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Tangerine Bank - Financial Statements
October 4, 2019
6:09 am
canadian.100
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Could someone give me the link for Tangerine Bank Financial Statements - latest fiscal year available. I cannot seem to find them - perhaps because Tangerine Bank is wholly owned by Scotiabank, they are not readily available. Thanks.

October 4, 2019
8:44 am
hwyc
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How about OSFI web tools referenced previously by another member here ?

( OSFI - Office of the Superintendent of Financial Institutions )

October 4, 2019
1:27 pm
canadian.100
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hwyc said
How about OSFI web tools referenced previously by another member here ?

( OSFI - Office of the Superintendent of Financial Institutions )  

That link did not work for me.

October 5, 2019
1:43 pm
Doug
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OSFI financial data returns are session-based. They're not permalinked.

Scotiabank, unfortunately, chooses not to break out its Tangerine P/L and assets/liabilities as a separate business sub-segment of its Retail and Small Business Banking segment (which, in turn, is part of Canadian Banking and Wealth Management strategic business unit). So, yeah, we are left with only the OSFI returns.

Here's the most direct link to access:

http://www.osfi-bsif.gc.ca/Eng.....INDAT.aspx

P/L returns are posted quarterly, usually there is a 90-120 day lag time. Balance sheet returns are posted monthly, with a 1-2 month lag time.

To figure out annual profit, you have to view the Q1-Q4 returns and look on the Net Income line.

Cheers,
Doug

October 5, 2019
3:02 pm
canadian.100
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Doug said

Here's the most direct link to access:

http://www.osfi-bsif.gc.ca/Eng.....INDAT.aspx

P/L returns are posted quarterly, usually there is a 90-120 day lag time. Balance sheet returns are posted monthly, with a 1-2 month lag time.

To figure out annual profit, you have to view the Q1-Q4 returns and look on the Net Income line.

Cheers,
Doug  

Thanks very much, Doug. Exactly what I wanted.
The Q4 2018 Consolidated Statement of Income gave me the year to date (whole year) Net Income. No need to add up by quarter for past complete years.
Re 2019, I found it strange that the July 31-19 Balance Sheet shows only $5.5B "Mortgages Receivable" and $35B "Deposits Receivable from Financial Institutions". Total Assets were about $42B. Shareholders' Equity is very small relatively at about $2.2B. Information is not there how much in dividends the parent (Scotia) is drawing out of Tangerine.
Doug - Is it usual for a financial institution to have as its largest asset "Deposits Receivable from Financial Institutions."? Seems like Tangerine is gathering in funds (deposits) perhaps for use by Scotia to actually loan out.

October 5, 2019
3:48 pm
Doug
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canadian.100 said

Thanks very much, Doug. Exactly what I wanted.
The Q4 2018 Consolidated Statement of Income gave me the year to date (whole year) Net Income. No need to add up by quarter for past complete years.
Re 2019, I found it strange that the July 31-19 Balance Sheet shows only $5.5B "Mortgages Receivable" and $35B "Deposits Receivable from Financial Institutions". Total Assets were about $42B. Shareholders' Equity is very small relatively at about $2.2B. Information is not there how much in dividends the parent (Scotia) is drawing out of Tangerine.
Doug - Is it usual for a financial institution to have as its largest asset "Deposits Receivable from Financial Institutions."? Seems like Tangerine is gathering in funds (deposits) perhaps for use by Scotia to actually loan out.  

On your latter question/point, yes, I've posted about this before but no one really made any observational comments in reply. Ordinarily, deposits and loans match up fairly in sync with each other as the deposits serve as the primary funding source for the loans. Back when they were ING DIRECT Canada, they used to have a $15-20 billion mortgage book, as they were in the mortgage broker channel (they were also previously in the deposit broker channel, too!). However, almost immediately upon closing, one of Scotia's first orders of business was to put the bulk of the ING DIRECT Canada (now Tangerine) mortgage book into run-off such that, at renewal time, the brokers simply convinced their clients to switch their mortgages to another lender as (a) Tangerine mortgage rates were no longer competitive (they ceased offering rate specials and only offered posted rates well above market) and (b) they'd have to deal with Tangerine directly if they opted to renew. Tangerine's put a bit more emphasis into direct-to-consumer mortgages, but hasn't really moved the needle beyond the ~$5 billion they got down to.

So yeah, Scotia is definitely using Tangerine as, primarily, a funding source for their on-balance sheet lending. Tangerine's grown its staffing and spent more on deposits, marketing, offices, and the like, so profit-wise, it's probably underperformed Scotia's initial growth expectations but they still pull in ~$500 million in net income annually to Scotia's bottom line.

We don't know how much of that is paid in dividends, unless there's a separate cash flow return you can access, but realistically, I'd say Scotia is probably retaining ~50% on Tangerine's balance sheet as retained earnings, or transferring part of it to Scotia's balance sheet as retaining earnings (a form of regulatory capital), and transferring ~50% up to Scotia as dividends.

I'm surprised how separate Scotia keeps Tangerine...initially, they'd said they planned to keep it separate, but to me, I don't know why they don't, say, introduce a Tangerine Trade (a co-branded version of Scotia iTRADE) or something?

To the first point, historically, Q4 returns were only that: fourth quarter returns. But that's great if they've changed them to be YTD returns.

As for the shareholder equity, when they purchased Tangerine, it was around $3.5 billion, so I think they've also pulled out some of the retained earnings and transferred those up to Scotia as the mortgage book wound down and they were required to hold less capital.

Cheers,
Doug

October 6, 2019
5:45 am
canadian.100
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If annual earnings are approx $500M and there is a relatively small amount of Retained Earnings ($2B or so), I would think Scotia is likely pulling out much more than 50% of the profits after all these years.
Scotia could put Tangerine in cash flow distress if it drains their cash resources, but guess that is highly unlikely.

October 6, 2019
11:46 am
hwyc
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So many is vowing to leave Tangerine due to the fee change 2020. It will be interesting to watch how their numbers change in the next few months/quarters

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