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Commencing in the first quarter of 2013, provisions for credit losses in the operating groups are reported on an actual loss basis, rather than on an expected loss basis. Prior period results have been restated accordingly. Provisions by operating group are outlined in Tables 6 and 13.
The provision for credit losses in P&C Canada and Private Client Group declined quarter over quarter by $18 million and $9 million, respectively. P&C U.S. provisions decreased by $43 million from last quarter to $32 million in the current quarter. In BMO Capital Markets, the provision for credit losses improved quarter over quarter due to higher recoveries of previously written-off amounts. On an adjusted basis, Corporate Services recovery was $51 million compared with a $115 million recovery last quarter, due to the decline in recoveries related to the M&I purchased credit impaired loans.
----------------------------------------------------------------------------Provision for Credit Losses Table 5--------------------------------------------------------------------------------------------------------------------------------------------------------(Canadian $ in millions, except as noted) Q1-2013 Q4-2012 Q1-2012----------------------------------------------------------------------------New specific provisions 418 506 412Reversals of previously established allowances (82) (60) (67)Recoveries of loans previously written-off (158) (230) (223)----------------------------------------------------------------------------Specific provision for credit losses 178 216 122Increase (decrease) in collective allowance - (24) 19----------------------------------------------------------------------------Provision for credit losses (PCL) 178 192 141--------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted provision for credit losses (1) 96 113 91PCL as a % of average net loans and acceptances (annualized) (2) 0.28 0.31 0.23PCL as a % of average net loans and acceptances excluding purchased portfolios (annualized) (2) (3) 0.29 0.39 0.48Specific PCL as a % of average net loans and acceptances (annualized) 0.28 0.34 0.20Adjusted specific PCL as a % of average net loans and acceptances (annualized) (1) 0.16 0.20 0.17--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Adjusted provision for credit losses excludes provisions related to the M&I purchased performing loan portfolio and changes in the collective allowance.(2) Certain ratios for 2012 have been restated to conform to reclassified balance sheet presentation.(3) Ratio is presented excluding purchased portfolios, to provide for better historical comparisons.This table contains adjusted results and measures which are Non-GAAP. Pleasesee the Non-GAAP Measures section.----------------------------------------------------------------------------Provision for Credit Losses by Operating Group (1) Table 6--------------------------------------------------------------------------------------------------------------------------------------------------------(Canadian $ in millions, except as noted) Q1-2013 Q4-2012 Q1-2012---------------------------------------------------------------------------- P&C Canada 128 146 155 P&C U.S. 32 75 63----------------------------------------------------------------------------Personal and Commercial Banking 160 221 218Private Client Group 2 11 5BMO Capital Markets (15) (4) (9)Corporate Services, including T&O (2) (3) Impaired real estate loan portfolio 8 17 19 Purchased Credit Impaired Loans (59) (132) (142)----------------------------------------------------------------------------Adjusted provision for credit losses 96 113 91----------------------------------------------------------------------------Specific provisions on purchased performing loans (3) 82 103 31----------------------------------------------------------------------------Change in collective allowance - (24) 19----------------------------------------------------------------------------Provision for credit losses 178 192 141--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Effective Q1 - 2013, provisions related to the interest on impaired loans are allocated to the operating groups and prior periods have been restated accordingly.(2) Corporate Services includes the provision for credit losses in respect of loans transferred from P&C U.S. to Corporate Services in Q3-2011.(3) Provisions for the purchased performing and credit impaired loan portfolios are reported under Corporate Services.This table contains adjusted results or measures which are Non-GAAP. Pleasesee the Non-GAAP Measures section.
