XML 39 R25.htm IDEA: XBRL DOCUMENT v3.25.4
Fair Value of Financial Instruments
 3 Months Ended
Jan. 31, 2026
Text Block [Abstract]  
Fair Value of Financial Instruments
17.
Fair value of financial instruments
(a) Financial instruments designated at fair value through profit or loss
In accordance with its risk management strategy, the Bank has elected to designate certain 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 at a benchmark rate.
The following table presents the fair value of liabilities designated at fair value through profit or loss and their changes in fair value.  
 
  
 
Fair value
 
 
Change in fair value
(1)

Gains/(Losses)
 
 
Cumulative change in fair value
(2)

Gains/(Losses)
 
  
 
As at
 
 
For the three months ended
 
 
As at
 
($ millions)
 
January 31
2026
 
 
October 31
2025
 
 
January 31
2025
 
 
January 31
2026
 
 
October 31
2025
 
 
January 31
2025
 
 
January 31
2026
 
 
October 31
2025
 
 
January 31
2025
 
Liabilities
 
 
 
 
 
 
 
 
 
Senior note liabilities
(3)
  
$
47,740
 
   $ 47,165     $ 39,594    
$
(105)
     $ (1,334 )
 
   $ 486    
$
3,165
 
   $ 3,270     $ 4,626  
  (1)
Change in the difference between the contractual maturity amount and the carrying value.
  (2)
The cumulative change in fair value is measured from the instrument’s date of initial recognition.
  (3)
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 offsetting fair value changes from associated derivatives is also recorded in
non-interest
income – trading revenues.
The following table presents 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  
($ millions)
     
 		 Contractual
maturity
amount		  
 
 		      Carrying value       




 		 Difference
between
contractual
maturity
amount and
carrying
value		  
 
 
 
 
 
 		     







 		 Changes in fair value
for the three
months period
attributable to
changes in own
credit risk
recorded in other
comprehensive
income
Gains/(Losses)		  
 
 
 
 

 
 

 		     



 		 Cumulative changes
in fair value
attributable to
changes in own
credit risk
(1)

Gains/(Losses)		  
 
 
 
 
 
As at January 31, 2026
   
$
50,905
 
   
$
47,740
 
   
$
3,165
 
   
$
(246
)
   
$
(1,852
)
As at October 31, 2025
    $ 50,435      $ 47,165      $ 3,270      $ (379 )     $ (1,606 ) 
As at January 31, 2025
    $  44,220      $  39,594      $  4,626      $  (264 )     $  (1,177 ) 
  (1)
The cumulative change in fair value is measured from the instruments’ date of initial recognition.
(b) Financial instruments – fair value
Fair value of financial instruments
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.
Refer to Note 6 of the audited consolidated financial statements in the 2025 Annual Report for the valuation techniques used to fair value its significant financial assets and liabilities.
The following table sets out the fair values of financial instruments of the Bank and ex
clu
des
non-financial
assets, such as property and equipment, investments in associates, precious metals, goodwill and other intangible assets.
 
  
  
 As at  
 
  
  
January 31, 2026
 
  
October 31, 2025
 
($ millions)
  
Total fair
value
 
  
Total
carrying
value
 
  
Total fair
value
 
  
Total
carrying
value
 
Assets:
  
  
  
  
Cash and deposits with financial institutions
   
$
73,838
 
   
$
73,838
 
    $ 65,967      $ 65,967  
Trading assets
   
 
161,043
 
   
 
161,043
 
      152,223        152,223  
Securities purchased under resale agreements and securities borrowed
   
 
215,379
 
   
 
215,379
 
       203,008         203,008  
Derivative financial instruments
   
 
47,788
 
   
 
47,788
 
      46,531        46,531  
Investment securities – FVOCI and FVTPL
   
 
119,947
 
   
 
119,947
 
      126,226        126,226  
Investment securities – amortized cost
   
 
22,069
 
   
 
22,452
 
      23,239        23,722  
Loans
   
 
754,887
 
   
 
755,475
 
      769,900        771,045  
Customers’ liability under acceptances
   
 
173
 
   
 
173
 
      177        177  
Other financial assets
   
 
28,419
 
   
 
28,419
 
      28,128        28,128  
Liabilities:
            
Deposits
   
 
 971,043
 
   
 
 971,682
 
      965,925        966,279  
Financial instruments designated at fair value through profit or loss
   
 
47,740
 
   
 
47,740
 
      47,165        47,165  
Acceptances
   
 
174
 
   
 
174
 
      178        178  
Obligations related to securities sold short
   
 
33,147
 
   
 
33,147
 
      38,104        38,104  
Derivative financial instruments
   
 
58,165
 
   
 
58,165
 
      56,031        56,031  
Obligations related to securities sold under repurchase agreements and securities lent
   
 
204,760
 
   
 
204,760
 
      189,144        189,144  
Subordinated debentures
   
 
5,882
 
   
 
5,807
 
      7,749        7,692  
Other financial liabilities
   
 
55,508
 
   
 
55,490
 
      56,500        56,529  
 
 
(c) Fair value hierarchy
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.
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 or other valuation techniques. Fair value estimates do not consider forced or liquidation sales.
Where financial instruments trade in inactive markets, illiquid markets or when using models where observable parameters do not exist, greater management judgement is required for valuation purposes. Valuations that require the significant use of unobservable inputs are classified as Level 3.
The following table outlines the fair value hierarchy and instruments carried at fair value on a recurring basis.
 
  
 
As at
 
  
 
January 31, 2026
 
 
October 31, 2025
 
($ 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
(1)
  
$
–
 
  
$
11,543
 
  
$
–
 
  
$
11,543
 
   $ –     $ 5,156     $ –     $ 5,156  
Trading assets
                
Loans
  
 
–
 
  
 
7,891
 
  
 
161
 
  
 
8,052
 
     –       8,486       1       8,487  
Canadian federal government and government guaranteed debt
  
 
14,997
 
  
 
3,603
 
  
 
–
 
  
 
18,600
 
     13,838       1,963       –       15,801  
Canadian provincial and municipal debt
  
 
7,071
 
  
 
4,497
 
  
 
–
 
  
 
11,568
 
     8,374       3,336       –       11,710  
U.S. treasury and other U.S. agencies’ debt
  
 
9,337
 
  
 
–
 
  
 
–
 
  
 
9,337
 
     9,132       –       –       9,132  
Other foreign governments’ debt
  
 
982
 
  
 
11,128
 
  
 
–
 
  
 
12,110
 
     1,837       8,451       –       10,288  
Corporate and other debt
  
 
3,922
 
  
 
7,224
 
  
 
–
 
  
 
11,146
 
     3,523       6,593       –       10,116  
Equity securities
  
 
88,921
 
  
 
128
 
  
 
11
 
  
 
89,060
 
     83,412       373       12       83,797  
Other
  
 
–
 
  
 
1,170
 
  
 
–
 
  
 
1,170
 
     –       2,892       –       2,892  
 
  
$
 125,230
 
  
$
 35,641
 
  
$
172
 
  
$
161,043
 
   $  120,116     $  32,094     $ 13     $  152,223  
Investment securities
(2)
                
Canadian federal government and government guaranteed debt
  
$
12,483
 
  
$
9,726
 
  
$
–
 
  
$
22,209
 
   $ 15,143     $ 7,967     $ –     $ 23,110  
Canadian provincial and municipal debt
  
 
11,925
 
  
 
9,315
 
  
 
–
 
  
 
21,240
 
     16,293       4,550       –       20,843  
U.S. treasury and other U.S. agencies’ debt
  
 
39,174
 
  
 
6,131
 
  
 
–
 
  
 
45,305
 
     42,300       6,736       –       49,036  
Other foreign governments’ debt
  
 
4,336
 
  
 
21,596
 
  
 
–
 
  
 
25,932
 
     7,099       20,627       –       27,726  
Corporate and other debt
  
 
194
 
  
 
2,679
 
  
 
31
 
  
 
2,904
 
     116       2,892       32       3,040  
Equity securities
  
 
122
 
  
 
297
 
  
 
1,938
 
  
 
2,357
 
     96       329       2,046       2,471  
 
  
$
68,234
 
  
$
49,744
 
  
$
  1,969
 
  
$
  119,947
 
   $ 81,047     $ 43,101     $  2,078     $ 126,226  
Derivative financial instruments
                
Interest rate contracts
  
$
–
 
  
$
9,383
 
  
$
–
 
  
$
9,383
 
   $ –     $ 9,804     $ 3     $ 9,807  
Foreign exchange and gold contracts
  
 
–
 
  
 
27,543
 
  
 
1
 
  
 
27,544
 
     –       26,411       1       26,412  
Equity contracts
  
 
513
 
  
 
6,263
 
  
 
93
 
  
 
6,869
 
     816       6,452       161       7,429  
Credit contracts
  
 
–
 
  
 
320
 
  
 
6
 
  
 
326
 
     –       269       4       273  
Commodity contracts
  
 
–
 
  
 
3,656
 
  
 
10
 
  
 
3,666
 
     –       2,594       16       2,610  
 
  
$
513
 
  
$
47,165
 
  
$
110
 
  
$
47,788
 
   $ 816     $ 45,530     $ 185     $ 46,531  
Liabilities:
                
Deposits
(3)
  
$
–
 
  
$
335
 
  
$
–
 
  
$
335
 
   $ –     $ 335     $ –     $ 335  
Financial liabilities designated at fair value through profit or loss
  
 
–
 
  
 
47,740
 
  
 
–
 
  
 
47,740
 
     –       47,165       –       47,165  
Obligations related to securities sold short
  
 
29,441
 
  
 
3,706
 
  
 
–
 
  
 
33,147
 
     34,864       3,240       –       38,104  
Derivative financial instruments
                
Interest rate contracts
  
 
–
 
  
 
17,149
 
  
 
3
 
  
 
17,152
 
     –       17,181       8       17,189  
Foreign exchange and gold contracts
  
 
–
 
  
 
27,353
 
  
 
–
 
  
 
27,353
 
     –       25,793       –       25,793  
Equity contracts
  
 
800
 
  
 
7,052
 
  
 
28
 
  
 
7,880
 
     783       9,288       43       10,114  
Credit contracts
  
 
–
 
  
 
21
 
  
 
2
 
  
 
23
 
     –       24       2       26  
Commodity contracts
  
 
–
 
  
 
5,747
 
  
 
10
 
  
 
5,757
 
     –       2,897       12       2,909  
 
  
$
800
 
  
$
57,322
 
  
$
43
 
  
$
58,165
 
   $ 783     $ 55,183     $ 65     $ 56,031  
  (1)
The fair value of precious metals is determined based on quoted market prices and forward spot prices, where applicable, less the cost to sell.
  (2)
Excludes debt investment securities measured at amortized cost of $22,452 (October 31, 2025 – $23,722).
  (3)
These amounts represent embedded derivatives bifurcated from structured note liabilities measured at amortized cost.

 
Level 3 instrument fair value changes
Financial instruments categorized as Level 3 as at January 31, 2026, in the fair value hierarchy comprised of loans, corporate bonds, equity securities and derivatives.
The following table summarizes the changes in Level 
3
instruments carried at fair value for the
three
months ended January 
31
,
2026
.
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
For the three months ended January 31, 2026
 
($ millions)
 
 

 
Fair value,
beginning of
the quarter
 
 
 
 
 


 
Gains/
(losses)
recorded
in income
(1)
 
 
 
 
 
 


 
Gains/
(losses)
recorded
in OCI
 
 
 
 
 
 
Purchases/
Issuances
 
 
 
 
Sales/
Settlements
 
 
 
  
Transfers
into
Level 3
  
 
 
 
 

 
Transfers
out of
Level 3
 
 
 
 
 

 
Fair value,
end of the
quarter
 
 
 
 
 





 
Changes in
unrealized
gains/(losses)
recorded in
income for
instruments
still held
(2)
 
 
 
 
 
 
 
Trading assets
 
      
 
      
 
      
 
      
 
      
 
      
 
      
 
    
 
 
      
Loans
 
$
1
 
 
$
–
 
 
$
(3
) 
 
$
164
 
 
$
–
 
 
$
–
 
 
$
(1
) 
 
$
161
 
 
$
–
 
Equity securities
 
 
12
 
 
 
(1
) 
 
 
–
 
 
 
4
 
 
 
–
 
 
 
2
 
 
 
(6
) 
 
 
11
 
 
 
–
 
 
 
 
13
 
 
 
(1
) 
 
 
(3
) 
 
 
168
 
 
 
–
 
 
 
2
 
 
 
(7
) 
 
 
172
 
 
 
–
 
Investment securities
 
      
 
      
 
      
 
      
 
      
 
      
 
      
 
    
 
 
      
Corporate and other debt
 
 
32
 
 
 
–
 
 
 
(1
) 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
31
 
 
 
–
 
Equity securities
 
 
2,046
 
 
 
22
 
 
 
2
 
 
 
68
 
 
 
(200
) 
 
 
–
 
 
 
–
 
 
 
1,938
 
 
 
22
 
 
 
 
2,078
 
 
 
22
 
 
 
1
 
 
 
68
 
 
 
(200
) 
 
 
–
 
 
 
–
 
 
 
1,969
 
 
 
22
 
Derivative financial instruments – assets
 
      
 
      
 
      
 
      
 
      
 
      
 
      
 
    
 
 
      
Interest rate contracts
 
 
3
 
 
 
(1
) 
 
 
–
 
 
 
–
 
 
 
(2
) 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
Foreign exchange and gold contracts
 
 
1
 
 
 
1
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(1
) 
 
 
1
 
 
 
1
 
Equity contracts
 
 
161
 
 
 
(9
) 
 
 
–
 
 
 
5
 
 
 
(70
) 
 
 
31
 
 
 
(25
) 
 
 
93
 
 
 
11
(3)
 
Credit contracts
 
 
4
 
 
 
2
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
6
 
 
 
2
 
Commodity contracts
 
 
16
 
 
 
(6
) 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
10
 
 
 
(6
) 
 
 
 
          
 
  
Derivative financial instruments – liabilities
 
      
 
      
 
      
 
      
 
      
 
      
 
      
 
    
 
 
      
Interest rate contracts
 
 
(8
) 
 
 
4
 
 
 
–
 
 
 
(1
) 
 
 
1
 
 
 
–
 
 
 
1
 
 
 
(3
) 
 
 
(2
)
(4)
 
Equity contracts
 
 
(43
) 
 
 
7
 
 
 
–
 
 
 
(9
) 
 
 
–
 
 
 
–
 
 
 
17
 
 
 
(28
) 
 
 
7
(3)
 
Credit contracts
 
 
(2
) 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(2
) 
 
 
–
 
Commodity contracts
 
 
(12
) 
 
 
2
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
–
 
 
 
(10
) 
 
 
2
 
 
 
 
120
 
 
 
–
 
 
 
–
 
 
 
(5
) 
 
 
(71
) 
 
 
31
 
 
 
(8
) 
 
 
67
 
 
 
15
 
Total
 
$
   2,211
 
 
$
   21
 
 
$
  (2
) 
 
$
   231
 
 
$
   (271
) 
 
$
   33
 
 
$
   (15
) 
 
$
   2,208
 
 
$
   37
 
  (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)
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)
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.
  (4)
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 tables summarize the changes in Level 3 instruments carried at fair value for the three months ended January 31, 2025.
 
      For the three months ended January 31, 2025  
($ millions)
    Fair value,
beginning
of the
quarter		      Gains/
(losses)
recorded
in income
(1)
      Gains/
(losses)
recorded
in OCI		      Purchases/
Issuances		      Sales/
Settlements		     
Transfers
into
Level 3
     
Transfers
out of
Level 3
      Fair value,
end of the
quarter		  
Trading assets
    $ 25      $ 1      $ –      $ 1      $ (13 )     $ 7      $ (11 )     $ 10  
Investment securities
       1,901         51         5         71        (8 )        –        (8 )         2,012  
Derivative financial instruments
      10        3        –        4           –        –           3        20  
Obligations related to securities sold short
      (2 )       –        –        –        –        –        2        –  
  (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.
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 at the end of the reporting period during which the change has occurred.
The following significant transfers made between Level 1 and 2, were based on whether the fair value was determined using quoted market prices from an active market.
During the three months ended January 31, 2026:
 
  •  
Trading assets of $1,154
million
,
 investment securities of $
186
million and obligations related to securities sold short of $238 million were transferred out of Level 2 into Level 1.
 
  •  
Trading assets of $2,075
million
,
investment securities of $
7,805
million and obligations related to securities sold short of $399 million were transferred out of Level 1 into Level 2.
During the three months ended January 31, 2025:
 
  •  
Trading assets of $1,004 million, investment securities of $788 million and obligations related to securities sold short of $392 million were transferred out of Level 2 into Level 1.
 
  •  
Trading assets of $1,519 million, investment securities of $
6,393
million and obligations related to securities sold short of $
1,366
million were transferred out of Level 1 into Level 2.
There were no significant transfers into and out of Level 3 during the three months ended January 31, 2026 and
January
 31, 2025.
Level 3 sensitivity
The Bank applies judgement in determining unobservable inputs used to calculate the fair value of Level 3 instruments.
Refer to Note 6 of the audited consolidated financial statements in the 2025 Annual Report for a description of the significant unobservable inputs for Level 3 instruments and the potential effect that a change in each unobservable input may have on the fair value measurement. There have been no significant changes to the Level 3 sensitivities during the quarter.