Fair value of financial instruments

9 Months Ended

Jul. 31, 2026

Note 3

Fair value of financial instruments

Carrying value and fair value of financial instruments

The following tables provide a comparison of the carrying values and fair values for financial instruments classified or designated as fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVOCI), and financial instruments measured at amortized cost. Embedded derivatives are presented on a combined basis with the host contracts in the Interim Condensed Consolidated Balance Sheets. Refer to Note 2 and Note 3 of our audited 2025 Annual Consolidated Financial Statements for a description of the valuation techniques and inputs used in the fair value measurement of our financial instruments. There have been no significant changes to our determination of fair value during the quarter.


	As at July 31, 2026
	Carrying value and fair value								Carrying value		Fair value
(Millions of Canadian dollars)	Financial instruments classified as FVTPL		Financial instruments designated as FVTPL		Financial instruments classified as FVOCI		Financial instruments designated as FVOCI		Financial instruments measured at amortized cost		Financial instruments measured at amortized cost		Total carrying amount		Total fair value
Financial assets
Interest-bearing deposits with banks	$	–	$	40,521	$	–	$	–	$	9,913	$	9,913	$	50,434	$	50,434
Securities
Trading		244,630		7,580		–		–		–		–		252,210		252,210
Investment, net of applicable allowance		–		–		288,844		1,659		103,449		100,270		393,952		390,773
		244,630		7,580		288,844		1,659		103,449		100,270		646,162		642,983
Assets purchased under reverse repurchase agreements and securities borrowed		236,944		–		–		–		77,094		77,110		314,038		314,054
Loans, net of applicable allowance
Retail		1,382		–		433		–		675,904		674,294		677,719		676,109
Wholesale		12,544		–		683		–		417,784		417,258		431,011		430,485
		13,926		–		1,116		–		1,093,688		1,091,552		1,108,730		1,106,594
Other
Derivatives		162,386		–		–		–		–		–		162,386		162,386
Other assets (1)		19,807		–		–		–		64,457		64,457		84,264		84,264
Financial liabilities
Deposits
Personal	$	1,190	$	45,087					$	492,341	$	492,732	$	538,618	$	539,009
Business and government (2)		496		190,637						835,786		836,967		1,026,919		1,028,100
Bank (3)		–		4,195						74,841		74,837		79,036		79,032
		1,686		239,919						1,402,968		1,404,536		1,644,573		1,646,141
Other
Obligations related to securities sold short		59,405		–						–		–		59,405		59,405
Obligations related to assets sold under repurchase agreements and securities loaned		–		269,759						55,426		55,426		325,185		325,185
Derivatives		167,038		–						–		–		167,038		167,038
Other liabilities (4)		–		20,198						66,306		66,292		86,504		86,490
Subordinated debentures		–		217						13,363		13,441		13,580		13,658


	As at October 31, 2025
	Carrying value and fair value								Carrying value		Fair value
(Millions of Canadian dollars)	Financia l instruments classified as FVTPL		Financial instruments designated as FVTPL		Financial instruments classified as FVOCI		Financial instruments designated as FVOCI		Financial instruments measured at amortized cost		Financial instruments measured at amortized cost		Total carrying amount		Total fair value
Financial assets
Interest-bearing deposits with banks	$	–	$	40,455	$	–	$	–	$	9,909	$	9,909	$	50,364	$	50,364
Securities
Trading		212,878		6,189		–		–		–		–		219,067		219,067
Investment, net of applicable allowance		–		–		240,299		1,496		100,926		98,728		342,721		340,523
		212,878		6,189		240,299		1,496		100,926		98,728		561,788		559,590
Assets purchased under reverse repurchase agreements and securities borrowed		226,213		–		–		–		83,470		83,470		309,683		309,683
Loans, net of applicable allowance
Retail		1,128		–		442		–		646,832		648,413		648,402		649,983
Wholesale		9,724		–		690		–		383,606		382,551		394,020		392,965
		10,852		–		1,132		–		1,030,438		1,030,964		1,042,422		1,042,948
Other
Derivatives		177,206		–		–		–		–		–		177,206		177,206
Other assets (1)		14,382		–		–		–		58,487		58,487		72,869		72,869
Financial liabilities
Deposits
Personal	$	942	$	41,302					$	487,496	$	488,644	$	529,740	$	530,888
Business and government (2)		313		168,690						777,311		779,130		946,314		948,133
Bank (3)		–		2,908						36,654		36,657		39,562		39,565
		1,255		212,900						1,301,461		1,304,431		1,515,616		1,518,586
Other
Obligations related to securities sold short		49,891		–						–		–		49,891		49,891
Obligations related to assets sold under repurchase agreements and securities loaned		–		242,916						46,600		46,600		289,516		289,516
Derivatives		183,953		–						–		–		183,953		183,953
Other liabilities (4)		–		21,688						58,287		58,293		79,975		79,981
Subordinated debentures		–		232						13,729		13,887		13,961		14,119

(1)	Includes financial instruments recognized in Other assets.

(2)	Business and government deposits include deposits from regulated deposit-taking institutions other than banks.

(3)	Bank deposits refer to deposits from regulated banks and central banks.

(4)	Includes financial instruments recognized in Other liabilities.

Fair value of as

set

s and liabilities measured at fair value on a recurring basis and classified using the fair value hierarchy


	As at
	July 31, 2026													October 31, 2025
	Fair value measurements using								Netting adjustments					Fair value measurements using								Netting adjustments
(Millions of Canadian dollars)	Level 1		Level 2			Level 3			Netting adjustments		Fair value			Level 1		Level 2			Level 3			Netting adjustments		Fair value
Financial assets
Interest-bearing deposits with banks	$	–	$	40,521		$	–		$		$	40,521		$	–	$	40,455		$	–		$		$	40,455
Securities
Trading
Debt issued or guaranteed by:
Canadian government
Federal		21,400		3,169			–					24,569			17,707		2,864			–					20,571
Provincial and municipal		–		23,529			–					23,529			–		16,891			–					16,891
U.S. federal, state, municipal and agencies (1)		1,647		53,493			–					55,140			435		40,322			–					40,757
Other OECD government (2)		7,636		10,310			–					17,946			7,152		7,265			–					14,417
Mortgage-backed securities		–		77			–					77			–		74			–					74
Asset-backed securities		–		2,119			–					2,119			–		1,295			–					1,295
Corporate debt and other debt		–		31,716			18					31,734			–		25,957			32					25,989
Equities		88,813		4,763			3,520					97,096			93,397		2,813			2,863					99,073
		119,496		129,176			3,538					252,210			118,691		97,481			2,895					219,067
Investment
Debt issued or guaranteed by:
Canadian government
Federal		29,063		14,542			–					43,605			30,110		9,756			–					39,866
Provincial and municipal		–		13,750			–					13,750			–		11,318			–					11,318
U.S. federal, state, municipal and agencies (1)		–		155,891			–					155,891			196		130,495			–					130,691
Other OECD government (2)		8,709		22,141			–					30,850			1,600		10,333			–					11,933
Mortgage-backed securities		–		2,937			31					2,968			–		2,645			29					2,674
Asset-backed securities		–		10,774			–					10,774			–		10,139			–					10,139
Corporate debt and other debt		–		30,884			122					31,006			–		33,544			134					33,678
Equities		638		349			672					1,659			547		367			582					1,496
		38,410		251,268			825					290,503			32,453		208,597			745					241,795
Assets purchased under reverse repurchase agreements and securities borrowed		–		236,944			–					236,944			–		226,213			–					226,213
Loans		–		12,853			2,189					15,042			–		10,710			1,274					11,984
Other
Derivatives
Interest rate contracts		–		28,653			234					28,887			–		25,871			293					26,164
Foreign exchange contracts		–		72,065			51					72,116			–		100,604			102					100,706
Credit derivatives		–		381			–					381			–		350			2					352
Other contracts		5,666		57,555			135					63,356			11,478		41,543			110					53,131
Valuation adjustments		–		(942	)		(37	)				(979	)		–		(1,035	)		(45	)				(1,080	)
Total gross derivatives		5,666		157,712			383					163,761			11,478		167,333			462					179,273
Netting adjustments										(1,375)		(1,375	)										(2,067)		(2,067	)
Total derivatives												162,386													177,206
Other assets		6,796		13,010			1					19,807			6,108		8,270			4					14,382
	$	170,368	$	841,484		$	6,936		$	(1,375)	$	1,017,413		$	168,730	$	759,059		$	5,380		$	(2,067)	$	931,102
Financial liabilities
Deposits
Personal	$	–	$	46,049		$	228		$		$	46,277		$	–	$	41,943		$	301		$		$	42,244
Business and government		–		191,133			–					191,133			–		169,003			–					169,003
Bank		–		4,195			–					4,195			–		2,908			–					2,908
Other
Obligations related to securities sold short		18,090		41,315			–					59,405			18,678		31,213			–					49,891
Obligations related to assets sold under repurchase agreements and securities loaned		–		269,759			–					269,759			–		242,916			–					242,916
Derivatives
Interest rate contracts		–		25,137			948					26,085			–		20,679			901					21,580
Foreign exchange contracts		–		67,353			27					67,380			–		95,045			46					95,091
Credit derivatives		–		276			–					276			–		262			–					262
Other contracts		5,348		69,030			390					74,768			12,657		56,287			366					69,310
Valuation adjustments		–		(95	)		(1	)				(96	)		–		(257	)		34					(223	)
Total gross derivatives		5,348		161,701			1,364					168,413			12,657		172,016			1,347					186,020
Netting adjustments										(1,375)		(1,375	)										(2,067)		(2,067	)
Total derivatives												167,038													183,953
Other liabilities		–		20,198			–					20,198			–		21,688			–					21,688
Subordinated debentures		–		217			–					217			–		232			–					232
	$	23,438	$	734,567		$	1,592		$	(1,375)	$	758,222		$	31,335	$	681,919		$	1,648		$	(2,067)	$	712,835

(1)	United States (U.S.).

(2)	Organisation for Economic Co-operation and Development (OECD).

Fair value measurements using significant unobservable inputs (Level 3 Instruments)

A financial instrument is classified as Level 3 in the fair value hierarchy if one

more of its unobservable inputs may significantly affect the measurement of its fair value. In preparing the financial statements, appropriate levels for these unobservable input parameters are chosen so that they are consistent with prevailing market evidence or management judgment. Due to the unobservable nature of the prices or rates, there may be uncertainty about the valuation of these Level 3 financial instruments.

During the three months ended July 31, 2026, there were no significant changes made to the valuation techniques and ranges and weighted averages of unobservable inputs used in the determination of fair value of Level 3 financial instruments. As at July 31, 2026, the impacts of adjusting one or more of the unobservable inputs by reasonably possible alternative assumptions did not change significantly from the impacts disclosed in our audited 2025 Annual Consolidated Financial Statements.

Changes in fair value measurement for instruments measured on a recurring basis and categorized in Level 3


	For the three months ended July 31, 2026
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlement (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	17		$	–		$	–		$	1		$	–		$	–		$	–		$	18		$	–
Equities		3,009			3			54			492			(48	)		10			–			3,520			6
		3,026			3			54			493			(48	)		10			–			3,538			6
Investment
Mortgage-backed securities		29			–			2			–			–			–			–			31			–
Corporate debt and other debt		123			1			2			–			(4	)		–			–			122			1
Equities		589			21			70			13			(21	)		–			–			672			21
		741			22			74			13			(25	)		–			–			825			22
Loans		1,835			(17	)		10			646			(58	)		–			(227	)		2,189			(15	)
Other
Net derivative balances (3)
Interest rate contracts		(649	)		(36	)		–			(4	)		(23	)		2			(4	)		(714	)		(35	)
Foreign exchange contracts		(42	)		60			(2	)		9			(15	)		–			14			24			59
Credit derivatives		1			(1	)		–			–			–			–			–			–			(1	)
Other contracts		(273	)		(43	)		(9	)		9			36			(62	)		87			(255	)		(20	)
Valuation adjustments		(72	)		–			–			–			36			–			–			(36	)		–
Other assets		2			–			–			–			(1	)		–			–			1			–
	$	4,569		$	(12	)	$	127		$	1,166		$	(98	)	$	(50	)	$	(130	)	$	5,572		$	16
Liabilities
Deposits	$	(188	)	$	(11	)	$	(1	)	$	(67	)	$	38		$	(80	)	$	81		$	(228	)	$	(9	)
	$	(188	)	$	(11	)	$	(1	)	$	(67	)	$	38		$	(80	)	$	81		$	(228	)	$	(9	)


	For the three mont hs en ded July 31, 2025
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlement (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	32		$	–		$	–		$	3		$	(3	)	$	51		$	–		$	83		$	–
Equities		2,655			(104	)		6			159			(31	)		1			(8	)		2,678			(81	)
		2,687			(104	)		6			162			(34	)		52			(8	)		2,761			(81	)
Investment
Mortgage-backed securities		31			–			(2	)		–			–			–			–			29			n.s.
Corporate debt and other debt		134			–			3			–			(3	)		–			–			134			n.s.
Equities		570			–			5			–			(1	)		–			–			574			n.s.
		735			–			6			–			(4	)		–			–			737			n.s.
Loans		1,207			(63	)		(3	)		20			(1	)		–			(11	)		1,149			(62	)
Other
Net derivative balances (3)
Interest rate contracts		(522	)		(68	)		1			34			(42	)		(28	)		(21	)		(646	)		(81	)
Foreign exchange contracts		(53	)		7			(1	)		1			–			–			–			(46	)		7
Credit derivatives		–			–			–			–			–			–			–			–			–
Other contracts		(392	)		(48	)		(2	)		(22	)		(7	)		(27	)		202			(296	)		(34	)
Valuation adjustments		25			–			–			–			(7	)		–			–			18			–
Other assets		5			–			–			–			(1	)		–			–			4			–
	$	3,692		$	(276	)	$	7		$	195		$	(96	)	$	(3	)	$	162		$	3,681		$	(251	)
Liabilities
Deposits	$	(542	)	$	(51	)	$	(1	)	$	(208	)	$	27		$	(61	)	$	267		$	(569	)	$	(32	)
	$	(542	)	$	(51	)	$	(1	)	$	(208	)	$	27		$	(61	)	$	267		$	(569	)	$	(32	)

	For the nine months ended July 31, 2026
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlement (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	32		$	(1	)	$	(1	)	$	2		$	(1	)	$	–		$	(13	)	$	18		$	–
Equities		2,863			(43	)		5			823			(166	)		38			–			3,520			(23	)
		2,895			(44	)		4			825			(167	)		38			(13	)		3,538			(23	)
Investment
Mortgage-backed securities		29			–			2			–			–			–			–			31			–
Corporate debt and other debt		134			3			(3	)		–			(12	)		–			–			122			2
Equities		582			21			78			15			(24	)		–			–			672			18
		745			24			77			15			(36	)		–			–			825			20
Loans		1,274			(95	)		4			1,194			(60	)		106			(234	)		2,189			(118	)
Other
Net derivative balances (3)
Interest rate contracts		(608	)		(69	)		–			9			(20	)		2			(28	)		(714	)		(62	)
Foreign exchange contracts		56			(65	)		(2	)		(40	)		32			10			33			24			57
Credit derivatives		2			(2	)		–			–			–			–			–			–			(1	)
Other contracts		(256	)		(48	)		(3	)		(7	)		44			(171	)		186			(255	)		(99	)
Valuation adjustments		(79	)		–			–			(29	)		72			–			–			(36	)		–
Other assets		4			–			–			–			(3	)		–			–			1			–
	$	4,033		$	(299	)	$	80		$	1,967		$	(138	)	$	(15	)	$	(56	)	$	5,572		$	(226	)
Liabilities
Deposits	$	(301	)	$	(26	)	$	2		$	(180	)	$	95		$	(297	)	$	479		$	(228	)	$	(13	)
	$	(301	)	$	(26	)	$	2		$	(180	)	$	95		$	(297	)	$	479		$	(228	)	$	(13	)


	For the nine months ended July 31, 2025
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlemen t (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	–		$	–		$	–		$	3		$	(3	)	$	83		$	–		$	83		$	–
Equities		2,544			(174	)		(8	)		493			(171	)		2			(8	)		2,678			(129	)
		2,544			(174	)		(8	)		496			(174	)		85			(8	)		2,761			(129	)
Investment
Mortgage-backed securities		31			–			(2	)		–			–			–			–			29			n.s.
Corporate debt and other debt		143			–			5			–			(14	)		–			–			134			n.s.
Equities		506			–			40			32			(4	)		–			–			574			n.s.
		680			–			43			32			(18	)		–			–			737			n.s.
Loans		1,781			32			(3	)		161			(815	)		7			(14	)		1,149			(43	)
Other
Net derivative balances (3)
Interest rate contracts		(493	)		(103	)		3			(5	)		(37	)		(19	)		8			(646	)		(115	)
Foreign exchange contracts		(51	)		(4	)		2			2			(1	)		–			6			(46	)		(16	)
Credit derivatives		–			–			–			–			–			–			–			–			–
Other contracts		(303	)		32			1			(34	)		–			(301	)		309			(296	)		75
Valuation adjustments		18			–			–			6			(6	)		–			–			18			–
Other assets		7			–			–			–			(3	)		–			–			4			–
	$	4,183		$	(217	)	$	38		$	658		$	(1,054	)	$	(228	)	$	301		$	3,681		$	(228	)
Liabilities
Deposits	$	(478	)	$	(42	)	$	–		$	(609	)	$	115		$	(271	)	$	716		$	(569	)	$	14
	$	(478	)	$	(42	)	$	–		$	(609	)	$	115		$	(271	)	$	716		$	(569	)	$	14

(1)

These amounts include the foreign currency translation gains or losses arising on consolidation of foreign subsidiaries relating to the Level 3 instruments, where applicable. The unrealized gains on Investment securities recognized in OCI were $62

million

for the three months ended July 31, 2026 (July 31, 2025 – gains of $2 million) and gains of $78 million for the nine months ended July 31, 2026 (July 31, 2025 – gains of $33 million), excluding the translation gains or losses arising on consolidation.

(2)	Other includes amortization of premiums or discounts recognized in net income.

(3)	Net derivatives as at July 31, 2026 included derivative assets of $383 million (July 31, 2025 – $353 million) and derivative liabilities of $1,364 million (July 31, 2025 – $1,323 million).

n.s.	not significant

Transfers between fair value hierarchy levels for instruments carried at fair value on a recurring basis

Transfers between Level 1 and Level 2, and transfers into and out of Level 3 are assumed to occur at the end of the period. For an asset or a liability that transfers into Level 3 during the period, the entire change in fair value for the period is excluded from the Gains (losses) included in earnings for positions still held column of the above reconciliation, whereas for transfers out of Level 3 during the period, the entire change in fair value for the period is included in the same column of the above reconciliation.

Transfers between Level 1 and 2 are dependent on whether fair value is obtained on the basis of quoted market prices in active markets (Level 1).

During the three months ended July 31, 2026, transfers out of Level 1 to Level 2 included Trading U.S. federal, state, municipal and agencies debt of $1,375 million and Investment U.S. federal, state, municipal and agencies debt of $135 million. During the three months ended July 31, 2025, there were no significant transfers out of Level 1 to Level 2.

During the three months ended July 31, 2026 and July 31, 2025, there were no significant transfers out of Level 2 to Level 1.

During the nine months ended July 31, 2026, transfers out of Level 1 to Level 2 included Trading U.S. federal, state, municipal and agencies debt of $1,858 million and Investment U.S. federal, state, municipal and agencies debt of $574 million. During the nine months ended July 31, 2025, transfers out of Level 1 to Level 2 included Trading U.S. federal, state, municipal and agencies debt of $938 million.

During the nine months ended July 31, 2026 and July 31, 2025, there were no significant transfers out of Level 2 to Level 1.

Transfers between Level 2 and Level 3 are primarily due to either a change in the market observability for an input, or a change in an unobservable input’s significance to a financial instrument’s fair value.

During the three months ended July 31, 2026 and July 31, 2025, there were no significant transfers out of Level 2 to Level 3.

During the three months ended July 31, 2026, transfers out of Level 3 to Level 2 included Loans due to changes in the market observability of inputs. During the three months ended July 31, 2025, transfers out of Level 3 to Level 2 included Deposits and Other contracts due to changes in the significance of unobservable inputs.

During the nine months ended July 31, 2026, transfers out of Level 2 to Level 3 included Deposits due to changes in the significance of unobservable inputs and Other contracts due to changes in the market observability of inputs and changes in the significance of unobservable inputs. During the nine months ended July 31, 2025, transfers out of Level 2 to Level 3 included Other contracts and Deposits due to changes in the significance of unobservable inputs.

During the nine months ended July 31, 2026, transfers out of Level 3 to Level 2 in

clud

ed Deposits due to changes in the significance of unobservable inputs, Loans due to changes in the market observability of inputs and Other contracts due to changes in the market observability of inputs and changes in the significance of unobservable inputs. During the nine months ended July 31, 2025, transfers out of Level 3 to Level 2 included Deposits and Other contracts due to changes in the significance of unobservable inputs and changes in the market observability of inputs.

Net interest income from financial instruments

Interest and dividend income arising from financial assets and financial liabilities and the associated costs of funding are reported in Net interest income.


	For the three months ended				For the nine months ended
(Millions of Canadian dollars)	July 31 2026		July 31 2025		July 31 2026		July 31 2025
Interest and dividend income (1), (2)
Financial instruments measured at fair value through profit or loss	$	7,768	$	7,679	$	22,688	$	22,932
Financial instruments measured at fair value through other comprehensive income		2,475		2,240		7,050		6,395
Financial instruments measured at amortized cost		16,342		16,191		47,973		48,208
		26,585		26,110		77,711		77,535
Interest expense (1)
Financial instruments measured at fair value through profit or loss	$	7,947	$	7,623	$	23,050	$	22,985
Financial instruments measured at amortized cost		9,894		10,136		28,826		30,195
		17,841		17,759		51,876		53,180
Net interest income	$	8,744	$	8,351	$	25,835	$	24,355

(1)

Excludes interest and dividend income for the three months ended July 31, 2026 of $303 million (July 31, 2025 – $300 million) and for the nine months ended July 31, 2026 of $987 million (July 31, 2025 – $957 million), and interest expense for the three months ended July 31, 2026 of $40

million

(July 31, 2025 – $52 million) and for the nine months ended July 31, 2026 of $116 million (July 31, 2025 – $170 million) presented in Insurance investment result in the Interim Condensed Consolidated Statements of Income.

(2)

Includes dividend income for the three months ended July 31, 2026 of $890

million

(July 31, 2025 – $905 million) and for the nine months ended July 31, 2026 of $2,700 million (July 31, 2025 – $2,904 million) presented in Interest and dividend income in the Interim Condensed Consolidated Statements of Income.