Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Investor Day (October 2015)
92 slides from Canadian Imperial Bank Of Commerce's investor day presentation, Oct 7, 2015
Slide 1: Banking that fits your life.
Banking that fits your life.
Slide 2: Forward Looking Statements
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 other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission and in other communicati
Slide 3: CIBC Investor Day - Agenda
3 CIBC Investor Day - Agenda Opening Remarks Victor Dodig President & CEO Kevin Glass SEVP & CFO Strategy - Panel Discussion Mike Capatides SEVP, Chief Administrative Officer & General Counsel Moderated by Victor Dodig Stephen Forbes EVP, Chief Commercial Officer David Williamson SEVP & Group Head,
Slide 4: Banking that fits your life.
Banking that fits your life.
Slide 5: Financial Performance
Financial Performance Kevin Glass Senior Executive Vice-President and Chief Financial Officer October 7, 2015
Slide 6: Agenda
6 Agenda Performance highlights Future outlook
Slide 7: Solid Performance Record — EPS Growth and ROE
7 Solid Performance Record — EPS Growth and ROE Diluted EPS Growth1 Return on Common Shareholders’ Equity1 ($) (%) 22.9 20.9 4% 20.6 9.33 8.94 8.65 2013 2014 2015 LTM2 2013 2014 Q3/15 1 Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders. 2 Last Twelve
Slide 8: Improving Credit Performance
8 Improving Credit Performance Loan Loss Ratio Gross Impaired Loans Ratio (basis points) (basis points) 60 53 51 44 38 28 2013 2014 2015 YTD 2013 2014 Q3/15
Slide 9: Consistent Dividend Increases
9 Consistent Dividend Increases Dividend Payout Ratio1 Dividend Paid (%) ($) +6% 43.9 44.0 44.8 4.30 3.80 3.94 2013 2014 2015 YTD 2013 2014 2015 1 Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders.
Slide 10: Strong Capital Position
10 Strong Capital Position Basel III CET1 Ratio (%) 10.8 10.3 10.1 9.9 9.4 9.3 2013 2014 Q3/15 CIBC Peer Average1 1 Peers include Big 6 Canadian banks, ex CIBC
Slide 11: Agenda
11 Agenda Performance highlights Future outlook
Slide 12: Balanced Capital Deployment
12 Balanced Capital Deployment Dividends Organic Investments Acquisitions Share Buybacks • Move to upper • Across business lines • Disciplined approach • NCIB renewed end of 40%-50% for long-term growth – Aligned to strategic in Sep/15 target range – Investing in customer- objectives – To repurchase
Slide 13: Our Strategy Will Drive Continued Profitable Growth
GOING FORWARD 13 Our Strategy Will Drive Continued Profitable Growth B U I L D I N G A Strong Innovative, Relationship–Oriented Bank 5–10% earnings growth Positive Operating Leverage NIX 55%
Slide 14: Simplifying our Bank
A CLOSER LOOK AT SIMPLIFICATION: 14 Simplifying our Bank Making it easier to bank and get work done at CIBC will free up resources to reinvest in our business Incremental Run Rate Project Accelerate revenue Savings Investment growth 2016 ~$100MM ~$150MM Reduce structural 2017 ~$300MM ~$150MM cost ba
Slide 15: Earnings Expectations
15 Earnings Expectations Prior to 2011 2011 — 2015 2016 — 2018 • Low growth • 5% EPS growth • EPS growth of 5 — 10%
Slide 16: Solid Performance, Clear Vision
IN SUMMARY 16 Solid Performance, Clear Vision • Solid performance record • Significant expense and efficiency opportunities • Achievable medium term financial goals Earnings NIX Return on Dividend Growth Ratio Equity Payout Ratio 5-10% 55% 18-20% CAGR run-rate by through ~50% 2019 the cycle
Slide 17: Banking that fits your life.
Banking that fits your life.
Slide 18: Panel Discussion
18 Panel Discussion • Victor Dodig, President & CEO • David Williamson, SEVP & Group Head, Retail & Business Banking • Michael Capatides, SEVP, CAO & General Counsel • Stephen Forbes, EVP & Chief Commercial Officer
Slide 19: Banking that fits your life.
Banking that fits your life.
Slide 20: Focusing on Our Clients
20 Focusing on Our Clients Not a new area of Increasing Urgency Our Goal: focus: and Intensity Closed the gap #1 significantly Outpaced Cdn in client competitors – satisfaction last 3 yrs Bank-wide priority
Slide 21: Banking that fits your life.
Banking that fits your life.
Slide 22: Program Clarity: Simplifying Our Bank Process
22 Program Clarity: Simplifying Our Bank 1 Process 2 3 Digitization Simplification Workforce Improving client experience Making it easier to get Evolving how and where we and efficiency things done work 4 Demand 5 6 Data Management Suppliers Harnessing data as an Providing the right support for Gene
Slide 23: Banking that fits your life.
Banking that fits your life.
Slide 24: Bank Wide Innovation – 3 Horizons
24 Bank Wide Innovation – 3 Horizons Core Adjacent Ground- Banking Opportunities Breaking Ideas
Slide 25: Banking that fits your life.
Banking that fits your life.
Slide 26: Measuring Our Progress
26 Measuring Our Progress • Declaring #1 in Client experience a 3 billion bank-wide priority opportunities • Establishing a common each year to make measure for all – NPS CIBC the #1 bank for our clients • Aligning exec compensation to performance for 2016
Slide 27: Doing it Right Will be Measured by Leading Indicators
27 Doing it Right Will be Measured by Leading Indicators Client Depth of # of Client Client Acquisition Relationship / Complaints Attrition PUC
Slide 28: Banking that fits your life.
Banking that fits your life.
Slide 29: Retail and Business Banking
Retail and Business Banking David Williamson Senior Executive Vice-President and Group Head Retail and Business Banking October 7, 2015
Slide 30: Agenda
30 Agenda Progress to date Strategic growth initiatives
Slide 31: Retail and Business Banking At-a-Glance
31 Retail and Business Banking At-a-Glance Contribution to CIBC’s Earnings* Branches 1,128 ATMs 3,897 65% RBB Funds Managed $426 B Earnings $2.5 B * Last Twelve Months ended July 31, 2015
Slide 32: The Repositioning of Retail and Business Banking
32 The Repositioning of Retail and Business Banking Prior to 2011 2011 — 2015 2016 — 2018 • Performance • Closed the gap • #1 retail and business lagged peers vs peers bank in Canada
Slide 33: Results Delivered through Expense Management
2005-2010: 33 Results Delivered through Expense Management Revenue Growth vs Peer Average Expense Growth vs Peer Average (F05-F10 CAGR) (F05-F10 CAGR) 7% 4% 2% 0% CIBC Peer Avg. CIBC Peer Avg. Numbers are as reported
Slide 34: Lack of Investment Impacted Client Experience
2005-2010: 34 Lack of Investment Impacted Client Experience Ipsos Net Promoter Score JD Power Client Satisfaction vs Peer Average vs Peer Average (F05-F10) (F06-F10*) 741 714 CIBC Peer Avg. CIBC Peer Avg. -18.7 -1.0 * JD Power study launched in 2006
Slide 35: In 2011 We Focused on Two Key Objectives
35 In 2011 We Focused on Two Key Objectives Accelerating Profitable Enhancing Client Revenue Growth Experience
Slide 36: We Have Closed the Gap vs. Our Competitors
36 We Have Closed the Gap vs. Our Competitors Funds Managed Growth Revenue Growth Gap to Peers Gap to Peers 0.8% -0.3% -0.4% -1.3% -1.1% -1.9% -3.6% -4.8% F12 F13 F14 F151 F12 F13 F14 F151,2 1 Last Twelve Months as at July 31, 2015 2 Adjusted for acquisitions and divestitures
Slide 37: CIBC is the Only Big Canadian Bank with Positive Momentum in Client Experience
CIBC is the Only Big 5 Canadian Bank with Positive 37 Momentum in Client Experience Ipsos Net Promoter Score JD Power Client Satisfaction Point Change 2012-2015 Point Change 2012-2015 +10 1.5 Peer Avg. Peer Avg. CIBC CIBC -7.3 -13.8
Slide 38: We Made a Strategic Shift
38 We Made a Strategic Shift Benefits Product Client • Improved client satisfaction Centric Centric – NPS, JD Power increasing • Lower attrition – From 8.3% to 6.8% • Higher margins • More deposits – From 5th in growth to 1st Focus on Depth of Relationship
Slide 39: Deeper Client Relationships are Key to Our Progress
39 Deeper Client Relationships are Key to Our Progress Product Use Count Progress Driven By: • Organizational change +10% 4.9 • Sales force productivity enhancements 4.5 • Aligned incentives • New onboarding technology • Use of analytics for targeted offers and pricing F12 Today
Slide 40: New Clients Demonstrate Clearly How We are Deepening Relationships
New Clients Demonstrate Clearly How We 40 are Deepening Relationships Product Use Count of New Clients % of New Card Clients with 12 Months After Joining Multiple Products +38% 3.1 61% 2.2 10% F12 Today Petro New Clients Tim’s New Clients 2010 2014
Slide 41: Opportunity to Deepen Relationships with Mass Affluent Clients
Opportunity to Deepen Relationships with 41 Mass Affluent Clients through Imperial Service Offer Imperial Service vs Imperial Service Clients Mass Market Personal Banking Clients = Valuable Franchise Product Use Count 40% 7.9 4.5 12% Mass Market Imperial Service % of Client Base % of Personal Client
Slide 42: Agenda
42 Agenda Progress to date Strategic growth initiatives
Slide 43: With Momentum Established, Focus is Shifting from Gaining to Leading
With Momentum Established, Focus is Shifting 43 from Gaining to Leading #1 in Profitable Accelerate Profitable #1 in Client Enhance the Client Revenue Growth Experience
Slide 44: Our Strategic Initiatives Support CIBC's Strategy
44 Our Strategic Initiatives Support CIBC’s Strategy Key Strategic Initiatives 1. Simplify banking centre structure 2. Transform our network 3. Leverage digital channels 4. Build partnerships and drive innovation Earnings of $3 B in 2018
Slide 45: Simplifying Banking Centre Structure, Emphasis on Advice
STRATEGIC INITIATIVE #1: 45 Simplifying Banking Centre Structure, Emphasis on Advice BEFORE AFTER District VP District VP Banking Centre GM Imperial Service Branch Manager Leader Mass Affluent Segment Mass Market Segment All Segments • Complex structure • Smaller, smarter and well led • Leadership d
Slide 46: Simplifying Banking Centre Structure, Emphasis on Advice
STRATEGIC INITIATIVE #1: 46 Simplifying Banking Centre Structure, Emphasis on Advice Est. Financial Impact Client in the right offer ($MM) 200,000 clients $50 Mass Market Imperial Clients Service $20 PUC 4.5 PUC 7.9 800,000 clients F16 Investment Incremental Annual (1 year) Revenue in 2018
Slide 47: Transform Network Using Power of Digital Banking
STRATEGIC INITIATIVE #2: 47 Transform Network Using Power of Digital Banking • Shift transactions to digital channels Est. Financial Impact – Leverage digital leadership to meet day-to-day ($MM) banking needs at lower cost – Invest in business online platform to drive $175 self-service and straight-
Slide 48: Leverage Digital Channels to Drive Revenue
STRATEGIC INITIATIVE #3: 48 Leverage Digital Channels to Drive Revenue Channel Investment Trend Est. Financial Impact ($MM) Digital Branch $80 2012 2013 2014 2015 2016 2017 2018 $60 • Take a “mobile first” approach to all new projects • Accelerate investment in digital sales capability • More produc
Slide 49: 2018 Digital Banking Leadership Metrics
STRATEGIC INITIATIVE #3: 49 2018 Digital Banking Leadership Metrics 15% of sales from digital channels – vs 4% today 70% of clients engaged with digital channels – vs 48% today 25% of assisted channel leads sourced from digital
Slide 50: Build Partnerships and Drive Innovation
STRATEGIC INITIATIVE #4: 50 Build Partnerships and Drive Innovation Est. Financial Impact ($MM) $125 $40 Annual Investment Incremental Annual Required Revenue in 2018 (3 years)
Slide 51: Proven Record, Revitalized Growth Engine, Clear Plan
IN SUMMARY 51 Proven Record, Revitalized Growth Engine, Clear Plan • We have proven we can set PERFORMANCE goals and meet them Earnings of GROWTH ENGINE • Our growth engine is alive and vibrant $3 B in 2018 • We have a credible plan to PLAN achieve a leading position
Slide 52: Q&A
52 Q&A • David Williamson, SEVP & Group Head, Retail & Business Banking • Jon Hountalas, EVP, Business & Corporate Banking • Christina Kramer, EVP, Retail Distribution & Channel Strategy
Slide 53: Break
Break Banking that fits your life. 53
Slide 54: Banking that fits your life.
Banking that fits your life.
Slide 55: Capital Markets
Capital Markets Harry Culham Senior Executive Vice-President and Group Head, CIBC Capital Markets October 7, 2015
Slide 56: Agenda
56 Agenda Progress to date Strategic growth initiatives
Slide 57: Capital Markets At-a-Glance
57 Capital Markets At-a-Glance Contribution to CIBC’s Earnings* • 1,300 employees globally • Strong Canadian presence with international reach in the U.S., U.K., Asia, Australia and Latin America Capital 27% Markets • Full-service platform supporting all major Canadian industries • Global expertise
Slide 58: The Evolution of CIBC Capital Markets
58 The Evolution of CIBC Capital Markets Prior to 2011 2011 — 2015 2016 — 2018 • De-risking and • Consistent, high-quality • The leading repositioning of the earnings growth and Capital Markets franchise business re-investment in Canada with global capabilities
Slide 59: Recent Objectives and Areas of Focus
59 Recent Objectives and Areas of Focus 1 2 3 Consistent, Technology Disciplined client-driven earnings & Talent risk culture
Slide 60: Strong Performance vs. Peers
60 Strong Performance vs. Peers Revenue CAGR Earnings CAGR (FY2011-2015*) (FY2011-2015*) 13.1% 7.3% 7.2% 7.7% CIBC Peer Average CIBC Peer Average *November 1, 2010 to July 31, 2015
Slide 61: A Lower VaR Business vs. Peers
61 A Lower VaR Business vs. Peers Key Drivers VaR ($MM)* 16.1 • Client-focused risk allocation • Consistent earnings • Disciplined risk culture 3.7 CIBC Peers * Value at Risk: Fiscal 2015 Q3 Daily Average
Slide 62: A Canadian Capital Markets Leader
62 A Canadian Capital Markets Leader Syndicated loans1 #1 Corporate debt1,2 #2 Equity new issues and government debt1 #3 M&A advisory Industry Derivatives House of the Year Leadership Foreign Exchange, Commodities and Equity Trading 1 Rankings on a fiscal YTD Q3/2015 basis for Government and Corpora
Slide 63: Delivering Outsized Returns vs. Peers
63 Delivering Outsized Returns vs. Peers Key Drivers Consistent, Sustainable Results & Outsized Returns – RORC* (%) • Stable, high-quality earnings 21.2% • Disciplined expense management and resource allocation 14.5% • Strong risk management culture and infrastructure • Best-in-class e-commerce plat
Slide 64: Agenda
64 Agenda Progress to date Strategic growth initiatives
Slide 65: Client Trends Shaping Our Business
65 Client Trends Shaping Our Business 80% 53% $3 Trillion Of our top clients have operations in More than half of the $5.3 trillion-a- Estimated investment required in the U.S., or have transacted there day FX market is now traded the U.S. by 2020 to maintain aging in the last three years electronic
Slide 66: Our Strategic Initiatives Support CIBC's Strategy
66 Our Strategic Initiatives Support CIBC’s Strategy B U I L D I N G A Strong Innovative, Relationship–Oriented Bank Key Strategic Initiatives 1. Strengthen & expand leadership positions in Canada 2. Build a North American platform & expand coverage in key sectors globally 3. Deliver innovation to c
Slide 67: Strengthen & Expand Leadership Positions in Canada
STRATEGIC INITIATIVE #1: 67 Strengthen & Expand Leadership Positions in Canada Key Initiatives Product Use Count* 8 • Client coverage model focused on idea generation, higher-touch 6 service and advice • Expand product offerings to meet evolving client needs • Increase focus on mid-market clients F2
Slide 68: Build a North American Platform and Expand Capabilities in Key Sectors Globally
STRATEGIC INITIATIVE #2: 68 Build a North American Platform and Expand Capabilities in Key Sectors Globally Key Initiatives Percentage of Revenue from Outside Canada • Extend Canadian expertise to the 40% - 50% U.S. and globally in select, scalable sectors we know well 31% • Focus resources on clien
Slide 69: Deliver Innovation to Clients Across CIBC
STRATEGIC INITIATIVE #3: 69 Deliver Innovation to Clients Across CIBC Key Initiatives Percentage of FX Revenues from Alternate Clients Solutions • Continued expansion of our e-Capital Markets platform – FX, Equities, Commodities, Derivatives and Rates • Leverage e-platforms to deliver: – value-add s
Slide 70: Momentum Building, Raising the Bar for 2018
IN SUMMARY 70 Momentum Building, Raising the Bar for 2018 • Delivering high quality earnings PERFORMANCE and strong returns, with efficient capital deployment • Client-focused business with a scalable platform Earnings of STRATEGY • Underpinned by strong talent, $1.2 B technology & enhanced client b
Slide 71: Q&A
71 Q&A • Harry Culham, SEVP and Group Head, Capital Markets • Roman Dubczak, Managing Director & Head, Global Investment Banking • Christian Exshaw, Managing Director & Head, Global Markets • Jon Hountalas, EVP, Business & Corporate Banking
Slide 72: Banking that fits your life.
Banking that fits your life.
Slide 73: Wealth Management
Wealth Management Steve Geist Senior Executive Vice-President and Group Head, Wealth Management October 7, 2015
Slide 74: Agenda
74 Agenda Progress to date Strategic growth initiatives
Slide 75: Wealth Management At-a-Glance
75 Wealth Management At-a-Glance Contribution to CIBC’s Earnings1 of 14% is up from 9% in 2010 AUA / AUM (Spot; as at July 31, 2015) $318 B Revenue1 $2,455MM Wealth Earnings1 $534MM 14% Management Client-Facing Professionals 1,550 1. Last Twelve Months ended July 31, 2015
Slide 76: Wealth Management is a Diversified and Well Established Business
Wealth Management is a Diversified and Well 76 Established Business Asset Management Retail Brokerage Private Wealth Management CIBC Asset CIBC CIBC Private Management Wood Gundy Wealth Management Retail & institutional asset management Full service brokerage High-net-worth advisory services CIBC In
Slide 77: Strong Performance with Income Growth Outpacing Peers
Strong Performance with Income Growth 77 Outpacing Peers Revenue Growth Earnings Growth (5-Year CAGR1) (5-Year CAGR1) 19% 13% 11% 11% CIBC Peer CIBC Peer Average 2 Average 2 1. FY10 to FY15 Last Twelve Months ended July 31, 2015 2. Peer Average includes the Big 6 Banks, excluding CIBC and Scotiabank
Slide 78: Progress in Deepening Client Relationships…
78 Progress in Deepening Client Relationships… Top quartile Private Banking Net Promoter Score (NPS) Solid progress in 2015 Canadian JD Power Investor Satisfaction Studies Full Service Brokerage Discount Brokerage (YoY change) (YoY change) 14 5 10 Peer Average 1 CIBC Wood Peer Average 1 CIBC Inv
Slide 79: …is Driving Strong Business Results
79 …is Driving Strong Business Results Assets Mutual Fund Long-Term CIBC Investor’s Edge (Spot; $B) Net Sales ($B) Account Opens (‘000s) 54 318 5.9 297 5.4 234 4.8 40 217 36 36 3.9 F12 F13 F14 Q3 F12 F13 F14 F151 F12 F13 F14 F151 F15 1. Last Twelve Months ended July 31, 2015
Slide 80: Our Business has Been Gaining Industry Recognition
80 Our Business has Been Gaining Industry Recognition Best Wealth Management Provider – Canada World Finance Wealth Management Awards, 2014 #1 advisor ranking in Bank & Credit Union Report Card Investment Executive Bank & CU Report Card, 2015 #1 in Fees and Commissions – CIBC Investor’s Edge M
Slide 81: Agenda
81 Agenda Progress to date Strategic growth initiatives
Slide 82: Building Momentum in Wealth Management
82 Building Momentum in Wealth Management Prior to 2011 2011 — 2015 2016 — 2018 Driving superior Growth and growth Canadian-focused diversification franchise
Slide 83: Environmental Factors Shaping Our Industry
83 Environmental Factors Shaping Our Industry Aging Demographic $800B Digital Advances creating demand for outcome-oriented will be set in motion by 2024 through client expectations for real-time, investment solutions intergenerational wealth transfers on-demand access across channels 50% Evolving R
Slide 84: Our Strategic Initiatives Support CIBC's Strategy
84 Our Strategic Initiatives Support CIBC’s Strategy Strategic Initiatives 1. Enhance client experience 2. Drive asset growth 3. Simplify and optimize business platform Earnings of $700MM+ by 2018
Slide 85: Enhance Client Experience
STRATEGIC INITIATIVE #1: 85 Enhance Client Experience Key Initiatives Maintain Current Strong Performance Metrics • Enhance referrals and partnership Target across CIBC • Elevate our integrated offer Client retention XX 95%+ • Provide financial planning • Continue to deliver strong product offer Net
Slide 86: Drive Asset Growth
STRATEGIC INITIATIVE #2: 86 Drive Asset Growth Key Initiatives Performance Measures • Attract new clients and deepen existing F2015 F2018 Target relationships Net flows1 $15B $18B+ • Continue fee-based conversion • Create core banking and brokerage offer Fee-based • Refine compensation to emphasize
Slide 87: Simplify and Optimize Business Platform
STRATEGIC INITIATIVE #3: 87 Simplify and Optimize Business Platform Key Initiatives Performance Measures • Integrate fee-based platforms F2015 F2018 Target • Streamline business processes Operating leverage1 -0.8% 2%+ • Digitize key client interactions • Leverage existing capabilities across platfor
Slide 88: Strong Performance, Building Momentum
IN SUMMARY 88 Strong Performance, Building Momentum • Our performance has PERFORMANCE outpaced peers Earnings of ENVIRONMENT • Favourable industry dynamics $700MM+ by 2018 • Positioned to deliver GROWTH superior growth
Slide 89: Q&A
89 Q&A • Steve Geist, SEVP & Group Head, Wealth Management • Monique Gravel, Head of CIBC Wood Gundy • Jack Markwalter, CEO, Atlantic Trust • David Scandiffio, President & CEO, CIBC Asset Management
Slide 90: Banking that fits your life.
Banking that fits your life.
Slide 91: Q&A Session
91 Q&A Session
Slide 92: Banking that fits your life.
Banking that fits your life.
Canadian Imperial Bank of Commerce (CIBC) — Investor Day (October 2015) on 6ix