CASH AND SECURITIES Cash, securities and securities purchased under resale agreements totaled $3.7 billion at October 31, 2021, compared to $3.1 billion last year. The cash and securities portfolio is comprised of high-quality debt instruments that are not held for trading purposes and are typically held to maturity. The balance and mix of cash and securities are managed as part of our overall liquidity management process. Refer to the Liquidity Management section of our MD&A for additional information. Table 9 - Unrealized Gains and Losses on Debt Securities and Cash Resources Measured at FVOCI and Equity (1) ($ thousands) As at October 31, 2021
Gross Unrealized Gains
Gross Unrealized Losses
Amortized Cost
Fair Value
Measured at FVOCI Interest bearing deposits with regulated financial institutions (2)
$
21,344 $
-
$
- $
21,344
Debt securities issued or guaranteed by Canada
3,001,582
420 209 362
39,712
2,962,290
A province or municipality
409,583 199,255
3,084
406,708 198,799
Other debt securities (3)
818
Total
$
3,631,764 $
991
$
43,614 $
3,589,141
As at October 31, 2020
Gross Unrealized Gains
Gross Unrealized Losses
Amortized Cost
Fair Value
Measured at FVOCI Interest bearing deposits with regulated financial institutions (2)
$
254,442 $
11
$
2 $
254,451
Debt securities issued or guaranteed by Canada
1,313,002
5,232 3,394 1,126
267
1,317,967
A province or municipality
964,084 376,377
63
967,415 377,244
Other debt securities (3) Designated at FVOCI Preferred shares
259
1,953
39
-
1,992
Total
$
2,909,858 $
9,802
$
591 $
2,919,069
(1) Excludes financial instruments measured at amortized cost, including cash, non-interest bearing deposits with financial institutions and cheques and other items in transit of $107 million (October 31, 2020 – $114 million) and securities purchased under resale agreements of $30 million (October 31, 2020 – $50 million). (2) Included in cash resources on the consolidated balance sheets. (3) Includes securities issued or guaranteed by the United States Treasury of $199 million (October 31, 2020 – $93 million). Fluctuations in the value of securities are generally attributed to changes in interest rates, movements in market credit spreads and shifts in the interest rate curve. Net unrealized losses, before tax, recorded on the consolidated balance sheet at October 31, 2021 totaled $43 million, compared to net unrealized gains of $9 million last year. We recognized $3 million of net gains on securities in earnings compared to $9 million in the prior year. Net realized gains on securities were elevated last year as we re- balanced our cash and securities portfolio through market disruption that followed the emergence of the COVID-19 pandemic. During fiscal 2021, we disposed of all preferred shares previously held within our securities portfolio and designated as FVOCI. A nominal amount of realized gains on sales were recognized directly in retained earnings in accordance with IFRS 9, compared to $6 million of realized losses in the prior year. We regularly review the level of unrealized losses on securities. Impairment charges on debt securities are reflected in net gains (losses) on securities only in the case of an issuer credit event. We have no direct investment in any sovereign debt or other securities issued outside of Canada or the United States. Refer to Table 28 – Valuation of Financial Instruments of our MD&A for additional information on significant financial assets and liabilities reported at fair value.
CWB Financial Group 2021 Annual Report | 29
Powered by FlippingBook