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## Financial Results 

Personal and Commercial Client Group net income rose 22% to $968 million. Branch sales generated non-recurring revenue of $12 million ($9 million after tax) in 2001. The commentary that follows excludes those non-recurring items. 

Revenue increased $310 million or 7%, driven by significant volume growth in both Canadian and U.S. operations. Strong volume growth in Canada continued the trend from the latter half of 2001, as the expanded front-line sales staff was assimi- lated over that period. Volume growth was also spurred by the low interest rate environment and high demand for residential mortgages and personal loans. Personal deposits also rose, driven by depositors’ ready acceptance of our premium rate savings product, as well as economic uncertainty and weak equity markets. The favourable effects of the volume growth were partially offset by lower net interest margins, which reflected continuation of the trend from the summer of 2001 of spread compression in the low interest rate environment, and the effect of the highly competitive lending conditions. In the United States, revenue rose 26%, driven by strong loan and deposit growth and by the acquisition of Joliet at the end of the third quarter of 2001. Average net interest margins in the United States were virtually unchanged. Chicagoland Banking repre- sented slightly less than 20% of Personal and Commercial Client Group’s operations in 2002. 

Non-interest expenses rose $70 million or 3%. In Canada, they were virtually unchanged due to particularly successful expense management. Expenses rose in the United States due to system conversion and integration costs for Joliet, robust business volume growth, expansion initiatives and currency translation. The group’s expense-to-revenue ratio improved by 269 basis points, as both Canada and the United States enjoyed productivity gains. 

A more favourable tax rate and the discontinuance of goodwill amortization also contributed to higher earnings. 

## 2001 Compared with 2000 

Net income decreased $119 million to $794 million in 2001. 

Excluding non-recurring after-tax gains on sales of branches in 2001 and gains on the sales of Partners First and branches in fiscal 2000, net income decreased $37 million to $785 million. 

Excluding non-recurring items, revenue increased $145 million or 4%, driven by volume growth and higher gains on securiti- zations, partially offset by lower gains on sales of securities. 

Volumes improved in the second half of the year as the expanded sales force was assimilated, but the favourable impact was offset by spread compression in the declining interest rate environment. Expenses were $196 million higher due to strategic initiative spending and investment in front-line staffing. 

## Personal and Commercial Client Group ($ millions, except as noted) 

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Note: Graphs reflect Canada only. 

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