Canadian Imperial Bank Of Commerce · TSX:CM

Canadian Imperial Bank Of Commerce — Q2 2006 Earnings Presentation

37 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Jun 1, 2006

  1. Slide 1: Second Quarter 2006 Investor Presentation

    Second Quarter, 2006 Investor Presentation CIBC Second Quarter Investor Presentation June 1, 2006 Forward–Looking Statements From time to time, CIBC makes written or oral forward-looking statements within the meaning of certain securities laws, including in this presentation, in filings with Canadia

  2. Slide 2: CIBC Overview / Financial Review

    Second Quarter, 2006 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Second Quarter, 2006 Financial Review Tom Woods Senior Executive Vice-President and Chief Financial Officer 2

  3. Slide 3: Q2 Summary

    Second Quarter, 2006 Investor Presentation Q2 Summary $ Per Share EPS(1): $1.63 – Includes – Tax Recovery in Retail Markets 0.10 – Reversal of General Allowance for Credit Losses 0.05 – Mark-to-Market on Corp. Loan Credit Derivative Portfolio re. AcG-13 (0.03) – Mortgage Prepayment Fees Adjustment (

  4. Slide 4: CIBC Revenue

    Second Quarter, 2006 Investor Presentation CIBC Revenue ($MM) Q4/05 Q1/06 Q2/06 Change (1) Net Interest Income 1,172 (1) 1,148 1,036 (112) •Lower NIM; 3 less days Fees for Services Underwriting and Advisory 147 184 141 (43) •Lower M&A and U.S. equity new issues Deposit and Payment 197 195 187 (8) Cr

  5. Slide 5: Expenses

    Second Quarter, 2006 Investor Presentation CIBC Expenses ($MM) Q4/05 Q1/06 Q2/06 Change Employee Comp. and (1) Benefits 1,137 1,080 1,054 (26) •3 less days; lower incentive (1) Occupancy Costs 175 146 144 (2) compensation Computer and Office Equip. 308 273 274 1 Communications 80 75 75 - Advertising

  6. Slide 6: Retail Markets – Revenue

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue ($MM) (1) 2,021 2,060 2,059 (1) 1,971 1,964 Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 _______________________ (1) Affected by an Item of Note, see Slides 55 and 56 for details. 11 CIBC Retail Markets – Revenue Components F ‘05 F ‘06 ($MM) Q2

  7. Slide 7: Retail Markets – Revenue Components

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 Personal & Small ($MM) Q2 Q3 Q4 Q1 Q2 Business Banking Personal & Small + deposit balances up 6% Business Banking (1) 612 647 618 510 490 vs. Q2/05 Imperial Service (1) 232 246 236 229 227 Retail Brokerag

  8. Slide 8: Retail Markets – Revenue Components

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 ($MM) Q2 Q3 Q4 Q1 Q2 Retail Brokerage Personal & Small + record revenue Business Banking (1) 612 647 618 510 490 + strong in all areas Imperial Service (1) 232 246 236 229 227 + AUA up 13% vs. Q2/05 Retai

  9. Slide 9: Retail Markets – Revenue Components

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components Mortgages and F ‘05 F ‘06 Personal Lending ($MM) Q2 Q3 Q4 Q1 Q2 + mortgage balances up 8% vs. Q2/05 Personal & Small Business Banking (1) 612 647 618 510 490 Imperial Service (1) 232 246 236 229 227 – trend from vari

  10. Slide 10: Retail Markets – Net Income

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – Net Income ($MM) (1) 438 432 (1) vs. Q1 404 (1) + tax recovery ($35MM) 341 (1) 350 + lower expenses + strong Retail Brokerage – 3 less days vs. Q1 – shift from unsecured to secured lending – shift from variable to fixed mortgages Q2 Q3

  11. Slide 11: World Markets – Revenue Components

    Second Quarter, 2006 Investor Presentation CIBC World Markets – Revenue Components F ‘05 F ‘06 ($MM) Q2 Q3 Q4 Q1 Q2 Capital Markets 326 359 347 371 354 Investment Banking & (1) Credit Products 298 251 239 250 133 Commercial Banking 106 114 113 111 105 (1) Merchant Banking 61 239 391 12 69 (1) Other

  12. Slide 12: World Markets – Revenue Components

    Second Quarter, 2006 Investor Presentation CIBC World Markets – Revenue Components F ‘05 F ‘06 Investment ($MM) Q2 Q3 Q4 Q1 Q2 Banking & Credit Capital Markets 326 359 347 371 354 + Canada – equity new Investment Banking & issues up (1) Credit Products 298 251 239 250 133 Commercial Banking 106 114

  13. Slide 13: World Markets Net Income / Share Repurchases

    Second Quarter, 2006 Investor Presentation CIBC World Markets – Net Income/(Loss) ($MM) (2) excl. Enron provision (1)(2) 328 (2) vs. Q1 115 128 110 (2) 246 + expenses down + Merchant Banking up + continued Corporate loan loss recoveries – Investment Banking & Credit Products down (2) (2,287) Q2 Q3 Q

  14. Slide 14: Common Share Dividends

    Second Quarter, 2006 Investor Presentation Common Share Dividends ($ per share) 0.65 0.68 0.68 0.68 0.68 Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 27 CIBC Retail Markets – ROE & Efficiency (NIX) Ratio 43% 46% 47% ROE (1) 37% 38% 65% 63% 64% 62% NIX 60% (2) (2) (2) (2) Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 ___________________

  15. Slide 15: Retail Markets – Mortgages & Cards

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – Mortgages & Cards ($B; spot; managed assets) 93.7 94.8 93.2 Residential 91.0 Mortgages 88.1 11.2 10.8 10.9 Card Loans 10.5 10.4 Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 29 CIBC Retail Markets – Loan Balances (1) ($B; spot) 23.3 23.7 23.4 23.5 Person

  16. Slide 16: Retail Markets – Market Share

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – Market Share (1)(2) Residential 14.7% 14.8% 14.8% 14.7% Mortgages 14.5% Consumer 19.4% 19.6% 19.5% 19.3% Deposits 19.0% Consumer 11.4% 11.1% 10.8% 10.6% Loans 10.3% (excl. cards) Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 _______________________ (1) S

  17. Slide 17: Retail Markets – AUA & AUM

    Second Quarter, 2006 Investor Presentation CIBC Retail Markets – AUA & AUM (1) ($B) 1,030 1,028 973 967 877 AUA AUM 69 72 71 75 75 Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 _______________________ (1) Includes assets under administration or custody of CIBC Mellon Global Securities Services, which is a 50/50 joint

  18. Slide 18: Fixed Term Investments & Market Share

    Second Quarter, 2006 Investor Presentation Fixed Term Investments & Market Share Fixed Term Investments Canadian Market Share(1)(2) 40 20 34.5 34.4 34.3 34.3 35.3 Market Share (%) 30 15 $ Billions 15.4 15.3 15.3 15.3 15.2 20 10 10 0 5 Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 _______________________ (1) Source: OS

  19. Slide 19: Discount Brokerage

    Second Quarter, 2006 Investor Presentation Discount Brokerage (1) Active Accounts Trades / Day 500 15 438 450 421 430 432 400 Thousands 10 Thousands 11.5 300 8.9 8.9 8.1 200 7.0 5 100 0 0 Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 _______________________ (1) Average over the quarter. 37 CIBC Wood Gundy (1) AUA AUA

  20. Slide 20: CIBC Wood Gundy

    Second Quarter, 2006 Investor Presentation Earnings/(Loss) Per Share by type of (1)(2) Business ($) “Wholesale” 1.70 1.97 1.00 “Retail”(3) 0.27 4.59 0.27 3.65 3.66 3.99 1.34 1.23 (0.83) F ‘02 F ‘03 F ‘04 F ‘05 Q1 Q2 Annual F ‘06 _______________________ (1) Excludes Items of Note (see Slides 55 - 57)

  21. Slide 21: Retail plus Commercial Banking

    Second Quarter, 2006 Investor Presentation CIBC Retail plus Commercial Banking (1) ($MM) Revenue Efficiency (NIX) Ratio 2,135 2,173 2,170 65% 63% 64% 62% 2,077 2,069 60% Net Income ROE (2) 468 455 41% 45% 45% 429 37% 365 (2) 372 35% (2) (2) (2) (2) (2) (2) Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 F

  22. Slide 22: World Markets – Merchant Banking

    Second Quarter, 2006 Investor Presentation CIBC World Markets – Merchant Banking ($MM) Q2/06 summary 1,593 1,344 Carrying Value = $1,344MM as at Carrying Value April 30, 2006 Debt: 6% Equity: 22% Funds: 72% Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 43 CIBC World Markets – Merchant Banking Total Portfolio Industry

  23. Slide 23: World Markets – Market Share

    Second Quarter, 2006 Investor Presentation CIBC World Markets – Market Share Equity Trading (1) 8.7% Canada % of 8.3% 8.3% shares traded 7.3% 7.1% 2.2% 1.9% U.S. % of 1.2% shares traded 0.8% 0.8% Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 _______________________ (1) Source: TSX (Canada); AutEx (U.S.). U.S. volume r

  24. Slide 24: Economic Profit/(Loss)

    Second Quarter, 2006 Investor Presentation CIBC Economic Profit/(Loss) (1) ($MM) (2) 536 (2) (2) 385 401 256 (2) (2,094) Q2 Q3 Q4 Q1 Q2 F ‘05 F ‘06 _______________________ (1) Non-GAAP financial measure, see Slide 58. (2) Affected by an Item of Note, see Slides 55 - 57 for details. 47 CIBC Economic

  25. Slide 25: Behind the Reported NIMs

    Second Quarter, 2006 Investor Presentation Behind the Reported NIMs Q1/06 Q2/06 Reported NIM 1.59% 1.47% Reported NIM (TEB)(1) 1.66% 1.53% NIM (TEB)(1) excluding fixed(2) assets 1.93% 1.78% & excluding trading assets and adding back securitizations(3) 2.68% 2.62% & excluding other NII(4) 2.70% 2.65%

  26. Slide 26: Foreign Exchange Other than Trading

    Second Quarter, 2006 Investor Presentation Foreign Exchange Other than Trading (1) ($MM) F ‘05 F ‘06 Q2 Q3 Q4 Q1 Q2 Net foreign exchange gains on (2) capital repatriation - - 301 - 47 AcG-13 Gains/(Losses) on ineffective foreign exchange hedges 19 21 27 28 22 Other 52 43 36 36 35 71 64 364 64 104 __

  27. Slide 27: Reconciliation of Trading Revenue/Non-Controlling Interests

    Second Quarter, 2006 Investor Presentation Reconciliation of Trading Revenue/Non –Controlling Interests ($MM) Q1/06 Q2/06 Equity trading revenue (TEB)(1) 71 86 less(2): Revenue in certain VIE's(3) required to be consolidated in trading revenue 6 (28) 77 58 _______________________ (1) Taxable equival

  28. Slide 28: Items of Note – Q2/06

    Second Quarter, 2006 Investor Presentation Items of Note – Q2/06 Pre-Tax After-Tax EPS Effect Strategic Business Unit Effect ($MM) Effect ($MM) ($/share) Q2 2006 Accounting Adjustment re. Mortgage Loan Prepayment Fees (11) (7) (0.02) Retail Mkts Mark-to-Market on Corporate Loan Credit Derivative por

  29. Slide 29: Items of Note – Prior Quarters

    Second Quarter, 2006 Investor Presentation Items of Note – Prior Quarters Pre-Tax After-Tax EPS Effect Strategic Business Unit Effect ($MM) Effect ($MM) ($/share) Q3 2005 Enron-related Litigation Provision (2,830) (2,533) (7.45) World Mkts Net recovery re. Hedge fund provision (33) 20 0.06 Retail Mk

  30. Slide 30: Risk Review

    Second Quarter, 2006 Investor Presentation Second Quarter, 2006 Risk Review Second Quarter, 2006 Risk Review Steven McGirr Senior Executive Vice-President and Chief Risk Officer Treasury and Risk Management 30

  31. Slide 31: Key Messages - Credit

    Second Quarter, 2006 Investor Presentation Key Messages - Credit $MM ƒ Specific Loan Losses at $163MM in Q2 Q1/06 • Down $3MM quarter-over-quarter, but up Specific 166 $4MM year-over-year Provision Decline in Consumer (14) ƒ Continued strong performance in Provision Mortgages and Cards Increase in B

  32. Slide 32: Consumer Portfolio Specific Provisions

    Second Quarter, 2006 Investor Presentation Consumer Portfolio Specific Provisions ($MM) 150 130 110 Personal & Specific provisions in 90 Student Loans Personal and Student 70 Credit Loans reduced from Q1 50 Card Loans 30 levels Residential 10 Mortgages (10) 1999* 2000* 2001* 2002* 2003* 2004* Q1/05

  33. Slide 33: Loan Portfolio Mix

    Second Quarter, 2006 Investor Presentation Loan Portfolio Mix Business & Business & Gov't Loans Student Loans Gov't Loans Student Loans $35.9 $1.4 $34.5 $1.7 Personal Personal Loans Loans $24.8 $25.7 Residential Residential Mortgages Credit Cards Credit Mortgages $74.5 $7.8 Cards $77.7 $6.4 April 30

  34. Slide 34: Tier 1 Ratio Improved in Q2

    Second Quarter, 2006 Investor Presentation Tier 1 Ratio Improved in Q2 0.52% 0.23% 0.08% 0.15% 0.05% 9.2% 9.0% Common Preferred Higher Other and Shares RWA Q2 Preferred Net Dividends Income Q1/06 Q2/06 67 RWA and Capital Ratio Trends 140 Risk Weighted Assets Tier 1 Capital 12.0% 135 11.0% Tier 1 Cap

  35. Slide 35: Specific Provision for Credit Losses

    Second Quarter, 2006 Investor Presentation Appendix Specific Provision for Credit Losses ($MM) 400 Consumer Business & Government 350 101 300 250 138 91 200 156 150 274 77 161 198 100 184 185 154 169 140 164 150 50 73 87 22 9 19 38 22 13 0 2 -50 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 1999* 2000* 2001*

  36. Slide 36: Loan Diversification

    Second Quarter, 2006 Investor Presentation Business & Government Loan Diversification (Net Loans and Acceptances excl. Reverse Repos - $34.5B*) as at April 30, 2006 20% 17.6% Loans and Acceptances % of Business & Gov't 15% 12.0% 9.7% 10% 8.7% 8.3% 8.3% 6.9% 4.6% 4.3% 4.2% 4.0% 5% 2.3% 2.1% 2.0% 1.9%

  37. Slide 37: Q2 Formations

    Second Quarter, 2006 Investor Presentation Q2 Formations (Business & Government - $89MM) New Formations ($MM) New Formations as a % of Loans & Acceptances ** 800 5.0% Annualized % of Loans and Acceptances 600 4.0% $MM 3.0% 400 2.0% 200 1.0% 0 0.0% 1999* 2000* 2001* 2002* 2003* 2004* Q1/05 Q2/05 Q3/0

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