Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Debt Investor Presentation (2022)
66 slides from Canadian Imperial Bank Of Commerce's debt investor presentation, 2022
Slide 1: CIBC Fixed Income Investor Presentation Q3-2022
CIBC Fixed Income Investor Presentation Q3-2022 1
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation (the "Presentation") of general background information about Canadian Imperial Bank of Commerce ("CIBC") and its covered bond programme (the "Programme") as of the date of this document. It is information in summary form and does not purport to
Slide 3: Disclaimer (continued)
Disclaimer (continued) The Securities and the Covered Bond Guarantee (as described herein) have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons (as defined in Regulation S) except
Slide 4: Disclaimer (continued)
Disclaimer (continued) The Guarantor is not a bank nor an authorised deposit taking institution authorised to carry on banking business under the Australian Banking Act and it is not supervised by the Australian Prudential Regulation Authority. The Guarantor is not registered as a foreign company or
Slide 5: Forward-Looking Statements
Forward-Looking Statements A NOTE ABOUT FORWARD-LOOKING STATEMENTS: From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including in this Investor Presentation, in other filings with Canadian securities regulators or the SEC and in oth
Slide 6: Table of Contents
Table of Contents 1 Debt Programmes Summary 7 2 Canadian Economy & Consumer Profile 8 3 Canadian Imperial Bank of Commerce (“CIBC”) Overview 13 4 Canadian Mortgage Market 30 5 Legislative Covered Bond Programme, Collateral Pool 34 6 Contacts 39 7 Appendix 40 6
Slide 7: Debt Programmes Summary
Debt Programmes Summary Outperformed most G7 economies as measured by long term GDP growth rate during 2000-20201 • Strong diversified stable economy Canada • Aaa/AAA/AA+/AAA (Moody’s/S&P/Fitch/DBRS) • The World Economic Forum ranked Canada’s soundness of banks first in the world from 2008 to 2016,
Slide 8: Canadian Economy & Consumer Profile
Canadian Economy & Consumer Profile CIBC Investor Presentation 8
Slide 9: Canada: Key Facts
Canada Canada: Key Facts • GDP broken down by province/territory continues to demonstrate that Canada’s Population2 38.7 MM economy is well diversified GDP (market prices)3 CAD 2,812 BN GDP per capita3 CAD 72,758 Canada’s GDP by Province / Territory1 (%) Labour Force4 20.6 MM Provinces/Territories 1
Slide 10: Canadian Economy Selected Indicators
Canadian Economy Selected Indicators Unemployment Rate • Canada’s unemployment rate less volatile in the past decade, and not directly comparable to the United States unemployment rate1 • As measured by GDP indexed to 2007, the Canadian economy has outperformed most other major economies since the f
Slide 11: Canada GDP and Exports
Canada GDP and Exports • Well diversified economy, with several key industries including finance, manufacturing, services and real estate • Following the 2007-2008 global recession, the diversity had been a stabilizing factor and led to strong economic performance relative to other industrialized na
Slide 12: Canada’s Economic Outlook Post COVID
Canada’s Economic Outlook Post COVID Real GDP Trend 2 • Real GDP unchanged in May after a slight increase of 0.3% in April 2022; expected to grow by 3.8% in 2022 and 2.6% in 2023 Forecast • Residential construction has remained over 11% above pre-pandemic levels • Activity in several client-facing i
Slide 13: CIBC Overview
CIBC Overview CIBC Investor Presentation 13
Slide 14: A leading Canadian financial institution
A leading Canadian financial institution1 1867 13MM 50K $5.1B 15.3% 45.5% 11.8% FOUNDED CLIENTS2 NET-INCOME4 ROE4,5 TSR6 CET1 RATIO7 EMPLOYEES2,3 (YTD) (YTD) (3-YR) (as at Q3/22) DIVERSIFIED EARNINGS MIX STRONG CREDIT RATINGS Net Income by Strategic Business Unit2,8 Net Income Contribution by Region
Slide 15: Consistent execution of our strategy delivering for our clients and driving growth
Consistent execution of our strategy delivering for our clients and driving growth Focusing on high-growth, Elevating the client experience Investing in future differentiators high-touch client segments in an increasingly digital world within faster growing markets • CIBC GoalPlanner, our comprehens
Slide 16: Sustainable Returns to Shareholders
Sustainable Returns to Shareholders • CIBC has a strong track record of shareholder returns • CIBC has not missed a regular dividend or reduced its dividend since the first dividend payment in 18681 • Flat dividends from Q2-2020 to Q4-2021 due to temporary OSFI policy2 Note: Dividend of CAD 0.83 per
Slide 17: High-Quality, Client-Driven Balance Sheet
High-Quality, Client-Driven Balance Sheet (Based on Q3-2022 Results) Assets Liabilities & Equity $896B Cash & Repos Unsecured 123% Funding 27% 33% Coverage Wholesale-sourced Funding Liquid Assets (Liquid Assets / Trading & Wholesale Funding) Secured Funding3 Investment Securities Personal Deposits R
Slide 18: Solid returns underpinned by a commitment to balance sheet strength
Solid returns underpinned by a commitment to balance sheet strength… Basel III CET1 Ratio1 (%) Basel III Total Capital Ratio1 (%) 12.1 12.4 16.1 16.2 11.4 11.6 11.8 14.9 15.0 15.3 2018 2019 2020 2021 Q3/22 2018 2019 2020 2021 Q3/22 Basel III Leverage Ratio1 (%) Liquidity Coverage Ratio (LCR)1 (%) 4.
Slide 19: …and prudent risk management
…and prudent risk management1 Allowance for Credit Losses/Gross Loans2 (%) 0.89 0.64 0.58 0.51 0.45 2018 2019 2020 2021 Q3/22 Loan Loss Ratio3 (bps) 61 Impaired Total 33 29 26 26 23 16 19 12 4 2018 2019 2020 2021 Q3/22 1. All results are on a Reported basis and in Canadian dollars unless otherwise i
Slide 20: Well-positioned for rising interest rates
Well-positioned for rising interest rates Net Interest Income Sensitivity SBU Composition of Structural Deposit Mix3 to a +/- 100 bps change ($MM)1 Interest Rate Sensitivity1,2 Year 1 +100 bps Personal & Business Banking Cdn. Commercial & Wealth Interest-Bearing Deposits – Indeterminate - 100 bps U.
Slide 21: Resilient balance sheet supports organic business growth
Resilient balance sheet supports organic business growth $B Q3/21 Q2/22 Q3/22 Average Loans and Acceptances 440.0 492.6 510.0 • CET1 ratio of 11.8%, up 4 bps sequentially, reflecting: Average Deposits 599.3 664.2 673.6 • Capital generation from earnings net of dividends, offset partially by CET1 cap
Slide 22: Provision for credit losses up YoY and QoQ on an adjusted basis
Provision for credit losses up YoY and QoQ on an adjusted basis Adjusted Provision for Credit Losses up YoY and QoQ ($MM) Q3/21 Q2/22 Items of Q2/22 Q3/22 Reported Reported Note1 Adjusted2 Reported • Impaired provisions down in Q3/22 due to lower provisions net of reversals across all strategic busi
Slide 23: Credit Quality — Canadian Consumer
Credit Quality — Canadian Consumer Reported Net Write-Offs Q3/21 Q2/22 Q3/22 Net Write-off Ratio1 Canadian Residential Mortgages 0.01% 0.01% 0.01% Canadian Credit Cards 2.40% 2.16% 2.02% Personal Lending 0.49% 0.40% 0.52% Total 0.16% 0.15% 0.17% 90+ Days Delinquency Rates1 Q3/21 Q2/22 Q3/22 Canadian
Slide 24: Allowance coverage ratio down YoY and stable QoQ
Allowance coverage ratio down YoY and stable QoQ Reported Q3/21 Q2/22 Q3/22 Allowance coverage ratio down YoY and stable QoQ Canadian Credit Cards 5.0% 4.9% 4.9% • Allowance dollar increased QoQ due to higher performing allowance, partially offset by lower impaired allowance Canadian Residential Mor
Slide 25: Lending portfolio is well positioned
Lending portfolio is well positioned Overall Loan Mix (Loans/Acceptances Outstanding) • Nearly two-thirds of our portfolio is consumer lending, composed mainly of mortgages with uninsured having an average loan-to-value of 45% Cards 3% • The total variable rate mortgage portfolio with fixed payments
Slide 26: Diversification is Key to a Stable Wholesale Funding Profile
Diversification is Key to a Stable Wholesale Funding Profile Wholesale Funding Diversification • Well diversified across products, currencies, investor segments and geographic regions • Achieve appropriate balance between cost and stability of funding • Regular issuance to promote investor engagemen
Slide 27: CIBC Funding Strategy and Sources
CIBC Funding Strategy and Sources Funding Strategy • CIBC’s funding strategy includes access to funding through retail deposits and wholesale funding and deposits • CIBC updates its three-year funding plan on at least a quarterly basis • The wholesale funding strategy is to develop and maintain a su
Slide 28: Wholesale Funding Geography
Wholesale Funding Geography Wholesale Funding By Currency1 CAD 49.4 BN EUR 12.5 BN, CHF 3.2 BN, GBP 8.4 BN, NOK: 1.9 BN Canada Mortgage Bonds Covered Bonds JPY 65.0 BN Credit Cards Securitization Medium Term Notes Medium Term Notes Medium Term Notes Certificates of Deposit Canadian D
Slide 29: CIBC Funding Composition
CIBC Funding Composition Funding Sources – July 20224 Funding Sources BN Personal deposits 228.9 Business, Bank and Government deposits 261.9 Unsecured funding1 139.8 Securities sold short or repurchase agreements 87.2 Others (Includes derivatives) 76.0 Capital2 55.2 Securitization & Covered Bonds 4
Slide 30: Canadian Mortgage Market
Canadian Mortgage Market Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Investor Presentation 30
Slide 31: Mortgage Market Performance and Urbanization Rates
Mortgage Market Performance and Urbanization Rates Mortgage Arrears by Number of Mortgages Canadian mortgages consistently outperform U.S. and U.K. mortgages • Low defaults and arrears reflect the strong Canadian credit culture • Mortgage interest is generally not tax deductible, resulting in an inc
Slide 32: Canadian House Prices
Canadian House Prices Household Debt to Income Ratio4 • Absolute price level is moderate compared to major global urban centers • Canadian debt to income ratio in line with many developed nations • Growth rates of house prices in Canada have diverged across regions Average Home Price YoY % Region CA
Slide 33: CIBC’s Mortgage Portfolio
CIBC’s Mortgage Portfolio CIBC Canadian Residential Mortgages: CAD 259.6 BN Condo Exposure: CAD 45.4 BN • 21% of CIBC’s Canadian residential mortgage portfolio is insured, with 62% of insurance being provided by CMHC • The average loan to value1 of the uninsured portfolio is 45% • The condo develope
Slide 34: Legislative Covered Bond Programme, Collateral Pool
Legislative Covered Bond Programme, Collateral Pool Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Investor Presentation 34
Slide 35: Legislative Programme Summary
Legislative Programme Summary Programme Size CAD 60,000,000,000 Ratings Aaa / AAA by Moody’s / Fitch Asset Percentage Currently at 93.0% Currency Most Convertible Currencies Guarantor CIBC Covered Bond (Legislative) Guarantor Limited Partnership Listing Luxembourg Law Canadian Legislative Framework
Slide 36: Covered Bond Structure
Covered Bond Structure CIBC Interest Rate Swap Provider Consideration CIBC CIBC Loans and Covered Bond Seller (Legislative) Related Security Guarantor LP Guarantor CIBC Covered Bond Swap Repayment of Provider Intercompany Loan Intercompany Loan Computershare CIBC Trust Company of Canada Issuer / Ban
Slide 37: Cover Pool
Cover Pool Summary Statistics (August 31, 2022)1 Current Collateral Pool Canadian uninsured residential mortgages Asset Percentage Requirement 93.00% Current Balance CAD 48,919,397,070 Outstanding Covered Bonds CAD Eq. 31,957,566,500 Number of Loans 161,540 Average Balance CAD 302,831 Weighted Ave O
Slide 38: Cover Pool (August 2022)
Cover Pool (August 2022) Remaining Term Geographic Distribution Current Indexed Loan to Value Property Type 38
Slide 39: Contacts
Contacts PETER LEVITT WOJTEK NIEBRZYDOWSKI EXECUTIVE VICE PRESIDENT VICE PRESIDENT TREASURY AND TAXATION GLOBAL TERM FUNDING, TREASURY Email: Peter.Levitt@cibc.com Email: Wojtek.Niebrzydowski@cibc.ca Phone: +1 (416) 594-8487 Phone: +1 (416) 956-6748 Bloomberg: Niebrzydowsk@bloomberg.net 39
Slide 40: Appendix
Appendix CIBC Investor Presentation 40
Slide 41: Appendix
Appendix 1 S&P Global Ratings Upgrade 42 2 ESG & Sustainability 43 3 Canadian Mortgage Market 46 4 CIBC Canadian Real Estate 49 5 Selected Credit Exposures 51 6 Canadian Bail-in and Regulatory Regime Update 52 7 Covered Bond Triggers 59 8 Selected Covered Bond and Senior Issuances 63 9 Notes 66 41
Slide 42: S&P Global Ratings Upgrade
S&P Global Ratings Upgrade On Feb. 22, 2022, S&P Global Ratings affirmed its 'A+/A-1' long- and short-term issuer credit ratings on Canadian Imperial Bank of Commerce (CIBC). At the same time, S&P Global Ratings raised its ratings on CIBC's bail-inable senior debt, and its non-viability contingent c
Slide 43: An ESG strategy focused on creating positive change
An ESG strategy focused on creating positive change Ambitions in Action We’re activating our resources to create positive change for our team, our clients, our communities and our planet, contributing to a more secure, equitable and sustainable future where everyone’s ambitions are made real. We are
Slide 44: …and intertwined with our Purpose
…and intertwined with our Purpose Activating our resources to create positive change and contribute to a more secure, equitable and sustainable future1 CIBC Run for the Cure ~$270MM ~$480MM $155MM raised since 1984 raised since 1992 funding goal net-zero $300B 3 ambition by 2050 ‘ member of the bloc
Slide 45: External recognition for our commitment to sustainability
External recognition1 for our commitment to sustainability 2021 Climate Change Score = A- 2022 ESG Rating = AA 2022 ESG Risk Rating = 17.7 (low risk) Up from B in 2019 Industry Adjusted Score = 8.4 or 16th percentile among banks Up from 7.5 in 2020 Improved from 17.9 in 2021 Ranked among top-tier of
Slide 46: Canadian Mortgage Market
Canadian Mortgage Market Beneficial Mortgage Regulation in Canada • Under the Bank Act, banks can only advance uninsured mortgages up to an LTV ratio of 80% • Borrowers have to purchase default insurance if the mortgage has an LTV > 80% Default • Insurance covers the entire outstanding principal amo
Slide 47: Canadian Mortgage Market Regulatory Developments
Canadian Mortgage Market Regulatory Developments • Second home mortgage • Max. amortization insurance no longer • Standardizing eligibility reduced to 35 yrs. from • Reduce max. criteria for high-and low- available 40 amortization to 30 • Min. down payment for ratio insured mortgages, • Tightened in
Slide 48: Canadian Mortgage Market Regulatory Developments (continued)
Canadian Mortgage Market Regulatory Developments (continued) • Ontario Government • Temporary expansion of portfolio introduced Non- insurance eligibility criteria to allow • Minimum qualifying rate Resident the following for loans funded before (MQR) of greater of 5.25% speculation Tax March 20th,
Slide 49: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending • Mortgage growth has been driven by clients that have deep and balanced relationships with CIBC • 88% of mortgages are owner-occupied. Investor mortgages performance is strong and compares favourably with owner-occupied mortgages • The Greater Vancouver
Slide 50: Canadian Uninsured Residential Mortgages — Q3/22 Originations
Canadian Uninsured Residential Mortgages — Q3/22 Originations1 FICO score Distribution • Originations of $17B in Q3/22 • Average LTV2 in Canada: 65% • GVA3: 61% • GTA3: 64% 3 3 Loan-to-Value (LTV)2 Distribution 3 3 1 Originations include refinancing of existing mortgages but not renewals. 2 LTV rati
Slide 51: Commercial Real Estate exposure is well diversified
Commercial Real Estate exposure is well diversified Canadian Commercial Real Estate Exposure by Sector1 U.S. Commercial Real Estate Exposure by Sector2 Office Residential 10% Industrial Office 21% 17% 23% Industrial 11% Seniors Housing Retail Residential 2% 5% 7% $38.8B Other 4% US$18.0B Healthcare
Slide 52: Canadian Bail-in Regime Update
Canadian Bail-in Regime Update On April 18, 2018, Department of Finance published the bail-in regulations, and OSFI finalized the guidelines on Total Loss Absorbing Capacity (TLAC) and TLAC holdings. Department of Finance’s bank recapitalization (bail-in) conversion regulations • Provide statutory p
Slide 53: Canadian Bail-in Regime – Comparison to Other Jurisdictions
Canadian Bail-in Regime – Comparison to Other Jurisdictions Bail-in implementation in other jurisdictions has increased the riskiness of bail-inable bonds vs. non-bail-inable bonds: • Legislative changes prohibit bail-outs, increasing the probability that bail-in will be relied on • The hierarchy of
Slide 54: How Bail-In Is Expected To Work
How Bail-In Is Expected To Work When OSFI deems a bank has ceased to or may be about to cease to continue to be viable, it may trigger temporary takeover of the bank and carry out the bail-in conversion of NVCC capital and bail-in debt to common equity. There are no write-down provisions in the fr
Slide 55: Loss Absorption Waterfall
Liquidation to Resolution Comparison Liquidation Scenario Liquidation Resolution Bail-in debt ranks pari passu with all other senior Securitizations, Covered Bonds Securitizations, Covered Bonds unsecured liabilities. Legacy Senior Debt Structured Notes Legacy Senior Debt Derivatives Structured Note
Slide 56: Loss absorption waterfall
Comparison of Canadian and European Hierarchies in Bail-in Resolution Layers of bail-inable senior debt instruments European norm Canada Bank Recapitalization (Bail-in) Regulations Loss absorption waterfall Common Equity Tier 1 Common Equity Tier 1 Loss absorption waterfall Preferred Shares/ AT1 (PO
Slide 57: OSFI Non Viability Criteria
Office of the Superintendent of Financial Institutions (OSFI) Non Viability Criteria In assessing whether an institution has ceased, or is about to cease, to be viable, the following criteria can be considered, which may be mutually exclusive and should not be viewed as an exhaustive list1 Whether t
Slide 58: Domestic Stability Buffer
Domestic Stability Buffer Background • Canadian Domestic Systemically Important Banks (D-SIBs) are required to hold Pillar 2 capital buffer that is privately communicated to each bank, to address risks that are inadequately captured by the Pillar 1 minimum capital requirements • D-SIBs are subject t
Slide 59: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Servicer downgraded below Baa2/F2 by • Servicer, Guarantor and Bond Trustee agree to use Moody’s/Fitch commercially reasonable efforts to arrange for the • Servicer defaults on amounts due to Guarantor appointment of a successor Servi
Slide 60: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Issuer fails to pay any principal or interest in • Delivery of Issuer Acceleration Notice respect of the Covered Bonds within 10 business • Bond Trustee will serve a Notice to Pay on the days in the case of principal and 30 days in th
Slide 61: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Servicer Event of Default, not remedied within 30 • Notice of loans’ sale given by Issuer to Borrowers days • Borrowers notified to make payments to the • Issuer Event of Default (other than insolvency), Standby Account Bank for the a
Slide 62: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences Cash Manager required to direct the Servicer to deposit all Revenue Cash Management Cash Manager’s ratings fall below P-1/F1 or A by Receipts and Principal Receipts directly into the GDA Account within Deposit Ratings Moody’s/Fitch two
Slide 63: Outstanding Covered Issuances
Outstanding Covered Issuances Series Currency Issued Issue Date1 Maturity Date2 Coupon Rate Issue Spread1 CBL9 CHF 350,000,000 22-Dec-15 22-Dec-25 0.125% MS + 0% CBL19 EUR 1,250,000,000 24-Jan-18 24-Jan-23 0.25% MS - 0.05% CBL20 CHF 250,000,000 30-Apr-18 30-Apr-25 0.10% MS - 0.08% CBL22 EUR 1,000,00
Slide 64: Selected Outstanding TLAC Senior
Selected Outstanding TLAC Senior1 ISIN Programme Currency Issued Issue Date Maturity Date Coupon Rate Issue Spread CA1360695D97 CAD 1,250,000,000 15-Jan-19 15-Jan-24 3.290% GoC+1.40% CH0419040826 EMTN CHF 100,000,000 30-Jan-19 30-Jan-25 0.600% MS + 0.70% US13607GAP90 SEC USD 1,000,000,000 02-Apr-19
Slide 65: Selected Outstanding TLAC Senior (continued)
Selected Outstanding TLAC Senior1 (continued) ISIN Programme Currency Issued Issue Date Maturity Date Coupon Rate Issue Spread US13607HVC32 SEC USD 1,250,000,000 22-Jun-21 22-Jun-23 0.450% T + 0.30% US13607HVE97 SEC USD 750,000,000 22-Jun-21 22-Jun-23 1.250% T + 0.50% US13607HVD15 SEC USD 500,000,00
Slide 66: Notes on slide 44
Notes on slide 44 Slide 44 – …and intertwined with our Purpose 1. Please see risk factors under Forward-Looking Statements on Slide 1. In addition, as we work to advance our ESG goals, external factors outside of CIBC’s reasonable control may act as constraints on achieving these goals, including bu
Canadian Imperial Bank of Commerce — Debt Investor Presentation (2022) on 6ix