Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q3 2008 Earnings Presentation
30 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Aug 27, 2008
Slide 1: Third Quarter 2008 Investor Presentation
Third Quarter, 2008 Investor Presentation CIBC Investor Presentation August 27, 2008 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 securiti
Slide 2: CIBC Overview
Third Quarter, 2008 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Third Quarter, 2008 Financial Review David Williamson Senior Executive Vice-President and Chief Financial Officer 2
Slide 3: Q3 Summary
Third Quarter, 2008 Investor Presentation Q3 Summary $ Per Share EPS(1): $0.11 Includes(3) – Loss on Structured Credit Run-off Cash EPS(2): $0.13 Activities (1.56) – Losses/Interest Expense re. Pending Tax Settlement of Leveraged Leases (0.09) – Mark-to-Market on Credit Derivatives re. Corporate Loa
Slide 4: Structured Credit Run-off
Third Quarter, 2008 Investor Presentation Structured Credit Run-off Q3/08 Pre-Tax After-Tax EPS Effect Effect ($MM) Effect ($MM) ($/share) Credit Valuation Adjustments with Financial Guarantors (904) (609) (1.59) Unhedged USRMM Write-downs 12 8 0.02 Unhedged non-USRMM Write-downs (7) (5) (0.01) Dire
Slide 5: USRMM Remaining Exposure
Third Quarter, 2008 Investor Presentation USRMM Remaining Exposure – HEDGED with Financial Guarantors Remaining Asset Value Counterparty Exposure (U.S.$ B) 8.08 5.09 1.09 3.12 2.84 (1) 1.75 Q4 Q1 Q2 Q3 F ‘07 F ‘08 (1) Excludes notional of $1.88 B ($1.54 B Q2/08) with a fair value of $1.77 B ($1.45 B
Slide 6: Non-USRMM Exposure
Third Quarter, 2008 Investor Presentation Impact on Capital of Remaining Financial Guarantor USRMM Exposure (U.S.$ B) Counterparty Risk Weighted Exposure Assets USRMM Exposure 1.75 7.30 Non-USRMM Exposure 1.15 4.85 Total 2.90 12.15 11 CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q3 Q4 Q1
Slide 7: Retail Markets Revenue Components
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q3 Q4 Q1 Q2 Q3 Retail Banking Personal & Small vs. Q3/07: Business Banking 537 546 544 540 563 + balances up Imperial Service 247 242 244 239 250 + Visa gain ($24MM) Mortgages & Personal Lending 367 32
Slide 8: Retail Markets Revenue Components
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Revenue Components F ‘07 F ‘08 ($MM) Q3 Q4 Q1 Q2 Q3 Wealth Management (1) (1) (1) Retail Banking 1,705 2,073 1,723 1,620 1,671 vs. Q3/07: Retail Brokerage 295 282 276 264 275 – new issues down Asset Mgmt 126 123 120 116 117 – trading comm
Slide 9: Retail Markets Quarterly Statement of Operations
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Quarterly Statement of Operations F ‘07 F ‘08 ($MM) Q3 Q4 Q1 Q2 Q3 Net Income (1) (1) (1) (1) Revenue 2,386 2,794 2,371 2,239 2,355 vs. Q3/07: Provision for + volumes up Credit Losses 167 150 155 174 196 + expenses down Non-Interest + Vis
Slide 10: World Markets Revenue Components
Third Quarter, 2008 Investor Presentation CIBC World Markets Revenue Components F ‘07 F ‘08 ($MM) Q3 Q4 Q1 Q2 Q3 Capital Markets (1) (1) (1) (1) (1) Capital Markets 28 (249) (3,169) (2,253) (689) vs. Q2: Investment + loss on structured credit Banking & run-off activities down (1) (1) (1) (1) (1) Cre
Slide 11: World Markets Revenue Components
Third Quarter, 2008 Investor Presentation CIBC World Markets Revenue Components F ‘07 F ‘08 ($MM) Q3 Q4 Q1 Q2 Q3 Merchant Banking (1) (1) (1) (1) (1) Capital Markets 28 (249) (3,169) (2,253) (689) vs. Q2: Investment + higher gains & Banking & distributions (1) (1) (1) (1) (1) Credit Products 328 240
Slide 12: World Markets Net Income/(Loss)
Third Quarter, 2008 Investor Presentation CIBC World Markets Net Income/(Loss) ($MM) vs. Q2 (2) 410 + loss on structured credit 190 (2) run-off activities down 113 58 (2) (2) 35 (2) + expenses down (1) 220 (1) + higher mark-to-market (112) gains on credit derivatives re. Corporate (1) loans (538) –
Slide 13: Non-GAAP Financial Measures
Third Quarter, 2008 Investor Presentation Non–GAAP Financial Measures Cash Earnings/(Loss) Per Share, Taxable Equivalent Basis, Segmented ROE & Cash Efficiency Ratio For further details, see Non-GAAP measures within the Notes to users section on page i of the Q3/08 Supplementary Financial Informatio
Slide 14: Revenue
Third Quarter, 2008 Investor Presentation CIBC Revenue F ‘08 ($MM) Q1 Q2 Q3 vs. Q2 (1) Net Interest Income 1,154 1,349 1,327 Fees for Services Underwriting and Advisory 176 88 68 Deposit and Payment 195 191 197 Credit 60 56 58 Cards 77 67 81 Investment Mgmt and Custodial 136 131 129 Mutual Funds 212
Slide 15: Expenses
Third Quarter, 2008 Investor Presentation CIBC Expenses F ‘08 ($MM) Q1 Q2 Q3 vs. Q2 Employee Comp. and (1) (1) (1) Benefits 994 933 942 Occupancy Costs 145 142 148 Computer and Office Equip. 262 265 270 Communications 74 72 67 Advertising and Bus. Development 53 58 51 (1) (1) Professional Fees 51 61
Slide 16: Common Share Dividends
Third Quarter, 2008 Investor Presentation Common Share Dividends ($ per share) 0.87 0.87 0.87 0.87 0.77 Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 31 CIBC Retail Markets ROE & Cash Efficiency (NIX) Ratio(1) (%) 76 ROE 48 (2) 54 46 42 61 59 57 58 NIX 50 (2) (2) (2) (2) Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 (1) Non-GAAP financi
Slide 17: Retail Markets Mortgages & Cards
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Mortgages & Cards(1) ($B; spot; administered assets) 121.8 117.7 Residential 112.6 115.1 Mortgages 109.2 13.9 14.2 13.3 13.5 12.7 Card Loans Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 (1) Excludes FirstCaribbean. 33 CIBC Retail Markets Loan Balances(1) (
Slide 18: Retail Markets Market Share
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Market Share(1)(2) (%) Residential 14.2 14.2 14.1 14.1 14.1 Mortgages Consumer 19.5 19.8 19.6 19.5 19.2 Deposits Consumer 9.3 Loans 9.1 9.0 9.0 9.0 (excl. cards) Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 (1) Source: OSFI (consumer deposits); Bank of Can
Slide 19: Mutual Funds AUM & Market Share
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Mutual Funds/Managed Accounts AUM & Market Share(1) MF/Managed Accts AUM Canadian Market Share 70 11 62.4 61.8 61.9 61.5 61.7 60 Market Share (%) 50 $ Billions 9 40 8.5 8.5 8.6 8.4 8.5 30 7 20 10 0 5 Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 (1) Source:
Slide 20: Imperial Service and Discount Brokerage
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Imperial Service Funds Managed Funds Managed/Financial Adviser 100 100 85.0 85.1 86.6 87.7 87.3 80 80 $ Millions $ Billions 78.0 79.5 79.0 75.0 76.1 60 60 40 40 20 20 0 0 Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 39 CIBC Retail Markets Discount Brokerag
Slide 21: Wood Gundy and Merchant Banking
Third Quarter, 2008 Investor Presentation CIBC Retail Markets Wood Gundy(1) AUA AUA per Investment Adviser 140 120 118.5 118.6 120 110.3 113.1 109.2 100 $ Millions 100 $ Billions 90.1 91.5 89.5 80 85.6 87.6 80 60 60 40 40 20 20 0 0 Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 AUA excludes client cash and short positi
Slide 22: World Markets Market Share; Behind the Reported NIMs
Third Quarter, 2008 Investor Presentation CIBC World Markets Market Share (%) 16.3 Canadian 13.0 12.2 11.2 New Equity 9.5 Issues (1)(2) Equity Trading Canada - % 7.1 6.4 6.6 7.3 6.8 of shares traded (3) Q3 Q4 Q1 Q2 Q3 F ‘07 F ‘08 (1) Source: CIBC Equity Capital Markets. (2) Based on total amount und
Slide 23: Other Non-Interest Income; Unhedged USRMM Exposure
Third Quarter, 2008 Investor Presentation “Other” Non–Interest Income F ‘07 F ‘08 ($MM) Q3 Q4 Q1 Q2 Q3 (2) (2) (2) (1) Gains/(Losses) 22 486 (71) (31) (6) SAR (3) hedge revenue/(expense) (7) 11 (35) - (10) Income from equity-accounted investments 11 (8) 7 (2) (11) Gains/(Losses) on non-trading (2) (
Slide 24: Unhedged Structured Credit Non-USRMM Exposure
Third Quarter, 2008 Investor Presentation UNHEDGED Structured Credit Non-USRMM Exposure (U.S.$MM) Write-downs Jul. 31/08 Tranche Notional to-date Net Exposure A B C =A -B CLO $ 418 $ 51 $ 367 Corporate Debt 209 22 187 Warehouse 160 82 78 Others 348 3 345 ABCP 1,098 189 909 $ 2,233 $ 347 $ 1,886 47 H
Slide 25: Items of Note
Third Quarter, 2008 Investor Presentation Items of Note Pre-Tax After-Tax EPS Effect (1) Strategic Business Unit Q3 2008 Effect ($MM) Effect ($MM) ($/share) Loss on Structured Credit Run-off Activities (885) (596) (1.56) World Mkts Losses/Interest Expense re. Pending Tax Settlement of Leveraged Leas
Slide 26: Risk Review: Q3 Credit Review
Third Quarter, 2008 Investor Presentation Third Quarter, 2008 Risk Review Tom Woods Senior Executive Vice-President and Chief Risk Officer Q3 Credit Review Total Specific Retail & World Net Impaired Loans Provisions Markets Provisions 202 World Markets 316 315 Retail Markets 294 11 174 164 177 169 1
Slide 27: Q3 Trading Revenue Distribution; Tier 1 Ratio Movement
Third Quarter, 2008 Investor Presentation Q3 Trading Revenue (TEB) Distribution (1) (2) 11 10 9 Trading Revenue Days 8 7 6 5 4 3 2 1 0 (12)(11)(10) (9) (8) (7) (6) (5) (4) (3) (2) (1) 0 1 2 3 4 5 6 7 8 9 10 11 (C $ MM) (1) For further details, see Non-GAAP measures within the Notes to users section
Slide 28: Topical Risk Issues
Third Quarter, 2008 Investor Presentation Appendix Topical Risk Issues As at July 31, 2008 Direct U.S. Subprime Mortgage • None Exposure Unhedged U.S. Subprime Mortgage • See Third Quarter 2008 Report to Shareholders Exposure through RMBS and CDOs Hedged U.S. Subprime Mortgage • See Third Quarter 20
Slide 29: Select Retail Portfolio Specific Provisions
Third Quarter, 2008 Investor Presentation Select Retail Portfolio Specific Provisions ($MM) 125 Cards LLE 5,00% 4,50% Specific provisions in Loss Ratio 100 4,00% 75 3,50% 3,00% Cards portfolio … 2,50% 50 2,00% 1,50% 25 1,00% 0,50% 0 0,00% 1999* 2000* 2001* 2002* 2003* 2004* 2005* 2006* Q1/07 Q2/07 Q
Slide 30: World Markets Review / Q&A
Third Quarter, 2008 Investor Presentation Third Quarter, 2008 World Markets Review Richard Nesbitt Chairman & CEO CIBC World Markets Third Quarter, 2008 Q&A 30