Wholesale Banking - Positioned for Growth

Additional Tier 1 Capital ▪ Credit hierarchy is codified as a principle in regulatory and legislative documents in Canada ■ If a deposit-taking bank reaches the point of non-viability, OSFI's capital guidelines require Additional Tier 1 and Tier 2 capital instruments to be converted into common shares in a manner that respects the hierarchy of claims in liquidation ■ Such a conversion ensures that Additional Tier 1 and Tier 2 holders are entitled to a more favorable economic outcome than existing common shareholders Recently, OSFI issued the following statement illustrating regulatory intent of the resolution regime in Canada: If a deposit-taking bank reaches the point of non-viability, OSFI's capital guidelines require Additional Tier 1 and Tier 2 capital instruments to be converted into common shares in a manner that respects the hierarchy of claims in liquidation. This results in significant dilution to existing common shareholders. Such a conversion ensures that Additional Tier 1 and Tier 2 holders are entitled to a more favorable economic outcome than existing common shareholders who would be the first to suffer losses¹. AT1 Loss absorption jurisdictional comparison² Jurisdiction Canada Switzerland EU UK US Regulator OSFI FINMA SRB Loss NVCC Trigger Event CET1 Trigger Event & Non- Viability Event CET1 Trigger Event Bank of England CET1 Trigger Event FDIC absorption trigger CET1 trigger Point of non- viability trigger Discretionary Cancellation of Interest Loss absorption mechanism Contractual at PONV, at regulator's discretion Statutory bail in regulations provide that NVCC instruments should be converted ahead of or at the same time as bail in liabilities Yes For LRCN, full discretion to trigger delivery of preferred shares in lieu of interest payments Conversion 7% high trigger 5.125% low trigger Contractual at PONV, at regulator's discretion Statutory regulations provide for write down / conversion, before or together with resolution power Yes (+ dividend stopper) Conversion or permanent write-down 5.125% / 7% differs by jurisdiction Statutory at PONV, before or together with resolution power Yes 7% Statutory at PONV, before or together with resolution power Conversion or temporary write- down Conversion TD Australia APRA CET1 & Non Viability Trigger Event 5.125% Statutory, at Contractual at regulator's discretion PONV, at regulator's discretion Yes Yes Yes (+ dividend stopper) (+ dividend stopper) Permanent write- down Conversion 51

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