OTHER ASSETS AND OTHER LIABILITIES Other assets at October 31, 2022 totaled $1.1 billion compared to $831 million last year, driven by an increase in accounts receivable, higher fair values of favourable derivative contracts used for interest rate risk management purposes, and higher property and equipment, primarily associated with our new Vancouver and Markham banking centres. Other liabilities totaled $1.2 billion at October 31, 2022 compared to $798 million last year, with the increase primarily related to higher securities sold under repurchase agreements and an increase in the liability recognized for unfavourable derivative contracts used for interest rate risk management purposes. LIQUIDITY MANAGEMENT We maintain a conservative liquid asset profile. Our cash and securities portfolio is comprised of high-quality debt instruments, primarily issued or guaranteed by federal (Canada or United States), provincial or municipal governments, and short-term money market instruments. A schedule outlining our securities portfolio at October 31, 2022 is provided in Note 4 of the audited consolidated financial statements. For additional information on the governance and risk management related to liquidity and funding risk, refer to the Liquidity and Funding Risk section of our MD&A.
Table 18 - Liquid Assets ($ thousands)
2022
2021 Change from 2021
Cash and non-interest bearing deposits with financial institutions
$
81,228
$
87,853
$
(6,625)
Interest bearing deposits with financial institutions
26,833
21,344
5,489
Cheques and other items in transit
7,918
19,262
(11,344)
115,979
128,459
(12,480)
Government of Canada, provincial and municipal debt, term to maturity one year or less
2,051,914
90,435
1,961,479
Government of Canada, provincial and municipal debt, term to maturity more than one year
2,307,854
3,278,563
(970,709)
NHA mortgage-backed securities (1)
229,052
499,908
(270,856)
Other securities
159,027
204,880
(45,853)
Securities (sold) purchased under (repurchase) resale agreements
(247,354)
30,048
(277,402)
4,500,493
4,103,834
396,659
Total Liquid Assets
$
4,616,472
$
4,232,293
$
384,179
Total Assets
$ 41,440,143
$ 37,323,176
$
4,116,967
Liquid Assets as a Percentage of Total Assets
11 %
11 %
- %
Total Cash and Securities
$
4,387,420
$
3,732,385
$
655,035
Cash and Securities as a Percentage of Total Assets
11 %
10 %
1 %
Total Deposit Liabilities
$ 33,019,047
$ 29,975,739
$
3,043,308
Liquid Assets as a Percentage of Total Deposit Liabilities
14 %
14 %
- %
(1) Includes securitized mortgages that were not transferred to third parties. These are reported in loans at amortized cost on the consolidated balance sheets.
The composition of total liquid assets supports ongoing compliance with the OSFI Liquidity Adequacy Requirements (LAR) guideline. Liquid assets, as defined by OSFI, comprised of cash, deposits, securities (sold) purchased under (repurchase) resale agreements and marketable debt securities, totaled $4.6 billion at October 31, 2022 (October 31, 2021 – $4.2 billion). Liquid assets represented 11% of total assets, consistent with last year, and 14% of total deposit liabilities at year end, also consistent with last year. Our liquidity management is based on an internal stressed cash flow model, with the level of cash and securities driven primarily by the term structure of both assets and liabilities, and the liquidity structure of liabilities. In the prior year, we adopted the final version of Guideline B-6: Liquidity Principles (Guideline B-6), which complements the LAR guideline and sets out OSFI's expectations for how deposit-taking institutions should manage liquidity risk, with no significant impact on our liquidity management. In fiscal 2022, we continued to maintain very prudent levels of liquidity.
Other key elements of the composition of liquid assets at October 31, 2022 compared to the prior year include:
• Maturities within one year comprise 42% (October 31, 2021 – 8%), with the increase from the prior year in response to changes in market interest rates; • Government of Canada, provincial and municipal debt securities and unencumbered NHA MBS comprise 99% (October 31, 2021 – 92%); and, • Cash and deposits with financial institutions comprise 3% (October 31, 2021 – 3%).
34 | CWB Financial Group 2022 Annual Report
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