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Rating Action:

Moody's affirms large Canadian banks' ratings; maintains stable outlook

01 Aug 2019

Toronto, August 01, 2019 -- Moody's Investors Service ("Moody's") has affirmed the short-term and long term debt and deposit ratings, the issuer ratings (where assigned), the Counterparty Risk Ratings, the Counterparty Risk Assessments and standalone baseline credit assessments (BCAs) of The Toronto-Dominion Bank (TD), Royal Bank of Canada (RBC), Bank of Montreal (BMO), Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CIBC), and National Bank of Canada (NBC) and their affiliates. The outlook on the relevant ratings remains stable.

The ratings affirmation reflects Moody's unchanged assessment of the banks' standalone credit profiles, support and structural analysis, including its government support assumptions. 'Large Canadian banks continue to maintain strong credit fundamentals as reflected in their high standalone credit assessments and ratings, supported by favorable operating conditions', said David Beattie, Senior Vice President at Moody's Investors Service in Toronto.

Affirmations:

..Issuer: Toronto-Dominion Bank (The)

.... Adjusted Baseline Credit Assessment, Affirmed a1

.... Baseline Credit Assessment, Affirmed a1

.... Counterparty Risk Assessment, Affirmed Aa1(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa1

.... ST Counterparty Risk Rating, Affirmed P-1

.... Deposit Note/CD Program, Affirmed Aa1, stable

.... Deposit Note/CD Program, Affirmed (P)Aa1

.... Commercial Paper, Affirmed P-1

.... Other Short Term, Affirmed (P)P-1

.... Backed Other Short Term, Affirmed (P)P-1

.... Issuer Rating, Affirmed Aa3, stable

.... Senior Unsecured MTN, Affirmed (P)Aa1

.... Backed Senior Unsecured MTN, Affirmed (P)Aa1

.... Junior Senior Unsecured MTN, Affirmed (P)Aa3

.... Subordinate MTN, Affirmed (P)A2

.... Backed Subordinate MTN, Affirmed (P)A2

.... Pref. Stock Non-cumulative, Affirmed Baa1 (hyb)

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa1, stable

.... Junior Senior Unsecured Regular Bond/Debenture, Affirmed Aa3, stable

.... Junior Subordinate Regular Bond/Debenture, Affirmed A2 (hyb)

.... Subordinate Regular Bond/Debenture, Affirmed A2

.... Long-term Deposit Rating, Affirmed Aa1, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Pref. shelf Non-cumulative, Affirmed (P)Baa1

.... Senior Unsecured shelf, Affirmed (P)Aa1

.... Junior Senior Unsecured shelf, Affirmed (P)Aa3

.... Subordinate shelf, Affirmed (P)A2

..Issuer: TD Capital Trust IV

.... Pref. Stock, Affirmed Baa1 (hyb)

..Issuer: TD North America L.P.

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa1, stable

..Issuer: Toronto Dominion Bank (London)

.... Counterparty Risk Assessment, Affirmed Aa1(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa1

.... ST Counterparty Risk Rating, Affirmed P-1

.... Other Short Term, Affirmed (P)P-1

.... Subordinate MTN, Affirmed (P)A2

.... Senior Unsecured MTN, Affirmed (P)Aa1

.... Deposit Note/CD Program, Affirmed (P)Aa1

.... Deposit Note/CD Program, Affirmed (P)P-1

.... Commercial Paper, Affirmed P-1

..Issuer: Toronto Dominion Global Finance

.... Backed Senior Unsecured MTN, Affirmed (P)Aa1

.... Backed Other Short Term, Affirmed (P)P-1

..Issuer: Toronto Dominion Holdings (U.S.A.), Inc.

.... Backed Commercial Paper, Affirmed P-1

..Issuer: Toronto-Dominion Bank, New York Branch

.... Counterparty Risk Assessment, Affirmed Aa1(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa1

.... ST Counterparty Risk Rating, Affirmed P-1

.... Bank Deposits, Affirmed Aa1, stable

..Issuer: Royal Bank of Canada

.... Adjusted Baseline Credit Assessment, Affirmed a3

.... Baseline Credit Assessment, Affirmed a3

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Issuer Rating, Affirmed A2, stable

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Junior Subordinate MTN, Affirmed (P)Baa1

.... Junior Senior Unsecured MTN, Affirmed (P)A2

.... Subordinate MTN, Affirmed (P)Baa1

.... Other Short Term, Affirmed (P)P-1

.... Pref. Stock Non-cumulative, Affirmed Baa3 (hyb)

.... Junior Senior Unsecured Regular Bond/Debenture, Affirmed A2, stable

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

.... Junior Subordinate Regular Bond/Debenture, Affirmed Baa1 (hyb)

.... Subordinate Regular Bond/Debenture, Affirmed Baa1

.... Long-term Deposit Rating, Affirmed Aa2, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Pref. shelf Non-cumulative, Affirmed (P)Baa3

.... Senior Unsecured shelf, Affirmed (P)Aa2

.... Junior Senior Unsecured shelf, Affirmed (P)A2

.... Subordinate shelf, Affirmed (P)Baa1

.... Junior Subordinate shelf, Affirmed (P)Baa1

..Issuer: RBC (Barbados) Trading Bank Corporation

.... Long-term Issuer Rating, Affirmed A3, stable

.... Short-term Issuer Rating, Affirmed P-2

..Issuer: RBC Capital Trust

....Pref. Stock Non-cumulative, Affirmed Baa3 (hyb)

..Issuer: Royal Bank of Canada (London Branch)

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Junior Senior Unsecured MTN, Affirmed (P)A2

.... Subordinate MTN, Affirmed (P)Baa1

.... Other Short Term, Affirmed (P)P-1

.... Other Short Term, Affirmed P-1

.... Junior Senior Unsecured Regular Bond/Debenture, Affirmed A2

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

..Issuer: Royal Bank of Canada (New York)

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Long-term Deposit Rating, Affirmed Aa2, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Other Short Term, Affirmed (P)P-1

..Issuer: Royal Bank of Canada (Sydney Branch)

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Other Short Term, Affirmed (P)P-1

.... Other Short Term, Affirmed P-1

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

..Issuer: Royal Trust Corporation of Canada

.... Adjusted Baseline Credit Assessment, Affirmed a3

.... Baseline Credit Assessment, Affirmed a3

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Long-term Deposit Rating, Affirmed Aa2, stable

.... Short-term Deposit Rating, Affirmed P-1

..Issuer: Bank of Nova Scotia

.... Adjusted Baseline Credit Assessment, Affirmed a3

.... Baseline Credit Assessment, Affirmed a3

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Deposit Note/CD Program, Affirmed (P)Aa2

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Issuer Rating, Affirmed A2, stable

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Junior Subordinate MTN, Affirmed (P)Baa1

.... Junior Senior Unsecured MTN, Affirmed (P)A2

.... Other Short Term, Affirmed (P)P-1

.... Pref. Stock Non-cumulative, Affirmed Baa3 (hyb)

.... Junior Senior Unsecured Regular Bond/Debenture, Affirmed A2, stable

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

.... Junior Subordinate Regular Bond/Debenture, Affirmed Baa1 (hyb)

.... Subordinate Regular Bond/Debenture, Affirmed Baa1

.... Long-term Deposit Rating, Affirmed Aa2, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Pref. shelf Non-cumulative, Affirmed (P)Baa3

.... Pref. shelf, Affirmed (P)Baa3

.... Senior Unsecured shelf, Affirmed (P)Aa2

.... Junior Senior Unsecured shelf, Affirmed (P)A2

.... Subordinate shelf, Affirmed (P)Baa1

.... Junior Subordinate shelf, Affirmed (P)Baa1

..Issuer: Bank of Nova Scotia Australia Branch

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

..Issuer: Bank of Nova Scotia, Houston Branch

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

..Issuer: Bank of Nova Scotia, New York Agency

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Issuer Rating, Affirmed Aa2, stable

..Issuer: Montreal Trust Company of Canada

.... Adjusted Baseline Credit Assessment, Affirmed a3

.... Baseline Credit Assessment, Affirmed a3

.... Long-term Deposit Rating, Affirmed Aa2, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Deposit Note/CD Program, Affirmed (P)Aa2

..Issuer: Scotiabank Capital Trust

....Pref. Stock Non-cumulative, Affirmed Baa3 (hyb)

..Issuer: Scotiabank Europe Plc

.... Backed Senior Unsecured MTN, Affirmed (P)Aa2

.... Junior Senior Unsecured MTN, Affirmed (P)A2

..Issuer: Bank of Montreal

.... Adjusted Baseline Credit Assessment, Affirmed a3

.... Baseline Credit Assessment, Affirmed a3

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Junior Senior Unsecured MTN, Affirmed (P)A2

.... Subordinate MTN, Affirmed (P)Baa1

.... Other Short Term, Affirmed (P)P-1

.... Pref. Stock Non-cumulative, Affirmed Baa3 (hyb)

.... Junior Senior Unsecured Regular Bond/Debenture, Affirmed A2, stable

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

.... Junior Subordinated Regular Bond/Debenture, Affirmed Baa1 (hyb)

.... Long-term Deposit Rating, Affirmed Aa2, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Pref. shelf Non-cumulative, Affirmed (P)Baa3

.... Senior Unsecured shelf, Affirmed (P)Aa2

.... Subordinate shelf, Affirmed (P)Baa1

..Issuer: Bank of Montreal, Chicago Branch

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

..Issuer: Canadian Imperial Bank of Commerce

.... Adjusted Baseline Credit Assessment, Affirmed a3

.... Baseline Credit Assessment, Affirmed a3

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Junior Senior Unsecured MTN, Affirmed (P)A2

.... Subordinate MTN, Affirmed (P)Baa1

.... Other Short Term, Affirmed (P)P-1

.... Pref. Stock Non-cumulative, Affirmed Baa3 (hyb)

.... Junior Senior Unsecured Regular Bond/Debenture, Affirmed A2, stable

.... Junior Senior Unsecured shelf, Affirmed (P)A2

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

.... Subordinate Regular Bond/Debenture, Affirmed Baa1

.... Junior Subordinate Regular Bond/Debenture, Affirmed Baa1 (hyb)

.... Long-term Deposit Rating, Affirmed Aa2, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Senior Unsecured shelf, Affirmed (P)Aa2

.... Pref. shelf Non-cumulative, Affirmed (P)Baa3

.... Subordinate shelf, Affirmed (P)Baa1

..Issuer: Canadian Imperial Holdings, Inc.

.... Backed Commercial Paper, Affirmed P-1

..Issuer: CIBC Capital Trust

....Pref. Stock, Affirmed Baa3 (hyb)

..Issuer: CIBC World Markets plc

.... Backed Long-term Deposit Rating, Affirmed Aa2, stable

.... Backed Short-term Deposit Rating, Affirmed P-1

..Issuer: Canadian Imperial Bank of Commerce, Australia

.... Senior Unsecured MTN, Affirmed (P)Aa2

.... Other Short Term, Affirmed (P)P-1

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa2, stable

.... Junior Senior Unsecured MTN, Affirmed (P)A2

..Issuer: Canadian Imperial Bank of Commerce, New York

.... Deposit Note/CD Program, Affirmed Aa2, stable

.... Counterparty Risk Assessment, Affirmed Aa2(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa2

.... ST Counterparty Risk Rating, Affirmed P-1

.... Deposit Rating, Affirmed P-1

..Issuer: National Bank of Canada

.... Adjusted Baseline Credit Assessment, Affirmed baa1

.... Baseline Credit Assessment, Affirmed baa1

.... Deposit Note/CD Program, Affirmed Aa3, stable

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa3(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa3

.... ST Counterparty Risk Rating, Affirmed P-1

.... Issuer Rating, Affirmed A3, stable

.... Senior Unsecured MTN, Affirmed (P)Aa3

.... Backed Senior Unsecured MTN, Affirmed (P)Aa3

.... Junior Senior Unsecured MTN, Affirmed (P)A3

.... Subordinate MTN, Affirmed (P)Baa2

.... Other Short Term, Affirmed (P)P-1

.... Pref. Stock Non-cumulative, Affirmed Ba1 (hyb)

.... Junior Senior Unsecured Regular Bond/Debenture, Affirmed A3, stable

.... Senior Unsecured Regular Bond/Debenture, Affirmed Aa3, stable

.... Backed Senior Unsecured Regular Bond/Debenture, Affirmed Aa3, stable

.... Subordinate Regular Bond/Debenture, Affirmed Baa2

.... Junior Subordinate Regular Bond/Debenture, Affirmed Baa2 (hyb)

.... Long-term Deposit Rating, Affirmed Aa3, stable

.... Short-term Deposit Rating, Affirmed P-1

.... Pref. shelf, Affirmed (P)Ba1

.... Pref. shelf Non-cumulative, Affirmed (P)Ba1

.... Senior Unsecured shelf, Affirmed (P)Aa3

.... Subordinate shelf, Affirmed (P)Baa2

..Issuer: NBC Asset Trust

....Pref. Stock Non-cumulative, Affirmed Ba1 (hyb)

..Issuer: National Bank of Canada (London)

.... Deposit Note/CD Program, Affirmed Aa3, stable

.... Counterparty Risk Assessment, Affirmed Aa3(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa3

.... ST Counterparty Risk Rating, Affirmed P-1

.... Senior Unsecured MTN, Affirmed (P)Aa3

.... Other Short Term, Affirmed (P)P-1

..Issuer: National Bank of Canada, New York Branch

.... Commercial Paper, Affirmed P-1

.... Counterparty Risk Assessment, Affirmed Aa3(cr)

.... Counterparty Risk Assessment, Affirmed P-1(cr)

.... LT Counterparty Risk Rating, Affirmed Aa3

.... ST Counterparty Risk Rating, Affirmed P-1

Outlook Action:

..Issuer: TD North America L.P.

....Outlook, Remains Stable

..Issuer: Toronto Dominion Bank (London)

....Outlook, Remains Stable

..Issuer: Toronto Dominion Global Finance

....Outlook, Changed To No Outlook From Stable

..Issuer: Toronto-Dominion Bank (The)

....Outlook, Remains Stable

..Issuer: Toronto-Dominion Bank, New York Branch

....Outlook, Remains Stable

..Issuer: RBC (Barbados) Trading Bank Corporation

....Outlook, Remains Stable

..Issuer: Royal Bank of Canada

....Outlook, Remains Stable

..Issuer: Royal Bank of Canada (London Branch)

....Outlook, Remains Stable

..Issuer: Royal Bank of Canada (New York)

....Outlook, Remains Stable

..Issuer: Royal Bank of Canada (Sydney Branch)

....Outlook, Remains Stable

..Issuer: Royal Trust Corporation of Canada

....Outlook, Remains Stable

..Issuer: Bank of Nova Scotia

....Outlook, Remains Stable

..Issuer: Bank of Nova Scotia Australia Branch

....Outlook, Remains Stable

..Issuer: Bank of Nova Scotia, Houston Branch

....Outlook, Remains Stable

..Issuer: Bank of Nova Scotia, New York Agency

....Outlook, Remains Stable

..Issuer: Montreal Trust Company of Canada

....Outlook, Remains Stable

..Issuer: Scotiabank Europe Plc

....Outlook, Changed To No Outlook From Stable

..Issuer: Bank of Montreal

....Outlook, Remains Stable

..Issuer: Bank of Montreal, Chicago Branch

....Outlook, Changed To No Outlook From Stable

..Issuer: National Bank of Canada

....Outlook, Remains Stable

..Issuer: National Bank of Canada (London)

....Outlook, Remains Stable

..Issuer: National Bank of Canada, New York Branch

....Outlook, Changed To No Outlook From Stable

..Issuer: Canadian Imperial Bank of Commerce

....Outlook, Remains Stable

..Issuer: Canadian Imperial Bank of Commerce, Australia

....Outlook, Remains Stable

..Issuer: Canadian Imperial Bank of Commerce, New York

....Outlook, Remains Stable

..Issuer: CIBC World Markets plc

....Outlook, Remains Stable

RATINGS RATIONALE

The rationale for the affirmation of the large Canadian banks' assessments and ratings is the continuation of their key credit strengths, including superior asset quality and strong stable earnings capacity, supported by a stable operating environment and a favorable industry structure. Canada has a concentrated banking system with high barriers to entry and the largest six banks accounted for 93% of market share in assets, as of 30 April 2019, affording them significant pricing power. Moody's expects the banks' credit quality to remain very strong over the next 12-18 months and even if these firms were to increase provisions for credit losses in stressed consumer loan portfolios, they generate sufficient capital organically to maintain current dividend payout levels (40% - 50%), while continuing to invest in organic growth and digitization. Moody's notes that the stabilizing effect that macro-prudential measures have had on housing prices in Canada's major urban areas is helping ease the pressure on household finances. Nevertheless, high private-sector debt levels could result in asset-quality deterioration in an economic downturn, a distinct possibility given global trade uncertainties.

We believe that the Canadian banks' long-term deposits and senior unsecured bank debt are likely to face extremely low loss given failure, due to loss absorption provided by more junior obligations and to the high volume of deposits in its liability structure. As such, their long term deposits and senior unsecured bank debts are rated three to four notches above their adjusted BCA, reflecting the benefits of subordination and a moderate likelihood of systematic support. Notwithstanding the recently legislated bank resolution regime, we would expect the government to support a D-SIB if necessary to maintain financial stability. The junior senior unsecured "bail-in" bank debt is rated one notch above the adjusted BCA reflecting a low loss given failure as a result of the expected thickness of this tranche of loss absorbing capital and also obligations subordinated to it. For subordinated bank debt and preference shares our advanced LGF analysis confirms a high loss-given-failure.

The outlook on the relevant ratings remains stable, reflecting our view that the underlying strength of the operating environment will help the banks weather tail risks over the next 12 to 18 months.

The banks' focus on deposit gathering is gradually reducing reliance on confidence-sensitive wholesale funding. High liquidity coverage is a strength of the system.

Toronto-Dominion Bank (The)

The affirmation of TD's baseline credit assessment is supported by its leading market shares in many P&C Canadian financial services products, where TD typically holds first or second positions and market shares in the high teens, generating very strong and stable profitability. TD maintains healthy asset quality characterized by very low non-performing assets and limited credit concentrations. We expect these credit strengths to persist over the next 12 to 18 months.

Royal Bank of Canada

The affirmation of RBC's baseline credit assessment is supported by the strength of its Canadian P&C operations which generate recurring earnings with low volatility, its robust risk governance infrastructure, as well as strong liquidity and solid capital metrics. We expect these credit strengths to persist over the next 12 to 18 months.

Bank of Nova Scotia

The affirmation of BNS's baseline credit assessment is supported by its portfolio of well managed and diversified businesses generating results with low earnings volatility, the recurring earnings power of BNS' strong domestic retail franchise as well as strong expense management, supporting good profitability levels. We expect these credit strengths to persist over the next 12 to 18 months.

Bank of Montreal

The affirmation of BMO's baseline credit assessment is supported by the recurring earnings power of its strong domestic commercial and retail franchise, the geographic diversification provided by its US regional presence, as well as strong liquidity and capital relative to Canadian peers. We expect these credit strengths to persist over the next 12 to 18 months.

Canadian Imperial Bank of Commerce

The affirmation of CIBC's baseline credit assessment is supported by solid mid-tier market shares in P&C Canadian financial services including direct retail banking, residential mortgages and wealth management, where CIBC typically holds in excess of 10% shares, which provide stable and predictable earnings, as well as good asset quality with a large proportion of secured and insured consumer mortgage exposures. We expect these credit strengths to persist over the next 12 to 18 months.

National Bank of Canada

The affirmation of NBC's baseline credit assessment is supported by its very defensible local market presence in Quebec where it maintains #2 market standing in retail banking and #1 market standing in commercial banking, providing stable and predictable earnings. In addition, NBC is building a niche wealth management business outside of Québec. We expect these credit strengths to persist over the next 12 to 18 months.

WHAT COULD CHANGE THE RATINGS UP/DOWN

Toronto-Dominion Bank (The)

The ratings could be upgraded if the bank reduced its exposure to unsecured Canadian consumer debt. The ratings could be downgraded if the bank significantly increased reliance upon capital markets earnings, or income contribution from US operations, where it does not enjoy the same franchise strength as in Canada, increased exposure to unsecured Canadian consumer debt or experienced risk management and governance failures that result in increased earnings volatility. The ratings could also be downgraded due to a reduction in Moody's assumptions regarding expected issuance of junior senior debt, resulting in lower protection for senior creditors.

Royal Bank of Canada

The ratings could be upgraded if the bank reduced its relatively high exposure to less well-secured Canadian consumer debt or significantly reduced its reliance upon capital markets earnings. The ratings could be downgraded if the bank experienced a significant increase in loan or trading losses, a significant change in business mix or increased capital allocation towards the Capital Markets business or material regulatory, compliance or risk management failures. The ratings could also be downgraded due to a reduction in our assumptions regarding expected issuance of junior senior debt, resulting in lower protection for senior creditors.

Bank of Nova Scotia

The ratings could be upgraded if the bank reduced its exposure to unsecured Canadian consumer debt. The ratings could be downgraded if the bank significantly increased exposure to credit card and auto finance portfolios, substantially increased its reliance on earnings from international operations or experienced unexpected profitability erosion or control problems in international operations. The ratings could also be downgraded due to a reduction in Moody's assumptions regarding expected issuance of junior senior debt, resulting in lower protection for senior creditors.

Bank of Montreal

The ratings could be upgraded if the bank significantly reduced its reliance upon capital markets earnings or reduced its exposure to non-mortgage Canadian consumer debt as percentage of total Canadian consumer loans. The ratings could be downgraded if the bank significantly increased its reliance upon capital markets operations as measured by revenue contribution in excess of 25%, increased market risk exposures as measured by Value-at-Risk (VaR), significantly increased income contribution from the US operations or increased exposure to non-mortgage Canadian consumer debt. The ratings could also be downgraded due to a reduction in Moody's assumptions regarding expected issuance of junior senior debt, resulting in lower protection for senior creditors.

Canadian Imperial Bank of Commerce

The ratings could be upgraded if the bank reduced its relatively high exposure to Canadian consumer debt or significantly reduced its reliance upon capital markets earnings. The ratings could be downgraded if the bank significantly increased its reliance upon capital markets earnings, increased exposure to less well-secured Canadian consumer debt or experienced risk management and governance failures that result in increased earnings volatility. The ratings could also be downgraded due to a reduction in Moody's assumptions regarding expected issuance of junior senior debt, resulting in lower protection for senior creditors.

National Bank of Canada

The ratings could be upgraded if the bank reduced its relatively high exposure to less well-secured Canadian consumer debt or significantly reduced its reliance upon capital markets earnings. The ratings could be downgraded if the bank significantly increased its reliance upon capital markets earnings, increased exposure to less well-secured Canadian consumer debt or experienced risk management and governance failures that result in increased earnings volatility. The ratings could also be downgraded due to a reduction in Moody's assumptions regarding expected issuance of junior senior debt, resulting in lower protection for senior creditors.

The principal methodology used in these ratings was Banks published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The ratings have been disclosed to the rated entities or their designated agents and issued with no amendment resulting from that disclosure.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

The person who approved Royal Bank of Canada, Royal Bank of Canada (London Branch), Royal Bank of Canada (New York), Royal Bank of Canada (Sydney Branch), RBC (Barbados) Trading Bank Corporation, RBC Capital Trust and Royal Trust Corporation of Canada credit ratings is Ana Arsov, MD - Financial Institutions, Financial Institutions Group, (212) 553 0376, (212) 553 1653. The person who approved Bank of Montreal, Bank of Montreal, Chicago Branch, Bank of Nova Scotia, Bank of Nova Scotia Australia Branch, Bank of Nova Scotia Houston Branch, Bank of Nova Scotia New York Agency, Canadian Imperial Bank of Commerce, Canadian Imperial Bank of Commerce, New York, Canadian Imperial Holdings, Inc., CIBC Capital Trust, CIBC World Markets plc, Canadian Imperial Bank of Commerce, Australia, Montreal Trust Company of Canada, National Bank of Canada, National Bank of Canada (London), National Bank of Canada, New York Branch, NBC Asset Trust, Scotiabank Capital Trust, Scotiabank Europe Plc, Toronto Dominion Bank (London), Toronto-Dominion Bank (The), TD Capital Trust IV, TD North America L.P., Toronto Dominion Global Finance, Toronto-Dominion Bank, New York Branch and Toronto Dominion Holdings (U.S.A.), Inc. credit ratings is M. Celina Vansetti-Hutchins, MD - Banking, Financial Institutions Group, (212) 553 0376, (212) 553 1653.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

David Beattie
Senior Vice President
Financial Institutions Group
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

M. Celina Vansetti-Hutchins
MD - Banking
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Canada Inc.
70 York Street
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
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