Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q4 2024 Earnings Presentation
62 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Dec 5, 2024
Slide 1: Quarterly Results Presentation
Quarterly Results Presentation Fourth Quarter 2024 December 5, 2024 All amounts are in Canadian dollars unless otherwise indicated.
Slide 2: Forward-Looking Statements
Forward-Looking Statements Fourth Quarter 2024 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 Investor Presentation, in other filings with Canadian securities regulators o
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President & Chief Executive Officer
Slide 4: Key Messages
Key Messages Disciplined execution of our relationship-focused strategy positions us well for continued profitable growth 1 2 3 Strong Momentum in Clear Competitive Well-Positioned For Financial Performance Advantages Continued Profitable Growth Strong top-line growth, Diversified portfolio with
Slide 5: CIBC Overview
CIBC Overview Delivered record fiscal 2024 results and well-positioned for continued strong performance Diluted EPS Revenue PPPT3 NIAT ROE4 Credit Reported $7.28 Reported & Adjusted2 Reported $11.2B Reported $7.2B Reported 13.4% Impaired6 32 bps Adjusted1,2 $7.40 $25.6B Adjusted2 $11.3B Adjusted2 $7
Slide 6: Our Strategy
Our Strategy Progress against our strategic priorities Grow Our Mass Affluent & Expand Our Digital-First Deliver Connectivity and Enable, Simplify and Private Wealth Franchise Personal Banking Capabilities Differentiation to Our Clients Protect Our Bank Ranked #1 on the Ranked #1 in mobile $3.
Slide 7: Our Progress
Our Progress Key accomplishments within our diversified businesses CIBC Costco Mastercard +$[3.5]B +18 bps +613,000 +2% YoY 8 basis points recognized by Imperial Service Q4 NIM expansion from net new clients over [METRIC 2] C&I loan growth in Impaired loss rate in Money-In balanceprior year1 12 mont
Slide 8: Advancing Our ESG Strategy
Advancing Our ESG Strategy Committed to enabling a more equitable, inclusive, and sustainable future Building Integrity and Trust Creating Access to Opportunities Accelerating Climate Action We act with integrity and transparency to We partner to build equitable and resilient We support solutions to
Slide 9: In Summary
In Summary Client-focused strategy, diversified business mix, and consistent execution position us well to deliver strong shareholder returns Strong capital position Entering 2025 with Well-positioned enables growth and purpose, momentum, to execute against our capital return to and confidence clien
Slide 10: Financial Overview
Financial Overview Robert Sedran Senior Executive Vice-President & Chief Financial Officer
Slide 11: Financial Results Overview
Financial Results Overview Fourth quarter results highlight record revenue and consistent execution of our strategy Diluted Earnings Per Share Return on Equity Revenue Operating Leverage1 Reported $1.90 Reported 13.3% $6.6B Reported 3.0% +13% YoY Adjusted2 $1.91 Adjusted2 13.4% Reported & Adjusted2
Slide 12: Financial Results Overview
Financial Results Overview Strong PPPT growth, operating leverage, and improved credit quality Reported ($MM) Q4/24 YoY QoQ Q4/24 YoY Highlights: Revenue 6,617 13% 0% Revenue Non-Trading Net Interest Income 3,936 17% 3% • Broad-based revenue growth of 13% driven by margin expansion, volume Non-Tradi
Slide 13: Net Interest Income (NII)
Net Interest Income (NII) NII (ex-trading) grew 17% YoY, supported by margin expansion and continued balance sheet growth Net Interest Income Total Bank NIM (ex. Trading)3,4 +20 bps YoY 1.84% 1.86% 1.66% +2 bps 1.50% 1.50% 3 bps 1.44% 3,532 3,633 2 bps 1.86% 3,197 (278) (303) 1 bps 1.84% (4) bps (17
Slide 14: Non-Interest Income
Non-Interest Income Strong growth driven by trading revenues and higher market-related fees, partially offset by lower credit fees Non-Interest Income by Category ($MM)4 Market-Related Fees4 Transactional Fees4 +13% 3,072 YoY Other 2,984 8% 2,650 845 785 +32% Deposit & 594 Payment Investment Credit
Slide 15: Non-Interest Expenses
Non-Interest Expenses Higher performance-based compensation; core operating costs managed through efficiencies Adjusted1 Expenses ($MM) and YoY Expense Growth +11% 249 3,782 +4% 139 3,532 68 (70) 3,395 Q4/23 Investments2 Operating costs Efficiencies3 Perf. based comp. Q4/24 Reported: Reported: $3,44
Slide 16: Capital and Liquidity
Capital and Liquidity Starting fiscal 2025 with a strong balance sheet Capital Position $B Q4/23 Q3/24 Q4/24 • Balance sheet continues to remain well positioned to support organic growth Average Loans and Acceptances 1 539.5 545.9 551.7 1 • CET1 ratio of 13.3%, consistent with prior quarter Average
Slide 17: Canadian Personal & Business Banking
Canadian Personal & Business Banking Double-digit net income and PPPT growth supported by higher margins and lower PCLs Q4/24 YoY Highlights: Reported Adjusted1 • Net interest income up 8% driven by strong margin expansion and ($MM) Q4/24 YoY QoQ Q4/24 YoY QoQ focused volume growth • Net interest ma
Slide 18: Canadian Commercial Banking & Wealth Management
Canadian Commercial Banking & Wealth Management Continued growth in client assets and market appreciation Q4/24 YoY Highlights: Reported & Adjusted1 ($MM) Q4/24 YoY QoQ • Net interest income up 38% Revenue 1,523 11% 5% • Excluding impact of benchmark reform (offset by lower non- Net Interest Income
Slide 19: U.S. Commercial Banking & Wealth Management
U.S. Commercial Banking & Wealth Management Non-interest income up across all products Q4/24 YoY Highlights: Reported Adjusted1 • Net interest income up 7% mainly driven by higher volumes and (US$MM) Q4/24 YoY QoQ Q4/24 YoY QoQ loan margins, partially offset by mix shift to higher cost deposits Reve
Slide 20: Capital Markets & Direct Financial Services
Capital Markets & Direct Financial Services Strong revenue performance in Global Markets and Direct Financial Services (DFS) Q4/24 YoY Highlights: Reported Adjusted1 • Revenue up 9%: ($MM) Q4/24 YoY QoQ Q4/24 YoY QoQ • Global markets revenue up 14% driven by higher interest 2 Revenue 1,407 9% 4% 1,4
Slide 21: Corporate & Other
Corporate & Other • Reported and adjusted1 revenue higher YoY but lower Reported Adjusted1 sequentially ($MM) Q4/24 YoY QoQ Q4/24 YoY QoQ • Net interest income higher due to Treasury-related revenues • International Banking up 2% YoY due to higher volumes Revenue2 285 $224 $(198) 285 $224 $(75) • Ex
Slide 22: Business Performance & Outlook
Business Performance & Outlook Continue to execute against our strategy and deliver shareholder value Fiscal 2024 Highlights Updated Medium-Term Targets Revenue Growth 1 Expense Growth Deliver strong top-line growth 10% YoY Reported: 1% YoY Reported & Adjusted1 Adjusted1: 8% YoY Diluted EPS Growth
Slide 23: Risk Overview
Risk Overview Frank Guse Senior Executive Vice-President & Chief Risk Officer
Slide 24: Key Messages
Key Messages 1 2 3 Credit Performance Portfolio Management Allowance Coverage Loan losses performed well Active risk management Consistent year-over-year within our guidance for strategies continue to allowance levels indicative fiscal 2024 support positive portfolio of prudent risk performanc
Slide 25: Allowance for Credit Losses
Allowance for Credit Losses Allowance for credit losses was stable QoQ Allowance for Credit Losses ($MM) – Q4/24 Movements 280 137 4,117 4,118 2 4,114 (423) Impaired Provisions $417MM Q4/23 Q3/24 Performing Retail Business and Net write-offs Q4/24 Allowance Allowance Provisions Government and other
Slide 26: PCL on Impaired Loans
PCL on Impaired Loans1 Total impaired provisions were up slightly QoQ Total Bank ($MM, bps) Canadian Personal & Business Banking ($MM, bps) FY24 FY24 • Total bank impaired PCL was up slightly QoQ 32 bps 38 36 bps 35 35 • Canadian Personal & Business Banking 29 30 32 impaired PCL was down mainly due
Slide 27: Credit Performance – Gross Impaired Loans
Credit Performance – Gross Impaired Loans Gross impaired loan ratio was up modestly QoQ • Gross impaired loan ratio was up QoQ primarily due to an increase in Gross Impaired Loan Ratios Q4/23 Q3/24 Q4/24 business and government loans, partially offset by a decrease in Canadian Canadian Residential M
Slide 28: Canadian Consumer Lending
Canadian Consumer Lending Net write-offs and delinquencies trending in line with our expectations Net Write-offs: Reported Net Write-offs Q4/23 Q3/24 Q4/24 • Overall consumer net write-offs were stable QoQ Canadian Residential Mortgages <0.01% <0.01% <0.01% • The overall rate decrease QoQ is driven
Slide 29: Canadian Mortgages Renewal Profile
Canadian Mortgages Renewal Profile Impacts of payment increases at renewal expected to be manageable Current Balances by Renewal Year1 ($B) Variable Rate Fixed Rate 89 87 68 26 38 12 • Using illustrative 4% and 5% mortgage rates at time of renewal, and no borrower income growth 56 63 22 since origin
Slide 30: In Summary
In Summary Credit performance continues to be in line with expectations Our strategic focus Allowance levels Macro-economic remains on strong risk remain prudent and environment is fundamentals, provide coverage for expected to remain in line with our risk various potential dynamic into 2025 appetit
Slide 31: Appendix
Appendix CIBC®
Slide 32: Progress Against Our Medium-Term Objectives
Progress Against Our Medium-Term Objectives Financial performance against our objectives Fiscal 2024 Medium-Term Objectives1,2 3-Year 5-Year Reported: 1.5% Reported: 5.4% Diluted EPS Growth of 7% - 10% (CAGR3) Adjusted1,4: 0.8% Adjusted1,4: 4.4% Reported: 12.6% Reported: 12.8% Return on Equity of 16
Slide 33: Canadian Personal & Business Banking Fiscal 2024 Results
Canadian Personal & Business Banking Fiscal 2024 Results Helping our clients achieve their ambitions, and delivering sustainable, market-leading performance Fiscal 2024 Highlights Ranked #1 for the J.D. Ranked #1 for the Ranked #1 by Revenue PPPT2 Power 2024 Canada 2024 Investment Surviscor for Best
Slide 34: Canadian Commercial Banking & Wealth Management Fiscal 2024 Results
Canadian Commercial Banking & Wealth Management Fiscal 2024 Results Becoming Canada’s leader in financial advice and generating long-term consistent growth Fiscal 2024 Highlights Ranked 2nd in the Investment 80+ Top-tier InTouch NPS results Revenue PPPT2 Executive Brokerage Report for Commercial Ban
Slide 35: U.S. Commercial Banking & Wealth Management Fiscal 2024 Results
U.S. Commercial Banking & Wealth Management Fiscal 2024 Results Relationship-oriented solutions with a focus on organic growth and seamless connectivity Fiscal 2024 Highlights (US$) Awarded 2024 Best CIBC Syndications US Private Wealth Revenue PPPT2 Short-Term CD by ranked #1 in the ranked #2 Regist
Slide 36: Capital Markets & Direct Financial Services Fiscal 2024 Results
Capital Markets & Direct Financial Services Fiscal 2024 Results Deliver leading solutions through best-in-class insight, advice and execution Fiscal 2024 Highlights Recognized as Canada Derivatives Recognized as Best Investment Revenue PPPT2 House of the Year by the Global Bank by Global Finance for
Slide 37: Digital Trends
Digital Trends Growing Digital Adoption & Engagement in Canadian Personal Banking1 Digital Adoption Rate2 Active Digital Banking Users (MM)3 Digital Channel Usage (# of Sessions, MM) 86.7% 7.5 391 393 86.3% 7.4 382 86.1% 7.3 374 85.8% 7.2 85.0% 6.9 335 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Q4/23 Q1/24 Q2/24
Slide 38: Canadian Personal & Commercial Banking
Canadian Personal & Commercial Banking1 Strong margin expansion despite modest balance sheet growth Revenue ($MM)3 Net Interest Margin4 Mortgage Portfolio Spreads5 3,467 3,467 3,558 3,558 3,332 3,332 3,363 3,363 3,307 3,307 2.69% 742 742 691 691 784 784 804 804 2.68% 800 800 2.67% 2.67% 2,725 2,725
Slide 39: Balance Sheet
Balance Sheet Modest growth in loans and deposits and strong margin expansion drive NII growth Average Assets ($B) & Yields1,2,3 Average Liabilities and Equity ($B), & Costs1,4,5 5.60% 5.61% 5.68% 5.70% 4.16% 4.18% 4.22% 4.20% 5.48% 3.97% 962 982 990 1,012 1,036 962 982 990 1,012 1,036 52 54 55 57 5
Slide 40: Funding & Liquidity
Funding & Liquidity A well-diversified, high-quality, client-driven balance sheet • Liquidity and funding position continue to remain well-above regulatory requirements • Client deposits are the primary source of funding, comprising over $500B of the total funding base • Funding strategy is suppleme
Slide 41: Interest Rate Sensitivity
Interest Rate Sensitivity Well-positioned in a changing rate environment Net Interest Income Sensitivity to a +/- 100 bps Change ($MM)1 Interest Rate Environment in Canada and the U.S.2 Impact by currency Long-term vs short-term rates D e 6.00 Historic Actuals Implied Forwards 5.00 204 204 4.00 s 15
Slide 42: Provision for Credit Losses (PCL)
Provision for Credit Losses (PCL) PCL trended lower in Q4/24 Provision for Credit Losses down both YoY and QoQ ($MM) Q4/23 Q3/24 Q4/24 • Impaired provision was up in Q4/24, due to higher impairments in the U.S., partially Cdn. Personal & Business Banking 282 338 266 offset by decreases in other SBUs
Slide 43: Allowance Coverage
Allowance Coverage Allowance coverage trended slightly lower Total Allowance Coverage Q4/23 Q3/24 Q4/24 Total allowance coverage ratio down slightly both YoY and QoQ Canadian Credit Cards 4.2% 4.1% 4.6% • Allowance levels remained stable Canadian Residential Mortgages 0.1% 0.1% 0.1% Canadian Persona
Slide 44: Credit Portfolio Breakdown
Credit Portfolio Breakdown Lending Portfolio has a strong risk profile Credit portfolio is well diversified Overall Loan Mix (Net Outstanding Loans and Acceptances) • 62% of our portfolio is consumer lending, composed mainly of mortgages, with Canadian uninsured having an average loan-to-value of 52
Slide 45: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending Mortgage delinquencies perform in line with expectations • Mortgage originations continue to be driven by clients with deep and 90+ Days Delinquency Rates Q4/23 Q3/24 Q4/24 balanced relationships Total Mortgages 0.21% 0.30% 0.28% • The portion of non-amo
Slide 46: Canadian Uninsured Residential Mortgages
Canadian Uninsured Residential Mortgages Credit bureau score1 and LTV2 distributions remain healthy Credit Bureau Score1 Distribution 3 3 Loan-to-Value (LTV)2 Distribution 3 3 Endnotes are included on slides 52 to 58. Fourth Quarter, 2024 45
Slide 47: Canadian Uninsured Residential Mortgages – Q4/24 Originations
Canadian Uninsured Residential Mortgages – Q4/24 Originations1 Credit quality of new originations continues to remain high • Originations of $11.6B in Q4/24 • Average LTV2 in Canada: 66%, GVA3: 64%, GTA3: 66% Credit Bureau Score4 Distribution 3 3 Loan-to-Value (LTV)2 Distribution 3 3 Endnotes are in
Slide 48: U.S. Commercial Real Estate – Office Portfolio
U.S. Commercial Real Estate – Office Portfolio Majority of challenges behind us • Solid progress made as we continue to work through and liquidate problem loans • Watchlist loans remain elevated and there will be some new inflow, but defaults are anticipated to be significantly reduced • Gross impai
Slide 49: Commercial Real Estate
Commercial Real Estate Commercial real estate loans outstanding are well diversified Multi-Family Portfolio Metrics • Canada represents 63% of total Canadian & U.S. real estate loans Canada US outstanding Total outstanding ($B) C$10.6 US$5.3 • Gross impaired loans as a percentage of total Canadian &
Slide 50: Trading Revenue (TEB) Distribution
Trading Revenue (TEB) Distribution1 Strong performance over the quarter relative to the VaR usage Endnotes are included on slides 52 to 58. Fourth Quarter, 2024 49
Slide 51: Forward Looking Information
Forward Looking Information Variables used to estimate our Expected Credit Losses1 Forward-Looking Information Variables Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the next 12 months remaining forecast next 12 months remaining
Slide 52: Items of Note
Items of Note Fourth quarter 2024 Period Q4/24 Reporting Segments Pre-Tax EPS After-Tax & NCI Effect Effect Effect ($MM) ($MM) ($/Share)1 Reversal of the special assessment imposed by the Federal Deposit Insurance (3) (2) 0.00 U.S. Commercial Banking and Wealth Management Corporation (FDIC) on U.S.
Slide 53: Endnotes
Endnotes Fourth quarter 2024 Slide 4 – CIBC Overview 1. See note 1 on slide 60. 2. Adjusted results are non-GAAP measures. See slide 59 for further details. 3. Pre-provision, pre-tax earnings (PPPT) is revenue net of non-interest expenses and is a non-GAAP measure. See slide 59 for further details.
Slide 54: Endnotes
Endnotes Fourth quarter 2024 Slide 10 – Financial Results Overview cont’d 5. See notes 9 and 10 on slide 60. 6. OSFI requirement of 11.5% includes Pillar 1 minimum and Domestic Stability Buffer. 7. LCR is calculated pursuant to OSFI’s Liquidity Adequacy Requirements (LAR) Guideline, which is based o
Slide 55: Endnotes
Endnotes Fourth quarter 2024 Slide 17 – Canadian Commercial Banking & Wealth Management 1. Adjusted results are non-GAAP measures. See slide 59 for further details. 2. Pre-provision, pre-tax earnings is revenue net of non-interest expenses and is a non-GAAP measure. See slide 59 for further details.
Slide 56: Endnotes
Endnotes Fourth quarter 2024 Slide 24 – Allowance for Credit Losses 1. See note 13 on slide 61. Slide 25 – PCL on Impaired Loans 1. See note 10 on slide 60. Slide 26 – Credit Performance – Gross Impaired Loans 1. Includes wealth management loans under Canadian Commercial Banking and Wealth Managemen
Slide 57: Endnotes
Endnotes Fourth quarter 2024 Slide 33 – Canadian Commercial Banking & Wealth Management FY2024 Results 1. Adjusted results are non-GAAP measures. See slide 59 or further details. 2. Pre-provision, pre-tax earnings (PPPT) is revenue net of non-interest expenses and is a non-GAAP measure. See slide 59
Slide 58: Endnotes
Endnotes Fourth quarter 2024 Slide 37 – Canadian Banking: Personal & Commercial Banking 1. Includes the results of Canadian Personal and Business Banking and Canadian Commercial Banking, as well as Simplii Financial and CIBC Investor’s Edge, in Capital Markets. 2. Adjusted results are non-GAAP measu
Slide 59: Endnotes
Endnotes Fourth quarter 2024 Slide 45 – Canadian Uninsured Residential Mortgages 1. Starting Q2/23, our primary credit score provider is TransUnion as opposed to Equifax in the prior quarters. The scores are not identical, so score distributions up to Q1/23 are not directly comparable to score distr
Slide 60: Non-GAAP Measures
Non-GAAP Measures Fourth quarter 2024 We use a number of financial measures to assess the performance of our business lines as described below. Some measures are calculated in accordance with GAAP (IFRS), while other measures do not have a standardized meaning under GAAP, and accordingly, these meas
Slide 61: Glossary
Glossary Fourth quarter 2024 Definition 1 Adjusted Diluted EPS We adjust our reported diluted EPS to remove the impact of items of note, net of income taxes, to calculate the adjusted EPS. We adjust our reported net income attributable to common shareholders to remove the impact of items of note, ne
Slide 62: Glossary
Glossary Fourth quarter 2024 Definition We adjust our reported revenue and non-interest expenses to remove the impact of items of note. Commencing Q1/24, we no longer gross up tax-exempt revenue to bring it to a TEB 12 Adjusted Efficiency Ratio for the application of this ratio to our consolidated r
Canadian Imperial Bank of Commerce (CIBC) — Q4 2024 Earnings Presentation on 6ix