CWBFG Annual Report 2022

PROVISION FOR CREDIT LOSSES The provision for credit losses as a percentage of average loans of 14 basis points consisted of a ten basis point provision related to impaired loans and a four basis point provision related to performing loans. This compared to a nine basis point provision for credit losses last year, including a 17 basis point charge related to impaired loans and an eight basis point recovery related to performing loans. In dollar terms, the provision for credit losses of $46 million compared to $27 million last year. The provision for credit losses on impaired loans was a $32 million charge compared to a $51 million charge last year, while the provision for credit losses on performing loans was a $14 million charge compared to a recovery of $24 million last year. For additional information on the estimation of the performing loan allowance, refer to the Allowance for Credit Losses section of our MD&A.

Quarterly write-offs fluctuate as loans become impaired and are subsequently resolved. Our approach to managing credit risk has proven to be very effective and write-offs as a percentage of average loans of nine basis points remained well below our five-year average of 19 basis points.

Table 14 - Provision for Credit Losses (as a percentage of average loans)

IAS 39 (1)

IFRS 9

2022

2021

2020

2019

2018

Provision for credit losses on total loans

0.14 %

0.09 %

0.32 %

0.21 %

0.20 %

Provision for credit losses on impaired loans

0.10 0.09

0.17 0.19

0.18 0.17

0.21 0.23

0.19 0.18

Write-offs (2)

(1) Fiscal 2018 was prepared in accordance with IAS 39 Financial Instruments: Recognition and Measurement and have not been restated. (2) Non-GAAP measure – refer to definitions and detail provided on page 16.

PAST DUE LOANS Loans are considered past due when a customer has not made a payment by the contractual due date.

Table 15 - Past Due Loans

1 - 30 days

31 - 60 days

61 - 90 days

As at October 31, 2022

Total

Personal Business

$

62,119 $

28,338 $

1,152 $

91,609

112,008

48,970

45,845

206,823

Total

$

174,127 $

77,308 $

46,997 $

298,432

As at October 31, 2021

$

98,893 $

34,499 $

3,716 $

137,108

Past due performing loans of $298 million were 118% higher than prior year. Past due loans were at historical lows at the prior year-end. Over the last year borrower credit performance began to normalize. Past due performing loans as a percentage of total gross loans are now relatively consistent with pre-COVID-19 pandemic levels.

32 | CWB Financial Group 2022 Annual Report

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