interim consolidated statement of financial position 608,691 … · 2019-10-24 · 1 interim...

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Interim Consolidated Statement of Financial Position (unaudited) As at D ec 31 Sep 30 M ar 31 Dec 31

($ in thousands) 2011 2011 2011 2010

A ssets

C ash reso urces

Cash 48,958$ 459,781$ 210,385$ 116,735$

Interest-bearing deposits with financial institutions 484,191 1,621,878 1,123,779 259,647

533,149 2,081,659 1,334,164 376,382

Securit ies measured at fa ir value thro ugh net inco me ( no te 8) 2,276,372 2,040,377 1,959,658 1,824,441

Securit ies available-fo r-sale ( no te 8) 2,616 2,930 3,453 43,213

Securit ies purchased under reverse repurchase agreements 100,633 - - -

Lo ans

Residential mortgages 10,236,444 10,175,985 9,920,694 9,921,934

Business 10,187,566 9,821,952 9,134,397 9,251,830

Personal 5,597,519 5,701,528 5,589,507 5,571,606

Credit card 665,537 653,009 624,539 648,829

A llowance for credit losses (note 9) (107,766) (106,307) (112,485) (108,755)

26,579,300 26,246,167 25,156,652 25,285,444

Other

Property and equipment 256,145 247,148 235,994 239,588

Software and other intangibles 316,679 315,564 297,008 283,365

Derivative financial instruments (note 10) 328,129 351,052 271,886 193,586

Other assets 241,842 230,210 244,882 232,367

1,142,795 1,143,974 1,049,770 948,906

30,634,865$ 31,515,107$ 29,503,697$ 28,478,386$

Liabilit ies and equity

D epo sits

Personal 10,654,666$ 10,719,560$ 10,576,800$ 10,506,901$

Business and other 11,368,307 11,864,232 10,422,053 10,195,680

22,022,973 22,583,792 20,998,853 20,702,581

Other liabilit ies

Wholesale borrowings 2,689,745 3,228,268 3,000,155 2,720,610

Collateralized borrowings (note 14) 2,650,661 2,448,829 2,447,580 2,178,181

Derivative financial instruments (note 10) 222,709 229,505 254,411 150,472

Other liabilities 608,691 632,152 649,764 592,094

6,171,806 6,538,754 6,351,910 5,641,357

C apital investment no tes (note 13) 237,977 238,287 230,972 231,365

Subo rdinated debentures 113,362 113,362 67,467 67,467

Equity

Retained earnings 2,043,041 1,994,619 1,884,877 1,846,887

Accumulated other comprehensive income (loss) 45,706 46,293 (30,382) (11,271)

2,088,747 2,040,912 1,854,495 1,835,616

30,634,865$ 31,515,107$ 29,503,697$ 28,478,386$

The accompanying notes are an integral part o f these interim condensed consolidated financial statements.

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Interim Consolidated Statement of Income (unaudited)

D ec 31 Sep 30 Dec 31 D ec 31 Dec 31

($ in thousands) 2011 2011 2010 2011 2010

Interest inco me

Loans 297,418$ 303,198$ 298,579$ 897,811$ 853,120$

Securities measured at fair value through net income 8,525 9,786 7,709 25,510 15,071

Interest-bearing deposits with financial institutions 2,257 2,608 2,318 7,292 8,837

308,200 315,592 308,606 930,613 877,028

Interest expense

Deposits 65,274 70,176 67,386 200,179 193,573

Wholesale borrowings 17,216 20,058 19,366 56,775 55,482

Collateralized borrowings 18,944 18,846 16,902 56,427 48,241

Capital investment notes 2,529 2,453 2,475 7,420 7,259

Subordinated debentures 990 1,035 853 2,705 1,685

104,953 112,568 106,982 323,506 306,240

N et interest inco me 203,247 203,024 201,624 607,107 570,788

Other inco me

Service charges 18,861 16,779 17,223 52,883 51,664

Investor Services 14,954 14,939 12,759 44,664 37,168

Card fees 13,673 13,449 13,297 40,007 39,395

Credit fees 6,157 5,679 5,296 17,565 17,422

Insurance 4,021 4,296 3,780 14,442 10,913

Foreign exchange (1,137) 2,311 3,673 3,067 6,827

Net gains (losses) on derivative financial instruments 9,631 (2,322) (238) 4,746 4,373

Net gains on financial instruments at fair value through net income 9,980 13,995 9,991 40,873 13,238

Sundry 4,059 4,595 508 12,111 1,841

80,199 73,721 66,289 230,358 182,841

Operat ing revenue 283,446 276,745 267,913 837,465 753,629

P ro visio n fo r credit lo sses (note 9) 4,237 6,106 31,815 13,316 50,046

N o n-interest expenses

Salaries and employee benefits 104,383 104,542 95,029 317,352 277,967

Data processing 38,760 28,838 19,148 88,366 56,485

Premises and occupancy, including amortization 19,563 18,059 17,712 55,736 53,308

Professional and consulting costs 7,085 14,890 15,436 33,798 33,201

M arketing and supplies 7,965 7,367 7,383 22,331 19,750

Deposit guarantee fee 7,194 6,179 5,616 19,552 17,511

Equipment, including amortization 5,824 5,880 6,422 18,218 17,272

Software and other intangibles amortization 10,564 5,563 5,763 21,662 16,813

Communication 6,138 5,989 5,320 18,334 15,385

ATB agencies 2,181 2,111 2,061 6,402 6,150

Other 6,667 4,678 3,812 16,991 12,815

216,324 204,096 183,702 618,742 526,657

N et inco me befo re payment in lieu o f tax 62,885 66,543 52,396 205,407 176,926

Payment in lieu of tax (note 12) 14,463 15,305 19,879 47,243 42,013

N et inco me 48,422$ 51,238$ 32,517$ 158,164$ 134,913$


For the three months ended For the nine months ended

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Interim Consolidated Statement of Comprehensive Income (unaudited)


($ in thousands) 2011 2011 2010 2011 2010

N et inco me 48,422$ 51,238$ 32,517$ 158,164$ 134,913$

Other comprehensive (loss) income

Unrealized net gains (losses) on financial assets available-for-sale:

Unrealized net gains arising during the period 36 17 100 91 2,129

Unrealized net gains (losses) on derivative financial instruments designated as

cash flow hedges:

Unrealized net gains (losses) arising during the period 6,191 84,858 (5,377) 126,030 (12,676)

Net gains reclassified to net income (6,747) (6,314) (5,017) (18,439) (19,052)

Net actuarial (losses) gains on employee future benefits (67) (28,001) 15,089 (31,594) (10,756)

Other co mprehensive ( lo ss) inco me (587) 50,560 4,795 76,088 (40,355)

C o mprehensive inco me 47,835$ 101,798$ 37,312$ 234,252$ 94,558$



Interim Consolidated Statement of Changes in Equity (unaudited)

As at D ec 31 Sep 30 Dec 31 D ec 31 Dec 31

($ in thousands) 2011 2011 2010 2011 2010

R etained earnings

Balance at beginning of the period 1,994,619$ 1,943,381$ 1,814,370$ 1,884,877$ 1,711,974$

Net income 48,422 51,238 32,517 158,164 134,913

Balance at end of the period 2,043,041 1,994,619 1,846,887 2,043,041 1,846,887

A ccumulated o ther co mprehensive inco me ( lo ss)

A vailable-fo r-sale f inancial assets

Balance at beginning of the period (312) (329) 1,682 (367) (347)

Other comprehensive income 36 17 100 91 2,129

Balance at end of the period (276) (312) 1,782 (276) 1,782

D erivat ive f inancial instruments designated as cash f lo w hedges

Balance at beginning of the period 93,938 15,394 8,097 (14,209) 29,431

Other comprehensive (loss) income (556) 78,544 (10,394) 107,591 (31,728)

Balance at end of the period 93,382 93,938 (2,297) 93,382 (2,297)

Emplo yee future benef its - actuarial gains ( lo sses)

Balance at beginning of the period (47,333) (19,332) (25,845) (15,806) -

Other comprehensive (loss) income (67) (28,001) 15,089 (31,594) (10,756)

Balance at end of the period (47,400) (47,333) (10,756) (47,400) (10,756)

A ccumulated o ther co mprehensive inco me ( lo ss) 45,706 46,293 (11,271) 45,706 (11,271)

Equity 2,088,747$ 2,040,912$ 1,835,616$ 2,088,747$ 1,835,616$


For the nine months endedFor the three months ended

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Interim Consolidated Statement of Cash Flows (unaudited)


($ in thousands) 2011 2011 2010 2011 2010

Net income 48,422$ 51,238$ 32,517$ 158,164$ 134,913$

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Provision for credit losses 4,237 6,106 31,815 13,316 50,046

Depreciation and amortization 23,294 12,944 17,543 53,458 49,578

Net gains on financial instruments at fair value through net income (9,980) (13,995) (9,991) (40,873) (13,634)

Inco me adjusted fo r no n cash charges, credits and o ther items 65,973 56,293 71,884 184,065 220,903

Adjustments for net change in operating assets and liabilities:

Loans (351,154) (406,383) (314,485) (1,458,226) (1,218,681)

Deposits (557,980) 502,403 (71,608) 1,027,215 729,106

Derivative financial instruments 15,571 1,969 1,518 19,646 4,775

Interest bearing deposits with financial institutions 1,137,687 (703,172) 40,327 639,608 415,910

Prepayments and other receivables (9,823) (1,445) 9,921 10,958 (38,716)

Due to clients, brokers and dealers (3,081) (2,777) (7,854) (4,698) (7,930)

Deposit guarantee fee payable 7,194 6,179 5,616 (5,947) (5,226)

Accounts payable and accrued liabilities (7,728) 29,040 (9,046) (9,205) (73,288)

Liability for payment in lieu of tax 14,463 15,305 19,879 (12,055) 3,938

Net interest receivable and payable (39,152) 5,721 (36,900) (49,157) (23,603)

Others, net 28,061 28,965 30,201 68,727 7,316

N et cash pro vided by (used in) o perat ing act ivit ies 300,031 (467,902) (260,547) 410,931 14,504

Cash flows from investing activities:

Purchase of securities measured at fair value through net income (1,454,156) (1,217,021) (1,102,712) (3,297,943) (3,642,348)

Proceeds from securities measured at fair value through net income 1,214,343 795,998 1,071,093 2,981,948 3,207,125

Change in securities purchased under reverse repurchase agreements (100,633) 1,700,151 - (100,633) -

Purchases of property and equipment, software and other intangibles (33,407) (31,003) (40,975) (93,280) (123,657)

N et cash (used in) pro vided by invest ing act ivit ies (373,853) 1,248,125 (72,594) (509,908) (558,880)

Cash flows from financing activities:

Change in wholesale borrowings (538,522) (708,220) 149,534 (310,410) 112,616

Change in capital investment notes (311) (92) (474) (1,016) (1,187)

Change in collateralized borrowings 201,832 630 557 203,081 307,784

Issuance of subordinated debentures - - - 45,895 22,291

N et cash (used in) pro vided by f inancing act ivit ies (337,001) (707,682) 149,617 (62,450) 441,504

Net (decrease) increase in cash and cash equivalents (410,823) 72,541 (183,524) (161,427) (102,872)

Cash and cash equivalents at beginning of period 459,781 387,240 300,259 210,385 219,607

Cash and cash equivalents at end of period 48,958$ 459,781$ 116,735$ 48,958$ 116,735$

N et cash pro vided by (used in) o perat ing act ivit ies include:

Interest paid (133,140)$ (109,115)$ (141,626)$ (363,777)$ (323,155)$

Interest received 297,236$ 310,046$ 306,117$ 913,708$ 864,514$



Notes to the Interim Condensed Consolidated Financial Statements For the nine months ended December 31, 2011 ($ in thousands) (unaudited)

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1. Information on ATB Financial Alberta Treasury Branches (ATB) is an agent of the Crown in right of Alberta and operates under the authority of the Alberta Treasury Branches Act, Revised Statutes of Alberta, 2000, chapter A-37. Under the ATB Act, ATB was established as a provincial Crown corporation governed by a Board of Directors appointed by the Lieutenant-Governor in Council. ATB is exempt from Canadian federal and Alberta provincial income taxes but pays an amount to the provincial government designed to be in lieu of such a charge (as detailed in note 12). ATB is an Alberta based financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services.

2. Significant Accounting Policies General Information Adoption of International Financial Reporting Standards These unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and IFRS 1 First-time Adoption of International Financial Reporting Standards. The interim condensed consolidated financial statements do not include all of the information required for full annual financial statements. An explanation of how the transition to IFRS has affected the reported financial position, financial performance and cash flows of ATB is provided in note 4. The comparative figures presented in these interim condensed consolidated financial statements have been restated to take into account these new standards. These statements should be read in conjunction with the audited financial statements for the year ended March 31, 2011 prepared in accordance with Canadian GAAP and the June 30, 2011 interim condensed consolidated financial statements which includes details on ATB’s transition to IFRS. The accounting policies ATB adopted on April 1, 2011 are disclosed in note 2b to 2n of the June 30, 2011 interim condensed consolidated financial statements.

Presentation of Information The interim condensed consolidated financial statements are presented in Canadian dollars which is the functional currency of ATB. All tabular amounts are in thousands except where otherwise noted.

Consolidation

(i) Subsidiaries Subsidiaries are entities controlled by ATB. Control exists when ATB has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the interim condensed consolidated financial statements from the date that control commences until the date that control ceases. The financial statements of the subsidiaries have been prepared using uniform accounting policies for like transactions and other events in similar circumstances.

These interim condensed consolidated financial statements include the assets, liabilities, and results of operations and cash flows of ATB and its subsidiaries. All intercompany transactions and balances have been eliminated from the consolidated results.

The following wholly-owned subsidiaries, created for the purpose of offering investor services, were established by Order in Council and incorporated under the Business Corporations Act (Alberta):


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ATB Investment Management Inc., incorporated August 21, 2002

ATB Securities Inc., incorporated February 6, 2003

ATB Insurance Advisors Inc., incorporated July 21, 2006

(ii) Associates Associates are entities over which ATB has significant influence but not control. Investments in associate companies are accounted for by the equity method of accounting and are initially recognized at cost. ATB’s share of its associates’ post-acquisition profits or losses is recognized as other income in the consolidated income statement. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Intercompany transactions and balances have been eliminated to the extent of the ATB’s interest in the associates.

Use of Estimates and Assumptions The preparation of these interim condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of balance sheet assets and liabilities and the disclosure of contingent assets and liabilities as at the balance sheet date, as well as the reported amounts of revenues and expenses during the reported period. Actual results could differ significantly from these estimates, and the impact of any such differences will be recorded in future periods. The most significant amounts and disclosures where ATB must make estimates include the allowance for credit losses, the fair value of financial instruments, depreciation of property and equipment, amortization of software and other intangibles, assumptions underlying the accounting for employee future benefit obligations, and the provision for contingencies.

Translation of Foreign Currencies Financial assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the exchange rate in effect as at the balance sheet date. Operating revenues and expenses related to foreign-currency transactions are translated using the average exchange rate for the period. Realized and unrealized gains and losses arising from these translations are included in foreign exchange in the interim condensed consolidated statement of income.

3. Future Accounting Changes IFRS 7, Financial Instruments: Disclosures On October 7, 2010, the IASB issued amendments to IFRS 7, Financial Instruments: Disclosures, which expand disclosure requirements with respect to the derecognition of financial asset transfer transactions. ATB is currently assessing the new disclosure requirements, which must be applied prospectively for annual periods ending after December 31, 2012.

IFRS 9, Financial instruments – Phase 1 The IASB issued on November 12, 2009 and amended on October 28, 2010 the first phase of a project that will replace IAS 39, Financial Instruments: Recognition and Measurement. This standard defines a new way to classify and measure financial assets and liabilities. Financial assets will be classified in three categories (amortized cost, fair value through profit or loss and fair value through equity) based on the entity’s business model to manage its financial assets and the contractual cash flow characteristics of the financial assets. Financial liabilities will be classified in the same categories as those defined in IAS 39, but measurement of financial liabilities under the fair value option has been modified. Impairment of financial asset methodology, offsetting of financial assets and liabilities, and hedging activities will be covered in future phases that will complete IFRS 9.


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On December 16, 2011, IASB issued amendments to IFRS 9 Financial Instruments that defer the mandatory effective date from January 1, 2013 to January 1, 2015. The deferral will make it possible for all phases of the project to have the same mandatory effective date. The amendments also provide relief from the requirements to restate comparative financial statements for the effect of applying IFRS 9, although additional transitional disclosures will be required. Earlier application of the standard is permitted. ATB is currently assessing the impact of the adoption of IFRS 9; however, since the impact of the adoption depends on the financial instruments held by ATB on the date of adoption, ATB cannot quantify it.

IFRS 10, Consolidated Financial Statements On May 12, 2011, the IASB issued IFRS 10, Consolidated Financial Statements. IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 includes a new definition of control that determines which entities are consolidated. IFRS 10 replaces the part of IAS 27 Consolidated and Separate Financial Statements related to consolidated financial statements and replaces SIC 12 Consolidation — Special Purpose Entities. ATB is currently assessing the presentation and preparation requirements, which must be applied prospectively for the annual periods beginning on or after January 1, 2013.

IFRS 13, Fair Value Measurement On May 12, 2011, the IASB issued IFRS 13, Fair Value Measurement. IFRS 13 establishes a single framework for all fair value measurements when fair value is required or permitted by IFRS. IFRS 13 does not change when an entity is required to use fair value, but rather describes how to measure fair value under IFRS when it is required or permitted by IFRS. ATB is currently assessing the fair value measurement requirements, which must be applied prospectively for the annual periods beginning on or after January 1, 2013.

IAS 1, Presentation of Financial Statements On June 16, 2011, the IASB issued amendments to IAS 1, Presentation of Financial Statements, which improves the presentation of items of other comprehensive income. The amendments require the presentation by nature of items of other comprehensive income by distinguishing those that will not be reclassified to the statement of income in a subsequent period from those that will. ATB is currently assessing the impact of the adoption of this new standard. The revised standard is effective for annual periods beginning on or after July 1, 2012 with early adoption permitted. ATB will therefore apply these amendments to the year beginning April 1, 2013.

IAS 19, Employee Benefits On June 16, 2011, the IASB issued an amended version of IAS 19, Employee Benefits, to eliminate the option to defer the recognition of gains and losses, known as the “corridor method”. All actuarial gains and losses will now be recognized in other comprehensive income. The presentation of changes in assets and liabilities arising from defined benefit plans will be streamlined, and disclosure requirements for defined benefit plans will be enhanced. ATB is currently assessing the impact of the adoption of this new standard. The revised standard is effective for annual periods beginning on or after January 1, 2013 with early adoption permitted. ATB will therefore apply these amendments to the year beginning April 1, 2013.

IAS 32, Financial Instruments Presentation On December 16, 2011, the IASB issued amendments to IAS 32, Financial Instruments Presentation. The amendments address inconsistencies in current practice when applying the offsetting criteria. The amendments clarify the meaning of currently has a legally enforceable right of set off; and that some gross settlement systems may be considered equivalent to net settlement. ATB is currently assessing the impact of the amendments which are effective for annual periods beginning on or after January 1, 2014.


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4. Impact of IFRS Adoption ATB has adopted IFRS effective April 1, 2010 (ATB’s date of transition). Prior to the adoption of IFRS, ATB prepared its consolidated financial statements in accordance with Canadian GAAP. ATB’s financial statements for the year ending March 31, 2012 will be the first annual consolidated financial statements that comply with IFRS. Accordingly, ATB will make an unreserved statement of compliance with IFRS beginning with its 2012 annual financial statements. The accounting policies applied in these interim condensed consolidated financial statements are based on IFRS issued and outstanding as of February 21, 2012, the date the Audit Committee approved the statements. Any subsequent changes to IFRS that are given effect in ATB’s annual consolidated financial statements for the year ending March 31, 2012 could result in restatement of these interim condensed consolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

a. Elected Exemptions from full Retrospective Application In preparing these interim condensed consolidated financial statements in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards (“IFRS 1”), ATB has applied one of the optional exemptions from full retrospective application of IFRS. The optional exemption applied is described below.

Employee Benefits ATB has elected to recognize all cumulative actuarial gains and losses as at April 1, 2010 in opening retained earnings for ATB’s employee benefit plans.

b. Mandatory Exceptions to Retrospective Application In preparing these interim condensed consolidated financial statements in accordance with IFRS 1, ATB has applied certain mandatory exceptions from full retrospective application of IFRS. The mandatory exceptions applied from full retrospective application of IFRS are described below.

(i) Hedge Accounting Only hedging relationships that satisfied the hedge accounting criteria as of the transition date are reflected as hedges in ATB’s results under IFRS. Any derivatives not meeting the IAS 39 Financial Instruments: Recognition and Measurement criteria for hedge accounting were recorded as non-hedging derivative financial instruments.

(ii) Estimates Hindsight was not used to create or revise estimates and accordingly the estimates previously made by ATB under Canadian GAAP are consistent with their application under IFRS


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c. Reconciliation of Statement of Financial Position as Previously Reported Under Canadian GAAP to IFRS

As at M arch 31, 2011 Canadian A llowance for Securitization Employee

($ in thousands) GAAP (1) credit losses of receivables future benefits Leases Other IFRS

A ssets

Cash 161,901$ -$ -$ -$ -$ 48,484$ 210,385$

Interest-bearing deposits with financial institutions 1,123,779 - - - - - 1,123,779

Securities 2,058,878 - (101,085) - - 5,318 1,963,111

Loans 22,943,184 113,520 2,093,951 - - 5,997 25,156,652

Other assets 1,100,321 - 21,707 (51,387) 52,113 (72,984) 1,049,770

T o tal assets 27,388,063$ 113,520$ 2,014,573$ (51,387)$ 52,113$ (13,185)$ 29,503,697$


Deposits 23,982,145$ -$ -$ -$ -$ (2,983,292)$ 20,998,853$

Other liabilities 1,143,766 - 2,065,059 102,403 70,575 2,970,107 6,351,910

Capital investment notes 230,972 - - - - - 230,972

Subordinated debentures 67,467 - - - - - 67,467

Equity 1,963,713 113,520 (50,486) (153,790) (18,462) - 1,854,495

T o tal liabilit ies and equity 27,388,063$ 113,520$ 2,014,573$ (51,387)$ 52,113$ (13,185)$ 29,503,697$ (1) Per M arch 31, 2011 audited annual financial statements.

IFRS adjustments

As at December 31, 2010 Canadian A llowance for Securitization Employee

($ in thousands) GAAP (1) credit losses of receivables future benefits Leases Other IFRS

A ssets

Cash 148,025$ -$ -$ -$ -$ (31,290)$ 116,735$

Interest-bearing deposits with financial institutions 259,647 - - - - - 259,647

Securities 1,751,402 - 113,553 - - 2,699 1,867,654

Loans 23,378,049 116,826 1,784,666 - - 5,903 25,285,444

Other assets 976,798 - 22,307 (49,958) 53,159 (53,400) 948,906

T o tal assets 26,513,921$ 116,826$ 1,920,526$ (49,958)$ 53,159$ (76,088)$ 28,478,386$


Deposits 23,423,096$ -$ -$ -$ -$ (2,720,515)$ 20,702,581$

Other liabilities 872,089 - 1,953,535 99,444 71,862 2,644,427 5,641,357

Capital investment notes 231,365 - - - - - 231,365

Subordinated debentures 67,467 - - - - - 67,467

Equity 1,919,904 116,826 (33,009) (149,402) (18,703) - 1,835,616

T o tal liabilit ies and equity 26,513,921$ 116,826$ 1,920,526$ (49,958)$ 53,159$ (76,088)$ 28,478,386$ (1) Per December 31, 2010 unaudited interim financial statements.

IFRS adjustments

d. Reconciliation of Net Income, Comprehensive Income and Equity as Previously Reported under Canadian GAAP to IFRS (i) Net Income and Comprehensive Income

For the three

months ended

For the nine

months ended

Explanato ry Dec 31 Dec 31

($ in thousands) no tes 2010 2010

C o mprehensive inco me as repo rted under C anadian GA A P 55,416$ 110,547$

N et inco me as repo rted under C anadian GA A P 66,553 140,653

IFRS adjustments increase (decrease):

Provision for credit losses ( i) (17,481) (21,988)

Securitization of receivables ( ii) (17,444) 11,857

Employee future benefits ( iii) 1,052 5,699

Leases ( iv) (163) (1,308)

N et inco me as repo rted under IF R S 32,517 134,913

Other co mprehensive lo ss as repo rted under C anadian GA A P (11,137) (30,106)


Securitization of receivables ( ii) 843 507

Employee future benefits ( iii) 15,089 (10,756)

Other co mprehensive inco me ( lo ss) as repo rted under IF R S 4,795 (40,355)

C o mprehensive inco me as repo rted under IF R S 37,312$ 94,558$


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(ii) Equity

As at Explanato ry Dec 31

($ in thousands) no tes 2010

Equity

Equity as repo rted under C anadian GA A P 1,919,904$

Retained earnings as reported under Canadian GAAP 1,917,876


Provision for credit losses ( i) 116,826

Securitization of receivables ( ii) (30,466)

Employee future benefits ( iii) (138,646)

Leases ( iv) (18,703)

Retained earnings as reported under IFRS 1,846,887

Accumulated other comprehensive income (loss) as reported under Canadian GAAP 2,028


Securitization of receivables ( ii) (2,543)

Employee future benefits ( iii) (10,756)

Accumulated other comprehensive loss as reported under IFRS (11,271)

Equity as repo rted under IF R S 1,835,616$

Explanatory Notes (i) Provision for Credit Losses As part of the transition to IFRS, ATB has modified its method for estimating the collective and individual allowance on loans (referred to as the general and specific allowance under Canadian GAAP). Under IFRS, impairment provisions are based on an incurred loss model. This model considers the total loan exposure, the loss identification period, the probability of default and the loss given default. These items are adjusted for the risk rating and historical loss experience. Impairment is measured as the difference between an asset's carrying amount and the present value of estimated future cash flows. The expected cash flows should exclude future credit losses that have not been incurred and should be discounted at the financial asset's original effective interest rate. Changes in the allowance related to the passage of time are recognized as interest income, while those that are due to changes in expected cash flows are recognized through the provision expense.

(ii) Securitization of Receivables ATB periodically securitizes residential mortgage loans by selling loans in the form of mortgage-backed securities (MBS) through the Canada Mortgage Bond (CMB) program. Under Canadian GAAP, the features of the transaction met the derecognition criteria, therefore the transaction was accounted for as a sale with derecognition of the MBS (and underlying mortgages) from the consolidated statement of financial position and the recognition of a gain or loss in the consolidated statement of income. Under IFRS, the terms of the transaction do not meet the derecognition criteria, therefore the transaction is accounted for as a collateralized borrowing with the underlying mortgages of the securitized MBS recognized on the consolidated statement of financial position and a liability recognized for the funding received with no recognition of gains or losses on transfer. Under Canadian GAAP, ATB recognized a retained interest, deferred servicing revenues and related income in respect of retained interests. Under IFRS, ATB continues to recognize a full interest in the underlying securitized mortgages and therefore does not recognize the retained interest, deferred servicing revenues and related income. The net effect of these securitization transactions on transition to IFRS is a decrease to Canadian GAAP equity which represents the elimination on a retrospective basis of securitization gains and losses and servicing income realized under Canadian GAAP, less an adjustment for interest income and expense that would have otherwise been recognized under IFRS.


11

(iii) Employee Future Benefits On transition to IFRS, ATB recognized all cumulative actuarial gains and losses for all defined benefit plans as an opening retained earnings adjustment in accordance with the transitional provisions of IFRS 1. This gave rise to a reduction in opening retained earnings at the transition date which was principally made up of the cumulative actuarial gains and losses at April 1, 2010. Under IFRS, actuarial gains and losses subsequent to April 1, 2010 are recognized in OCI. Under IFRS, ATB expenses the cost of past service benefits awarded to employees under post employment benefit plans over the periods in which the benefits vest, which usually corresponds to the period in which the benefits are granted. Under Canadian GAAP, ATB expensed past service costs over the expected average remaining service period of participants in the plan. This gave rise to a reduction in opening retained earnings at the transition date which was principally made up of the unamortized past service costs at April 1, 2010. Under Canadian GAAP, ATB accounted for its participation in the Public Service Pension Plan as a defined contribution plan. Funding contributions were expensed as they became due and recorded in salaries and employee benefits in the consolidated statement of income. Under IFRS, the criteria used to determine whether a plan meets the definition of defined benefit plan differs from Canadian GAAP and as a result under IFRS, ATB is required to account for its participation in the PSPP as a defined benefit plan. The effect of accounting for ATB’s participation in the PSPP is an increase in other liabilities and a reduction in opening retained earnings at the transition date to account for ATB’s share of the obligation to provide future employee benefits. Subsequent to the transition date, actuarial gains and losses have been recognized in OCI. Additional information on this change is detailed in Note 16 of the June 30, 2011 interim consolidated financial statements.

(iv) Leases ATB has various obligations under long-term non-cancellable contracts, which include leases for buildings and equipment. Under Canadian GAAP the majority of the leases were treated as operating leases as they did not meet the recognition criteria for capitalization. Under IFRS the leases should be treated as finance leases when substantially all the risk and rewards of ownership are transferred to the lessee. As a result certain operating leases which met the recognition criteria for finance leases under IFRS are capitalized as property and equipment on the consolidated statement of financial position and corresponding liability recorded for the finance lease obligations at April 1, 2010. Additionally, subsequent to the transition date, depreciation on the property and equipment capitalized under IFRS and interest charges on the finance lease obligations have been recorded on the consolidated statement of income.

(v) Changes to the Consolidated Statement of Cash Flows The transition from Canadian GAAP to IFRS had no significant impact on cash flows generated by ATB except that, under IFRS, cash flows relating to loans, deposits and interest-bearing deposits with financial institutions are classified as operating. Under Canadian GAAP cash flows relating to loans and interest-bearing deposits with financial institutions were classified as investing, and those for deposits were classified as financing.

(vi) Other As part of the IFRS transition, ATB made a change to its accounting policy relative to the recognition of regular way purchases. In the past ATB has recognized purchases and sales on a settlement date basis. The accounting policy was changed to trade date. This change was made in order for ATB to recognize regular way purchases and sales of financial instruments on a consolidated basis that is consistent with its subsidiaries regulatory requirement to recognize regular way purchase transactions on a trade date basis. ATB has also reclassified the following items on the statement of financial position and statement of income as part of the transition to IFRS:

certain items in transit previously reported as other assets or other liabilities have been reclassified to cash.


12

wholesale deposits has been renamed wholesale borrowings and has been moved from deposits to other liabilities to more accurately reflect the nature of the transaction

the amount previously reported as recovery of loss on asset-backed commercial paper has been included in net gains on financial instruments at fair value through net income and reported in other income in the consolidated statement of income.

5. Financial Instruments a. Classification and Carrying Value The following table summarizes ATB’s financial instrument classifications and provides their carrying value: As at

($ in thousands)

Held-for-trading

assets and

liabilities

measured at fair

value

Designated at fair

value through net

income

Available-for-sale

instruments

measured at fair

value

Loans and

receivables

measured at

amortized cost

Financial liabilities

measured at amortized

cost

Derivatives

designated for

hedge

accounting Total carrying value

Financial assets

$ 48,958 $ - $ - $ - $ - $ - $ 48,958

Interest-bearing deposits with financial institutions - 484,191 - - - - 484,191

- 2,276,372 2,616 - - - 2,278,988

- 100,633 - - - - 100,633

Loans

Residential mortgages - - - 10,236,444 - - 10,236,444

Business - - - 10,187,566 - - 10,187,566

Personal - - - 5,597,519 - - 5,597,519 Credit card - - - 665,537 - - 665,537

Allowance for credit losses - - - (107,766) - - (107,766)

- - - 26,579,300 - - 26,579,300

Other

Derivative financial instruments 228,140 - - - - 99,989 328,129

Other assets - - - 164,120 - - 164,120

228,140 - - 164,120 - 99,989 492,249


Deposits

Personal - - - - (10,654,666) - (10,654,666)

Business and other - - - - (11,368,307) - (11,368,307)

- - - - (22,022,973) - (22,022,973)

Other

Wholesale borrowings - - - - (2,689,745) - (2,689,745)

Collateralized borrowings - - - - (2,650,661) - (2,650,661)

Derivative financial instruments (222,709) - - - - - (222,709)

Other liabilities - (13,960) - - (439,364) - (453,324)

(222,709) (13,960) - - (5,779,770) - (6,016,439)

Capital investment notes - - - - (237,977) - (237,977)

Subordinated debentures - - - - (113,362) - (113,362)

December 31, 2011

Cash

Securities

Securities purchased under reverse repurchase agreements

[Remainder of page intentionally left blank.]


13

As at

($ in thousands)

Held-for-trading

assets and

liabilities

measured at fair

value

Designated at fair

value through net

income

Available-for-sale

instruments

measured at fair

value

Loans and

receivables

measured at

amortized cost


measured at amortized

cost

Derivatives

designated for

hedge

accounting Total carrying value

Financial assets

$ 210,385 $ - $ - $ - $ - $ - $ 210,385

Interest-bearing deposits with financial institutions - 1,123,779 - - - - 1,123,779

- 1,959,658 3,453 - - - 1,963,111

Loans

Residential mortgages - - - 9,920,694 - - 9,920,694

Business - - - 9,134,397 - - 9,134,397

Personal - - - 5,589,507 - - 5,589,507 Credit card - - - 624,539 - - 624,539

Allowance for credit losses - - - (112,485) - - (112,485)

- - - 25,156,652 - - 25,156,652

Other

Derivative financial instruments 233,846 - - - - 38,040 271,886

Other assets - - - 176,920 - - 176,920

233,846 - - 176,920 - 38,040 448,806


Deposits

Personal - - - - (10,576,800) - (10,576,800)

Business and other - - - - (10,422,053) - (10,422,053)

- - - - (20,998,853) - (20,998,853)

Other

Wholesale borrowings - - - - (3,000,155) - (3,000,155)

Collateralized borrowings - - - - (2,447,580) - (2,447,580)

Derivative financial instruments (237,179) - - - - (17,232) (254,411)

Other liabilities - (12,385) - - (499,389) - (511,774)

(237,179) (12,385) - - (5,947,124) (17,232) (6,213,920)

Capital investment notes - - - - (230,972) - (230,972)

Subordinated debentures - - - - (67,467) - (67,467)

March 31, 2011

Cash

Securities

b. Fair Value Hierarchy The following tables present the financial instruments ATB has recognized at fair value, classified using the fair value hierarchy described in note 5 to the consolidated financial statements for the year ended March 31, 2011.

As at December 31, 2011

($ in thousands) Level 1 Level 2 Level 3 T o tal

F inancial assets

Interest-bearing depo sits with f inancial inst itut io ns

Designated at fair value through net income -$ 484,191$ -$ 484,191$

Securit ies

Available-for-sale - - 2 ,616 2 ,616

Designated at fair value through net income - 1,601,324 675,048 2 ,276,372

Securit ies purchased under reverse repurchase agreements - 100,633 - 100,633

Other assets

Derivative financial instruments - 328,129 - 328,129

T o tal f inancial assets - 2 ,514,277 677,664 3 ,191,941

F inancial liabilit ies

Other liabilit ies

Derivative financial instruments - (222,608) (101) (222,709)

Designated at fair value through net income - - (13,960) (13,960)

T o tal f inancial liabilit ies -$ (222,608)$ (14,061)$ (236,669)$


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As at M arch 31, 2011

($ in thousands) Level 1 Level 2 Level 3 Total

F inancial assets

Interest-bearing depo sits with f inancial inst itut io ns

Designated at fair value through net income -$ 1,123,779$ -$ 1,123,779$

Securit ies

Available-for-sale - - 3,453 3,453

Designated at fair value through net income - 1,324,985 634,673 1,959,658

Other assets

Derivative financial instruments - 271,886 - 271,886

T o tal f inancial assets - 2,720,650 638,126 3,358,776

F inancial liabilit ies

Other liabilit ies

Derivative financial instruments - (254,222) (189) (254,411)

Designated at fair value through net income - - (12,385) (12,385)

T o tal f inancial liabilit ies -$ (254,222)$ (12,574)$ (266,796)$

6. Risk Management The use of financial instruments exposes ATB to credit, liquidity, and market risk.

Credit Risk Credit risk is the potential for financial loss in the event that a borrower or counterparty fails to repay a loan or otherwise honor their financial or contractual obligations. Examples of typical products bearing credit risk include retail and commercial loans, guarantees, and letters of credit. ATB’s risk management practices and key measures are disclosed in the Risk Management section of the MD&A in the 2011 Annual Report. Key measures as at December 31, 2011 are outlined below. Total Credit Exposure The amounts shown in the table below best represent ATB’s maximum exposure to credit risk as at December 31, 2011, without taking into account any non-cash collateral held or any other credit enhancements.

As at D ecember 31 M arch 31

($ in thousands) 2011 2011

Financial assets (1) 29,782,326$ 28,867,767$

Other commitments and off-balance sheet items 13,602,642 12,735,816

Total credit risk 43,384,968$ 41,603,583$ (1) Includes derivatives stated net of collateral held and master netting agreements

In addition to the previous table, ATB is exposed to credit risk on its holdings of $484,191 (March 31, 2011: $1,123,779) in interest-bearing deposits with financial institutions and $2,276,372 (March 31, 2011: $1,959,658) in securities measured at fair value through net income and $2,616 (March 31, 2011: $3,453) in securities available- for-sale (as detailed in note 8).



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Credit Quality ATB’s loan portfolio consists of the following:

As at

($ in thousands) D ecember 31, 2011 M arch 31, 2011

N et carrying Net carrying

Gro ss lo ans Individually C o llect ively value value

Residential mortgages 10,236,444$ 4,830$ 8 ,222$ 10,223,392$ 9,908,386$

Personal 5,597,519 11,085 11,427 5 ,575,007 5,568,801

Credit card 665,537 - 16,123 649,414 606,422

Agricultural 1,519,956 43 1,005 1,518,908 1,399,526

Independent business 2,589,342 5 ,640 16,567 2 ,567,135 2,420,531

Commercial 6,078,268 16,056 16,768 6 ,045,444 5,252,986

26,687,066$ 37,654$ 70,112$ 26,579,300$ 25,156,652$

A llo wances assessed

Impaired Loans Impaired loans included in the preceding table consist of the following:

As at

($ in thousands) M arch 31, 2011

A llo wances

Gro ss impaired individually N et carrying Net carrying

lo ans assessed value value

Residential mortgages 80,696$ 4 ,830$ 75,866$ 83,017$

Commercial 35,052 16,056 18,996 23,754

Personal 36,987 11,085 25,902 18,723

Independent business 22,750 5 ,640 17,110 20,946

Agricultural 6,282 43 6 ,239 3,821

181,767$ 37,654$ 144,113$ 150,261$

D ecember 31, 2011

Loans Past Due The following are the loans past due but not impaired because they are less than 90 days past due or because it is otherwise reasonable to expect timely collection of principal and interest: As at

($ in thousands) December 31, 2011 March 31, 2011

Residential

mortgages Business Personal Credit card (1) Total Total

Up to one month 184,209$ 143,695$ 43,251$ 36,717$ 407,872$ 264,024$

Over one month up to two months 44,493 4,011 12,297 8,681 69,482 58,918

Over two months up to three months 4,855 2,975 7,294 2,780 17,904 25,706

Over three months 3,385 2,094 4,596 3,490 13,565 13,707

Total past due but not impaired 236,942$ 152,775$ 67,438$ 51,668$ 508,823$ 362,355$ (1) Consumer credit card loans are classif ied as impaired and w ritten off w hen payments become 180 days past due. Business and agricultural credit card loans that become

due for three consecutive billing cycles (or approximately 90 days) are removed from the credit card portfolio and transferred into the applicable impaired loan category. Industry Concentration ATB is inherently exposed to significant concentrations of credit risk as its customers are all participants in the Alberta economy, which in the past has shown strong growth and occasional sharp declines. ATB manages its credit risk through diversification of its credit portfolio by limiting concentrations to single borrowers, industries, and geographic regions of Alberta. As at December 31, 2011, no single industry segment represents more than 22.5% (March 31, 2011: 22.5%) of total gross business loans, and no single borrower represents more than 0.27% (March 31, 2011: 0.30%) of the total gross loan portfolio.


16

Liquidity Risk Liquidity risk is the risk of ATB being unable to meet its known financial commitments when they come due and being unable to meet unexpected cash requirements at a reasonable cost. As with other similar financial institutions, ATB’s risk arises from fluctuations in cash flows from lending, deposit-taking, investing, and other activities. These commitments are generally met through cash flows supplemented by investment assets readily convertible to cash, or through ATB’s capacity to borrow. ATB’s risk management practices and key measures are disclosed in the Risk Management section of the MD&A in the 2011 Annual Report. As at December 31, 2011, ATB maintained a liquidity level in excess of the Board-approved minimum levels.

Market Risk Market risk is the risk that ATB may incur a loss due to adverse changes in interest rates, foreign-exchange rates, and equity or commodity market prices. ATB’s risk management practices and key measures are disclosed in note 25 to the consolidated financial statements for the year ended March 31, 2011 and the Risk Management section of the MD&A in the 2011 Annual Report. A description of ATB’s key market risks and their measurement as at December 31, 2011 is outlined below:

Interest rate risk Interest rate risk is the risk of a negative impact on ATB’s net interest income (NII) due to changes in market interest rates. This risk occurs when there is a mismatch in the re-pricing characteristics of interest-rate-sensitive assets (such as loans and investments) and interest-rate-sensitive liabilities (such as deposits). Interest Rate Sensitivity The following table provides the potential impact of an immediate and sustained 100 basis point increase and decrease in interest rates on ATB’s net income as applied against ATB’s core balance sheet:

As at D ecember 31 September 30


Increase in interest rates of:

100 basis points 16,600$ 8,698$

200 basis points 32,267 16,168

Decrease in interest rates of:

100 basis points (32,286) (45,771)

200 basis points (26,853)$ (46,093)$ The core balance sheet excludes ATB’s short term liquidity portfolios and borrowings, and their associated interest rate derivatives as balances are not stable over time and their inclusion would not reflect the core banking book interest rate risk position. In addition, the ATB has elected to use fair value accounting methodologies for its short term portfolios, and as such, accrual measures of income volatility such as those shown for the core balance sheet are not directly comparable.

Foreign exchange risk Foreign exchange risk is the potential risk of loss resulting from fluctuations in foreign exchange rates. This risk arises from the existence of a net asset or liability position denominated in foreign currencies and/or a difference in maturity profiles for purchases and sales of a given currency. ATB manages its net foreign currency exposure daily by ensuring that U.S. dollar and British pound sterling net exposures are kept within approved risk limits. For all other currencies, exposures are immediately offset with other counterparties.


17

Equity and commodity risk Equity price risk arises when ATB offers deposit products where the rate of return is linked to changes in the value of equity securities or equity market indices. ATB uses equity-linked derivatives to hedge the associated risk exposure on these products. Equity risk is subject to Board-approved limits. ATB has no material net exposure as at December 31, 2011, and such exposures have historically been immaterial. Commodity price risk arises when ATB offers derivative products where the value of the derivative instrument is linked to changes in the price of the underlying commodity. ATB uses commodity-linked derivatives to fully hedge the associated commodity risk exposure on these products. ATB does not accept any net direct commodity price risk.

7. Capital Disclosure ATB measures and reports capital adequacy to ensure that it meets the minimum levels set out by its regulator, Alberta Finance, while supporting the continued growth of its business.

As a Crown corporation, ATB and its subsidiaries operate under a regulatory framework established pursuant to the Alberta Treasury Branches Act and associated regulations and guidelines. The capital adequacy requirements for ATB are defined in a guideline authorized by the Minister of Finance, which was modelled after guidelines governing other Canadian deposit-taking institutions. ATB’s minimum Tier 1 capital requirement is 7%, and the total capital requirement is the greater of 10% of risk-weighted assets or 5% of total assets. Risk weights are established for various on-balance-sheet and off-balance-sheet assets according to the degree of credit risk. The capital requirements were amended during the prior fiscal year to expand the definition of Tier 2 capital. Tier 1 capital consists of retained earnings, and Tier 2 capital consists of notional capital and eligible portions of the general allowance for credit losses, subordinated debentures, and capital investment notes (to a maximum of $500,000). Effective March 30, 2009, $600,000 of notional (or deemed) capital was made available to ATB. This amount reduces by 25% of net income each quarter. As at December 31, 2011, ATB has exceeded both the total capital requirements and the Tier 1 capital requirement of the Capital Adequacy Guideline.

As at D ecember 31 M arch 31


Tier 1 capital

Retained earnings 2,043,041$ 1,884,877$

Tier 2 capital

Eligible portions of:

Subordinated debentures 70,283 33,658

Capital investment notes 95,191 134,188

General allowance for credit losses 71,211 73,808

Notional capital 501,678 541,219

738,363 782,873

Total regulatory capital 2,781,404$ 2,667,750$

Total risk-weighted assets 22,076,744$ 20,880,958$

Risk-weighted capital ratios

Tier 1 capital ratio 9.3% 9.0%

Total regulatory capital ratio 12.6% 12.8%


18

8. Securities The carrying value of securities, by remaining term to maturity and net of valuation provisions, is as follows: As at D ecember 31 M arch 31


Less than 1 year F ro m 1–5 years Over 5 years

T o tal carrying

value

Total carrying

value

Securit ies available-fo r-sale

Commercial paper

Third-party-sponsored ABCP -$ 630$ 1,986$ 2 ,616$ 3,453$

T o tal securit ies available-fo r-sale - 630 1,986 2 ,616 3,453

Securit ies measured at fair value thro ugh net inco me

Issued or guaranteed by the Canadian federal or provincial government 1,601,324 - - 1,601,324 1,324,985

Commercial paper

Third-party-sponsored ABCP - 35,205 590,850 626,055 590,603

Bank-sponsored ABCP - 48,993 - 48,993 44,070

T o tal securit ies measured at fair value thro ugh net inco me 1,601,324 84,198 590,850 2 ,276,372 1,959,658

T o tal securit ies 1,601,324$ 84,828$ 592,836$ 2 ,278,988$ 1,963,111$ Gross unrealized gains (losses) on securities available-for-sale are presented in the following table:

C o st o r Gro ss Gro ss

As at December 31, 2011 amo rt ized unrealized unrealized C arrying

($ in thousands) co st gains lo sses value

Securit ies available-fo r-sale

Commercial paper

Third-party-sponsored ABCP 2,892 - (276) 2 ,616

T o tal securit ies available-fo r-sale 2,892$ -$ (276)$ 2 ,616$

Asset-Backed Commercial Paper As outlined in note 9 to the consolidated financial statements for the year ended March 31, 2011, the investments subject to the Montreal Accord were restructured on January 21, 2009 and ATB exchanged its original notes for new longer-term floating-rate notes that more closely matched the maturities of the underlying assets. These notes were issued via new trusts called Master Assets Vehicles (MAV). The table below provides a breakdown of the face value of ATB’s ABCP holdings as at December 31, 2011:



19

Expected

As at December 31, 2011 principal Credit

($ in thousands) Cost Coupon repayment rating

Third-party ABCP

MAV 1

Class A-1 410,065$ 0.30% (1) Dec 2016 A (high)

Class A-2 384,749 0.30% (1) Dec 2016 A

Class B 65,595 0.30% (1) Dec 2016 None

Class C 26,741 20.0% (1) Dec 2016 None

Tracking notes for ineligible assets 21,494 Floating (2) July 2056 None

Total MAV 1 908,644

MAV 3

Tracking notes for traditional assets 2,892 Floating (2) Sept 2016 None

Total MAV 3 2,892

Other 34,770 1.55% (1) Dec 2016 B (high)

Total third-party ABCP 946,306

Bank-sponsored ABCP 67,021 0%–0.35% (1) Dec 2013– None–A (low)

Sept 2016

Total ABCP 1,013,327$ 1 Spread over bankers' acceptance rate.2 Coupon rate floats based on the yield of the underlying assets. MAV 1, which includes synthetic and ineligible assets restructured under the Montreal Accord, is measured at fair value through net income while MAV 3, which includes traditional assets, has been classified as available-for-sale. On restructuring, ATB recorded a liability in “other liabilities” to represent the estimated fair value of the self-funded margin funding facility (MFF) required as part of the restructuring. The MFF is in place to cover possible collateral calls on the leveraged super-senior trades underlying the MAV notes. Advances under this facility are expected to bear interest at a rate based on the bankers’ acceptance rate. If ATB fails to fund any collateral under this facility, the notes held by ATB could be terminated or exchanged for subordinated notes. In order to continue to participate in MAV 1 and self-fund the MFF, ATB must maintain a credit rating equivalent to AA (high) with at least two of four credit-rating agencies. If ATB does not maintain the required credit rating, it will be required to provide collateral or obtain the required commitment through another entity with a sufficiently high credit rating. ATB’s share of the MFF credit commitment is $551,500, for which ATB does not receive a fee.

Valuation The table below provides a breakdown of the fair value of ATB’s ABCP holding:

Foreign

estimated Note exchange estimated

($ in thousands) cost fair value redemptions impact (1) cost fair value

MAV 1 908,538$ 576,000$ (1,701)$ 1,807$ 908,644$ 605,056$

MAV 3 3,819 3,453 (927) -$ 2,892 2,616

Other third-party sponsored ABCP 34,770 14,603 - - 34,770 20,999

Bank-sponsored ABCP 67,021 44,070 - - 67,021 48,993

Total ABCP 1,014,148$ 638,126$ (2,628)$ 1,807$ 1,013,327$ 677,664$ 1 MAV 1 includes securities with a carrying value of $25,700 (March 31, 2011: $24,434) denominated in U.S. funds.

March 31, 2011 December 31, 2011

There is no observable market price for the notes as at the balance sheet date, accordingly, ATB estimated the fair value of the synthetic assets using a discounted cash flow method. The key assumption in this model is the market discount rate. The market discount rate is based on the various tranches of the CDX.IG index adjusted to reflect the lack of liquidity inherent in the notes.


20

The estimated fair value of the MAV 1 notes increased by $8,624 (September 30, 2011 $11,710) in the current quarter.

Other Third-Party-Sponsored ABCP ATB holds an investment of $34,770 of third-party-sponsored ABCP restructured outside the Montreal Accord. Consistent with last quarter, Dominion Bond Rating Service (DBRS) currently rates this investment as B (high). ATB continues to estimate the fair value of this investment based on a review of the underlying assets in the trust.

Bank-Sponsored Asset-Backed Commercial Paper As outlined in note 9 to the consolidated financial statements for the year ended March 31, 2011, ATB also holds investments in certain bank-sponsored commercial paper that were restructured similar to the Montreal Accord notes. These notes are valued using a discounted cash flow model similar to the technique used for the MAV synthetic assets.

Measurement Uncertainty The estimate of the fair value of the ABCP notes continues to be subject to significant risks and uncertainties including the timing and amounts of cash flows, market liquidity, the quality and term of the underlying assets including the possibility of margin calls and the future market for the notes. Accordingly, the fair value of the notes may change materially. A 1% increase in the discount rate will decrease the value of ATB’s ABCP notes by approximately $30,000.



21

9. Allowance for Credit Losses The allowance for credit losses recorded in the interim condensed consolidated statement of finance position is maintained at the level which management considers adequate to absorb credit-related losses for all on- and off-balance sheet items in ATB’s credit portfolio as at the balance sheet date. The continuity of the allowance for credit losses is as follows:

For the three months ended D ecember 31 Sep 30 December 31

($ in thousands) 2011 2011 2010

C o llect ively assessed

Balance at beginning of the period 66,212$ 69,106$ 57,444$

Provision (recovery) for credit losses 3,900 (2,894) 12,494

Balance at end of the period 70,112 66,212 69,938

Individually assessed

Balance at beginning of the period 41,773$ 38,972$ 28,419$

Writeoffs and recoveries (2,890) (6,199) (7,520)

Provision for credit losses 337 9,000 19,321

A llowance for credit losses 39,220 41,773 40,220

Less: allowance for cost of credit recovery included in other liabilities 1,566 1,678 1,403

Balance at end of the period 37,654 40,095 38,817

Total 107,766$ 106,307$ 108,755$

For the nine months ended D ecember 31 December 31


C o llect ively assessed

Balance at beginning of the year 73,808$ 62,280$

(Recovery) provision for credit losses (3,696) 7,658

Balance at end of the year 70,112 69,938

Individually assessed

Balance at beginning of the year 40,844$ 22,486$

Writeoffs and recoveries (18,636) (24,654)

Provision for credit losses 17,012 42,388

A llowance for credit losses 39,220 40,220

Less: allowance for cost of credit recovery included in other liabilities 1,566 1,403

Balance at end of the year 37,654 38,817

Total 107,766$ 108,755$

10. Derivative Financial Instruments The fair value of derivative financial instruments, segregated between contracts in a favourable position (i.e., having positive fair value) and contracts in an unfavourable position (i.e., having negative fair value) consists of the following:



22

As at

N o tio nal Notional

($ in thousands) amo unt A ssets Liabilit ies amount Assets Liabilities

Corporate derivatives

Cash flow hedges 2,610,000$ 99,989$ -$ 2,182,000$ 38,040$ (17,232)$

Overnight interest rate swaps 5,488,000 3 ,537 (7 ,787) 14,965,000 4,711 (2,775)

Other 348,531 45,167 - 731,541 73,480 (1,091)

Client derivatives 5,112,083 175,230 (166,812) 3,443,696 155,640 (154,108)

Corporate foreign exchange forwards 886,145 4 ,206 (4 ,325) 1,241,765 15 (10,160)

Embedded derivatives

Equity-and commodity-linked deposits 320,374 - (43,684) 350,045 - (68,856)

Other 31,616 - (101) 30,930 - (189)

14,796,749$ 328,129$ (222,709)$ 22,944,977$ 271,886$ (254,411)$

D ecember 31, 2011 M arch 31, 2011

In addition to the notional amounts of derivative instruments shown above, ATB has certain foreign exchange spot deals that settle in one day. These deals had notional amounts of $612 as at December 31, 2011 (March 31, 2011: $13,214). Refer to note 20 to the consolidated financial statements for the year ended March 31, 2011 for a more complete description of ATB’s derivative-related activities.

11. Commitments, Guarantees, and Contingent Liabilities Guarantees represent an irrevocable obligation to make payments to a third party in certain situations. Guarantees include contracts or indemnities that contingently require ATB to make payments (either in the form of an asset or in the form of services) to another party based on changes in an asset, liability, or equity the other party holds; failure of a third party to perform under an obligating agreement; or failure of a third party to pay its indebtedness when due. The term of these guarantees varies according to the contract and normally does not exceed one year. In the event of a call on such commitments, ATB has recourse against the customer. Significant guarantees provided by ATB to third parties include: As at D ecember 31 M arch 31


Loan guarantees and standby letters of credit 358,442$ 347,182$

Notional principal amounts for the fo llowing:

- Foreign exchange forward contracts 1,667,000 1,793,500

- Commodity forward contracts 4,331,228 2,891,961 In the ordinary course of business, ATB grants a security interest in certain collateral (including securities, interest-bearing deposits with financial institutions and loans and accounts) to the Bank of Canada in order to participate in clearing and payment systems and to have access to its facilities. ATB also pledges securities to Clearing and Depository Services Inc. in order to participate in a settlement-agent credit ring. The total amount pledged as at December 31, 2011 has a carrying value of $423,588 (March 31, 2011: $439,460). ATB has also pledged $2,605,704 in mortgages to support the collateralized borrowing outstanding at December 31, 2011 (March 31, 2011: $2,418,880).


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12. Payment in Lieu of Tax As at December 31, 2011, ATB accrued a total of $14,463 (September 30, 2011: $15,305 and December 31, 2010: $19,879) for payment in lieu of tax. The payment in lieu of tax will be settled by issuing subordinated debentures until ATB’s Tier 2 notional capital is eliminated. For prior periods the payment in lieu of tax was calculated as 23% of net income reported under Canadian GAAP. Commencing first quarter of this fiscal year, it will be calculated as 23% of net income reported under IFRS.

13. Capital Investment Notes Capital investment notes are five-year non-redeemable guaranteed notes issued to the general public that qualify under ATB’s capital requirements as Tier 2 capital to a maximum of $500,000. As at December 31, 2011, $237,977 (March 31, 2011: $230,972) of these notes were outstanding with a fixed rate of return of 4.25% and will mature in fiscal 2014-15.

14. Collateralized Borrowings ATB periodically securitizes residential mortgage loans by selling loans in the form of mortgage backed securities through the Canada Mortgage Bond (CMB) program. The terms of this transaction do not meet the derecognition criteria, therefore it is accounted for as a collateralized borrowing. The following table presents the carrying amount of the residential mortgage loans transferred but not derecognized, and the related liability recognized on the consolidated statement of financial position: As at D ecember 31 M arch 31


Residential mortgage loans 2,651,796$ 2,451,244$

Collateralized borrowings 2,650,661$ 2,447,580$

15. Segmented Information ATB has organized its operations and activities around the following four business segments or lines of business:

Corporate Financial Services provides financial services to medium- and large-sized corporate borrowers.

Investor Services provides wealth management solutions including retail brokerage, mutual funds, portfolio management, and investment advice.

Retail Financial Services comprises the branch, agency, and ABM networks and provides financial services to individuals.

Business and Agriculture Services provides financial services to business, and agricultural customers. The four identified segments differ in products and services offered, but are all within the same geographic region as virtually all of ATB’s operations are limited to customers within the Province of Alberta.

Refer to note 26 of the consolidated financial statements for the year ended March 31, 2011 for additional detail on the method used to generate the segmented information.


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R etail C o rpo rate

As at and for the three months ended F inancial B usiness & F inancial Investo r C o rpo rate

($ in thousands) Services A griculture Services Services units ( 1)T o tal

D ecember 31, 2011

Net interest income 86,273$ 47,804$ 43,738$ 149$ 25,283$ 203,247$

Other income 25,898 17,861 21,820 16,261 (1,641) 80,199

Total operating revenue 112,171 65,665 65,558 16,410 23,642 283,446

Provision for (recovery of) credit losses 4,123 846 77 - (809) 4 ,237

Non-interest expenses 79,595 34,876 10,697 17,602 73,554 216,324

Income (loss) before payment in lieu of tax 28,452 29,944 54,784 (1,192) (49,103) 62,885

Payment in lieu of tax - - - - 14,463 14,463

Net income (loss) 28,452$ 29,944$ 54,784$ (1,192)$ (63,566)$ 48,422$

Total assets 16,149,659$ 4 ,339,406$ 6 ,102,070$ 55,160$ 3 ,988,570$ 30,634,865$

Total liabilities 10,243,741$ 6 ,302,681$ 4 ,702,130$ 40,839$ 7 ,256,727$ 28,546,118$

September 30, 2011

Net interest income 87,984$ 48,532$ 42,075$ 162$ 24,271$ 203,024$

Other income (loss) 26,955 20,308 24,423 16,390 (14,355) 73,721


Provision for (recovery of) credit losses 5,562 1,142 104 - (702) 6,106




Net income (loss) 30,423$ 42,527$ 60,915$ (1,096)$ (81,531)$ 51,238$

Total assets 16,111,427$ 4,213,337$ 5,865,000$ 67,434$ 5,257,909$ 31,515,107$

Total liabilities 10,839,128$ 6,573,839$ 5,371,257$ -$ 6,689,971$ 29,474,195$

D ecember 31, 2010 ( 2)

Net interest income 85,445$ 49,571$ 42,878$ 1,331$ 22,399$ 201,624$

Other income 23,099 15,707 13,583 13,345 555 66,289


Provision for credit losses 12,311 1,568 17,864 - 72 31,815




Net income (loss) 25,319$ 37,077$ 29,400$ (2,055)$ (57,224)$ 32,517$

Total assets 15,702,639$ 4,081,819$ 5,365,068$ 45,596$ 3,283,264$ 28,478,386$

Total liabilities 10,638,542$ 6,260,945$ 3,780,589$ -$ 5,962,694$ 26,642,770$

1 Composed of business units o f a corporate nature, such as investment, risk management, asset/liability management, and treasury operations, as well as expenses, general allowances, and

recoveries for credit losses not expressly attributed to any line.2 Prior period results have been restated based on a change in corporate allocation methodology.



25

R etail C o rpo rate

For the nine months ended F inancial B usiness & F inancial Investo r C o rpo rate

($ in thousands) Services A griculture Services Services units ( 1)T o tal

D ecember 31, 2011




Provision for (recovery of) credit losses 15,070 2 ,773 (1,402) - (3 ,125) 13,316


Income (loss) before payment in lieu of tax 89,663 106,692 168,247 (4 ,721) (154,474) 205,407


Net income (loss) 89,663$ 106,692$ 168,247$ (4 ,721)$ (201,717)$ 158,164$

D ecember 31, 2010 ( 2)




Provision for (recovery of) credit losses 26,794 4,766 19,154 - (668) 50,046




Net income (loss) 83,455$ 110,457$ 128,914$ (9,831)$ (178,082)$ 134,913$

1 Composed of business units of a corporate nature, such as investment, risk management, asset/liability management, and treasury operations, as well as expenses, general allowances, and

recoveries for credit losses not expressly attributed to any line.2 Prior period results have been restated based on a change in corporate allocation methodology.


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The following Management’s Discussion and Analysis (MD&A) considers ATB’s results of operations and financial condition for the three months ended December 31, 2011 and is dated March 1, 2012. The MD&A should be read in conjunction with the unaudited interim condensed consolidated financial statements and related notes for the period ended December 31, 2011 as well as the audited consolidated financial statements and MD&A for the year ended March 31, 2011.


Caution regarding forward-looking statements This report may include forward-looking statements. ATB Financial from time to time may make forward-looking statements in other written or verbal communications. These statements may involve, but are not limited to, comments relating to ATB’s objectives or targets for the short and medium term, strategies or actions planned to achieve those objectives, targeted and expected financial results, and the outlook for operations or the Alberta economy. Forward-looking statements typically use the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” or other similar expressions or future or conditional verbs such as “could,” “should,” “would,” or “will.” By their very nature, forward-looking statements require ATB’s management to make numerous assumptions and are subject to inherent risks and uncertainties, both general and specific. A number of factors could cause actual future results, conditions, actions, or events to differ materially from the targets, expectations, estimates, or intentions expressed in the forward-looking statements. Such factors include, but are not limited to: changes in legislative or regulatory environment; changes in ATB’s markets; technological changes; changes in general economic conditions, including fluctuations in interest rates, currency values, and liquidity conditions; and other developments, including the degree to which ATB anticipates and successfully manages the risks implied by such factors. ATB cautions readers that the aforementioned list is not exhaustive. Anyone reading and relying on forward-looking statements should carefully consider these and other factors that could potentially have an adverse affect on ATB’s future results, as there is a significant risk that forward-looking statements will not prove to be accurate. Readers should not place undue reliance on forward-looking statements, as actual results may differ materially from plans, objectives, and

expectations. ATB does not undertake to update any forward-looking statement contained in this report.

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Management’s Discussion and Analysis

(Unaudited)

Introduction This is the third quarter that ATB has reported under the International Financial Reporting Standards (IFRS) framework. As a result, all comparative results have been adjusted to reflect the retrospective application of IFRS. Refer to note 4 of this quarter’s unaudited interim consolidated financial statements for additional detail on these retrospective adjustments.

Net Income For the third quarter ended December 31, 2011 ATB Financial reported net income before payment in lieu of tax of $62.9 million, a decrease of $3.7 million from the prior quarter. The main reason for this decrease was a $12.2 million increase in non-interest expenses. This negative variance was partially offset by an $6.5 million increase in other income and a $1.9 million reduction to the provision for credit losses.

Net income before pilot this quarter is $10.5 million more then the third quarter last year. This positive variance was driven by a $27.6 million reduction in provision for credit losses and a $13.9 million increase in other income, partially offset by a $32.6 million increase in non-interest expenses.

On a year to date basis, net income before payment in lieu of tax is $205.4 million, $28.5 million more than last year. The increase is driven by increased net interest income ($36.3 million), increased other income ($47.5 million) and lower provisions for credit losses ($36.7 million), partially offset by higher non-interest expenses ($92.1 million).

Net Interest Income This quarter’s net interest income of $203.2 million is consistent with the $203.0 million reported last quarter, although net interest spread reduced from 2.78% to 2.74%. This decrease in spread is due to lower yields on both loans and investments resulting from the low interest rate environment and increased competition in the marketplace.

The current quarter’s net interest income was relatively consistent on an absolute basis with $201.6 million recorded in the third quarter last year, despite net interest spread reduced from 2.93% to 2.74% over same period. This is due to growth in the balance sheet over this period.

Although net interest spread on a year to date basis has decreased from 2.82% to 2.80%, net interest income has increased by $36.3 million year over year. This increase in net interest income can be attributed to the growth in the loan portfolio over the last nine months.

Additional information on ATB’s exposure to interest rate risk as at December 31, 2011 is provided in note 6 to the unaudited interim consolidated financial statements. Specifically, based on ATB’s current interest rate risk modeling, it is estimated that a one-percentage point increase in prime would increase ATB’s net interest income by $16.6 million over the following twelve month period.

Other Income Other income increased by $6.5 million, from $73.7 million to $80.2 million over the prior quarter. This increase was driven by a gain on the fair value of certain derivative financial instruments which increased by $11.9 million. Service charge revenues also contributed to the increase over the prior quarter, with an increase of $2.1 million. These increases were partially offset by negative variances on gains on financial instruments at fair value ($4.0 million) and foreign exchange income ($3.4 million). Net gains on financial instruments at fair value include fair value changes recognized on ATB’s asset-backed commercial paper portfolio and fair value changes on short term securities measured at fair value. It was the fair value of the short term securities that negatively impacted other income this quarter as the gain on asset-backed commercial paper was consistent quarter to quarter. Compared to last year, the third quarters other income increased by $13.9 million. This increase was also driven by a gain on the fair value of certain derivative financial instruments, which increased $9.9 million. An increase in sundry revenue ($3.6 million), service charge revenue ($1.6 million) and investor services revenue ($2.2 million) also contributed to the positive variance. A $4.8 million decrease in foreign exchange revenue partially offset the above positive variances.

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Management’s Discussion and Analysis (continued)

On a year to date basis other income is $230.4 million, $47.5 million more than last year. The majority of this increase ($26.9 million) relates to gains recognized on ATB’s asset-backed commercial paper portfolio included in net gains on financial instruments at fair value. Sundry income and investor services income were the other main contributors to the increase over the prior year, increasing by $10.3 million and $7.5 million respectively.

Credit Quality The provision for credit loss in the third quarter ended December 31, 2011 was $4.2 million, compared to $6.1 million recorded last quarter and $31.8 million recorded in the third quarter last year. The provision consists of both an individually assessed (previously known as the specific loss) and collectively assessed (previously known as the general loss) component. The collectively assessed credit loss provision is management’s best estimate of probable losses not yet specifically identified in the loan portfolio, while individually assessed provisions are recorded when loans are identified as impaired. The current quarter’s provision includes a $0.3 million individual provision and $3.9 million collective provision. On a year to date basis, the provision for credit losses has reduced from $50.0 million last year to $13.3 million this year. This $36.7 million reduction reflects improvement in the economy compared to prior year. Gross impaired loans were $181.8 million at the end of the current quarter, compared to $186.5 million last quarter and $174.4 million last year. Although this trend is negative, gross impaired loans remain at less than 1% of ATB’s loan portfolio and management remains comfortable at this level. The amount impaired does not directly translate into amounts to be written-off as ATB holds security in support of any current credit exposure. The expected write-offs relative to the current impaired loans are reflected in the individually assessed provisions for credit losses. As at December 31, 2011, total current credit loss allowances were $107.8 million, compared to $106.3 million last quarter and $108.8 million in the third quarter of the prior year. Management expects that the allowance for credit losses will be within the targeted range of 20 to 30 basis points of average loans for the year, and remains satisfied with the quality of the credit portfolio.

Non-Interest Expenses For the quarter ended December 31, 2011, total non-interest expenses were $216.3 million, $12.2 million higher than the previous quarter. The main contributors to this increase are data processing costs, which increased by $9.9 million, and software and other intangibles amortization, which increased by $5.0 million. These increases were partially offset by a decrease of $7.8 million in professional and consulting costs. The increase in data processing and software and other intangibles amortization is due to the increased costs associated with ATB’s new banking system. ATB expects that these expenses will stabilize over the next quarter and then gradually decrease as the new system stabilizes. Non-interest expense has increased by $32.6 million compared to the third quarter last year. This is due to a combination of increases in staff, data processing and software amortization costs. These increases relate both to the growth of the enterprise and operating costs associated with our banking system implementation. ATB management remains committed to operating efficiently, but is balancing this commitment with the goal of making strategic investments in the organization which will have long term benefits and will result in better service to our customers. On a year to date basis, non-interest expenses are $618.7 million, compared to $526.7 million last year. Similar to the increase over the third quarter last year, this increase is being driven by combination of increases in staff, data processing and software amortization costs. The efficiency ratio, used as a measure of operating efficiency, is the ratio of non-interest expenses to operating revenue (net interest income before provision for credit losses, plus other income). A lower ratio is indicative of

29


higher efficiency at generating income. For the third quarter ended December 31, 2011, ATB reported an efficiency ratio of 76.3% compared to 73.8% last quarter and 68.6% in the third quarter of the prior year. The current efficiency ratio is consistent with management’s expectations and is expected to remain at a high level for the medium term as ATB’s new banking system is stabilized.

Banking System Transformation After three years of planning, development and testing, ATB converted to a new banking system last quarter. The system has now been operating for four months and ATB continues to work through the stabilization process. ATB associates and customers have had some challenges relative to the new system and associated processes, but overall things are going well considering the scope and complexity of the system.

Balance Sheet Cash resources and securities are trending back towards more historical levels now that the new banking system has been implemented, reducing from $4.1 billion last quarter to the current level of $2.9 billion. ATB increased its liquidity position during the conversion process to ensure that it would be able to service customers throughout the implementation and early stabilization period. ATB has two principal sources of funding – personal and business or commercial deposits, primarily sourced through our retail network, and wholesale borrowings, which consist primarily of bearer deposit notes and mid-term notes issued on ATB’s behalf by the Government of Alberta and sold to other financial institutions. Personal and business deposits stood at $22.0 billion as at December 31, 2011. This represents a decrease of $0.6 billion (or 2.5%) over the prior quarter and an increase of $1.3 billion (or 6.4%) over the third quarter last year. ATB had been offering moderately higher rates on deposits in prior quarters in order to increase liquidity during the banking system conversion and it was expected that these deposits would decrease after the conversion when interest rates returned to normal. Wholesale borrowings are used as a source of funds to supplement retail deposits in supporting lending activities and can fluctuate significantly quarter to quarter. The agreement with the Government of Alberta currently limits the total volume of such borrowings to $5.5 billion. As at December 31, 2011, ATB has $2.7 billion in wholesale borrowings. This is $0.5 billion less than the prior quarter but remains consistent with the prior year. Net loans have increased this quarter to $26.6 billion. This is $0.3 billion more than last quarter and $1.3 billion more than the third quarter last year. Accumulated other comprehensive income at the end of the quarter of $45.7 million is relatively consistent with the prior quarter as there was not much movement in the valuation of employee benefits, available-for-sale securities or derivatives designated as cash flow hedges during the quarter.

Asset Backed Commercial Paper As at December 31, 2011, ATB held a portfolio of long-term asset-backed commercial paper with a face value of $1.0 billion, a fair value of $677.7 million and an expected maturity of between 2 and 5 years. This includes $946.3 million ($628.7 million fair value) of third-party-sponsored ABCP and $67.0 million ($49.0 million fair value) of bank-sponsored ABCP. With the exception of the traditional notes, which have been classified as available-for-sale, all of ATB’s investment in ABCP has been classified as securities measured at fair value through net income, which is marked to market each quarter with the resulting valuation adjustment being recorded in the income statement. There continues to be no observable market price for these notes as at the balance sheet date, accordingly, ATB has estimated the fair value of the majority of the ABCP notes using discounted cash flow methodologies. The key assumption in this model is the market discount rate. The market discount rate is based on the various tranches of the CDX.IG index adjusted to reflect the lack of liquidity inherent in the notes. Consistent with the prior quarter, the valuation of ineligible tracking notes, traditional tracking notes and the other non-MAV third party sponsored ABCP was based on ATB’s review of the underlying assets.

30


Consistent with last quarter, ATB has recognized a $12.2 million ($12.4 million last quarter) increase in the fair value of the ABCP portfolio. ATB expects that as the notes continue to move closer to maturity that further positive adjustments will be recorded. The overall value of ATB’s ABCP holdings is estimated to be 66.9% of cost; this is an increase of 1.2% from last quarter’s valuation. The estimate of the fair value of the ABCP notes continues to be subject to significant risks and uncertainties including the timing and amounts of cash flows, market liquidity, the quality and term of the underlying assets including the possibility of margin calls and the future market for the notes. Accordingly, the fair value of the notes may change materially. For additional details on these notes and the associated risks and obligations refer to note 9 to the consolidated March 31, 2011 year-end financial statements.

Segmented Information As detailed in note 15 to the interim consolidated financial statements, ATB has four major business lines comprising of Retail Financial Services (RFS), Business and Agriculture (B&AG), Corporate Financial Services (CFS), and Investor Services. A fifth line, designated Corporate units, is made up of business units of a corporate nature, and includes expenses, general allowances, and recoveries not expressly attributed to any line of business. A decrease in operating revenue and an increase in non-interest expenses in RFS, B&AG and CFS resulted in all three lines of business earning less than last quarter despite a reduction in the provision for credit losses. An increase in operating revenue and reduction in the provision for credit losses in RFS and CFS resulted in increase in earning compared to third quarter last year despite an increase in non-interest expenses. Although operating revenue is consistent in B&AG compared to third quarter last year, an increase in non-interest expenses resulted in a decrease in net income for the line. Investor Services assets under management and administration increased to $6.6 billion this quarter, compared to $6.3 billion last quarter and $5.9 billion last year. This is lower than anticipated due to the general low investor confidence in the market currently. As expected, Investor Services continues to operate at a loss as it continues to invest for future growth and to realize economies of scale. Current expectations are that this segment will start to earn a profit in fiscal 2013.

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Corporate Offices

9888 Jasper Avenue Edmonton, Alberta T5J 1P1

(780) 408-7300 Fax (780) 422-4178 www.atb.com

interim consolidated statement of financial position 608,691 … · 2019-10-24 · 1 interim...

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