Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Debt Investor Presentation (August 2020)
63 slides from Canadian Imperial Bank Of Commerce's debt investor presentation, August 2020
Slide 1: CIBC Fixed Income Investor Presentation Q3 2020
CIBC Fixed Income Investor Presentation Q3 2020
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: Forward-looking statements are typically identified by the words “believe”, “expect”, “anticipate”, “intend”, “estimate”, “forecast”, “target”, “objective” and other similar expressions or future or conditional verbs such as “will”,
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 Bail-in and Regulatory Regime Update 31 5. Canadian Mortgage Market 39 6. Legislative Covered Bond Programme, Collateral Pool 43 7. Contacts
Slide 7: Debt Programmes Summary
Debt Programmes Summary Best economic performance amongst G7 economies as measured by long term GDP growth rate during 2000-20191 • 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 fro
Slide 8: Canadian Economy & Consumer Profile
Canadian Economy & Consumer Profile
Slide 9: Canada: Key Facts
Canada Canada: Key Facts • GDP broken down by province / territory continues to demonstrate that Canada’s economy is well diversified Population2 38.0 MM GDP (market prices)3 CAD 2,057 BN Canada’s GDP by Province / Territory1(%) GDP per capita3 CAD 47,941 Labour Force4 20.0 MM Provinces/Territories
Slide 10: Canadian Labour Market Profile
Canadian Labour Market Profile Total Employment Strong Job Creation Record • Canada regained all jobs lost during the recession by January 2010, before the United Kingdom and the United States • Net employment increases in Canada and the United States from February 2008 to August 2020 are 1,164,800
Slide 11: 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 other major economies since the financ
Slide 12: 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 13: CIBC Overview
CIBC Overview
Slide 14: CIBC Snapshot
CIBC Snapshot CIBC (CM: TSX, NYSE) is a leading North American financial institution. Through our four strategic business units – Canadian Personal and Business Banking, Canadian Commercial Banking and Wealth Management, U.S. Commercial Banking and Wealth Management, and Capital Markets - our ~44K e
Slide 15: Our Business Strategies and Strategic Priorities
Our Business Strategies and Strategic Priorities Canadian Commercial U.S. Commercial Canadian Personal and Banking and Wealth Banking and Wealth Capital Markets Business Banking Management Management Build a modern consumer Build best-in-class Build a leading North Build a leading Canadian and small
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 1868 Dividends Note: Dividend of CAD 1.46 per share for the quarter ending October 31, 2020 payable on Octo
Slide 17: Strong, High Quality Liquid Client Driven Balance Sheet
Strong, High Quality Liquid Client Driven Balance Sheet Based on Q3/20 results Assets Liabilities & Equity CAD 768BN Cash and Repos 127% 36% Coverage Unsecured Funding 28% Liquid (Liquid Assets/ Wholesale Trading & Wholesale Funding) Funding Assets Investment Securities Secured Funding (3) 116% Cove
Slide 18: Continuous commitment to balance sheet strength
Continuous commitment to balance sheet strength Basel III CET1 Ratio Basel III Total Capital Ratio (%) (%) 11.3 11.4 11.6 11.8 14.8 14.9 15.0 15.4 10.6 13.8 (1) (1) 2016 2017 2018 2019 Q3 2020 2016 2017 2018 2019 Q3 2020 Basel III Leverage Ratio2 Liquidity Coverage Ratio2 (%) (%) 4.6 150.0 4.3 4.3 4
Slide 19: Continued capital, liquidity and balance sheet strength
Continued capital, liquidity and balance sheet strength $B Q3/19 Q2/20 Q3/20 Q3 Highlights Average Loans and Acceptances 393.7 412.8 414.9 • Continue to maintain strong liquidity and capital positions while supporting client needs Average Deposits 479.1 526.5 557.4 • Internal capital generation, net
Slide 20: Credit Review
Credit Review Provision For Credit Losses (PCL) Reported & Adjusted1 Q3/19 Q2/20 Q3/20 ($MM) Cdn. Personal & Business 204 654 220 Banking Impaired 197 208 151 Performing 7 446 69 Cdn. Commercial Banking & 17 186 57 Wealth Impaired 15 62 45 Performing 2 124 12 U.S. Commercial Banking & 29 230 160 Wea
Slide 21: Increased allowance to reflect the current economic backdrop
Increased allowance to reflect the current economic backdrop Reported Q3/19 Q2/20 Q3/20 Allowance coverages were up YoY and QoQ Canadian Credit Cards 3.6% 6.3% 6.2% • Reflective of updates to forward looking indicators, and increased provisions related to COVID-19 Canadian Residential Mortgages 0.1%
Slide 22: Lending portfolio mix remains sound
Lending portfolio mix remains sound Overall Loan Mix (Outstanding) • Nearly two-thirds of our portfolio is consumer lending composed mainly of mortgages, with uninsured having an average loan-to-value of 52% • Oil and gas is 2.3% of the loan portfolio; 43% investment grade Consumer • The balance of
Slide 23: Exposure to vulnerable sectors represents 2% of our lending portfolio
Exposure to vulnerable sectors represents 2% of our lending portfolio Leisure & Entertainment Loans Outstanding Retailer Loans Outstanding Restaurants 32% Auto Dealers 45% Department & Convenience Hotels Stores 6% Air Transport 17% 12% $3.8B $4.8B Household Furnishing Stores 6% Other Retail 10% Food
Slide 24: Commercial Real Estate exposure remains diversified
Commercial Real Estate exposure remains diversified Canadian Commercial Real Estate Exposure by Sector1 U.S. Commercial Real Estate Exposure by Sector2 Office Residential Office 13% 18% Industrial 27% 14% Industrial 10% Seniors Housing Residential 1% 7% Healthcare 2% Retail $28.9B Other 5% 12% US$15
Slide 25: Exposure to Oil & Gas represents 2.3% of our lending portfolio
Exposure to Oil & Gas represents 2.3% of our lending portfolio Oil & Gas Mix (Outstanding) • $9.6B drawn exposure in Q3/20 – 43% investment grade Midstream Petroleum Distribution 11% – The U.S. comprises 35% of drawn loan exposure 22% • 80% of undrawn exposure is investment grade • $39.8B of retail
Slide 26: The majority of client accommodation to roll-off next quarter
The majority of client accommodation to roll-off next quarter Weekly Account Accommodations - Canadian Personal Banking (000s) 79 • New accommodation requests have decreased and stabilized this quarter 61 • The majority of our exposure in the deferral program are in Mortgages (90%) 43 • Nearly all c
Slide 27: 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 Term Geography Instrument • Regular issuance to
Slide 28: 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 29: Wholesale Funding Geography
Wholesale Funding Geography Wholesale Funding By Currency CAD 52.2 BN EUR 7.2 BN, CHF 2.2 BN, GBP 4.6 BN, SEK 2.0 BN, NOK: 0.15 BN Canada Mortgage Bonds Covered Bonds JPY 55.1 BN Credit Cards Securitization Medium Term Notes Medium Term Notes Medium Term Notes Canadian Dollar Deposits
Slide 30: CIBC Funding Composition
CIBC Funding Composition Funding Sources – July 20201 1 Unsecured funding is comprised of wholesale bank deposits, certificates of deposit and commercial paper, bearer deposit notes and bankers’ acceptances, senior unsecured EMTN and senior unsecured structured notes 2 Capital includes subordinated
Slide 31: Canadian Bail-in Regime Update
Canadian Bail-in Regime Update
Slide 32: 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 33: 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 34: 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. At bail-in, all NVCC instruments would be fu
Slide 35: Loss Absorption Waterfall
Liquidation to Resolution Comparison Liquidation Scenario Liquidation Resolution Bail-in debt ranks pari passu with all other senior unsecured Securitizations, Covered Bonds Securitizations, Covered Bonds liabilities. Legacy Senior Debt Structured Notes Resolution Scenario Legacy Senior Debt Derivat
Slide 36: Overview of Creditor Hierarchies in Bail-In Resolution
Overview of Creditor Hierarchies in Bail-In Resolution National layers of bail-inable senior debt instruments Canada Bank Recapitalization Bank Insolvency Ordinance Resolution Mechanism Act French Sapin 2 Italy Spanish Revised (Bail-in) Regulations (BIO-FINMA) / BoE/PRA (§46f KWG new) Insolvency Law
Slide 37: 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
Slide 38: 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 39: Canadian Mortgage Market
Canadian Mortgage Market
Slide 40: Mortgage Market Performance and Urbanisation Rates
Mortgage Market Performance and Urbanisation 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 41: Canadian House Prices
Canadian House Prices Average Home Price • Absolute price level is moderate compared to major global urban centers City CAD USD Eq. 1 • Canadian debt to income ratio in line with many developed nations Canada 571K 426K • Growth rates of house prices in Canada have diverged across regions Toronto 880
Slide 42: CIBC’s Mortgage Portfolio
CIBC’s Mortgage Portfolio CIBC Canadian Residential Mortgages: CAD 203.9 BN Condo Exposure • 31% of CIBC’s Canadian residential mortgage portfolio is insured, with 71% of insurance being provided by CMHC • The average loan to value1 of the uninsured portfolio is 52% • The condo developer exposure is
Slide 43: Legislative Covered Bond Programme, Collateral Pool
Legislative Covered Bond Programme, Collateral Pool
Slide 44: Legislative Programme Summary (July 2020)
Legislative Programme Summary (July 2020) 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 Legislativ
Slide 45: Covered Bond Structure Overview
Covered Bond Structure Overview CIBC Interest Rate Swap Provider Consideration CIBC CIBC Covered Bond Seller Loans and (Legislative) Related Security Guarantor LP Guarantor CIBC Covered Bond Swap Repayment of Provider Intercompany Loan Intercompany Loan Computershare CIBC Trust Company of Canada Iss
Slide 46: Cover Pool
Cover Pool Summary Statistics (July 31, 2020)1 Current Collateral Pool Canadian uninsured residential mortgages Asset Percentage Requirement 93.00% Current Balance CAD 39,176,611,392 Outstanding Covered Bonds CAD Eq. 27,154,650,800 Number of Loans 139,800 Average Balance CAD 280,233 Weighted Ave Ori
Slide 47: Cover Pool (July 2020)
Cover Pool (July 2020) Remaining Term Geographic Distribution Current Indexed Loan to Value Property Type 47
Slide 48: CIBC Contacts
CIBC Contacts INVESTOR RELATIONS EMAIL PHONE GEOFF WEISS Geoffrey.Weiss@cibc.com +1 416-980-5093 Senior Vice President JASON PATCHETT Jason.Patchett@cibc.com +1 416-980-8691 Senior Director ALICE DUNNING Alice.Dunning@cibc.com +1 416-861-8870 Senior Director TREASURY EMAIL PHONE PETER LEVITT Peter.L
Slide 49: Appendix
Appendix
Slide 50: Appendix
Appendix 1. Canadian Mortgage Market 51 2. CIBC Canadian Real Estate 54 3. Corporate Responsibility 57 4. Selected Covered Bond and Senior Issuances 62 50
Slide 51: 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 • Insurance covers the entire outstanding pri
Slide 52: Canadian Mortgage Market Regulatory Developments
Canadian Mortgage Market Regulatory Developments • Max. amortization • Reduce max. • Second home mortgage reduced to 35 yrs. from amortization to 30 insurance no longer 40 yrs. from 35 yrs. available • Set min. down payment to • Refinancing max. • Tightened income 5% LTV lowered to 85% verification
Slide 53: Canadian Mortgage Market Regulatory Developments (continued)
Canadian Mortgage Market Regulatory Developments (continued) • Standardizing eligibility • Ontario criteria for high-and low- Government • Qualifying rate for • Min. down payment for ratio insured mortgages, introduced Non- mortgages changed new insured mortgage will including a mortgage rate Reside
Slide 54: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates Q3/19 Q2/20 Q3/20 • Total mortgage delinquency rate was up due to COVID-19 Total Mortgages 0.27% 0.32% 0.36% • The Greater Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) continue to outperform the Canadian average Uninsu
Slide 55: Canadian Uninsured Residential Mortgages — Q3/20 Originations
Canadian Uninsured Residential Mortgages — Q3/20 Originations Beacon Distribution • Originations of $11B in Q3/20 • Average LTV1 in Canada: 63% • GVA2: 58% • GTA2: 62% 2 2 Loan-to-Value (LTV)1 Distribution 2 2 1 LTV ratios for residential mortgages are calculated based on weighted average. See page
Slide 56: Canadian Uninsured Residential Mortgages
Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average • Less than 1% of this portfolio has a Beacon score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 52% • GVA2: 46% • GTA2: 47% 2 2 Lo
Slide 57: Corporate Responsibility
Corporate Responsibility
Slide 58: Environmental Commitments
Environmental Commitments Material Topics Key Performance indicators Target Status as of Oct 31, 2019 Climate Change Reduction in greenhouse gas (GHG) emissions 20% reduction in GHG emissions intensity from our Canadian and U.S. 6% achieved intensity1 operations over eight years (2019–2026) Diversio
Slide 59: Social Commitments
Social Commitments Material Topics Key Performance indicators Target Status as of Oct 31, 2019 Client Experience CIBC Client Experience Net Promoter Score (CX NPS) Index Continuous improvement CX NPS Index improved to 60.9 New loans to small and medium-sized Provide $9 billion in new loans to SMEs b
Slide 60: Social Commitments (Continued)
Social Commitments (Continued) Material Topics Key Performance indicators Target Status as of Oct 31, 2019 Inclusion and Percentage of board-approved executive roles held by women At a minimum, between 35% and 40% women in board- 32%† Diversity approved executive roles by 2022 Percentage of board-ap
Slide 61: Governance Commitments
Governance Commitments Material Topics Key Performance indicators Target Status as of Oct 31, 2019 Corporate Governance Percentage of women on the CIBC Board of Directors At least 30% women and at least 30% men on the CIBC 40% (as of April Board of Directors 2020 AGM) Percentage of independent direc
Slide 62: Outstanding Benchmark Covered Issuance
Outstanding Benchmark Covered Issuance 1. Self issued for Bank of Canada Repo Program 62 62
Slide 63: Selected Legacy and TLAC Senior
Selected Legacy and TLAC Senior1 1. The Base Prospectus for the Note Issuance Programme is available on: https://www.cibc.com/en/about-cibc/investor-relations/debt-information/note-issuance-programme.html 2. Any bonds with an Issue Date post September 22nd, 2018 are TLAC Issuances 63 63
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