Investor Presentation Q1 2016 March 2016
2 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 presentation, in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission and in other communications. All such statements are made pursuant to the safe harbour provisions of, and are intended to be forward-looking statements under applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements made about our operations, business lines, financial condition, risk management, priorities, targets, ongoing objectives, strategies and outlook for calendar year 2016 and subsequent periods. Forward-looking statements are typically identified by the words believe, expect, anticipate, intend, estimate, forecast, target, objective and other similar expressions or future or conditional verbs such as will, should, would and could. By their nature, these statements require us to make assumptions and are subject to inherent risks and uncertainties that may be general or specific. A variety of factors, many of which are beyond our control, affect our operations, performance and results, and could cause actual results to differ materially from the expectations expressed in any of our forward-looking statements. These factors include: credit, market, liquidity, strategic, insurance, operational, reputation and legal, regulatory and environmental risk; the effectiveness and adequacy of our risk management and valuation models and processes; legislative or regulatory developments in the jurisdictions where we operate, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, the U.S. Foreign Account Tax Compliance Act and regulatory reforms in the United Kingdom and Europe, the Basel Committee on Banking Supervision s global standards for capital and liquidity reform, and those relating to the payments system in Canada; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions, and interest rate and liquidity regulatory guidance; the resolution of legal and regulatory proceedings and related matters; the effect of changes to accounting standards, rules and interpretations; changes in our estimates of reserves and allowances; changes in tax laws; changes to our credit ratings; political conditions and developments; the possible effect on our business of international conflicts and the war on terror; natural disasters, public health emergencies, disruptions to public infrastructure and other catastrophic events; reliance on third parties to provide components of our business infrastructure; potential disruptions to our information technology systems and services; increasing cyber security risks which may include theft of assets, unauthorized access to sensitive information, or operational disruption; social media risk; losses incurred as a result of internal or external fraud; anti-money laundering; the accuracy and completeness of information provided to us concerning clients and counterparties; the failure of third parties to comply with their obligations to us and our affiliates or associates; intensifying competition from established competitors and new entrants in the financial services industry including through internet and mobile banking; technological change; global capital market activity; changes in monetary and economic policy; currency value and interest rate fluctuations, including as a result of oil price volatility; general business and economic conditions worldwide, as well as in Canada, the U.S. and other countries where we have operations, including increasing Canadian household debt levels and Europe s sovereign debt crisis; our success in developing and introducing new products and services, expanding existing distribution channels, developing new distribution channels and realizing increased revenue from these channels; changes in client spending and saving habits; our ability to attract and retain key employees and executives; our ability to successfully execute our strategies and complete and integrate acquisitions and joint ventures; and our ability to anticipate and manage the risks associated with these factors. This list is not exhaustive of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Any forward-looking statements contained in this presentation represent the views of management only as of the date hereof and are presented for the purpose of assisting our shareholders and financial analysts in understanding our financial position, objectives and priorities and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statement that is contained in this presentation or in other communications except as required by law. Investor Relations contacts: John Ferren, Senior Vice-President 416 861-5743 Investor Relations Fax Number 416 980-5028 Visit the Investor Relations section at www.cibc.com
3 Our Stock & Our Company (1) CIBC is a leading Canadian-based global financial institution with a client-focused strategy that creates value for our stakeholders. OUR STOCK CM SYMBOL NYSE/ TSX EXCHANGE $36.1B MARKET CAP 1.8M SHARES/DAY (3) Aa3, A+, AA- DEBT RATINGS 5.0% YIELD OUR COMPANY (3) ~11M CLIENTS +1,100 BRANCHES +43K EMPLOYEES $14.5B REVENUE $3.9B NET INCOME $479B TOTAL ASSETS (1) Presented under IFRS basis. Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders. As of January 31, 2016 (3) Last 12 months as of January 31, 2016
2016 Strategy Corporate Objectives 4 Strategy Objectives Our Goal Innovating for the Future Adopting technology to enhance the client experience Simplifying our Bank Improving process efficiencies for our clients and for our teams Reshape the way our clients bank and transact with CIBC Unlock value for reinvestment A strong, innovative, relationshiporiented bank Focusing on our Clients Culture focused on the needs of our clients and on being advocates for our clients Deepening client relationships
5 Our Business Segments (LTM as of Jan. 31, 2016; Adjusted Net Income of $3.9B) (1) 66% - Retail & Business Banking 24% - Capital Markets 14% - Wealth Management -4% - Corporate & Other 14% -4% 24% 66% 1) Results are adjusted for items of note.
6 Strong Performance Diluted Adjusted Earnings / Share (1) ($) Basel III Common Equity Ratio (%) 5.0% 10.8 7.57 7.98 8.65 8.94 9.45 9.64 10.3 9.9 10.3 10.6 9.9 9.4 9.3 2011 2012 2013 2013 CM Peer Average (1) Presented under IFRS basis. Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders. Last twelve months as of January 31, 2016
7 Attractive returns to shareholders (1) Adjusted Return on Equity (%) Dividend Yield (%) 22.8 22.9 18.5 20.9 17.2 16.9 19.9 15.7 19.0 14.3 4.6 4.3 4.3 3.9 3.8 3.7 4.3 4.3 5.0 4.6 2012 2013 2014 2015 Q1 16 2012 2013 2014 2015 Q1 16 CM Peer Average CM Peer Average (1) Presented under IFRS basis. Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders.
Disciplined Capital Deployment Reinvestment / Return to Shareholders 8 Cash Earnings $3.9B LTM (1) Organic Growth Acquisitions Return to Shareholders High priority Focused on operational investment Deeper client relationships Selective acquisitions to support strategic priorities Consistent with defined risk appetite Moving to higher end of 40-50% dividend payout ratio Share repurchase program in place (up to 2% of outstanding) Strong Capital Generation flexibility (1) Last twelve months as of January 31, 2016
9 Retail & Business Banking Delivering a better experience for our clients Strategic Objectives: ENHANCING CLIENT EXPERIENCE ACCELERATING PROFITABLE REVENUE GROWTH Our Strategy to Win: MODERN CONVENIENCE BANKING Easy Personalized Flexible Growth Accelerators: STRATEGIC RELATIONSHIPS INNOVATION
10 Retail & Business Banking: Key Priorities Delivering on consumers preferences for a banking experience that is easy, personalized and flexible KEY PRIORITIES OBJECTIVE 1 Easy Streamline / simplify / automate processes Digitization of information Product & documentation simplification Improve market position 2 Personalized 360 view of client Differentiated experience based on client value and preferences Over-index growth from Mass Affluent and Commercial Banking Differentiated position in market Leadership in Mass Affluent 3 Flexible Drive digital sales growth Enhance self-serve capabilities Channel integration Payments innovation Leadership in emerging channels and banking innovation
Re t a i l a n d B u s i n e s s B a n k i n g Making good progress (1) 11 Adjusted Net Income ($ billions) Deposits ($ billions) 0.04 2.38 2.5 2.6 ex Aero Aero 163 172 175 Interest Earning Assets ($ billions) Loan Loss Ratio (%) 220 232 236 0.31 0.28 0.27 (1) Presented under IFRS basis. Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders. Last Twelve Months.
12 Capital Markets: Key Priorities Developing deep client relationships in Canada, growing execution capabilities in the U.S., and creating innovative solutions for Retail and Wealth clients. KEY PRIORITIES OBJECTIVE 1 Client Leadership in Canada Continue to develop deep client relationships Focus on eliminating platform gaps Build core Canadian Commerce activities Consistent, sustainable earnings 2 Client Capabilities Outside of Canada Extend core business North American energy & infrastructure build out Higher long-term growth & diversification 3 Collaboration & Innovation Across CIBC Enterprise-wide client management Align Private Banking & Corporate contacts Investments in cash management & other deposit gathering initiatives New revenue & relationship opportunities
C apital Markets Making good progress (1) 13 Adjusted Net Income Adjusted Efficiency Ratio ($ millions) (%) 965 946 50.8 51.4 913 49.9 Average Loans and Acceptances Average Value at Risk ($ billions) ($ millions) 24.4 29.0 30.3 3.5 4.0 4.1 (1) Presented under IFRS basis. Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders. Last Twelve Months.
14 Wealth Management: Key Priorities Capitalizing on client demand shifts, enhancing client experience, and advancing CIBC s overall growth, diversification and funding objectives. KEY PRIORITIES OBJECTIVE 1 Enhance Client Experience Elevate our integrated Wealth offer Continue fee-based conversion Enhance investment capabilities Improve and differentiate market position 2 Attract New Clients Attract net new High Net Worth clients Grow self-directed business Elevate Asset Management Organic growth 3 Strategic US Acquisitions Grow earnings contributions to >15% Target US Private Banking, Wealth Management, Asset Management Inorganic growth
Wealth Management Making good progress (1) 15 Adjusted Net Income Contribution to CIBC s Earnings ($ millions) (%) 536 526 13 14 14 486 Mutual Funds Assets Under Administration ($ billions) ($ billions) 305 300 84.2 83.4 289 77 2014 2015 Q1 16 2014 2015 Q1 16 (1) Presented under IFRS basis. Non-GAAP measures which exclude items of note as referenced in our quarterly Report to Shareholders. Last Twelve Months.
16 Summary Retail & Business Repositioned to focus on client relationships to accelerate profitable revenue growth and enhance the client experience Wealth Management Positioned for organic growth and strategic acquisitions of US private banking and wealth management assets Capital Markets De-risked with plans to grow with our clients global needs for lending, advisory services and capital markets products Industry leading Return on Equity, Capital Strength, and Dividend Yield Committed to delivering sustainable shareholder value
17 CIBC Contacts JOHN FERREN, SENIOR VICE-PRESIDENT Email: John.Ferren@cibc.com Phone: +1 416-861-5743 SELL-SIDE ANALYSTS, CONTACT: JASON PATCHETT, SENIOR DIRECTOR Email: Jason.Patchett@cibc.com Phone: +1 416-980-8691 INSTITUTIONAL INVESTORS, CONTACT: ALICE DUNNING, SENIOR DIRECTOR Email: Alice.Dunning@cibc.com Phone: +1 416-861-8870