Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q4 2008 Earnings Presentation
30 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Dec 4, 2008
Slide 1: Fourth Quarter 2008 Investor Presentation
Fourth Quarter, 2008 Investor Presentation CIBC Investor Presentation December 4, 2008 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 presentation, in other filings with Canadian securi
Slide 2: CIBC Overview
Fourth Quarter, 2008 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Fourth Quarter, 2008 Financial Review David Williamson Senior Executive Vice-President and Chief Financial Officer 2
Slide 3: Q4 Summary
Fourth Quarter, 2008 Investor Presentation Q4 Summary $ Per Share EPS(1): $1.06 Includes(3) – Favourable Tax-related Items 1.21 Cash EPS(2): $1.09 – Loss on Structured Credit Run-off Activities (0.84) – Other Mark-to-Market Gains/(Losses), Tier 1 Capital Valuation Adjustments, and Ratio: 10.5% Write
Slide 4: Structured Credit Run-off
Fourth Quarter, 2008 Investor Presentation Structured Credit Run-off Q4/08 Pre-Tax After-Tax EPS Effect Effect ($MM) Effect ($MM) ($/share) Credit Valuation Adjustments with Financial Guarantors (1,269) (854) (2.24) Gain on Reduction of Unfunded Commitment on a VFN 895 603 1.58 Unhedged non-USRMM Wr
Slide 5: Non-USRMM Purchased Protection from Financial Guarantors
Fourth Quarter, 2008 Investor Presentation Non-USRMM (1) – Purchased Protection from Financial Guarantors (U.S.$MM) Corporate Total Fair (2) S&P Moody's Fitch CLO Debt CMBS Other Notional Value (3)(4) (5) #I AA A2 - $ 623 $ - $ 777 $ 264 $ 1,664 $ 437 (6) (3)(4) (5) # II AA Aa3 - 946 - - 833 1,779 3
Slide 6: Retail Markets
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q4 Q1 Q2 Q3 Q4 Retail Banking Personal & Small vs. Q4/07: Business Banking 546 544 540 563 582 + volumes up Imperial Service 242 244 239 250 244 Mortgages & – spreads down Personal Lending 321 319 302
Slide 7: Retail Markets
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q4 Q1 Q2 Q3 Q4 Wealth Management (1) (1) (1) Retail Banking 1,918 1,530 1,496 1,565 1,509 vs. Q4/07: Retail Brokerage 282 276 264 275 254 – new issues down Asset Mgmt 123 120 116 117 109 – trading com
Slide 8: Retail Markets
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Quarterly Statement of Operations F ‘07 F ‘08 ($MM) Q4 Q1 Q2 Q3 Q4 Net Income (1) (1) (1) (1) Revenue 2,794 2,371 2,239 2,355 2,288 vs. Q4/07: Provision for + volumes up Credit Losses 150 155 174 196 232 + expenses down Non-Interest Expe
Slide 9: World Markets
Fourth Quarter, 2008 Investor Presentation CIBC World Markets Revenue Components F ‘07 F ‘08 ($MM) Q4 Q1 Q2 Q3 Q4 Capital Markets (1) (1) (1) (1) (1) Capital Markets (249) (3,169) (2,253) (689) (495) vs. Q3: Investment + loss on Structured Credit Banking & Run-off activities down (1) (1) (1) (1) (1)
Slide 10: World Markets
Fourth Quarter, 2008 Investor Presentation CIBC World Markets Revenue Components F ‘07 F ‘08 ($MM) Q4 Q1 Q2 Q3 Q4 Merchant Banking (1) (1) (1) (1) (1) Capital Markets (249) (3,169) (2,253) (689) (495) vs. Q3: Investment – higher losses & Banking & write-downs (1) (1) (1) (1) (1) Credit Products 240
Slide 11: World Markets
Fourth Quarter, 2008 Investor Presentation CIBC World Markets Net Income/(Loss) ($MM) vs. Q3 456 (2) + Enron related increased (2) 190 tax benefit 113 (2) (2) 35 (2) 58 + loss on Structured Credit Run-off activities down 133 (1) (1) (112) + M&A fees up + loan losses down (1) (538) + higher mark-to-m
Slide 12: Non-GAAP Financial Measures
Fourth Quarter, 2008 Investor Presentation Non–GAAP Financial Measures Cash Earnings/(Loss) Per Share, Taxable Equivalent Basis, Segmented ROE, Cash Efficiency Ratio & Economic Capital For further details, see Non-GAAP measures within the Notes to users section on page i of the Q4/08 Supplementary F
Slide 13: Revenue
Fourth Quarter, 2008 Investor Presentation CIBC Revenue F ‘07 F ‘08 ($MM) Q4 Q3 Q4 vs. Q3 (1) (1) Net Interest Income 1,240 1,327 1,377 • Retail product Fees for Services volumes up Underwriting and Advisory 190 68 79 Deposit and Payment 200 197 193 Credit 59 58 63 Cards 72 81 81 Investment Mgmt and
Slide 14: Expenses
Fourth Quarter, 2008 Investor Presentation CIBC Expenses F ‘07 F ‘08 ($MM) Q4 Q3 Q4 vs. Q3 Employee Comp. and (1) (1) (1) Benefits 1,006 942 1,048 • Higher severance expenses Occupancy Costs 148 148 175 Computer and Office (1) Equip. 283 270 298 Communications 81 67 71 Advertising and Bus. Developme
Slide 15: Common Share Dividends
Fourth Quarter, 2008 Investor Presentation Common Share Dividends ($ per share) 0.87 0.87 0.87 0.87 0.87 Q4 Q1 Q2 Q3 Q4 F ‘07 F ‘08 29 CIBC Retail Markets ROE & Cash Efficiency (NIX) Ratio(1) (%) 76 ROE 54 46 42 42 61 59 57 58 NIX 50 (2) (2) (2) (2) Q4 Q1 Q2 Q3 Q4 F ‘07 F ‘08 (1) Non-GAAP financial
Slide 16: Mutual Funds/Managed Accounts AUM & Market Share
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Mutual Funds/Managed Accounts AUM & Market Share(1) MF/Managed Accts AUM Canadian Market Share 70 11 61.8 61.9 61.5 61.7 60 56.8 Market Share (%) 50 $ Billions 9 40 8.4 8.5 8.6 8.5 8.6 30 7 20 10 0 5 Q4 Q1 Q2 Q3 Q4 F ‘07 F ‘08 (1) Source
Slide 17: Loan Balances and Market Share
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Loan Balances(1) ($B; spot) 27.9 26.9 Personal 26.0 Loans 24.8 25.1 Small Bus. Loans 7.4 7.4 7.3 7.1 7.2 Q4 Q1 Q2 Q3 Q4 F ‘07 F ‘08 (1) Excludes Retail Brokerage and FirstCaribbean. 33 CIBC Retail Markets Market Share(1)(2) (%) Residenti
Slide 18: Market Share
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Market Share(1)(2) (cont’d) (%) Cards, 17.8 17.9 17.8 17.6 17.5 outstandings Cards, 23.6 23.2 22.9 23.3 23.4 purchase volumes Q4 Q1 Q2 Q3 Q4 F ‘07 F ‘08 (1) Source: CBA; excludes AMEX and proprietary cards. (2) Two month time lag. 35 CIB
Slide 19: Imperial Service and Discount Brokerage
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Imperial Service Funds Managed Funds Managed/Financial Adviser 100 100 85.1 86.6 87.7 87.3 84.3 80 80 $ Millions $ Billions 78.0 79.5 79.0 78.5 76.1 60 60 40 40 20 20 0 0 Q4 Q1 Q2 Q3 Q4 F ‘07 F ‘08 37 CIBC Retail Markets Discount Brokera
Slide 20: Wood Gundy and World Markets Market Share
Fourth Quarter, 2008 Investor Presentation CIBC Retail Markets Wood Gundy(1) AUA AUA per Investment Adviser 140 120 118.6 120 110.3 113.1 109.2 100 92.1 $ Millions 100 $ Billions 91.5 89.5 80 85.6 87.6 80 75.5 60 60 40 40 20 20 0 0 Q4 Q1 Q2 Q3 Q4 F ‘07 F ‘08 AUA excludes client cash and short positi
Slide 21: Behind the Reported NIMs
Fourth Quarter, 2008 Investor Presentation Behind the Reported NIMs F ‘07 F ‘08 Q4 Q3 Q4 Reported NIM 1.45% 1.54% 1.60% (1) Reported NIM (TEB) 1.58% 1.59% 1.63% NIM (TEB) (1) (2) excluding fixed assets 1.83% 1.88% 1.93% & excluding trading assets and adding back securitizations 2.47% 2.52% 2.50% (3)
Slide 22: Unhedged USRMM Exposure
Fourth Quarter, 2008 Investor Presentation (1) UNHEDGED USRMM Exposure (U.S.$MM) Write-downs Oct. 31/08 Tranche Type Notional to-date Net Exposure A B C =A -B Super Senior CDO of Mezz RMBS $ 811 $ 784 $ 27 Warehouse RMBS 365 354 11 Various Various 825 764 61 $ 2,001 $ 1,902 $ 99 (1) There are severa
Slide 23: Hedged Canadian Conduit Non-USRMM Exposure
Fourth Quarter, 2008 Investor Presentation HEDGED Canadian Conduit Non-USRMM (1) Exposure (U.S.$MM) (2) Mark-to- Collateral (3) Conduit Underlying Notional Market held Great North Trust Investment grade (4) (5) corporate credit index $ 4,103 $ 352 $ 540 Nemertes I / 160 Investment grade Nemertes II
Slide 24: Items of Note (Cont'd)
Fourth Quarter, 2008 Investor Presentation Items of Note (Cont’d) Pre-Tax After-Tax EPS Effect (1) Strategic Business Unit Q3 2008 Effect ($MM) Effect ($MM) ($/share) Loss on Structured Credit Run-off Activities (885) (596) (1.56) World Mkts Losses/Interest Expense re. Pending Tax Settlement of Leve
Slide 25: 2008 Balanced Scorecard – Financial Measures
Fourth Quarter, 2008 Investor Presentation 2008 Balanced Scorecard – Financial Measures (1) Objective Result (2)(3) Earnings Per Share Growth 5 - 10% per annum 2008 loss per share of $5.89 vs. 2007 EPS of $9.21 Return on Equity (3) at least 20% (19.4)% Capital Strength Tier 1 Capital Ratio - 8.5% 10
Slide 26: Q4 Credit Review
Fourth Quarter, 2008 Investor Presentation Q4 Credit Review Total Specific Retail & World Net Impaired Loans Provisions Markets Provisions World Markets 352 219 Retail Markets 202 226 310 294 11 191 152 134 0.48% 0.46% 0.31% (18) (7) Q4 Q3 Q4 Q4 Q3 Q4 Q4 Q3 Q4 F ‘07 F ‘08 F ‘07 F ‘08 F ‘07 F ‘08 51
Slide 27: Tier 1 Ratio Movement in Q4
Fourth Quarter, 2008 Investor Presentation Tier 1 Ratio Movement in Q4 0.25% 0.05% 10.5% 0.37% RWA Preferred 9.8% Shares Net Income Q3 Q4 F’08 F’08 53 Appendix 27
Slide 28: Topical Risk Issues
Fourth Quarter, 2008 Investor Presentation Topical Risk Issues As at October 31, 2008 Direct U.S. Subprime Mortgage Exposure • None Unhedged U.S. Subprime Mortgage • See 2008 Annual Accountability Report Exposure through RMBS and CDOs Hedged U.S. Subprime Mortgage • See 2008 Annual Accountability Re
Slide 29: Retail Markets Review
Fourth Quarter, 2008 Investor Presentation Fourth Quarter, 2008 Retail Markets Review Sonia Baxendale Senior Executive Vice-President Fourth Quarter, 2008 World Markets Review Richard Nesbitt Chairman & CEO CIBC World Markets 29
Slide 30: Q&A
Fourth Quarter, 2008 Investor Presentation Fourth Quarter, 2008 Q&A 30