Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q2 2022 Earnings Presentation
39 slides from Canadian Imperial Bank Of Commerce's earnings presentation, May 26, 2022
Slide 1: Quarterly Results Presentation Second Quarter 2022
Quarterly Results Presentation Second Quarter 2022 May 26, 2022 All amounts are in Canadian dollars unless otherwise indicated.
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 Investor Presentation, in other filings with Canadian securities regulators or the SEC and in oth
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President and Chief Executive Officer
Slide 4: Strong performance across our Bank as we deliver on our near-term priorities
Strong performance across our Bank as we deliver on our near-term priorities EPS1 Reported $1.62 Adjusted2 $1.77 Elevating the client Focusing on High-growth, Investing in future experience High-touch client segments differentiators Revenue Announced market-leading Launched CIBC Costco Loans and Dep
Slide 5: Supporting our clients and communities
Supporting our clients and communities #2 Released CIBC’s Net-Zero Approach 2 J.D. Power Committed to collaborating with and supporting $500,000 Satisfaction Scores2 our clients through the low carbon transition Provided financial support for Ukraine to Established 2030 targets1 (2020 base yea
Slide 6: Financial Review
Financial Review Hratch Panossian Senior Executive Vice-President and Chief Financial Officer
Slide 7: Solid results in Q2 2022
Solid results in Q2 2022 Revenue Q2/22 revenue Operating Leverage2 Q2/22 Operating Leverage Q2/22 EPS Q2/22 ROE EPS1 ROE2 Reported $5.4B Reported +11% YoY Reported $1.62 Reported 14.0% (4.0)% $1.77 Adjusted $5.4B Adjusted Adjusted3 +11% YoY Adjusted3 15.2% (1.8)% Liquidity Coverage Ratio7 Average Q2
Slide 8: Second Quarter 2022 Financial Results
Second Quarter 2022 Financial Results Reported ($MM) Q2/22 YoY QoQ Revenue Revenue 5,376 9% (2%) • Net interest income up 12% YoY Net interest income 3,088 12% (1%) • Diversified volume growth across our business; total average loans up 16% Non-interest income 2,288 5% (3%) YoY, average deposits up
Slide 9: Strong growth in net interest income driven by robust growth in loans and deposits
Strong growth in net interest income driven by robust growth in loans and deposits Net Interest Margin1,2 Loans2,4 ($B, local currency) Deposits2 ($B, local currency) 3 Canadian Personal & Commercial NIM1,5 U.S. Commercial & Wealth NIM1 6 1 Certain additional disclosures for these specified financia
Slide 10: Positioned to continue benefiting from rising rates
Positioned to continue benefiting from rising rates • Year 1 benefit of approximately $428MM to our net interest income from an immediate and sustained 100 bps increase as at April 30, 2022, with approximately 50% driven by short-term rates • Year 2 benefit from rising rates (+100 bps) of approximat
Slide 11: Trading activity drives continued strength in fee income
Trading activity drives continued strength in fee income Non-Interest Income by Category ($MM)1 • Market-related fees benefited from strong trading activity • Trading revenues up 51% YoY • Mutual fund fees up 5% YoY, despite sequential declines • Continued growth in investment management and custodi
Slide 12: Expense growth driven by investments to fuel sustained growth, and inflationary pressures
Expense growth driven by investments to fuel sustained growth, and inflationary pressures Expense Growth ($MM) - Adjusted1 • Strategic Initiatives focused on driving long-term growth, with the two largest components being: • Investments associated with the acquisition of the Costco credit card portf
Slide 13: We continue to deploy Balance Sheet resources towards organic growth
We continue to deploy Balance Sheet resources towards organic growth $B Q2/21 Q1/22 Q2/22 • CET1 ratio of 11.7%, down 52 bps, reflecting: Average Loans and Acceptances 425.0 474.5 492.6 • Capital generation from earnings net of dividends Average Deposits 586.6 652.9 664.2 CET1 capital 31.9 34.8 35.1
Slide 14: Personal & Business Banking – diversified business mix reflected in strong revenue growth
Personal & Business Banking – diversified business mix reflected in strong revenue growth Reported ($MM) Q2/22 YoY QoQ • Net interest income increase of 11% YoY driven by continued strong volume growth Revenue 2,143 10% (2%) • Loan balances up 12%, 1% due to Costco card portfolio Net interest income
Slide 15: Canadian Commercial & Wealth – strong top-line growth driven by increased client activity
Canadian Commercial & Wealth – strong top-line growth driven by increased client activity Reported & Adjusted1 ($MM) Q2/22 YoY QoQ • Strong volume growth driving 31% increase in net interest income Revenue 1,303 15% 0% • Commercial loan balances up 22% YoY Net interest income 401 31% 6% • Commercial
Slide 16: U.S. Commercial & Wealth – strong business volumes amid market volatility and investments
U.S. Commercial & Wealth – strong business volumes amid market volatility and investments Reported (US$MM) Q2/22 YoY QoQ • Net interest income up 8% YoY due to volume growth Revenue 467 10% (3%) • Loan balances up 12%; up 18% excluding PPP loans Net interest income 304 9% (1%) • Deposit balances up
Slide 17: Capital Markets – strong performance broadly, supported by higher client activity
Capital Markets – strong performance broadly, supported by higher client activity Reported & Adjusted1 ($MM) Q2/22 YoY QoQ • Continued strength across the business Revenue2 1,316 10% 1% • Increased trading activity from last year in fixed income, foreign exchange, and equity derivatives Net interest
Slide 18: Corporate and Other
Corporate and Other Reported ($MM) Q2/22 YoY QoQ • Lower treasury revenues, largely impacted by credit spread dislocation in the quarter Revenue1 23 (82%) (78%) • Adjusted2 expenses up 8% YoY and 7% QoQ Net interest income (40) ($44) ($26) Non-interest income 63 (50%) (47%) • YoY growth driven by hi
Slide 19: In Summary
In Summary Disciplined and consistent approach to capital allocation provides capacity and flexibility to execute on our growth plans Resilient, Solid results demonstrate diversified continued momentum franchise as we across our business continue to navigate uncertain markets Second Quarter, 2022 19
Slide 20: Risk Review
Risk Review Shawn Beber Senior Executive Vice-President, Chief Risk Officer
Slide 21: Provision for credit losses up YoY and QoQ
Provision for credit losses up YoY and QoQ ($MM) Q2/21 Q1/22 Q2/22 Items Q2/22 Provision for Credit Losses up YoY and QoQ Reported Reported Reported of Adjusted2 • Impaired provisions up in Q2/22 due to higher write-offs and allowance increase in Note1 retail and higher provisions net of reversals i
Slide 22: Allowance Coverage Ratio down YoY and QoQ
Allowance Coverage Ratio down YoY and QoQ Allowance coverage ratio down YoY and QoQ Reported Q2/21 Q1/22 Q2/22 • Lower allowance coverage in Q2/22 driven by portfolio growth Canadian Credit Cards 5.8% 5.7% 4.9% • Current allowance coverage remains higher than the pre-pandemic level Canadian Resident
Slide 23: Lending portfolio is well positioned
Lending portfolio is well positioned Overall Loan Mix (Outstanding) • Nearly two-thirds of our portfolio is consumer lending composed mainly of mortgages, with uninsured having an average loan-to-value of 46% • The balance of our portfolio is in business and government lending with an average risk r
Slide 24: Credit Quality — gross impaired loan ratios down YoY and QoQ
Credit Quality — gross impaired loan ratios down YoY and QoQ Reported Q2/21 Q1/22 Q2/22 Balances were down YoY & QoQ Canadian Residential Mortgages 0.25% 0.17% 0.14% • Overall impaired balances continued to trend lower Canadian Personal Lending 0.32% 0.27% 0.30% Business & Government Loans1 0.90% 0.
Slide 25: Credit Quality — Canadian Consumer
Credit Quality — Canadian Consumer Reported Net Write-Offs Q2/21 Q1/22 Q2/22 Net Write-off Ratio1 Canadian Residential Mortgages 0.01% 0.01% 0.01% Canadian Credit Cards 5.65% 1.88% 2.16% Personal Lending 0.53% 0.42% 0.40% Total 0.29% 0.13% 0.15% 90+ Days Delinquency Rates1 Q2/21 Q1/22 Q2/22 Canadian
Slide 26: In Summary
In Summary Second Quarter, 2022 26
Slide 27: Appendix
Appendix CIBC®
Slide 28: Growing Digital Engagement and Adoption
Growing Digital Engagement and Adoption1 Digital Adoption Rate2 Active Digital Banking Users3 Digital Channel Usage (MM) (# of Sessions, MM) Digital Transactions4 (MM) Transactions by Channel4 5 1 Canadian Personal Banking only, excluding Simplii Financial. 2 Digital Adoption Rate calculated using 9
Slide 29: Canadian Personal and Commercial Banking
Canadian Personal and Commercial Banking1 Net Income Net Interest Margin on Average Interest Earning Assets (bps)2 2 Average Loans ($B)3,4 Average Deposits ($B)3 5 1 Includes the results of Canadian Personal and Business Banking and Canadian Commercial Banking, as well as Simplii Financial and CIBC
Slide 30: U.S. Commercial Banking & Wealth Management (C$)
U.S. Commercial Banking & Wealth Management (C$) Reported (C$MM) Q2/22 YoY QoQ • Net interest income up 10%, reflecting continued strength in client acquisition and franchising Revenue 591 11% (3%) Net interest income 385 10% (1%) • Loan balances up 15% YoY Non-interest income 206 14% (6%) • Deposit
Slide 31: Commercial Real Estate exposure is well diversified
Commercial Real Estate exposure is well diversified Canadian Commercial Real Estate Exposure by Sector1 U.S. Commercial Real Estate Exposure by Sector2 • 70% of drawn loans investment grade3 • 38% of drawn loans investment grade3 1 Includes $3.6B in Multi Family that is reported in residential mortg
Slide 32: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates Q2/21 Q1/22 Q2/22 • The Greater Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) continue to perform well Total Mortgages 0.25% 0.17% 0.14% Uninsured Mortgages 0.23% 0.13% 0.10% Uninsured Mortgages in GVA1 0.24% 0.11% 0.11
Slide 33: Canadian Uninsured Residential Mortgages — Q2/22 Originations
Canadian Uninsured Residential Mortgages — Q2/22 Originations1 FICO score Distribution • Originations of $17B in Q2/22 • Average LTV2 in Canada: 65% • GVA3: 62% • GTA3: 64% 3 3 Loan-to-Value (LTV)2 Distribution 3 3 1 Originations include refinancing of existing mortgages but not renewals. 2 LTV rati
Slide 34: Canadian Uninsured Residential Mortgages
Canadian Uninsured Residential Mortgages FICO score Distribution • Better current FICO score and LTV1 distributions in GVA2 and GTA2 than the Canadian average • Less than 1% of this portfolio has a FICO score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 46% • GVA2: 43% • GTA2: 44%
Slide 35: Trading Revenue (TEB) Distribution
Trading Revenue (TEB) Distribution1 1 See note 4 on slide 39. Second Quarter, 2022 35
Slide 36: Forward-looking Information Variables used to estimate our Expected Credit Loss
Forward-looking Information Variables used to estimate our Expected Credit Loss1 Forward-Looking Information Variables Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the next 12 months remaining forecast next 12 months remaining fo
Slide 37: Q2/22 Items of Note
Q2/22 Items of Note Item Pre-Tax After-Tax & EPS Effect NCI Effect Effect1 ($MM) ($MM) ($/Share) Reporting Segments Acquisition and integration-related costs as well as purchase accounting adjustments and provision for credit losses for performing 106 77 0.09 Canadian Personal & Business Banking loa
Slide 38: 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 International Financial Reporting Standards (IFRS or GAAP), while other measures do not have a standardized meaning under GAAP, and accor
Slide 39: Glossary
Glossary Item Definition 1 Total PCL Ratio Provision for (reversal of) credit losses to average loans and acceptances, net of allowance for credit losses. 2 Impaired PCL Ratio Provision for (reversal of) credit losses on impaired loans to average loans and acceptances, net of allowance for credit lo
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