member] | Retail [member] | AIRB portfolio [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	32,847
Total	32,847	$ 31,672
Other retail [member] | Retail [member] | AIRB portfolio [member] | Exceptionally low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	498
Other retail [member] | Retail [member] | AIRB portfolio [member] | Very low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	6,971
Other retail [member] | Retail [member] | AIRB portfolio [member] | Low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	16,721
Other retail [member] | Retail [member] | AIRB portfolio [member] | Medium low probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	5,123
Other retail [member] | Retail [member] | AIRB portfolio [member] | Medium probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	2,569
Other retail [member] | Retail [member] | AIRB portfolio [member] | High probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	486
Other retail [member] | Retail [member] | AIRB portfolio [member] | Extremely high probability of default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	303
Other retail [member] | Retail [member] | AIRB portfolio [member] | Default [member]
Disclosure of detailed information about financial instruments [line items]
Exposure at default	$ 176

XML

Financial Instruments-Risk Management - Summary of Interest Rate Sensitivity (Detail) - CAD ($) $ in Millions	12 Months Ended
	Oct. 31, 2018	Oct. 31, 2017
Net income [member] | 100 bp increase [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	$ (105)	$ 64
Net income [member] | 100 bp increase [member] | Canadian dollar [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	(181)
Net income [member] | 100 bp increase [member] | Other currencies [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	76
Net income [member] | 100 bp decrease [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	101	(67)
Net income [member] | 100 bp decrease [member] | Canadian dollar [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	177
Net income [member] | 100 bp decrease [member] | Other currencies [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	(76)
Economic value of equity [member] | 100 bp increase [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	(870)	(354)
Economic value of equity [member] | 100 bp increase [member] | Canadian dollar [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	(458)
Economic value of equity [member] | 100 bp increase [member] | Other currencies [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	(412)
Economic value of equity [member] | 100 bp decrease [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	797	$ 183
Economic value of equity [member] | 100 bp decrease [member] | Canadian dollar [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	291
Economic value of equity [member] | 100 bp decrease [member] | Other currencies [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in interest rates pro-forma after tax impact	$ 506

XML

Financial Instruments-Risk Management - VaR by Risk Factor (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Credit risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	$ 11.0	$ 10.1
Credit spread [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	6.2	6.9
Interest rate risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	7.7	8.4
Equity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	5.8	3.2
Currency risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	2.8	2.9
Commodity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	1.7	1.3
Debt specific risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	3.6	3.3
Risk diversification effect [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	(11.7)	(10.3)
Bank risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	13.2	10.6
Bank stressed risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	44.6	$ 34.7
Weighted average [member] | Credit risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	11.6
Weighted average [member] | Credit spread [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	7.8
Weighted average [member] | Interest rate risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	9.5
Weighted average [member] | Equity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	3.0
Weighted average [member] | Currency risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	3.3
Weighted average [member] | Commodity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	1.6
Weighted average [member] | Debt specific risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	3.4
Weighted average [member] | Risk diversification effect [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	(10.0)
Weighted average [member] | Bank risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	12.9
Weighted average [member] | Bank stressed risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	42.7
Top of range [member] | Credit risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	17.8
Top of range [member] | Credit spread [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	12.2
Top of range [member] | Interest rate risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	17.2
Top of range [member] | Equity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	15.5
Top of range [member] | Currency risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	5.8
Top of range [member] | Commodity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	2.1
Top of range [member] | Debt specific risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	4.2
Top of range [member] | Bank risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	18.4
Top of range [member] | Bank stressed risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	59.0
Bottom of range [member] | Credit risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	6.9
Bottom of range [member] | Credit spread [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	4.8
Bottom of range [member] | Interest rate risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	4.3
Bottom of range [member] | Equity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	1.2
Bottom of range [member] | Currency risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	1.1
Bottom of range [member] | Commodity price risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	1.0
Bottom of range [member] | Debt specific risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	2.6
Bottom of range [member] | Bank risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	8.6
Bottom of range [member] | Bank stressed risk [member]
Disclosure of detailed information about financial instruments [line items]
Value at risk	$ 26.3

XML

Financial Instruments-Risk Management - Summary of Market Risk Capital Requirements (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Bank risk [member]
Disclosure of detailed information about financial instruments [line items]
Market risk capital	$ 13.2	$ 10.6
Bank stressed risk [member]
Disclosure of detailed information about financial instruments [line items]
Market risk capital	44.6	$ 34.7
Capital requirements [member]
Disclosure of detailed information about financial instruments [line items]
Market risk capital	669.0
Capital requirements [member] | Bank risk [member]
Disclosure of detailed information about financial instruments [line items]
Market risk capital	124.0
Capital requirements [member] | Bank stressed risk [member]
Disclosure of detailed information about financial instruments [line items]
Market risk capital	419.0
Capital requirements [member] | Incremental risk charge [member]
Disclosure of detailed information about financial instruments [line items]
Market risk capital	95.0
Capital requirements [member] | Standardized approach risk [member]
Disclosure of detailed information about financial instruments [line items]
Market risk capital	$ 31.0

XML

Financial Instruments-Risk Management - Summary of Market Risk Capital Requirements (Parenthetical) (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	Oct. 31, 2017
Disclosure of detailed information about financial instruments [abstract]
Risk-weighted assets	$ 8,357	$ 7,839

XML

Business Combinations - Additional Information (Detail) $ / shares in Units, shares in Millions, $ in Millions, $ in Millions						12 Months Ended
	Oct. 03, 2018 CAD ($)	Sep. 01, 2018 USD ($)	Jul. 06, 2018 CAD ($)	May 09, 2018 CAD ($)	May 01, 2018 CAD ($) shares $ / shares	Oct. 31, 2018 CAD ($)	Oct. 03, 2018 USD ($)	Sep. 01, 2018 CAD ($)	Jul. 06, 2018 USD ($)	Oct. 31, 2017 CAD ($)	Oct. 31, 2016 CAD ($)
Disclosure of detailed information about business combination [line items]
Goodwill						$ 10,007				$ 7,243	$ 7,384
Proportion of ownership interest						100.00%
Deferred tax liabilities						$ 493
Revenue						394
Net income (loss)						(257)
Provision for credit losses						404
Provision for credit losses after tax						285
Acquisition cost						44
Citibank's consumer and small and medium enterprise operations [member]
Disclosure of detailed information about business combination [line items]
Assets acquired						2,000
Liabilities assumed						1,400
Citibank's consumer and small and medium enterprise operations [member] | Deposits acquired in business combination [member]
Disclosure of detailed information about business combination [line items]
Liabilities assumed						1,300
Citibank's consumer and small and medium enterprise operations [member] | Loans acquired in business combination [member]
Disclosure of detailed information about business combination [line items]
Assets acquired						$ 1,900
BBVA Chile [member]
Disclosure of detailed information about business combination [line items]
Business acquisition, purchase price									$ 2,200
Proportion of ownership interest		75.50%
Proportion of consolidated			100.00%
Non-controlling interest			31.80%
Payment made by minority shareholder to increase pro forma ownership		$ 400
Other assets acquired			$ 8,400
Aggregate amount of goodwill and intangibles			1,300
Other liabilities acquired			12,800
Non-controlling interest			$ 600					$ 800
BBVA Chile [member] | Banco Bilbao Vizcaya Argentaria [member]
Disclosure of detailed information about business combination [line items]
Proportion of ownership interest			68.20%
BBVA Chile [member] | BBVA Seguros Vida S.A [member]
Disclosure of detailed information about business combination [line items]
Proportion of ownership interest			100.00%
BBVA Chile [member] | Servicios Corporativos S.A [member]
Disclosure of detailed information about business combination [line items]
Proportion of ownership interest			100.00%
BBVA Chile [member] | Inmobiliaria e Inversiones S.A.[member]
Disclosure of detailed information about business combination [line items]
Proportion of ownership interest			68.10%
BBVA Chile [member] | Inversiones DCV S.A.[member]
Disclosure of detailed information about business combination [line items]
Proportion of ownership interest			4.10%
BBVA Chile [member] | Deposits acquired in business combination [member]
Disclosure of detailed information about business combination [line items]
Liabilities assumed			$ 13,400
BBVA Chile [member] | Loans acquired in business combination [member]
Disclosure of detailed information about business combination [line items]
Assets acquired			$ 19,900
Banco Cencosud, Peru [member]
Disclosure of detailed information about business combination [line items]
Percentage of controlling interest				51.00%
Credit cards and consumer loans				$ 130
Partnership term under the agreement				15 years
MD Financial Management [member]
Disclosure of detailed information about business combination [line items]
Business acquisition, purchase price	$ 2,700
Goodwill							$ 1,200
Assets under management and administration	$ 49,000
Term of affinity agreement	10 years
Commitment amount payable	$ 115
Deferred tax liabilities							500
Other net assets							100
MD Financial Management [member] | Indefinite life intangible assets [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition							1,900
MD Financial Management [member] | Finite life intangible assets [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition							$ 70
Jarislowsky Fraser [member]
Disclosure of detailed information about business combination [line items]
Assets under management					$ 40,000
Business acquisition, purchase price					978
Earn out paid					$ 56
Common shares issued | shares					11.1
Common shares value not including earn-out					$ 878
Business acquisition, purchase price, cash					$ 44
Common shares issued, fair value per share | $ / shares					$ 78.86
Goodwill					$ 556
Assets acquired					(9)
Jarislowsky Fraser [member] | Indefinite life intangible assets [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition					(308)
Jarislowsky Fraser [member] | Finite life intangible assets [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition					$ (255)

XML

Business Combinations - Fair Value of Identifiable Net Assets at Acquisition Date (Detail) - CAD ($) $ in Millions	Oct. 31, 2018	May 01, 2018	Oct. 31, 2017	Oct. 31, 2016
Disclosure of detailed information about business combination [line items]
Deferred tax liability	$ (1,205)		$ (697)
Goodwill arising on acquisition	$ 10,007		$ 7,243	$ 7,384
Jarislowsky Fraser [member]
Disclosure of detailed information about business combination [line items]
Total net assets acquired		$ 9
Deferred tax liability		(150)
Goodwill arising on acquisition		556
Purchase consideration transferred		978
Jarislowsky Fraser [member] | Finite life intangible assets [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition		(255)
Jarislowsky Fraser [member] | Indefinite life intangible assets [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition		(308)
Jarislowsky Fraser [member] | Client relationships [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition		$ 255

XML

Business Combinations - Fair Value of Identifiable Net Assets at Acquisition Date (Parenthetical) (Detail) - Jarislowsky Fraser [member] $ in Millions	May 01, 2018 CAD ($)
Fund management contracts [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition	$ 290
Trademark [member]
Disclosure of detailed information about business combination [line items]
Intangible assets arising on acquisition	$ 18