Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q3 2007 Earnings Presentation
30 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Aug 30, 2007
Slide 1: Third Quarter 2007 Investor Presentation
Third Quarter, 2007 Investor Presentation CIBC Investor Presentation August 30, 2007 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 Canadian securities reg
Slide 2: CIBC Overview
Third Quarter, 2007 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Third Quarter, 2007 Financial Review Tom Woods Senior Executive Vice-President and Chief Financial Officer 2
Slide 3: Q3 Summary
Third Quarter, 2007 Investor Presentation Q3 Summary $ Per Share EPS(1): $2.31 Includes(3) – Write-downs re. CDO/RMBS (0.56) Cash EPS(2): $2.34 – Net Reversal of Litigation Accruals 0.21 – Mark-to-Market gains on Corp. Loan Credit Derivative Portfolio 0.15 – Tax-Related Adjustment 0.14 – Premium on
Slide 4: Revenue
Third Quarter, 2007 Investor Presentation CIBC Revenue F ‘07 ($MM) Q1 Q2 Q3 vs. Q2 Net Interest Income 1,059 1,079 1,180 • 3 more days Fees for Services Underwriting and Advisory 185 178 192 Deposit and Payment 193 193 205 Credit 69 82 77 Cards 70 60 68 Investment Mgmt and Custodial 130 130 136 Mutu
Slide 5: Expenses
Third Quarter, 2007 Investor Presentation CIBC Expenses F ‘07 ($MM) Q1 Q2 Q3 vs. Q2 Employee Comp. and Benefits 1,160 1,126 1,100 • Lower incentive compensation Occupancy Costs 150 152 152 Computer and Office Equip. 263 279 279 Communications 71 88 77 Advertising and Bus. Development 50 66 59 Profes
Slide 6: Retail Markets Revenue Components
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Revenue ($MM) 2,151 2,189 2,259 2,038 2,046 Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 11 CIBC Retail Markets Revenue Components F ‘06 F ‘07 ($MM) Q3 Q4 Q1 Q2 Q3 Personal & Small Business Banking 533 522 517 501 537 Imperial Service 242 230 237 232 247 R
Slide 7: Retail Markets Revenue Components
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Revenue Components F ‘06 F ‘07 Personal & Small ($MM) Q3 Q4 Q1 Q2 Q3 Business Banking Personal & Small vs. Q2: Business Banking 533 522 517 501 537 + deposit balances up Imperial Service 242 230 237 232 247 + sales commissions up Retail B
Slide 8: Revenue Components
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Revenue Components F ‘06 F ‘07 ($MM) Q3 Q4 Q1 Q2 Q3 Retail Brokerage Personal & Small vs. Q2: Business Banking 533 522 517 501 537 + annuitized revenue up Imperial Service 242 230 237 232 247 – new issues down Retail Brokerage 275 292 314
Slide 9: Revenue Components
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Revenue Components Mortgages & Personal F ‘06 F ‘07 Lending ($MM) Q3 Q4 Q1 Q2 Q3 vs. Q2: + residential balances Personal & Small up 5% Business Banking 533 522 517 501 537 + 3 more days + prepayment cash Imperial Service 242 230 237 232 2
Slide 10: Revenue Components
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Revenue Components F ‘06 F ‘07 ($MM) Q3 Q4 Q1 Q2 Q3 Other Personal & Small vs. Q2: Business Banking 533 522 517 501 537 – Treasury revenue down Imperial Service 242 230 237 232 247 Retail Brokerage 275 292 314 306 308 Cards 340 380 371 36
Slide 11: World Markets Revenue Components
Third Quarter, 2007 Investor Presentation CIBC World Markets Revenue ($MM) (1) 784 (1) (1) 726 677 (1) 697 582 (1) Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 (1) Affected by an Item of Note, see Slides 48 and 49 for details. 21 CIBC World Markets Revenue Components F ‘06 F ‘07 ($MM) Q3 Q4 Q1 Q2 Q3 (1) Capital Marke
Slide 12: World Markets Revenue Components
Third Quarter, 2007 Investor Presentation CIBC World Markets Revenue Components F ‘06 F ‘07 ($MM) Q3 Q4 Q1 Q2 Q3 Capital Markets (1) Capital Markets 325 351 449 351 28 vs. Q2: Investment Banking & – write-downs re. Credit Products 217 (1) 242 (1) 204 (1) 247 (1) 328 (1) CDO/RMBS ($290MM) – equity st
Slide 13: World Markets Revenue Components
Third Quarter, 2007 Investor Presentation CIBC World Markets Revenue Components F ‘06 F ‘07 ($MM) Q3 Q4 Q1 Q2 Q3 Merchant Banking (1) Capital Markets 325 351 449 351 28 vs. Q2: Investment Banking & + gains & distributions Credit Products 217 (1) 242 (1) 204 (1) 247 (1) 328 (1) ($187MM) Commercial Ba
Slide 14: Common Share Dividends
Third Quarter, 2007 Investor Presentation Common Share Dividends ($ per share) 0.77 0.77 0.70 0.70 0.70 Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 27 CIBC Retail Markets ROE & Cash Efficiency (NIX) Ratio(1) (%) (2) (2) (2) 55 55 53 (2) 51 48 (2) ROE NIX 61 61 61 60 59 Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 (1) Non-GAAP financi
Slide 15: Mortgages & Cards
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Mortgages & Cards(1) ($B; spot; administered assets) 109.2 104.3 101.5 Residential 99.7 97.3 Mortgages 12.7 12.3 11.7 12.0 Card Loans 11.6 Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 (1) Excludes FirstCaribbean. 29 CIBC Retail Markets Loan Balances(1) ($B
Slide 16: Market Share
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Market Share(1)(2) (%) Residential 14.2 14.2 14.1 14.1 14.2 Mortgages (3) Consumer 19.3 19.5 18.9 19.0 19.2 Deposits Consumer 10.0 9.9 9.6 Loans 9.5 9.3 (3) (excl. cards) Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 (1) Source: OSFI (consumer deposits); Ba
Slide 17: AUM & Market Share
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Mutual Funds/Managed Accounts AUM & Market Share(1) MF/Managed Accts AUM Canadian Market Share 70 11 61.1 62.4 59.3 Market Share (%) 60 53.9 55.4 50 $ Billions 9 40 8.8 8.8 8.6 8.5 8.5 30 7 20 10 0 5 Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 (1) Source:
Slide 18: Imperial Service
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Imperial Service Funds Managed Funds Managed/Financial Advisor 100 100 82.9 84.4 85.0 79.5 81.0 80 80 $ Millions $ Billions 71.8 73.9 75.0 60 71.6 70.9 60 40 40 20 20 0 0 Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 35 CIBC Retail Markets Discount Brokerag
Slide 19: Wood Gundy
Third Quarter, 2007 Investor Presentation CIBC Retail Markets Wood Gundy(1) AUA AUA per Investment Adviser 140 140 115.6 117.6 120.4 118.5 120 113.1 120 $ Millions 100 100 $ Billions 80 80 87.0 89.9 90.1 82.1 84.1 60 60 40 40 20 20 0 0 Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 AUA excludes client cash and short po
Slide 20: Retail plus Commercial Banking
Third Quarter, 2007 Investor Presentation CIBC Retail plus Commercial Banking(1) Revenue Net Income F ‘06 F ‘07 F ‘06 F ‘07 ($MM) Q3 Q2 Q3 Q3 Q2 Q3 (2) (2) CIBC Retail Markets 2,038 2,189 2,259 487 583 555 Plus: Commercial 126 121 127 44 34 42 Banking 2,164 2,310 2,386 531 617 597 (1) Commercial Ban
Slide 21: World Markets ROE & Cash Efficiency Ratio
Third Quarter, 2007 Investor Presentation CIBC World Markets ROE & Cash Efficiency (NIX) Ratio(1) (%) 39 44 42 52 37 ROE NIX 70 65 67 (TEB) (2) 63 59 (3) (3) (3) (3) (3) Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 (1) Non-GAAP financial measures, see Slide 50. (2) Taxable equivalent basis. Non-GAAP financial measure
Slide 22: World Markets Market Share
Third Quarter, 2007 Investor Presentation CIBC World Markets Market Share (%) 16.5 Canadian 14.0 12.0 10.8 New Equity 10.3 Issues (1)(2) Equity Trading 8.1 Canada - % 6.8 7.6 7.2 7.1 of shares traded (3) Q3 Q4 Q1 Q2 Q3 F ‘06 F ‘07 (1) Source: CIBC Equity Capital Markets. (2) Based on total amount un
Slide 23: Behind the Reported NIMs
Third Quarter, 2007 Investor Presentation Behind the Reported NIMs F ‘07 Q2 Q3 Reported NIM 1.36% 1.41% (1) Reported NIM (TEB) 1.42% 1.49% NIM (TEB) (1) (2) excluding fixed assets 1.63% 1.70% & excluding trading assets and adding back securitizations 2.45% 2.46% (3) (4) & excluding other NII 2.55% 2
Slide 24: Tax Reconciliation – Q3/07
Third Quarter, 2007 Investor Presentation Tax Reconciliation – Q3/07 (A) (B) (B ÷ A) Net Income Tax Tax Rate Tax Rate ($MM) (1) Before Tax Expense Q3/07 Q3YTD Reported 998 157 15.7% 16.5% Adjustments Income tax 48 (2) - World recoveries Markets Other tax 21 - World adjustments Markets 69 (4) (3) Adj
Slide 25: Items of Note
Third Quarter, 2007 Investor Presentation Items of Note – 2006 Pre-Tax After-Tax EPS Effect Strategic Business Unit Q4 2006 Effect ($MM) Effect ($MM) ($/share) Mark-to-Market on Corporate Loan Credit Derivative portfolio re. AcG-13 (13) (8) (0.02) World Mkts Reversal of General Allowance for Credit
Slide 26: Risk Review
Third Quarter, 2007 Investor Presentation Third Quarter, 2007 Risk Review Ken Kilgour Senior Executive Vice-President and Chief Risk Officer Risk Management Q3 Credit Review Total Specific Retail & World Net Impaired Loans Provisions Markets Provisions World Markets 360 190 Retail Markets 4 316 164
Slide 27: Trading Revenue vs. Risk; Tier 1 Ratio Movement
Third Quarter, 2007 Investor Presentation Trading Revenue (TEB) vs. Risk (1) (2),(3) ($MM) 15 15 0 0 (15) (15) (30) (30) (45) (45) (60) (60) (75) (75) (90) (90) (105) Trading Revenue Total VaR (105) (120) (120) 1-May 8-May 15-May 22-May 29-May 5-Jun 12-Jun 19-Jun 26-Jun 3-Jul 10-Jul 17-Jul 24-Jul 31
Slide 28: Topical Risk Issues
Third Quarter, 2007 Investor Presentation Topical Risk Issues U.S. subprime mortgages • None Exposure to U.S. residential mortgage • As previously disclosed in August 13th market through RMBS and CDOs news release Leveraged buy out underwriting • Less than 0.6% of assets commitments • No covenant-li
Slide 29: US Residential Mortgage RMBS / CDO and Non-Bank ABCP Exposure
Third Quarter, 2007 Investor Presentation US Residential Mortgage RMBS / CDO and Non-Bank ABCP Exposure August 13 News Release: CIBC expects strong third quarter earnings “…CIBC's exposure to the U.S. residential mortgage market before write-downs is approximately US$1.7 billion (excluding exposure
Slide 30: World Markets Review
Third Quarter, 2007 Investor Presentation Third Quarter, 2007 World Markets Review Brian Shaw Chairman and Chief Executive Officer, CIBC World Markets Third Quarter, 2007 Q&A 30
Canadian Imperial Bank of Commerce (CIBC) — Q3 2007 Earnings Presentation on 6ix