v3.24.3
Goodwill and other intangible assets
 12 Months Ended
Oct. 31, 2024
Text Block [Abstract]  
Goodwill and other intangible assets
Note 11 Goodwill and other intangible assets
Goodwill
 
   
   
For the year ended October 31, 2024
  
                     
(Millions of
Canadian dollars)
  
Personal
Banking –
Canada
    
Caribbean
Banking
    
Commercial
Banking
    
Canadian
Wealth
Management
    
Global Asset
Management
    
U.S. Wealth
Management
(including
City National)
    
International
Wealth
Management
    
Investor
Services
    
Insurance
    
Capital
Markets
    
Total
  
Balance at beginning of period
  
$
1,851
 
  
$
1,791
 
  
$
793
 
  
$
593
 
  
$
2,016
 
  
$
3,080
 
  
$
1,124
 
  
$
29
 
  
$
112
 
  
$
1,205
 
  
$
12,594
 
Acquisitions
  
 
3,159
 
  
 
–
 
  
 
3,022
 
  
 
283
 
  
 
72
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
6,536
 
Dispositions
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
Currency translations and
other
  
 
(16
) 
  
 
7
 
  
 
–
 
  
 
1
 
  
 
76
 
  
 
11
 
  
 
74
 
  
 
–
 
  
 
–
 
  
 
3
 
  
 
156
 
Balance at end of period
  
$
4,994
 
  
$
1,798
 
  
$
3,815
 
  
$
877
 
  
$
2,164
 
  
$
3,091
 
  
$
1,198
 
  
$
29
 
  
$
112
 
  
$
1,208
 
  
$
19,286
 
                                                                   
   
    For the year ended October 31, 2023  
(Millions of
Canadian dollars)
   Personal
Banking –
Canada 
(1)
     Caribbean
Banking		     Commercial
Banking
(1)
     Canadian
Wealth
Management		     Global Asset
Management		     U.S. Wealth
Management
(including
City National)		     International
Wealth
Management		     Investor
Services		     Insurance     Capital
Markets		     Total  
Balance at beginning of period
   $ 1,802     $ 1,759     $ 772     $ 589     $ 1,928     $ 3,027     $ 1,042     $ 59     $ 112     $ 1,187     $ 12,277  
Acquisitions
     49       –       21       –       –       –       –       –       –       –       70  
Dispositions
     –       –       –       –       –       –       –       (30 )      –       –       (30 ) 
Currency translations and
other
     –       32       –       4       88       53       82       –       –       18       277  
Balance at end of period
   $  1,851     $  1,791     $  793     $  593     $  2,016     $  3,080     $  1,124     $  29     $  112     $  1,205     $  12,594  
 
(1)   Amounts have been revised from those previously presented to conform to our new basis of segment presentation. Refer to Note 26 for further details of our business segments.
 
Effective the fourth quarter of 2024, the Personal & Commercial Banking segment became two standalone business segments: Personal Banking and Commercial Banking. As a result, the previous Canadian Banking CGU became two CGUs: Personal Banking – Canada and Commercial Banking.
Canadian
Banking goodwill was allocated to these new CGUs. Comparative results have been revised to conform to our new basis of segment presentation. Refer to Note 26 for further details of our business segments.
We perform our annual impairment test by comparing the carrying amount of each CGU to its recoverable amount. The recoverable amount of a CGU is represented by its VIU, except in circumstances where the carrying amount of a CGU exceeds its VIU. In such cases, the greater of the CGU’s FVLCD and its VIU is the recoverable amount. Our annual impairment test is performed as at August 1.
In our 2024 and 2023 annual impairment tests, the recoverable amount of our Caribbean Banking CGU was based on its FVLCD and the recoverable amounts of all other CGUs tested were based on their VIU.
Value in use
We calculate VIU using a five-year discounted cash flow method, with the exception of our International Wealth Management CGU where cash flow projections covering a seven-year period were used, which more closely aligns with the strategic growth plan resulting from the acquisition of RBC Brewin Dolphin. Future cash flows are based on financial plans agreed by management, estimated based on forecast results, business initiatives, capital required to support future cash flows and returns to shareholders. Key drivers of future cash flows include net interest margins and average interest-earning assets. The values assigned to these drivers over the forecast period are based on past experience, external and internal economic forecasts, and management’s expectations of the impact of economic conditions on our financial results. Beyond the initial cash flow projection period, cash flows are assumed to increase at a constant rate using a nominal long-term growth rate (terminal growth rate). Terminal growth rates are based on the long-term steady state growth expectations in the countries within which the CGU operates. The discount rates used to determine the present value of each CGU’s projected future cash flows are based on the bank-wide cost of capital, adjusted for the risks to which each CGU is exposed. CGU-specific risks include: country risk, business/operational risk, geographic risk (including political risk, devaluation risk, and government regulation), currency risk, and price risk (including product pricing risk and inflation).
The estimation of VIU involves significant judgment in the determination of inputs to the discounted cash flow model and is most sensitive to changes in future cash flows, discount rates and terminal growth rates applied to cash flows beyond the forecast period. The sensitivity of the VIU to key inputs and assumptions used was tested by recalculating the recoverable amount using reasonably possible changes to those parameters. As at August 1, 2024, no reasonably possible change in an individual key input or assumption, as described, would result in a CGU’s carrying amount exceeding its recoverable amount based on VIU.
The terminal growth rates and pre-tax discount rates used in our discounted cash flow models are summarized below.
 
     As at    
   
August 1, 2024
          August 1, 2023  
    
Discount
rate
(1)
     
Terminal
growth
rate
           Discount
rate
(1)
      Terminal
growth
rate		  
Group of cash generating units
             
Personal Banking – Canada
(2)
  
 
11.7%
 
   
 
3.0%
 
        11.7%        3.0%  
Caribbean Banking
  
 
13.7  
 
   
 
3.5  
 
        12.9          3.5    
Commercial Banking
(2)
  
 
11.7  
 
   
 
3.0  
 
        11.7          3.0    
Canadian Wealth Management
  
 
12.5  
 
   
 
3.0  
 
        12.5          3.0    
Global Asset Management
  
 
12.4  
 
   
 
3.0  
 
        12.5          3.0    
U.S. Wealth Management (including City National)
  
 
12.6  
 
   
 
3.0  
 
        12.5          3.0    
International Wealth Management
  
 
12.3  
 
   
 
3.0  
 
        12.5          3.0    
Investor Services
  
 
12.5  
 
   
 
3.0  
 
        12.4          3.0    
Insurance
  
 
12.5  
 
   
 
3.0  
 
        12.4          3.0    
Capital Markets
  
 
12.7  
 
   
 
3.0  
 
  
 
      12.7          3.0    
 
(1)
Pre-tax discount rates are determined implicitly based on post-tax discount rates.
(2)
Represent assumptions relating to the previous Canadian Banking CGU, which became the Personal Banking – Canada and Commercial Banking CGUs effective the fourth quarter of 2024.
Fair value less costs of disposal – Caribbean Banking
We calculated FVLCD using a discounted cash flow method that projects future cash flows over a 5-year period. Cash flows are based on management forecasts, adjusted to approximate the considerations of a prospective third-party buyer. Cash flows beyond the initial 5-year period are assumed to increase at a constant rate using a nominal long-term growth rate. Future cash flows, terminal growth rates, and discount rates are based on the same factors noted above. This fair value measurement is categorized as level 3 in the fair value hierarchy as certain significant inputs are not observable.
The estimation of FVLCD involves significant judgment in the determination of inputs to the discounted cash flow model and is most sensitive to changes in future cash flows, discount rates and terminal growth rates applied to cash flows beyond the forecast period. The sensitivity of the FVLCD to key inputs and assumptions was tested by recalculating the recoverable amount using reasonably possible changes to those parameters. As at August 1, 2024, no reasonably possible change in an individual key input or assumption, as described, would result in the CGU’s carrying amount exceeding its recoverable a
m
ount.
Other intangible assets
 
 
 
 
 
For the year ended October 31, 2024
 
(Millions of Canadian dollars)
 
Internally
generated
software
 
 
Other
software
 
 
Core
deposit
intangibles
 
 
Customer
list and
relationships 
(1)
 
 
In process
software
 
 
Total
 
Gross carrying amount
 
 
 
 
 
 
Balance at beginning of period
  
$
5,595
 
  
$
1,097
 
  
$
1,658
 
  
$
2,456
 
  
$
1,527
 
  
$
12,333
 
Additions
  
 
31
 
  
 
4
 
  
 
–
 
  
 
9
 
  
 
1,090
 
  
 
1,134
 
Acquisition through business combination
  
 
–
 
  
 
–
 
  
 
1,972
 
  
 
370
 
  
 
–
 
  
 
2,342
 
Transfers
  
 
1,204
 
  
 
42
 
  
 
–
 
  
 
–
 
  
 
(1,246
)
  
 
–
 
Dispositions
  
 
(1,204
)
  
 
(67
)
  
 
–
 
  
 
(9
)
  
 
(1
)
  
 
(1,281
)
Impairment losses
  
 
(37
)
  
 
(18
)
  
 
–
 
  
 
–
 
  
 
(30
)
  
 
(85
)
Currency translations
  
 
32
 
  
 
17
 
  
 
7
 
  
 
115
 
  
 
3
 
  
 
174
 
Other changes
  
 
(47
)
  
 
(1
)
  
 
–
 
 
 
–
 
  
 
14
 
  
 
(34
)
Balance at end of period
  
$
5,574
 
  
$
1,074
 
  
$
3,637
 
  
$
2,941
 
  
$
1,357
 
  
$
14,583
 
Accumulated amortization
            
Balance at beginning of period
  
$
(3,596
)
  
$
(658
)
  
$
(1,330
)
  
$
(846
)
  
$
–
 
  
$
(6,430
)
Amortization charge for the year
  
 
(986
)
  
 
(102
)
  
 
(325
)
  
 
(136
)
  
 
–
 
  
 
(1,549
)
Dispositions
  
 
1,204
 
  
 
66
 
  
 
–
 
  
 
7
 
  
 
–
 
  
 
1,277
 
Impairment losses
  
 
12
 
  
 
5
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
17
 
Currency translations
  
 
(21
)
  
 
(7
)
  
 
(8
)
  
 
(31
)
  
 
–
 
  
 
(67
)
Other changes
  
 
–
 
  
 
(33
)
  
 
–
 
  
 
–
 
  
 
–
 
  
 
(33
)
Balance at end of period
  
$
(3,387
)
  
$
(729
)
  
$
(1,663
)
  
$
(1,006
)
  
$
–
 
  
$
(6,785
)
Net balance at end of period
  
$
2,187
 
  
$
345
 
  
$
1,974
 
  
$
1,935
 
  
$
1,357
 
  
$
7,798
 
                                            
    For the year ended October 31, 2023 (Restated – Note 2)  
(Millions of Canadian dollars)
   Internally
generated
software		     Other
software		     Core
deposit
intangibles		     Customer
list and
relationships		     In process
software		     Total  
Gross carrying amount
            
Balance at beginning of period
   $ 5,076     $ 908     $ 1,630     $ 2,472     $ 1,535     $ 11,621  
Additions
     81       179       –       –       1,134       1,394  
Acquisition through business combination
     –       31       –       –       –       31  
Transfers
     1,067       78       –       –       (1,145 )      –  
Dispositions
     (509 )      (145 )      –       (160 )      8       (806 ) 
Impairment losses
     (73 )      –       –       (9 )      (5 )      (87 ) 
Currency translations
     68       17       28       144       38       295  
Other changes
     (115 )      29       –       9       (38 )      (115 ) 
Balance at end of period
   $ 5,595     $ 1,097     $ 1,658     $ 2,456     $ 1,527     $ 12,333  
Accumulated amortization
            
Balance at beginning of period
   $ (3,031 )    $ (612 )    $ (1,146 )    $ (749 )    $ –     $ (5,538 ) 
Amortization charge for the year
     (993 )      (146 )      (160 )      (172 )      –       (1,471 ) 
Dispositions
     506       157       –       114       –       777  
Impairment losses
     (19 )      –       –       –       –       (19 ) 
Currency translations
     (37 )      (13 )      (24 )      (33 )      –       (107 ) 
Other changes
     (22 )      (44 )      –       (6 )      –       (72 ) 
Balance at end of period
   $ (3,596 )    $ (658 )    $ (1,330 )    $ (846 )    $ –     $ (6,430 ) 
Net balance at end of period
   $ 1,999     $ 439     $ 328     $ 1,610     $ 1,527     $ 5,903  
 
(1)
Includes $259 million of mutual fund management contracts with indefinite useful lives in the Global Asset Management CGU acquired in the HSBC Canada transaction.