Canadian Imperial Bank Of Commerce · TSX:CM
Canadian Imperial Bank Of Commerce — Q4 2005 Earnings Presentation
41 slides from Canadian Imperial Bank Of Commerce's earnings presentation, Dec 1, 2005
Slide 1: Fourth Quarter 2005 Investor Presentation
Fourth Quarter, 2005 Investor Presentation CIBC Fourth Quarter Investor Presentation December 1, 2005 Forward–Looking Statements From time to time, CIBC makes written or oral forward-looking statements within the meaning of certain securities laws, including in this presentation, in filings with Can
Slide 2: CIBC Overview / Financial Review
Fourth Quarter, 2005 Investor Presentation CIBC Overview Gerry McCaughey President and Chief Executive Officer Fourth Quarter, 2005 Financial Review Tom Woods Senior Executive Vice-President and Chief Financial Officer 2
Slide 3: Q4 Summary and Items of Note
Fourth Quarter, 2005 Investor Presentation Q4 Summary EPS(1): $2.06 - Includes several Items of Note (net $0.62) - see below Tier 1 Capital Ratio: 8.5% Q4/06 Expense run rate: see Slide 15 Items that HELPED Q4 Results Items that HURT Q4 Results • Merchant Banking • Higher than normal (GPI and SDM) -
Slide 4: Items of Note – Retail Markets and World Markets Q4/05
Fourth Quarter, 2005 Investor Presentation Items of Note – Retail Markets Q4/05 Pre-Tax After-Tax EPS Effect Effect ($MM) Effect ($MM) ($/share) Revenue Premium Paid on Preferred Share Redemptions (7) (7) (0.02) (7) (7) (0.02) Loan Losses Net Adjustment to the Provision for Credit Losses in the Reta
Slide 5: Items of Note – Corp. & Other Q4/05
Fourth Quarter, 2005 Investor Presentation Items of Note – Corp. & Other Q4/05 Pre-Tax After-Tax EPS Effect Effect ($MM) Effect ($MM) ($/share) Revenue Premium Paid on Preferred Share Redemptions (4) (4) (0.01) Repatriation of Capital & Retained Earnings 301 (7) (0.02) 297 (11) (0.03) Loan Losses Re
Slide 6: CIBC – Quarterly Statement of Operations
Fourth Quarter, 2005 Investor Presentation CIBC – Quarterly Statement of Operations F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 (1) (1) Revenue 2,901 3,079 2,820 3,151 3,423 (1) (1) Provision for Credit Losses 175 178 159 199 170 (1) (1) (1) (1) Non-Interest Expenses 2,266 1,901 2,032 4,850 2,057 (2) excl. Enr
Slide 7: Loan Losses and Expenses
Fourth Quarter, 2005 Investor Presentation CIBC Loan Losses F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 Specific Loan Losses/(Recoveries) (1) (1) CIBC Retail Markets 157 194 169 185 224 CIBC World Markets 43 (17) (9) 13 (4) Corporate and Other - 1 (1) 1 - Total Specific Loan Losses/(Recoveries) 200 178 159 199
Slide 8: Expenses – Targeted Reductions
Fourth Quarter, 2005 Investor Presentation CIBC Expenses – Targeted Reductions [see “Forward- “Forward-Looking Statements” – Slide 2] ($MM) Total Expenses - Q2/05 2,032 Hedge Fund Provision(1 ) -75 Excluding Hedge Fund 1,957 Provision(2) Q2/05 Q4/06(3) Employee Comp. and 1,055 1,075 +20 Benefits Pro
Slide 9: Net Income/(Loss) Components
Fourth Quarter, 2005 Investor Presentation CIBC – Net Income/(Loss) Components F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 (1) (1) (1) (1) (1) CIBC Retail Markets 393 478 341 404 350 (1) (1) (1) (1) CIBC World Markets (34) 173 115 (2,287) 328 (2) excl. Enron provision 160 246 (1) (1) (1) Corporate and Other 43
Slide 10: Retail Markets – Revenue Components
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 Personal & Small Business Banking 613 615 612 647 618 Imperial Service 218 227 232 246 236 Retail Brokerage 251 277 288 270 296 (1) Cards 357 383 332 368 364 Mortgages & Personal Lend
Slide 11: Retail Markets – Revenue Components
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 Imperial Service Personal & Small Includes Private Wealth Business Banking 613 615 612 647 618 Management Imperial Service 218 227 232 246 236 Retail Brokerage 251 277 288 270 296 + d
Slide 12: Retail Markets – Revenue Components
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 Cards Personal & Small + balances up Business Banking 613 615 612 647 618 Imperial Service 218 227 232 246 236 – purchase volumes down Retail Brokerage 251 277 288 270 296 (seasonal)
Slide 13: Retail Markets – Revenue Components
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – Revenue Components F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 Asset Management Personal & Small + Mutual Fund AUM up 3% Business Banking 613 615 612 647 618 Imperial Service 218 227 232 246 236 – commissions paid to Retail Brokerage 251 277 288
Slide 14: Retail Markets – Net Income
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – Net Income ($MM) (1) 478 (1) vs. Q3 393 (1) 404 (1) + Revenue up $39MM 341 (1) 350 – Loan losses up $39MM - $23MM adjustments - $16MM deterioration – Expenses up $41MM - severance, project spending, brokerage payments, advertising up Q
Slide 15: World Markets – Revenue Components
Fourth Quarter, 2005 Investor Presentation CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 Capital Markets 322 359 326 359 347 Investment Banking & Credit Products 234 286 298 251 239 (1) Merchant Banking 146 23 61 239 391 Commercial Banking 112 116 106 114 113 (1) Other 15
Slide 16: World Markets – Revenue Components
Fourth Quarter, 2005 Investor Presentation CIBC World Markets – Revenue Components F ‘04 F ‘05 Investment ($MM) Q4 Q1 Q2 Q3 Q4 Banking & Credit Capital Markets 322 359 326 359 347 + active loan syndication Investment Banking & market Credit Products 234 286 298 251 239 Merchant Banking 146 23 61 239
Slide 17: World Markets – Revenue and Net Income
Fourth Quarter, 2005 Investor Presentation CIBC World Markets – Revenue Components F ‘04 F ‘05 ($MM) Q4 Q1 Q2 Q3 Q4 Other Capital Markets 322 359 326 359 347 – interest expense re. U.S. Investment Banking & income tax reassessments Credit Products 234 286 298 251 239 (1) Merchant Banking 146 23 61 2
Slide 18: Balance Sheet Measures and Share Repurchases
Fourth Quarter, 2005 Investor Presentation CIBC – Competitive Balance Sheet Measures Net Tier 1 Unrealized General GA as % Impaired ($MM) Ratio Gains Allowance of RWA(1) Loans(2) CIBC 8.5% 69 975 0.84% 288 Bank Peer Group(3) 10.3% 493 1,179 0.75% 501 _______________________ (1) General Allowance as
Slide 19: Common Share Dividends
Fourth Quarter, 2005 Investor Presentation Common Share Dividends ($ per share) 0.68 0.68 0.65 0.65 0.60 Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 37 CIBC Retail Markets – ROE & Efficiency (NIX) Ratio 50% (1) 40% 43% ROE 37% 38% 65% 63% 64% NIX 61% 59% (2) (2) (2) (2) (2) Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 _______________
Slide 20: Retail Markets – Mortgages, Cards and Loan Balances
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – Mortgages & Cards ($B; spot) 93.2 91.0 Residential 88.1 86.0 Mortgages 84.4 10.8 10.5 Card Loans 10.4 10.4 10.3 Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 39 CIBC Retail Markets – Loan Balances (1) ($B; spot) 23.3 23.7 Personal 22.6 21.6 21.9 Loans 11
Slide 21: Retail Markets – Market Share
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – Market Share (1)(2) 14.8% 14.8% Residential 14.7% 14.7% 14.7% Mortgages 19.3% 19.3% 19.4% Consumer 19.2% 19.2% Deposits Consumer 11.4% 11.4% 11.4% Loans 11.1% 10.9% (excl. cards) Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 _______________________ (1) S
Slide 22: Retail Markets – AUA & AUM
Fourth Quarter, 2005 Investor Presentation CIBC Retail Markets – AUA & AUM (1) ($B) 973 967 877 826 771 AUA AUM 67 69 69 72 71 Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 _______________________ (1) Includes assets under administration or custody of CIBC Mellon Global Securities Services, which is a 50/50 joint vent
Slide 23: Fixed Term Investments & Imperial Service
Fourth Quarter, 2005 Investor Presentation Fixed Term Investments & Market Share Fixed Term Investments Canadian Market Share(1)(2) 40 20 33.9 34.2 34.3 34.2 34.1 35 Market Share (%) 30 15 $ Billions 25 15.3 15.3 15.3 15.3 15.3 20 15 10 10 5 0 5 Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 _______________________ (1)
Slide 24: Discount Brokerage and CIBC Wood Gundy
Fourth Quarter, 2005 Investor Presentation Discount Brokerage (1) Active Accounts Trades / Day 500 15 450 421 430 432 405 409 400 350 Thousands Thousands 10 300 250 8.9 8.1 200 7.3 7.0 5.9 5 150 100 50 0 0 Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 _______________________ (1) Average over the quarter. 47 CIBC Wood
Slide 25: Earnings/(Loss) Per Share by Type of Business
Fourth Quarter, 2005 Investor Presentation Earnings/(Loss) Per Share by type of (1)(2) Business ($) “Wholesale” 1.70 1.97 1.00 “Retail”(3) 0.60 4.59 0.37 0.36 0.37 3.65 3.66 3.99 1.14 1.10 1.17 1.18 (0.83) F ‘02 F ‘03 F ‘04 F ‘05 Q1 Q2 Q3 Q4 Annual F ‘05 _______________________ (1) Excludes Items of
Slide 26: Retail plus Commercial Banking
Fourth Quarter, 2005 Investor Presentation CIBC Retail plus Commercial Banking (1) ($MM) Revenue Efficiency (NIX) Ratio 2,224 2,173 2,135 65% 64% 2,077 61% 63% 2,051 59% Net Income ROE 517 49% 425 (2) 429 (2) 39% 41% 35% 37% 365 (2) 372 (2) (2) (2) (2) (2) (2) (2) Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 F ‘04
Slide 27: World Markets – Merchant Banking
Fourth Quarter, 2005 Investor Presentation CIBC World Markets – Merchant Banking Q4/05 summary ($MM) 1,686 Carrying Value = $1,382MM as at 1,382 Carrying Value October 31, 2005 Debt: 6% Equity: 26% Funds: 68% Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 53 CIBC World Markets – Merchant Banking Total Portfolio Industr
Slide 28: World Markets – Market Share
Fourth Quarter, 2005 Investor Presentation CIBC World Markets – Market Share Equity Trading (1) 8.8% 8.7% Canada % of 8.3% 8.3% 8.3% shares traded 1.9% 1.9% 2.2% 1.9% U.S. % of 1.2% shares traded Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 _______________________ (1) Source: TSX (Canada); AutEx (U.S.). U.S. volume r
Slide 29: Economic Profit/(Loss)
Fourth Quarter, 2005 Investor Presentation CIBC Economic Profit/(Loss) (1) ($MM) (2) (2) 516 (2) 536 201 (2) 256 (2) (2,094) Q4 Q1 Q2 Q3 Q4 F ‘04 F ‘05 _______________________ (1) For further details, see Non-GAAP measures within the Notes to users section on page i of the Q4/05 Supplementary Financ
Slide 30: Behind the Reported NIMs
Fourth Quarter, 2005 Investor Presentation Behind the Reported NIMs Q3/05 Q4/05 Reported NIM 1.66% 1.62% Reported NIM (TEB)(1) 1.73% 1.69% NIM (TEB)(1) excluding fixed(2) assets 2.03% 2.00% & excluding trading assets and adding back securitizations(3) 2.71% 2.52% & excluding other NII(4) 2.73% 2.68%
Slide 31: Capital Repatriation
Fourth Quarter, 2005 Investor Presentation Capital Repatriation ($MM) Q4/05 Net foreign exchange revenue recorded in foreign exchange other than trading(1) 301 Net tax expense(1) (308) (7) _______________________ (1) Net of hedging activities 61 Foreign Exchange Other than Trading (1) ($MM) F ‘04 F
Slide 32: Summary of AcG-13 Gains/(Losses)
Fourth Quarter, 2005 Investor Presentation Summary of AcG–13 Gains/(Losses) ($MM) F ‘04 F ‘05 Q4 Q1 Q2 Q3 Q4 AcG-13 Gains/(Losses) on ineffective foreign exchange hedges(1) 6 2 19 21 27 AcG-13 Gains/(Losses) on other ineffective hedges plus cost of credit hedges(2) (13) (2) 2 (36) (3) (7) - 21 (15)
Slide 33: Non-Controlling Interests and Income Taxes Reconciliation
Fourth Quarter, 2005 Investor Presentation Non–Controlling Interests ($MM) Q3/05 Q4/05 Non-Controlling Interests in certain VIE's(1) required to be consolidated 101 19 Other 14 13 115 32 _______________________ (1) Certain investment vehicles managed by employees. 65 Reconciliation of Q3/05 Income T
Slide 34: Risk Review – Key Messages Credit
Fourth Quarter, 2005 Investor Presentation Fourth Quarter, 2005 Risk Review Steven McGirr Senior Executive Vice-President and Chief Risk Officer Treasury and Risk Management Key Messages - Credit Credit Quality • Specific Loan Losses at $220 million in Q4 – Increase of $20 million year-over-year, an
Slide 35: Specific Provision for Credit Losses
Fourth Quarter, 2005 Investor Presentation Specific Provision for Credit Losses as % of Net Loans and Acceptances 2.50% Consumer Net Loans and Acceptances Business & Government (excl. Reverse Repos) 2.00% Total Expected Total Annualized % of (excl. Reverse Repos) Bank Range: 1.50% 0.50% - 0.65% 1.00
Slide 36: Impaired Loans and Loan Portfolio Mix
Fourth Quarter, 2005 Investor Presentation Impaired Loans Gross Impaired Loans Net Impaired Loans (excluding General Allowance) Net Impaired Loans as % of Loans & BAs (excl. Reverse Repos) 2.5 2.0% NIL as a % of Total Loans and BAs 1.8% 2.0 1.6% 1.4% 1.5 1.2% $B 1.0% 1.0 0.8% 0.6% 0.5 0.4% 0.2% 0.0
Slide 37: Trading Revenue vs. Risk and Tier 1 Ratio
Fourth Quarter, 2005 Investor Presentation Trading Revenue (TEB) vs. Risk (1) (2),(3) Backtesting of Trading Revenue vs. Total VaR Fourth Quarter, 2005 Trading Revenue Total VaR 16 16 12 12 8 8 C$MM 4 4 - - (4) (4) (8) (8) (12) (12) (16) (16) 3-Oct 10-Oct 17-Oct 24-Oct 31-Oct 1-Aug 8-Aug 15-Aug 22-A
Slide 38: RWA and Capital Ratio Trends
Fourth Quarter, 2005 Investor Presentation RWA and Capital Ratio Trends 140 Risk Weighted Assets Tier 1 Capital 12.0% 135 11.0% Tier 1 Capital 130 Target > 8.5% 10.0% 125 $B 9.0% 120 8.0% 115 110 7.0% 105 6.0% 1999 2000 2001 2002 2003 2004 Q1/05 Q2/05 Q3/05 Q4/05 75 Appendix 38
Slide 39: Specific Provision and Loan Portfolio Mix
Fourth Quarter, 2005 Investor Presentation Specific Provision for Credit Losses ($MM) 400 Consumer Business & Government 350 101 300 250 138 91 200 156 150 274 77 161 198 100 184 185 154 169 140 50 73 87 22 9 19 38 22 0 -50 Q1/05 Q2/05 Q3/05 Q4/05 1999* 2000* 2001* 2002* 2003* 2004* -100 * Full Year
Slide 40: Business & Government Loan Diversification
Fourth Quarter, 2005 Investor Presentation Business & Government Loan Diversification (Net Loans and Acceptances excl. Reverse Repos - $35.7B*) as at October 31, 2005 20% 18.5% Loans and Acceptances % of Business & Gov't 15% 11.9% 9.4% 9.1% 10% 8.5% 6.5% 6.5% 5.6% 4.7% 4.6% 5% 3.8% 2.8% 1.9% 1.7% 1.
Slide 41: Q4 Formations
Fourth Quarter, 2005 Investor Presentation Q4 Formations (Business & Government - $131MM) New Formations ($MM) New Formations as a % of Loans & Acceptances ** 800 5.0% Annualized % of Loans and Acceptances 600 4.0% $MM 3.0% 400 2.0% 200 1.0% 0 0.0% 1999* 2000* 2001* 2002* 2003* 2004* Q1/05 Q2/05 Q3/
Canadian Imperial Bank of Commerce (CIBC) — Q4 2005 Earnings Presentation on 6ix