Q1 2013 vs Q1 2012
Net income was $310 million, an increase of $86 million or 38% from the previous year. A strong focus on clients and a more favourable market environment resulted in strength across our businesses for the quarter. ROE was 21.3%, up from 19.8% a year ago. Our U.S. segment also benefited from a recovery of prior periods' income taxes.
Revenue increased $129 million or 17% to $904 million, driven by higher non-interest revenue, which included a significant improvement in mergers and acquisitions and debt underwriting fees. Interest and equity trading revenues also improved. The weaker U.S. dollar decreased revenue by $7 million relative to a year ago.
In line with higher revenue, non-interest expense increased $31 million or 6%, mainly due to higher employee compensation costs, coupled with higher support costs. The weaker U.S. dollar decreased expense by $3 million relative to a year ago.
Q1 2013 vs Q4 2012
This quarter's results were very strong, declining a modest $4 million or 2% from the previous quarter.
Revenue was $3 million higher, reflecting increased investment banking activity, primarily in mergers and acquisitions and debt underwriting, offset by a decline in trading revenues.
Non-interest expense decreased $6 million or 1% mainly due to lower employee compensation. This decrease was lowered by stock-based compensation costs for employees eligible to retire, which are recognized in the first quarter of the year.
There was a lower income tax recovery in the current quarter. The current quarter results benefited from a recovery of prior periods' income taxes in the U.S. segment. The prior quarter benefited from a larger tax recovery in the Canadian segment.
----------------------------------------------------------------------------Corporate Services, Including Technology and Operations Table 27----------------------------------------------------------------------------(Canadian $ in % Increase % Increase millions, except as (Decrease) (Decrease) noted) Q1-2013 Q1-2012 vs Q1-2012 Q4-2012 vs Q4-2012----------------------------------------------------------------------------Net interest income before group teb offset 143 160 (11) 149 (4)Group teb offset (64) (52) (24) (92) 30----------------------------------------------------------------------------Net interest income (teb) 79 108 (28) 57 38Non-interest revenue 4 187 (98) 133 (97)----------------------------------------------------------------------------Total revenue (teb) 83 295 (72) 190 (57)Provision for (recovery of) credit losses 31 (73) +100 (36) +100Non-interest expense 244 211 16 346 (30)----------------------------------------------------------------------------Profit (loss) before income taxes (192) 157 (+100) (120) (59)Provision for (recovery of) income taxes (teb) (127) (24) (+100) (142) 11----------------------------------------------------------------------------Reported net income (loss) (65) 181 (+100) 22 (+100)----------------------------------------------------------------------------Adjusted ResultsAdjusted total revenue (teb) (137) (79) (77) (66) (+100)Adjusted provision for (recovery of) credit losses (51) (123) 58 (115) 55Adjusted non-interest expense 149 69 +100 115 29Adjusted net income (loss) (94) 20 (+100) 41 (+100)----------------------------------------------------------------------------Corporate Services Provision for (Recovery of) Credit Losses Impaired real estate loan portfolio 8 19 (58) 17 (53) Purchased credit impaired loans (59) (142) 58 (132) 55----------------------------------------------------------------------------Provision for (recovery of) credit losses, adjusted basis (51) (123) 59 (115) 56Collective provision - 19 (100) (24) 100Purchased performing loans 82 31 +100 103 (20)----------------------------------------------------------------------------Provision for (recovery of) credit losses, reported basis 31 (73) +100 (36) +100----------------------------------------------------------------------------Average loans and acceptances 1,189 2,186 (46) 1,397 (15)Period-end loans and acceptances 1,054 2,122 (50) 1,314 (20)----------------------------------------------------------------------------U.S. Select Financial Data (US$ in millions)Total revenue (teb) 116 208 (44) 179 (35)Provision for (recovery of) credit losses 24 (103) +100 (69) +100Non-interest expense 139 98 40 196 (29)Provision for (recovery of) income taxes (teb) (36) 59 (+100) (16) (+100)----------------------------------------------------------------------------Reported net income (loss) (11) 154 (+100) 68 (+100)----------------------------------------------------------------------------Adjusted total revenue (teb) (96) (24) (+100) (7) (+100)Adjusted provision for (recovery of) credit losses (55) (123) 55 (116) 53Adjusted non-interest expense 47 (2) +100 31 52Adjusted net income (loss) (36) 84 (+100) 84 (+100)--------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted results in this table are non-GAAP amounts or non-GAAP measures.Please see the Non-GAAP Measures section.nm - not meaningful
