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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