Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q4 2006 Earnings Presentation
35 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Dec 7, 2006
Slide 1: CIBC Fourth Quarter Investor Presentation
Fourth Quarter, 2006 Investor Presentation CIBC Fourth Quarter Investor Presentation December 7, 2006 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 presentation, in filings with Canadi
Slide 2: CIBC Overview
Fourth Quarter, 2006 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Fourth Quarter, 2006 Financial Review Tom Woods Senior Executive Vice-President and Chief Financial Officer 2
Slide 3: Q4 Summary
Fourth Quarter, 2006 Investor Presentation Q4 Summary $ Per Share EPS(1): $2.32 – Includes – Tax-Related Adjustments 0.27 – Reversal of General Allowance for Credit Losses 0.07 – Mark-to-Market loss on Corp. Loan Credit Derivative Portfolio re. AcG-13 (0.02) • Record quarter (apart from the above) •
Slide 4: Revenue
Fourth Quarter, 2006 Investor Presentation CIBC Revenue ($MM) Q2/06 Q3/06 Q4/06 Change (1) (1) Net Interest Income 1,036 1,121 1,130 9 Fees for Services Underwriting and Advisory 141 140 168 28 •Higher M&A Deposit and Payment 187 201 195 (6) Credit 58 74 104 30 •Continued strength in Corporate Credi
Slide 5: Expenses
Fourth Quarter, 2006 Investor Presentation CIBC Expenses ($MM) Q2/06 Q3/06 Q4/06 Change Employee Comp. and Benefits 1,054 1,090 1,064 (26) •Lower compensation Occupancy Costs 144 136 136 - Computer and Office Equip. 274 278 286 8 Communications 75 74 73 (1) Advertising and Bus. Development 54 53 68
Slide 6: Retail Markets – Revenue
Fourth Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue ($MM) 2,060 (1) 2,059 (1) 2,042 2,043 1,964 Q4 Q1 Q2 Q3 Q4 F ‘05 F ‘06 _______________________ (1) Affected by an Item of Note, see Slides 53 and 54 for details. 11 CIBC Retail Markets – Revenue Components F ‘05 F ‘06 ($MM) Q4
Slide 7: Retail Markets – Revenue Components
Fourth Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 Personal & Small ($MM) Q4 Q1 Q2 Q3 Q4 Business Banking Personal & Small vs. Q3: Business Banking (1) 618 510 490 533 522 + deposit spreads up Imperial Service (1) 236 229 227 241 229 Retail Brokerage 296
Slide 8: Retail Markets – Revenue Components
Fourth Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 ($MM) Q4 Q1 Q2 Q3 Q4 Retail Brokerage Personal & Small vs. Q3: Business Banking (1) 618 510 490 533 522 + Trading volumes up Imperial Service (1) 236 229 227 241 229 + solicitation fees up Retail Brokerag
Slide 9: Retail Markets – Revenue Components
Fourth Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 Mortgages and ($MM) Q4 Q1 Q2 Q3 Q4 Personal Lending Personal & Small vs. Q3: Business Banking (1) 618 510 490 533 522 + residential balances Imperial Service (1) 236 229 227 241 229 up 2% Retail Brokerage
Slide 10: World Markets – Revenue
Fourth Quarter, 2006 Investor Presentation CIBC World Markets – Revenue ($MM) (1) 964 (1) 679 677 (1) 697 (1) 607 Q4 Q1 Q2 Q3 Q4 F ‘05 F ‘06 _______________________ (1) Affected by an Item of Note, see Slides 53 and 54 for details. 19 CIBC World Markets – Revenue Components F ‘05 F ‘06 ($MM) Q4 Q1 Q
Slide 11: World Markets – Revenue Components
Fourth Quarter, 2006 Investor Presentation CIBC World Markets – Revenue Components F ‘05 F ‘06 ($MM) Q4 Q1 Q2 Q3 Q4 Capital Markets Capital Markets 347 371 354 325 351 vs. Q3: Investment Banking & + Equity structured (1) (1) (1) Credit Products 239 250 133 231 254 products and proprietary up Commerc
Slide 12: World Markets – Revenue Components
Fourth Quarter, 2006 Investor Presentation CIBC World Markets – Revenue Components F ‘05 F ‘06 ($MM) Q4 Q1 Q2 Q3 Q4 Merchant Banking Capital Markets 347 371 354 325 351 vs. Q3: Investment Banking & – lower gains and (1) (1) (1) Credit Products 239 250 133 231 254 distributions Commercial Banking 113
Slide 13: Share Repurchases and Common Share Dividends
Fourth Quarter, 2006 Investor Presentation CIBC – No Share Repurchases in Q4/06 Quarterly Repurchase Cumulative Repurchase 97.2MM shares 12 11.6 100 90 10 Millions (cumulative) 80 Millions (quarterly) 7.6 70 8 7.2 6.5 60 6.2 6.2 6 5.5 5.4 50 5.2 4.7 4.7 4.5 4.4 40 4 3.4 3.6 2.8 30 2.0 2.1 20 1.8 2 1
Slide 14: Retail Markets – ROE & Efficiency (NIX) Ratio
Fourth Quarter, 2006 Investor Presentation CIBC Retail Markets – ROE & Efficiency (NIX) Ratio (2) 51% (2) 55% ROE (1) 46% 47% 38% 64% 62% NIX 61% 61% 60% (2) (2) Q4 Q1 Q2 Q3 Q4 F ‘05 F ‘06 _______________________ (1) Non-GAAP financial measure, see Slide 56. (2) Affected by an Item of Note, see Slid
Slide 15: Retail Markets – Loan Balances and Market Share
Fourth Quarter, 2006 Investor Presentation CIBC Retail Markets – Loan Balances (1) ($B; spot) 24.1 23.7 23.9 Personal 23.4 23.5 Loans 9.7 9.2 Small Bus. 9.0 8.6 Loans 8.2 Q4 Q1 Q2 Q3 Q4 F ‘05 F ‘06 _______________________ (1) Excludes Retail Brokerage. 29 CIBC Retail Markets – Market Share (1)(2) 14
Slide 16: Retail Markets – Market Share
Fourth Quarter, 2006 Investor Presentation CIBC Retail Markets – Market Share (1)(2) (cont'd) Cards, 18.4% 18.3% 18.1% 18.2% 18.1% outstandings Cards, 28.6% 28.5% purchase 27.7% 27.2% volumes 26.5% Q4 Q1 Q2 Q3 Q4 F ‘05 F ‘06 _______________________ (1) Source: CBA; excludes AMEX and proprietary card
Slide 17: Mutual Funds/Managed Accounts AUM & Market Share
Fourth Quarter, 2006 Investor Presentation Mutual Funds/Managed Accounts AUM & Market Share (1) MF/Managed Accts AUM Canadian Market Share 60 55.7 55.4 11.0 52.4 53.3 53.9 50 Market Share (%) 40 9.0 $ Billions 9.1 9.0 8.8 8.8 8.8 30 20 7.0 10 0 5.0 Q4 Q1 Q2 Q3 Q4 F ‘05 F ‘06 _______________________
Slide 18: Imperial Service
Fourth Quarter, 2006 Investor Presentation Imperial Service # IDA Registered Productivity ($MM) Financial Advisers Funds Managed per FA 70.9 1,075 1,070 66.7 1,029 987 62.2 58.7 F ‘03 F ‘04 F ‘05 F ‘06 F ‘03 F ‘04 F ‘05 F ‘06 Annual Annual 35 Discount Brokerage (1) Active Accounts Trades / Day 500 1
Slide 19: Wood Gundy
Fourth Quarter, 2006 Investor Presentation CIBC Wood Gundy (1)(2) AUA AUA per Investment Adviser 120 112.7 114.8 113.1 115.6 120 106.2 100 100 80 80 82.9 84.1 $ Millions 82.3 82.1 $ Billions 76.0 60 60 40 40 20 20 0 0 Q4 Q1 Q2 Q3 Q4 F ‘05 _______________________ F ‘06 AUA excludes client cash and sh
Slide 20: Retail plus Commercial Banking
Fourth Quarter, 2006 Investor Presentation CIBC Retail plus Commercial Banking (1) ($MM) Revenue Net Income F ‘05 F ‘06 F ‘05 F ‘06 Q4 Q3 Q4 Q4 Q3 Q4 (2) (2) (2) (2) CIBC Retail Markets 2,060 2,042 2,043 350 487 501 (2) Plus: Commercial Banking 113 112 113 22 41 41 2,173 2,154 2,156 372 528 542 ____
Slide 21: World Markets – ROE & Efficiency Ratio
Fourth Quarter, 2006 Investor Presentation CIBC World Markets – ROE & Efficiency (NIX) Ratio 69% 44% 39% ROE(1) 26% 24% NIX 78% (2) 73% 70% (TEB) 63% 58% (3) (3) (3) (3) Q4 Q1 Q2 Q3 Q4 F ‘05 F ‘06 _______________________ (1) Non-GAAP financial measure, see Slide 56. (2) Taxable equivalent basis. Non
Slide 22: Merchant Banking
Fourth Quarter, 2006 Investor Presentation CIBC World Markets – Merchant Banking Total Portfolio Industry Diversification (Carrying Value = $1,352MM as at October 31, 2006) Consumer Services 20.7 % Entertainment 4.7 Financial Services 5.2 Hardware & Software 8.5 Healthcare 5.1 Industrial Growth & Se
Slide 23: World Markets – Market Share
Fourth Quarter, 2006 Investor Presentation CIBC World Markets – Market Share Canadian New Equity Issues (1)(2) 20 15.6 15.2 Market Share (%) 15 14.3 12.3 10.4 10 5 0 Q4 Q1 Q2 Q3 Q4 (3) (3) F ‘05 F ‘06 _______________________ (1) Source: CIBC Equity Capital Markets. (2) Based on total amount underwri
Slide 24: CIBC Economic Profit
Fourth Quarter, 2006 Investor Presentation CIBC Economic Profit (1) ($MM) F ‘05 F ‘06 Q4 Q1 Q2 Q3 Q4 (2) (2) (2) (2) CIBC Retail Markets 227 312 312 363 384 (2) (2) (2) (2) CIBC World Markets 263 64 50 128 154 (2) (2) (2) (2) Corporate and Other 46 9 39 (19) 95 Total CIBC 536 385 401 472 633 _______
Slide 25: “Other” Non–Interest Income
Fourth Quarter, 2006 Investor Presentation “Other” Non–Interest Income ($MM) F ‘05 F ‘06 Q4 Q1 Q2 Q3 Q4 Gains/(Losses)(1) 28 35 48 60 72 SAR(2) hedge revenue/(expense) (17) 15 5 (10) 16 Income from equity-accounted investments 25 19 33 24 7 AcG-13 Gains/(Losses) on ineffective hedges plus cost of (4
Slide 26: Summary of AcG–13 Gains/(Losses)
Fourth Quarter, 2006 Investor Presentation Summary of AcG–13 Gains/(Losses) ($MM) F ‘05 F ‘06 Q4 Q1 Q2 Q3 Q4 AcG-13 Gains/(Losses) on ineffective foreign exchange hedges(1) 27 28 22 19 14 AcG-13 Gains/(Losses) on other ineffective hedges plus cost of (3) (3) (3) credit hedges(2) (3) (20) (30) (1) (2
Slide 27: Items of Note – 2006
Fourth Quarter, 2006 Investor Presentation Items of Note – 2006 Pre-Tax After-Tax EPS Effect Strategic Business Unit Effect ($MM) Effect ($MM) ($/share) Q4 2006 Mark-to-Market on Corporate Loan Credit Derivative portfolio re. AcG-13 (13) (8) (0.02) World Mkts Reversal of General Allowance for Credit
Slide 28: 2006 Balanced Scorecard – Financial Measures
Fourth Quarter, 2006 Investor Presentation 2006 Balanced Scorecard – Financial Measures (1) Objective Result (2)(3) Earnings Per Share Growth 10% per annum 2006 EPS of $7.43 vs. loss of $0.46 in 2005 Return on Equity (3) 17% - 20% 27.9% Capital Strength Tier 1 Capital Ratio - 8.5% 10.4% Total Capita
Slide 29: Risk Review
Fourth Quarter, 2006 Investor Presentation Fourth Quarter, 2006 Risk Review Steven McGirr Senior Executive Vice-President and Chief Risk Officer Treasury and Risk Management Q4 Key Messages - Credit Specific Provision ($MM) 220 152 Specific Loan Losses at $131MM 131 • Down $21MM quarter-over-quart
Slide 30: Specific Provision for Credit Losses
Fourth Quarter, 2006 Investor Presentation Specific Provision for Credit Losses ($MM) 400 Retail Markets 1.25% World Markets Expected Total Other Bank Range: Loss Ratio 0.50% - 0.65% 1.00% 300 108 156 0.75% 102 200 171 0.50% 266 89 185 224 100 185 194 174 163 169 180 180 159 132 0.25% 61 72 13 0 (4)
Slide 31: Trading Revenue vs. Risk; Tier 1 Ratio
Fourth Quarter, 2006 Investor Presentation Trading Revenue (TEB) vs. Risk (1) (2),(3) Backtesting of Trading Revenue vs. Total VaR Fourth Quarter, 2006 Trading Revenue Total VaR 30 30 24 24 18 18 C$MM 12 12 6 6 0 0 (6) (6) (12) (12) 03-Oct 09-Oct 13-Oct 19-Oct 25-Oct 31-Oct 01-Aug 07-Aug 11-Aug 17-A
Slide 32: Appendix: RWA and Capital Ratio Trends
Fourth Quarter, 2006 Investor Presentation RWA and Capital Ratio Trends 140 Risk Weighted Assets Tier 1 Capital 12.0% 135 11.0% Tier 1 Capital 130 Target: 8.5% 10.0% 125 $B 9.0% 120 8.0% 115 110 7.0% 105 6.0% 1999 2000 2001 2002 2003 2004 Q1/05 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 63 Appendix 3
Slide 33: Loan Portfolio Mix
Fourth Quarter, 2006 Investor Presentation Loan Portfolio Mix Business & Business & Gov't Loans Student Loans Gov't Loans Student Loans $35.7 $1.3 $36.1 $1.6 Personal Personal Loans Loans $26.0 $26.1 Residential Mortgages Residential Credit Credit Cards Mortgages $77.2 Cards $6.4 $81.3 $7.0 October
Slide 34: Credit Protection and Impaired Loans
Fourth Quarter, 2006 Investor Presentation Credit Protection Industry Diversification ($MM) as at October 31, 2006 Total Bought Oil & Gas $2,363 Business Services 456 Cable & Telecom 1,156 Manufacturing - Capital 616 Forest Products 381 Retail & Wholesale 564 Real Estate 266 Utilities 579 Broadcasti
Slide 35: Q4 Formations
Fourth Quarter, 2006 Investor Presentation Q4 Formations (Business & Government - $38MM) New Formations ($MM) New Formations as a % of Loans & Acceptances ** 800 5,0% Annualized % of Loans and Acceptances 600 4,0% $MM 3,0% 400 2,0% 200 1,0% 0 0,0% 1999* 2000* 2001* 2002* 2003* 2004* Q1/05 Q2/05 Q3/0
Canadian Imperial Bank of Commerce (CIBC) — Q4 2006 Earnings Presentation on 6ix