Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q3 2006 Earnings Presentation
37 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Aug 31, 2006
Slide 1: Third Quarter 2006 Investor Presentation
Third Quarter, 2006 Investor Presentation CIBC Third Quarter Investor Presentation August 31, 2006 Forward–Looking Statements From time to time, CIBC makes 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 / Financial Review
Third Quarter, 2006 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Third Quarter, 2006 Financial Review Tom Woods Senior Executive Vice-President and Chief Financial Officer 2
Slide 3: Q3 Summary
Third Quarter, 2006 Investor Presentation Q3 Summary $ Per Share EPS(1): $1.86 – Includes – Tax-Related Adjustments 0.14 – Mark-to-Market gain on Corp. Loan Credit Derivative Portfolio re. AcG-13 0.03 • Tier 1 Capital Ratio – 9.6% (apart from the above) (increase from 9.2% in Q2) • Results helped by
Slide 4: CIBC Revenue
Third Quarter, 2006 Investor Presentation CIBC Revenue ($MM) Q1/06 Q2/06 Q3/06 Change (1) (1) Net Interest Income 1,148 1,036 1,121 85 •3 more days; YTD reclassification Fees for Services Underwriting and Advisory 184 141 140 (1) Deposit and Payment 195 187 201 14 Credit 84 58 74 16 Cards 64 52 61 9
Slide 5: CIBC Expenses
Third Quarter, 2006 Investor Presentation CIBC Expenses ($MM) Q1/06 Q2/06 Q3/06 Change Employee Comp. and Benefits 1,080 1,054 1,090 36 •3 more days; higher incentive Occupancy Costs 146 144 136 (8) compensation Computer and Office Equip. 273 274 278 4 Communications 75 75 74 (1) Advertising and Bus
Slide 6: Retail Markets – Revenue
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue ($MM) (1) 2,021 2,060 2,059 (1) 2,042 1,964 Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ (1) Affected by an Item of Note, see Slides 57 and 58 for details. 11 CIBC Retail Markets – Revenue Components F ‘05 F ‘06 ($MM) Q3 Q
Slide 7: Retail Markets – Revenue Components
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 Personal & Small ($MM) Q3 Q4 Q1 Q2 Q3 Business Banking Personal & Small vs. Q2: Business Banking (1) 647 618 510 490 533 + balances up 3% Imperial Service (1) 246 236 229 227 241 + deposit spreads up Retai
Slide 8: Retail Markets – Revenue Components
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 ($MM) Q3 Q4 Q1 Q2 Q3 Retail Brokerage Personal & Small vs. Q2: Business Banking (1) 647 618 510 490 533 + Annuitized revenue up Imperial Service (1) 246 236 229 227 241 Retail Brokerage 270 296 292 313 270
Slide 9: Retail Markets – Revenue Components
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – Revenue Components F ‘05 F ‘06 Mortgages and ($MM) Q3 Q4 Q1 Q2 Q3 Personal Lending Personal & Small vs. Q2: Business Banking (1) 647 618 510 490 533 + Residential balances up Imperial Service (1) 246 236 229 227 241 2% Retail Brokerage
Slide 10: Retail Markets – Net Income
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – Net Income ($MM) (1) 487 (1) 438 432 (1) vs. Q2 404 (1) + lower loan losses 350 + deposit volumes & spreads + 3 more days – Retail Brokerage down Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ (1) Affected by an Item of Note, see Sl
Slide 11: World Markets – Revenue Components
Third Quarter, 2006 Investor Presentation CIBC World Markets – Revenue Components F ‘05 F ‘06 ($MM) Q3 Q4 Q1 Q2 Q3 Capital Markets 359 347 371 354 325 Investment Banking & (1) (1) Credit Products 251 239 250 133 231 Commercial Banking 114 113 111 105 112 (1) Merchant Banking 239 391 12 69 90 (1) (1)
Slide 12: World Markets – Revenue Components
Third Quarter, 2006 Investor Presentation CIBC World Markets – Revenue Components F ‘05 F ‘06 Investment ($MM) Q3 Q4 Q1 Q2 Q3 Banking & Credit Capital Markets 359 347 371 354 325 + M&A Investment Banking & (1) + U.S. Real Estate Finance (1) Credit Products 251 239 250 133 231 + mark-to-market gain o
Slide 13: World Markets – Revenue Components
Third Quarter, 2006 Investor Presentation CIBC World Markets – Revenue Components F ‘05 F ‘06 ($MM) Q3 Q4 Q1 Q2 Q3 Other Capital Markets 359 347 371 354 325 – interest expense re. U.S. Investment Banking & tax settlement (1) (1) Credit Products 251 239 250 133 231 Commercial Banking 114 113 111 105
Slide 14: Share Repurchases and Common Share Dividends
Third Quarter, 2006 Investor Presentation CIBC – No Share Repurchases in Q3/06 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 15: Retail Markets – ROE & Efficiency Ratio
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – ROE & Efficiency (NIX) Ratio (2) 46% 47% 51% (1) 43% ROE 38% 63% 64% 62% NIX 61% 60% (2) (2) (2) Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ (1) Non-GAAP financial measure, see Slide 60. (2) Affected by an Item of Note, see Slide
Slide 16: Retail Markets – Loan Balances and Market Share
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – Loan Balances (1) ($B; spot) 23.7 23.4 23.5 23.9 23.3 Personal Loans 10.2 9.7 Small Bus. 9.2 Loans 9.0 8.6 Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ (1) Excludes Retail Brokerage. 31 CIBC Retail Markets – Market Share (1)(2) 14
Slide 17: Retail Markets – Market Share
Third Quarter, 2006 Investor Presentation CIBC Retail Markets – Market Share (1)(2) (cont'd) Cards, 18.4% 18.4% 18.3% outstandings 18.1% 18.2% Cards, 28.6% 28.5% 28.5% purchase 27.7% volumes 26.5% Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ (1) Source: CBA; excludes AMEX and proprietary cards
Slide 18: Retail Markets – AUA & AUM
Third Quarter, 2006 Investor Presentation Mutual Funds/Managed Accounts AUM & Market Share (1) MF/Managed Accts AUM Canadian Market Share 60 55.7 11.0 52.4 53.3 53.9 50.5 50 Market Share (%) 40 9.0 $ Billions 9.3 9.1 9.0 8.8 8.8 30 20 7.0 10 0 5.0 Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ (
Slide 19: Imperial Service and Discount Brokerage
Third Quarter, 2006 Investor Presentation Imperial Service # IDA Registered Productivity ($MM) Financial Advisers Funds Managed per FA 70.2 71.7 71.6 1,070 66.7 1,020 994 977 F ‘05 Q1 Q2 Q3 F ‘05 Q1 Q2 Q3 Annual F ‘06 Annual F ‘06 37 Discount Brokerage (1) Active Accounts Trades / Day 500 15 450 458
Slide 20: Wood Gundy and EPS by Type of Business
Third Quarter, 2006 Investor Presentation CIBC Wood Gundy (1) AUA AUA per Investment Adviser 115.6 117.3 115.6 120 111.7 120 109.1 100 100 80 80 84.4 84.8 83.9 $ Millions 80.4 $ Billions 78.1 60 60 40 40 20 20 0 0 Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ AUA includes client cash and short
Slide 21: Retail plus Commercial Banking
Third Quarter, 2006 Investor Presentation CIBC Retail plus Commercial Banking (1) ($MM) Revenue Net Income F ‘05 F ‘06 F ‘05 F ‘06 Q3 Q2 Q3 Q3 Q2 Q3 (2) (2) (2) (2) CIBC Retail Markets 2,021 1,964 2,042 404 432 487 Plus: Commercial Banking 114 105 112 25 23 41 2,135 2,069 2,154 429 455 528 _________
Slide 22: World Markets – ROE & Efficiency Ratio
Third Quarter, 2006 Investor Presentation CIBC World Markets – ROE & Efficiency (NIX) Ratio 69% 26% 24% 39% ROE(1) (499%) (3) 349% NIX (2) (TEB) 58% 73% 78% 70% (4) (4) (4) (4) Q3 Q4 Q1 Q2 Q3 F ‘05 F ‘06 _______________________ (1) Non-GAAP financial measure, see Slide 60. (2) Taxable equivalent bas
Slide 23: World Markets – Merchant Banking
Third Quarter, 2006 Investor Presentation CIBC World Markets – Merchant Banking Total Portfolio Industry Diversification (Carrying Value = $1,350MM as at July 31, 2006) Consumer Services 21.9 % Entertainment 4.7 Financial Services 5.4 Hardware & Software 8.0 Healthcare 4.9 Industrial Growth & Servic
Slide 24: World Markets – Market Share
Third Quarter, 2006 Investor Presentation CIBC World Markets – Market Share Canadian New Equity Issues (1)(2) 20 17.3 15.6 15.2 Market Share (%) 15 12.3 10.4 10 5 0 Q3 Q4 Q1 Q2 Q3 (3) F ‘05 F ‘06 _______________________ (1) Source: CIBC Equity Capital Markets. (2) Based on total amount underwritten.
Slide 25: Economic Profit/(Loss)
Third Quarter, 2006 Investor Presentation CIBC Economic Profit/(Loss) (1) ($MM) F ‘05 F ‘06 Q3 Q4 Q1 Q2 Q3 (2) (2) (2) (2) CIBC Retail Markets 282 227 312 312 363 (2) (2) (2) (2) CIBC World Markets (2,348) 263 64 50 128 (2) (2) (2) Corporate and Other (28) 46 9 39 (19) Total CIBC (2,094) 536 385 401
Slide 26: Other Non-Interest Income
Third Quarter, 2006 Investor Presentation “Other” Non–Interest Income ($MM) F ‘05 F ‘06 Q3 Q4 Q1 Q2 Q3 Gain/(Loss) on Sale of Loans 1 1 1 (1) (2) Other Gains/(Losses)(1) 73 27 34 49 62 SAR(2) hedge revenue/(expense) 12 (17) 15 5 (10) Income from equity-accounted investments 80 25 19 33 24 AcG-13 Gai
Slide 27: Summary of AcG-13 Gains/(Losses)
Third Quarter, 2006 Investor Presentation Summary of AcG–13 Gains/(Losses) ($MM) F ‘05 F ‘06 Q3 Q4 Q1 Q2 Q3 AcG-13 Gains/(Losses) on ineffective foreign exchange hedges(1) 21 27 28 22 19 AcG-13 Gains/(Losses) on other ineffective hedges plus cost of (3) (3) credit hedges(2) (36) (3) (20) (30) (1) (1
Slide 28: Non-Controlling Interests and Tax Reconciliation
Third Quarter, 2006 Investor Presentation Non–Controlling Interests ($MM) Q2/06 Q3/06 Non-Controlling Interests in certain VIE's(1) required to be consolidated 28 3 Other - 1 28 4 _______________________ (1) Certain investment vehicles managed by employees. 55 Tax Reconciliation – Q3/06 (A) (B) (B ÷
Slide 29: Items of Note – 2006 YTD
Third Quarter, 2006 Investor Presentation Items of Note – 2006 YTD Pre-Tax After-Tax EPS Effect Strategic Business Unit Effect ($MM) Effect ($MM) ($/share) Q3 2006 Write-down re. Future income tax asset - (10) (0.03) Corp. & Other Interest Expense re. U.S. income tax reassessments (22) (12) (0.04) W
Slide 30: Items of Note – Q3 2005 and Non-GAAP Measures
Third Quarter, 2006 Investor Presentation Items of Note – Q3 2005 Pre-Tax After-Tax EPS Effect Strategic Business Unit Effect ($MM) Effect ($MM) ($/share) Q3 2005 Enron-related Litigation Provision (2,830) (2,533) (7.45) World Mkts Net recovery re. Hedge fund provision (33) 20 0.06 Retail Mkts, Worl
Slide 31: Risk Review
Third Quarter, 2006 Investor Presentation Third Quarter, 2006 Risk Review Steven McGirr Senior Executive Vice-President and Chief Risk Officer Treasury and Risk Management Key Messages - Credit Specific Provision ($MM) Specific Loan Losses at $152MM in Q3 199 • Down $11MM quarter-over-quarter, and
Slide 32: Specific Provision for Credit Losses
Third Quarter, 2006 Investor Presentation Specific Provision for Credit Losses ($MM) 400 1.25% Retail Markets 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 89 224 100 185 194 174 163 185 180 180 159 169 0.25% 61 72 0 13 (14) (9)
Slide 33: Trading Revenue vs. Risk and Tier 1 Ratio
Third Quarter, 2006 Investor Presentation Trading Revenue (TEB) vs. Risk (1) (2),(3) Backtesting of Trading Revenue vs. Total VaR Third Quarter, 2006 Trading Revenue Total VaR 40 40 32 32 24 24 C$MM 16 16 8 8 0 0 (8) (8) (16) (16) 3-Jul 10-Jul 17-Jul 24-Jul 31-Jul 1-May 8-May 15-May 22-May 29-May 5-
Slide 34: RWA and Capital Ratio Trends
Third 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 67 Appendix 34
Slide 35: Loan Portfolio Mix
Third Quarter, 2006 Investor Presentation Loan Portfolio Mix Business & Business & Gov't Loans Student Loans Gov't Loans Student Loans $35.7 $1.4 $36.2 $1.6 Personal Personal Loans Loans $25.6 $26.1 Residential Mortgages Residential Credit Cards Credit $76.8 Mortgages $7.6 Cards $78.8 $6.8 July 31,
Slide 36: Credit Protection and Impaired Loans
Third Quarter, 2006 Investor Presentation Credit Protection Industry Diversification ($MM) as at July 31, 2006 Total Bought Oil & Gas $2,082 Business Services 497 Cable & Telecom 690 Manufacturing - Capital 794 Forest Products 354 Retail & Wholesale 711 Real Estate 232 Utilities 603 Broadcasting, Pu
Slide 37: Q3 Formations
Third Quarter, 2006 Investor Presentation Q3 Formations (Business & Government - $45MM) New Formations ($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 Q3/05
Canadian Imperial Bank of Commerce (CIBC) — Q3 2006 Earnings Presentation on 6ix