Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — CIBC — Q4 2017 Earnings Presentation
30 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Nov 30, 2017
Slide 1: CIBC Investor Presentation Q4 F17
CIBC Investor Presentation Q4 F17 November 30, 2017
Slide 2: Forward-Looking Statements
1 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 com
Slide 3: CIBC Overview
CIBC Overview Victor Dodig President and Chief Executive Officer
Slide 4: Financial Review
Financial Review Kevin Glass Senior Executive Vice-President and Chief Financial Officer
Slide 5: Fourth Quarter, 2017 Highlights
4 Fourth Quarter, 2017 Highlights Adjusted1 Q4/16 Q3/17 Q4/17 Earnings ($MM, except for EPS, Efficiency Ratio, ROE, and CET1 Ratio) • Adjusted1 EPS growth of 8% YoY Revenue 3,684 4,113 4,247 • Operating Leverage of 3.4% • ROE of 17.2% Non-Interest Expenses 2,200 2,368 2,420 Pre-Provision Earnings 1,
Slide 6: Canadian Personal and Small Business Banking
5 Canadian Personal and Small Business Banking Strong, diversified and profitable revenue growth 1 Adjusted Q4/16 Q3/17 Q4/17 • Solid volume growth and stable NIMs ($MM) • Operating leverage of 3.6% Personal & Small Business Banking 1,981 2,028 2,086 • Stable credit performance Other 24 11 10 Revenu
Slide 7: Strong and Balanced Market Share Growth
6 Strong and Balanced Market Share Growth Q4/17 YoY Most Current Absolute YoY Growth Balances Growth 1 Rank Rank Market Share ($B) Money-In Personal Deposits & GICs 143 5.3% 16.7% 4 3 Canadian Retail Mutual Fund AUM 101 11.6% 15.4% 3 2 Small Business Deposits & GICs 22 3.8% 13.6% 4 6 Money-Out Real
Slide 8: Canadian Commercial Banking and Wealth Management
Canadian Commercial Banking and 7 Wealth Management Strong results driven by volume and asset growth 1 Adjusted Q4/16 Q3/17 Q4/17 • Strong volume growth in Commercial ($MM) Banking Commercial Banking 312 333 348 − Deposits up 12% YoY Wealth Management 534 570 574 − Loans up 8% YoY Revenue 846 903 92
Slide 9: U.S. Commercial Banking and Wealth Management
U.S. Commercial Banking and 8 Wealth Management Continued profitable client growth 1 Adjusted Q4/16 Q3/17 Q4/17 • Revenue growth reflects the high-quality ($MM) U.S. banking and private wealth capabilities added during the year Commercial Banking 49 150 257 Wealth Management 57 80 110 • Acquisition
Slide 10: Former PrivateBank (US$)
9 Former PrivateBank (US$) Adjusted1 (US$MM), 2016 2017 Sep. 30 Oct. 313 2 for the three months ended • Growth in average loans4 of US$2B, or 14%, Revenue 184 226 and average deposits4 of US$1B, or 7% Non-Interest Expenses 92 119 • Solid momentum in new client Pre-Provision Earnings 92 107 developme
Slide 11: Capital Markets
10 Capital Markets Delivering consistent and stable earnings Adjusted1 Q4/16 Q3/17 Q4/17 • Growing and diversifying our business by ($MM) geography, industry and products: Global Markets 366 362 299 − Delivering capital markets products and services to our Canadian and Corporate & Investment Banking
Slide 12: Corporate and Other
11 Corporate and Other Adjusted1 Q4/16 Q3/17 Q4/17 • Consistent performance in International ($MM) Banking International Banking 176 183 183 • Higher Treasury revenue Other (78) 70 33 2 • Lower TEB offset YoY Revenue 98 253 216 Non-Interest Expenses 288 289 297 • Strong credit performance Pre-Provis
Slide 13: Capital
12 Capital CET1 Ratio (all-in basis) 12bps 29bps (3)bps (6)bps (10)bps 10.6% 10.4% Q3/17 Internal Capital Common Shares RWAs (excl. FX) Geneva Basel I Floor Q4/17 Generation Issued (excl. & Other Geneva related) • Strong internal capital generation • Share issuance driven by DRIP Partially offset by
Slide 14: 2017 Highlights
13 2017 Highlights Adjusted1 FY16 FY17 Earnings ($MM, except for EPS, Efficiency Ratio, ROE, and CET1 Ratio) • Adjusted1 EPS up 9% YoY Revenue 14,530 15,975 • Operating Leverage of 1.6% • ROE of 18.1% Non-Interest Expenses 8,709 9,312 Pre-Provision Earnings 5,821 6,663 Revenue • Diversified revenue
Slide 15: Fourth Quarter, 2017 Risk Review
Fourth Quarter, 2017 Risk Review Laura Dottori-Attanasio Senior Executive Vice-President and Chief Risk Officer
Slide 16: Provision for Credit Losses
15 Provision for Credit Losses Adjusted1 Q4/16 Q3/17 Q4/17 vs. Q3/17: ($MM) • Lower losses in U.S. real estate finance Canadian Personal and Small Business and Canadian retail portfolios 189 190 183 Banking • Higher losses in Canadian Canadian Commercial Banking and Commercial Banking 18 (3) 11 Weal
Slide 17: Credit Quality — Gross Impaired Loans
16 Credit Quality — Gross Impaired Loans Reported Q4/16 Q3/17 Q4/17 vs. Q3/17: Canadian Residential Mortgages 0.14% 0.14% 0.14% • Overall gross impaired ratio continues to Canadian Personal Lending 0.33% 0.30% 0.29% remain low and stable 1 CIBC Business & Government Loans 0.93% 0.43% 0.40% CIBC Bank
Slide 18: Credit Quality — Net Write-offs
17 Credit Quality — Net Write-offs Reported Q4/16 Q3/17 Q4/17 • Overall net write-off ratio remain stable Canadian Residential Mortgages 0.01% 0.02% 0.01% QoQ Canadian Credit Cards 3.31% 3.33% 3.06% • Lower ratio in Business & Government Canadian Personal Lending 0.77% 0.78% 0.72% portfolio YoY CIBC
Slide 19: Canadian Real Estate Secured Personal Lending
18 Canadian Real Estate Secured Personal Lending 90+ Days Delinquency Rates • Uninsured mortgages in the Greater Q4/16 Q3/17 Q4/17 Vancouver Area1 (GVA) and Greater Toronto Area1 (GTA) have lower 90+ days Total Mortgages 0.25% 0.23% 0.23% delinquency rates than the Uninsured Mortgages 0.19% 0.17% 0.
Slide 20: Canadian Credit Cards and Unsecured Personal Lending
Canadian Credit Cards and Unsecured 19 Personal Lending 90+ Days Delinquency Rates • 90+ days delinquency rates of both Q4/16 Q3/17 Q4/17 credit cards and unsecured personal lending were down YoY Canadian Credit Cards 0.82% 0.75% 0.78% 1 Canadian Unsecured Personal Lending 0.50% 0.47% 0.48% Balances
Slide 21: Appendix
Appendix
Slide 22: Building Deeper Relationships With Our Mortgage Clients
Building Deeper Relationships With Our 21 Mortgage Clients Real Estate Secured Lending Average Balances by Channel Over 75% were 1% • Less than 15% are single-product 24% single-product relationships FirstLine Mortgages 32% clients CIBC Mortgage Advisors 8% • Over 55% of clients have deposits and /
Slide 23: Reported Results ($MM)
22 Reported Results ($MM) Total Bank Q4/16 Q3/17 Q4/17 Canadian Personal & Small Business Banking Q4/16 Q3/17 Q4/17 Revenue 3,681 4,104 4,269 Personal & Small Business Banking 1,981 2,028 2,086 Non-Interest Expenses 2,347 2,452 2,570 Other 24 11 7 Pre-Provision Earnings 1,334 1,652 1,699 Revenue 2,0
Slide 24: Canadian Uninsured Residential Mortgages — Q4/17 Originations
Canadian Uninsured Residential Mortgages — 23 Q4/17 Originations Beacon Distribution • $12B of originations in Q4/17 • Average LTV1 in Canada: 64% 40% 36% − GVA2: 58% 31% 30% 31% 36% 17% 14% 17% − GTA2: 62% 6% 4% 6% 10% 12% 10% ≤650 651-700 701-750 751-800 >800 2 2 Canada GVA GTA Loan-to-Value (LTV)
Slide 25: Canadian Uninsured Residential Mortgages
24 Canadian Uninsured Residential Mortgages Beacon Distribution • Better current Beacon and LTV1 distributions in GVA2 and GTA2 than the Canadian average 38% 41% 40% 29% 27% 30% • Less than 1% of this portfolio has a 15% 13% 14% 11% 13% 10% Beacon score of 650 or lower and an LTV1 7% 6% 6% over 75%
Slide 26: Oil & Gas Business & Government Exposure
25 Oil & Gas Business & Government Exposure Direct Exposure1 • $18.1B of direct exposure1, up from $17.3B last quarter 17.7 17.4 17.3 18.1 16.8 − 75% of this is investment grade • $7.5B drawn exposure1, up from $7.2B last quarter − 63% of this is investment grade • 84% of undrawn exposure1 is invest
Slide 27: Oil & Gas Retail Exposure
26 Oil & Gas Retail Exposure Retail Exposure1 in Oil Provinces ($B) • $41.4B of retail exposure1 to oil provinces2 (or $21.8B excluding insured mortgages) 40.2 40.5 40.8 41.3 41.4 − Alberta accounts for $32.7B or 79% of the retail exposure1 − Average LTV3 of 65% in the uninsured mortgage portfolio Q
Slide 28: Trading Revenue (TEB) Distribution
27 Trading Revenue (TEB)1 Distribution2 ($MM) ($MM) 20 20 15 15 10 10 5 5 0 0 (5) (5) (10) (10) (15) (15) Aug-17 Sep-17 Oct-17 Trading Revenue (TEB) VaR 1 Non-GAAP financial measure. See slide 29 for further details. 2 Trading revenue distribution on which VaR is calculated is not on a TEB basis. Tr
Slide 29: Items of Note
28 Items of Note Q4 2017 FY 2017 Pre-Tax After-Tax EPS Pre-Tax After-Tax EPS Effect & NCI Effect Effect & NCI Effect ($MM) Effect ($/Share) ($MM) Effect ($/Share) ($MM) ($MM) Fees and charges related to the launch of Simplii Financial and the related wind-down of 98 71 0.15 98 71 0.16 President’s Ch
Slide 30: Non-GAAP Financial Measures
29 Non-GAAP Financial Measures • Adjusted results are Non-GAAP financial measures that do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. • For further details on items of note see slide 28 of this prese