Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q3 2019 Earnings Presentation
27 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Aug 22, 2019
Slide 1: Investor Presentation Third Quarter 2019
Investor Presentation Third Quarter 2019 August 22, 2019
Slide 2: Forward-Looking Statements
2 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 communicat
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President and Chief Executive Officer
Slide 4: Building the relationship-oriented franchise
Building the relationship-oriented franchise 4 …for a modern world Optimized Diversified Disciplined Strong Client Operational Earnings Capital Focused Culture Efficiency Growth Deployment • Positive momentum • Q3/19 adjusted1 • U.S. region • CET1 ratio of 11.4% in client depth and NIX ratio of 55.4
Slide 5: Financial Review
Financial Review Kevin Glass Senior Executive Vice-President and Chief Financial Officer
Slide 6: Third Quarter, 2019 - Highlights
6 Third Quarter, 2019 - Highlights Reported ($MM, unless otherwise noted) Q3/18 Q2/19 Q3/19 Earnings – Adjusted1 Revenue 4,547 4,542 4,732 Non-Interest Expenses 2,572 2,588 2,670 • Pre-Provision Earnings2 growth of 3% YoY • ROE of 15.6% Impaired 274 250 272 Performing (33) 5 19 Revenue Provision for
Slide 7: Capital
7 Capital CET1 Ratio • Strong internal capital generation Partially offset by: • RWA increase driven by business growth
Slide 8: Canadian Personal and Small Business Banking
8 Canadian Personal and Small Business Banking Strong performance driven by NIM expansion and volume growth Reported ($MM) Q3/18 Q2/19 Q3/19 • Solid results driven by margin expansion and volume Revenue 2,176 2,128 2,239 growth Non-Interest Expenses 1,105 1,122 1,140 − NIM up 12 bps YoY and 8 bps Qo
Slide 9: Canadian Commercial Banking and Wealth Management
Canadian Commercial Banking and 9 Wealth Management Continued volume growth and fee income driving solid pre-provision earnings2 growth Reported & Adjusted1 ($MM) Q3/18 Q2/19 Q3/19 • Continued momentum in Commercial Banking, with Revenue 988 1,003 1,023 results driven by volume growth Non-Interest E
Slide 10: U.S. Commercial Banking and Wealth Management
U.S. Commercial Banking and 10 Wealth Management Results reflect the continued execution of our high-touch, relationship-oriented strategy Reported ($MM) Q3/18 Q2/19 Q3/19 • Strong results driven by expanding client base and Revenue 448 475 509 deepening relationships Non-Interest Expenses 246 277 2
Slide 11: Capital Markets
11 Capital Markets Delivering consistent and diversified performance Reported & Adjusted1 ($MM) Q3/18 Q2/19 Q3/19 2 • Strong performance in Global Markets driven by higher Revenue 752 751 746 trading revenue Non-Interest Expenses 384 372 390 • Lower underwriting activity Pre-Provision Earnings3 368
Slide 12: Corporate and Other
12 Corporate and Other Reported ($MM) Q3/18 Q2/19 Q3/19 • Strong performance in CIBC FirstCaribbean Revenue1 183 185 215 − Q3/18 included Government of Barbados loans and Non-Interest Expenses 324 287 327 securities restructuring, impacting both revenue and Impaired 44 5 4 provision for credit losse
Slide 13: Risk Review
Risk Review Laura Dottori-Attanasio Senior Executive Vice-President and Chief Risk Officer
Slide 14: Provision for Credit Losses
14 Provision for Credit Losses Reported & Adjusted1 ($MM) Q3/18 Q2/19 Q3/19 Cdn. Personal & Small Business 199 202 197 Provision for Credit Losses up QoQ Cdn. Commercial Banking & Wealth 2 25 15 • Higher provisions in U.S. Commercial Banking and Capital Markets U.S. Commercial Banking & Wealth 28 12
Slide 15: Credit Quality — Gross Impaired Loans
15 Credit Quality — Gross Impaired Loans Reported Q3/18 Q2/19 Q3/19 Canadian Residential Gross Impaired Loans down QoQ 0.24% 0.27% 0.27% Mortgages • Lower impairments as a result of a $331MM Canadian Personal Lending 0.31% 0.34% 0.34% reduction in utilities Business & Government • Offset by a $120MM
Slide 16: Credit Quality — Canadian Consumer Net Write-offs
Credit Quality — Canadian Consumer 16 Net Write-offs Reported Q3/18 Q2/19 Q3/19 Canadian Residential • Overall write-off ratios are stable 0.01% 0.01% 0.01% Mortgages Canadian Credit Cards 3.28% 3.48% 3.34% CIBC Personal Lending 0.76% 0.82% 0.72% Total 0.28% 0.30% 0.28% Net Write-off Ratio
Slide 17: Credit Quality — Canadian Personal Banking Delinquencies
Credit Quality — Canadian Personal Banking 17 Delinquencies 90+ Days Q3/18 Q2/19 Q3/19 Delinquency Rates 90+ Days Delinquency rates flat QoQ Residential Mortgages 0.24% 0.27% 0.27% • Delinquencies continue to remain stable Uninsured 0.19% 0.21% 0.22% Insured 0.33% 0.37% 0.38% Credit Cards 0.78% 0.79
Slide 18: Appendix
Appendix
Slide 19: Canadian Personal and Commercial Banking
19 Canadian Personal and Commercial Banking Net Income – Adjusted ($MM)1 Net Interest Margin (bps) 2% Average Loans & Acceptances2 ($B) Average Deposits ($B) 2% 9% 1 Adjusted results are non-GAAP financial measures. See slide 27 for further details. 2 Loan amounts are stated before any related allow
Slide 20: Canadian Personal Banking Digital Transformation
Canadian Personal Banking Digital 20 Transformation1 Digital Adoption Rate2 Active Mobile Users3 (Millions) 4.5% 28.0% Banking Centres Self-Serve Transactions4 (%) -5.0% 3.7% 1 Excludes Simplii Financial. 2 Digital Adoption Rate calculated using 90-day active users. 3 Active Mobile Users represent t
Slide 21: Improved Diversification - Continued Growth in the U.S. Region
Improved Diversification - Continued Growth in 21 the U.S. Region U.S. Region Earnings Contribution – Adjusted1 U.S Region AUA2 ($B) 1 Adjusted results are non-GAAP financial measures. See slide 27 for further details. 2 Assets under management (AUM) are included in assets under administration (AUA)
Slide 22: Canadian Real Estate Secured Personal Lending
22 Canadian Real Estate Secured Personal Lending 90+ Days Q3/18 Q2/19 Q3/19 • Delinquency rates remained flat in Q3/19 Delinquency Rates Total Mortgages 0.24% 0.27% 0.27% • The Greater Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) continue to outperform the Canadian Uninsured Mortgages 0.19%
Slide 23: Canadian Uninsured Residential Mortgages — Q3/19 Originations
Canadian Uninsured Residential Mortgages — 23 Q3/19 Originations Beacon Distribution • Originations of $9B in Q3/19 • Average LTV1 in Canada: 64% − GVA2: 57% − GTA2: 62% 2 2 Loan-to-Value (LTV)1 Distribution 2 2 1 LTV ratios for residential mortgages are calculated based on weighted average. See pag
Slide 24: Canadian Uninsured Residential Mortgages
24 Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average • 1% of this portfolio has a Beacon score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 54% − GVA2: 46% − GTA2: 50% 2 2 Loan-to-V
Slide 25: Trading Revenue (TEB) Distribution
25 Trading Revenue (TEB)1 Distribution2 1 Non-GAAP financial measure. See slide 27 for further details. 2 Trading revenue (TEB) comprises both trading net interest income and non-interest income and excludes underwriting fees, commissions, certain month-end transfer pricing and other miscellaneous a
Slide 26: Q3 2019 Items of Note
26 Q3 2019 Items of Note After-Tax Pre-Tax & NCI EPS Effect Effect Effect Item ($MM) ($MM) ($/Share) Reporting Segments Canadian Personal & Small Business Banking/ Amortization of acquisition-related 27 21 0.05 U.S. Commercial Banking & Wealth Management/ intangible assets Corporate & Other Purchase
Slide 27: Non-GAAP Financial Measures
27 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