ENHANCED DISCLOSURE TASK FORCE (EDTF) RECOMMENDATIONS

The Enhanced Disclosure Task Force (EDTF) was established by the Financial Stability Board in May 2012 with the goal of developing fundamental disclosure principles. On October 29, 2012 the EDTF published its report, “Enhancing the Risk Disclosures of Banks”, which sets forth recommendations around improving risk disclosures and identifies existing leading practice risk disclosures.

Below is the index of all these recommendations to facilitate easy reference in the Bank’s annual report and other public disclosure documents available on www.scotiabank.com/investorrelations.

 

		Reference Table for EDTF
								Pages
		Type of risk		Number		Disclosure		MD&A				Financial Statements				Supplementary Regulatory Capital Disclosures
		General		1		The index of risks to which the business is exposed.			14
				2		The Bank’s risk to terminology, measures and key parameters.			74-78
				3		Top and emerging risks, and the changes during the reporting period.			80-81, 85-91
				4		Discussion on the regulatory development and plans to meet new regulatory ratios.			54-57, 99-102, 114-116
		Risk governance, risk management and business model		5		The Bank’s Risk Governance structure.			72-74
				6		Description of risk culture and procedures applied to support the culture.			74-78
				7		Description of key risks from the Bank’s business model.			79
				8		Stress testing use within the Bank’s risk governance and capital management.			75-76
		Capital Adequacy and risk-weighted assets		9		Pillar 1 capital requirements, and the impact for global systemically important banks.			54-57				206				3
				10		a) Regulatory capital components.			58								18-21
						b) Reconciliation of the accounting balance sheet to the regulatory balance sheet.											15-16
				11		Flow statement of the movements in regulatory capital since the previous reporting period, including changes in common equity tier 1, additional tier 1 and tier 2 capital.			59-60								74
				12		Discussion of targeted level of capital, and the plans on how to establish this.			54-57
				13		Analysis of risk-weighted assets by risk type, business, and market risk RWAs.			63-67, 79, 123				176, 229				5, 34, 36-47, 59-61, 65, 77, 83
				14		Analysis of the capital requirements for each Basel asset class.			63-67				176, 223-229				13-14, 34-48, 58-61, 65, 70-73
				15		Tabulate credit risk in the Banking Book.			63-67				224				13-14, 34-48, 70-73
				16		Flow statements reconciling the movements in risk-weighted assets for each risk-weighted asset type.			63-67								49, 64, 76
				17		Discussion of Basel III Back-testing requirement including credit risk model performance and validation.			64-66								50-53, 81
		Liquidity Funding		18		Analysis of the Bank’s liquid assets.			97-102
				19		Encumbered and unencumbered assets analyzed by balance sheet category.			99
				20		Consolidated total assets, liabilities and off-balance sheet commitments analyzed by remaining contractual maturity at the balance sheet date.			103-105
				21		Analysis of the Bank’s sources of funding and a description of the Bank’s funding strategy.			102-103
		Market Risk		22		Linkage of market risk measures for trading and non-trading portfolios and the balance sheet.			96
				23		Discussion of significant trading and non-trading market risk factors.			92-97				228-229
				24		Discussion of changes in period on period VaR results as well as VaR assumptions, limitations, backtesting and validation.			92-97				228-229
				25		Other risk management techniques e.g. stress tests, stressed VaR, tail risk and market liquidity horizon.			92-97				229
		Credit Risk		26		Analysis of the aggregate credit risk exposures, including details of both personal and wholesale lending.			85-91, 117-123				186-187, 225-227				5, 34, 36-47, 59-61
				27		Discussion of the policies for identifying impaired loans, defining impairments and renegotiated loans, and explaining loan forbearance policies.							155-157, 187
				28		Reconciliations of the opening and closing balances of impaired loans and impairment allowances during the year.			88, 117-118, 120, 121				187				31-32
				29		Analysis of counterparty credit risk that arises from derivative transactions.			83-84				174-177				82
				30		Discussion of credit risk mitigation, including collateral held for all sources of credit risk.			83-84, 89
		Other risks		31		Quantified measures of the management of operational risk.			67, 106
				32		Discussion of publicly known risk items.			71

 

14  |  2022 Scotiabank Annual Report

Management’s Discussion and Analysis

 

Table of Contents

 

 

2022 Scotiabank Annual Report  |  15

Management’s Discussion and Analysis

 

FORWARD LOOKING STATEMENTS

From time to time, our public communications include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission (SEC), or in other communications. In addition, representatives of the Bank may include forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include, but are not limited to, statements made in this document, the Management’s Discussion and Analysis in the Bank’s 2022 Annual Report under the headings “Outlook” and in other statements regarding the Bank’s objectives, strategies to achieve those objectives, the regulatory environment in which the Bank operates, anticipated financial results, and the outlook for the Bank’s businesses and for the Canadian, U.S. and global economies. Such statements are typically identified by words or phrases such as “believe,” “expect,” “foresee,” “forecast,” “anticipate,” “intend,” “estimate,” “plan,” “goal,” “target,” “project,” “commit,” “objective,” and similar expressions of future or conditional verbs, such as “will,” “may,” “should,” “would,” “might,” “can” and “could” and positive and negative variations thereof.

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved.

We caution readers not to place undue reliance on these statements as a number of risk factors, many of which are beyond our control and effects of which can be difficult to predict, could cause our actual results to differ materially from the expectations, targets, estimates or intentions expressed in such forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including but not limited to: general economic and market conditions in the countries in which we operate; changes in currency and interest rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the failure of third parties to comply with their obligations to the Bank and its affiliates; changes in monetary, fiscal, or economic policy and tax legislation and interpretation; changes in laws and regulations or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, and the effect of such changes on funding costs; changes to our credit ratings; the possible effects on our business of war or terrorist actions and unforeseen consequences arising from such actions; operational and infrastructure risks; reputational risks; the accuracy and completeness of information the Bank receives on customers and counterparties; the timely development and introduction of new products and services, and the extent to which products or services previously sold by the Bank require the Bank to incur liabilities or absorb losses not contemplated at their origination; our ability to execute our strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of changes to accounting standards, rules and interpretations on these estimates; global capital markets activity; the Bank’s ability to attract, develop and retain key executives; the evolution of various types of fraud or other criminal behaviour to which the Bank is exposed; disruptions in or attacks (including cyber-attacks) on the Bank’s information technology, internet, network access, or other voice or data communications systems or services; increased competition in the geographic and in business areas in which we operate, including through internet and mobile banking and non-traditional competitors; exposure related to significant litigation and regulatory matters; climate change and other environmental and social risks, including sustainability that may arise, including from the Bank’s business activities; the occurrence of natural and unnatural catastrophic events and claims resulting from such events; inflationary pressures; Canadian housing and household indebtedness; the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic and its impact on the global economy, financial market conditions and the Bank’s business, results of operations, financial condition and prospects; and the Bank’s anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank’s business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank’s financial results, businesses, financial condition or liquidity. These and other factors may cause the Bank’s actual performance to differ materially from that contemplated by forward-looking statements. The Bank cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Bank’s results, for more information, please see the “Risk Management” section of the Bank’s 2022 Annual Report, as may be updated by quarterly reports.

Material economic assumptions underlying the forward-looking statements contained in this document are set out in the 2022 Annual Report under the headings “Outlook”, as updated by quarterly reports. The “Outlook” and “2023 Priorities” sections are based on the Bank’s views and the actual outcome is uncertain. Readers should consider the above-noted factors when reviewing these sections. When relying on forward-looking statements to make decisions with respect to the Bank and its securities, investors and others should carefully consider the preceding factors, other uncertainties and potential events.

Any forward-looking statements contained in this document represent the views of management only as of the date hereof and are presented for the purpose of assisting the Bank’s shareholders and analysts in understanding the Bank’s financial position, objectives and priorities, and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on its behalf.

Additional information relating to the Bank, including the Bank’s Annual Information Form, can be located on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.

November 29, 2022

 

16  |  2022 Scotiabank Annual Report

MANAGEMENT’S DISCUSSION & ANALYSIS

Management’s Discussion and Analysis (MD&A) is provided to enable readers to assess the Bank’s financial condition and results of operations as at and for the year ended October 31, 2022. The MD&A should be read in conjunction with the Bank’s 2022 Consolidated Financial Statements, including the Notes. This MD&A is dated November 29, 2022.

Additional information relating to the Bank, including the Bank’s 2022 Annual Report, are available on the Bank’s website at www.scotiabank.com. As well, the Bank’s 2022 Annual Report and Annual Information Form are available on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC’s website at www.sec.gov.

Non-GAAP Measures

The Bank uses a number of financial measures and ratios to assess its performance, as well as the performance of its operating segments. Some of these financial measures and ratios are presented on a non-GAAP basis and are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), are not defined by GAAP and do not have standardized meanings and therefore might not be comparable to similar financial measures and ratios disclosed by other issuers. The Bank believes that non-GAAP measures and ratios are useful as they provide readers with a better understanding of how management assesses performance. These non-GAAP measures and ratios are used throughout this report and defined below.

Adjusted results and adjusted diluted earnings per share

The following table presents a reconciliation of GAAP reported financial results to non-GAAP adjusted financial results. Management considers both reported and adjusted results and measures useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non-interest expenses, income taxes and non-controlling interest. Presenting results on both a reported basis and adjusted basis allows readers to assess the impact of certain items on results for the periods presented, and to better assess results and trends excluding those items that may not be reflective of ongoing business performance. Net income and diluted earnings per share have been adjusted for the following:

 

1.

Amortization of acquisition-related intangible assets:

Costs of $71 million ($97 million pre-tax) (October 31, 2021 – $75 million ($103 million pre-tax)) relate to the amortization of intangible assets recognized upon the acquisition of businesses, excluding software, and are recorded in the Canadian Banking, International Banking and Global Wealth Management operating segments.

 

2.

Restructuring and other provisions:

In Q4 2022, the Bank recorded a restructuring charge of $66 million ($85 million pre-tax) primarily related to the strategic decision to realign the Global Banking and Markets businesses in Asia Pacific to focus on select banking and capital markets activities in the region. The charge also included reductions in Canadian and international technology employees, driven by ongoing technology modernization and digital transformation.

In the prior year, the Bank recorded a restructuring charge of $93 million ($126 million pre-tax), substantially related to International Banking for the cost of reducing branches and full-time employees, driven by the accelerated customer adoption of digital channels and process automation. The Bank also recorded settlement and litigation provisions in the amount of $46 million ($62 million pre-tax) in connection with the Bank’s former metals business.

These charges were recorded in the Other operating segment.

 

3.

Support costs for the Scene+ loyalty program:

The Bank recorded costs of $98 million ($133 million pre-tax) to support the expansion of the Scene+ loyalty program to include Empire Company Limited as a partner. These committed costs relate to operational support, transition marketing and technology initiatives and were recognized as an expense in Q4 2022 in the Other operating segment.

 

4.

Net loss on divestitures and wind-down of operations:

In Q4 2022, the Bank sold its investments in associates in Venezuela and Thailand. Additionally, the Bank wound down its operations in India and Malaysia in relation to its realignment of the business in the Asia Pacific region. Collectively, the sale and wind-down of these entities resulted in a net loss of $340 million ($361 million pre-tax), of which $294 million ($315 million pre-tax) related to the reclassification of cumulative foreign currency translation losses net of hedges, from accumulated other comprehensive income to non-interest income in the Consolidated Statement of Income. This net loss was recorded in the Other operating segment. For further details on these transactions, please refer to Note 36 of the consolidated financial statements.

 

2022 Scotiabank Annual Report  |  17

Management’s Discussion and Analysis

 

T1  Reconciliation of reported and adjusted results and diluted earnings per share

 

As at October 31 ($ millions)		2022				2021
Reported Results
Net interest income		$	18,115			$	16,961
Non-interest income			13,301				14,291
Total revenue			31,416				31,252
Provision for credit losses			1,382				1,808
Non-interest expenses			17,102				16,618
Income before taxes			12,932				12,826
Income tax expense			2,758				2,871
Net income		$	10,174			$	9,955
Net income attributable to non-controlling interests in subsidiaries (NCI)			258				331
Net income attributable to equity holders			9,916				9,624
Net income attributable to preferred shareholders and other equity instrument holders			260				233
Net income attributable to common shareholders			9,656				9,391
Diluted earnings per share (in dollars)		$	8.02			$	7.70
Adjustments
Adjusting items impacting non-interest income and total revenue (Pre-tax)
Net loss on divestitures and wind-down of operations		$	361			$	–
Adjusting items impacting non-interest expenses (Pre-tax)
Amortization of acquisition-related intangible assets			97				103
Restructuring and other provisions			85				188
Support costs for the Scene+ loyalty program			133				–
Total non-interest expense adjusting items (Pre-tax)		$	315			$	291
Total impact of adjusting items on net income before taxes			676				291
Impact of adjusting items on income tax expense
Net loss on divestitures and wind-down of operations			(21	)			–
Amortization of acquisition-related intangible assets			(26	)			(28	)
Restructuring and other provisions			(19	)			(49	)
Support costs for the Scene+ loyalty program			(35	)			–
Total impact of adjusting items on income tax expense			(101	)			(77	)
Total impact of adjusting items on net income			575				214
Impact of adjusting items on NCI related to restructuring and other provisions			(1	)			(10	)
Total impact of adjusting items on net income attributable to equity holders and common shareholders		$	574			$	204
Adjusted Results
Net interest income		$	18,115			$	16,961
Non-interest income			13,662				14,291
Total revenue			31,777				31,252
Provision for credit losses			1,382				1,808
Non-interest expenses			16,787				16,327
Income before taxes			13,608				13,117
Income tax expense			2,859				2,948
Net income		$	10,749			$	10,169
Net income attributable to NCI			259				341
Net income attributable to equity holders			10,490				9,828
Net income attributable to preferred shareholders and other equity instrument holders			260				233
Net income attributable to common shareholders		$	10,230			$	9,595
Diluted earnings per share (in dollars)		$	8.50			$	7.87
Impact of adjustments on diluted earnings per share (in dollars)		$	0.48			$	0.17

 

18  |  2022 Scotiabank Annual Report

T1A  Reconciliation of reported and adjusted results by business line

 

		For the year ended October 31, 2022(1)
($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Reported net income (loss)		$	4,763			$	2,667			$	1,565			$	1,911			$	(732	)		$	10,174
Net income attributable to non-controlling interests in subsidiaries (NCI)			–				249				9				–				–				258
Reported net income attributable to equity holders			4,763				2,418				1,556				1,911				(732	)		$	9,916
Reported net income attributable to preferred shareholders and other equity instrument holders			6				6				3				4				241			$	260
Reported net income attributable to common shareholders		$	4,757			$	2,412			$	1,553			$	1,907			$	(973	)		$	9,656
Adjustments
Adjusting items impacting non-interest income and total revenue (Pre-tax)
Net loss on divestitures and wind-down of operations		$	–			$	–			$	–			$	–			$	361			$	361
Adjusting items impacting non-interest expenses (Pre-tax)
Amortization of acquisition-related intangible assets			22				39				36				–				–				97
Restructuring and other provisions			–				–				–				–				85				85
Support costs for the Scene+ loyalty program			–				–				–				–				133				133
Total non-interest expenses adjustments (Pre-tax)			22				39				36				–				218				315
Total impact of adjusting items on net income before taxes			22				39				36				–				579				676
Total impact of adjusting items on income tax expense			(6	)			(11	)			(9	)			–				(75	)			(101	)
Total impact of adjusting items on net income			16				28				27				–				504				575
Impact of adjusting items on NCI related to restructuring and other provisions			–				–				–				–				(1	)			(1	)
Total impact of adjusting items on net income attributable to equity holders and common shareholders			16				28				27				–				503				574
Adjusted net income (loss)		$	4,779			$	2,695			$	1,592			$	1,911			$	(228	)		$	10,749
Adjusted net income attributable to equity holders		$	4,779			$	2,446			$	1,583			$	1,911			$	(229	)		$	10,490
Adjusted net income attributable to common shareholders		$	4,773			$	2,440			$	1,580			$	1,907			$	(470	)		$	10,230

 

(1)	Refer to Business Line Overview on page 37.

 

		For the year ended October 31, 2021(1)
($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Reported net income (loss)		$	4,155			$	2,155			$	1,574			$	2,075			$	(4	)		$	9,955
Net income attributable to non-controlling interests in subsidiaries (NCI)			–				332				9				–				(10	)			331
Reported net income attributable to equity holders			4,155				1,823				1,565				2,075				6				9,624
Reported net income attributable to preferred shareholders and other equity instrument holders			20				21				11				15				166				233
Reported net income attributable to common shareholders		$	4,135			$	1,802			$	1,554			$	2,060			$	(160	)		$	9,391
Adjustments
Adjusting items impacting non-interest expenses (Pre-tax)
Amortization of acquisition-related intangible assets		$	22			$	45			$	36			$	–			$	–			$	103
Restructuring and other provisions			–				–				–				–				188				188
Total non-interest expenses adjustments (Pre-tax)			22				45				36				–				188				291
Total impact of adjusting items on net income before taxes			22				45				36				–				188				291
Total impact of adjusting items on income tax expense			(6	)			(13	)			(9	)			–				(49	)			(77	)
Total impact of adjusting items on net income			16				32				27				–				139				214
Impact of adjusting items on NCI related to restructuring and other provisions			–				–				–				–				(10	)			(10	)
Total impact of adjusting items on net income attributable to equity holders and common shareholders			16				32				27				–				129				204
Adjusted net income (loss)		$	4,171			$	2,187			$	1,601			$	2,075			$	135			$	10,169
Adjusted net income attributable to equity holders		$	4,171			$	1,855			$	1,592			$	2,075			$	135			$	9,828
Adjusted net income attributable to common shareholders		$	4,151			$	1,834			$	1,581			$	2,060			$	(31	)		$	9,595

 

(1)	Refer to Business Line Overview on page 37.

 

2022 Scotiabank Annual Report  |  19

Management’s Discussion and Analysis

 

Constant Dollar

International Banking business segment results are analyzed on a constant dollar basis which is a non-GAAP measure. Under the constant dollar basis, prior period amounts are recalculated using current period average foreign currency rates. The following table presents the reconciliation between reported, adjusted and constant dollar results for International Banking for prior periods. The Bank believes that constant dollar is useful for readers to understand business performance without the impact of foreign currency translation and is used by management to assess the performance of the business segment. The tables below are computed on a basis that is different than the table “Impact of foreign currency translation” in Overview of Performance on page 26.

T2  Reconciliation of International Banking’s reported and adjusted results and constant dollar results

 

For the year ended October 31 ($ millions)		2021
(Taxable equivalent basis)		Reported results				Foreign exchange				Constant dollar results
Net interest income		$	6,625			$	147			$	6,478
Non-interest income			2,993				119				2,874
Total revenue			9,618				266				9,352
Provision for credit losses			1,574				40				1,534
Non-interest expenses			5,254				105				5,149
Income tax expense			635				30				605
Net Income		$	2,155			$	91			$	2,064
Net income attributable to non-controlling interest in subsidiaries		$	332			$	24			$	308
Net income attributable to equity holders of the Bank		$	1,823			$	67			$	1,756
Other measures
Average assets ($ billions)		$	194			$	4			$	190
Average liabilities ($ billions)		$	149			$	5			$	144

 

For the year ended October 31 ($ millions)		2021
(Taxable equivalent basis)		Adjusted results				Foreign exchange				Constant dollar adjusted results
Net interest income		$	6,625			$	147			$	6,478
Non-interest income			2,993				119				2,874
Total revenue			9,618				266				9,352
Provision for credit losses			1,574				40				1,534
Non-interest expenses			5,209				102				5,107
Income tax expense			648				32				616
Net Income		$	2,187			$	92			$	2,095
Net income attributable to non-controlling interest in subsidiaries		$	332			$	23			$	309
Net income attributable to equity holders of the Bank		$	1,855			$	69			$	1,786

Reconciliation of average total assets, core earning assets and core net interest income

Earning assets

Earning assets are defined as income generating assets which include deposits with financial institutions, trading assets, investment securities, investments in associates, securities borrowed or purchased under resale agreements, loans net of allowances, and customers’ liability under acceptances.

Non-earning assets

Non-earning assets are defined as cash, precious metals, derivative financial instruments, property and equipment, goodwill and other intangible assets, deferred tax assets and other assets.

Core earning assets

Core earning assets are defined as interest-bearing deposits with financial institutions, investment securities and loans net of allowances. This is a non-GAAP measure. The Bank believes that this measure is useful for readers as it presents the main interest-generating assets of the personal and commercial businesses, and eliminates the impact of trading businesses.

Core net interest income

Core net interest income is defined as net interest income earned from core earning assets. This is a non-GAAP measure.

Net interest margin

Net interest margin is calculated as core net interest income for the business line divided by average core earning assets. Net interest margin is a non-GAAP ratio.

 

20  |  2022 Scotiabank Annual Report

T3  Reconciliation of average total assets, average earning assets, average core earning assets and net interest margin by business line

Consolidated Bank

 

For the year ended October 31 (Unaudited) ($ millions)		2022				2021
Average total assets - Reported(1)		$	1,281,708			$	1,157,213
Less: Non-earning assets			107,536				94,908
Average total earning assets(1)		$	1,174,172			$	1,062,305
Less:
Trading assets			138,390				142,033
Securities purchased under resale agreements
and securities borrowed			140,557				116,829
Other deductions			62,531				51,750
Average core earning assets(1)		$	832,694			$	751,693
Net Interest Income - Reported		$	18,115			$	16,961
Less: Non-core net interest income			(185	)			190
Core net interest income		$	18,300			$	16,771
Net interest margin			2.20	%			2.23	%

 

(1)	Average balances represent the average of daily balances for the period.

Canadian Banking

 

For the year ended October 31 (Unaudited) ($ millions)		2022				2021
Average total assets - Reported(1)		$	429,528			$	380,772
Less: Non-earning assets			4,092				4,102
Average total earning assets(1)		$	425,436			$	376,670
Less:
Other deductions			23,482				17,382
Average core earning assets(1)		$	401,954			$	359,288
Net Interest Income - Reported		$	9,001			$	8,030
Less: Non-core net interest income			–				–
Core net interest income		$	9,001			$	8,030
Net interest margin			2.24	%			2.23	%

 

(1)	Average balances represent the average of daily balances for the period.

International Banking

 

For the year ended October 31 (Unaudited) ($ millions)		2022				2021
Average total assets - Reported(1)		$	206,550			$	194,124
Less: Non-earning assets			17,808				15,218
Average total earning assets(1)		$	188,742			$	178,906
Less:
Trading assets			4,978				5,812
Securities purchased under resale agreements
and securities borrowed			1,265				–
Other deductions			6,781				6,581	(2)
Average core earning assets(1)		$	175,718			$	166,513
Net Interest Income - Reported		$	6,900			$	6,625
Less: Non-core net interest income			(66	)			50
Core net interest income		$	6,966			$	6,575
Net interest margin			3.96	%			3.95	%(2)

 

(1)	Average balances represent the average of daily balances for the period.

(2)	Prior period has been restated to reflect the deduction of non-interest bearing deposits with financial institutions, to align with the Bank’s definition.

Return on equity

Return on equity is a profitability measure that presents the net income attributable to common shareholders as a percentage of average common shareholders’ equity.

 

2022 Scotiabank Annual Report  |  21

Management’s Discussion and Analysis

 

The Bank attributes capital to its business lines on a basis that approximates 10.5% of Basel III common equity capital requirements which includes credit, market and operational risks and leverage inherent within each business segment.

Return on equity for the business segments is calculated as a ratio of net income attributable to common shareholders of the business segment and the capital attributed.

Adjusted return on equity is a non-GAAP ratio which represents adjusted net income attributable to common shareholders as a percentage of adjusted average common shareholders’ equity.

Return on equity by operating segment

T4  Return on equity by operating segment

 

For the year ended October 31, 2022 ($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Reported
Net income (loss) attributable to common shareholders		$	4,757			$	2,412			$	1,553			$	1,907			$	(973	)		$	9,656
Total average common equity(1)			18,105				18,739				9,576				13,328				5,442				65,190
Return on equity			26.3	%			12.9	%			16.2	%			14.3	%			nm	(2)			14.8	%
Adjusted(3)
Net income (loss) attributable to common shareholders			4,773				2,440				1,580				1,907				(470	)			10,230
Total average common equity(1)			18,105				18,739				9,576				13,328				5,619				65,367
Return on equity			26.4	%			13.0	%			16.5	%			14.3	%			nm	(2)			15.6	%

 

(1)	Average amounts calculated using methods intended to approximate the daily average balances for the period.

(2)	Not meaningful.

(3)	Refer to Tables on pages 18 and 19.

 

For the year ended October 31, 2021 ($ millions)		Canadian Banking				International Banking				Global Wealth Management				Global Banking and Markets				Other				Total
Reported
Net income (loss) attributable to common shareholders		$	4,135			$	1,802			$	1,554			$	2,060			$	(160	)		$	9,391
Total average common equity(1)			16,388				17,377				9,301				12,450				8,311				63,827
Return on equity			25.2	%			10.4	%			16.7	%			16.5	%			nm	(2)			14.7	%
Adjusted(3)
Net income (loss) attributable to common shareholders			4,151				1,834				1,581				2,060				(31	)			9,595
Total average common equity(1)			16,388				17,377				9,301				12,450				8,385				63,901
Return on equity			25.3	%			10.6	%			17.0	%			16.5	%			nm	(2)			15.0	%

 

(1)	Average amounts calculated using methods intended to approximate the daily average balances for the period.

(2)	Not meaningful.

(3)	Refer to Tables on pages 18 and 19.

Return on tangible common equity

Return on tangible common equity is a profitability measure that is calculated by dividing the net income attributable to common shareholders, adjusted for the amortization of intangibles (excluding software), by average tangible common equity. Tangible common equity is defined as common shareholders’ equity adjusted for goodwill and intangible assets (excluding software), net of deferred taxes. This is a non-GAAP ratio.

Adjusted return on tangible common equity represents adjusted net income attributable to common shareholders as a percentage of adjusted average tangible common equity. This is a non-GAAP ratio.

T5  Return on tangible common equity

 

For the years ended October 31 ($ millions)		2022				2021
Reported
Average common equity – Reported(1)		$	65,190			$	63,827
Average goodwill(1)(2)			(9,197	)			(9,424	)
Average acquisition-related intangibles (net of deferred tax)(1)			(3,803	)			(3,895	)
Average tangible common equity(1)		$	52,190			$	50,508
Net income attributable to common shareholders – Reported		$	9,656			$	9,391
Amortization of acquisition-related intangible assets (after tax)(3)			71				75
Net income attributable to common shareholders adjusted for amortization of acquisition-related intangible assets (after tax)		$	9,727			$	9,466
Return on tangible common equity(4)			18.6	%			18.7	%
Adjusted(3)
Adjusted net income attributable to common shareholders		$	10,230			$	9,595
Average tangible common equity – adjusted(1)		$	52,367			$	50,582
Return on tangible common equity – adjusted(4)			19.5	%			19.0	%

 

(1)	Average amounts calculated using methods intended to approximate the daily average balances for the period.

(2)	Includes imputed goodwill from investments in associates.

(3)	Refer to Tables on pages 18 and 19.

(4)	Calculated on full dollar amounts.

 

22  |  2022 Scotiabank Annual Report

Adjusted productivity ratio

Adjusted productivity ratio represents adjusted non-interest expenses as a percentage of adjusted total revenue.

Management uses the productivity ratio as a measure of the Bank’s efficiency. A lower ratio indicates improved productivity.

Adjusted operating leverage

This financial metric measures the rate of growth in adjusted total revenue less the rate of growth in adjusted non-interest expenses.

Management uses operating leverage as a way to assess the degree to which the bank can increase operating income by increasing revenue.

Trading-related revenue (Taxable equivalent basis)

Trading-related revenue consists of net interest income and non-interest income. Included are unrealized gains and losses on security positions held, realized gains and losses from the purchase and sale of securities, fees and commissions from securities borrowing and lending activities, and gains and losses on trading derivatives. Underwriting and other advisory fees, which are shown separately in the Consolidated Statement of Income, are excluded. Trading related revenue includes certain net interest income and non-interest income items on a taxable equivalent basis (TEB). This methodology grosses up tax-exempt income earned on certain securities to an equivalent before tax basis.

Management believes that this basis for measurement of trading-related revenue provides a uniform comparability of net interest income and non-interest income arising from both taxable and non-taxable sources and facilitates a consistent basis of measurement. While other banks also use TEB, their methodology may not be comparable to the Bank’s methodology.

Adjusted effective tax rate

The adjusted effective tax rate is calculated by dividing adjusted income tax expense by adjusted income before taxes.

 

2022 Scotiabank Annual Report  |  23

Management’s Discussion and Analysis

 

T6  Financial highlights

 

As at and for the years ended October 31		2022				2021
Operating results ($ millions)
Net interest income			18,115				16,961
Non-interest income			13,301				14,291
Total revenue			31,416				31,252
Provision for credit losses			1,382				1,808
Non-interest expenses			17,102				16,618
Income tax expense			2,758				2,871
Net income			10,174				9,955
Net income attributable to common shareholders			9,656				9,391
Operating performance
Basic earnings per share ($)			8.05				7.74
Diluted earnings per share ($)			8.02				7.70
Return on equity (%)(1)			14.8				14.7
Return on tangible common equity (%)(2)			18.6				18.7
Productivity ratio (%)(1)			54.4				53.2
Operating leverage (%)(1)			(2.4	)			1.1
Net interest margin (%)(2)			2.20				2.23
Financial position information ($ millions)
Cash and deposits with financial institutions			65,895				86,323
Trading assets			113,154				146,312
Loans			744,987				636,986
Total assets			1,349,418				1,184,844
Deposits			916,181				797,259
Common equity			65,150				64,750
Preferred shares and other equity instruments			8,075				6,052
Assets under administration(1)			641,636				652,924
Assets under management(1)			311,099				345,762
Capital and liquidity measures
Common Equity Tier 1 (CET1) capital ratio (%)(3)			11.5				12.3
Tier 1 capital ratio (%)(3)			13.2				13.9
Total capital ratio (%)(3)			15.3				15.9
Total loss absorbing capacity (TLAC) ratio (%)(4)			27.4				27.8
Leverage ratio (%)(5)			4.2				4.8
TLAC Leverage ratio (%)(4)			8.8				9.6
Risk-weighted assets ($ millions)(3)			462,448				416,105
Liquidity coverage ratio (LCR) (%)(6)			119				124
Net stable funding ratio (NSFR) (%)(7)			111				110
Credit quality
Net impaired loans ($ millions)			3,151				2,801
Allowance for credit losses ($ millions)(8)			5,499				5,731
Gross impaired loans as a % of loans and acceptances(1)			0.62				0.67
Net impaired loans as a % of loans and acceptances(1)			0.41				0.42
Provision for credit losses as a % of average net loans and acceptances(1)(9)			0.19				0.29
Provision for credit losses on impaired loans as a % of average net loans and acceptances(1)(9)			0.24				0.53
Net write-offs as a % of average net loans and acceptances(1)			0.24				0.54
Adjusted results(2)
Adjusted net income ($ millions)			10,749				10,169
Adjusted diluted earnings per share ($)			8.50				7.87
Adjusted return on equity (%)			15.6				15.0
Adjusted return on tangible common equity (%)			19.5				19.0
Adjusted productivity ratio (%)			52.8				52.2
Adjusted operating leverage (%)			(1.1	)			1.5
Common share information
Closing share price ($) (TSX)			65.85				81.14
Shares outstanding (millions)
Average – Basic			1,199				1,214
Average – Diluted			1,208				1,225
End of period			1,191				1,215
Dividends paid per share ($)			4.06				3.60
Dividend yield (%)(1)			5.1				5.2
Market capitalization ($ millions) (TSX)			78,452				98,612
Book value per common share ($)(1)			54.68				53.28
Market value to book value multiple(1)			1.2				1.5
Price to earnings multiple (trailing 4 quarters)(1)			8.2				10.5
Other information
Employees (full-time equivalent)			90,979				89,488
Branches and offices			2,384				2,518

 

(1)	Refer to Glossary on page 133 for the description of the measure.

(2)	Refer to page 17 for a discussion of Non-GAAP measures.

(3)	This measure has been disclosed in this document in accordance with OSFI Guideline – Capital Adequacy Requirements (November 2018).

(4)	This measure has been disclosed in this document in accordance with OSFI Guideline – Total Loss Absorbing Capacity (September 2018).

(5)	This measure has been disclosed in this document in accordance with OSFI Guideline – Leverage Requirements (November 2018).

(6)	This measure has been disclosed in this document in accordance with OSFI Guideline – Public Disclosure Requirements for Domestic Systemically Important Banks on Liquidity Coverage Ratio (April 2015).

(7)	This measure has been disclosed in this document in accordance with OSFI Guideline – Net Stable Funding Ratio Disclosure Requirements (January 2021).

(8)	Includes allowance for credit losses on all financial assets – loans, acceptances, off-balance sheet exposures, debt securities, and deposits with financial institutions.

(9)	Includes provision for credit losses on certain financial assets – loans, acceptances, and off-balance sheet exposures.

 

24  |  2022 Scotiabank Annual Report

Management’s Discussion and Analysis    |    Overview of Performance

 

OVERVIEW OF PERFORMANCE

Financial Results: 2022 vs 2021

Net income was $10,174 million in 2022, up 2% from $9,955 million in 2021, due primarily to higher net interest income and lower provision for credit losses and lower provision for income taxes, partly offset by higher non-interest expenses. Diluted earnings per share (EPS) were $8.02 compared to $7.70. Return on equity was 14.8% compared to 14.7%.

Adjusting items impacting net income in the current year were $575 million after-tax ($676 million pre-tax) [refer to Non-GAAP Measures starting on page 17]. The Bank recorded a net loss of $340 million ($361 million pre-tax) in relation to the divesture of investments in associates in Venezuela and Thailand, and the wind-down of operations in India and Malaysia, mostly relating to the reclassification of cumulative foreign currency translation losses net of hedges, from accumulated other comprehensive income to non-interest income in the Consolidated Statement of Income. The Bank recognized costs of $98 million ($133 million pre-tax) to support the expansion of the Scene+ loyalty program to include Empire Company Limited as a partner. The Bank recorded a restructuring charge of $66 million ($85 million pre-tax) primarily related to the strategic decision to realign the Global Banking and Markets business in Asia Pacific to focus on select banking and capital markets activities in the region. The charge also included reductions in Canadian and international technology employees, driven by ongoing technology modernization and digital transformation. Other adjusting items in the current year included amortization of acquisition-related intangible assets of $71 million ($97 million pre-tax). Net impact of the adjustments on diluted earnings per share was $0.48 and on Basel III Common Equity Tier 1 (CET1) ratio was two basis points.

The adjustments in the prior year were $214 million after-tax ($291 million pre-tax) which included restructuring and other provisions of $139 million after-tax ($188 million pre-tax), and amortization of acquisition-related intangible assets of $75 million ($103 million pre-tax).

Adjusted net income was $10,749 million, up 6% from $10,169 million. The increase in adjusted net income was due primarily to higher net interest income, lower provision for credit losses and lower income taxes, partly offset by higher non-interest expenses. Adjusted diluted EPS were $8.50 compared to $7.87 and adjusted return on equity was 15.6% compared to 15.0%.

Net interest income was $18,115 million, an increase of $1,154 million or 7%. The increase was driven by strong loan growth and higher margins across all business lines, partly offset by a lower contribution from asset/liability management activities related to higher funding costs and the negative impact of foreign currency translation. Net interest margin was down three basis points to 2.20%, driven primarily by a lower contribution from asset/liability management activities related to higher funding costs.

Non-interest income of $13,301 million was down $990 million or 7%, including adjusting items of $361 million [refer to Non-GAAP Measures starting on page 17]. Adjusted non-interest income decreased $629 million or 4%, due primarily to lower trading revenues, investment gains, underwriting and advisory fees, income from associated corporations, unrealized losses on non-trading derivatives, mutual fund fees and the negative impact of foreign currency translation. These were partly offset by higher banking revenues, brokerage fees and non-trading foreign exchange fees.

The provision for credit losses was $1,382 million compared to $1,808 million last year, a decrease of $426 million or 24% due mainly to lower provision for credit losses on impaired loans, partly offset by higher provision for credit losses on performing loans, across all business lines. The provision for credit losses ratio decreased 10 basis points to 19 basis points.

Non-interest expenses were $17,102 million, an increase of $484 million or 3%, including adjusting items of $315 million this year compared to $291 million last year [refer to Non-GAAP Measures starting on page 17]. Adjusted non-interest expenses also increased 3%. Higher personnel costs, share-based payments, professional fees, advertising, technology-related costs, and business and capital taxes were partly offset by the positive impact of foreign currency translation. The prior year’s expenses were impacted by higher performance-based compensation and the increased investment in the SCENE loyalty program. The productivity ratio was 54.4% compared to 53.2%. On an adjusted basis, the productivity ratio was 52.8% compared to 52.2%. Operating leverage was negative 2.4%. On an adjusted basis, operating leverage was negative 1.1%.

The provision for income taxes was $2,758 million compared to $2,871 million last year. The effective tax rate was 21.3% compared to 22.4% in the prior year. The adjusted effective tax rate was 21.0% compared to 22.5% due primarily to higher inflation-related benefits in Chile and Mexico and higher tax-exempt income during the year.

The Basel III Common Equity Tier 1 (CET1) ratio was 11.5% as at October 31, 2022, compared to 12.3% last year.

Medium-term financial objectives

The following table provides a summary of our 2022 performance against our medium-term financial performance objectives:

 

		2022 Results
						Reported				Adjusted(1)
Diluted earnings per share growth of 7%+							4.2	%			8.0%
Return on equity of 14%+							14.8	%			15.6%
Achieve positive operating leverage							Negative 2.4	%			Negative 1.1%
Maintain strong capital ratios							CET1 capital ratio of 11.5	%			N/A

 

(1)	Refer to Non-GAAP Measures on page 17.

 

Shareholder Returns   In fiscal 2022, the total shareholder return on the Bank’s shares was negative 14.5%, compared to the total return of the S&P/TSX Composite Index of negative 4.8%. The total compound annual shareholder return on the Bank’s shares over the past five years was 0.3%, and 6.7% over the past 10 years. This is below the total annual return of the S&P/TSX Composite Index over the past five years and ten years of 7.2% and 7.8%, respectively.   Dividends per share totaled $4.06 for the year, up 13% from 2021. The Bank’s target payout range is 40-50%. The dividend payout ratio for the year was 50.3%. The Board of Directors approved a quarterly dividend of $1.03 per common share, at its meeting on November 28, 2022. This quarterly dividend applies to shareholders of record at the close of business on January 4, 2023, and is payable January 27, 2023.				C1  Closing common share price as at October 31

 

2022 Scotiabank Annual Report  |  25

Management’s Discussion and Analysis

 

Economic Summary and Outlook

The global economic outlook has deteriorated over the last year owing to the combined impacts of central bank efforts to tame inflation, the consequences of Russia’s war on Ukraine, pandemic management in China and the impact of higher energy prices. Concerns about potential slowdown and high inflation have led to very volatile financial markets, which have clouded the outlook further.

In Canada, as in the United States, economic fundamentals suggest the reduction in economic activity will be minor and more like a stall in growth. Firm and household balance sheets remain in solid shape despite the rise in interest rates and fall in asset values. Labour markets in both countries continue to show historic strength suggesting that firms are unlikely to resort to dramatic cuts in their workforce as growth slows. In Canada, still relatively high commodity prices continue to provide a boost to economic activity, in contrast to the effect seen in commodity importing countries. Inflation is expected to decline gradually over coming quarters as the impact of higher interest rates is felt through economies. A broad number of upstream indicators of inflation suggest that the factors that have boosted inflation will soon have the opposite impact on inflation. The speed at which inflation will decline owing to these factors will be mitigated by the impact of rising wages and their impact on service sector prices. Despite this assessment, the inflation outlook remains clouded. Inflation has defied expectations for most of the last 2 years and we have yet to observe tangible impacts of the observed decline in the factors underlying the rise in prices seen during that time.

The Bank of Canada and Federal Reserve are nearing the end of their monetary policy tightening cycles. We expect that the Bank of Canada’s policy rate peaks at 4.25% by the end of the year and that the Federal Reserve stops raising its target rate when it reaches 5% early next year.

Central banks in the Pacific Alliance Countries have also been raising policy rates aggressively to counter inflationary pressures. This process is also nearing its end as the pace of economic expansion moderates. Political uncertainty, along with extreme volatility in international capital markets have been headwinds to the region over the last year, but economies and capital flows have been remarkably resilient considering these challenges. Growth will decelerate further given the rising in funding costs, the decline in commodity prices associated with global economic weakness, and the reduction in demand emanating from the drop in European and Chinese economic activity. Despite these developments, growth in the Pacific Alliance Countries is likely to outstrip that in most advanced nations through 2023.

Outlook

After a period of sustained economic growth driven in part by fiscal and monetary stimulus and the impact of higher commodity prices, the Bank expects economic growth to moderate in its major markets through much of 2023. The Bank’s earnings in 2023 are expected to benefit from higher interest income and non-interest revenue but be negatively impacted by higher funding costs, higher expenses that are expected to grow inline with inflation, normalizing provision for credit losses related to the end of performing allowance releases, and a higher tax rate in Canada and certain international countries. Once rates stabilize, the Bank is expected to benefit from asset repricing, resulting in net interest margin expansion. The Bank’s capital and liquidity position is expected to remain strong in 2023.

Impact of Foreign Currency Translation

The impact of foreign currency translation on net income is shown in the table below.

T8  Impact of foreign currency translation

 

		2022								2021
For the fiscal years		Average exchange rate				% Change				Average exchange rate				% Change
U.S. Dollar/Canadian Dollar			0.777				(2.3	)%			0.795				6.9	%
Mexican Peso/Canadian Dollar			15.799				(1.5	)%			16.035				1.3	%
Peruvian Sol/Canadian Dollar			3.002				(1.0	)%			3.032				18.0	%
Colombian Peso/Canadian Dollar			3,187				8.8	%			2,929				7.6	%
Chilean Peso/Canadian Dollar			669.905				12.9	%			593.123				0.2	%

 

26  |  2022 Scotiabank Annual Report

Management’s Discussion and Analysis    |    Overview of Performance

 

T8  Impact of foreign currency translation (Cont’d)

 

Impact on net income(1) ($ millions except EPS)		2022 vs. 2021				2021 vs. 2020
Net interest income		$	(158	)		$	(512	)
Non-interest income(2)			(109	)			(276	)
Non-interest expenses			92				408
Other items (net of tax)			72				203
Net income		$	(103	)		$	(177	)
Earnings per share (diluted)		$	(0.09	)		$	(0.14	)
Impact by business line ($ millions)
Canadian Banking		$	3			$	(6	)
International Banking(2)			(97	)			(130	)
Global Wealth Management			–				(15	)
Global Banking and Markets			27				(79	)
Other(2)			(36	)			53
		$	(103	)		$	(177	)

 

(1)	Includes impact of all currencies.

(2)	Includes the impact of foreign currency hedges.

 

2022 Scotiabank Annual Report  |  27

Management’s Discussion and Analysis

 

GROUP FINANCIAL PERFORMANCE

Net Income

Net income was $10,174 million in 2022, up 2% from $9,955 million in 2021, due primarily to higher net interest income, lower provision for credit losses and lower provision for income taxes, partly offset by higher non-interest expenses.

Adjusting items during the current year were $575 million (refer to Table T1). These included a net loss on divestitures and wind-down of operations of $340 million, support costs related to the Scene+ loyalty program of $98 million, and restructuring and other provisions of $66 million (October 31, 2021 – $139 million). Adjusting items during the current year also included amortization of acquisition-related intangible assets of $71 million (October 31, 2021 – $75 million).

Adjusted net income was $10,749 million, up 6% from $10,169 million. The increase in adjusted net income was due primarily to higher net interest income, lower provision for credit losses and lower provision for income taxes, partly offset by higher non-interest expenses.

Net Interest Income

Net interest income was $18,115 million, an increase of $1,154 million or 7%. The increase was driven by strong loan growth and higher margins across all business lines, partly offset by a lower contribution from asset/liability management activities related to higher funding costs and the negative impact of foreign currency translation.

In Canadian Banking, net interest income increased $971 million or 12% due to strong loan and deposit growth, as well as a higher net interest margin from the impact of Bank of Canada rate increases. International Banking net interest income increased $275 million or 4%, driven primarily by higher commercial loans and residential mortgages. Net interest income increased $136 million or 22% in Global Wealth Management driven by higher deposit margins and strong loan growth. Global Banking and Markets net interest income increased $194 million or 14%, due mainly to higher deposit margins and loan growth. In the Other segment net interest income decreased $422 million due mainly to higher funding costs resulting from higher interest rates and asset/liability management activities.

Core earning assets (refer to Non-GAAP Measures on page 17) increased $81 billion or 11% to $833 billion driven by strong growth in residential mortgages, commercial and corporate loans, as well as higher treasury assets.

Net interest margin was down three basis points to 2.20%, driven primarily by a lower contribution from asset/liability management activities related to higher funding costs.

 

28  |  2022 Scotiabank Annual Report

Management’s Discussion and Analysis    |    Group Financial Performance

 

T9  Average balance sheet⁽¹⁾ and net interest income

 

		2022												2021
For the fiscal years ($ billions)		Average balance				Interest				Average rate				Average balance				Interest				Average rate
Assets
Deposits with financial institutions		$	81.9			$	0.8				1.02	%		$	75.6			$	0.2				0.24	%
Trading assets			138.6				0.8				0.57	%			142.9				0.3				0.22	%
Securities purchased under resale agreements and securities borrowed			141.7				0.5				0.32	%			119.8				0.2				0.15	%
Investment securities			97.3				2.1				2.14	%			92.2				1.1				1.25	%
Loans:
Residential mortgages			337.7				11.1				3.29	%			299.7				9.3				3.09	%
Personal loans			95.5				5.8				6.07	%			92.0				5.1				5.56	%
Credit cards			13.6				2.3				16.74	%			13.3				2.3				17.11	%
Business and government			253.3				10.2				4.03	%			217.2				6.5				3.00	%
Allowance for credit losses			(5.4	)											(6.8	)
Total loans		$	694.7			$	29.4				4.23	%		$	615.4			$	23.2				3.76	%
Customers’ liability under acceptances			20.0												16.4
Total average earning assets		$	1,174.2			$	33.6				2.86	%		$	1,062.3			$	25.0				2.35	%
Other assets			107.5												94.9
Total average assets		$	1,281.7			$	33.6				2.62	%		$	1,157.2			$	25.0				2.16	%
Liabilities and equity
Deposits:
Personal		$	252.9			$	3.0				1.19	%		$	245.4			$	2.0				0.81	%
Business and government			572.6				9.3				1.63	%			489.7				4.2				0.85	%
Financial institutions			51.8				0.5				0.88	%			44.4				0.3				0.72	%
Total deposits		$	877.3			$	12.8				1.46	%		$	779.5			$	6.5				0.83	%
Obligations related to securities sold under repurchase agreements and securities lent			117.6				0.3				0.26	%			116.5				0.1				0.12	%
Subordinated debentures			7.8				0.3				3.47	%			6.6				0.2				2.74	%
Other interest-bearing liabilities			81.5				2.1				2.55	%			78.3				1.2				1.58	%
Total interest-bearing liabilities		$	1,084.2			$	15.5				1.42	%		$	980.9			$	8.0				0.82	%
Financial instruments designated at fair value through profit or loss			22.8												21.1
Other liabilities including acceptances			101.3												83.3
Equity(2)			73.4												71.9
Total liabilities and equity		$	1,281.7			$	15.5				1.20	%		$	1,157.2			$	8.0				0.69	%
Net interest income						$	18.1											$	17.0

 

(1)	Average of daily balances.

(2)	Includes non-controlling interest of $1.7 (2021 – $2.3).

 

2022 Scotiabank Annual Report  |  29