Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q4 2018 Earnings Presentation
27 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Nov 29, 2018
Slide 1: CIBC Investor Presentation Q4 F18
CIBC Investor Presentation Q4 F18 November 29, 2018
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: Fourth Quarter, 2018 Financial Review
Fourth Quarter, 2018 Financial Review Kevin Glass Senior Executive Vice-President and Chief Financial Officer
Slide 5: Fourth Quarter, 2018 Highlights
5 Fourth Quarter, 2018 Highlights 1 Adjusted Q4/17 Q3/18 Q4/18 Earnings1 ($MM, except for EPS, Efficiency Ratio, ROE, and CET1 Ratio) • EPS growth of 7% YoY Revenue 4,247 4,535 4,504 • ROE of 16.4% Non-Interest Expenses 2,420 2,520 2,548 Pre-Provision Earnings 1,827 2,015 1,956 Revenue Impaired 210
Slide 6: Capital
6 Capital CET1 Ratio (all-in basis) 30 bps 9 bps (18) bps 11.4% 11.3% (10) bps Q3/18 Earnings net of RWAs (excl. FX) Share Other Q4/18 Dividends Repurchases • Strong internal capital generation Partially offset by: • RWA growth • Share repurchases
Slide 7: Canadian Personal and Small Business Banking
7 Canadian Personal and Small Business Banking Strong margins and expense management driving profitable results 1 Adjusted Q4/17 Q3/18 Q4/18 • Revenue growth driven by margin ($MM) expansion and volume growth Personal & Small Business Banking 2,086 2,165 2,190 − NIM up 9 bps YoY and 2 bps QoQ Other
Slide 8: Canadian Commercial Banking and Wealth Management
Canadian Commercial Banking and 8 Wealth Management Profitable results driven by volume growth and expense discipline 1 Adjusted Q4/17 Q3/18 Q4/18 • Strong volume growth in Commercial ($MM) Banking Commercial Banking 348 389 386 − Loan balances up 10% YoY Wealth Management 574 599 600 − Deposit bala
Slide 9: U.S. Commercial Banking and Wealth Management
U.S. Commercial Banking and 9 Wealth Management Strong YoY earnings growth driven by volume growth and margin expansion 1 Adjusted Q4/17 Q3/18 Q4/18 • Strong, diversified loan growth in ($MM) Commercial Banking Commercial Banking 264 294 304 • Solid organic deposit growth from Wealth Management 114
Slide 10: Capital Markets
10 Capital Markets Stable and diversified earnings 1 Adjusted Q4/17 Q3/18 Q4/18 • Higher trading revenue, partially offset ($MM) by lower debt underwriting Global Markets 299 408 371 • Strong performance in the U.S., with Corporate & Investment Banking 326 350 281 revenue growth of 21% YoY Other (3)
Slide 11: Corporate and Other
11 Corporate and Other 1 Adjusted Q4/17 Q3/18 Q4/18 • Consistent profitable results in CIBC ($MM) FirstCaribbean − Impact of Government of Barbados International Banking 183 172 188 loans and securities restructuring Other 33 11 32 treated as an item of note 2 Revenue 216 183 220 Non-Interest Expens
Slide 12: 2018 Highlights
12 2018 Highlights 1 Adjusted FY17 FY18 Earnings1 ($MM, except for EPS, Efficiency Ratio, ROE, and CET1 Ratio) • Adjusted1 EPS up 10% YoY Revenue 15,975 17,832 • Operating Leverage of 3.2% Non-Interest Expenses 9,312 10,064 • ROE of 17.4% Pre-Provision Earnings 6,663 7,768 Impaired 827 924 Revenue •
Slide 13: Fourth Quarter, 2018 Risk Review
Fourth Quarter, 2018 Risk Review Laura Dottori-Attanasio Senior Executive Vice-President and Chief Risk Officer
Slide 14: Provision for Credit Losses
14 Provision for Credit Losses IAS 39 IFRS 9 Reported Q4/17 Q3/18 Q4/18 Provision for Impaired down QoQ ($MM) • Credit conditions remained stable Canadian Personal and Small Business Banking 181 199 182 • Lower loan losses in personal lending Canadian Commercial Banking and Wealth 11 2 8 and credit
Slide 15: Credit Quality — Gross Impaired Loans
15 Credit Quality — Gross Impaired Loans IAS 39 IFRS 9 Reported Q4/17 Q3/18 Q4/18 Gross Impaired Loans down QoQ Canadian Residential Mortgages 0.14% 0.24% 0.24% • Overall credit quality remained stable Canadian Personal Lending 0.29% 0.31% 0.33% (excluding CIBC FirstCaribbean) CIBC Business & Govern
Slide 16: Credit Quality — Net Write-offs
16 Credit Quality — Net Write-offs Reported Q4/17 Q3/18 Q4/18 Net Write-offs were stable QoQ Canadian Residential Mortgages 0.01% 0.01% 0.01% • Credit cards lower due to seasonality Canadian Credit Cards 3.06% 3.28% 3.05% • Personal lending up due to shift in the Canadian Personal Lending 0.72% 0.76
Slide 17: Credit Quality — Canadian Personal Banking Delinquencies
Credit Quality — Canadian Personal Banking 17 Delinquencies IAS 39 IFRS 9 90+ Days Delinquency Rates Q4/17 Q3/18 Q4/18 Late stage delinquency rates remained Credit Cards 0.78% 0.78% 0.80% stable QoQ 1 Unsecured Personal Lending 0.48% 0.48% 0.46% Home Equity Lines of Credit 0.19% 0.22% 0.22% Uninsure
Slide 18: Appendix
Appendix
Slide 19: Canadian Personal and Small Business Banking Market Share
Canadian Personal and Small Business 19 Banking Market Share Q4/18 YoY Balances YoY Most Current Absolute Growth ($B) Growth Market Share1 Rank Rank Money-In Personal Deposits & GICs 145 1.6% 16.5% 4 6 Canadian Retail Mutual Fund AUM 101 -0.3% 14.6% 4 3 Small Business Deposits & GICs 22 1.5% 13.8% 4
Slide 20: Reported Results ($MM)
20 Reported Results ($MM) Total Bank Q4/17 Q3/18 Q4/18 Canadian Personal & Small Business Banking Q4/17 Q3/18 Q4/18 Revenue 4,269 4,547 4,452 Personal & Small Business Banking 2,086 2,165 2,190 Non-Interest Expenses 2,570 2,572 2,591 Other 7 11 11 Pre-Provision Earnings 1,699 1,975 1,861 Revenue 2,0
Slide 21: Canadian Oil Volatility
21 Canadian Oil Volatility Business and Government Drawn Exposure ($B) • $7.9B drawn exposure: − 60% investment grade • WCS drawn exposure: 7.9 − 6.6% of total Oil & Gas; 0.1% of total Business and Government 4.1 2.4 0.5 − 68% investment grade Total Oil & Gas Total Exploration & Canadian Exploration
Slide 22: Canadian Real Estate Secured Personal Lending
22 Canadian Real Estate Secured Personal Lending IAS 39 IFRS 9 90+ Days Delinquency Rates Q4/17 Q3/18 Q4/18 • Delinquency rates remained stable Total Mortgages 0.23% 0.24% 0.24% • The Greater Vancouver Area1 (GVA) and Uninsured Mortgages 0.17% 0.19% 0.19% Greater Toronto Area1 (GTA) continue to outp
Slide 23: Canadian Uninsured Residential Mortgages — Q4/18 Originations
Canadian Uninsured Residential Mortgages — 23 Q4/18 Originations Beacon Distribution • Originations of $7B in Q4/18 • Average LTV1 in Canada: 64% 37%41%40% − GVA2: 55% 31%26%30% − GTA2: 61% 16%15%15% 11%13%10% 5% 5% 5% ≤650 651-700 701-750 751-800 >800 2 2 Canada GVA GTA Loan-to-Value (LTV)1 Distrib
Slide 24: Canadian Uninsured Residential Mortgages
24 Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average 39%43%41% 27%24%27% • Less than 1% of this portfolio has a 14%12%14% 13%15%12% Beacon score of 650 or lower and an LTV1 7% 6% 6% over 75% ≤650 651
Slide 25: Trading Revenue (TEB) Distribution
25 Trading Revenue (TEB)1 Distribution2 ($MM) ($MM) 20 20 15 15 10 10 5 5 0 0 (5) (5) (10) (10) Aug-18 Sep-18 Oct-18 Trading Revenue VaR 1 Non-GAAP financial measure. See slide 27 for further details. 2 Trading revenue (TEB) comprises both trading net interest income and non-interest income and excl
Slide 26: Items of Note
26 Items of Note Q4 2018 FY 2018 Pre-Tax After-Tax EPS Pre-Tax After-Tax EPS Effect & NCI Effect Effect & NCI Effect ($MM) Effect ($/Share) ($MM) Effect ($/Share) Incremental losses on debt securities and loans in FirstCaribbean International Bank Limited (CIBC FirstCaribbean) recognized in the four
Slide 27: Non-GAAP Financial Measures
27 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 26 of this prese