Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q1 2021 Earnings Presentation
37 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Feb 25, 2021
Slide 1: Quarterly Results Presentation First Quarter 2021
Quarterly Results Presentation First Quarter 2021 February 25, 2021 All amounts are in Canadian dollars unless otherwise indicated.
Slide 2: 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 report, in other filings with Canadian securities regulators or the SEC and in other communicatio
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President and Chief Executive Officer
Slide 4: Continued progress executing on our strategy
Continued progress executing on our strategy Reinvigorate our Accelerate the pace Protect and build Canadian consumer of transformation on areas of franchise and simplification strength • Introduced client-focused value • Accelerating investments in support • Strong connectivity across the enhanceme
Slide 5: Financial Review
Financial Review Hratch Panossian Senior Executive Vice-President and Chief Financial Officer
Slide 6: Highlights
Highlights • Record pre-provision earnings1 underpinned by a strong balance sheet • On track to return to pre-pandemic profitability, owing to a diversified franchise and resilient business model • Improving competitive position and market share trends, driven by ongoing investment and business tran
Slide 7: First Quarter 2021 Financial Results
First Quarter 2021 Financial Results Reported ($MM) Q1/21 YoY QoQ Overall Performance Revenue 4,963 2% 8% • Adjusted EPS1 growth of 10% and PPPT1,2 Earnings growth of 5% Net interest income 2,839 3% 2% • Lower provisions for credit losses Non-interest income 2,124 1% 17% • CET1 ratio of 12.3% Non-In
Slide 8: Positive non-trading NII trend driven by volume growth; continued strength in trading
Positive non-trading NII trend driven by volume growth; continued strength in trading NIM on Average Interest Earning Assets Average Loans1 ($B) Average Deposits ($B) Canadian P&C NIM U.S. Commercial & Wealth NIM 1 Average loans and acceptances, before any related allowances. 2 In US$, U.S. Commerci
Slide 9: Strong recovery in fee income despite continued headwinds related to Covid-19
Strong recovery in fee income despite continued headwinds related to Covid-19 Non-Interest Income by Category ($MM)1 • Strong market-related fees • Trading revenue reflects favourable market conditions and increased client activity • Higher investment management and mutual fund fees driven by market
Slide 10: Continued Balance Sheet Strength
Continued Balance Sheet Strength $B Q1/20 Q4/20 Q1/21 • Continued to demonstrate balance sheet resilience Average Loans and Acceptances 399.9 413.1 417.5 • CET1 increase driven mainly by internal capital generation Average Deposits 501.6 568.7 583.6 • 37 bps capital generation from earnings, net of
Slide 11: Personal & Business Banking – continued momentum reflected in sequential improvement
Personal & Business Banking – continued momentum reflected in sequential improvement Reported & Adjusted1 ($MM) Q1/21 YoY QoQ • Positive trends in balance growth, with lower rates and shift in asset mix continuing to pressure margins Revenue 2,025 (3%) 1% Net interest income 1,483 (1%) 0% • NIM down
Slide 12: Canadian Commercial & Wealth – strong top-line growth driven by increased client activity
Canadian Commercial & Wealth – strong top-line growth driven by increased client activity • Strong deposit growth continues in Commercial Banking, with current low-rate Reported & Adjusted1 ($MM) Q1/21 YoY QoQ environment impacting net-interest income Revenue 1,088 3% 6% • Commercial loan balances u
Slide 13: U.S. Commercial Banking & Wealth – strong growth in client funds managed continues
U.S. Commercial Banking & Wealth – strong growth in client funds managed continues Reported (US$MM) Q1/21 YoY QoQ • Continued focus on expanding client relationships Revenue 437 15% 11% • Loan balances up 10% YoY Net interest income 292 12% 9% • Deposit balances up 42% YoY Non-interest income 145 20
Slide 14: Capital Markets – record quarter driven by strong client trading and origination activity
Capital Markets – record quarter driven by strong client trading and origination activity Reported & Adjusted1 ($MM) Q1/21 YoY QoQ • Solid results across all businesses: Revenue2 1,174 17% 26% • Higher trading revenues in Fixed Income, Foreign Exchange and Equities Net interest income 682 37% 5% • R
Slide 15: Corporate and Other
Corporate and Other Reported ($MM) Q1/21 YoY QoQ • Continued impact from elevated cost of liquidity reserves Revenue1 115 (46%) (6%) • FCIB performance impacted by lower interest rates and reduced client activity as a result of the pandemic Net interest income 2 (98%) (50%) Non-interest income 113 0
Slide 16: In Summary
In Summary Strong balance sheet Record pre-provision provides significant earnings1 highlight the Ongoing strategic investments flexibility to continue strength of our diversified will continue to improve supporting our clients, franchise, which is well competitive position growing our business and
Slide 17: Risk Review
Risk Review Shawn Beber Senior Executive Vice-President and Chief Risk Officer
Slide 18: Provision for credit losses lower in performing loans and higher in impaired loans
Provision for credit losses lower in performing loans and higher in impaired loans Reported & Adjusted1 ($MM) Q1/20 Q4/20 Q1/21 Provision for Credit Losses down YoY & QoQ Cdn. Personal & Business Banking 211 121 54 • Down YoY due to lower provisions in both performing and impaired loans Impaired 189
Slide 19: Allowance decreased after peaking in the prior quarter
Allowance decreased after peaking in the prior quarter Reported Q1/20 Q4/20 Q1/21 Allowance coverages were up YoY and flat QoQ Canadian Credit Cards 4.0% 6.2% 6.4% • Coverage remains relatively stable across all products Canadian Residential Mortgages <0.1% 0.1% 0.1% • Approximately one-third of per
Slide 20: Lending portfolio mix remains sound
Lending portfolio mix remains sound 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 52% • Oil and gas is 2.0% of the loan portfolio; 48% investment grade • The balance of our portf
Slide 21: Credit Quality — gross impaired loans trended higher in Q1
Credit Quality — gross impaired loans trended higher in Q1 Reported Q1/20 Q4/20 Q1/21 Balances were up YoY & QoQ Canadian Residential Mortgages 0.30% 0.29% 0.27% • Lower consumer impairments in Q1 Canadian Personal Lending 0.37% 0.32% 0.35% • Impairments in business and government loans were up, mai
Slide 22: Credit Quality — Canadian Consumer
Credit Quality — Canadian Consumer Reported Net Write-Offs Q1/20 Q4/20 Q1/21 Net Write-off Ratio Canadian Residential Mortgages 0.01% 0.01% 0.01% Canadian Credit Cards 3.16% 1.76% 1.49% Personal Lending 0.77% 0.51% 0.56% Total 0.28% 0.16% 0.15% Net write-offs were down YoY & QoQ • The low level of w
Slide 23: Appendix
Appendix
Slide 24: Growing Digital Engagement and Adoption
Growing Digital Engagement and Adoption1 Digital Adoption Rate2 Active Digital Banking Users3 Digital Channel Usage (MM) (# of Sessions, MM) Digital Transactions4 Transactions by Channel4 (MM) 5 1 Canadian Personal Banking only, excluding Simplii Financial. 2 Digital Adoption Rate calculated using 9
Slide 25: Canadian Personal and Commercial Banking
Canadian Personal and Commercial Banking Net Income – Adjusted ($MM)1 Net Interest Margin (bps) Average Assets ($B) Average Deposits ($B) 1 Adjusted results are non-GAAP financial measures. See slide 37 for further details. First Quarter, 2021 25
Slide 26: U.S. Commercial Banking & Wealth Management (C$)
U.S. Commercial Banking & Wealth Management (C$) Reported (C$MM) Q1/21 YoY QoQ • Continued focus on expanding client relationships Revenue 561 12% 8% • Loan balances up 7% YoY Net interest income 374 9% 5% • Deposit balances up 38% YoY Non-interest income 187 18% 15% • NIM up 23 bps QoQ and 6 bps Yo
Slide 27: Improved Diversification - Growth in the U.S. Region
Improved Diversification - Growth in the U.S. Region U.S. Region Earnings Contribution – Adjusted1 U.S Region AUA (US$B)2 1 Adjusted results are non-GAAP financial measures. See slide 37 for further details. 2 Assets under management (AUM) are included in assets under administration (AUA). First Qua
Slide 28: 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 Outstanding 1 • 25% of drawn loans investment grade2 • 45% of drawn loans investment grade2 • The U.S. comprises 20% of drawn exposure • The U.S. comprises 5% of drawn expos
Slide 29: 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 • 67% of drawn loans investment grade3 • 30% of drawn loans investment grade3 1 Includes $2.7B in Multi Family that is included in residential mortg
Slide 30: Exposure to Oil & Gas represents 2.0% of our lending portfolio
Exposure to Oil & Gas represents 2.0% of our lending portfolio Oil & Gas Mix (Outstanding) • $8.5B drawn exposure in Q1/21 • 48% investment grade • The U.S. comprises 29% of drawn loan exposure • 77% of undrawn exposure is investment grade • $40.0B of retail exposure1 to oil provinces2 ($31.9B mortg
Slide 31: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates Q1/20 Q4/20 Q1/21 • The Greater Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) continue to outperform the Canadian average Total Mortgages 0.30% 0.29% 0.27% Uninsured Mortgages 0.24% 0.28% 0.24% Uninsured Mortgages in GV
Slide 32: Canadian Uninsured Residential Mortgages — Q1/21 Originations
Canadian Uninsured Residential Mortgages — Q1/21 Originations Beacon Distribution • Originations of $17B in Q1/21 • Average LTV1 in Canada: 63% • GVA2: 57% • GTA2: 63% 2 2 Loan-to-Value (LTV)1 Distribution 2 2 1 LTV ratios for residential mortgages are calculated based on weighted average. See page
Slide 33: Canadian Uninsured Residential Mortgages
Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average • Less than 1% of this portfolio has a Beacon score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 52% • GVA2: 46% • GTA2: 49% 2 2 Lo
Slide 34: Trading Revenue (TEB) Distribution
Trading Revenue (TEB)1 Distribution2 1 Non-GAAP financial measure. See slide 37 for further details. 2 Trading revenue (TEB) comprises both trading net interest income and non-interest income and excludes underwriting fees, commissions, certain month-end transfer pricing and other miscellaneous adju
Slide 35: Forward-looking Information Variables used to estimate our Expected Credit Loss
Forward-looking Information Variables used to estimate our Expected Credit Loss1 Forward-Looking Information Variables Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the next 12 months remaining forecast next 12 months remaining fo
Slide 36: Q1 2021 Items of Note
Q1 2021 Items of Note Item Pre-Tax After-Tax & EPS Effect NCI Effect Effect ($MM) ($MM) ($/Share) Reporting Segments U.S. Commercial Banking & Wealth Management Amortization of acquisition-related intangible assets 20 15 0.03 Corporate & Other Adjustment to Net Income attributable to common sharehol
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures We use a number of financial measures to assess the performance of our business lines. Some measures are calculated in accordance with GAAP (IFRS), while other measures do not have a standardized meaning under GAAP, and accordingly, these measures may not be comparable to
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