Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q3 2005 Earnings Presentation
40 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Aug 24, 2005
Slide 1: CIBC Third Quarter Investor Presentation
Third Quarter, 2005 Investor Presentation CIBC Third Quarter Investor Presentation August 24, 2005 CIBC Overview Gerry McCaughey President and Chief Executive Officer 1
Slide 2: Financial Review: Q3 Summary
Third Quarter, 2005 Investor Presentation Third Quarter, 2005 Financial Review Tom Woods Senior Executive Vice-President and Chief Financial Officer Q3 Summary Loss per share(1): $5.77 - Includes(2): - Enron-related litigation provision ($7.45/share) - Higher than normal Merchant Banking • Capital R
Slide 3: Items of Note and Quarterly Income Statement
Third Quarter, 2005 Investor Presentation Items of Note Pre-Tax After-Tax EPS Effect Strategic Business Unit Effect ($MM) Effect ($MM) ($/share) Q3 2005 Enron-related Litigation Provision(1) (2,830) (2,533) (7.45) World Mkts Net recovery re. Hedge fund provision(2) (33) 20 0.06 Wealth Mgmt, World Mk
Slide 4: CIBC Revenue and Expenses
Third Quarter, 2005 Investor Presentation CIBC Revenue ($MM) Q1/05 Q2/05 Q3/05 Change Net Interest Income 1,322 1,224 1,219 (5) Fees for Services Underwriting and Advisory 223 200 157 (43) • Lower new equity issues Deposit and Payment 200 194 203 9 Credit 82 76 88 12 Cards 88 74 82 8 Investment Mgmt
Slide 5: CIBC NIAT Components
Third Quarter, 2005 Investor Presentation CIBC – NIAT Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 (1) (1) CIBC Retail Markets 247 293 364 263 286 (1) (1) CIBC Wealth Management 104 100 114 78 118 (1) (1) (1) CIBC World Markets 253 (34) 173 115 (2,287) excl. Enron provision (2) 160 246 (1) (1) (1) Co
Slide 6: Retail Markets Revenue Components
Third Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Personal Banking 527 545 551 538 561 Small Business Banking 145 146 151 145 152 (1) Cards 347 357 383 332 368 Mortgages 148 147 145 146 152 (1) Other 158 132 225 147 138 1,325 1,327 1,
Slide 7: Retail Markets Revenue Components: Small Business and Cards
Third Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Small Business Personal Banking 527 545 551 538 561 + deposit and loan balances up Small Business Banking 145 146 151 145 152 + fee income up (1) Cards 347 357 383 332 368 Mortgages 14
Slide 8: Retail Markets Revenue Components: Mortgages and Other
Third Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Mortgages Personal Banking 527 545 551 538 561 + residential balances up Small Business Banking 145 146 151 145 152 + prepayment cash penalties up (1) Cards 347 357 383 332 368 Mortgag
Slide 9: Retail Markets NIAT and Wealth Management Revenue
Third Quarter, 2005 Investor Presentation CIBC Retail Markets – NIAT ($MM) (1) 364 vs. Q2 (1) 293 286 + higher balances 263 + Cards revenue up 247 + fee income up – loan losses up – severance costs up Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 _______________________ (1) Affected by an Item of Note, see Slide 5 for
Slide 10: Wealth Management Revenue Components
Third Quarter, 2005 Investor Presentation CIBC Wealth Management – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Imperial Service 195 195 200 200 207 Retail Brokerage 233 251 277 288 270 Private Wealth Management 35 34 38 36 37 Wealth Products 125 113 130 124 132 Other 21 19 8 15 4 609 612 653
Slide 11: Wealth Management Revenue: Retail Brokerage and Products
Third Quarter, 2005 Investor Presentation CIBC Wealth Management – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Retail Brokerage Imperial Service 195 195 200 200 207 + Assets Under Administration up Retail Brokerage 233 251 277 288 270 Private Wealth Management 35 34 38 36 37 – trading volume
Slide 12: Wealth Management NIAT
Third Quarter, 2005 Investor Presentation CIBC Wealth Management – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Other Revenue Imperial Service 195 195 200 200 207 – lower Treasury revenue in GIC books Retail Brokerage 233 251 277 288 270 Private Wealth Management 35 34 38 36 37 Wealth Product
Slide 13: World Markets Revenue
Third Quarter, 2005 Investor Presentation CIBC World Markets – Revenue ($MM) 929 836 791 749 742 Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 25 CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Capital Markets 321 309 349 325 346 Investment Banking & Credit Products 326 247 296 299 264 Merchan
Slide 14: World Markets Revenue Components
Third Quarter, 2005 Investor Presentation CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Capital Markets Capital Markets 321 309 349 325 346 + debt businesses up Investment Banking & + structured products and Credit Products 326 247 296 299 264 equity arbitrage up Merchant
Slide 15: World Markets Merchant Banking and NIAT
Third Quarter, 2005 Investor Presentation CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q3 Q4 Q1 Q2 Q3 Merchant Banking Capital Markets 321 309 349 325 346 Note - $45MM is VIE Investment Banking & consolidation ($27MM Credit Products 326 247 296 299 264 netted out in Non- Controlling Int
Slide 16: Competitive Balance Sheet Measures and Share Repurchases
Third Quarter, 2005 Investor Presentation CIBC – Competitive Balance Sheet Measures Net Tier 1 Unrealized General GA as % Impaired ($MM) Ratio Gains Allowance of RWA(1) Loans(2) CIBC 7.5% 841 1,025 0.84% 307 Bank Peer Group(3) 10.1% 504 1,204 0.78% 562 _______________________ (1) General Allowance a
Slide 17: Common Share Dividends; Retail Markets ROE and Efficiency
Third Quarter, 2005 Investor Presentation Common Share Dividends ($ per share) 0.68 0.65 0.65 0.60 0.60 Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 33 CIBC Retail Markets – ROE & Efficiency (NIX) Ratio 55% 43% 41% 44% ROE(1) 36% 58% 57% 56% NIX 55% 53% (2) (2) Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 _______________________ (1) F
Slide 18: Retail Markets Mortgages, Cards and Loan Balances
Third Quarter, 2005 Investor Presentation CIBC Retail Markets – Mortgages & Cards ($B; spot) 91.0 88.1 Residential 86.0 84.4 Mortgages 82.1 10.5 10.4 10.4 10.3 Card Loans 10.1 Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 35 CIBC Retail Markets – Loan Balances (1) ($B; spot) 23.3 22.6 Personal 21.6 21.9 20.9 Loans 11.
Slide 19: Retail Markets Market Share
Third Quarter, 2005 Investor Presentation CIBC Retail Markets – Market Share (1)(2) 14.8% 14.8% Residential 14.7% 14.7% 14.7% Mortgages Consumer 19.3% 19.3% 19.2% 19.2% Deposits 19.0% (3) Consumer 11.3% 11.4% 11.4% 11.4% Loans 11.1% (excl. cards) Q3 Q4 Q1 Q2 Q3 _______________________ F ‘04 F ‘05 (1
Slide 20: Wealth Management ROE, Efficiency, AUA and AUM
Third Quarter, 2005 Investor Presentation CIBC Wealth Management – ROE & Efficiency (NIX) Ratio 40% 42% 36% 35% 28% ROE(1) 79% 78% NIX 73% 74% 73% (2) (2) Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 _______________________ (1) For further details, see Non-GAAP measures within the Notes to users section on page i of
Slide 21: Mutual Fund and Fixed Term Investments Market Share
Third Quarter, 2005 Investor Presentation Mutual Fund AUM & Market Share Mutual Fund AUM Canadian Market Share(1) 44.4 10.0 45 42.2 42.4 40.6 40.5 40 Market Share (%) 9.0 35 $ Billions 30 8.6 8.5 8.4 8.3 8.0 25 8.2 20 7.0 15 10 6.0 5 0 5.0 Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 _______________________ Source -
Slide 22: Imperial Service and Discount Brokerage
Third Quarter, 2005 Investor Presentation Imperial Service # IDA Registered Productivity ($MM) Financial Advisers Funds Managed per FA 64.1 65.9 62.2 63.3 1,075 1,077 1,072 1,070 F ‘04 Q1 Q2 Q3 F ‘04 Q1 Q2 Q3 Annual F ‘05 Annual F ‘05 43 Discount Brokerage (1) Active Accounts Trades / Day 500 15 450
Slide 23: Wood Gundy and EPS by Type of Business
Third Quarter, 2005 Investor Presentation CIBC Wood Gundy (1) AUA AUA per Investment Adviser 120 111.7 120 105.4 105.6 97.9 100.6 100 100 80 80 $ Millions 80.4 $ Billions 76.2 76.1 60 70.0 71.9 60 40 40 20 20 0 0 Q3 Q4 Q1 Q2 Q3 F ‘04 F ‘05 _______________________ AUA includes client cash and short p
Slide 24: Retail & Wealth plus Commercial Banking
Third Quarter, 2005 Investor Presentation CIBC Retail & Wealth plus Commercial Banking (1) ($MM) Revenue NIAT F ‘04 F ‘05 F ‘04 F ‘05 Q3 Q2 Q3 Q3 Q2 Q3 CIBC Retail Markets 1,325 1,308 1,371 247 263 286 (2) (2) CIBC Wealth Management 609 663 650 104 78 118 CIBC Retail & Wealth 1,934 1,971 2,021 351 3
Slide 25: World Markets ROE and Efficiency Ratio
Third Quarter, 2005 Investor Presentation CIBC World Markets – ROE & Efficiency (NIX) Ratio 45% (7%) 33% 23% ROE (1) (499%) (3) 349% NIX (2) (TEB) 106% (3) 69% 69% 75% (4) (4) (4) Q3 Q4 Q1 Q2 Q3 F ‘04 _______________________ F ‘05 (1) For further details, see Non-GAAP measures within the Notes to us
Slide 26: World Markets Merchant Banking and Equity Trading Share
Third Quarter, 2005 Investor Presentation CIBC World Markets – Merchant Banking Total Portfolio Industry Diversification (Carrying Value = $1,472MM as at July 31, 2005) Consumer Services 20.3 % Entertainment 5.5 Financial Services 6.3 Hardware & Software 5.4 Healthcare 4.4 Industrial Growth & Servic
Slide 27: World Markets Market Share; Economic Profit
Third Quarter, 2005 Investor Presentation CIBC World Markets – Market Share Canadian New Equity Issues (1) 20 16.9 17.4 16.3 16.6 15.1 Market Share (%) 15 10 5 0 Q3 Q4 Q1 Q2 Q3 F ‘04 (2) F ‘05 _______________________ Source: CIBC Equity Capital Markets. (1) Based on total amount underwritten. Includ
Slide 28: Economic Profit/(Loss) and Reported NIMs
Third Quarter, 2005 Investor Presentation CIBC Economic Profit/(Loss) (1) ($MM) F ‘04 F ‘05 Q3 Q4 Q1 Q2 Q3 (2) (2) CIBC Retail Markets 157 205 280 179 201 (2) (2) CIBC Wealth Management 67 63 78 43 81 (2) (2) (2) CIBC World Markets 181 (103) 108 52 (2,348) (2) (2) (2) Corporate and Other (15) 36 50
Slide 29: Other Non-Interest Income
Third Quarter, 2005 Investor Presentation “Other” Non–Interest Income ($MM) F ‘04 F ‘05 Q3 Q4 Q1 Q2 Q3 Gain/(Loss) on Sale of Loans 30 28 (6) 7 1 Other Gains/(Losses)(1) 109 6 23 42 73 SAR(2) hedge revenue/(expense) (2) 19 (12) 15 12 Income from equity-accounted (4) investments(3) 16 9 76 17 80 AcG-
Slide 30: Reconciliation of Trading Revenue/Non-Controlling Interests
Third Quarter, 2005 Investor Presentation Reconciliation of Trading Revenue/Non –Controlling Interests ($MM) Q2/05 Q3/05 Equity trading revenue (TEB)(1) 51 196 less(2): Revenue in certain VIE's(3) required to be consolidated in trading revenue (2) (127) 49 69 _______________________ (1) Taxable equi
Slide 31: Reconciliation re. Settlement of Hedge Fund Investigation
Third Quarter, 2005 Investor Presentation Reconciliation re. Settlement of Hedge Fund Financing/Services Investigation (1) In Q3/05: 1. We took an incremental accrual of $33MM and tax-effected it, and 2. We tax-effected a portion of prior accruals. 1. Incremental Accrual (C $MM) CIBC Income Tax Afte
Slide 32: Reconciliation of Q3/05 Income Taxes
Third Quarter, 2005 Investor Presentation Reconciliation of Q3/05 Income Taxes (1) Net Tax Income/(Loss) (Recovery)/ Tax Rate ($MM) Before Tax Expense Reported (1,898) (106) 5.6% Add back/(subtract): Enron-related litigation provision 2,830 297 Provision re. Hedge Funds 33 53 Variable Interest Entit
Slide 33: Risk Review
Third Quarter, 2005 Investor Presentation Third Quarter, 2005 Risk Review Wayne Fox Vice Chair and Chief Risk Officer Treasury, Balance Sheet and Risk Management Key Messages Credit Quality • Gross Impaired Loans reduced 6.8% year-over-year, 5.7% quarter-over-quarter • Specific provisions at $199 mi
Slide 34: Specific Provision for Credit Losses
Third Quarter, 2005 Investor Presentation Specific Provision for Credit Losses as % of Net Loans and Acceptances 2.50% Consumer Business & Government Net Loans and Acceptances (excl. Reverse Repos) 2.00% Total (excl. Reverse Repos) Expected Total Annualized % of Bank Range: 1.50% 0.50% - 0.65% 1.00%
Slide 35: Impaired Loans and Loan Portfolio Mix
Third Quarter, 2005 Investor Presentation Impaired Loans Gross Impaired Loans Net Impaired Loans (excluding General Allowance) Net Impaired Loans as % of Loans & BAs (excl. Reverse Repos) 2.5 2.0% NIL as a % of Total Loans and BAs 1.8% 2.0 1.6% 1.4% 1.5 1.2% $B 1.0% 1.0 0.8% 0.6% 0.5 0.4% 0.2% 0.0 0
Slide 36: Trading Revenue vs. Risk; RWA and Capital Ratio Trends
Third Quarter, 2005 Investor Presentation Trading Revenue (TEB) vs. Risk (1) (2),(3) Backtesting of Trading Revenue vs. Total VaR Third Quarter, 2005 Trading Revenue Total VaR 16 16 12 12 8 8 4 4 C$MM - - (4) (4) (8) (8) (12) (12) (16) (16) 8-Jul 19-Jul 28-Jul 9-Jun 20-Jun 29-Jun 2-May 11-May 20-May
Slide 37: Appendix
Third Quarter, 2005 Investor Presentation Appendix Specific Provision for Credit Losses ($MM) 400 Consumer Business & Government 350 101 300 250 138 91 200 156 150 274 77 161 100 184 185 154 169 140 50 73 87 22 9 19 38 0 -50 Q1/05 Q2/05 Q3/05 1999* 2000* 2001* 2002* 2003* 2004* -100 * Full Year /4.
Slide 38: Business/Consumer Loan Portfolio Mix
Third Quarter, 2005 Investor Presentation Business/Consumer Loan Portfolio Mix 80% 73% 75% 75% 75% 76% % of Outstanding Loans 67% 70% 62% 59% 60% 56% 50% 44% 42% 39% 40% 33% 27% 30% 25% 25% 25% 24% 20% 10% 0% 1999 2000 2001 2002 2003 2004 Q1/05 Q2/05 Q3/05 Business & Government Consumer 75 Business
Slide 39: Credit Protection and Q3 Formations
Third Quarter, 2005 Investor Presentation Credit Protection Industry Diversification ($MM) as at July 31, 2005 On Balance Sheet Total Bought Oil & Gas $437 $2,275 Business Services 314 515 Cable & Telecom 245 664 Manufacturing - Capital 226 882 Forest Products 162 380 Retail & Wholesale 156 531 Real
Slide 40: Forward-Looking Statements
Third Quarter, 2005 Investor Presentation Forward – Looking Statements This presentation contains forward-looking statements which are made pursuant to the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but ar