Q2 2013 vs Q2 2012
P&C Canada net income of $430 million was essentially unchanged from a year ago. Revenue was consistent with the prior year as the effect of strong volume growth across most products was offset by the impact of lower net interest margin. Provisions for credit losses fell $13 million or 8% due to a decrease in provisions in the consumer portfolio.
Non-interest expense increased $19 million or 3% due to continued investment in the business including higher employee-related costs with increases in front-line resources across a number of roles.
Our investment campaign was a success with strong mutual fund growth and good growth in tax-free savings account balances. Our commercial loan and deposit growth continues to show momentum.
In the commercial banking segment, revenue increased $10 million due to the effects of higher balance and fee volumes across most products, partially offset by the impact of lower net interest margin.
Commercial loan balances increased 12% year over year, marking the fourth straight quarter of increasing growth. Commercial deposit balances growth was 12%, marking the third straight quarter of increasing growth.
In the personal banking segment, revenue decreased $7 million year over year due to the impact of lower net interest margin, partially offset by the effects of higher balance and fee volumes across most products. Total personal lending balances (including mortgages, Homeowner ReadiLine and other consumer lending products, but excluding credit cards) increased 10% year over year. Total personal lending (excluding credit cards) market share was up 16 basis points and would have increased even more except for the impact from two recent acquisitions by competitors.
Personal deposit balances increased 4% year over year mainly due to increased retail operating deposits.
Net interest margin decreased 24 basis points to 2.59% due to lower deposit spreads in the low rate environment, changes in mix including customer preferences for lower margin deposit products and loan growth exceeding deposit growth.
Average current loans and acceptances increased $15 billion or 10% from a year ago, and deposits increased $7 billion or 7%.
Q2 2013 vs Q1 2013
Net income decreased $28 million or 6% from last quarter due to the impact of fewer days and higher provisions for credit losses. Revenue decreased $31 million or 2%, due to three fewer days in the current quarter and, otherwise increased as the effects of higher balance and fee volumes across most products were partially offset by the impact of lower net interest margin. Net interest margin decreased 6 basis points.
Commercial revenue decreased $16 million due to fewer days and the impact of lower net interest margin, partially offset by the effects of higher volumes across most products.
Commercial lending market share for small and medium-sized loans was up 10 basis points and commercial deposits market share was up 43 basis points.
Personal revenue decreased $15 million, due to fewer days and the impact of lower net interest margin, partially offset by the effects of higher balance and fee volumes across most products. Personal lending market share was up 5 basis points and would have increased even more except for the impact from a recent acquisition by a competitor.
Provisions for credit losses increased $26 million, with the bulk of the increase in the commercial portfolio, primarily due to a higher provision related to one account.
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