v3.25.4
Derivative and Hedging Instruments (Tables)
 12 Months Ended
Dec. 31, 2025
Derivative And Hedging Instruments [Abstract]  
Summary of Gross Notional Amount and Fair Value of Derivative Instruments The following table presents gross notional amount and fair value of derivative instruments by the underlying risk exposure.
As at December 31,
2025
2024
Notional
amount
Fair value
Notional
amount
Fair value
Type of hedge
Instrument type
Assets
Liabilities
Assets
Liabilities
Qualifying hedge accounting relationships
Fair value hedges
Interest rate swaps
$196,158
$2,793
$3,826
$206,181
$2,734
$3,533
Foreign currency swaps
16,383
71
2,385
14,121
145
2,114
Forward contracts
25,324
30
2,730
25,692
74
3,420
Cash flow hedges
Interest rate swaps
10,946
31
63
9,036
24
48
Foreign currency swaps
650
-
190
650
-
216
Forward contracts
-
-
-
-
-
-
Equity contracts
298
-
-
324
6
-
Net investment hedges
Forward contracts
587
3
6
602
18
-
Total derivatives in qualifying hedge accounting
relationships
250,346
2,928
9,200
256,606
3,001
9,331
Derivatives not designated in qualifying hedge
  accounting relationships
Interest rate swaps
112,633
2,403
3,050
110,114
2,188
2,906
Interest rate futures
21,483
-
-
9,054
-
-
Interest rate options
4,876
8
-
5,633
16
-
Foreign currency swaps
36,417
2,434
558
33,924
1,854
272
Currency rate futures
2,242
-
-
2,238
-
-
Forward contracts
55,555
848
1,511
52,044
882
1,675
Equity contracts
23,995
1,006
28
25,290
724
63
Credit default swaps
109
1
-
114
2
-
Equity futures
5,354
-
-
4,004
-
-
Total derivatives not designated in qualifying hedge
  accounting relationships
262,664
6,700
5,147
242,415
5,666
4,916
Total derivatives
$513,010
$9,628
$14,347
$499,021
$8,667
$14,247
Summary of Fair Values of Derivative Instruments by Remaining Term to Maturity The following tables present the fair values of the derivative instruments by the remaining term to maturity. Fair values disclosed
below do not incorporate the impact of master netting agreements (refer to note 8 (g)).
Remaining term to maturity
As at December 31, 2025
Less than
1 year
1 to 3
years
3 to 5
years
Over 5
years
Total
Derivative assets
$970
$842
$809
$7,007
$9,628
Derivative liabilities
2,270
1,746
875
9,456
14,347
Remaining term to maturity
As at December 31, 2024
Less than
1 year
1 to 3
years
3 to 5
years
Over 5
years
Total
Derivative assets
$1,171
$578
$635
$6,283
$8,667
Derivative liabilities
2,320
2,304
1,244
8,379
14,247
Summary of Maturity Analysis for Derivative Financial Assets The following tables present the fair values of the derivative instruments by the remaining term to maturity. Fair values disclosed
below do not incorporate the impact of master netting agreements (refer to note 8 (g)).
Remaining term to maturity
As at December 31, 2025
Less than
1 year
1 to 3
years
3 to 5
years
Over 5
years
Total
Derivative assets
$970
$842
$809
$7,007
$9,628
Derivative liabilities
2,270
1,746
875
9,456
14,347
Remaining term to maturity
As at December 31, 2024
Less than
1 year
1 to 3
years
3 to 5
years
Over 5
years
Total
Derivative assets
$1,171
$578
$635
$6,283
$8,667
Derivative liabilities
2,320
2,304
1,244
8,379
14,247
Summary of Gross Notional Amount by Remaining Term to Maturity The following tables present gross notional amount by the remaining term to maturity, total fair value (including accrued interest),
credit equivalent amount and capital requirement by contract type.
Remaining term to maturity (notional amounts)
Fair value
As at December 31, 2025
Less than
1 year
1 to 5
years
Over
5 years
Total
Positive
Negative
Net
Credit
equivalent
amount(1)
Capital
requirement(2)
Interest rate contracts
OTC swap contracts
$5,558
$29,751
$115,594
$150,903
$5,336
$(7,275)
$(1,939)
$331
$9
Cleared swap contracts
9,337
29,166
130,331
168,834
251
(222)
29
-
-
Forward contracts
18,825
23,142
-
41,967
168
(3,427)
(3,259)
44
1
Futures
21,483
-
-
21,483
-
-
-
-
-
Options purchased
453
1,206
3,217
4,876
8
-
8
15
-
Subtotal
55,656
83,265
249,142
388,063
5,763
(10,924)
(5,161)
390
10
Foreign exchange
Swap contracts
2,554
14,023
36,873
53,450
2,473
(3,253)
(780)
1,172
19
Forward contracts
32,894
1,051
5,554
39,499
713
(819)
(106)
821
20
Futures
2,242
-
-
2,242
-
-
-
-
-
Subtotal
37,690
15,074
42,427
95,191
3,186
(4,072)
(886)
1,993
39
Credit derivatives
17
92
-
109
1
-
1
-
-
Equity contracts
Swap contracts
1,435
704
-
2,139
5
(15)
(10)
19
-
Futures
5,354
-
-
5,354
-
-
-
-
-
Options purchased
18,246
3,908
-
22,154
1,000
(13)
987
252
2
Subtotal
25,052
4,704
-
29,756
1,006
(28)
978
271
2
Subtotal including accrued
interest
118,398
103,043
291,569
513,010
9,955
(15,024)
(5,069)
2,654
51
Less accrued interest
-
-
-
-
327
(677)
(350)
-
-
Total
$118,398
$103,043
$291,569
$513,010
$9,628
$(14,347)
$(4,719)
$2,654
$51
Remaining term to maturity (notional amounts)
Fair value
As at December 31, 2024
Less than
1 year
1 to 5
years
Over
5 years
Total
Positive
Negative
Net
Credit
equivalent
amount(1)
Capital
requirement(2)
Interest rate contracts
OTC swap contracts
$6,999
$25,019
$112,685
$144,703
$5,103
$(6,976)
$(1,873)
$323
$9
Cleared swap contracts
9,507
31,033
140,088
180,628
240
(189)
51
-
-
Forward contracts
20,661
21,028
-
41,689
231
(4,467)
(4,236)
36
1
Futures
9,054
-
-
9,054
-
-
-
-
-
Options purchased
863
1,086
3,684
5,633
16
-
16
17
-
Subtotal
47,084
78,166
256,457
381,707
5,590
(11,632)
(6,042)
376
10
Foreign exchange
Swap contracts
2,044
13,733
32,918
48,695
1,983
(2,709)
(726)
1,028
19
Forward contracts
29,423
1,105
6,121
36,649
743
(628)
115
698
17
Futures
2,238
-
-
2,238
-
-
-
-
-
Subtotal
33,705
14,838
39,039
87,582
2,726
(3,337)
(611)
1,726
36
Credit derivatives
-
114
-
114
2
-
2
-
-
Equity contracts
Swap contracts
1,926
762
-
2,688
31
(14)
17
27
-
Futures
4,004
-
-
4,004
-
-
-
-
-
Options purchased
19,437
3,489
-
22,926
699
(43)
656
375
3
Subtotal
25,367
4,365
-
29,732
732
(57)
675
402
3
Subtotal including accrued
interest
106,156
97,369
295,496
499,021
9,048
(15,026)
(5,978)
2,504
49
Less accrued interest
-
-
-
-
381
(779)
(398)
-
-
Total
$106,156
$97,369
$295,496
$499,021
$8,667
$(14,247)
$(5,580)
$2,504
$49
(1)Credit equivalent amount is the sum of replacement cost and the potential future credit exposure less any collateral held. Replacement cost represents the current
cost of replacing all contracts with a positive fair value. The amounts take into consideration legal contracts that permit offsetting of positions. The potential future
credit exposure is calculated based on a formula prescribed by the Office of the Superintendent of Financial Institutions (“OSFI”).
(2)Capital requirement represents the credit equivalent amount, weighted according to the creditworthiness of the counterparty, as prescribed by OSFI.
Summary of Average Rate of Hedging Instruments in Hedge Relationships That Do Not Frequently Reset The following tables present the average rate of the hedging instruments in key hedge relationships that do not frequently reset.
As at December 31, 2025
Remaining term to maturity             
(notional amounts)
Fair value
Hedged item
Hedging instrument
Average rate
Less than
1 year
1 to 5
years
Over 5
years
Total
Positive
Negative
Net
Inflation risk
Inflation linked insurance
liabilities
Interest rate swaps
CPI rate: 297.02
$107
$606
$10,233
$10,946
$31
$(63)
$(32)
Foreign exchange risk
Foreign currency assets
Foreign currency
swaps
CAD/EUR: 0.66285
-
213
1,463
1,676
-
(80)
(80)
Foreign currency assets
Foreign currency
swaps
CAD/GBP: 0.55972
-
115
515
630
-
(14)
(14)
Foreign currency assets
Foreign currency
swaps
CAD/USD: 0.72856
20
352
1,100
1,472
14
(4)
10
Foreign currency assets
Foreign currency
swaps
JPY/EUR: 0.00603
-
281
481
762
-
(100)
(100)
Foreign exchange and interest
rate risk
Floating rate foreign currency
liabilities
Foreign currency
swaps
CAD/USD: 0.86655
-
-
650
650
-
(190)
(190)
Debt securities at fair value
through OCI
Foreign currency
swaps
CAD/USD: 1.23451
8
-
-
8
1
-
1
Equity risk
Stock-based compensation
Equity contracts
MFC price: $38.39
26
272
-
298
-
-
-
Total
$161
$1,839
$14,442
$16,442
$46
$(451)
$(405)
As at December 31, 2024
Remaining term to maturity             
(notional amounts)
Fair value
Hedged item
Hedging instrument
Average rate
Less than
1 year
1 to 5
years
Over 5
years
Total
Positive
Negative
Net
Inflation risk
Inflation linked insurance
liabilities
Interest rate swaps
CPI rate: 290.22
$92
$568
$8,376
$9,036
$24
$(48)
$(24)
Foreign exchange risk
Foreign currency assets
Foreign currency
swaps
CAD/EUR: 0.66703
-
160
1,311
1,471
16
-
16
Foreign currency assets
Foreign currency
swaps
CAD/GBP: 0.56259
-
115
434
549
22
-
22
Foreign currency assets
Foreign currency
swaps
CAD/USD: 0.73009
165
407
1,067
1,639
9
(27)
(18)
Foreign exchange and interest
rate risk
Floating rate foreign currency
liabilities
Foreign currency
swaps
CAD/USD: 0.86655
-
-
650
650
-
(216)
(216)
Debt securities at fair value
through OCI
Foreign currency
swaps
CAD/USD: 1.22914
42
9
-
51
7
-
7
Equity risk
Stock-based compensation
Equity contracts
MFC price: $30.12
20
304
-
324
6
-
6
Total
$319
$1,563
$11,838
$13,720
$84
$(291)
$(207)
Summary of Fair Value Contracts Categorized by Hierarchy Explanatory Fair value and the fair value hierarchy of derivative instruments
As at December 31, 2025
Fair value
Level 1
Level 2
Level 3
Derivative assets
Interest rate contracts
$5,403
$-
$5,380
$23
Foreign exchange contracts
3,218
-
3,218
-
Equity contracts
1,006
-
956
50
Credit default swaps
1
-
1
-
Total derivative assets
$9,628
$-
$9,555
$73
Derivative liabilities
Interest rate contracts
$10,367
$-
$10,307
$60
Foreign exchange contracts
3,952
-
3,949
3
Equity contracts
28
-
22
6
Total derivative liabilities
$14,347
$-
$14,278
$69
As at December 31, 2024
Fair value
Level 1
Level 2
Level 3
Derivative assets
Interest rate contracts
$5,193
$-
$5,026
$167
Foreign exchange contracts
2,742
-
2,742
-
Equity contracts
730
-
730
-
Credit default swaps
2
-
2
-
Total derivative assets
$8,667
$-
$8,500
$167
Derivative liabilities
Interest rate contracts
$10,954
$-
$7,571
$3,383
Foreign exchange contracts
3,230
-
3,227
3
Equity contracts
63
-
47
16
Total derivative liabilities
$14,247
$-
$10,845
$3,402
Movement in net derivatives measured at fair value using significant unobservable inputs (Level 3) is presented in note 3 (g).
Summary of Recognizes Gains and (Losses) on Derivatives and Related Hedged Items in Fair Value Hedges in Total Investment The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges in total investment
result. These investment gains (losses) are shown in the following tables.
For the year ended December 31, 2025
Change in
value of the
hedged item for
ineffectiveness
measurement
Change in
value of the
hedging
instrument for
ineffectiveness
measurement
Ineffectiveness
recognized in
Total investment
result
Carrying
amount for
hedged items(1)
Accumulated
fair value
adjustments on
hedged items
Accumulated
fair value
adjustments on
de-designated
hedged items
Assets
Interest rate risk
Debt securities and others(2) at FVOCI
$269
$917
$1,186
$51,430
$(405)
$174
Foreign currency risk
Debt securities and others at FVOCI
(321)
321
-
6,370
-
-
Foreign currency and interest rate risk
Debt securities and others at FVOCI
390
(483)
(93)
10,715
(106)
(109)
Total assets
$338
$755
$1,093
$68,515
$(511)
$65
Liabilities
Interest rate risk
Insurance contract liabilities and others(3)
$1,304
$(2,392)
$(1,088)
$51,642
$1,025
$3,591
Foreign currency and interest rate risk
Insurance contract liabilities and others
(124)
298
174
4,580
29
51
Total liabilities
$1,180
$(2,094)
$(914)
$56,222
$1,054
$3,642
For the year ended December 31, 2024
Change in
value of the
hedged item for
ineffectiveness
measurement
Change in
value of the
hedging
instrument for
ineffectiveness
measurement
Ineffectiveness
recognized in
Total investment
result
Carrying
amount for
hedged items(1)
Accumulated
fair value
adjustments on
hedged items
Accumulated
fair value
adjustments on
de-designated
hedged items
Assets
Interest rate risk
Debt securities at FVOCI
$(833)
$812
$(21)
$117,538
$(1)
$(601)
Foreign currency risk
Debt securities at FVOCI
(80)
80
-
3,561
-
-
Foreign currency and interest rate risk
Debt securities at FVOCI
451
(559)
(108)
11,130
(367)
196
Total assets
$(462)
$333
$(129)
$132,229
$(368)
$(405)
Liabilities
Interest rate risk
Insurance contract liabilities 
$3,591
$(3,329)
$262
$47,747
$3,386
$237
Foreign currency and interest rate risk
Insurance contract liabilities
55
(17)
38
3,167
137
-
Total liabilities
$3,646
$(3,346)
$300
$50,914
$3,523
$237
(1)The carrying amounts for hedged items presented are related to hedged items in active hedging relationships as at the reporting date.
(2)Includes hedge accounting results for a new hedge strategy designated in 2025 for hedging interest rate risk related to fixed rate residential mortgage with carrying
amount of $386 as at the reporting date with ineffectiveness during the year ended December 31, 2025 of $1.
(3)Includes hedge accounting results for a new hedge strategy designated in 2025 for hedging interest rate risk related to fixed rate term deposits with carrying
amount of $100 as at the reporting date with no ineffectiveness during the year ended December 31, 2025.
For the year ended
December 31, 2025
Hedged items in qualifying cash flow hedging
relationships
Change in fair
value of
hedged items
for
ineffectiveness
measurement
Change in fair
value of
hedging
instruments for
ineffectiveness
measurement
Gains (losses)
deferred in
AOCI on
derivatives
Gains (losses)
reclassified
from AOCI into
Total
investment
result
Ineffectiveness
recognized in
Total
investment
result
Interest rate risk
Treasury locks
Forecasted liability issuance
$-
$-
$-
$-
$-
Foreign exchange risk
Foreign currency swaps
Fixed rate liabilities
-
-
-
-
-
Interest and foreign
exchange risk
Foreign currency swaps
Floating rate liabilities
(8)
8
8
17
-
Equity price risk
Equity contracts
Stock-based compensation
(50)
50
50
87
-
CPI risk
Interest rate swaps(1)
Inflation linked insurance liabilities
(5)
5
5
23
-
Total
$(63)
$63
$63
$127
$-
For the year ended   
December 31, 2024
Hedged items in qualifying cash flow hedging
relationships
Change in fair
value of
hedged items
for
ineffectiveness
measurement
Change in fair
value of
hedging
instruments for
ineffectiveness
measurement
Gains (losses)
deferred in
AOCI on
derivatives
Gains (losses)
reclassified
from AOCI into
Total
investment
result
Ineffectiveness
recognized in
Total
investment
result
Interest rate risk
Treasury locks
Forecasted liability issuance
$3
$(3)
$(3)
$-
$-
Foreign exchange risk
Foreign currency swaps
Fixed rate liabilities
(23)
23
23
26
-
Interest and foreign
exchange risk
Foreign currency swaps
Floating rate liabilities
32
(32)
(32)
(75)
-
Equity price risk
Equity contracts
Stock-based compensation
(145)
145
145
66
-
CPI risk
Interest rate swaps(1)
Inflation linked insurance liabilities
(60)
60
60
17
-
Total
$(193)
$193
$193
$34
$-
(1)Gains (losses) deferred in AOCI on derivatives are presented in AOCI under Insurance finance income (expenses).
Summary of Balances in the Company’s Cash Flow Hedge Reserve The table below details the balances in the Company’s cash flow hedge reserve.
As at December 31,
2025
2024
Balances in the cash flow hedge reserve for continuing hedges
$(54)
$10
Balances remaining in the cash flow hedge reserve on de-designated hedges
-
-
Total
$(54)
$10
Summary of Investment Hedging Relationships on Consolidated Statements of Income and Consolidated Statements of Other Comprehensive Income The effects of net investment hedging relationships on the Consolidated Statements of Income and the Consolidated Statements
of Other Comprehensive Income are shown in the following tables.
For the year ended December 31, 2025
Change in fair
value of
hedged items
for
ineffectiveness
measurement
Change in fair
value of
hedging
instruments for
ineffectiveness
measurement
Gains (losses)
deferred in
AOCI
Gains (losses)
reclassified
from AOCI into
Total
investment
result
Ineffectiveness
recognized in
Total
investment
result
Non-functional currency denominated debt
$(368)
$368
$368
$-
$-
Forward currency contracts
7
(7)
(7)
-
-
Total
$(361)
$361
$361
$-
$-
For the year ended December 31, 2024
Change in fair
value of
hedged items
for
ineffectiveness
measurement
Change in fair
value of
hedging
instruments for
ineffectiveness
measurement
Gains (losses)
deferred in
AOCI
Gains (losses)
reclassified
from AOCI into
Total
investment
result
Ineffectiveness
recognized in
Total
investment
result
Non-functional currency denominated debt
$665
$(665)
$(665)
$-
$-
Forward currency contracts
(45)
45
45
-
-
Total
$620
$(620)
$(620)
$-
$-
Summary of Balances in Company’s Net Investment Hedge Reserve The table below details the balances in the Company’s net investment hedge reserve.
As at December 31,
2025
2024
Balances in the foreign currency translation reserve for continuing hedges
$(200)
$(561)
Balances remaining in the net investment hedge reserve on de-designated hedges
-
-
Total
$(200)
$(561)
Summary of Reconciliation of Accumulated Other Comprehensive Income (Loss) Related to Cash Flow Hedges Reconciliation of accumulated other comprehensive income (loss) related to cash flow hedges
For the year ended December 31, 2025
Accumulated other
comprehensive
income (loss),
beginning of year
Hedging gains
(losses)
recognized in
AOCI during the
year
Reclassification
from AOCI to
income
Accumulated other
comprehensive
income (loss), end
of year
Reclassification
adjustment related
to de-designated
hedges as hedged
item affects income
Reclassification adjustment
related to items for which
the hedged future cash
flows are no longer
expected to occur
Interest rate risk
$(2)
$-
$-
$(2)
$-
$-
Interest rate and foreign exchange risk
(64)
8
17
(73)
-
-
Foreign exchange translation risk
-
-
-
-
-
-
CPI risk
(42)
5
23
(60)
-
-
Equity price risk
118
50
87
81
-
-
Total
$10
$63
$127
$(54)
$-
$-
For the year ended December 31, 2024
Accumulated other
comprehensive
income (loss),
beginning of year
Hedging gains
(losses)
recognized in
AOCI during the
year
Reclassification
from AOCI to
income
Accumulated other
comprehensive
income (loss), end
of year
Reclassification
adjustment related
to de-designated
hedges as hedged
item affects income
Reclassification adjustment
related to items for which
the hedged future cash
flows are no longer
expected to occur
Interest rate risk
$1
$(3)
$-
$(2)
$-
$-
Interest rate and foreign exchange risk
(107)
(32)
(75)
(64)
-
-
Foreign exchange translation risk
3
23
26
-
-
-
CPI risk
(85)
60
17
(42)
-
-
Equity price risk
39
145
66
118
-
-
Total
$(149)
$193
$34
$10
$-
$-
Summary of Reconciliation of Accumulated Other Comprehensible Income (Loss) Related to Net Investment Hedges Reconciliation of accumulated other comprehensive income (loss) related to net investment hedges
For the year ended December 31, 2025
Accumulated other
comprehensive
income (loss),
beginning of year
Hedging gains
(losses)
recognized in
AOCI during the
year
Reclassification
from AOCI to
income
Accumulated other
comprehensive
income (loss), end
of year
Reclassification
adjustment related to
de-designated
hedges as hedged
item affects income
Reclassification adjustment
related to items for which
the hedged future cash
flows are no longer
expected to occur
Foreign exchange translation risk
$(561)
$361
$-
$(200)
$-
$-
For the year ended December 31, 2024
Accumulated other
comprehensive
income (loss),
beginning of year
Hedging gains
(losses)
recognized in
AOCI during the
year
Reclassification
from AOCI to
income
Accumulated other
comprehensive
income (loss), end
of year
Reclassification
adjustment related to
de-designated
hedges as hedged
item affects income
Reclassification adjustment
related to items for which
the hedged future cash
flows are no longer
expected to occur
Foreign exchange translation risk
$59
$(620)
$-
$(561)
$-
$-
Summary of Movement in Cost of Hedging by Hedged Risk Category The following table provides details of the movement in the cost of
hedging by hedged risk category.
For the year ended December 31,
2025
2024
Foreign exchange risk
Balance, beginning of year
$111
$-
Changes in fair value
(143)
111
Amount reclassified to profit or loss
(37)
-
Balance, end of year
$5
$111
Foreign exchange and interest rate risk
Balance, beginning of year
$8
$18
Changes in fair value
(3)
(10)
Amount reclassified to profit or loss
-
-
Balance, end of year
$5
$8
Summary of Investment Income (Loss) on Derivatives Not Designated in Qualifying Hedge Accounting Relationships Investment income (loss) on derivatives not designated in qualifying hedge accounting relationships
For the years ended December 31,
2025
2024
Interest rate swaps
$4
$(116)
Interest rate futures
114
52
Interest rate options
(9)
(20)
Foreign currency swaps
144
108
Currency rate futures
15
(137)
Forward contracts
(423)
(626)
Equity futures
(477)
(423)
Equity contracts
766
437
Credit default swaps
(1)
(1)
Total
$133
$(726)