The global economic downturn that started in 2007 affected most sectors in the Canadian economy, particularly the financial sector, including the banking industry. For example, the common shares of Toronto Dominion Bank decreased from \(\$ 68.12\) per share on January 2, 2008, to \(\$ 32.80\) per share on February 23, 2009, before they started climbing up in March 2009 onward. Because banks lend money to individuals and companies, one would expect the banks to experience some difficulty in collecting money from their customers during an economic downturn.

Using your Web browser, contact the websites and consult the annual reports of three of the following banks: Bank of Montreal, Scotiabank, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, and TD Canada Trust for fiscal year 2009.

Required:

1. What is the amount of the "provision for credit losses" that each bank reported on its income statement for both years 2008 and \(2009 ?\)

2. Compute the following percentage: Provision for credit losses/Net interest income, for both years 2008 and 2009. Did the ratio increase from 2008 to 2009 for each of these banks? If so, what could have caused the increase? Explain.

3. What is the amount of the "allowance for loan losses" that each bank reported on its statement of financial position (balance sheet) at the end of its 2009 fiscal year?

4. Compute the following ratio: Allowance for loan losses/Total loans receivable, for both years 2008 and 2009, and comment on the changes in the ratio from 2008 to 2009.