3rd Quarter, 2000 Investor Presentation

Transcription

1 Canadian Imperial Bank of Commerce 3rd Quarter, 2000 September 7, 2000

2 CIBC Overview John S. Hunkin Chairman and CEO Third Quarter, 2000 Financial Review Tom Woods Executive Vice-President Chief Financial Officer 1

3 CIBC - Performance Highlights Another strong quarter $1.43 EPS $0.90 EPS (adjusted) - up 20% vs Q3/99 On track to achieve $500 MM cost reductions Increased specific LLP $150 MM $75 MM taken in Q3 Strong capital position 8.9% Tier 1 Unrealized gains - $2.75 B CIBC - Financial Highlights F'99 F'00 Q3 Net Income (C$MM) $394 $451 $676 $601 EPS (Fully Diluted) $0.88 $1.03 $1.60 $1.43 ROE 15.4% 18.2% 28.5% 23.8% Efficiency Ratio 71.6% 71.0% 62.4% 65.4% Tier 1 Ratio 8.4% 8.6% 8.5% 8.9% 2

4 CIBC - Income Statement F'99 F'00 (C$MM) Q3 Total Revenue (TEB) 2,898 2,779 3,359 3,054 Total Non-Interest Expenses 2,076 1,973 2,096 1,996 Operating Income ,263 1,058 Provision for Credit Losses Net Income Before Tax Taxes and Minority Interest Net Income After Tax CIBC - Adjusted EPS (C$EPS) Q4 Note: Numbers shown above do not include the following: certain securities gains and losses; Oppenheimer integration costs; restructuring charges; write-down of technology assets; CIBC National Bank start-up costs; the sale of real estate properties; and increases to the General Provision (see Appendix 1 for details) 3

5 CIBC - NIAT Components F'99 F'00 (C$MM) Q3 Electronic Commerce Retail & Small Business Wealth Management CIBC World Markets Other (50) (33) 24 (19) CIBC Other comprises Corporate Development and unallocated revenues and costs of Treasury and Balance Sheet Management, Risk Management, and Administration. (2) Results normalized for restructuring provisions, asset write-downs, and Oppenheimer integration (see Appendix 1 for details) Electronic Commerce - Revenues (C$MM) Q4 4

6 Electronic Commerce - Revenue Components F'99 F'00 (C$MM) Q4 Cards Mortgages Insurance Other Revenues are net of payments made to the customer segments (Imperial Service, Retail (Convenience), Small Business), which aggregated C$480MM in Q3. See page 6 of the Supplementary Financial Information. Electronic Commerce - NIAT (C$MM) Q4 Before deducting restructuring charge ($77MM pre-tax), and asset write-downs ($54MM pre-tax). 5

7 Electronic Commerce - ROE & NIX Ratio ROE 16% 21% 20% 13% 14% 16% 16% NIX 65% 61% 61% 79% 72% 73% 68% Q4 Before deducting restructuring charge $77MM (pre-tax), and asset write-downs of $54MM (pre-tax). Electronic Commerce - Customers (000 s) Telephone Banking 1,541 1,665 1,797 1,943 2,088 2,198 2,315 PC Banking Amicus Q4 President s Choice Financial (Loblaws alliance) in Canada, and Marketplace Bank (Winn-Dixie alliance) and Safeway Select Bank (Safeway alliance) in the U.S. 6

8 Electronic Commerce - Cards & Mortgages (C$B) Residential Mortgages Card Loans Q4 Includes securitized assets. Retail & Small Business - Revenues (C$MM) Q4 7

9 Retail & Small Business - Revenue Components F'99 F'00 (C$MM) Q4 Retail Banking Small Business Banking Lending Products West Indies Other Retail Banking = Convenience Customer segment (revenue sharing arrangements with product groups) Small Business Banking = A distinct customer segment (revenue sharing arrangements with product groups) Lending Products = Product group for Retail loan portfolio for Imperial Service, Retail Convenience and Small Business customer segments, as well as the Student Loan portfolio Retail & Small Business - NIAT (C$MM) (2) Q4 Before deducting $13MM (pre-tax) restructuring charge. (2) Before deducting $55MM (pre-tax) restructuring charge. 8

10 Retail & Small Business - ROE & NIX Ratio ROE 17% 18% 10% 18% 16% 18% 19% NIX 70% 70% 73% 67% 70% 69% 71% Q4 (2) Before deducting $13MM (pre-tax) restructuring charge. (2) Before deducting $55MM (pre-tax) restructuring charge. Retail & Small Business - Loan Balances & Branches (C$B) Personal Loans Small Bus. Loans Number of Branches 1,302 1,302 1,299 1,293 1,265 1,235 1,215 Q4 9

11 Wealth Management - Revenues (C$MM) Q4 US Private Equity Fund Asset Management fees are received in Q1. Significantly higher in Q1 ($100MM) Wealth Management - Revenue Components F'99 F'00 (C$MM) Q4 Prv. Client / Asset Mgt Imperial Service Wealth Products Global Prv. Banking Other U.S. Private Equity Fund Asset Management fees received in Q1. Significantly higher in Q1/00 ($100MM). Private Client = Full Service Brokerage (Canada and the U.S.) Imperial Service = High Value Customer segment (revenue sharing arrangements with product groups) Wealth Products = Mutual Funds, Discount Brokerage, GIC s, Investment Management Services product groups 10

12 Wealth Management - NIAT (C$MM) 141 (2) Q4 Before deducting restructuring charge ($53MM pre-tax). (2) U.S. Private Equity Fund Asset Management fees are received in Q1. Significantly higher in Q1/00 ($25MM NIAT). Wealth Management - ROE & NIX Ratios ROE 40% 41% 29% 16% 87% 78% 58% NIX 85% 85% 89% 91% 71% 76% 80% Q4 Before deducting restructuring charge ($53MM pre-tax). 11

13 Wealth Management - AUA & AUM (C$B) AUA AUM Q4 AUA includes Custodial Services assets administered (not part of Wealth Management). See page 14 of the Supplementary Financial Information. CIBC World Markets - Revenues (C$MM) 1,303 1,399 1, Q4 12

14 CIBC World Markets - Revenue Components F'99 F'00 (C$MM) Q4 Capital Markets Investment Banking & Credit Products Merchant Banking 52 (28) 430 (11) Commercial Banking Other (2) 25 (4) (26) , ,399 1,291 CIBC World Markets - NIAT Q4 Before deducting restructuring charges and Oppenheimer integration charges. See page 9 of the Supplementary Financial Information. 13

15 CIBC World Markets - ROE & NIX Ratio ROE 9% 11% 29% 11% 19% 39% 35% NIX 71% 70% 57% 72% 65% 56% 54% Q4 Before deducting restructuring charges, and Oppenheimer integration charges. See page 9 of the Supplementary Financial Information. CIBC World Markets - U.S. Investment Banking Equity Offerings # of Deals (US$B) Q4 Lead and Co-lead managed equity offerings. 14

16 CIBC- Expense Reduction Program F'99 F'00 (C$MM) Q2 Total Non Interest Expenses 1,826 1,973 2,096 1,996 Exclusions: Incentive Compensation Commissions Other Variable Expenses Strategic Initiatives Base Expenses 1,397 1,369 1,341 1,317 Decrease Year-Over-Year Decrease 6% Annualized Savings CIBC - Competitive Balance Sheet Measures Tier 1 Unrealized General Net Impaired (C$MM) Ratio Gains Provision Loans CIBC 8.9% 2,750 1,150 (170) BMO 8.4% (85) 970 (195) BNS 8.5% 787 1,300 (163) RBC 8.5% (100) 1,160 (114) TD 7.3% (56) 15

17 CIBC - Performance vs. Objectives Objective Measure YTD Performance Total Return Best total return of Up 37% Canadian banks (bank index up 20%) Return on Equity 18% by % EPS Growth 15% per year 67% Efficiency NIX of 60% by % Capital Strength Tier 1 7.5% - 8.5% 8.9% Total 10.5% % 12.0% Excluding gain on sale of real estate properties Appendix 1 - Base Operating EPS F'99 (C$MM - except EPS) Q4 Reported Net Income Earnings Per Share (FD) (0.04) Major Gains / Losses - 10 (130) 68 - (176) (221) Earnings Per Share (0.31) (0.45) (0.54) Restructuring Charges Earnings Per Share Write-down of Tech Assets Earnings Per Share Oppenheimer Integration Earnings Per Share CIBC National Bank Earnings Per Share Sale of DC (128) - Earnings Per Share (0.33) - Increase to General Provision Earnings Per Share Base Operations Earnings Per Share (FD) Yr/Yr Growth 20% Gain on Securities is the net impact of Global Crossing, Loewen, and Newcourt. 16

18 Q3/2000 Risk Review Dr. Robert Mark Senior Executive Vice-President, Risk Management Loan Loss Provisions Specific provisions of $218 million were taken in Q3/2000, an increase from $143 in each of the past 2 quarters, and up from $173 million in Q3/1999. The general allowance remains at $1.15 billion, now 0.85% of risk weighted assets. 17

19 Loan Portfolio Net Loans and Acceptances Personal Loans ($21.6b) Growth 1.4% VISA ($5.3b) Growth 36.4% Business & Government Loans (ex repos) ($56.7b) Growth -3.7% Residential Mortgages ($50.2b) Growth 9.2% Total Loan Portfolio: $133.9b (ex repos) Growth 2.6% Growth=2 year compound rate Business & Government Loans Net Loans and Acceptances Transportation, Comm & Utilities $8.3b (15%) Other $4.0b (7%) Non- Residential Mortgages $2.2b (4%) Retail $3.4b (6%) Wholesale $2.2b (4%) Services $7.3b (13%) Natural Resources $4.7b (8%) Agriculture $3.2b (6%) Real Estate $4.3b (8%) Manufacturing $8.9b (16%) Financial Institutions $8.1b (14%) 18

20 Gross and Net Impaired Loans Billions $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 -$0.5 Gross Impaired Loans Net Impaired Loans Net Impaired Loans as % of Loans & BA's 1.7% 1.5% 1.3% 1.1% 0.9% 0.7% 0.5% 0.3% 0.1% -0.1% -0.3% Q4/95 Q2/96 Q4/96 Q2/97 Q4/97 Q2/98 Q4/98 Q2/99 Q4/99 Q2/00 Business & Government Loans Net Impaired Loans $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Q4/96 Q1/97 Q2/97 Q3/97 Q4/97 Q1/98 Q2/98 Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Millions Net Impaired Loans Net Impaired Loans as % of Loans & BA's 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 19

21 Consumer Loans Net Impaired Loans Millions $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 Residential Mortgages Personal Loans (ex VISA) Res Mtg NILs as % of Outstanding Personal Loan NILs as % of Outstandings Q1/98 Q2/98 Q3/98 Q4/98 Q1/99 Q2/99 Q3/99 Q4/99 Q1/00 Q2/00 Q3/ % 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Exposures to Select Geographic Areas C$ Millions Jun 30/2000 Jun 30/1999 Selected Asia (2) Japan 1,466 2,761 All Asia 4,483 6,734 Latin America Eastern Europe Gross domestic and cross-border exposures, including securities, net derivatives, lending related and other asset exposures (2) Indonesia, Korea, Thailand, Malaysia, Philippines 20

22 Fiscal 2000 Trading Revenues vs. RMU Bands C$ Millions Nov Nov Dec Dec Dec Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul-00 Fiscal 2000 Trading Revenues (Cdn $ Millions) 25 Average Daily Trading Revenue $0 $4.0MM Q3 $4.9MM YTD Frequency (days) Histogram for November 1, 1999 to July 31,

23 Reduced Risk Usage (Cdn $ Millions) C$ Millions May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct Nov-98 Dec-98 Jan-99 Feb-99 Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Risk has been reduced by 50% from peak levels Forward Looking Statements Investor presentations may contain forward-looking statements about the operations, objectives, targets and strategies of CIBC. Forward-looking statements are typically identified by the words believe, expect, anticipate, intend, estimate and other similar expressions. These statements are subject to risks and uncertainties. Actual results may differ materially due to a variety of factors, including legislative or regulatory developments, competition, technological change, global capital markets activity, interest rates, and general economic conditions in Canada, North America or internationally. This list is not exhaustive of the factors that may affect any of CIBC s forward-looking statements. These and other factors should be considered carefully and you should not place undue reliance on CIBC s forward-looking statements. Investor Relations Contacts: Kathy Humber, Senior Vice-President, Investor Relations (416) Marek Dzieduszycki, Senior Manager, Investor Relations (416) Jason Trainor (416) Investor Relations Fax Number (416)