Annual Report 2003 Close Report
Financial Highlights
To Our Shareholders
Management's Discussion and Analysis
Financial Results
More About Us
The Future Matters
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Managements Discussion & Analysis

How We Performed
Off-balance Sheet Arrangements
Critical Accounting Policies
Controls and Procedures
How Our Businesses Performed

Personal and Commercial Banking
Wholesale Banking
Wealth Management
Corporate Management

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Personal and Commercial Banking

Economic outlook

A strengthening in the Canadian economy should be supportive to personal and commercial banking activities in 2004. Economic growth is expected to accelerate to around 3% next year from below 2% in 2003. This performance for the economy should bring gains in personal income and corporate profits, which should generate increased day-to-day banking activity. Rising economic activity may also increase demand for loans. However, an improvement in investor confidence may cause non-term deposits to decline, as individuals and firms redeploy some of the large cash holdings they have accumulated over the past few years into other investments.

Although some moderation is expected in housing markets, the level of activity should remain strong, which is good news for real estate secured lending and home-related insurance. Auto sales are also expected to remain firm, implying healthy demand for auto-related insurance. Lastly, small business banking is likely to benefit from the fact that small businesses tend to outperform larger businesses during the early stages of a rebound in economic growth. See page 32 for discussion of factors that may affect future results.