Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Debt Investor Presentation (December 2020)
65 slides from Canadian Imperial Bank Of Commerce's debt investor presentation, December 2020
Slide 1: CIBC Debt Programmes Update
CIBC Debt Programmes Update International Investor Presentation December 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: From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including in this Annual Report, in other filings with Canadian securities regulators or the SEC and in other commu
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 Strong 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 f
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 58,808 Labour Force4 20.4 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 Global Financial Crisis by January 2010, before the United Kingdom and the United States • Net employment increases in Canada and the United States from February 2008 to October 2020
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 (TSE & NYSE: CM) $44B 10MM 44K 12.1% 9.1% #1 MOBILE MARKET-CAP1 CLIENTS1 EMPLOYEES1 CET1 RATIO1 PRE-PROVISION BANKING APP FOR 7 EARNINGS (5-yr CAGR)2 CONSECUTIVE YEARS3 DIVERSIFIED EARNINGS MIX STRONG CREDIT RATINGS Net Income by Strategic Business Unit4 Net Income Contribution by Regi
Slide 15: Overview of Our Strategic Business Units
Overview of Our Strategic Business Units Canadian Personal and Canadian Commercial U.S. Commercial Banking Business Banking Banking and Wealth Capital Markets and Wealth Management Management • High-touch, relationship- • Providing clients across oriented • High-touch, relationship- • Integrated glo
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 January 31, 2021 payable on Janu
Slide 17: Strong, High Quality Liquid Client Driven Balance Sheet
Strong, High Quality Liquid Client Driven Balance Sheet Based on Q4/20 results Assets Liabilities & Equity CAD 770BN Cash and Repos 137% 37% Coverage Unsecured Funding 27% Liquid (Liquid Assets/ Wholesale Trading & Wholesale Funding) Funding Assets Investment Securities Secured Funding (3) 120% Cove
Slide 18: Continuous Commitment to Balance Sheet Strength
Continuous Commitment to Balance Sheet Strength 1 1 1 On June 23, 2017, CIBC completed the acquisition of PrivateBancorp, Inc. and its subsidiary, The PrivateBank and Trust Company. 2 Public disclosure of the Basel III Leverage Ratio and the Liquidity Coverage Ratio was required effective January 1,
Slide 19: Continued capital, liquidity and balance sheet strength
Continued capital, liquidity and balance sheet strength $B Q4/19 Q3/20 Q4/20 Q4 Highlights Average Loans and Acceptances 396.4 414.9 413.1 • Continued capital, liquidity and balance sheet strength Average Deposits 485.6 557.4 568.7 • CET1 Increase driven by internal capital generation and a net CET1
Slide 20: Credit Review
Credit Review Provision For Credit Losses (PCL) Reported & Adjusted1 Q4/19 Q3/20 Q4/20 ($MM) Cdn. Personal & Business 255 220 130 Banking Impaired 218 151 89 Performing 37 69 41 Cdn. Commercial Banking & 80 57 25 Wealth Impaired 71 45 21 Performing 9 12 4 U.S. Commercial Banking & 17 160 82 Wealth I
Slide 21: Increased allowance to reflect the current economic backdrop
Increased allowance to reflect the current economic backdrop Reported Q4/19 Q3/20 Q4/20 Canadian Credit Cards 3.8% 6.2% 6.2% Allowance coverages were up YoY and QoQ Canadian Residential Mortgages <0.1% 0.1% 0.1% • Reflective of updates to forward looking Canadian Personal Lending 1.2% 2.0% 1.9% indi
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 2.2% of the loan portfolio; 44% investment grade • The balance of our port
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 • 25% of drawn loans investment grade2 • 44% of drawn loans investment grade2 • The U.S. comprises 16% of drawn exposure • The U.S. comprises 5% of drawn exposur
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 $30.2B US$15.4B • 69% of drawn loans investment grade3 • 31% of drawn loans investment grade3 1 Includes $2.6B in Multi Family that is included in r
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) • $9.0B drawn exposure in Q4/20 • 44% investment grade • The U.S. comprises 30% of drawn loan exposure • 76% of undrawn exposure is investment grade • $40.0B of retail exposure1 to oil provinces2 ($31.8B mortg
Slide 26: Most accommodations are now complete
Most accommodations are now complete Weekly Account Accommodations – Canadian Personal Banking • New accommodation requests for Canadian Personal Banking down to minimal levels • The majority of remaining mortgage balances run off in November and December • Overall client patterns since returning fr
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 Term Geography Instrument • Achieve appropriate balance between cost and stability of funding • 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 51.9 BN EUR 7.2 BN, CHF 2.2 BN, GBP 4.8 BN, SEK 1.9 BN, NOK: 0.14 BN Canada Mortgage Bonds Covered Bonds JPY 56.8 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 – October 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 Source: CIBC Q4-2020 Suppleme
Slide 31: Canadian Bail-in and Regulatory Regime Update
Canadian Bail-in and Regulatory 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. • There are no write-down provisions in the fr
Slide 35: Loss Absorption Waterfall
Liquidation to Resolution Comparison Liquidation Scenario Liquidation Resolution Bail-in debt ranks pari passu with all Securitizations, Covered Bonds Securitizations, Covered Bonds other senior unsecured 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 • Absolute price level is moderate compared to Average Home Price major global urban centers City CAD USD Eq. 1 Canada 607K 462K • Canadian debt to income ratio in line with many Toronto 898K 683K developed nations Vancouver 1045K 795K • Growth rates of house prices in Canada h
Slide 42: CIBC’s Mortgage Portfolio
CIBC’s Mortgage Portfolio CIBC Canadian Residential Mortgages: CAD 212.0 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 (October 2020)
Legislative Programme Summary (October 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 Legisla
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 (October 31, 2020)1 Current Collateral Pool Canadian uninsured residential mortgages Asset Percentage Requirement 93.00% Current Balance CAD 36,996,037,130 Outstanding Covered Bonds CAD Eq. 27,154,650,800 Number of Loans 133,039 Average Balance CAD 278,084 Weighted Ave
Slide 47: Cover Pool (October 2020)
Cover Pool (October 2020) Remaining Term Geographic Distribution Current Indexed Loan to Value Property Type 47
Slide 48: Contacts
Contacts Peter Levitt Wojtek Niebrzydowski Executive Vice President and Treasurer, Vice President, Global Term Funding, Group Treasury Group Treasury Bloomberg: Niebrzydowsk@bloomberg.net Email: Peter.Levitt@cibc.com Email: Wojtek.Niebrzydowski@cibc.ca Phone: +1-416-594-8487 Phone: +1-416-956-6748 4
Slide 49: Appendix
Appendix
Slide 50: Appendix
Appendix 1. Canadian Mortgage Market 51 2. CIBC Canadian Real Estate 54 3. Sustainability 57 4. Covered Bond Triggers 60 5. Selected Covered Bond and Senior Issuances 64 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 covers the entire outstanding principal amo
Slide 52: Canadian Mortgage Market Regulatory Developments
Canadian Mortgage Market Regulatory Developments • Second home mortgage • Max. amortization reduced • Reduce max. insurance no longer available to 35 yrs. from 40 amortization to 30 yrs. • Tightened income verification • Set min. down payment to from 35 yrs. • Min. down payment for new rules for Sel
Slide 53: Canadian Mortgage Market Regulatory Developments (continued)
Canadian Mortgage Market Regulatory Developments (continued) • Removal of exceptions to standard Gross/Total Debt Servicing (GDS/TDS) ratios • At least one borrower (or guarantor) must have a minimum credit • Standardizing eligibility criteria score of 680. for high-and low-ratio insured • Non-tradi
Slide 54: CIBC Canadian Real Estate Secured Personal Lending
CIBC Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Q4/19 Q3/20 Q4/20 • The Greater Vancouver Area1 (GVA) and Greater Toronto Rates Area1 (GTA) continue to outperform the Canadian average Total Mortgages 0.28% 0.36% 0.29% Uninsured Mortgages 0.22% 0.34% 0.28% Uninsured Mortgages
Slide 55: Canadian Uninsured Residential Mortgages – Q4/20 Originations
Canadian Uninsured Residential Mortgages – Q4/20 Originations Beacon Distribution • Originations of $14B in Q4/20 • 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. 2 GVA and
Slide 56: Canadian Uninsured Residential Mortgages – Q4/20
Canadian Uninsured Residential Mortgages – Q4/20 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: 48
Slide 57: Sustainability
Sustainability
Slide 58: ESG Commitments
ESG Commitments 1 For the cumulative results of 2018 through 2020; 2 Cases against CIBC by the Office of the Privacy Commissioner of Canada; 3 The full picture of our hiring for persons with disabilities is likely not reflected due to low self-disclosure in the survey utilized for data collection 58
Slide 59: Our Commitment to Sustainability
Our Commitment to Sustainability 59
Slide 60: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Servicer downgraded below Baa2/F2 by Moody’s/Fitch • Servicer, Guarantor and Bond Trustee agree to use • Servicer defaults on amounts due to Guarantor not commercially reasonable efforts to arrange for the remedied in 3 business days
Slide 61: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Issuer fails to pay any principal or interest in respect of • Delivery of Issuer Acceleration Notice the Covered Bonds within 10 business days in the case • Bond Trustee will serve a Notice to Pay on the Guarantor of principal and 30
Slide 62: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Servicer Event of Default, not remedied within 30 days • Notice of loans’ sale given by Issuer to Borrowers • Issuer Event of Default (other than insolvency), not • Borrowers notified to make payments to the Standby remedied within 30
Slide 63: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences Cash Management Cash Manager’s ratings fall below P- Cash Manager required to direct the Servicer to deposit all Revenue Receipts and Principal Deposit Ratings 1/F1 or A by Moody’s/Fitch Receipts directly into the GDA Account or Transac
Slide 64: Outstanding Benchmark Covered Issuance
Outstanding Benchmark Covered Issuance Extended Due for Series Currency Issued Maturity Type Issue Date Maturity Date Coupon Rate Issue Spread Fitch/Moody's Payment Date CBL9 CHF 200,000,000 Soft Bullet 22-Dec-15 22-Dec-25 22-Dec-26 0.125% MS + 0% AAA/Aaa CBL9-2 CHF 150,000,000 Soft Bullet 22-Dec-15
Slide 65: Selected Legacy and TLAC Senior
Selected Legacy and TLAC Senior1 ISIN Programme Currency Issued Issue Date2 Maturity Date Coupon Rate Issue Spread US136069TY74 MJDS USD 1,000,000,000 16-Jun-17 16-Jun-22 2.55% T + 0.80% US136069TZ40 MJDS USD 500,000,000 16-Jun-17 16-Jun-22 LIBOR + 0.72% 0.72% XS1646520921 EMTN/Formosa USD 300,000,0
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