Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q4 2019 Earnings Presentation
29 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Dec 5, 2019
Slide 1: Investor Presentation Fourth Quarter 2019
Investor Presentation Fourth Quarter 2019 December 5, 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 Annual Report, in other filings with Canadian securities regulators or the SEC and in other com
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President and Chief Executive Officer
Slide 4: Building the relationship-oriented franchise for a modern world
Building the relationship-oriented franchise 4 …for a modern world Optimized Diversified Disciplined Strong Client Operational Earnings Capital Focused Culture Efficiency Growth Deployment • Delivered our best • FY19 adjusted1 NIX • U.S. region’s • CET1 ratio of 11.6% client experience ratio of 55.5
Slide 5: Financial Review
Financial Review Hratch Panossian Senior Executive Vice-President and Chief Financial Officer
Slide 6: Fourth Quarter, 2019 - Highlights
6 Fourth Quarter, 2019 - Highlights Reported ($MM, unless otherwise noted) Q4/18 Q3/19 Q4/19 Revenue 4,452 4,732 4,772 Earnings – Adjusted1 Non-Interest Expenses 2,591 2,670 2,838 • Pre-Provision Earnings2 growth of 4% YoY Impaired 259 272 330 Revenue Performing 5 19 72 Provision for Credit Losses 2
Slide 7: Capital
7 Capital CET1 Ratio • Q4/19 pro-forma CET1 ratio of ~12.0% after expected sale of controlling interest in FCIB • CET1 ratio of 11.6% − Strong internal capital generation Partially offset by: − RWA increase driven by business growth − Repurchase of 1 million common shares in Q4/19, with CET1 impact
Slide 8: Canadian Personal and Small Business Banking
8 Canadian Personal and Small Business Banking Strong margins and modest growth in volume driving YoY revenue growth Reported ($MM) Q4/18 Q3/19 Q4/19 • Performance driven by modest volume growth and Revenue 2,201 2,239 2,225 margin expansion Non-Interest Expenses 1,100 1,140 1,156 − Deposit balances
Slide 9: Canadian Commercial Banking and Wealth Management
Canadian Commercial Banking and 9 Wealth Management Strong pre-provision earnings1 growth driven by volume growth and expense discipline Reported ($MM) Q4/18 Q3/19 Q4/19 • Continued double-digit volume growth driving strong Revenue 986 1,023 1,028 results in Commercial Banking Non-Interest Expenses
Slide 10: U.S. Commercial Banking and Wealth Management
U.S. Commercial Banking and 10 Wealth Management Robust growth driven by continued client development and improved credit quality Reported ($MM) Q4/18 Q3/19 Q4/19 • Strong volume growth helped counter impact of three Revenue 457 509 503 separate rate cuts Non-Interest Expenses 264 282 286 − Loan bal
Slide 11: Capital Markets
11 Capital Markets Strong core pre-provision earnings1 growth through focus on delivering diversified results Reported & Adjusted2 ($MM) Q4/18 Q3/19 Q4/19 3 • Higher trading revenues and underwriting fees Revenue 649 746 735 • Strong loan growth in Corporate Banking Non-Interest Expenses 356 390 386
Slide 12: Corporate and Other
12 Corporate and Other Reported ($MM) Q4/18 Q3/19 Q4/19 • Results impacted by a number of items including a Revenue1 159 215 281 goodwill impairment charge and interest income related Non-Interest Expenses 350 327 480 to certain income tax matters Impaired 45 4 4 • Higher revenues in FCIB Performing
Slide 13: 2019 Highlights
13 2019 Highlights Reported ($MM, unless otherwise noted) FY18 FY19 Revenue 17,834 18,611 Earnings – Adjusted1 Non-Interest Expenses 10,258 10,856 • Pre-Provision Earnings2 growth of 5% YoY Impaired 952 1,147 • ROE of 15.4% Performing (82) 139 Revenue Provision for Credit Losses 870 1,286 Net Income
Slide 14: Risk Review
Risk Review Laura Dottori-Attanasio Senior Executive Vice-President and Chief Risk Officer
Slide 15: Provision for Credit Losses
15 Provision for Credit Losses Reported ($MM) Q4/18 Q3/19 Q4/19 Provision for Credit Losses up YoY & QoQ Cdn. Personal & Small Business 182 197 218 • Partly due to forward looking indicators, along with Cdn. Commercial Banking & Wealth 8 15 71 higher impairments U.S. Commercial Banking & Wealth 22 3
Slide 16: Credit Quality — Gross Impaired Loans
16 Credit Quality — Gross Impaired Loans Reported Q4/18 Q3/19 Q4/19 Canadian Residential Higher Gross Impaired Loans 0.24% 0.27% 0.28% Mortgages • Mainly due to business & government loans including Canadian Personal Lending 0.33% 0.34% 0.37% one notable impairment in the retail and wholesale Busine
Slide 17: Credit Quality — Canadian Consumer Net Write-offs
Credit Quality — Canadian Consumer 17 Net Write-offs Reported Q4/18 Q3/19 Q4/19 Canadian Residential Net Write-offs up YoY & QoQ 0.01% 0.01% 0.01% Mortgages • Higher net write-offs in credit cards and unsecured Canadian Credit Cards 3.05% 3.34% 3.20% personal lines of credit Personal Lending 0.79% 0
Slide 18: Credit Quality — Canadian Personal Banking Delinquencies
Credit Quality — Canadian Personal Banking 18 Delinquencies 90+ Days Q4/18 Q3/19 Q4/19 Delinquency Rates 90+ Days Delinquency rates up YoY & QoQ Residential Mortgages 0.24% 0.27% 0.28% • Higher mortgage delinquencies mainly from insured Uninsured 0.19% 0.22% 0.22% mortgages Insured 0.34% 0.38% 0.41%
Slide 19: Provision for Credit Losses
19 Provision for Credit Losses Reported ($MM) FY18 FY19 Cdn. Personal & Small Business 741 896 PCL rates have been normalizing Impaired 760 809 • Performing PCL moved in 2019 mainly due to Performing (19) 87 changes in forward looking indicators • 2019 performance in line with expectations despite C
Slide 20: Appendix
Appendix
Slide 21: Canadian Personal and Commercial Banking
21 Canadian Personal and Commercial Banking Net Income – Adjusted ($MM)1 Net Interest Margin (bps) -11% Average Loans & Acceptances2 ($B) Average Deposits ($B) 2% 9% 1 Adjusted results are non-GAAP financial measures. See slide 29 for further details. 2 Loan amounts are stated before any related all
Slide 22: Canadian Personal Banking Digital Transformation
Canadian Personal Banking Digital 22 Transformation1 Digital Adoption Rate2 Active Mobile Users3 (Millions) 5.0% 29.1% Banking Centres Self-Serve Transactions4 (%) -4.8% 3.3% 1 Excludes Simplii Financial. 2 Digital Adoption Rate calculated using 90-day active users. 3 Active Mobile Users represent t
Slide 23: Improved Diversification - Continued Growth in the U.S. Region
Improved Diversification - Continued Growth in 23 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 29 for further details. 2 Assets under management (AUM) are included in assets under administration (AUA)
Slide 24: Canadian Real Estate Secured Personal Lending
24 Canadian Real Estate Secured Personal Lending 90+ Days Q4/18 Q3/19 Q4/19 • Total mortgage delinquency rate trended slightly higher Delinquency Rates Total Mortgages 0.24% 0.27% 0.28% in Q4/19, but uninsured portfolio rate remained stable • The Greater Vancouver Area1 (GVA) and Greater Toronto Uni
Slide 25: Canadian Uninsured Residential Mortgages — Q4/19 Originations
Canadian Uninsured Residential Mortgages — 25 Q4/19 Originations Beacon Distribution • Originations of $10B in Q4/19 • Average LTV1 in Canada: 64% − GVA2: 58% − GTA2: 61% 2 2 Loan-to-Value (LTV)1 Distribution 2 2 1 LTV ratios for residential mortgages are calculated based on weighted average. See pa
Slide 26: Canadian Uninsured Residential Mortgages
26 Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average • Less than 1% of this portfolio has a Beacon score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 54% − GVA2: 47% − GTA2: 50% 2 2
Slide 27: Trading Revenue (TEB) Distribution
27 Trading Revenue (TEB)1 Distribution2 1 Non-GAAP financial measure. See slide 29 for further details. 2 Trading revenue (TEB) comprises both trading net interest income and non-interest income and excludes underwriting fees, commissions, certain month-end transfer pricing and other miscellaneous a
Slide 28: Items of Note
28 Items of Note Q4 2019 FY 2019 After-Tax After-Tax Pre-Tax & NCI EPS Pre-Tax & NCI EPS Effect Effect Effect Effect Effect Effect Item ($MM) ($MM) ($/Share) ($MM) ($MM) ($/Share) Goodwill impairment charge related to the expected sale of our controlling interest in FirstCaribbean International Bank
Slide 29: Non-GAAP Financial Measures
29 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