Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q3 2017 Earnings Presentation
32 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Aug 24, 2017
Slide 1: CIBC Investor Presentation Third Quarter, 2017
CIBC Investor Presentation Third Quarter, 2017 August 24, 2017
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: Third Quarter, 2017 Financial Review
Third Quarter, 2017 Financial Review Kevin Glass Senior Executive Vice-President and Chief Financial Officer
Slide 5: Third Quarter, 2017 Summary
5 Third Quarter, 2017 Summary Q3/16 Q2/17 Q3/17 • Adjusted(2) EPS growth of 4% YoY Net Income ($MM) - Reported (1) 1,441 1,050 1,097 Net Income ($MM) - Adjusted (2) 1,072 1,070 1,166 • Operating Leverage of 1.0% • ROE of 17.3% Diluted EPS - Reported $3.61 $2.59 $2.60 Diluted EPS - Adjusted (2) $2.67
Slide 6: Canadian Retail & Business Banking
6 Canadian Retail & Business Banking Adjusted ($MM) (1) Q3/16 Q2/17 Q3/17 • Strong and broad-based volume growth Personal Banking 1,779 1,771 1,867 Business Banking 435 447 467 − Mortgages up 13% Other 11 7 8 − Personal deposits up 7% Revenue 2,225 2,225 2,342 Provision for Credit Losses 197 196 187
Slide 7: Canadian Wealth Management
7 Canadian Wealth Management Adjusted ($MM) (1) Q3/16 Q2/17 Q3/17 • Higher fee-based client asset Retail Brokerage 317 352 354 growth in Retail Brokerage Asset Management 196 207 204 Private Wealth Management 41 42 45 Revenue 554 601 603 • Strong AUM growth in Asset Non-Interest Expenses 384 405 417
Slide 8: U.S. Commercial Banking & Wealth Management
8 U.S. Commercial Banking & Wealth Management Adjusted ($MM) (1) Q3/16 Q2/17 Q3/17 • Strong results from PrivateBank Commercial Banking 39 42 150 contributed $26MM(1) to Q3/17 Wealth Management 53 58 80 earnings(3) Other 1 1 9 Revenue 93 101 239 Provision for Credit Losses 0 0 34 • Combined YoY reve
Slide 9: Capital Markets
9 Capital Markets Adjusted ($MM) (1) Q3/16 Q2/17 Q3/17 • Revenue down 8% YoY Global Markets 415 407 360 − Higher revenue from Global Corporate & Investment Banking 325 284 321 Markets Financing activities Other (2) (1) (2) Revenue (2) 738 690 679 − Lower equity derivatives trading Provision for (rev
Slide 10: Corporate & Other
10 Corporate & Other Adjusted ($MM) (1) Q3/16 Q2/17 Q3/17 • Revenue up YoY International Banking 176 178 183 − Lower TEB revenue offset Other (109) (90) 67 Revenue (2) 67 88 250 − Higher revenue in CIBC Provision for (reversal of) Credit Losses (1) (12) (13) FirstCaribbean and Treasury Non-Interest
Slide 11: Capital
11 Capital CET1 Ratio (all-in basis) • CET1 ratio down 180 bps QoQ, largely reflecting the impact of the PrivateBank acquisition Partially offset by: • Strong internal capital generation • Share issuance driven by DRIP
Slide 12: Third Quarter, 2017 Risk Review
Third Quarter, 2017 Risk Review Laura Dottori-Attanasio Senior Executive Vice-President and Chief Risk Officer
Slide 13: Provision for Credit Losses
13 Provision for Credit Losses Adjusted ($MM) (1) Q3/16 Q2/17 Q3/17 vs. Q2/17: Canadian Retail and Business Banking 197 196 187 Canadian Wealth Management - - - • U.S. Commercial Banking U.S. Commercial Banking and Wealth Management - - 34 and Wealth Management: Capital Markets 7 (5) 1 Corporate and
Slide 14: Impaired Loans and Formations
14 Impaired Loans and Formations Q3/16 Q2/17 Q3/17 • New formations up QoQ, mainly Reported ($MM) Consumer 291 349 339 due to one loan in our pre- Business and Government 283 40 134 existing U.S. real estate finance Total New Formations 574 389 473 portfolio • Gross impaired loans up $11 Gross and N
Slide 15: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured 15 Personal Lending 90+ Days Delinquency Rates Q3/16 Q2/17 Q3/17 • Uninsured mortgages in the Total Mortgages 0.26% 0.25% 0.23% Greater Vancouver Area(1) (GVA) Uninsured Mortgages 0.19% 0.19% 0.17% and Greater Toronto Area(1) (GTA) Uninsured Mortgages in GVA (1) 0.04% 0.
Slide 16: Canadian Uninsured Residential Mortgages – Q3/17 Originations
Canadian Uninsured Residential Mortgages – 16 Q3/17 Originations Beacon Distribution 41% • $16B of originations in Q3/17 37% 38% 32% 31% 28% • Average LTV(1) in Canada: 63% − GVA(2): 58% 16% 16% 14% 10% 12% − GTA(2): 61% 9% 6% 5% 5% ≤650 651-700 701-750 751-800 >800 (2) (2) Canada GVA GTA Loan-to-Va
Slide 17: Canadian Uninsured Residential Mortgages
17 Canadian Uninsured Residential Mortgages Beacon Distribution 42% • Better current Beacon and LTV(1) 40% 38% distributions in GVA(2) and GTA(2) than 28% 29% the Canadian average 26% • About 1% of this portfolio has a 15% 13% 15% 11% 13% Beacon score of 650 or lower and an 10% 8% 6% 6% LTV(1) over
Slide 18: Canadian Credit Cards and Unsecured Personal Lending
Canadian Credit Cards and Unsecured 18 Personal Lending 90+ Days Delinquency Rates Q3/16 Q2/17 Q3/17 • 90+ days delinquency rates of Total Credit Cards 0.77% 0.84% 0.75% both credit cards and unsecured (1) Credit Cards in Oil Provinces 0.90% 1.06% 0.91% personal lending were down Total Unsecured Per
Slide 19: Trading Revenue (TEB) Distribution
19 Trading Revenue (TEB)(1) Distribution(2) ($MM) ($MM) 20 20 15 15 10 10 5 5 0 0 (5) (5) (10) (10) (15) (15) (20) (20) (25) (25) May-17 Jun-17 Jul-17 Trading Revenue (TEB) VaR 1 Non-GAAP financial measure. See slide 32 for further details. 2 Trading revenue distribution on which VaR is calculated i
Slide 20: Appendix
Appendix
Slide 21: Canadian Retail & Business Banking – Loans & Deposits
21 Canadian Retail & Business Banking – Loans & Deposits Average Loans & Acceptances ($B) Average Deposits ($B) +11% +9% Growth YoY QoQ Growth YoY QoQ Residential Mortgages 13% 3% Personal Deposits & GICs 7% 1% Personal Loans 7% 3% Business Deposits & GICs 13% 4% Credit Cards 2% 2% Business Lending
Slide 22: Wealth Management – Client Asset Balances & Mutual Funds
Wealth Management – Client Asset Balances & Mutual 22 Funds AUA ($B)(1)(2) AUM ($B)(1)(2) Canadian Retail Mutual Funds ($B) +9% 1 Includes assets in Canadian Wealth Management and U.S. Commercial Banking & Wealth Management 2 Assets under management (AUM) are included in assets under administration
Slide 23: The PrivateBank Results (US$)
23 The PrivateBank Results (US$) • Net income of $20MM represents 39 Adjusted ($MM) (1) Q3/17 days of earnings Revenue 104 • Key credit metrics remain strong Provision for Credit Losses 11 relative to cyclical averages Non-Interest Expenses 62 • Net Interest Margin of 3.97% Net Income - Adjusted (1)
Slide 24: Canadian Retail & Business Banking
24 Canadian Retail & Business Banking Reported ($MM) Q3/16 Q2/17 Q3/17 Personal Banking 1,779 1,771 1,867 Business Banking 435 447 467 Other 11 7 8 Revenue 2,225 2,225 2,342 Provision for Credit Losses 197 196 187 Non-Interest Expenses 1,121 1,149 1,176 Income Before Income Taxes 907 880 979 Income
Slide 25: Canadian Wealth Management
25 Canadian Wealth Management Reported ($MM) Q3/16 Q2/17 Q3/17 Retail Brokerage 317 352 354 Asset Management 196 207 204 Private Wealth Management 41 42 45 Other 428 - - Revenue 982 601 603 Non-Interest Expenses 385 405 417 Income Before Income Taxes 597 196 186 Income Taxes 91 43 50 Net Income - Re
Slide 26: U.S. Commercial Banking & Wealth Management
26 U.S. Commercial Banking & Wealth Management Reported ($MM) Q3/16 Q2/17 Q3/17 Commercial Banking 39 42 150 Wealth Management 53 58 80 Other 1 1 9 Revenue 93 101 239 Provision for Credit Losses 0 0 34 Non-Interest Expenses 68 71 154 Income Before Income Taxes 25 30 51 Income Taxes 2 4 11 Net Income
Slide 27: Capital Markets
27 Capital Markets it Reported ($MM) Q3/16 Q2/17 Q3/17 Global Markets 415 407 360 Corporate & Investment Banking 325 284 321 Other 29 (1) (2) (1) Revenue 769 690 679 Provision for (reversal of) Credit Losses 47 (5) 1 Non-Interest Expenses 355 348 340 Income Before Income Taxes 367 347 338 Income Tax
Slide 28: Corporate & Other
28 Corporate & Other Reported ($MM) Q3/16 Q2/17 Q3/17 International Banking 176 178 183 Other (109) (97) 58 (1) Revenue 67 81 241 Provision for (reversal of) Credit Losses (1) (12) (13) Non-Interest Expenses 289 302 365 Loss Before Income Taxes (221) (209) (111) Income Taxes (1) (186) (166) (61) Net
Slide 29: Oil & Gas Corporate & Business Banking Exposure
Oil & Gas Corporate & Business Banking 29 Exposure Direct Exposure(1) ($B) • $17.3 of direct exposure(1), 17.7 17.4 17.3 17.2 16.8 down from $17.4B last quarter − 76% of this is investment grade • $7.2B drawn exposure(1), up from $6.2B last quarter Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Downstream Integrated
Slide 30: Oil & Gas Retail Exposure
30 Oil & Gas Retail Exposure Retail Exposure(1) in Oil Provinces(2) ($B) • $41.3B of retail exposure(1) to oil 39.7 40.2 40.5 40.8 41.3 provinces(2) (or $21.4B excluding insured mortgages) − Alberta accounts for $32.5B or 79% of the retail exposure(1) Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 − Average LTV(3) o
Slide 31: Q3 2017 Items of Note
31 Q3 2017 Items of Note Pre-Tax After-Tax & EPS Reporting Effect NCI Effect Effect Segments ($MM) ($MM) ($/Share) Q3 2017 Increase in legal provisions 45 33 0.08 Corporate & Other Transaction and integration-related costs associated with the 38 29 0.07 Corporate & Other acquisition of The PrivateBa
Slide 32: Non-GAAP Financial Measures
32 Non-GAAP Financial Measures • Adjusted results are Non-GAAP financial measures that do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. • For further details on items of note see slide 31 of this prese