Moving CIBC Forward December 2005

Transcription

1 Moving CIBC Forward INVESTOR PRESENTATION Information disclosed within this presentation is current through October 31, 2005, unless otherwise indicated A Note About 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 Canadian securities regulators or the U.S. Securities and Exchange Commission and in other communications. These statements include, but are not limited to, statements about the operations, business lines, financial condition, risk management, priorities, targets, ongoing objectives, strategies and outlook of CIBC for 2006 and subsequent periods. Forwardlooking statements are typically identified by the words believe, expect, anticipate, intend, estimate 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 CIBC s control, affect the operations, performance and results of CIBC and its business lines, and could cause actual results to differ materially from the expectations expressed in any of CIBC s forward-looking statements. These factors include: legislative or regulatory developments in the jurisdictions where CIBC operates, including developments in Canadian laws regulating financial institutions and U.S. regulatory changes affecting foreign companies listed on a U.S. exchange; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions; the resolution of legal proceedings and related matters; the effect of applying future accounting changes; changes in tax laws; political conditions and developments; the possible effect on CIBC s business of international conflicts and the war on terror; acts of God; reliance on third parties to provide components of CIBC s business infrastructure; the accuracy and completeness of information provided to CIBC by clients and counterparties; intensifying competition from established competitors and new entrants in the financial services industry; technological change; global capital market activity; interest rate fluctuations; currency value fluctuations; general economic conditions worldwide, as well as in Canada, the U.S. and other countries where CIBC has operations; changes in market rates and prices which may adversely affect the value of financial products; CIBC s 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; and CIBC s ability to anticipate and manage the risks associated with these factors. 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 readers should not place undue reliance on CIBC s forward-looking statements. CIBC does not undertake to update any forward-looking statement that is contained in this presentation or other communications. 2 1

2 Presentation Outline Investing in Canada Investing in the Banking Sector Investing in CIBC History of sustainable returns to shareholders Financial Summary Key business priorities 3 The Canadian Economy High relative returns Since October , S&P/TSX Composite Index has outperformed the S&P 500 by 26.0% Sustained Economic Growth Over Past Several Years Stable real GDP growth (2 4%) Steady growth in consumer spending (2-4%) Near record low unemployment rate (6-8%) Modest inflation (1-2%) Sound Financial Management Eight consecutive years of Government surplus Only G7 country to record a surplus in 2004, and expected to continue to be the only G-7 country to post government surplus in 2005 and 2006 Debt to GDP ratio is the lowest among G7 countries 4 2

3 The Canadian Banking Industry Historically high multiples reflect solid fundamentals Bank dividend to long bond yields remain high vs. historical levels (banks are inexpensive) Sustainable earnings growth (5-year CAGR 9%) High ROEs (5-year average 15%) Lower risk profile Diversification into higher multiple wealth management business Few alternatives in Canada for high liquidity, yield and growth potential Favourable credit environment Prolonged cyclically low interest rates (5-year average BoC target rate: 3.0%) Personal and corporate bankruptcies remain at normal levels Strong relative returns Canadian Banks have outperformed the S&P/TSX Composite and major international bank indices over the past 5 years 5 Recognition for Sustainability CIBC included on the Dow Jones Sustainability Index for 4th consecutive year in 2005 Top 10% of global sustainability-driven large-cap companies Only 1 of 2 Canadian Banks to be included 260 DJ Sustainability Index vs. DJ World Index (Ten years ended October 31, 2005) Index 10-Year Price Appreciation DJ Sustainability 92% DJ World 76% DJ World Index DJ Sustainability Index 6 3

4 Sustainable Returns to Shareholders CIBC s dividends have increased by more than 100% over the past 5 years Dividend payout ratio objective is 40-50% CIBC Quarterly Dividends per Share (annualized) $2.60 $2.20 Growth 106% $1.80 $1.40 $1.00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q Sustainable Returns to Shareholders CIBC has repurchased 57.2MM shares for consideration of $3.6B over the past 5 years Shares Repurchased (MM)

5 Investing in CIBC - Financial Summary F2005 Market capitalization $24.1B Closing share price: $72.20 Market to book 2.9x Tier 1 capital 8.5% Total capital 12.7% AUA $967B AUM $71B ROE (1.6)% (1) Efficiency ratio (TEB) 85.6% (1)(2) Total Assets $280B Net Interest Margin 1.71% Net Impaired Loans as a % of Loans: 0.2% $217 MM unrealized corporate equity gains (1) These figures are affected by Items of Note. For further details, see Items of Note, Slides 6 and 10 of the CIBC Fourth Quarter Investor Presentation dated December 1, 2005 available on (2) These ratios are non-gaap financial measures. CIBC believes that these non-gaap financial measures provide a fuller understanding of operations. Investors may find these non-gaap financial measures useful in analyzing financial performance. For further details, see Slide Business Priorities Generate Consistent Returns over the Long Term Maintain Business Strength Improve Productivity Build Balance Sheet Strength 10 5

6 Putting Clients First CIBC Imperial Service CIBC Wood Gundy CIBC Small Business CIBC Private Wealth Management CIBC Personal Banking CIBC World Markets 11 Retail Markets Strategy Leverage our Affluent Client Leadership Extend our CIBC Imperial Service offer to more of our clients Increase Competitiveness in our Core Business Focus on relationship-based approach to satisfy more of our clients financial needs Operational Effectiveness Enhance overall quality and consistency of service delivery Increase productivity Improve credit quality 12 6

7 Retail Markets Product strength through multi-channel distribution Mortgages Administered ($B) Cards Loans Administered ($B) #1 in Purchase Volumes Market Share 27.7% 13 Wealth Management Strategy High-Performing Organization Institutional Quality for Investors One-Firm Approach to Maximize Share Retain and attract top Investment Advisors and Portfolio Managers Promote a highperforming culture that encourages collaboration within Wealth Develop competitively priced, marketleading investment solutions Deliver alpha with strong investment performance Leverage the CIBC franchise: Individual relationships through Retail Markets Institutional relationships through World Markets 14 7

8 Wealth Management Full Service Brokerage Leadership AUA CAGR of 10% since 2002 $83B $92B $101B $109B Assets Under Administration 15 CIBC World Markets CIBC s Wholesale Operations Client Proprietary Institutional Corporate Commercial Advisory Credit Capital Markets Canada United States International 16 8

9 CIBC World Markets - Strategies and Achievements What we ve done Reduced economic capital Reduced credit capital Reduced Merchant Banking Where we are Canadian market leader Targeted U.S. focus Enhanced governance Where we re going Strengthen core client base Maintain governance discipline Deliver high quality returns 17 Canadian Surveys and Statistics Canadian Market Leader Leading Underwriter (1) #1 in equity issues every year since 2000 Leader in Research (2) Maintained #1 position in Fixed Income research every year since 1998 Leader in service quality (2) Ranked #1 in overall equity sales, research and trading quality Leader in Mergers & Acquisitions (1) #1 advisor every year since 2001 (1) Source: Fiscal Year League Tables (2) Source: Independent surveys 18 9

10 Sustainable Returns to Shareholders Total Shareholder Return since October 31, % 75.5% 50.0 % % S&P/TSX Banks Index S&P/TSX Composite Index CIBC 19 For What Matters Critical value drivers Client satisfaction Employee commitment Continued risk management Meaningful contribution to our communities Financial transparency Good governance 20 10

11 Notes to Users Performance measurement CIBC uses a number of financial measures to assess the performance of our lines of business. Some measures are calculated in accordance with GAAP, while other measures do not have standardized calculations under GAAP and, accordingly, these measures described below, may not be comparable to similar measures used by other companies. This document references the following non-gaap measures: Economic capital Economic capital provides the financial framework to understand the returns of each line of business, commensurate with the risk taken. Economic capital is based upon an estimate of the equity capital required to protect the business lines from future potential adverse economic scenarios that would result in significant losses. It is comprised of credit, market, operational and strategic risk capital. The capital methodologies employed quantify the level of risk within products, clients, and business lines, as required. The difference between CIBC total equity capital and economic capital allocated to the business lines is held in Corporate and Other. From time to time, CIBC's economic capital model may be enhanced as part of the risk measurement process and these changes are made prospectively. There is no comparable GAAP measure for economic capital. Net interest income, taxable equivalent basis (TEB) We adjust net interest income to reflect tax-exempt income on an equivalent before-tax basis. This measure enables comparability of net interest income arising from both taxable and tax-exempt sources. Net interest income (TEB) is used to calculate the efficiency ratio, trading revenue, net interest margin and net interest margin on average interest-earning assets, all on a taxable equivalent basis (TEB). Management believes these measures permit uniform measurement, which enables users of our financial information to make comparisons more readily 21 Contact Information Investor Relations contacts: John Ferren, CA, CFA, Vice-President (416) Rachel Gauci, Director (416) Investor Relations Fax Number (416) Visit us in the Investor Relations section at