Loans, Impaired Loans and Allowance for Credit Losses

9 Months Ended

Jul. 31, 2026

Loans, Impaired Loans and Allowance for Credit Losses

7.	Loans, impaired loans and allowance for credit losses

(a) Loans at amortized cost


	As at
	July 31, 2026
($ millions)	Gross carrying amount		Allowance for credit losses		Net carrying amount
Residential mortgages	$	366,643	$	1,495	$	365,148
Personal loans		108,016		2,272		105,744
Credit cards		16,365		1,157		15,208
Business and government		286,860		2,405		284,455
Total	$	777,884	$	7,329	$	770,555


	As at
	April 30, 2026						October 31, 2025
($ millions)	Gross carrying amount		Allowance for credit losses		Net carrying amount		Gross carrying amount		Allowance for credit losses		Net carrying amount
Residential mortgages	$	368,495	$	1,450	$	367,045	$	370,191	$	1,460	$	368,731
Personal loans		108,355		2,254		106,101		110,567		2,432		108,135
Credit cards		16,040		1,166		14,874		18,045		1,355		16,690
Business and government		271,694		2,280		269,414		279,705		2,216		277,489
Total	$	764,584	$	7,150	$	757,434	$	778,508	$	7,463	$	771,045

(b) Impaired loans

(1)


	As at
	July 31, 2026
($ millions)	Gross impaired loans		Allowance for credit losses		Net carrying amount
Residential mortgages	$	3,058	$	850	$	2,208
Personal loans		945		556		389
Credit cards		–		–		–
Business and government		3,798		1,092		2,706
Total	$	7,801	$	2,498	$	5,303
By geography:
Canada	$	2,876	$	784	$	2,092
United States		119		9		110
Mexico		1,526		551		975
Peru		759		389		370
Chile		1,467		366		1,101
Other international		1,054		399		655
Total	$	7,801	$	2,498	$	5,303


	As at
	April 30, 2026						October 31, 2025
($ millions)	Gross impaired loans		Allowance for credit losses		Net carrying amount		Gross impaired loans		Allowance for credit losses		Net carrying amount
Residential mortgages	$	2,904	$	841	$	2,063	$	2,903	$	840	$	2,063
Personal loans		975		566		409		1,071		604		467
Credit cards		–		–		–		–		–		–
Business and government		3,729		1,001		2,728		3,270		897		2,373
Total	$	7,608	$	2,408	$	5,200	$	7,244	$	2,341	$	4,903
By geography:
Canada	$	2,798	$	796	$	2,002	$	2,416	$	683	$	1,733
United States		124		13		111		–		–		–
Mexico		1,515		570		945		1,494		535		959
Peru		739		367		372		823		400		423
Chile		1,452		344		1,108		1,420		332		1,088
Other international		980		318		662		1,091		391		700
Total	$	7,608	$	2,408	$	5,200	$	7,244	$	2,341	$	4,903

(1)

Interest income recognized on impaired loans during the three months ended July 31, 2026 was $78 (April 30, 2026 – $29; October 31, 2025 – $23).

(i)

Key inputs and assumptions

The Bank’s allowance for credit losses is measured using a three-stage approach based on the extent of credit deterioration since origination. The calculation of the Bank’s allowance for credit losses is an output of a set of complex models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. Some of the key drivers include the following:

•

Changes in risk ratings of the borrower or instrument reflecting changes in their credit quality;

•

Changes in the volumes of transactions;

•

Changes in the forward-looking macroeconomic environment reflected in the variables used in the models such as GDP growth, unemployment rates, commodity prices, interest rates, and house price indices, which are closely related with credit losses in the relevant portfolio;

•

Changes in macroeconomic scenarios and the probability weights assigned to each scenario; and

•

Borrower migration between the three stages.

The Bank determines its allowance for credit losses using four probability-weighted forward-looking scenarios (base case, optimistic, pessimistic and very pessimistic).

The Bank considers both internal and external sources of information and data to achieve unbiased projections and forecasts in determining the allowance for credit losses. The Bank prepares the scenarios using forecasts generated by Scotiabank Economics (SE). The forecasts are generated using models whose outputs are modified by SE as necessary to formulate a ‘base case’ view of the most probable future direction of economic developments. The development of the base case and alternative scenarios is overseen by a governance committee that consists of internal stakeholders from across the Bank. The final base case and alternative scenarios reflect significant review and oversight, and incorporate judgement both in the determination of the scenarios’ forecasts and the probability weights that are assigned to them.

(ii)

Key macroeconomic variables

The inputs and models used for calculating expected credit losses may not always capture all characteristics of the market at the date of the financial statements. Qualitative adjustments or overlays may be made for certain portfolios or geographies as temporary adjustments in circumstances where, in the Bank’s view, the inputs, assumptions, and/or modelling techniques do not capture all relevant risk factors, including the emergence of economic or geopolitical events, up to the date of the financial statements. As required under IFRS 9, the allowance for credit losses at each reporting period must be based on inputs, assumptions and information available up to that date.

The Bank has generated a forward-looking base case scenario and three alternative forward-looking scenarios (one optimistic and two pessimistic) as key inputs into the expected loss provisioning models. Given the uncertainty surrounding U.S. trade policies and the direction of tariffs, the scenarios as of July 31, 2026 have varying assumptions of imposed tariffs. The base case scenario assumes tariffs announced and implemented, avoiding speculation on future announcements, including potential trade deals and tariff pauses. Differing assumptions are reflected in the alternative scenarios described below. As new information comes to light in the future, the scenarios and assumptions will be updated accordingly.

The higher tariff landscape and tensions in the Middle East are still impacting our base case. Our working assumptions are that in coming months, CUSMA negotiations will conclude with only a mild impact on effective tariff rates, and that conditions in the Middle East improve sufficiently for commodity prices and transportation costs to start easing. The Canadian economic outlook now features a more pronounced deceleration in 2026, mostly because GDP in the first quarter of this year recorded a mild decline due to temporary factors. GDP growth is expected to strengthen thereafter with the reversal of these factors, alongside a diminishing impact on growth from higher tariffs, lagged effects from past interest rate cuts, and planned increases in defen

e and public infrastructure spending. Economic growth in the U.S. is projected to slow modestly from 2025 to 2026-2027, as the expected moderation in household expenditures will be largely offset by robust growth in business investment, mostly AI-related and supported by healthy corporate balance sheets. Monetary policy paths are still expected to diverge across the two economies, reflecting differing economic conditions and inflation pressures. By mid-2027, the Bank of Canada is expected to raise its policy rate by a cumulative 75 basis points while the Federal Reserve is expected to reduce its policy rate by 50 basis points.

The optimistic scenario features somewhat stronger economic activity relative to the base case. The pessimistic scenario features a negative demand-type shock with globally tighter financial conditions, weaker growth and inflation, and lower monetary policy rates than in the base case scenario. It also assumes a combination of U.S. imposed tariffs on world economies, including an effective tariff of

7.5%

on imports from Canada and Mexico, while facing no retaliation from these countries. The very pessimistic scenario features a strong stagflationary impulse that leads to a protracted period of financial market uncertainty. Ongoing geopolitical events in Iran also contribute to this stagflation impulse through higher prices for oil and other commodities. This scenario also assumes U.S. imposed tariffs with a magnitude about three times that of the pessimistic scenario. Under this scenario, all countries retaliate. This will result in higher inflation, requiring central banks to raise their policy rates to higher levels than in the base case to bring inflation under control, which will dampen economic activity.

The following tables show certain key macroeconomic variables used to calculate the modelled estimate for the allowance for credit losses. Further changes in these variables up to the date of the financial statements are incorporated through expert credit judgement. For the base case, optimistic and pessimistic scenarios, the projections are provided for the next 12 months and for the remaining forecast period, which represents a medium-term view.


	Base Case Scenario				Alternative Scenario Optimistic				Alternative Scenario Pessimistic				Alternative Scenario Very Pessimistic
As at July 31, 2026	Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period
Canada
Real GDP growth, y/y % change		1.7		2.0		2.7		2.8		-1.1		2.6		-4.6		3.2
Consumer price index, y/y %		2.6		1.8		2.8		2.1		2.0		1.6		6.1		2.1
Unemployment rate, average %		6.4		6.1		6.0		5.2		7.7		6.8		10.6		7.4
Bank of Canada overnight rate target, average %		2.8		2.9		3.1		3.6		2.1		2.3		3.6		3.5
HPI - Housing Price Index, y/y % change		-2.3		5.1		-1.6		6.2		-6.5		5.7		-9.8		5.2
USD/CAD exchange rate, average		1.33		1.29		1.32		1.27		1.40		1.27		1.48		1.29
U.S.
Real GDP growth, y/y % change		1.7		2.3		2.2		3.2		-1.1		3.1		-4.0		3.6
Consumer price index, y/y %		3.2		2.3		3.5		2.6		3.4		2.2		7.1		2.5
Target federal funds rate, upper limit, average %		3.4		3.2		3.8		3.7		3.4		2.8		4.3		3.9
Unemployment rate, average %		4.2		4.1		4.1		3.7		5.7		4.6		8.0		4.9
Mexico
Real GDP growth, y/y % change		1.2		1.8		1.6		2.5		-1.4		2.3		-4.7		3.0
Unemployment rate, average %		3.2		3.6		3.1		3.1		3.9		3.7		6.1		4.5
Chile
Real GDP growth, y/y % change		3.2		2.1		4.6		2.9		0.7		2.7		-3.5		3.6
Unemployment rate, average %		7.8		7.3		7.5		6.8		9.1		7.5		11.4		8.0
Peru
Real GDP growth, y/y % change		3.1		2.8		4.6		3.8		0.4		3.4		-1.2		3.9
Unemployment rate, average %		5.6		6.0		5.1		5.0		6.8		6.4		10.6		7.6
Caribbean
Real GDP growth, y/y % change		3.6		4.0		4.0		4.8		1.6		4.5		-0.1		5.0
Global
WTI oil price, average USD/bbl		79		69		85		81		68		62		127		73
Copper price, average USD/lb		5.89		6.37		6.07		6.91		5.43		6.24		5.93		6.22
Global GDP, y/y % change		3.0		2.8		3.7		3.7		0.7		3.4		-1.9		3.9


	Base Case Scenario				Alternative Scenario Optimistic				Alternative Scenario Pessimistic				Alternative Scenario Very Pessimistic
As at April 30, 2026	Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period
Canada
Real GDP growth, y/y % change		1.6		2.0		2.6		2.9		-1.0		2.6		-4.4		3.3
Consumer price index, y/y %		3.1		1.9		3.3		2.4		2.6		1.7		6.5		2.1
Unemployment rate, average %		6.4		5.9		5.9		4.5		7.6		6.5		10.4		7.1
Bank of Canada overnight rate target, average %		2.8		2.9		3.1		3.7		2.1		2.4		3.5		3.5
HPI - Housing Price Index, y/y % change		-1.6		4.7		-0.9		6.2		-5.6		5.3		-8.9		4.8
USD/CAD exchange rate, average		1.34		1.30		1.33		1.28		1.40		1.28		1.48		1.30
U.S.
Real GDP growth, y/y % change		1.6		2.4		2.2		3.3		-1.1		3.1		-3.9		3.6
Consumer price index, y/y %		3.0		2.4		3.2		2.8		3.2		2.3		6.8		2.6
Target federal funds rate, upper limit, average %		3.6		3.4		3.8		4.0		3.5		3.0		4.4		4.1
Unemployment rate, average %		4.3		4.0		4.1		3.6		5.7		4.5		8.1		4.8
Mexico
Real GDP growth, y/y % change		0.9		1.9		1.3		2.6		-1.6		2.4		-4.8		3.1
Unemployment rate, average %		3.5		3.8		3.3		3.3		4.2		3.9		6.5		4.8
Chile
Real GDP growth, y/y % change		2.5		2.1		3.3		3.0		0.1		2.7		-4.0		3.7
Unemployment rate, average %		8.1		7.3		7.9		6.8		9.3		7.5		11.6		8.0
Peru
Real GDP growth, y/y % change		3.3		2.7		4.4		3.5		0.7		3.2		-0.8		3.8
Unemployment rate, average %		5.8		6.0		5.4		5.1		6.9		6.4		10.9		7.5
Caribbean
Real GDP growth, y/y % change		3.7		4.0		4.1		4.7		1.8		4.4		-0.6		4.9
Global
WTI oil price, average USD/bbl		85		69		89		83		74		63		130		74
Copper price, average USD/lb		5.39		5.86		5.51		6.38		4.99		5.74		5.41		5.72
Global GDP, y/y % change		2.4		2.8		3.2		3.7		0.3		3.4		-2.3		3.9


	Base Case Scenario				Alternative Scenario Optimistic				Alternative Scenario Pessimistic				Alternative Scenario Very Pessimistic
As at October 31, 2025	Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period		Next 12 Months		Remaining Forecast Period
Canada
Real GDP growth, y/y % change		1.2		2.2		2.4		3.1		-1.1		2.7		-4.4		3.4
Consumer price index, y/y %		1.9		2.2		2.1		2.7		1.4		2.0		5.0		2.4
Unemployment rate, average %		7.0		5.8		6.6		4.7		8.2		6.4		11.2		7.0
Bank of Canada overnight rate target, average %		2.3		2.8		2.8		3.7		2.1		2.4		3.1		3.3
HPI - Housing Price Index, y/y % change		1.9		6.2		2.6		7.7		-2.0		6.7		-5.1		6.2
USD/CAD exchange rate, average		1.32		1.30		1.31		1.29		1.37		1.29		1.45		1.30
U.S.
Real GDP growth, y/y % change		1.4		2.3		1.9		3.2		-1.0		3.0		-3.7		3.5
Consumer price index, y/y %		2.6		2.5		2.7		2.8		2.7		2.4		6.0		2.7
Target federal funds rate, upper limit, average %		3.3		3.0		3.5		3.5		3.2		2.7		3.9		3.6
Unemployment rate, average %		4.5		4.3		4.4		4.0		5.8		4.8		8.1		5.2
Mexico
Real GDP growth, y/y % change		-0.2		2.2		0.6		2.9		-2.4		2.6		-5.5		3.3
Unemployment rate, average %		3.3		3.7		3.2		3.1		3.9		3.8		6.1		4.6
Chile
Real GDP growth, y/y % change		2.4		2.0		3.5		2.8		0.3		2.6		-3.7		3.5
Unemployment rate, average %		7.9		6.7		7.7		6.4		9.0		6.9		11.2		7.3
Peru
Real GDP growth, y/y % change		2.9		3.1		4.1		4.0		0.6		3.6		-1.0		4.1
Unemployment rate, average %		5.7		6.1		5.3		5.2		6.7		6.5		10.5		7.6
Colombia
Real GDP growth, y/y % change		2.9		2.5		4.0		3.4		0.7		3.0		-1.0		3.5
Unemployment rate, average %		10.3		9.9		10.0		9.1		12.0		10.5		18.9		12.5
Caribbean
Real GDP growth, y/y % change		3.7		4.0		4.4		4.7		1.6		4.4		-0.6		4.9
Global
WTI oil price, average USD/bbl		60		66		64		78		53		61		45		56
Copper price, average USD/lb		4.19		4.68		4.29		5.03		3.92		4.60		3.61		4.47
Global GDP, y/y % change		2.2		2.7		3.0		3.5		0.3		3.2		-2.2		3.7

(iii)

Sensitivity

Relative to the base case scenario, the weighting of these multiple scenarios increased the reported allowance for credit losses for financial assets in Stage 1 and Stage 2 to $5,040 million (April 30, 2026 – $4,936 million; October 31, 2025 – $5,313 million) from $4,726 million (April 30, 2026 – $4,644 million; October 31, 2025 – $5,018 million).

The Bank enhanced certain of its IFRS 9 models in the prior year, with the enhanced models exhibiting higher sensitivity to changes in the macroeconomic outlook. If the Bank was to apply a probability weighted average of its two pessimistic scenarios for the measurement of allowance for credit losses for such assets, the allowance for credit losses on performing financial instruments would be $649 million higher than the reported allowance for credit losses as at July 31, 2026 (April 30, 2026 – $591 million; October 31, 2025 – $786 million), excluding the consideration of changes in qualitative overlays or expert credit judgement. Actual results will differ as this does not consider the migration of exposures or incorporate changes that would occur in the portfolio due to risk mitigation actions and other factors.

Under our current probability-weighted scenarios, if all performing financial assets were in Stage 1, reflecting a 12 month expected loss period, the allowance for credit losses would be $800 million (April 30, 2026 – $807 million; October 31, 2025 – $801 million) lower than the reported allowance for credit losses on performing financial assets.

(iv)

Allowance for credit losses


Allowance for credit losses
($ millions)	Balance as at November 1, 2025		Provision for credit losses (1)		Net write- offs			Other, including foreign currency adjustment			Balance as at July 31, 2026
Residential mortgages	$	1,460	$	189	$	(99	)	$	(55	)	$	1,495
Personal loans		2,432		1,380		(1,271	)		(269	)		2,272
Credit cards		1,355		893		(913	)		(178	)		1,157
Business and government		2,392		1,004		(561	)		(227	)		2,608
	$	7,639	$	3,466	$	(2,844)		$	(729)		$	7,532
Presented as:
Allowance for credit losses on loans	$	7,463									$	7,329
Allowance for credit losses on acceptances (2)		1										1
Allowance for credit losses on off-balance sheet exposures (3)		175										202

(1)

Excludes amounts associated with other assets of $6. The provision for credit losses, net of these amounts, is $3,472.

(2)

Allowance for credit losses on acceptances is recorded against the financial asset in the Consolidated Statement of Financial Position.

(3)

Allowance for credit losses on

off-balance

sheet exposures is recorded in other liabilities in the Consolidated Statement of Financial Position.


($ millions)	Balance as at November 1, 2024		Provision for credit losses (1)		Net write- offs			Other, including foreign currency adjustment			Balance as at July 31, 2025
Residential mortgages	$	1,208	$	270	$	(72	)	$	24		$	1,430
Personal loans		2,319		1,499		(1,353	)		(78	)		2,387
Credit cards		1,160		1,029		(942	)		3			1,250
Business and government		2,036		817		(466	)		(83	)		2,304
	$	6,723	$	3,615	$	(2,833	)	$	(134	)	$	7,371
Presented as:
Allowance for credit losses on loans	$	6,536									$	7,197
Allowance for credit losses on acceptances (2)		1										1
Allowance for credit losses on off-balance sheet exposures (3)		186										173

(1)

Excludes amounts associated with other assets and reversal of impairment losses of $(14). The provision for credit losses, net of these amounts, is $3,601.

(2)

Allowance for credit losses on acceptances is recorded against the financial asset in the Consolidated Statement of Financial Position.

(3)

Allowance for credit losses on

off-balance

sheet exposures is recorded in other liabilities in the Consolidated Statement of Financial Position.


Allowance for credit losses on loans	As at July 31, 2026
($ millions)	Stage 1		Stage 2		Stage 3		Total
Residential mortgages	$	209	$	436	$	850	$	1,495
Personal loans		578		1,138		556		2,272
Credit cards		263		894		–		1,157
Business and government		733		580		1,092		2,405
Total (1)	$	1,783	$	3,048	$	2,498	$	7,329

(1)

Excludes allowance for credit losses of $222 for other financial assets including acceptances, investment securities, deposits with banks,

off-balance

sheet credit risks and reverse repos.


	As at October 31, 2025
($ millions)	Stage 1		Stage 2		Stage 3		Total
Residential mortgages	$	196	$	424	$	840	$	1,460
Personal loans		613		1,215		604		2,432
Credit cards		338		1,017		–		1,355
Business and government		713		606		897		2,216
Total (1)	$	1,860	$	3,262	$	2,341	$	7,463

(1)

Excludes allowance for credit losses of $191 for other financial assets including acceptances, investment securities, deposits with banks,

off-balance

sheet credit risks and reverse repos.


	As at July 31, 2025
($ millions)	Stage 1		Stage 2		Stage 3		Total
Residential mortgages	$	185	$	447	$	798	$	1,430
Personal loans		564		1,223		600		2,387
Credit cards		309		941		–		1,250
Business and government		699		595		836		2,130
Total (1)	$	1,757	$	3,206	$	2,234	$	7,197

(1)

Excludes allowance for credit losses of $189 for other financial assets including acceptances, investment securities, deposits with banks,

off-balance

sheet credit risks and reverse repos.

The following table presents the changes to the allowance for credit losses on loans.


	As at and for the three months ended
	July 31, 2026												July 31, 2025
($ millions)	Stage 1			Stage 2			Stage 3			Total			Stage 1			Stage 2			Stage 3			Total
Retail loans:
Residential mortgages
Balance at beginning of period	$	190		$	419		$	841		$	1,450		$	178		$	452		$	748		$	1,378
Provision for credit losses
Remeasurement (1)		(51	)		57			50			56			(73	)		21			118			66
Newly originated or purchased financial assets		11			–			–			11			11			–			–			11
Derecognition of financial assets and maturities		(2	)		(9	)		–			(11	)		(2	)		(10	)		–			(12	)
Changes in models and methodologies		–			–			–			–			–			–			–			–
Transfer to (from):
Stage 1		67			(61	)		(6	)		–			80			(64	)		(16	)		–
Stage 2		(9	)		52			(43	)		–			(10	)		69			(59	)		–
Stage 3		–			(25	)		25			–			–			(26	)		26			–
Gross write-offs		–			–			(45	)		(45	)		–			–			(39	)		(39	)
Recoveries		–			–			7			7			–			–			7			7
Foreign exchange and other movements		3			3			21			27			1			5			13			19
Balance at end of period	$	209		$	436		$	850		$	1,495		$	185		$	447		$	798		$	1,430
Personal loans
Balance at beginning of period	$	558		$	1,130		$	566		$	2,254		$	534		$	1,228		$	617		$	2,379
Provision for credit losses
Remeasurement (1)		(166	)		225			332			391			(136	)		201			318			383
Newly originated or purchased financial assets		87			–			–			87			94			–			–			94
Derecognition of financial assets and maturities		(25	)		(27	)		–			(52	)		(23	)		(34	)		–			(57	)
Changes in models and methodologies		–			–			–			–			3			(4	)		–			(1	)
Transfer to (from):
Stage 1		152			(148	)		(4	)		–			146			(142	)		(4	)		–
Stage 2		(36	)		65			(29	)		–			(54	)		87			(33	)		–
Stage 3		(1	)		(111	)		112			–			(2	)		(115	)		117			–
Gross write-offs		–			–			(504	)		(504	)		–			–			(508	)		(508	)
Recoveries		–			–			74			74			–			–			85			85
Foreign exchange and other movements		9			4			9			22			2			2			8			12
Balance at end of period	$	578		$	1,138		$	556		$	2,272		$	564		$	1,223		$	600		$	2,387
Credit cards
Balance at beginning of period	$	250		$	916		$	–		$	1,166		$	292		$	943		$	–		$	1,235
Provision for credit losses
Remeasurement (1)		(50	)		123			187			260			(67	)		168			188			289
Newly originated or purchased financial assets		20			–			–			20			41			–			–			41
Derecognition of financial assets and maturities		(7	)		(5	)		–			(12	)		(10	)		(12	)		–			(22	)
Changes in models and methodologies		–			–			–			–			2			(3	)		–			(1	)
Transfer to (from):
Stage 1		69			(69	)		–			–			86			(86	)		–			–
Stage 2		(24	)		24			–			–			(39	)		39			–			–
Stage 3		–			(101	)		101			–			–			(102	)		102			–
Gross write-offs		–			–			(342	)		(342	)		–			–			(368	)		(368	)
Recoveries		–			–			54			54			–			–			73			73
Foreign exchange and other movements		5			6			–			11			4			(6	)		5			3
Balance at end of period	$	263		$	894		$	–		$	1,157		$	309		$	941		$	–		$	1,250
Total retail loans
Balance at beginning of period	$	998		$	2,465		$	1,407		$	4,870		$	1,004		$	2,623		$	1,365		$	4,992
Provision for credit losses
Remeasurement (1)		(267	)		405			569			707			(276	)		390			624			738
Newly originated or purchased financial assets		118			–			–			118			146			–			–			146
Derecognition of financial assets and maturities		(34	)		(41	)		–			(75	)		(35	)		(56	)		–			(91	)
Changes in models and methodologies		–			–			–			–			5			(7	)		–			(2	)
Transfer to (from):
Stage 1		288			(278	)		(10	)		–			312			(292	)		(20	)		–
Stage 2		(69	)		141			(72	)		–			(103	)		195			(92	)		–
Stage 3		(1	)		(237	)		238			–			(2	)		(243	)		245			–
Gross write-offs		–			–			(891	)		(891	)		–			–			(915	)		(915	)
Recoveries		–			–			135			135			–			–			165			165
Foreign exchange and other movements		17			13			30			60			7			1			26			34
Balance at end of period	$	1,050		$	2,468		$	1,406		$	4,924		$	1,058		$	2,611		$	1,398		$	5,067
Non-retail loans:
Business and government
Balance at beginning of period	$	829		$	625		$	1,001		$	2,455		$	820		$	611		$	836		$	2,267
Provision for credit losses
Remeasurement (1)		(126	)		22			297			193			(50	)		69			213			232
Newly originated or purchased financial assets		410			–			–			410			308			–			–			308
Derecognition of financial assets and maturities		(347	)		(58	)		(12	)		(417	)		(245	)		(40	)		(9	)		(294	)
Changes in models and methodologies		82			49			–			131			–			–			–			–
Transfer to (from):
Stage 1		37			(37	)		–			–			29			(29	)		–			–
Stage 2		(16	)		16			–			–			(21	)		21			–			–
Stage 3		–			(8	)		8			–			(1	)		(13	)		14			–
Gross write-offs		–			–			(192	)		(192	)		–			–			(210	)		(210	)
Recoveries		–			–			11			11			–			–			12			12
Foreign exchange and other movements		14			10			(8	)		16			5			3			(20	)		(12	)
Balance at end of period including off-balance sheet exposures	$	883		$	619		$	1,105		$	2,607		$	845		$	622		$	836		$	2,303
Less: Allowance for credit losses on off-balance sheet exposures ( 2 )		(150	)		(39	)		(13	)		(202	)		(146	)		(27	)		–			(173	)
Balance at end of period ( 2 )	$	733		$	580		$	1,092		$	2,405		$	699		$	595		$	836		$	2,130

(1)

Includes credit risk changes as a result of significant increases in credit risk, changes in credit risk that did not result in a transfer between stages, changes in model inputs and assumptions and changes due to drawdowns of undrawn commitments.

(2)

Allowance for credit losses on

off-balance

sheet exposures is recorded in other liabilities in the Consolidated Statement of Financial Position.


	As at and for the nine months ended
	July 31, 2026												July 31, 2025
($ millions)	Stage 1			Stage 2			Stage 3			Total			Stage 1			Stage 2			Stage 3			Total
Retail loans:
Residential mortgages
Balance at beginning of period	$	196		$	424		$	840		$	1,460		$	165		$	398		$	645		$	1,208
Provision for credit losses
Remeasurement (1)		(178	)		145			224			191			(172	)		123			319			270
Newly originated or purchased financial assets		32			–			–			32			36			–			–			36
Derecognition of financial assets and maturities		(6	)		(28	)		–			(34	)		(6	)		(23	)		–			(29	)
Changes in models and methodologies		–			–			–			–			(2	)		(14	)		9			(7	)
Transfer to (from):
Stage 1		201			(178	)		(23	)		–			196			(156	)		(40	)		–
Stage 2		(29	)		180			(151	)		–			(33	)		189			(156	)		–
Stage 3		–			(75	)		75			–			–			(75	)		75			–
Gross write-offs		–			–			(117	)		(117	)		–			–			(91	)		(91	)
Recoveries		–			–			18			18			–			–			19			19
Foreign exchange and other movements ( 2 )		(7	)		(32	)		(16	)		(55	)		1			5			18			24
Balance at end of period	$	209		$	436		$	850		$	1,495		$	185		$	447		$	798		$	1,430
Personal loans
Balance at beginning of period	$	613		$	1,215		$	604		$	2,432		$	544		$	1,154		$	621		$	2,319
Provision for credit losses
Remeasurement (1)		(473	)		687			1,057			1,271			(464	)		797			1,079			1,412
Newly originated or purchased financial assets		262			–			–			262			288			–			–			288
Derecognition of financial assets and maturities		(68	)		(85	)		–			(153	)		(66	)		(110	)		–			(176	)
Changes in models and methodologies		–			–			–			–			3			(33	)		5			(25	)
Transfer to (from):
Stage 1		445			(435	)		(10	)		–			457			(445	)		(12	)		–
Stage 2		(116	)		201			(85	)		–			(160	)		249			(89	)		–
Stage 3		(3	)		(335	)		338			–			(6	)		(361	)		367			–
Gross write-offs		–			–			(1,488	)		(1,488	)		–			–			(1,583	)		(1,583	)
Recoveries		–			–			217			217			–			–			230			230
Foreign exchange and other movements ( 2 )		(82	)		(110	)		(77	)		(269	)		(32	)		(28	)		(18	)		(78	)
Balance at end of period	$	578		$	1,138		$	556		$	2,272		$	564		$	1,223		$	600		$	2,387
Credit cards
Balance at beginning of period	$	338		$	1,017		$	–		$	1,355		$	288		$	872		$	–		$	1,160
Provision for credit losses
Remeasurement (1)		(189	)		466			600			877			(218	)		571			652			1,005
Newly originated or purchased financial assets		60			–			–			60			99			–			–			99
Derecognition of financial assets and maturities		(24	)		(20	)		–			(44	)		(33	)		(32	)		–			(65	)
Changes in models and methodologies		–			–			–			–			–			(10	)		–			(10	)
Transfer to (from):
Stage 1		223			(223	)		–			–			269			(269	)		–			–
Stage 2		(71	)		71			–			–			(96	)		96			–			–
Stage 3		–			(312	)		312			–			–			(284	)		284			–
Gross write-offs		–			–			(1,075	)		(1,075	)		–			–			(1,106	)		(1,106	)
Recoveries		–			–			162			162			–			–			164			164
Foreign exchange and other movements ( 2 )		(74	)		(105	)		1			(178	)		–			(3	)		6			3
Balance at end of period	$	263		$	894		$	–		$	1,157		$	309		$	941		$	–		$	1,250
Total retail loans
Balance at beginning of period	$	1,147		$	2,656		$	1,444		$	5,247		$	997		$	2,424		$	1,266		$	4,687
Provision for credit losses
Remeasurement (1)		(840	)		1,298			1,881			2,339			(854	)		1,491			2,050			2,687
Newly originated or purchased financial assets		354			–			–			354			423			–			–			423
Derecognition of financial assets and maturities		(98	)		(133	)		–			(231	)		(105	)		(165	)		–			(270	)
Changes in models and methodologies		–			–			–			–			1			(57	)		14			(42	)
Transfer to (from):
Stage 1		869			(836	)		(33	)		–			922			(870	)		(52	)		–
Stage 2		(216	)		452			(236	)		–			(289	)		534			(245	)		–
Stage 3		(3	)		(722	)		725			–			(6	)		(720	)		726			–
Gross write-offs		–			–			(2,680	)		(2,680	)		–			–			(2,780	)		(2,780	)
Recoveries		–			–			397			397			–			–			413			413
Foreign exchange and other movements ( 2 )		(163	)		(247	)		(92	)		(502	)		(31	)		(26	)		6			(51	)
Balance at end of period	$	1,050		$	2,468		$	1,406		$	4,924		$	1,058		$	2,611		$	1,398		$	5,067
Non-retail loans:
Business and government
Balance at beginning of period	$	854		$	640		$	897		$	2,391		$	739		$	508		$	788		$	2,035
Provision for credit losses
Remeasurement (1)		(205	)		248			900			943			(52	)		259			603			810
Newly originated or purchased financial assets		1,091			–			–			1,091			983			–			–			983
Derecognition of financial assets and maturities		(937	)		(209	)		(20	)		(1,166	)		(856	)		(93	)		(28	)		(977	)
Changes in models and methodologies		82			49			–			131			–			–			–			–
Transfer to (from):
Stage 1		91			(91	)		–			–			92			(92	)		–			–
Stage 2		(46	)		46			–			–			(59	)		62			(3	)		–
Stage 3		–			(33	)		33			–			(3	)		(23	)		26			–
Gross write-offs		–			–			(598	)		(598	)		–			–			(513	)		(513	)
Recoveries		–			–			37			37			–			–			47			47
Foreign exchange and other movements ( 2 )		(47	)		(31	)		(144	)		(222	)		1			1			(84	)		(82	)
Balance at end of period including off-balance sheet exposures	$	883		$	619		$	1,105		$	2,607		$	845		$	622		$	836		$	2,303
Less: Allowance for credit losses on off-balance sheet exposures ( 3 )		(150	)		(39	)		(13	)		(202	)		(146	)		(27	)		–			(173	)
Balance at end of period ( 3 )	$	733		$	580		$	1,092		$	2,405		$	699		$	595		$	836		$	2,130

(1)

(2)

Includes impact of divested operations.

(3)

Allowance for credit losses on

off-balance

sheet exposures is recorded in other liabilities in the Consolidated Statement of Financial Position.

(d)

Carrying value of exposures by risk rating


Residential mortgages	As at July 31, 2026								As at October 31, 2025
Category of PD grades ($ millions)	Stage 1		Stage 2		Stage 3 (1)		Total		Stage 1		Stage 2		Stage 3 (1)		Total
Very low	$	220,338	$	2,979	$	–	$	223,317	$	219,905	$	3,983	$	–	$	223,888
Low		85,951		3,410		–		89,361		83,755		4,820		–		88,575
Medium		15,788		10,129		–		25,917		15,870		8,618		–		24,488
High		2,400		5,844		–		8,244		3,002		6,007		–		9,009
Very high		7		2,941		–		2,948		48		3,170		–		3,218
Loans not graded (2)		13,283		515		–		13,798		16,937		1,173		–		18,110
Default		–		–		3,058		3,058		–		–		2,903		2,903
Total	$	337,767	$	25,818	$	3,058	$	366,643	$	339,517	$	27,771	$	2,903	$	370,191
Allowance for credit losses		209		436		850		1,495		196		424		840		1,460
Carrying value	$	337,558	$	25,382	$	2,208	$	365,148	$	339,321	$	27,347	$	2,063	$	368,731

(1)

Stage 3 includes purchased or originated credit-impaired loans.

(2)