In the personal banking segment, revenue increased by $6 million year over year, with higher volumes across most products partially offset by the impact of lower net interest margin. Total personal lending balances (including mortgages, Homeowner ReadiLine and other consumer lending products but excluding credit cards) increased 9.5% year over year. Total personal lending (excluding credit cards) market share was up 8 basis points. Adjusting for the impact of a peer acquisition in the first quarter of 2013, total personal lending market share was up 39 basis points.
Our goal is to grow market share while remaining attentive to the credit quality of the portfolio. We continue to focus on strengthening the total personal lending business through focused investment and improved productivity in the sales force.
Personal deposit balances increased 3% year over year mainly in retail operating deposits. Market share for personal deposits decreased 27 basis points year over year due to slow growth in term deposits.
In the commercial banking segment, revenue decreased $6 million as the effects of higher volumes across most products were more than offset by the impact of lower net interest margin.
Commercial loan balances increased 9.4% year over year and commercial deposit balances grew 6%. We continue to rank second in Canadian business banking market share of small and medium-size business loans.
Average current loans and acceptances increased $14 billion or 9% from a year ago, and personal and commercial deposits grew $4 billion or 4%.
Q1 2013 vs Q4 2012
Net income increased $16 million or 3% from last quarter driven by lower provisions for credit losses. Revenue increased by $5 million due to higher volumes across most products, offset by the effect of lower net interest margin. Net interest margin decreased 3 basis points, primarily driven by changes in mix, including loan growth exceeding deposit growth, and lower deposit spreads in the low rate environment.
Provisions for credit losses fell $18 million due to lower net provisions across all products.
Non-interest expense increased by $3 million, due to stock-based compensation for employees eligible to retire, which is expensed in the first quarter of each year. We continue to manage expenses prudently while investing selectively in the business.
Personal revenue was essentially unchanged quarter over quarter. Personal lending market share was down 15 basis points. Adjusting for the impact of a peer acquisition in the first quarter of 2013, total personal lending market share was up 16 basis points. Personal deposits market share was down 13 basis points.
Commercial revenue increased by $5 million, driven by higher volumes across most products, partially offset by the effect of lower net interest margin.
Average current loans and acceptances increased $3 billion or 2% from last quarter, while personal and commercial deposits increased $2 billion or 2%.
----------------------------------------------------------------------------Personal and Commercial Banking U.S. (P&C U.S.) Table 24---------------------------------------------------------------------------- % Increase % Increase(Canadian $ in millions, (Decrease) (Decrease) except as noted) Q1-2013 Q1-2012 vs Q1-2012 Q4-2012 vs Q4-2012----------------------------------------------------------------------------Net interest income (teb) 600 638 (6) 596 1Non-interest revenue 152 149 2 146 5----------------------------------------------------------------------------Total revenue (teb) 752 787 (5) 742 1Provision for credit losses 32 63 (49) 75 (57)Non-interest expense 449 493 (9) 462 (3)----------------------------------------------------------------------------Income before income taxes 271 231 17 205 32Provision for income taxes (teb) 89 72 22 65 35----------------------------------------------------------------------------Reported net income 182 159 15 140 31--------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted net income 195 176 11 156 26----------------------------------------------------------------------------Operating leverage (%) 4.3 6.8 nm (3.7) nmAdjusted operating leverage (%) 3.9 11.9 nm (4.1) nmEfficiency ratio (%) (teb) 59.8 62.7 (2.9) 62.3 (2.5)Adjusted efficiency ratio (%) (teb) 57.1 59.6 (2.5) 59.2 (2.1)Net interest margin on earning assets (%) (teb) 4.21 4.47 (0.26) 4.30 (0.09)Average earning assets ($ billions) 56 57 - 55 3--------------------------------------------------------------------------------------------------------------------------------------------------------U.S. Select Financial Data (US$ in millions, except as noted)Net interest income (teb) 603 630 (4) 603 -Non-interest revenue 152 148 3 147 4----------------------------------------------------------------------------Total revenue (teb) 755 778 (3) 750 1Non-interest expense 451 487 (7) 467 (3)Reported net Income 183 157 17 141 30Adjusted net income 197 174 13 156 25Average earning assets (US$ billions) 57 56 2 56 2--------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted results in this table are non-GAAP amounts or non-GAAP measures.Please see the Non-GAAP Measures section.nm - not meaningful
