Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q2 2018 Earnings Presentation
27 slides from Canadian Imperial Bank Of Commerce's earnings presentation, May 23, 2018
Slide 1: CIBC Investor Presentation Q2 F18
CIBC Investor Presentation Q2 F18 May 23, 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 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: Second Quarter, 2018 Financial Review
Second Quarter, 2018 Financial Review Kevin Glass Senior Executive Vice-President and Chief Financial Officer
Slide 5: Second Quarter, 2018 Highlights
5 Second Quarter, 2018 Highlights Adjusted1 Q2/17 Q1/18 Q2/18 Earnings1 ($MM, except for EPS, Efficiency Ratio, ROE, and CET1 Ratio) • EPS growth of 12% YoY Revenue 3,705 4,432 4,361 • Operating Leverage of 5.9% Non-Interest Expenses 2,256 2,529 2,467 • ROE of 17.4% Pre-Provision Earnings 1,449 1,90
Slide 6: Capital
6 Capital CET1 Ratio (all-in basis) 16bps 35bps 5bps (20)bps 11.2% 10.8% Q1/18 Internal Capital Reversal of RWAs (excl. FX) Other Q2/18 Generation Basel I Floor • Strong internal capital generation • Reversal of Basel I Floor adjustment Partially offset by: • RWA growth
Slide 7: Canadian Personal and Small Business Banking
7 Canadian Personal and Small Business Banking Volume growth, higher margins and expense discipline driving strong, diversified earnings Adjusted1 Q2/17 Q1/18 Q2/18 • Solid volume growth ($MM) − Loans up 7% YoY Personal & Small Business Banking 1,927 2,125 2,076 Other 10 13 14 − Deposits up 3% YoY R
Slide 8: Canadian Personal and Small Business Banking
8 Canadian Personal and Small Business Banking YoY Revenue Growth Composition ($MM) — Adjusted1 • Deepening client relationships are driving strong and diversified revenue growth 153 134 • Money-Out growth has converged to industry levels 59 62% 72% • YTD market share gains in Money-In have been 65%
Slide 9: Canadian Commercial Banking and Wealth Management
Canadian Commercial Banking and 9 Wealth Management Profitable results from volume and asset growth Adjusted1 Q2/17 Q1/18 Q2/18 • Continued growth in Commercial ($MM) Banking Commercial Banking 320 354 359 − Loans up 8% YoY Wealth Management 566 600 578 − Deposits up 12% YoY Revenue 886 954 937 Non-
Slide 10: U.S. Commercial Banking and Wealth Management
U.S. Commercial Banking and 10 Wealth Management Consistent focus on building deep, profitable client relationships 1 Adjusted Q2/17 Q1/18 Q2/18 • Continued loan growth in the higher rate ($MM) environment Commercial Banking 43 281 274 − Loans up 4% QoQ Wealth Management 59 128 136 − Deposits up 1%
Slide 11: CIBC Bank USA (US$)
11 CIBC Bank USA (US$) 1 2017 2018 2018 Adjusted (US$MM), • Strong loan and deposit growth for the three months ended Mar. 31 Jan. 31 Apr. 303 2 3 − Loans up US$1.7B or 11% YoY Revenue 198 236 223 − Deposits up US$0.7B or 4% YoY Non-Interest Expenses 110 117 118 Pre-Provision Earnings 88 119 105 • N
Slide 12: Capital Markets
12 Capital Markets Consistent and diversified results 1 Adjusted Q2/17 Q1/18 Q2/18 • Higher core franchise revenue ($MM) Global Markets 408 486 409 • Lower equity derivatives trading and equity underwriting activity Corporate & Investment Banking 284 305 293 Other - 10 8 • Higher expenses reflecting
Slide 13: Corporate and Other
13 Corporate and Other Adjusted1 Q2/17 Q1/18 Q2/18 • Higher revenue in CIBC FirstCaribbean ($MM) and Treasury International Banking 178 179 185 • Lower TEB revenue offset Other (90) (53) 25 • Tax and expense recoveries Revenue2 88 126 210 Non-Interest Expenses 285 304 256 Pre-Provision Earnings (197
Slide 14: Second Quarter, 2018 Risk Review
Second Quarter, 2018 Risk Review Laura Dottori-Attanasio Senior Executive Vice-President and Chief Risk Officer
Slide 15: Provision for Credit Losses
15 Provision for Credit Losses IAS 39 IFRS 9 Adjusted1 Q2/17 Q1/18 Q2/18 Provision for Impaired ($MM) • Adjusted PCL rates are stable YoY Canadian Personal and Small Business Banking 195 180 199 • Increase in Canadian Personal and Small Canadian Commercial Banking and Wealth Business Banking largely
Slide 16: Credit Quality — Gross Impaired Loans
16 Credit Quality — Gross Impaired Loans IAS 39 IFRS 9 Reported Q2/17 Q1/18 Q2/18 • Stable QoQ and YoY Canadian Residential Mortgages 0.15% 0.23% 0.25% Canadian Personal Lending 0.34% 0.30% 0.32% 1 CIBC Business & Government Loans 0.51% 0.40% 0.39% CIBC Bank USA n/a 0.66% 0.65% CIBC FirstCaribbean 6
Slide 17: Credit Quality — Net Write-offs
17 Credit Quality — Net Write-offs Reported Q2/17 Q1/18 Q2/18 • Up QoQ, but stable YoY Canadian Residential Mortgages 0.01% 0.01% 0.01% • Canadian Credit Cards and Personal Canadian Credit Cards 3.51% 2.99% 3.41% Lending continue to trend lower YoY Canadian Personal Lending 0.81% 0.72% 0.74% CIBC Bu
Slide 18: Canadian Credit Cards and Unsecured Personal Lending
Canadian Credit Cards and Unsecured 18 Personal Lending IAS 39 IFRS 9 90+ Days Delinquency Rates Q2/17 Q1/18 Q2/18 • 90+ days delinquency rate of cards portfolio down QoQ, from a seasonal Canadian Credit Cards 0.84% 0.94% 0.90% high in the prior quarter Canadian Unsecured Personal Lending1 0.47% 0.5
Slide 19: Appendix
Appendix
Slide 20: Strong and Balanced Market Share Growth
20 Strong and Balanced Market Share Growth Q2/18 YoY Most Current Absolute YoY Growth Balances Growth 1 Rank Rank Market Share ($B) Money-In Personal Deposits & GICs 145 2.8% 16.8% 4 3 Canadian Retail Mutual Fund AUM 103 4.4% 15.5% 3 3 Small Business Deposits & GICs 21 1.8% 13.8% 3 1 Money-Out Real
Slide 21: Reported Results ($MM)
21 Reported Results ($MM) Total Bank Q2/17 Q1/18 Q2/18 Canadian Personal & Small Business Banking Q2/17 Q1/18 Q2/18 Revenue 3,698 4,459 4,376 Personal & Small Business Banking 1,927 2,125 2,076 Non-Interest Expenses 2,275 2,578 2,517 Other 10 13 14 Pre-Provision Earnings 1,423 1,881 1,859 Revenue 1,
Slide 22: Canadian Real Estate Secured Personal Lending
22 Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates Q2/17 Q1/18 Q2/18 • Uninsured mortgages in the Greater Vancouver Total Mortgages 0.25% 0.23% 0.25% Area1 (GVA) and Greater Toronto Area1 (GTA) have lower 90+ days delinquency rates than the Uninsured Mortgages 0.19% 0.19% 0.
Slide 23: Canadian Uninsured Residential Mortgages — Q2/18 Originations
Canadian Uninsured Residential Mortgages — 23 Q2/18 Originations Beacon Distribution • $7B of originations in Q2/18 • Average LTV1 in Canada: 64% 40%36% − GVA2: 57% 33%29%33% 35% 17%14%17% − GTA2: 62% 6% 5% 6% 9% 12% 8% ≤650 651-700 701-750 751-800 >800 2 2 Canada GVA GTA Loan-to-Value (LTV)1 Distri
Slide 24: Canadian Uninsured Residential Mortgages
24 Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average 39%42%40% • 1% of this portfolio has a Beacon score of 28%25%28% 650 or lower and an LTV1 over 75% 14%13%14% 12%14%11% 7% 6% 7% • Average LTV1 in
Slide 25: Trading Revenue (TEB) Distribution
25 Trading Revenue (TEB)1 Distribution2 1 Non-GAAP financial measure. See slide 27 for further details. 2 Trading revenue (TEB) comprises both trading net interest income and non-interest income and excludes underwriting fees, commissions, certain month-end transfer pricing and other miscellaneous a
Slide 26: Q2 2018 Items of Note
26 Q2 2018 Items of Note After-Tax Pre-Tax EPS & NCI Reporting Effect Effect Effect Segments ($MM) ($/Share) ($MM) Canadian Personal & Small Business Banking/ U.S. Commercial Banking & Wealth Amortization of intangible assets 26 19 0.04 Management/ Corporate & Other Transaction and integration-relat
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