Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Debt Investor Presentation (March 2022)
66 slides from Canadian Imperial Bank Of Commerce's debt investor presentation, March 2022
Slide 1: CIBC Fixed Income Investor Presentation Q1-2022
CIBC Fixed Income Investor Presentation Q1-2022 1
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 S&P Global Ratings Update 8 3 Canadian Economy & Consumer Profile 9 4 Canadian Imperial Bank of Commerce (“CIBC”) Overview 13 5 Canadian Bail-in and Regulatory Regime Update 29 6 Canadian Mortgage Market 37 7 Legislative Covered Bond Programme, Collate
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: S&P Global Ratings Upgrade
S&P Global Ratings Upgrade On Feb. 22, 2022, S&P Global Ratings affirmed its 'A+/A-1' long- and short-term issuer credit ratings on Canadian Imperial Bank of Commerce (CIBC). At the same time, S&P Global Ratings raised its ratings on CIBC's bail-inable senior debt, and its non-viability contingent c
Slide 9: Canadian Economy & Consumer Profile
Canadian Economy & Consumer Profile CIBC Investor Presentation 9
Slide 10: Canada: Key Facts
Canada Canada: Key Facts • GDP broken down by province/territory continues to demonstrate that Canada’s Population2 38.4 MM economy is well diversified GDP (market prices)3 CAD 2,462 BN GDP per capita3 CAD 54,748 Canada’s GDP by Province / Territory1 (%) Labour Force4 20.5 MM Provinces/Territories 1
Slide 11: 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 12: 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 13: CIBC Overview
CIBC Overview CIBC Investor Presentation 13
Slide 14: A Leading Canadian Financial Institution
A Leading Canadian Financial Institution TOP SCORING REPORTED 5.8% $72B 11MM 46K 12.2% MOBILE ADJUSTED 8.5% BANKING APP MARKET-CAP1 CLIENTS1 EMPLOYEES CET1 RATIO1 PPPT EARNINGS 7 OF THE PAST 8 5-YR CAGR YEARS3 OUR GOAL OUR STRATEGIC PRIORITIES Deliver superior client experience and top-tier sharehol
Slide 15: 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% 38% F16 26% Q1/22 LTM $4.3B $6.7B U.S. 14% Region 2 22% 2% 23% U.S. 27% Region 2%2 Personal & Business Banking Cdn. Commercial & Wealth U.S. Commercial & Wealth Capital Markets 1 Doe
Slide 16: Our Strategic Business Units
Our Strategic Business Units Canadian Commercial Canadian Personal & U.S. Commercial Banking & Banking & Wealth Capital Markets Business Banking Wealth Management Management • Providing clients across Canada with • High-touch, relationship-oriented • High-touch, relationship-oriented • Integrated gl
Slide 17: 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 to Q4-2021 due to temporary OSFI policy1 Note: Dividend of CAD 1.61 per
Slide 18: High-Quality, Client-Driven Balance Sheet
High-Quality, Client-Driven Balance Sheet (Based on Q1 2022 Results) Assets Liabilities & Equity $861B Cash & Repos Unsecured 125% Funding 28% 35% Coverage Wholesale Funding Liquid Assets (Liquid Assets / Trading & Wholesale Funding) Secured Funding3 Investment Securities Personal Deposits Residenti
Slide 19: 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 12.2 16.1 16.2 15.7 11.4 11.6 14.9 15.0 2018 2019 2020 2021 Q1/22 2018 2019 2020 2021 Q1/22 Basel III Leverage Ratio (%) Liquidity Coverage Ratio (%) 4.7 4.7 142 4.3 4.3 4.3 131
Slide 20: Continued capital strength supports our strategy
Continued capital strength supports our strategy $B Q1/21 Q4/21 Q1/22 • CET1 ratio of 12.2%, down 13 bps, reflecting: Average Loans and Acceptances 417.5 455.5 474.5 • Strong capital generation of $1.1B from earnings net of dividends Average Deposits 583.6 623.2 652.9 • Increase in RWAs of $11.4B fr
Slide 21: Credit Review
Credit Review Provision For Credit Losses (PCL) Reported & Adjusted1 ($MM) Q1/21 Q4/21 Q1/22 Cdn. Personal & Business Banking 54 164 98 Impaired 109 87 99 Performing (55) 77 (1) Cdn. Commercial Banking & Wealth 33 (5) (4) Impaired 19 6 (1) Performing 14 (11) (3) U.S. Commercial Banking & Wealth 45 (
Slide 22: Prudent risk management
Prudent risk management Allowance for Credit Losses/Gross Loans1,2 0.89% 0.64% 0.61% 0.51% 0.45% 2018 2019 2020 2021 Q1/22 Loan Loss Ratio2,3,4 (bps) 61 31 34 33 26 29 26 25 25 23 16 11 4 6 2016 2017 2018 2019 2020 2021 Q1/22 Impaired Total COVID-19 Pandemic 1 Allowance for credit losses to gross ca
Slide 23: 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% • Lower allowance coverage in Q1/22 largely driven by portfolio growth Canadian Residential Mortgages 0.1% 0.1% 0.05% • Current allowance coverage re
Slide 24: 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 48% • Oil and gas is 1% of the loan portfolio; 49% investment grade Cards 2% Consumer • The ba
Slide 25: 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 26: 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 27: Wholesale Funding Geography
Wholesale Funding Geography Wholesale Funding By Currency1 CAD 46.6 BN EUR 11.2 BN, CHF 2.4 BN, GBP 8.6 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 Certific
Slide 28: CIBC Funding Composition
CIBC Funding Composition Funding Sources – January 20221 Funding Sources BN Personal deposits 220.1 Business and government deposits 233.4 Unsecured funding1 148.7 Securities sold short or repurchase agreements 94.0 Others (Includes derivatives) 65.2 2 Capital 52.8 Securitization & Covered Bonds 47.
Slide 29: 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 29
Slide 30: 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 31: 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 32: 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 33: 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 Legacy Senior Debt Derivatives Structured Note
Slide 34: 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 Bank Insolvency Ordinance Resolution Mechanism Act French Sapin 2 Italy Spanish Revised (Bail-in) Regulations (BIO-FINMA) / BoE/PRA (§46f KWG new) Insolvency Law
Slide 35: 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 36: 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 37: Canadian Mortgage Market
Canadian Mortgage Market Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Investor Presentation 37
Slide 38: 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 39: Canadian House Prices
Canadian House Prices Average Home Price • Absolute price level is moderate compared to major global urban YoY % Region CAD1 USD Eq.2 centers Increase3 Canada 748K 593K 17% • Canadian housing market among others that have experienced Toronto 1260K 999K 19% sharp rises in residential real estate valu
Slide 40: CIBC’s Mortgage Portfolio
CIBC’s Mortgage Portfolio CIBC Canadian Residential Mortgages: CAD 248.3 BN Condo Exposure: CAD 42.0 BN • 23% 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 48% • The condo develope
Slide 41: 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 41
Slide 42: 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 43: Covered Bond Structure
Covered Bond Structure CIBC Interest Rate Swap Provider Consideration CIBC CIBC Covered Bond Seller Loans and (Legislative) Related Security Guarantor LP Guarantor CIBC Covered Bond Swap Repayment of Provider Intercompany Loan Intercompany Loan Computershare CIBC Trust Company of Canada Issuer / Ban
Slide 44: Cover Pool
Cover Pool Summary Statistics (January 31, 2022)1 Current Collateral Pool Canadian uninsured residential mortgages Asset Percentage Requirement 93.00% Current Balance CAD 47,452,609,561 Outstanding Covered Bonds CAD Eq. 30,786,440,000 Number of Loans 157,408 Average Balance CAD 301,466 Weighted Ave
Slide 45: Cover Pool (January 2022)
Cover Pool (January 2022) Remaining Term Geographic Distribution Current Indexed Loan to Value Property Type 45
Slide 46: 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) 956-6748 Bloomberg: Niebrzydowsk@bloomberg.net 46
Slide 47: Appendix
Appendix CIBC Investor Presentation 47
Slide 48: Appendix
Appendix 1 Sustainability 49 2 Canadian Mortgage Market 53 3 CIBC Canadian Real Estate 56 4 Selected Credit Exposures 59 5 Covered Bond Triggers 60 6 Selected Covered Bond and Senior Issuances 64 48
Slide 49: Sustainability
Sustainability CIBC Investor Presentation 49
Slide 50: 2021 ESG Performance Highlights
2021 ESG Performance Highlights 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
Slide 51: We are aligned to international best practices
We are aligned to international best practices Voluntary Memberships & Commitments: Net Zero Banking Alliance Frameworks: 51
Slide 52: External recognition of CIBC’s commitment to sustainability
External recognition1 of CIBC’s commitment to sustainability Dec/21 Climate Change Score = A- 2021 ESG Rating = AA 2021 ESG Risk Rating = 17.9 (low risk) Up from B in 2019 Industry Adjusted Score = 8.4 or 13th percentile among banks Up from 7.5 in 2020 Improved from 18.3 in 2020 Ranked among top-tie
Slide 53: 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% Default • Insurance covers the entire outstanding principal amo
Slide 54: 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 55: 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 56: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates Q1/21 Q4/21 Q1/22 • The Greater Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) continue to outperform the Canadian average Total Mortgages 0.30% 0.17% 0.17% Uninsured Mortgages 0.24% 0.14% 0.13% Uninsured Mortgages in GV
Slide 57: Canadian Uninsured Residential Mortgages – Q1/22 Originations
Canadian Uninsured Residential Mortgages – Q1/22 Originations FICO score Distribution • Originations of $17B in Q1/22 • Average LTV1 in Canada: 66% • GVA2: 63% • GTA2: 65% Loan-to-Value (LTV)1 Distribution 1 1LTV ratios for residential mortgages are calculated based on weighted average. See page 27
Slide 58: 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: 48% • GVA2: 45% • GTA2: 47%
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% Office Residential Industrial 24% 19% 16% Industrial 11% Residential 1% Seniors Housing Retail Healthcare 3% 5% $36.8B 8% US$17.2B 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 required to direct the Servicer to deposit all Revenue Cash Management Cash Manager’s ratings fall below P-1/F1 or A by Receipts and Principal Receipts directly into the GDA Account within Deposit Ratings Moody’s/Fitch two
Slide 64: Outstanding Covered Issuances
Outstanding Covered Issuances Series Currency Issued Issue Date1 Maturity Date2 Coupon Rate Issue Spread1 CBL9 CHF 350,000,000 22-Dec-15 22-Dec-25 0.125% MS + 0% CBL12 EUR 1,250,000,000 25-Jul-16 25-Jul-22 0.00% MS + 0.06% CBL16 GBP 525,000,000 17-Jul-17 30-Jun-22 1.125% GBP LIBOR + 0.67% CBL17 USD
Slide 65: Selected Outstanding TLAC Senior
Selected Outstanding TLAC Senior1 Issue Maturity Coupon ISIN Programme Currency Issued Issue Spread Date Date Rate 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-A
Slide 66: Selected Outstanding TLAC Senior (continued)
Selected Outstanding TLAC Senior1 (continued) Issue ISIN Programme Currency Issued Maturity Date Coupon Rate Issue Spread Date CA13607GRU09 CAD 1,250,000,000 19-Jan-21 19-Jan-26 1.100% T + 0.62% CA13607HMS80 CAD 1,250,000,000 4-Mar-21 4-Mar-25 (4NC3) CORRA + 0.46% CORRA + 0.46% CA13607HUM29 CAD 1,50
Canadian Imperial Bank of Commerce — Debt Investor Presentation (March 2022) on 6ix