CWBFG Annual Report 2023

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS Financial assets include cash resources, securities, securities purchased under resale agreements, loans, derivatives, and certain other assets. Financial liabilities include deposits, securities sold under repurchase agreements, derivatives, debt, and certain other liabilities. The use of financial instruments exposes CWB to credit, liquidity, and market risk. A discussion of how these are managed can be found in the Risk Management section of our MD&A. Further information on how the fair value of financial instruments is determined is included in the Financial Instruments Measured at Fair Value discussion in the Accounting Policies and Estimates section of our MD&A. Income and expenses are classified as to source, either securities or loans for income, and deposits or debt for expense. Gains (losses) on the sale of securities, unrealized gains (losses) on securities measured at FVTPL, and fair value changes in certain derivatives are classified to non-interest income. DERIVATIVE FINANCIAL INSTRUMENTS More detailed information on the nature of derivative financial instruments is shown in Note 10 of the audited consolidated financial statements for the year ended October 31, 2023. The notional amounts of derivative financial instruments are not reflected on the consolidated balance sheets. Table 22 - Derivative Financial Instruments ($ thousands) 2023 2022 Notional Amounts Interest rate swaps designated as cash flow hedges (1) $ 8,615,000 $ 6,070,000 Interest rate swaps designated as fair value hedges (2) 339,616 355,020 Equity swaps designated as cash flow hedges (3) 21,342 19,756 Equity swaps not designated as accounting hedges (4) 7,677 8,066 Foreign exchange contracts not designated as accounting hedges (5) 787,071 144 Total $ 9,770,706 $ 6,452,986

(1) Interest rate swaps designated as accounting cash flow hedges outstanding at October 31, 2023 mature between November 2023 and July 2033. (2) Interest rate swaps designated as accounting fair value hedges outstanding at October 31, 2023 mature between October 2024 and September 2028. (3) Equity swaps designated as accounting hedges outstanding at October 31, 2023 mature between June 2024 and June 2026. (4) Equity swaps not designated as accounting hedges outstanding at October 31, 2023 mature in June 2024. (5) Foreign exchange contracts outstanding at October 31, 2023 mature between November 2023 and September 2024.

The active use of interest rate swap contracts remains an integral component to manage the interest rate gap position. Derivative financial instruments are entered into only for CWB’s own account. We do not act as an intermediary in derivatives markets. Transactions are entered into on the basis of industry standard contracts with approved counterparties subject to periodic and at least annual review, including an assessment of the credit worthiness of the counterparty. As part of our structural Market Risk Management Policy the use of derivative financial instruments is approved, reviewed, and monitored on a regular basis by the Group Asset Liability Committee (ALCo), and are reviewed and approved by the Board Risk Committee no less than annually.

OFF-BALANCE SHEET Off-balance sheet items include assets under management, advisement, and administration. Table 23 - Off-balance sheet items ($ thousands)

2023

2022

Wealth Management Assets under management and administration

$

7,925,785 $

7,825,003 1,824,961 13,943,199

Assets under advisement (1)

2,197,397 15,370,989

Assets Under Administration - Other

(1) Primarily comprised of assets under advisement related to our Indigenous Services wealth management business.

Wealth management assets under management and administration were $7.9 billion at year end compared to $7.8 billion one year ago, primarily due an increase in the market value of underlying assets and new client acquisitions, partially offset by a decline in balances from our existing clients. Indigenous Services assets under advisement of $2.2 billion increased from $1.8 billion last year, primarily due to asset growth from new and existing clients. Other assets under administration totaled $15.4 billion at October 31, 2023 (October 31, 2022 – $13.9 billion). The increase from last year reflected higher market value of underlying assets and asset growth from both new and existing clients in CWB Trust Services. Other off-balance sheet items are comprised of standard industry credit instruments (guarantees, standby letters of credit and commitments to extend credit) and contractual purchase obligations. We do not utilize, nor do we have exposure to, collateralized debt obligations or credit default swaps. For additional information regarding other off-balance sheet items refer to Note 17 of the audited consolidated financial statements for the year ended October 31, 2023.

36 | CWB Financial Group 2023 Annual Report

Powered by