32 slides from Canadian Imperial Bank Of Commerce's earnings presentation, May 29, 2008
Slide 1: Second Quarter 2008 Investor Presentation
Second Quarter, 2008 Investor Presentation CIBC Investor Presentation May 29, 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 securities
Slide 2: CIBC Overview / Financial Review
Second Quarter, 2008 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Second Quarter, 2008 Financial Review David Williamson Senior Executive Vice-President and Chief Financial Officer 2
Slide 3: Q2 Summary
Second Quarter, 2008 Investor Presentation Q2 Summary $ Per Share Loss Per Includes(3) – Loss on Structured Credit Run-off Share(1): $3.00 Activities (4.37) Cash Loss – Change in Non-Monoline CVA (0.09) Per Share(2): $2.98 – Capital Repatriation (0.05) – Higher than Normal Severance (0.05) – Visa IP
Slide 4: Structured Credit Run-off
Second Quarter, 2008 Investor Presentation Structured Credit Run-off Q2/08 Pre-Tax After-Tax EPS Effect Effect ($MM) Effect ($MM) ($/share) Credit Valuation Adjustments with Financial Guarantors (2,166) (1,458) (3.81) Unhedged USRMM Write-downs (114) (77) (0.20) Unhedged non-USRMM Write-downs (61) (
Slide 5: Unhedged USRMM Exposure
Second Quarter, 2008 Investor Presentation (1) UNHEDGED USRMM Exposure (U.S.$MM) Write-downs Apr. 30/08 Tranche Type Notional to-date Net Exposure A B C =A -B Super Senior CDO of Mezz RMBS $ 283 $ 256 $ 27 CDO squared 417 417 - Warehouse RMBS 388 334 54 Mezz CDO squared 116 116 - Various Various 153
Slide 6: Unhedged Structured Credit Non-USRMM Exposure
Second Quarter, 2008 Investor Presentation UNHEDGED Structured Credit Non-USRMM Exposure (U.S.$MM) Write-downs Apr. 30/08 Tranche Notional to-date Net Exposure A B C =A -B CLO $ 346 $ 50 $ 296 Corporate Debt 337 29 308 CMBS 201 2 199 Warehouse 159 75 84 Others 136 - 136 ABCP 1,273 109 1,164 $ 2,452
Slide 7: Retail Markets Revenue Components
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 Personal & Small Business Banking 501 537 546 544 540 Imperial Service 232 247 242 244 239 Retail Brokerage 294 295 282 276 264 (1) (1) Cards 399 405 809 423 415 Mortgages & Personal Le
Slide 8: Retail Markets Revenue Components
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 Imperial Service Personal & Small vs. Q2/07: Business 501 537 546 544 540 + spreads up Imperial Service 232 247 242 244 239 + deposit balances up Retail Brokerage 294 295 282 276 264 (1
Slide 9: Retail Markets Revenue Components
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 Cards Personal & Small vs. Q2/07: Business 501 537 546 544 540 + purchase volumes up Imperial Service 232 247 242 244 239 + outstandings up Retail Brokerage 294 295 282 276 264 (1) (1)
Slide 10: Retail Markets Revenue Components
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 FirstCaribbean Personal & Small vs. Q2/07: Business 501 537 546 544 540 – FX rate Imperial Service 232 247 242 244 239 – portfolio revenue down Retail Brokerage 294 295 282 276 264 (1)
Slide 11: Retail Markets Quarterly Statement of Operations
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Quarterly Statement of Operations F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 Net Income (1) (1) (1) Revenue 2,309 2,386 2,794 2,371 2,239 vs. Q2/07: Provision for + Cards & Mortgages (1) Credit Losses 186 167 150 155 174 balances up Non-Interest –
Slide 12: World Markets Revenue Components
Second Quarter, 2008 Investor Presentation CIBC World Markets Revenue Components F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 Capital Markets (1) (1) (1) (1) Capital Markets 351 28 (249) (3,169) (2,253) vs. Q1: Investment + equity structured Banking & Credit products up (1) (1) (1) (1) (1) Products 247 328 240
Slide 13: World Markets Revenue Components
Second Quarter, 2008 Investor Presentation CIBC World Markets Revenue Components F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 Merchant Banking (1) (1) (1) (1) Capital Markets 351 28 (249) (3,169) (2,253) vs. Q1: Investment + lower write-downs Banking & Credit (1) (1) (1) (1) (1) – lower gains & Products 247 328
Slide 14: World Markets Quarterly Statement of Operations
Second Quarter, 2008 Investor Presentation CIBC World Markets Quarterly Statement of Operations F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 Expenses (1) (1) (1) (1) (1) Revenue 606 455 5 (2,957) (2,166) vs. Q1: Provision for • lower performance- Credit Losses - (5) (18) 17 2 related compensation Non-Interest (
Slide 15: Expense Objective
Second Quarter, 2008 Investor Presentation CIBC Expense Objective Q4/06 ($MM) Baseline Q2/08 Total Expenses 1,892 1,788 - (98) (1)(2) Less: Items of Note Less: FirstCaribbean - (94) Less: Exited/Sold Businesses (116) (19) 1,776 1,577 (2) Total Expenses - "Adjusted" (1) Affected by an Item of Note, s
Slide 16: CIBC Revenue
Second Quarter, 2008 Investor Presentation Second Quarter, 2008 Financial Review Appendix CIBC Revenue F ‘07 F ‘08 ($MM) Q4 Q1 Q2 vs. Q1 Net Interest Income 1,240 1,154 1,349 • Lower trading related funding costs & Fees for Services higher Retail spreads Underwriting and Advisory 190 176 88 • Sale o
Slide 17: Loan Losses and CIBC Expenses
Second Quarter, 2008 Investor Presentation CIBC Loan Losses F ‘07 F ‘08 (1) ($MM) Q2 Q3 Q4 Q1 Q2 (2) CIBC Retail Markets 186 167 150 155 174 CIBC World Markets - (5) (18) 17 2 (2) Corporate and Other (20) - - - - Total 166 162 132 172 176 (1) Starting in Q1/08 the general allowance for credit losses
Slide 18: Net Income Components and Common Share Dividends
Second Quarter, 2008 Investor Presentation CIBC Net Income/(Loss) Components F ‘07 F ‘08 ($MM) Q2 Q3 Q4 Q1 Q2 (1) (1) (1) (1) CIBC Retail Markets 617 596 960 657 509 (1) (1) (1) (1) (1) CIBC World Markets 160 220 (112) (2,159) (1,637) (1) (1) (1) Corporate and Other 30 19 36 46 17 Total 807 835 884
Slide 19: Retail Markets ROE & Cash Efficiency Ratio
Second Quarter, 2008 Investor Presentation CIBC Retail Markets ROE & Cash Efficiency (NIX) Ratio(1) (%) 76 ROE 52 (2) 48 (2) 54 42 61 61 59 57 NIX 50 (2) (2) (2) Q2 Q3 Q4 Q1 Q2 F ‘07 F ‘08 (1) Non-GAAP financial measures, see Slide 30. (2) Affected by an Item of Note, see Slides 51 and 52 for detail
Slide 20: Retail Markets Loan Balances and Market Share
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Loan Balances(1) ($B; spot) 26.0 Personal 24.8 25.1 24.2 24.5 Loans Small Bus. 7.8 7.5 7.4 7.4 7.3 Loans Q2 Q3 Q4 Q1 Q2 F ‘07 F ‘08 (1) Excludes Retail Brokerage and FirstCaribbean. 39 CIBC Retail Markets Market Share(1)(2) (%) Residenti
Slide 21: Retail Markets Market Share
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Market Share(1)(2)(3) (cont’d) (%) Cards, 17.6 17.8 17.8 n/a n/a outstandings Cards, purchase 24.1 23.8 23.6 n/a n/a volumes Q2 Q3 Q4 Q1 Q2 F ‘07 F ‘08 (1) Source: CBA; excludes AMEX and proprietary cards. (2) Two month time lag. (3) CBA
Slide 22: Fixed Term Investments & Imperial Service
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Fixed Term Investments & Market Share(1)(2) Fixed Term Investments Canadian Market Share 50 45.4 46.3 25 43.6 43.6 44.5 Market Share (%) 40 20 $ Billions 30 17.2 17.4 17.5 17.6 17.5 15 20 10 10 0 5 Q2 Q3 Q4 Q1 Q2 F ‘07 F ‘08 (1) Source:
Slide 23: Discount Brokerage and Wood Gundy
Second Quarter, 2008 Investor Presentation CIBC Retail Markets Discount Brokerage(1) Active Accounts Trades/Day 500 478 480 481 486 15 472 400 Thousands Thousands 11.2 11.3 10 10.7 300 9.8 9.3 200 5 100 0 0 Q2 Q3 Q4 Q1 Q2 F ‘07 F ‘08 (1) Average over the quarter. 45 CIBC Retail Markets Wood Gundy(1)
Slide 24: Merchant Banking and Market Share
Second Quarter, 2008 Investor Presentation CIBC World Markets Merchant Banking ($MM) 1,311 1,159 Q2/08 summary “Amortized Cost” “Amortized Cost” = $1,159MM as at April 30, 2008(1) Debt: 2% Equity: 26% Funds: 72% Q2 Q3 Q4 Q1 Q2 F ‘07 F ‘08 (1) “Book Value” on the Balance Sheet as at April 30, 2008 is
Slide 25: Behind the Reported NIMs
Second Quarter, 2008 Investor Presentation Behind the Reported NIMs F ‘08 Q1 Q2 Reported NIM 1.33% 1.57% (1) Reported NIM (TEB) 1.40% 1.64% NIM (TEB) (1) (2) excluding fixed assets 1.65% 1.93% & excluding trading assets and adding back securitizations 2.42% 2.44% (3) (4) & excluding other NII 2.44%
Slide 26: Items of Note
Second Quarter, 2008 Investor Presentation Items of Note Pre-Tax After-Tax EPS Effect (1) Strategic Business Unit Q2 2008 Effect ($MM) Effect ($MM) ($/share) Loss on Structured Credit Run-off Activities (2,484) (1,672) (4.37) World Mkts Change in Non-Monoline CVA (50) (34) (0.09) World Mkts Capital
Slide 27: Risk Review
Second Quarter, 2008 Investor Presentation Second Quarter, 2008 Risk Review Tom Woods Senior Executive Vice-President and Chief Risk Officer Q2 Credit Review Total Specific Retail & World Net Impaired Loans Provisions Markets Provisions 360 360 190 World Markets 174 Retail Markets 315 171 0 177 190
Slide 28: Trading Revenue Days and Tier 1 Ratio Movement
Second Quarter, 2008 Investor Presentation Q2 Trading Revenue (TEB) Distribution (1) (2) 9 8 Trading Revenue Days 7 6 5 4 3 2 1 0 (10) (9) (8) (7) (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 (C $ MM) (1) For further details, see Non-GAAP measures within the Notes to users section on page i of the
Slide 29: Risk Management – Areas of Focus
Second Quarter, 2008 Investor Presentation Risk Management – Areas of Focus Risk Appetite • Enhanced framework • More direct linkage with business strategy and operational limits Risk Governance • Risk committees – roles expanded • Strengthened approval process for new products and strategies Risk O
Slide 30: Topical Risk Issues
Second Quarter, 2008 Investor Presentation Topical Risk Issues As at April 30, 2008 Direct U.S. Subprime Mortgage • None Exposure Unhedged U.S. Subprime Mortgage • See Second Quarter 2008 Report to Shareholders Exposure through RMBS and CDOs Hedged U.S. Subprime Mortgage • See Second Quarter 2008 Re
Slide 31: Retail Markets Review
Second Quarter, 2008 Investor Presentation Second Quarter, 2008 Retail Markets Review Sonia Baxendale Senior Executive Vice-President Second Quarter, 2008 World Markets Review Richard Nesbitt Chairman & CEO CIBC World Markets 31
Slide 32: Q&A
Second Quarter, 2008 Investor Presentation Second Quarter, 2008 Q&A 32