Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Debt Investor Presentation (December 2020)
54 slides from Canadian Imperial Bank Of Commerce's debt investor presentation, December 2020
Slide 1: CIBC Fixed Income Investor Presentation
CIBC Fixed Income Investor Presentation Q4 2020
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) A final form prospectus (the “Prospectus”) and any applicable final terms for Covered Bonds, other than Exempt Covered Bonds, (as defined in the Prospectus) to be admitted to trading on a regulated market (as defined in the Prospectus Directive) have been prepared and made ava
Slide 4: Disclaimer (continued)
Disclaimer (continued) No prospectus or other disclosure document (within the meaning of the Corporations Act) has been, and it is not intended that any such prospectus or other disclosure document will be, lodged with the Australian Securities and Investments Commission. Any information or offering
Slide 5: Debt Programmes Summary
Debt Programmes Summary Best economic performance amongst G7 economies as measured by long term GDP growth rate during 2000-20191 • 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 fro
Slide 6: Canadian Economy & Consumer Profile
Canadian Economy & Consumer Profile CIBC Fixed Income Investor Presentation
Slide 7: Canada: Key Facts
Canada Canada: Key Facts • GDP broken down by province/territory continues to demonstrate that Canada’s economy is well diversified Population2 38.0 MM GDP (market prices)3 CAD 2,057 BN GDP per capita3 CAD 58,808 Canada’s GDP by Province / Territory1 (%) Labour Force4 20.4 MM Provinces/Territories 1
Slide 8: 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 9: CIBC Overview
CIBC Overview CIBC Fixed Income Investor Presentation
Slide 10: CIBC Snapshot
CIBC Snapshot (TSE & NYSE: CM) $44B 10MM 44K 12.1% 9.1% #1 MOBILE MARKET-CAP1 CLIENTS1 EMPLOYEES1 CET1 RATIO1 PRE-PROVISION BANKING APP FOR 7 EARNINGS (5-yr CAGR)2 CONSECUTIVE YEARS3 DIVERSIFIED EARNINGS MIX STRONG CREDIT RATINGS Net Income by Strategic Business Unit4 Net Income Contribution by Regi
Slide 11: COVID-19 Response
COVID-19 Response OUR TEAM OUR CLIENTS OUR COMMUNITIES Supporting and Ensuring Our Team’s Well-being Assisting 500k+ Clients with Flexibility Increasing Donations to Support Those Most at Risk • Enabled 75% of employees to work remotely, • Implemented payment deferral programs on • Community Food Ce
Slide 12: Most accommodations are now complete
Most accommodations are now complete Weekly Account Accommodations - Canadian Personal Banking (000s) • New accommodation requests for Canadian Personal Banking down to minimal levels • The majority of remaining mortgage balances run off in November and December • Overall client patterns since retur
Slide 13: Fourth Quarter 2020 Financial Results
Fourth Quarter 2020 Financial Results Reported ($MM) Q4/20 YoY QoQ Overall Performance - Adjusted1 Revenue 4,600 (4%) (2%) • Earnings reflect resilience of diversified franchise Net interest income 2,792 (0%) 2% • Moderating provision for credit losses Non-interest income 1,808 (8%) (9%) • Strong ca
Slide 14: 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% Consumer • Oil and gas is 2.2% of the loan portfolio; 44% investment grade 66% • The balance
Slide 15: Provision for credit losses lower in both impaired and performing loans
Provision for credit losses lower in both impaired and performing loans Reported & Adjusted1 ($MM) Q4/19 Q3/20 Q4/20 Provision for Credit Losses down YoY & QoQ Cdn. Personal & Business Banking 255 220 130 • Provisions were lower in Q4/20 after raising the allowance for performing loans in Q2/20 and
Slide 16: Increased allowance to reflect the current economic backdrop
Increased allowance to reflect the current economic backdrop Allowance for Credit Losses ($MM) Allowance for Credit Losses up YoY & QoQ • Performing allowance remained stable in Q4 • Impaired allowance increased this quarter due to higher impairments Provision on Performing Loans ($MM) 82 128 113 (9
Slide 17: Strong capital, liquidity and balance sheet position
Strong capital, liquidity and balance sheet position $B Q4/19 Q3/20 Q4/20 Q4 Highlights Average Loans and Acceptances 396.4 414.9 413.1 • Continued capital, liquidity and balance sheet strength Average Deposits 485.6 557.4 568.7 • CET1 Increase driven by internal capital generation and a net decreas
Slide 18: Solid Returns to Shareholders…
Solid Returns to Shareholders… Adjusted Diluted EPS1,2 ($) Adjusted Return on Equity1,2 (%) 19.0% 18.1% $12.21 $11.92 17.4% $11.11 15.4% $10.22 $9.69 11.7% $2.79 $2.71 $0.94 $3.24 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Pre-Provision Earnings ($B) Adjusted Dividend Payout Ratio1,2,3 (%) 60
Slide 19: …Through Investments in Top-Line Growth and Improving Efficiency
…Through Investments in Top-Line Growth and Improving Efficiency Adjusted Revenue (TEB)1,2,3 ($B) Adjusted Non-Interest Expenses1,3 ($B) $18.1 $18.7 $18.9 $10.1 $10.4 $10.6 $16.3 $8.7 $9.3 $15.0 $4.6 $2.6 $4.8 $2.6 $4.6 $2.6 $4.9 $2.7 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Adjusted Effici
Slide 20: 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 (%) 11.6% 12.1% 11.3% 11.4% 16.1% 10.6% 14.8% 14.9% 15.0% 13.8% 2016 2017 1 2018 2019 2020 2016 2017 1 2018 2019 2020 Basel III Leverage Ratio (%) Liquidity Coverage Ratio (%) 4.7% 145.0% 4.
Slide 21: …and Prudent Risk Management
…and Prudent Risk Management Allowance for Credit Losses/Gross Loans1,2 (%) 0.89% 0.56% 0.47% 0.51% 0.45% 2016 2017 2018 2019 2020 Loan Loss Ratio2,3,4 (bps) Impaired Total 61 38 36 31 34 33 27 28 26 29 26 25 25 23 2014 2015 2016 2017 2018 2019 2020 Oil & Gas Crisis COVID-19 Pandemic 1 Allowance for
Slide 22: 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 Note: Dividend of CAD 1.46 per share for the quarter ending January 31, 2021 payable on January 28, 20
Slide 23: High-Quality, Client-Driven Balance Sheet
High-Quality, Client-Driven Balance Sheet (Based on Q4 2020 Results) Assets Liabilities & Equity $770B Cash & Repos Unsecured 137% Funding 27% 37% Coverage Wholesale Funding Liquid Assets (Liquid Assets / Trading & Wholesale Funding) Secured Funding3 Investment Securities Personal Deposits Residenti
Slide 24: 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 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 Source
CIBC Funding Strategy and Source 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 sus
Slide 27: Wholesale Funding Geography
Wholesale Funding Geography Wholesale Funding By Currency1 CAD 50.8 BN EUR 7.1 BN, CHF 2.2 BN, GBP 3.5 BN, SEK 2.0 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
Slide 28: CIBC Funding Composition
CIBC Funding Composition Funding Sources – Oct 20201 Funding Sources BN Personal deposits 202.2 Business and government deposits 209.0 Unsecured funding1 119.4 Securities sold short or repurchase agreements 89.4 Others (Includes derivatives) 62.3 Capital2 47.0 Securitization & Covered Bonds 40.2 Tot
Slide 29: Canadian Bail-in Regime Update
Canadian Bail-in Regime Update Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Fixed Income Investor Presentation
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 Derivatives Legacy Senior Debt Resolution Scen
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 (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 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: Canadian Mortgage Market
Canadian Mortgage Market Note: All amounts are in Canadian dollars unless otherwise indicated. CIBC Fixed Income Investor Presentation
Slide 37: Mortgage Market Performance and Urbanisation Rates
Mortgage Market Performance and Urbanisation 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 607K 462K • Canadian debt to income ratio in line with many developed nations Toronto 898K 683K • Growth rates of house prices in Canada have diverged across V
Slide 39: CIBC's Mortgage Portfolio
CIBC’s Mortgage Portfolio CIBC Canadian Residential Mortgages: CAD 212.0 BN Condo Exposure • 32% of CIBC’s Canadian residential mortgage portfolio is insured, with 71% of insurance being provided by CMHC • The average loan to value1 of the uninsured portfolio is 52% • The condo developer exposure is
Slide 40: CIBC Investor Relations Contacts
CIBC Investor Relations Contacts GEOFF WEISS, SENIOR VICE PRESIDENT Email: Geoffrey.Weiss@cibc.com Phone: +1 (416) 980-5093 JASON PATCHETT, SENIOR DIRECTOR ALICE DUNNING, SENIOR DIRECTOR CALLEN GLASS, SENIOR DIRECTOR Email: Jason.Patchett@cibc.com Email: Alice.Dunning@cibc.com Email: Callen.Glass@ci
Slide 41: CIBC Treasury Contacts
CIBC Treasury Contacts PETER LEVITT, EXECUTIVE VICE PRESIDENT Email: Peter.Levitt@cibc.com Phone: +1 (416) 594-8487 WOJTEK NIEBRZYDOWSKI, VICE PRESIDENT Email: Wojtek.Niebrzydowski@cibc.com Phone: +1 (416) 594-6748 CIBC Fixed Income Investor Presentation | 41
Slide 42: Appendix
Appendix CIBC Fixed Income Investor Presentation
Slide 43: Exposure to Oil & Gas Represents 2.2% of our Lending Portfolio
Exposure to Oil & Gas Represents 2.2% of our Lending Portfolio Oil & Gas Mix (Outstanding) • $9.0B drawn exposure in Q4/20 – 44% investment grade Midstream – The U.S. comprises 30% of drawn loan exposure Petroleum Distribution 10% 24% • 76% of undrawn exposure is investment grade O&G Services 5% • $
Slide 44: 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 Restaurants 31% Auto Dealers 44% Department & Air Transport Convenience Hotels/Motels Stores 7% 17% 12% $3.8B $4.3B Household Furnishing Stores 6% Other Retail 1
Slide 45: 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 Residential Office 12% 19% 27% Industrial 15% Industrial 9% Seniors Housing Residential 1% 7% Healthcare 2% $30.2B US$15.4B Other 5% Retail H
Slide 46: Canadian Mortgage Market
Canadian Mortgage Market • 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 to 12 months accrued interest Default Ins
Slide 47: Canadian Mortgage Market Regulatory Developments
Canadian Mortgage Market Regulatory Developments • Max. amortization reduced to 35 yrs. from 40 • Second home mortgage • Set min. down payment insurance no longer to 5% • Reduce max. available • Min. credit score of 620 amortization to 30 • Min. down payment for • Tightened income • 45% max. TDS rat
Slide 48: 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 • Standardizing eligibility Resident the following for loans funded before criteria for high-and low- speculation Tax March 20t
Slide 49: Canadian Real Estate Secured Personal Lending
Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates Q4/19 Q3/20 Q4/20 • The Greater Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) continue to outperform the Canadian average Total Mortgages 0.28% 0.36% 0.29% Uninsured Mortgages 0.22% 0.34% 0.28% Uninsured Mortgages in GV
Slide 50: Canadian Uninsured Residential Mortgages — Q4/20 Originations
Canadian Uninsured Residential Mortgages — Q4/20 Originations Beacon Distribution • Originations of $14B in Q4/20 • Average LTV1 in Canada: 63% • GVA2: 58% • GTA2: 62% 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 51: 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: 48% 2 2 Lo
Slide 52: Outstanding Benchmark Covered Issuance
Outstanding Benchmark Covered Issuance Extended Due for Payment Series Currency Issued Maturity Type Issue Date Maturity Date Coupon Rate Issue Spread Fitch/Moody's Date CBL9 CHF 200,000,000 Soft Bullet 22-Dec-15 22-Dec-25 22-Dec-26 0.125% MS + 0% AAA/Aaa CBL9-2 CHF 150,000,000 Soft Bullet 22-Dec-15
Slide 53: Selected Legacy and TLAC Senior
Selected Legacy and TLAC Senior1 ISIN Programme Currency Issued Issue Date2 Maturity Date Coupon Rate Issue Spread US136069TY74 MJDS USD 1,000,000,000 16-Jun-17 16-Jun-22 2.55% T + 0.80% US136069TZ40 MJDS USD 500,000,000 16-Jun-17 16-Jun-22 LIBOR + 0.72% 0.72% XS1646520921 EMTN/Formosa USD 300,000,0
Slide 54: 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 Annual Report, in other filings with Canadian securities regulators or the SEC and in other commu
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