CWBFG Annual Report 2022

DEPOSITS AND FUNDING

Table 16 - Deposits ($ thousands)

2022 Total

% of Total

Demand

Notice

Term

Personal

$

35,688

$

6,654,784

$

3,957,977

$

10,648,449

32 %

Business and government

1,314,615

6,456,577

2,457,809 7,639,305

10,229,001

31 23

Deposit brokers

-

-

7,639,305

Capital markets

-

-

4,502,292

4,502,292

14

Total

$

1,350,303

$

13,111,361

$

18,557,383

$

33,019,047

100 %

% of Total

4 %

40 %

56 %

100 %

2021 Total

% of Total

Demand

Notice

Term

Personal

$

41,271

$

7,274,688

$

2,847,594

$

10,163,553

34 %

Business and government

1,310,964

5,838,025

1,945,920

9,094,909

30

Deposit brokers

-

-

6,386,296

6,386,296

21

Capital markets

-

-

4,330,981

4,330,981

15

Total

$

1,352,235

$

13,112,713

$

15,510,791

$

29,975,739

100 %

% of Total

4 %

44 %

52 %

100 %

We delivered strong execution against our funding diversification strategy during the year. Total deposits of $33.0 billion were up 10% ($3.0 billion).

Personal deposits increased 5% ($485 million) and business and government deposits increased 12% ($1.1 billion) during the year, reflecting strong growth in our fixed term deposits, primarily driven by our full-service banking centres.

Table 17 - Deposits by Source (as a percentage of total deposits at October 31)

2022

2021

Branch-raised

63 %

64 %

Deposit brokers

23 14

21 15

Capital markets

Total

100 %

100 %

References to branch-raised deposits within our MD&A include all deposits generated through our full-service banking centres, as well as deposits raised via CWB Trust Services and Motive Financial. Accelerated branch-raised business and personal deposit growth is an ongoing strategic focus for us as success in this area provides a lower cost of funding with the opportunity to generate transaction fee revenue. Consistent with our commercial focus, we generate a considerable portion of our branch-raised deposits from business clients that tend to hold larger balances compared to personal clients, which can increase the volatility of demand and notice deposits. Refer to the Liquidity Management section of our MD&A for additional information. We have consistently delivered strong growth of relationship-based, branch-raised deposits over the past several years. Branch-raised deposits of $20.9 billon increased 8% ($1.6 billion) from last year, with 34% growth in our fixed term deposits. Demand and notice deposits remained relatively consistent year-over-year. We delivered strong new demand and notice deposit growth as we continued to capitalize on full-service client opportunities by attracting new clients both within and outside of our banking centre footprint. The net new demand and notice deposit growth was offset by a decline in other client deposit balances and a shift in existing client deposits to branch- raised term deposits, which reflects a shift in client preference in the rising rate environment. Nearly all of our annual branch-raised deposit growth was generated from our banking centres. Branch-raised deposits comprised 63% of total deposits at October 31, 2022, compared to 64% last year. CWB Trust Services raises deposits through notice accounts, including cash balances held in registered accounts as well as corporate trust deposits, and fixed term deposits through our branch network. CWB Trust Services deposits grew 1% ($53 million) from the prior year, as new and existing client additions were partially offset by clients moving uninvested funds towards short-term deposits reflective of uncertain economic conditions and the rising rate environment. Motive Financial deposits remained relatively stable with last year.

Other types of deposits are primarily sourced through a deposit broker network and debt capital markets. Capital market deposits increased $0.2 billion from last year, and represented 14% of total deposits, compared to 15% in the prior year.

The broker deposit market remains an efficient and liquid source of funding. Although these funds are subject to commissions, this cost is countered by a reduced dependence on a more extensive branch network and the benefit of generating insured fixed-term retail deposits over a wide geographic base. We only raise fixed term deposits through this funding channel, with terms to maturity between one and five years, and do not offer a High Interest Savings Account (HISA) product. Broker-sourced deposits increased 20% from last year and represent 23% of total deposits, up from 21% last year. We continue to invest in our securitization capabilities and participate in lease securitization vehicles, the NHA MBS program and the Canada Mortgage Bond (CMB) program. The gross amount of securitized leases and loans was $2.1 billion, compared to $1.9 billion one year ago. The gross amount of mortgages securitized under the NHA MBS program was $1.4 billion, consistent with last year. Funding from the securitization of leases, loans and mortgages totaled $1.2 billion (2021 – $1.4 billion) during the year, including $1.0 billion (2021 – $1.0 billion) of equipment leases and loans, and $0.2 billion (2021 – $0.5 billion) from participation in the CMB program.

CWB Financial Group 2022 Annual Report | 33

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