CWBFG Annual Report 2023

PROVISION FOR CREDIT LOSSES The provision for credit losses as a percentage of average loans of seven basis points consisted of a four basis point provision related to impaired loans and a three basis point provision related to performing loans. This compared to a 14 point provision for credit losses last year, including a ten basis point charge related to impaired loans and a four basis point charge related to performing loans. In dollar terms, the provision for credit losses was $27 million compared to $46 million last year. The provision for credit losses on impaired loans was $15 million compared to $32 million last year. The lower provision for credit losses on impaired loans was primarily due to an increase in recoveries of impaired loan write-offs upon final resolution. The provision for credit losses on performing loans was a $12 million charge, compared to a charge of $14 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. The timing of write-offs and recoveries of previous write-offs can 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 ten basis points remained well below our five-year historical average. Table 12 – Provision for Credit Losses (as a percentage of average loans)

2023

2022

2021

2020

2019

Provision for credit losses on total loans Provision for credit losses on impaired loans

0.07 %

0.14 %

0.09 %

0.32 %

0.21 %

0.04 0.10

0.10 0.09

0.17 0.19

0.18 0.17

0.21 0.23

Write-offs

PAST DUE LOANS Loans are considered past due when a customer has not made a payment by the contractual due date. Table 13 – Past Due Loans ($ thousands)

1 – 30 days

31 – 60 days

61 – 90 days

As at October 31, 2023

Total

Personal Business

$

114,397 $

57,326 $

4,059 $

175,782 202,118 377,900

116,991

58,998

26,129

Total

$

231,388 $

116,324 $

30,188 $

As at October 31, 2022

$

174,127 $

77,308 $

46,997 $

298,432

Past due performing loans of $378 million were 27% higher than prior year. Past due performing loans as a percentage of total gross loans are now moderately higher than our five-year historical average and are starting to reflect the impacts of the elevated interest rate environment on borrower credit performance.

30 | CWB Financial Group 2023 Annual Report

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