NON-INTEREST INCOME


Reported non-interest income for the year was $14,392 million, an increase of $1,690 million, or 13%, compared with last year. All segments experienced increases in reported non-interest income. Wholesale Banking non-interest income increased due to higher trading revenue and fees. Corporate segment non-interest income increased primarily due to the contribution from an acquisition in the strategic cards portfolio and higher revenue from treasury and balance sheet management activities, partially offset by a lower gain due to change in the fair value of derivatives hedging the reclassified


T ABLE 9 NON-INTEREST INCOME (millions of Canadian dollars, except as noted) 2016


Investment and securities services Broker dealer fees and commissions


Full-service brokerage and other securities services Underwriting and advisory Investment management fees Mutual fund management Trust fees


Total investment and securities services Credit fees


Net securities gains (losses) Trading income (losses) Service charges Card services


Insurance revenue Other income (loss)


Total TRADING-RELATED INCOME


Trading-related income is the total of net interest income on trading positions, trading income (loss), and income from financial instruments designated at fair value through profit or loss that are managed within a trading portfolio. Trading-related income for the year was $1,335 million, an increase of $183 million, or 16%, compared with last year. For additional details, refer to Note 22 of the 2016 Consolidated Financial Statements. The increase in trading-related income over last year reflected higher fixed income, and foreign exchange trading, partially offset by lower equity trading.


$


463 853 546 505


1,623 153


4,143 1,048


54 395


2,571 2,313 3,796 72


$ 14,392 2015


$ 430 760 443 481


1,569 150


3,833 925


79 (223)


2,376 1,766 3,758 188


$ 12,702 $ 2014


412 684 482 413


1,355 150


3,496 845


173 (349)


2,152 1,552 3,883 625


$ 12,377


2016 vs. 2015 % change


8%


12 23 5 3 2


8 13


(32) 277 8


31 1


(62) 13%


The mix of trading-related income between net interest income and trading income is largely dependent upon the level of interest rates, which impacts the funding costs of the Bank’s trading portfolios. Management believes that the total trading-related income is the appropriate measure of trading performance.


available-for-sale securities portfolio, which was reported as an item of note. The increase in Canadian Retail non-interest income reflected wealth asset growth and higher personal and business banking fee-based revenue. U.S. Retail non-interest income increased primarily due to fee income growth in personal banking, the positive impact from an acquisition in the strategic cards portfolio, and the favourable impact of foreign currency translation, partially offset by a change in time order posting of customer transactions and an unfavourable hedging impact. Adjusted non-interest income for the year was $14,385 million, an increase of $1,672 million, or 13%, compared with last year.


FINANCIAL RESULTS OVERVIEW Provision for Credit Losses


PCL for the year was $2,330 million, an increase of $647 million, or 38%, compared with last year. All segments experienced increases in PCL. Corporate segment PCL increased primarily due to higher provisions for incurred but not identified credit losses. U.S. Retail PCL increased primarily due to commercial loan volume growth, an allowance increase reflecting the current economic environment in business banking, and higher provisions for auto loans and credit cards, partially offset by the release of the South Carolina flooding reserve, improvements on residential mortgages and home equity loans, and the unfavourable impact of foreign currency translation. Canadian Retail PCL reflected higher provisions in the auto lending portfolio. Wholesale Banking PCL increased due to higher specific provisions in the oil and gas sector.


PROVISION FOR CREDIT LOSSES (millions of Canadian dollars)


$2,500 2,000


1,500 1,000 500 0 14 15 Reported 16 Adjusted


TD BANK GROUP ANNUAL REPORT 2016 MANAGEMENT’S DISCUSSION AND ANALYSIS


19


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