Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q2 2005 Earnings Presentation
37 slides from Canadian Imperial Bank Of Commerce's earnings presentation, May 25, 2005
Slide 1: CIBC Second Quarter Investor Presentation
Second Quarter, 2005 Investor Presentation CIBC Second Quarter Investor Presentation May 25, 2005 CIBC Overview John Hunkin Chief Executive Officer Gerry McCaughey President and Chief Operating Officer 1
Slide 2: Q2 Summary
Second Quarter, 2005 Investor Presentation Second Quarter, 2005 Financial Review Tom Woods Senior Executive Vice-President and Chief Financial Officer All financial results are in Canadian dollars on a “REPORTED” basis unless otherwise stated. Q2 Summary EPS(1): $1.20 - Includes $75MM provision re.
Slide 3: Quarterly Income Statement
Second Quarter, 2005 Investor Presentation CIBC – Quarterly Income Statement F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 (1) Revenue 3,027 2,906 2,901 3,079 2,820 (2) (3) Non-Interest Expenses 2,074 1,968 2,266 1,901 2,032 Operating Income 953 938 635 1,178 788 (4) (5) Provision for Credit Losses 207 91 175 17
Slide 4: Expenses
Second Quarter, 2005 Investor Presentation CIBC Expenses ($MM) Q4/04 Q1/05 Q2/05 Change Employee Comp. and Benefits 1,042 1,054 1,055 1 (1) Occupancy Costs 180 159 157 (2) Computer and Office Equip. 309 271 293 22 •higher project spending Communications 84 86 82 (4) Advertising and Bus. Development
Slide 5: Retail Markets – Revenue
Second Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue ($MM) 1,455 1,325 1,327 1,308 1,240 Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 9 CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Personal Banking 492 527 545 551 538 Small Business Banking 140 145 146 151 145 (1) Card
Slide 6: Retail Markets – Revenue Components
Second Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Personal Banking Personal Banking 492 527 545 551 538 + loan balances up Small Business Banking 140 145 146 151 145 + sales commissions up (1) Cards 333 347 357 383 332 – 3 less days
Slide 7: Retail Markets – Revenue Components
Second Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Cards Personal Banking 492 527 545 551 538 + revolve rate up Small Business Banking 140 145 146 151 145 – seasonal decline in (1) Cards 333 347 357 383 332 purchase volumes and balanc
Slide 8: Retail Markets – Revenue Components
Second Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Other Revenue Personal Banking 492 527 545 551 538 + higher Treasury revenue Small Business Banking 140 145 146 151 145 (1) – higher-than-normal Cards 333 347 357 383 332 insurance re
Slide 9: Wealth Management – Revenue
Second Quarter, 2005 Investor Presentation CIBC Wealth Management - Revenue ($MM) 650 653 663 609 612 Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 17 CIBC Wealth Management - Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Imperial Service 187 195 195 200 200 Retail Brokerage 294 233 251 277 288 Private Wealth Ma
Slide 10: Wealth Management – Revenue Components
Second Quarter, 2005 Investor Presentation CIBC Wealth Management - Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Imperial Service Imperial Service 187 195 195 200 200 + growth in funds managed - up 2% vs. Q1 Retail Brokerage 294 233 251 277 288 - up 6% vs. Q2/04 Private Wealth Management 37 3
Slide 11: Wealth Management – Revenue Components
Second Quarter, 2005 Investor Presentation CIBC Wealth Management - Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Wealth Products Imperial Service 187 195 195 200 200 – Canada Savings Bond commissions (seasonal) Retail Brokerage 294 233 251 277 288 – 3 less days Private Wealth Management 37 35
Slide 12: World Markets – Revenue
Second Quarter, 2005 Investor Presentation CIBC World Markets – Revenue ($MM) 1,012 836 791 749 742 Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 23 CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Capital Markets 421 321 309 349 325 Investment Banking & Credit Products 442 326 247 296 299 Merc
Slide 13: World Markets – Revenue Components
Second Quarter, 2005 Investor Presentation CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Capital Markets Capital Markets 421 321 309 349 325 + retail structured notes Investment Banking & + VIE consolidation revenue Credit Products 442 326 247 296 299 ($12MM; offset in Min
Slide 14: World Markets – Revenue Components
Second Quarter, 2005 Investor Presentation CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q2 Q3 Q4 Q1 Q2 Merchant Banking Capital Markets 421 321 309 349 325 + gains/other – Investment Banking & $87MM (net)(1) Credit Products 442 326 247 296 299 + lower write-downs – $26MM Merchant Bankin
Slide 15: Balance Sheet Measures
Second Quarter, 2005 Investor Presentation CIBC – Competitive Balance Sheet Measures Net Tier 1 Unrealized General GA as % Impaired ($MM) Ratio Gains Allowance of RWA(1) Loans(2) CIBC 10.7% 819 1,025 0.86% 348 Bank Peer Group(3) 10.8% 564 1,140 0.79% 610 _______________________ (1) General Allowance
Slide 16: Common Share Dividends
Second Quarter, 2005 Investor Presentation Common Share Dividends ($ per share) 0.65 0.65 0.60 0.60 0.50 Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 31 CIBC Retail Markets – ROE & Efficiency (NIX) Ratio 55% 43% 41% ROE(1) 31% 36% 60% 58% NIX 57% 55% 53% (2) (3) Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 _______________________ (1)
Slide 17: Mortgages & Cards
Second Quarter, 2005 Investor Presentation CIBC Retail Markets - Mortgages & Cards ($B; spot) 88.1 86.0 84.4 Residential 82.1 79.6 Mortgages 10.3 10.4 10.4 10.1 Card Loans 9.9 Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 33 CIBC Retail Markets - Loan Balances (1) ($B; spot) 21.9 22.6 21.6 Personal 20.9 20.0 Loans 12.
Slide 18: Market Share
Second Quarter, 2005 Investor Presentation CIBC Retail Markets - Market Share (1)(2) 14.8% 14.8% Residential 14.7% 14.7% 14.7% Mortgages Consumer 19.3% 19.2% 19.2% 19.1% Deposits 19.0% (3) Consumer 11.5% 11.5% 11.4% 11.5% 11.4% Loans (excl. cards) Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 _______________________ S
Slide 19: Wealth Management – ROE & Efficiency (NIX) Ratio
Second Quarter, 2005 Investor Presentation CIBC Wealth Management - ROE & Efficiency (NIX) Ratio 40% 35% 36% 35% 28% ROE(1) 79% 77% NIX 73% 74% 73% (2) Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 _______________________ (1) For further details, see Non-GAAP measures within the Notes to users section on page i of the
Slide 20: AUA & AUM
Second Quarter, 2005 Investor Presentation Mutual Fund AUM & Market Share Mutual Fund AUM Canadian Market Share(1) 10.0 45 42.2 42.4 40.7 40.5 40.4 9.5 40 Market Share (%) 9.0 35 8.5 8.7 $ Billions 30 8.6 8.5 8.4 8.3 8.0 25 7.5 20 7.0 15 6.5 10 6.0 5 5.5 5.0 Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 ______________
Slide 21: Imperial Service
Second Quarter, 2005 Investor Presentation Imperial Service # IDA Registered Productivity ($MM) Financial Advisers Funds Managed per FA 62.2 63.3 64.1 1,075 1,077 1,072 58.7 1,029 F ‘03 F ‘04 Q1 Q2 F ‘03 F ‘04 Q1 Q2 Annual F ‘05 Annual F ‘05 41 Discount Brokerage (1) Active Accounts Trades / Day 500
Slide 22: Wood Gundy
Second Quarter, 2005 Investor Presentation CIBC Wood Gundy (1) AUA AUA per Investment Adviser 120 120 105.4 105.6 98.2 97.9 100.6 100 100 80 80 $ Millions $ Billions 76.2 76.1 60 70.0 70.0 71.9 60 40 40 20 20 0 0 Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 _______________________ AUA includes client cash and short p
Slide 23: Retail & Wealth plus Commercial Banking
Second Quarter, 2005 Investor Presentation CIBC Retail & Wealth plus Commercial Banking (1) ($MM) Revenue NIAT F ‘04 F ‘05 F ‘04 F ‘05 Q2 Q1 Q2 Q2 Q1 Q2 (2) (2) CIBC Retail Markets 1,240 1,455 1,308 199 364 263 (3) CIBC Wealth Management 650 653 663 96 114 78 CIBC Retail & Wealth 1,890 2,108 1,971 2
Slide 24: World Markets – ROE & Efficiency (NIX) Ratio
Second Quarter, 2005 Investor Presentation CIBC World Markets – ROE & Efficiency (NIX) Ratio 40% 45% 33% 23% ROE(1) (7%) 106% NIX (2) (TEB) 69% 69% 75% 64% (3) (4) Q2 Q3 Q4 Q1 Q2 F ‘04 F ‘05 _______________________ (1) For further details, see Non-GAAP measures within the Notes to users section on p
Slide 25: World Markets – Merchant Banking
Second Quarter, 2005 Investor Presentation CIBC World Markets - Merchant Banking Total Portfolio Industry Diversification (Carrying Value = $1,537MM as at April 30, 2005) Consumer Services 20.2 % Entertainment 5.4 Financial Services 8.1 Hardware & Software 6.3 Healthcare 3.7 Industrial Growth & Serv
Slide 26: World Markets – Market Share
Second Quarter, 2005 Investor Presentation CIBC World Markets – Market Share Canadian New Equity Issues (1) 20 17.7 16.9 17.0 16.3 15.1 Market Share (%) 15 10 5 0 Q2 Q3 Q4 Q1 Q2 F ‘04 (2) F ‘05 _______________________ Source: CIBC Equity Capital Markets. (1) Based on total amount underwritten. Inclu
Slide 27: Economic Profit
Second Quarter, 2005 Investor Presentation Economic Profit (1) ($MM) F ‘04 F ‘05 Q2 Q3 Q4 Q1 Q2 CIBC Retail Markets 118 157 205 280 179 CIBC Wealth Management 60 67 63 78 43 CIBC World Markets 172 181 (103) 108 52 Corporate and Other (48) (13) 36 50 (18) Total CIBC 302 392 201 516 256 ______________
Slide 28: Other Non-Interest Income
Second Quarter, 2005 Investor Presentation “Other” Non-Interest Income ($MM) F ‘04 F ‘05 Q2 Q3 Q4 Q1 Q2 Gain/(Loss) on Sale of Loans 42 30 28 (6) 7 Other Gains/(Losses)(1) 38 109 6 23 42 SAR(2) hedge revenue/(expense) 2 (2) 19 (12) 15 Income from equity-accounted (4) investments(3) 14 16 9 76 17 AcG
Slide 29: Risk Review
Second Quarter, 2005 Investor Presentation Second Quarter, 2005 Risk Review Wayne Fox Vice Chair and Chief Risk Officer Treasury, Balance Sheet and Risk Management Key Messages Credit Quality • Gross Impaired Loans reduced 14.3% year-over-year, 0.4% quarter- over-quarter • Specific provisions reduce
Slide 30: Specific Provision for Credit Losses
Second Quarter, 2005 Investor Presentation Specific Provision for Credit Losses as % of Net Loans and Acceptances 2.50% Consumer Business & Government Expected Total Bank Net Loans and Acceptances (excl. Reverse Repos) 2.00% Total Range: 0.50% - 0.65% (excl. Reverse Repos) Annualized % of 1.50% 1.00
Slide 31: Impaired Loans
Second Quarter, 2005 Investor Presentation Impaired Loans Gross Impaired Loans Net Impaired Loans (excluding General Allowance) Net Impaired Loans as % of Loans & BAs (excl. Reverse Repos) NIL as a % of Total Loans and BAs 2.5 2.0% 1.8% 2.0 1.6% 1.4% 1.5 1.2% $B 1.0% 1.0 0.8% 0.6% 0.5 0.4% 0.2% 0.0
Slide 32: Trading Revenue vs. Risk
Second Quarter, 2005 Investor Presentation Trading Revenue (TEB) vs. Risk* Backtesting of Trading Revenue vs. Total VaR Second Quarter, 2005 Trading Revenue Total VaR 20 20 16 16 12 12 8 8 C$MM 4 4 - - (4) (4) (8) (8) (12) (12) 1-Feb 10-Feb 21-Feb 2-Mar 11-Mar 22-Mar 31-Mar 11-Apr 20-Apr 29-Apr * Fo
Slide 33: Appendix
Second Quarter, 2005 Investor Presentation Appendix Specific Provision for Credit Losses ($MM) 400 Consumer Business & Government 350 101 300 250 138 91 200 156 150 274 117 77 174 100 184 185 169 169 140 157 50 73 87 83 33 9 19 0 -28 -2 -50 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 1999* 2000* 2001* 2002*
Slide 34: Business/Consumer Loan Portfolio Mix
Second Quarter, 2005 Investor Presentation Business/Consumer Loan Portfolio Mix 80% 74% 74% 74% 75% 75% 75% % of Outstanding Loans 73% 67% 70% 62% 59% 60% 56% 50% 44% 42% 39% 40% 33% 27% 30% 26% 26% 26% 25% 25% 25% 20% 10% 0% 1999 2000 2001 2002 2003 Q1/04 Q2/04 Q3/04 Q4/04 Q1/05 Q2/05 Business & Go
Slide 35: Credit Protection
Second Quarter, 2005 Investor Presentation Credit Protection Industry Diversification ($MM) On Balance Total as at April 30, 2005 Sheet Bought Oil & Gas $721 $2,088 Business Services 314 421 Manufacturing - Capital 239 715 Cable & Telecom 223 502 Forest Products 134 290 Utilities 120 549 Manufacturi
Slide 36: Forward-Looking Statements
Second Quarter, 2005 Investor Presentation Internal Capital Generation (C$MM) Preferred Common Share Net NIAT Dividends Dividends Repurchases Quarterly Annual 1999 934 (17) (492) (500) (75) 2000 1,932 (17) (501) (1,074) 340 2001 1,582 (17) (536) (867) 162 2002 542 (50) (577) (313) (398) 2003 1,950 (
Slide 37: Q&A
Second Quarter, 2005 Investor Presentation Q&A 37