• Revenue(1A)
    ($ billions)
     
    2015: 2.4, 2016: 2.8, 2017: 2.8
  • Net income(1A)
    ($ millions)
     
    2015: 847, 2016: 992, 2017: 1,090
  • Efficiency ratio
    (%)
     
    2015: 52.6, 2016: 48.2, 2017: 48.5
  • Average value-at-risk (VaR)
    ($ millions)
     
    2015: 4.0, 2016: 5.8, 2017:
(1A)
Certain prior period information has been reclassified to conform to the presentation adopted in the current year. See “External reporting changes” for additional details.

Capital Markets awards and recognition

  • Canada Derivatives House Of The Year – 2017 GlobalCapital Americas Derivatives Awards
  • 2017 Canadian Hedge Fund Award for Top Canadian Prime Broker – Alternative IQ
  • Multi-deal winner at the 2017 IJGlobal Americas Deals of the Year Awards:
    • Project Financing, Americas – Kingston Jamaica Port Terminal
    • Refinancing, Americas – Sabine Pass & Creole Trail Refinancing
    • Acquisition Financing, Americas – Chicago Skyway
    • Acquisition Financing, Europe – London City Airport
    • Acquisition Financing, Asia Pacific – Port of Melbourne
    • Project Financing, Africa – Oyu Tolgoi Copper Project, Mongolia
  • Ranked #1 for number of deals led in Canadian Loan Syndication Thomson Reuters and Bloomberg Lead Arranger League Tables, January-September 2017
  • Revenue – Global markets(1B)
    ($ millions)
    2015: 1,356, 2016: 1,645, 2017: 1,601
  • Revenue – Corporate and investment banking(1B)
    ($ millions)
    2015: 1,050, 2016: 1,093, 2017: 1,216
(1B)
Certain prior period information has been reclassified to conform to the presentation adopted in the current year. See “External reporting changes” for additional details.

As a leading capital markets franchise in Canada and banking partner to our clients around the world, Capital Markets acted as:

  • Exclusive financial advisor to Pembina Pipeline Corp. on its $9.7 billion acquisition of Veresen Inc.;
  • Joint bookrunner on a $1.4 billion issue of convertible unsecured subordinated debentures represented by installment receipts for Hydro One Ltd. in support of the acquisition of Avista Corporation, joint global coordinator and joint bookrunner on a $2.8 billion bought secondary offering of Hydro One Ltd. common shares by the Province of Ontario and joint bookrunner for a $950 million dual-tranche offering of medium-term notes;
  • Financial Advisor to Metro Inc. in its $4.5 billion acquisition of The Jean Coutu Group (PJC) Inc. and joint bookrunner and co-lead arranger on the establishment of $3.45 billion in new facilities to support the acquisition; in addition, co-Manager on Metro’s sale of $650 million subordinate voting shares of Couche-Tard by way of a block trade bought deal;
  • Joint bookrunner on Kinder Morgan Canada Ltd.’s $1.75 billion initial public offering and joint bookrunner and co-lead arranger for the $5.5 billion in credit facilities to fund TMEP as well as joint bookrunner on a $300 million issue of preferred shares;
  • Lead underwriter and joint bookrunner on a $1.4 billion 4-tranche issue of senior secured nominal amortizing bonds for Alberta PowerLine LP;
  • Exclusive financial advisor to Teck Resources Limited on its $1.2 billion sale of the Waneta Dam;
  • Financial advisor to Sentry Investments on its $780 million sale to CI Financial;
  • Exclusive financial advisor to Barrick Gold on its US$960 million sale of a 50% interest in the Veladero Mine in Argentina to Shandong Gold Mining Co., Ltd.;
  • Lead manager and joint bookrunner on a $414 million bought deal offering of subscription receipts and on a $300 million offering of preferred shares, and joint lead and joint bookrunner on a $425 million issue of unsecured medium term notes for Intact Financial Corporation in support of its acquisition of OneBeacon Insurance Group, Ltd for US$1.7 billion; and
  • Lead bookrunner on Canada Goose Holdings Inc.’s $391 million dual-listed initial public offering on the TSX and NYSE and its follow-on US$259 million secondary offering of subordinate voting shares, as well as joint lead on its US$163 million Term Loan B offering, and agent and joint lead arranger on its $250 million asset-backed loan facility.

Results(1C)

Table of Results for Capital Markets for the last three years from 2017 to 2015.
$ millions, for the year ended October 31 2017 2016(2C) 2015(2C)
Revenue
Global markets $ 1,601 $ 1,645 $ 1,356
Corporate and investment banking 1,216 1,093 1,050
Other 6 18 (2)
Total revenue(3C) 2,823 2,756 2,404
Provision for (reversal of) credit losses (4) 155 44
Non-interest expenses 1,373 1,328 1,264
Income before income taxes 1,454 1,273 1,096
Income taxes(3C) 364 281 249
Net income $ 1,090 $ 992 $ 847
Net income attributable to:
Equity shareholders (a) $ 1,090 $ 992 $ 847
Efficiency ratio 48.6 % 48.2 % 52.6 %
Return on equity(4C) 35.5 % 30.6 % 35.7 %
Charge for economic capital(4C) (b) $ (299) $ (314) $ (284)
Economic profit(4C) (a+b) $ 791 $ 678 $ 563
Average assets ($ billions) $ 156.4 $ 154.8 $ 134.7
Full-time equivalent employees 1,314 1,260 1,270
(1C)
For additional segmented information, see Note 28 to the consolidated financial statements.
(2C)
Certain information has been reclassified to conform to the presentation adopted in the current year. See "External reporting changes" for additional details.
(3C)
Revenue and income taxes are reported on a TEB basis. Accordingly, revenue and income taxes include a TEB adjustment of $298 million (2016: $474 million; 2015: $482 million). The equivalent amounts are offset in the revenue and income taxes of Corporate and Other.
(4C)
For additional information, see the “Non-GAAP measures” section.

Financial overview

Net income was up $98 million or 10% from 2016, primarily due to a reversal of credit losses compared with a provision for credit losses in 2016, and higher revenue, partially offset by higher non-interest expenses and income taxes.

Revenue

Revenue was up $67 million or 2% from 2016.

Global markets revenue was down $44 million or 3%, primarily due to lower revenue from equity derivatives, interest rate, and foreign exchange trading, partially offset by higher revenue from global markets financing activities, equity trading, the movement in reserves related to derivative client exposure, and a gain on sale of an investment.

Corporate and investment banking revenue was up $123 million or 11%, primarily due to higher investment portfolio gains, higher debt underwriting activity, and higher revenue from corporate banking, partially offset by lower revenue from equity underwriting.

Other revenue was down $12 million or 67%, due to lower revenue from our run-off businesses, as 2016 included a gain from the structured credit run-off business, shown as an item of note.

Provision for credit losses

2017 included a reversal of credit losses of $4 million, compared with a provision for credit losses of $155 million in 2016, primarily due to better performance in the oil and gas sector. The prior year also included losses in our exited European leveraged finance portfolio, shown as an item of note.

Non-interest expenses

Non-interest expenses were up $45 million or 3% from 2016, primarily due to higher spending on strategic initiatives and performance-based compensation.

Income taxes

Income taxes were up $83 million or 30% from 2016, primarily due to higher income and the impact of changes in the proportion of income subject to varying rates of tax in different jurisdictions.

Average assets

Average assets were up $1.6 billion or 1% from 2016, primarily due to an increase in trading securities, partially offset by a decrease in loan balances.