Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Debt Investor Presentation (December 2021)
65 slides from Canadian Imperial Bank Of Commerce's debt investor presentation, December 2021
Slide 1: CIBC Fixed Income Investor Presentation Q4-2021
CIBC Fixed Income Investor Presentation Q4-2021
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation (the "Presentation") of general background information about Canadian Imperial Bank of Commerce ("CIBC") and its covered bond programme (the "Programme") as of the date of this document. It is information in summary form and does not purport to
Slide 3: Disclaimer (continued)
Disclaimer (continued) The Securities and the Covered Bond Guarantee (as described herein) have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons (as defined in Regulation S) except
Slide 4: Disclaimer (continued)
Disclaimer (continued) The Guarantor is not a bank nor an authorised deposit taking institution authorised to carry on banking business under the Australian Banking Act and it is not supervised by the Australian Prudential Regulation Authority. The Guarantor is not registered as a foreign company or
Slide 5: Forward-Looking Statements
Forward-Looking Statements 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 or the SEC and in oth
Slide 6: Table of Contents
Table of Contents 1 Debt Programmes Summary 7 2 Canadian Economy & Consumer Profile 8 3 Canadian Imperial Bank of Commerce (“CIBC”) Overview 12 4 Canadian Bail-in and Regulatory Regime Update 28 5 Canadian Mortgage Market 36 6 Legislative Covered Bond Programme, Collateral Pool 40 7 Contacts 45 8 Ap
Slide 7: Debt Programmes Summary
Debt Programmes Summary Outperformed most G7 economies as measured by long term GDP growth rate during 2000-20201 • Strong diversified stable economy Canada • Aaa/AAA/AA+/AAA (Moody’s/S&P/Fitch/DBRS) • The World Economic Forum ranked Canada’s soundness of banks first in the world from 2008 to 2016,
Slide 8: Canadian Economy & Consumer Profile
Canadian Economy & Consumer Profile CIBC Investor Presentation
Slide 9: Canada: Key Facts
Canada Canada: Key Facts • GDP broken down by province/territory continues to demonstrate that Canada’s Population2 38.2 MM economy is well diversified GDP (market prices)3 CAD 2,462 BN GDP per capita3 CAD 64,530 Canada’s GDP by Province / Territory1 (%) Labour Force4 20.5 MM Provinces/Territories 1
Slide 10: Canadian Economy Selected Indicators
Canadian Economy Selected Indicators Unemployment Rate • Canada’s unemployment rate less volatile in the past decade, and not directly comparable to the United States unemployment rate1 • As measured by GDP indexed to 2007, the Canadian economy has outperformed most other major economies since the f
Slide 11: Canada GDP and Exports
Canada GDP and Exports • Well diversified economy, with several key industries including finance, manufacturing, services and real estate • Following the 2007-2008 global recession, the diversity had been a stabilizing factor and led to strong economic performance relative to other industrialized na
Slide 12: CIBC Overview
CIBC Overview CIBC Investor Presentation
Slide 13: A Leading Canadian Financial Institution
A Leading Canadian Financial Institution TOP RANKED $68B 11MM 45K 12.4% 8.6% MOBILE BANKING APP – MARKET-CAP1 CLIENTS1 EMPLOYEES CET1 RATIO1 PPPT (5-yr CAGR)2 2ND CONSECUTIVE EARNINGS (5-yr CAGR)2 YEAR3 OUR GOAL OUR STRATEGIC PRIORITIES Deliver superior client experience and top-tier shareholder Ele
Slide 14: Diversified Businesses with Leading Canadian and Growing U.S. Platform
Diversified Businesses with Leading Canadian and Growing U.S. Platform Net Income by Strategic Business Unit1 29% 48% 39% F16 26% F21 $4.3B $6.4B U.S. 14% Region2 21% 2% 23% U.S. 26% Region2 2% Personal & Business Banking Cdn. Commercial & Wealth U.S. Commercial & Wealth Capital Markets 1 Does not i
Slide 15: Our Strategic Business Units
Our Strategic Business Units Canadian Personal & Canadian Commercial Banking & U.S. Commercial Banking & Capital Markets Business Banking Wealth Management Wealth Management • Providing clients across Canada with • High-touch, relationship-oriented • High-touch, relationship-oriented • Integrated gl
Slide 16: Sustainable Returns to Shareholders
Sustainable Returns to Shareholders • CIBC has a strong track record of shareholder returns • CIBC has not missed a regular dividend or reduced its dividend since the first dividend payment in 1868 • Flat dividends from Q2-2020 onward due to temporary OSFI policy1 Note: Dividend of CAD 1.61 per shar
Slide 17: High-Quality, Client-Driven Balance Sheet
High-Quality, Client-Driven Balance Sheet (Based on Q4 2021 Results) Assets Liabilities & Equity $838B Cash & Repos Unsecured 127% Funding 28% 36% Coverage Wholesale Funding Liquid Assets (Liquid Assets / Trading & Wholesale Funding) Secured Funding3 Investment Securities Personal Deposits Residenti
Slide 18: Underpinned by a Commitment to Balance Sheet Strength
Underpinned by a Commitment to Balance Sheet Strength Basel III CET1 Ratio (%) Basel III Total Capital Ratio (%) 12.1% 12.4% 11.4% 11.6% 16.1% 16.2% 10.6% 14.9% 15.0% 13.8% 2017 1 2018 2019 2020 2021 2017 1 2018 2019 2020 2021 Basel III Leverage Ratio (%) Liquidity Coverage Ratio (%) 4.7% 4.7% 145.0
Slide 19: Continued balance sheet strength
Continued balance sheet strength $B Q4/20 Q3/21 Q4/21 • CET1 ratio of 12.4%, up 7 bps, reflecting: Average Loans and Acceptances 413.1 440.1 455.5 • Capital generation from earnings net of dividends of $0.7B Average Deposits 568.7 599.3 623.2 • Increase in RWAs of $3.8B from strong credit growth CET
Slide 20: Credit Review
Credit Review Provision For Credit Losses (PCL) Reported & Adjusted1 ($MM) Q4/20 Q3/21 Q4/21 Cdn. Personal & Business Banking 121 67 164 Impaired 88 82 87 Performing 33 (15) 77 Cdn. Commercial Banking & Wealth 25 (49) (5) Impaired 21 (11) 6 Performing 4 (38) (11) U.S. Commercial Banking & Wealth 82
Slide 21: Prudent Risk Management
Prudent Risk Management Allowance for Credit Losses/Gross Loans1,2 (%) 0.89% 0.64% 0.47% 0.51% 0.45% 2017 2018 2019 2020 2021 Loan Loss Ratio2,3,4 (bps) Impaired Total 70 61 50 31 34 33 27 28 25 25 26 29 26 30 23 16 10 4 -10 2015 2016 2017 2018 2019 2020 2021 COVID-19 Pandemic 1 Allowance for credit
Slide 22: Allowance for credit losses down YoY and QoQ
Allowance for credit losses down YoY and QoQ Reported Q4/20 Q3/21 Q4/21 Allowance coverages were down YoY and QoQ Canadian Credit Cards 6.2% 5.0% 5.9% • Slightly lower allowance coverage driven by portfolio growth and favourable portfolio credit migration, partially offset by an unfavourable change
Slide 23: Lending portfolio is well diversified
Lending portfolio is well diversified Overall Loan Mix (Outstanding) • Nearly two-thirds of our portfolio is consumer lending composed mainly of mortgages, with uninsured having an average loan-to-value of 49% • Oil and gas is 1% of the loan portfolio; 49% investment grade Consumer Cards 2% • The ba
Slide 24: Diversification is Key to a Stable Wholesale Funding Profile
Diversification is Key to a Stable Wholesale Funding Profile Wholesale Funding Diversification • Well diversified across products, currencies, investor segments and geographic regions • Achieve appropriate balance between cost and stability of funding • Regular issuance to promote investor engagemen
Slide 25: CIBC Funding Strategy and Sources
CIBC Funding Strategy and Sources Funding Strategy • CIBC’s funding strategy includes access to funding through retail deposits and wholesale funding and deposits • CIBC updates its three-year funding plan on at least a quarterly basis • The wholesale funding strategy is to develop and maintain a su
Slide 26: Wholesale Funding Geography
Wholesale Funding Geography Wholesale Funding By Currency1 CAD 47.2 BN EUR 9.0 BN, CHF 2.4 BN, GBP 5.9 BN, NOK: 0.15 BN Canada Mortgage Bonds Covered Bonds Credit Cards Securitization JPY 55.0 BN Medium Term Notes Medium Term Notes Medium Term Notes Canadian Dollar Deposits Certifica
Slide 27: CIBC Funding Composition
CIBC Funding Composition Funding Sources – October 20211 Funding Sources BN Personal deposits 213.9 Business and government deposits 226.6 Unsecured funding1 138.1 Securities sold short or repurchase agreements 97.1 Others (Includes derivatives) 68.0 2 Capital 51.4 Securitization & Covered Bonds 42.
Slide 28: Canadian Bail-in and Regulatory Regime Update
Canadian Bail-in and Regulatory Regime Update Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Investor Presentation
Slide 29: Canadian Bail-in Regime Update
Canadian Bail-in Regime Update On April 18, 2018, Department of Finance published the bail-in regulations, and OSFI finalized the guidelines on Total Loss Absorbing Capacity (TLAC) and TLAC holdings. Department of Finance’s bank recapitalization (bail-in) conversion regulations • Provide statutory p
Slide 30: Canadian Bail-in Regime – Comparison to Other Jurisdictions
Canadian Bail-in Regime – Comparison to Other Jurisdictions Bail-in implementation in other jurisdictions has increased the riskiness of bail-inable bonds vs. non-bail-inable bonds: • Legislative changes prohibit bail-outs, increasing the probability that bail-in will be relied on • The hierarchy of
Slide 31: How Bail-In Is Expected To Work
How Bail-In Is Expected To Work When OSFI deems a bank has ceased to or may be about to cease to continue to be viable, it may trigger temporary takeover of the bank and carry out the bail-in conversion of NVCC capital and bail-in debt to common equity. There are no write-down provisions in the fr
Slide 32: Loss Absorption Waterfall
Liquidation to Resolution Comparison Liquidation Scenario Liquidation Resolution Bail-in debt ranks pari passu with all other senior Securitizations, Covered Bonds Securitizations, Covered Bonds unsecured liabilities. Legacy Senior Debt Structured Notes Derivatives Legacy Senior Debt Resolution Scen
Slide 33: Overview of Creditor Hierarchies in Bail-In Resolution
Overview of Creditor Hierarchies in Bail-In Resolution National layers of bail-inable senior debt instruments Canada Bank Recapitalization (Bail- Bank Insolvency Ordinance (BIO- Resolution Mechanism Act (§46f French Sapin 2 Italy Spanish Revised in) Regulations FINMA) / BoE/PRA KWG new) Insolvency L
Slide 34: OSFI Non Viability Criteria
Office of the Superintendent of Financial Institutions (OSFI) Non Viability Criteria In assessing whether an institution has ceased, or is about to cease, to be viable, the following criteria can be considered, which may be mutually exclusive and should not be viewed as an exhaustive list1 Whether t
Slide 35: Domestic Stability Buffer
Domestic Stability Buffer Background • Canadian Domestic Systemically Important Banks (D-SIBs) are required to hold Pillar 2 capital buffer that is privately communicated to each bank, to address risks that are inadequately captured by the Pillar 1 minimum capital requirements • D-SIBs are subject t
Slide 36: Canadian Mortgage Market
Canadian Mortgage Market Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Investor Presentation
Slide 37: Mortgage Market Performance and Urbanization Rates
Mortgage Market Performance and Urbanization Rates Mortgage Arrears by Number of Mortgages Canadian mortgages consistently outperform U.S. and U.K. mortgages • Low defaults and arrears reflect the strong Canadian credit culture • Mortgage interest is generally not tax deductible, resulting in an inc
Slide 38: Canadian House Prices
Canadian House Prices Average Home Price • Absolute price level is moderate compared to major global urban City CAD USD Eq. 1 centers Canada 717K 579K • Canadian housing market among others that have experienced Toronto 1129K 911K sharp rises in residential real estate values over the last year Vanc
Slide 39: CIBC's Mortgage Portfolio
CIBC’s Mortgage Portfolio CIBC Canadian Residential Mortgages: CAD 242.9 BN Condo Exposure: CAD 40.7 BN • 25% of CIBC’s Canadian residential mortgage portfolio is insured, with 64% of insurance being provided by CMHC • The average loan to value1 of the uninsured portfolio is 49% • The condo develope
Slide 40: Legislative Covered Bond Programme, Collateral Pool
Legislative Covered Bond Programme, Collateral Pool Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Investor Presentation
Slide 41: Legislative Programme Summary
Legislative Programme Summary Programme Size CAD 60,000,000,000 Ratings Aaa / AAA by Moody’s / Fitch Asset Percentage Currently at 93.0% Currency Most Convertible Currencies Guarantor CIBC Covered Bond (Legislative) Guarantor Limited Partnership Listing Luxembourg Law Canadian Legislative Framework
Slide 42: Covered Bond Structure
Covered Bond Structure • In April 2012, the Canadian government introduced legislation which provides a framework for the issuance of covered bonds by Canadian financial institutions • In July 2012, the National Housing Act was amended to establish a legal framework for covered bond programmes in Ca
Slide 43: Cover Pool
Cover Pool Summary Statistics (October 31, 2021)1 Current Collateral Pool Canadian uninsured residential mortgages Asset Percentage Requirement 93.00% Current Balance CAD 50,216,788,907 Outstanding Covered Bonds CAD Eq. 26,290,750,000 Number of Loans 164,474 Average Balance CAD 305,317 Weighted Ave
Slide 44: Cover Pool (October 2021)
Cover Pool (October 2021) Remaining Term Geographic Distribution Current Indexed Loan to Value Property Type 44
Slide 45: Contacts
Contacts PETER LEVITT WOJTEK NIEBRZYDOWSKI EXECUTIVE VICE PRESIDENT VICE PRESIDENT TREASURY AND TAXATION GLOBAL TERM FUNDING, TREASURY Email: Peter.Levitt@cibc.com Email: Wojtek.Niebrzydowski@cibc.ca Phone: +1 (416) 594-8487 Phone: +1 (416) 594-6748 Bloomberg: Niebrzydowsk@bloomberg.net 45
Slide 46: Appendix
Appendix CIBC Investor Presentation
Slide 47: Appendix
Appendix 1 Sustainability 48 2 Canadian Mortgage Market 52 3 CIBC Canadian Real Estate 55 4 Selected Credit Exposures 58 5 Covered Bond Triggers 60 6 Selected Covered Bond and Senior Issuances 64 47
Slide 48: Sustainability
Sustainability CIBC Investor Presentation
Slide 49: 2021 ESG Performance
2021 ESG Performance In 2021, we built on our longstanding commitment to ESG as a cornerstone of how we operate and create value for our stakeholders. Top 10 $4.8B 38% 89% $132.7M in financing for the renewable in new loan authorizations to women in board-approved our employee engagement score inves
Slide 50: Our Commitment to Sustainability
Our Commitment to Sustainability Environmental Social Governance Net Zero Banking Alliance 50
Slide 51: Our Commitment to ESG
Our Commitment to ESG Rating Provider Rating1 2020 Climate Change Score: A- (from B in 2019) 2021 ESG Rating: AA; Scale of CCC to AAA (best) Industry Adjusted Score: 8.4 (up from 7.5 in 2020) 2021 ESG Risk Rating: 18.3 (low risk); equivalent to 13th percentile among banks (improved from 17th percent
Slide 52: Canadian Mortgage Market
Canadian Mortgage Market Beneficial Mortgage Regulation in Canada • Under the Bank Act, banks can only advance uninsured mortgages up to an LTV ratio of 80% • Borrowers have to purchase default insurance if the mortgage has an LTV > 80% • Insurance covers the entire outstanding principal amount, up
Slide 53: Canadian Mortgage Market Regulatory Developments
Canadian Mortgage Market Regulatory Developments • Second home mortgage • Max. amortization insurance no longer • Standardizing eligibility reduced to 35 yrs. from • Reduce max. criteria for high-and low- available 40 amortization to 30 • Min. down payment for ratio insured mortgages, • Tightened in
Slide 54: Canadian Mortgage Market Regulatory Developments (continued)
Canadian Mortgage Market Regulatory Developments (continued) • Ontario Government • Temporary expansion of portfolio introduced Non- insurance eligibility criteria to allow • Minimum qualifying rate Resident the following for loans funded before (MQR) of greater of 5.25% speculation Tax March 20th,
Slide 55: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates Q4/20 Q3/21 Q4/21 • The Greater Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) continue to outperform the Canadian average Total Mortgages 0.29% 0.19% 0.17% Uninsured Mortgages 0.28% 0.15% 0.14% Uninsured Mortgages in GV
Slide 56: Canadian Uninsured Residential Mortgages — Q4/21 Originations
Canadian Uninsured Residential Mortgages — Q4/21 Originations FICO score Distribution • Originations of $18B in Q4/21 • Average LTV1 in Canada: 66% • GVA2: 62% • GTA2: 65% 2 2 Loan-to-Value (LTV)1 Distribution 2 2 1 LTV ratios for residential mortgages are calculated based on weighted average. See p
Slide 57: Canadian Uninsured Residential Mortgages
Canadian Uninsured Residential Mortgages FICO score Distribution • Better current FICO score and LTV1 distributions in GVA2 and GTA2 than the Canadian average • Less than 1% of this portfolio has a FICO score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 49% • GVA2: 45% • GTA2: 47%
Slide 58: Exposure to vulnerable sectors represents 2% of our lending portfolio
Exposure to vulnerable sectors represents 2% of our lending portfolio Leisure & Entertainment Loans Outstanding Retailer Loans Outstanding2 Food, Beverage & Department & Gas Stations Drug - Retail Restaurants Convenience 9% 19% 34% Stores 5% Hotels/Motels Auto Parts 20% Retailers 11% $3.2B $4.8B Ret
Slide 59: Commercial Real Estate exposure remains diversified
Commercial Real Estate exposure remains diversified Canadian Commercial Real Estate Exposure by Sector1 U.S. Commercial Real Estate Exposure by Sector2 Office 11% Residential Office Industrial 25% 19% 16% Industrial 10% Residential 1% Seniors Housing 6% Retail Healthcare 3% $34.9B 9% US$16.1B Hotel
Slide 60: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Servicer downgraded below Baa2/F2 by • Servicer, Guarantor and Bond Trustee agree to use Moody’s/Fitch commercially reasonable efforts to arrange for the • Servicer defaults on amounts due to Guarantor appointment of a successor Servi
Slide 61: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Issuer fails to pay any principal or interest in • Delivery of Issuer Acceleration Notice respect of the Covered Bonds within 10 business • Bond Trustee will serve a Notice to Pay on the days in the case of principal and 30 days in th
Slide 62: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences • Servicer Event of Default, not remedied within 30 • Notice of loans’ sale given by Issuer to Borrowers days • Borrowers notified to make payments to the • Issuer Event of Default (other than insolvency), Standby Account Bank for the a
Slide 63: Covered Bond Structural Summary - Triggers
Covered Bond Structural Summary - Triggers Trigger Consequences Cash Manager’s ratings fall below P-1/F1 or A by Cash Manager required to direct the Servicer to deposit all Revenue Cash Management Moody’s/Fitch Receipts and Principal Receipts directly into the GDA Account within Deposit Ratings two
Slide 64: Outstanding Benchmark Covered Issuance
Outstanding Benchmark Covered Issuance Series Currency Issued Issue Date Maturity Date Legal Final Maturity Coupon Rate Issue Spread CBL9 CHF 200,000,000 22-Dec-15 22-Dec-25 22-Dec-26 0.125% MS + 0% CBL9-2 CHF 150,000,000 22-Dec-15 22-Dec-25 22-Dec-26 0.125% MS + 0.05% CBL12 EUR 1,250,000,000 25-Jul
Slide 65: Selected Outstanding TLAC Senior
Selected Outstanding TLAC Senior1 ISIN Programme Currency Issued Issue Date2 Maturity Date Coupon Rate Issue Spread CA1360695D97 CAD 1,250,000,000 15-Jan-19 15-Jan-24 3.29% GoC+1.40% CH0419040826 EMTN CHF 100,000,000 30-Jan-19 30-Jan-25 0.60% MS + 0.70% US13607GAP90 SEC USD 1,000,000,000 2-Apr-19 2-
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