Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q1 2020 Earnings Presentation
28 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Feb 26, 2020
Slide 1: Investor Presentation First Quarter 2020
Investor Presentation First Quarter 2020 February 26, 2020
Slide 2: 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 report, in other filings with Canadian securities regulators or the SEC and in other communicatio
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President and Chief Executive Officer
Slide 4: First Quarter 2020 Key Performance Measures
First Quarter 2020 Key Performance Measures Q1/20 Effieiency EPS Q1/20 EPS Efficiency Ratio CET1 Ratio Ratio Q1/20 CET1 Ratio Reported $2.63 Reported 63.1% 11.3% +4 bps YoY Adjusted1 $3.24 Adjusted1 55.0% +8% YoY +60 bps YoY 2020 Guidance Low Single Digit 2022 Guidance2 53.5% - 54.0% 2020 Guidance 1
Slide 5: Accelerating our transformation journey
Accelerating our transformation journey Purpose-led culture • A relentless focus on deepening client relationships • Investing in new technology to service our clients • Flexible, progressive workplace that inspires and enables greater connectivity Optimize efficiency • Leveraging technologies to dr
Slide 6: Financial Review
Financial Review Hratch Panossian Senior Executive Vice-President and Chief Financial Officer
Slide 7: Strong earnings driven by Capital Markets
Strong earnings driven by Capital Markets Reported ($MM) Q1/20 YoY QoQ Earnings – Adjusted1 Revenue 4,855 6% 2% • EPS growth of 8% YoY Net interest income 2,761 6% (1%) • ROE of 16.1% Non-interest income 2,094 6% 6% Revenue Non-Interest Expenses 3,065 11% 8% • Strong trading and underwriting activit
Slide 8: Capital position continues to be strong
Capital position continues to be strong CET1 Ratio 33 bps Pro forma (36) bps 11.7% (10) bps 11.6% (14) bps 11.3% Q4/19 Earnings net of RWAs Restructuring Regulatory/Model Q1/20 Dividends (excl. FX) Charge Updates and Other Q1 Highlights • Strong internal capital generation • Strong organic RWA growt
Slide 9: Continuing progress in Personal and Small Business Banking
Continuing progress in Personal and Small Business Banking • Higher net interest income driven by growth in deposit Reported ($MM) Q1/20 YoY QoQ volumes and margin expansion Revenue 2,214 2% (0%) • Deposit balances up 6% YoY Net interest income 1,618 4% (1%) Non-interest income 596 (1%) 0% • NIM up
Slide 10: Strong volume growth in Canadian Commercial and Wealth
Strong volume growth in Canadian Commercial and Wealth • Continued volume growth driving growth in net interest Reported ($MM) Q1/20 YoY QoQ income, largely offset by lower margins Revenue 1,055 7% 3% • Commercial loan balances up 9% YoY Net interest income 315 1% 4% Non-interest income 740 10% 2% •
Slide 11: Client acquisition driving growth in U.S. Commercial and Wealth
Client acquisition driving growth in U.S. Commercial and Wealth • Higher net interest income driven by continued momentum Reported ($MM) Q1/20 YoY QoQ in client acquisition and deepening relationships, partially Revenue 507 6% 1% offset by YoY NIM compression Net interest income 348 1% 2% • Loan bal
Slide 12: Very strong results in Capital Markets
Very strong results in Capital Markets • Strong performance in Global Markets broadly across Reported & Adjusted1 ($MM) Q1/20 YoY QoQ trading and financing activities Revenue2 871 22% 18% • Higher underwriting activity YoY Net interest income 384 32% 6% • Double-digit revenue growth in U.S. region N
Slide 13: Corporate and Other
Corporate and Other • Reported results include restructuring charge primarily Reported ($MM) Q1/20 YoY QoQ relating to employee severance Revenue1 208 (8%) (25%) • Strong performance in FCIB driven by higher fee income Net interest income 96 16% (41%) • Offset by lower treasury revenues Non-interest
Slide 14: Risk Review
Risk Review Laura Dottori-Attanasio Senior Executive Vice-President and Chief Risk Officer
Slide 15: Provision for Credit Losses
Provision for Credit Losses Reported & Adjusted1 ($MM) Q1/19 Q4/19 Q1/20 Total Provision for Credit Losses down YoY & QoQ Cdn. Personal & Small Business 208 255 215 • Lower impairments during the current quarter Impaired 192 218 192 • Performing provisions were lower as forward looking indicators re
Slide 16: Credit Quality — Gross Impaired Loans
Credit Quality — Gross Impaired Loans Reported Q1/19 Q4/19 Q1/20 Gross Impaired Loans stable YoY and QoQ Canadian Residential Mortgages 0.27% 0.28% 0.30% • Slightly higher impairments in Canadian residential mortgages Canadian Personal Lending 0.34% 0.37% 0.37% • The gross impaired loan ratio remain
Slide 17: Credit Quality — Canadian Consumer Net Write-offs
Credit Quality — Canadian Consumer Net Write-offs Reported Q1/19 Q4/19 Q1/20 Net Write-offs stable YoY & down QoQ Canadian Residential Mortgages 0.01% 0.01% 0.01% • Write-offs remained relatively stable in our consumer portfolio Canadian Credit Cards 3.02% 3.20% 3.16% Personal Lending 0.76% 0.86% 0.
Slide 18: Credit Quality — Canadian Consumer Delinquencies
Credit Quality — Canadian Consumer Delinquencies 90+ Days Q1/19 Q4/19 Q1/20 90+ Days Delinquency rates up YoY & QoQ Delinquency Rates • Delinquency rates have increased primarily as a result of seasoning of the mortgage portfolio Canadian Residential Mortgages 0.27% 0.28% 0.30% Uninsured 0.21% 0.22%
Slide 19: Appendix
Appendix
Slide 20: Canadian Personal and Commercial Banking
Canadian Personal and Commercial Banking Net Income – Adjusted ($MM)1 Net Interest Margin (bps) Average Loans & Acceptances2 ($B) Average Deposits ($B) 1 Adjusted results are non-GAAP financial measures. See slide 28 for further details. 2 Loan amounts are stated before any related allowances. 20
Slide 21: Canadian Personal Banking Digital Transformation
Canadian Personal Banking Digital Transformation1 Digital Adoption Rate2 Active Mobile Users3 (Millions) Banking Centres Self-Serve Transactions4 (%) 1 Excludes Simplii Financial. 2 Digital Adoption Rate calculated using 90-day active users. 3 Active Mobile Users represent the 90-day Active clients
Slide 22: Improved Diversification - Continued Growth in the U.S. Region
Improved Diversification - Continued Growth in the U.S. Region U.S. Region Earnings Contribution – Adjusted1 U.S Region AUA ($B)2 1 Adjusted results are non-GAAP financial measures. See slide 28 for further details. 2 Assets under management (AUM) are included in assets under administration (AUA). 2
Slide 23: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending • Total mortgage delinquency rate trended slightly higher in 90+ Days Q1/19 Q4/19 Q1/20 Q1/20 Delinquency Rates • The Greater Vancouver Area1 (GVA) and Greater Toronto Total Mortgages 0.27% 0.28% 0.30% Area1 (GTA) continue to outperform the Canadian aver
Slide 24: Canadian Uninsured Residential Mortgages — Q1/20 Originations
Canadian Uninsured Residential Mortgages — Q1/20 Originations Beacon Distribution • Originations of $9B in Q1/20 • Average LTV1 in Canada: 64% • GVA2: 57% • GTA2: 61% 2 2 Loan-to-Value (LTV)1 Distribution 2 2 1 LTV ratios for residential mortgages are calculated based on weighted average. See page 2
Slide 25: Canadian Uninsured Residential Mortgages
Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average • Less than 1% of this portfolio has a Beacon score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 53% • GVA2: 47% • GTA2: 50% 2 2 Lo
Slide 26: Trading Revenue (TEB) Distribution
Trading Revenue (TEB)1 Distribution2 ($MM) ($MM) 20 20 15 15 10 10 5 5 0 0 (5) (5) (10) (10) (15) Dec-19 Jan-20 (15) Nov-19 Trading Revenue VaR 1 Non-GAAP financial measure. See slide 28 for further details. 2 Trading revenue (TEB) comprises both trading net interest income and non-interest income a
Slide 27: Q1 2020 Items of Note
Q1 2020 Items of Note Item After-Tax Pre-Tax & NCI EPS Effect Effect Effect ($MM) ($MM) ($/Share) Reporting Segments Restructuring charge primarily relating to 339 250 0.56 Corporate & Other employee severance Canadian Personal & Small Business Banking/ Amortization of acquisition-related 27 21 0.05
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures We use a number of financial measures to assess the performance of our business lines. Some measures are calculated in accordance with GAAP (IFRS), while other measures do not have a standardized meaning under GAAP, and accordingly, these measures may not be comparable to
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