Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q1 2022 Earnings Presentation
38 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Feb 25, 2022
Slide 1: Quarterly Results Presentation First Quarter 2022
Quarterly Results Presentation First Quarter 2022 February 25, 2022 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 Investor Presentation, in other filings with Canadian securities regulators or the SEC and in oth
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President and Chief Executive Officer
Slide 4: Record results driven by strong performance across our businesses
Record results driven by strong performance across our businesses Gaining market share2 in our consumer businesses Strong growth in Capital Markets Connectivity Revenues3 EPS $MM 34 bps 19 bps +17% Reported $4.03 % of Capital 20% 21% Adjusted1 $4.08 Markets revenues YoY +14% Nov/F21 Nov/F22 Revenue
Slide 5: Executing on our near-term priorities
Executing on our near-term priorities Elevating the client Focusing on high-growth, Investing in future experience in an increasingly high-touch client differentiators within faster digital world segments growing markets • Entered into an agreement with nCino to • Launched CIBC Family Office to help
Slide 6: Financial Review
Financial Review Hratch Panossian Senior Executive Vice-President and Chief Financial Officer
Slide 7: Record results in Q1 2022
Record results in Q1 2022 EPS ROE Revenue Operating Leverage Reported $4.03 Reported 17.4% Reported Reported (0.1)% $5.5B $4.08 +11% YoY Adjusted1 Adjusted1 17.6% Adjusted1 Adjusted1 0.2% +14% YoY PPPT1,2 PCL Ratio3 CET1 Ratio4 Liquidity Coverage Ratio5 Average Reported $2.5B Total 6 bps 12.2% -3 bp
Slide 8: First Quarter 2022 Financial Results
First Quarter 2022 Financial Results Reported ($MM) Q1/22 YoY QoQ Revenue Revenue 5,498 11% 9% • Net interest income up 10% YoY Net interest income 3,132 10% 5% • Diversified volume growth across our business; total average loans up 14% Non-interest income 2,366 11% 14% YoY, average deposits up 12%
Slide 9: Double-digit growth in net interest income driven by robust growth in volumes
Double-digit growth in net interest income driven by robust growth in volumes Net Interest Margin1,2 Loans2,4 ($B, local currency) Deposits2 ($B, local currency) YoY QoQ YoY QoQ +25% +10% +8% +5% +12% +5% +19% +5% +10% +3% +13% +6% +12% +3% +6% +2% 3 Personal & Business Banking Cdn. Commercial & Wea
Slide 10: Positioned to benefit from rising rates
Positioned to benefit from rising rates • Year 1 benefit of $454 million to our net interest income from an immediate and sustained 100 bps increase as at January 31, 2022, with approximately 60% driven by short rates • Year 2 benefit from rising rates (+100 bps) of approximately $840MM, driven prim
Slide 11: Broad-based growth in fee income
Broad-based growth in fee income Non-Interest Income by Category ($MM)1 • Market-related fees benefitting from rebound in trading activity • Trading revenues up 20% YoY • Strong client flows and market appreciation in Wealth Management • Strong growth in transactional fees • Continued recovery in co
Slide 12: Expense growth driven by performance-based compensation, investments and inflation
Expense growth driven by performance-based compensation, ongoing investments to fuel sustained growth, and the impact of inflation Non-Interest Expense Growth ($MM) - Adjusted1 • Higher performance-based compensation Reported Reported • Strategic Initiatives focused on driving long-term $2,726MM $3,
Slide 13: 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 $1.1B from earnings net of Average Deposits 583.6 623.2 652.9 dividends CET1 capital 31.4 33.8 34.8 CET
Slide 14: Personal & Business Banking – continued momentum reflected in double-digit PPPT growth
Personal & Business Banking – continued momentum reflected in double-digit PPPT1 growth Reported ($MM) Q1/22 YoY QoQ • Net interest income increase of 7% driven by continued strong volume growth Revenue 2,183 8% 3% • NIM up 1 bp QoQ and down 10 bps YoY Net interest income 1,587 7% 3% • Loan balances
Slide 15: Canadian Commercial & Wealth – broad-based growth across our connected franchise
Canadian Commercial & Wealth – broad-based growth across our connected franchise Reported & Adjusted1 ($MM) Q1/22 YoY QoQ • Strong volume growth driving 27% increase in net interest income Revenue 1,297 19% 5% • Commercial loan balances up 19% YoY Net interest income 377 27% 7% • Commercial deposit
Slide 16: U.S. Commercial & Wealth – continued strength in client acquisition and franchising
U.S. Commercial & Wealth – continued strength in client acquisition and franchising Reported (US$MM) Q1/22 YoY QoQ • Net interest income up 5% driven by strong volume growth Revenue 479 10% 7% • Loan balances up 8% YoY; up 13% excluding PPP forgiveness Net interest income 306 5% 4% • Deposit balance
Slide 17: Capital Markets – strength of diversified franchise reflected in top-line growth
Capital Markets – strength of diversified franchise reflected in top-line growth Reported & Adjusted1 ($MM) Q1/22 YoY QoQ • Strong performance across our business Revenue2 1,304 11% 29% • Increased trading activity in equities and foreign exchange Net interest income 793 16% 15% • Higher Corporate B
Slide 18: Corporate and Other
Corporate and Other Reported ($MM) Q1/22 YoY QoQ • Strong revenue growth in FCIB, offset by lower treasury and other corporate revenues Revenue1 105 (9%) (14%) • Adjusted1 expenses up 7% YoY and down 22% QoQ Net interest income (14) ($16) ($44) Non-interest income 119 5% 29% • YoY growth driven by h
Slide 19: In Summary
In Summary Well-positioned to Disciplined approach Strong momentum achieve our goals to capital allocation demonstrates strength given ongoing provides capacity and of our diversified investments as we flexibility to execute franchise execute against our on our growth plans focused priorities First
Slide 20: Risk Review
Risk Review Shawn Beber Senior Executive Vice-President, Chief Risk Officer
Slide 21: Provision for credit losses down YoY and QoQ
Provision for credit losses down YoY and QoQ Reported & Adjusted1 ($MM) Q1/21 Q4/21 Q1/22 Provision for Credit Losses down YoY and QoQ Cdn. Personal & Business Banking 54 164 98 • Impaired provisions up in Q1/22 due to higher write-offs and impaired balances in retail and higher provisions in U.S. C
Slide 22: Allowance for credit losses down YoY and QoQ
Allowance for credit losses down YoY and QoQ Reported Q1/21 Q4/21 Q1/22 Allowance coverages were down YoY and QoQ Canadian Credit Cards 6.4% 5.9% 5.7% • Lower allowance coverage in Q1/22 largely driven by portfolio growth Canadian Residential Mortgages 0.1% 0.05% 0.05% • Current allowance coverage r
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 48% • Oil and gas is 1% of the loan portfolio; 55% investment grade1 • The balance of our port
Slide 24: Credit Quality — gross impaired loan ratios remained stable in Q1/22
Credit Quality — gross impaired loan ratios remained stable in Q1/22 Reported Q1/21 Q4/21 Q1/22 Balances were down YoY & up QoQ Canadian Residential Mortgages 0.27% 0.17% 0.17% • Canadian retail impaired balances continued to remain low in Q1/22 Canadian Personal Lending 0.35% 0.26% 0.27% • U.S. Com
Slide 25: Credit Quality — Canadian Consumer
Credit Quality — Canadian Consumer Reported Net Write-Offs Q1/21 Q4/21 Q1/22 Net Write-off Ratio1 Canadian Residential Mortgages 0.01% 0.01% 0.01% Canadian Credit Cards 1.49% 1.83% 1.88% Personal Lending 0.56% 0.39% 0.42% Total 0.15% 0.13% 0.13% 90+ Days Delinquency Rates1 Q1/21 Q4/21 Q1/22 Canadian
Slide 26: Appendix
Appendix CIBCO®
Slide 27: Growing Digital Engagement and Adoption
Growing Digital Engagement and Adoption1 Digital Adoption Rate2 Active Digital Banking Users3 Digital Channel Usage (MM) (# of Sessions, MM) 2.0% 6.4% 3.8% Digital Transactions4 Transactions by Channel4 (MM) 9.2% 5 1 Canadian Personal Banking only, excluding Simplii Financial. 2 Digital Adoption Rat
Slide 28: Canadian Personal and Commercial Banking
Canadian Personal and Commercial Banking1 Net Income Net Interest Margin on Average Interest Earning Assets (bps) 2 Average Loans ($B)3,4 Average Deposits ($B)3 +14% +8% 5 1 Includes the results of Canadian Personal and Business Banking and Canadian Commercial Banking, as well as Simplii Financial a
Slide 29: U.S. Commercial Banking & Wealth Management (C$)
U.S. Commercial Banking & Wealth Management (C$) Reported (C$MM) Q1/22 YoY QoQ • Net interest income up 4%, reflecting continued strength in client acquisition and franchising Revenue 609 9% 8% Net interest income 389 4% 6% • Loan balances up 7% YoY Non-interest income 220 18% 13% • Deposit balances
Slide 30: 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 31: 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 0.27% 0.17% 0.17% Uninsured Mortgages 0.24% 0.14% 0.13% Uninsured Mortgages in GV
Slide 32: Canadian Uninsured Residential Mortgages — Q1/22 Originations
Canadian Uninsured Residential Mortgages — Q1/22 Originations FICO score Distribution • Originations of $17B in Q1/22 • Average LTV1 in Canada: 66% • GVA2: 63% • GTA2: 65% 2 2 Loan-to-Value (LTV)1 Distribution 2 2 1 LTV ratios for residential mortgages are calculated based on weighted average. See p
Slide 33: Canadian Uninsured Residential Mortgages
Canadian Uninsured Residential Mortgages FICO score Distribution • Better current FICO score and LTV1 distributions in GVA2 and GTA2 than the Canadian average • Less than 1% of this portfolio has a FICO score of 650 or lower and an LTV1 over 75% • Average LTV1 in Canada: 48% • GVA2: 45% • GTA2: 47%
Slide 34: Trading Revenue (TEB) Distribution
Trading Revenue (TEB) Distribution1 ($MM) ($MM) 20 20 10 10 0 0 (10) (10) (20) Nov-21 Dec-21 Jan-22 (20) Trading Revenue VaR 1 See note 4 on slide 38. First Quarter, 2022 34
Slide 35: Forward-looking Information Variables used to estimate our Expected Credit Loss
Forward-looking Information Variables used to estimate our Expected Credit Loss1 Forward-Looking Information Variables Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the Avg. Value over the next 12 months remaining forecast next 12 months remaining fo
Slide 36: Q1/22 Items of Note
Q1/22 Items of Note Item Pre-Tax After-Tax & EPS Effect NCI Effect Effect ($MM) ($MM) ($/Share) Reporting Segments U.S. Commercial Banking & Wealth Management Amortization of acquisition-related intangible assets 20 15 0.03 Corporate & Other Transaction and integration-related costs associated with
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 International Financial Reporting Standards (IFRS or GAAP), while other measures do not have a standardized meaning under GAAP, and accor
Slide 38: Glossary
Glossary Item Definition Capital Markets Connectivity Revenue from non-traditional Capital markets clients, leveraging the full suite of Capital Markets products and services across the bank’s 1 Revenue Canadian and U.S. commercial clients, high net worth individuals and retail clients. 2 Total PCL
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