Corporate Services quarterly net income can vary, in large part due to the inclusion of the adjusting items, which are largely recorded in Corporate Services. Adjusted results in Corporate Services were relatively steady in 2012 and better than in 2011. This was primarily due to a reduction in the adjusted provision for credit losses recorded in Corporate Services in 2012, reflecting the significant recoveries of provisions on the M&I purchased credit impaired loan portfolio. These recoveries can vary and reduced recoveries in the first quarter of 2013 together with lower revenues and increased expenses lowered Corporate Services results in the quarter.
The U.S. dollar weakened in the first half of 2011 before strengthening in the fourth quarter and reaching a level close to parity. Movements in exchange rates in 2012 and for 2013 to date were more subdued. A weaker U.S. dollar lowers the translated value of U.S.-dollar-denominated revenues, expenses, provisions for credit losses, income taxes and net income.
The effective income tax rate can vary, as it depends on the timing of resolution of certain tax matters, recoveries of prior periods' income taxes and the relative proportion of earnings attributable to the different jurisdictions in which we operate. The adjusted effective rate was lower in 2012 than in 2011 due in large part to a 1.6 percentage point reduction in the statutory Canadian income tax rate in 2012 and higher recoveries of prior periods' income taxes. The rate increased in 2013 due to reduced recoveries.
This Quarterly Earnings Trends section contains forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.
Total assets of $542.3 billion at January 31, 2013, increased $16.8 billion from October 31, 2012, with minimal impact from the stronger U.S. dollar. The increase primarily reflects growth in cash and cash equivalents and interest bearing deposits with banks of $11.4 billion, securities borrowed or purchased under resale agreements of $5.9 billion and net loans and acceptances of $5.3 billion, partly offset by decreases in the remaining assets of $5.8 billion.
The $11.4 billion increase in cash and cash equivalents and interest bearing deposits with banks was primarily due to increased balances held with central banks.
The $5.9 billion increase in securities borrowed or purchased under resale agreements was mainly due to increased client-driven activities.
The $5.3 billion increase in net loans and acceptances was primarily due to an increase in loans to businesses and governments in both P&C U.S. and P&C Canada and an increase in residential mortgages, primarily in P&C Canada.
The $5.8 billion decrease in the remaining assets was primarily related to a decline in derivative financial assets, primarily in interest rate contracts. There was a comparable decrease in derivative financial liabilities.
Liabilities and equity increased $16.8 billion from October 31, 2012. The change primarily reflects increases in deposits of $27.2 billion, partly offset by decreases in derivative financial liabilities of $5.2 billion, securities lent or sold under repurchase agreements of $2.0 billion, securities sold but not yet purchased of $2.0 billion and other liabilities of $2.2 billion. All remaining liabilities and equity increased by a combined $1.0 billion.
The $27.2 billion increase in deposits was largely driven by a $17.1 billion increase in business and government deposits due to increased U.S. deposits and U.S. dollar wholesale funding. Deposits by individuals increased $5.5 billion, while deposits by banks increased $4.6 billion.
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