TORONTO, May 28, 2015 /CNW/ - CIBC (TSX: CM) (NYSE:
CM) today announced its financial results for the second quarter
ended April 30, 2015.
Second quarter highlights
- Reported net income was $911
million, compared with $306
million for the second quarter a year ago, and $923 million for the prior quarter.
- Adjusted net income(1) was $924 million, compared with $887 million for the second quarter a year ago,
and $956 million for the prior
quarter.
- Reported diluted earnings per share (EPS) was $2.25, compared with $0.73 for the second quarter a year ago, and
$2.28 for the prior quarter.
- Adjusted diluted EPS(1) was $2.28, compared with $2.17 for the second quarter a year ago, and
$2.36 for the prior quarter.
- Reported return on common shareholders' equity (ROE) was
19.9% and adjusted ROE(1) was 20.2%.
"We delivered strong results in the second quarter across all
business lines," says Victor G.
Dodig, CIBC President and Chief Executive Officer. "We
continued to execute well on our client-focused strategy to build a
strong, innovative, relationship-oriented bank that delivers
consistent and sustainable earnings growth."
Results for the second quarter of 2015 were affected by the
following items of note aggregating to a negative impact of
$0.03 per share:
- $10 million ($8 million after-tax) amortization of intangible
assets; and
- $8 million ($5 million after-tax) loss from the structured
credit run-off business.
CIBC's Basel III Common Equity Tier 1 ratio at April 30, 2015 was 10.8%, and our Tier 1 and
Total capital ratios were 12.6% and 15.3%, respectively, on an
all-in basis compared with Basel III Common Equity Tier 1 ratio of
10.3%, Tier 1 capital ratio of 12.1% and Total capital ratio of
15.0% in the prior quarter. At the end of this quarter, CIBC's
Basel III Leverage ratio was 3.9% on an all-in basis.
CIBC announced a quarterly dividend increase of 3 cents per common share to $1.09 per share.
Core business performance
Retail and Business Banking reported net income of
$583 million for the second quarter,
up $37 million or 7% from the second
quarter a year ago. Adjusting for items of note, adjusted net
income(1) was $584 million, up $21 million or 4%, primarily due to higher
revenue, partially offset by higher expenses and loan losses.
Revenue was up in both Personal and Business banking as a result of
solid volume growth and higher fee revenue.
During the second quarter of 2015, Retail and Business Banking
continued to make progress against our objectives of accelerating
profitable revenue growth and enhancing the client experience:
- We launched the new CIBC Mobile Banking App for Apple Watch,
furthering CIBC's innovation leadership for our clients;
- CIBC introduced a new CIBC Telus co-branded rewards card,
strengthening our credit card portfolio and providing more options
for our clients; and
- We announced a partnership with MaRS Discovery District to
create a new corporate innovation hub and join MaRS' new FinTech
cluster, continuing our focus on developing the next wave of
banking innovations for our clients.
Subsequent to the end of the quarter, CIBC was recognized for
continued leadership in mobile banking, sharing the top overall
score among the five largest Canadian banks in the Forrester
Research Mobile Banking Benchmark.
Wealth Management reported net income of $129 million for the second quarter, up
$12 million or 10% from the second
quarter a year ago. Adjusting for items of note, adjusted net
income(1) was $134
million, up $13 million or
11%.
Revenue of $615 million was up
$67 million or 12%, primarily due to
higher assets under management (AUM) driven by market appreciation
and strong net sales of long-term mutual funds.
During the second quarter of 2015, Wealth Management continued
its progress in support of our strategic priority to build our
wealth management platform:
- CIBC Asset Management achieved record long-term mutual fund net
sales in the second quarter of $2.5
billion and total year-to-date sales of $3.9 billion;
- CIBC Investor's Edge saw account openings rise 50% year over
year on strategic client offers, including $6.95 online equity trades and commission-free
exchange traded fund trading during this RRSP season; and
- Atlantic Trust, our U.S. private wealth management business,
was named Best Multi-Family Office (National) at the annual Family
Wealth Report Awards and was recognized for excellence in
investments for the fourth straight year by the Private Asset
Management Awards.
Wholesale Banking reported net income of $250 million for the second quarter, up
$37 million or 17% from the second
quarter a year ago. Excluding items of note, adjusted net
income(1) was $255
million, up $27 million or
12%, primarily due to higher revenue from commodities and foreign
exchange trading, and higher underwriting and advisory
activity.
As a leading wholesale bank in Canada and active in core Canadian industries
in the rest of the world, Wholesale Banking acted as:
- Co-lead arranger and co-underwriter for a $1.8 billion and US$593
million senior secured credit facility, in addition to joint
bookrunner on a $950 million bought
deal of subscription receipts and extendible convertible debentures
in support of DH Corporation's acquisition of Fundtech;
- Financial advisor to Veresen on the formation of Veresen
Midstream Limited Partnership, a joint venture with KKR, and on the
acquisition by the joint venture of certain natural gas assets from
Encana and the Cutbank Ridge Partnership for approximately
$600 million; and
- Joint bookrunner on a $750
million issue of 10-year investment grade bonds for Husky
Energy Inc.
(1) |
|
For additional information, see the "Non-GAAP measures"
section. |
Credit quality
Provision for credit losses of $197
million was down $133 million
or 40% from the same quarter last year. Excluding items of note in
the prior year quarter, the provision for credit losses increased
by $12 million largely due to higher
losses in the business lending portfolio and higher bankruptcies in
the personal lending portfolio. Compared with the prior quarter,
provision for credit losses was up $10
million or 5%, mainly due to higher bankruptcies in the card
and personal lending portfolios and higher losses in the business
lending portfolio, partly offset by lower losses in our U.S. real
estate finance portfolio.
Non-GAAP measures
We use a number of financial measures to assess the performance of
our business lines. Some measures are calculated in accordance with
GAAP (IFRS), while other measures do not have a standardized
meaning under GAAP, and accordingly, these measures may not be
comparable to similar measures used by other companies. Investors
may find these non-GAAP measures useful in analyzing financial
performance. For a more detailed discussion on our non-GAAP
measures, see page 13 of our 2014 Annual Report. The following
table provides a reconciliation of non-GAAP to GAAP measures
related to CIBC on a consolidated basis.
|
|
|
|
|
|
|
|
As at or for the
three |
|
|
|
As at or for the
six |
|
|
|
|
|
|
|
|
|
months ended |
|
|
|
months ended |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
2015 |
|
|
|
2014 |
|
$ millions |
|
|
|
|
|
|
|
|
Apr. 30 |
|
|
|
Jan.
31 |
|
|
|
Apr.
30 |
|
|
|
|
Apr.
30 |
|
|
|
Apr.
30 |
|
Reported and adjusted diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported net income attributable to diluted common
shareholders |
|
|
|
A |
|
|
|
$ |
895 |
|
|
$ |
907 |
|
|
$ |
292 |
|
|
|
$ |
1,802 |
|
|
$ |
1,441 |
|
After-tax impact of items of note
(1) |
|
|
|
|
|
|
|
|
13 |
|
|
|
33 |
|
|
|
581 |
|
|
|
|
46 |
|
|
|
355 |
|
After-tax impact of
items of note on non-controlling interests |
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
(10) |
|
|
|
|
- |
|
|
|
(10) |
|
Adjusted net income
attributable to diluted common shareholders (2) |
|
|
|
B |
|
|
|
$ |
908 |
|
|
$ |
940 |
|
|
$ |
863 |
|
|
|
$ |
1,848 |
|
|
$ |
1,786 |
|
Diluted
weighted-average common shares outstanding (thousands) |
|
|
|
C |
|
|
|
|
397,785 |
|
|
|
397,887 |
|
|
|
398,519 |
|
|
|
|
397,833 |
|
|
|
398,861 |
|
Reported diluted EPS ($) |
|
|
|
A/C |
|
|
|
$ |
2.25 |
|
|
$ |
2.28 |
|
|
$ |
0.73 |
|
|
|
$ |
4.53 |
|
|
$ |
3.61 |
|
Adjusted diluted EPS
($) (2) |
|
|
|
B/C |
|
|
|
|
2.28 |
|
|
|
2.36 |
|
|
|
2.17 |
|
|
|
|
4.64 |
|
|
|
4.48 |
|
Reported and adjusted return on
common shareholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shareholders' equity |
|
|
|
D |
|
|
|
$ |
18,437 |
|
|
$ |
18,123 |
|
|
$ |
17,173 |
|
|
|
$ |
18,277 |
|
|
$ |
16,872 |
|
Reported return on common shareholders'
equity |
|
|
|
A/D |
|
|
|
|
19.9 |
% |
|
|
19.9 |
% |
|
|
7.0 |
% |
|
|
|
19.9 |
% |
|
|
17.2 |
% |
Adjusted return on
common shareholders' equity (2) |
|
|
|
B/D |
|
|
|
|
20.2 |
% |
|
|
20.6 |
% |
|
|
20.6 |
% |
|
|
|
20.4 |
% |
|
|
21.3 |
% |
|
|
|
|
|
|
|
Retail and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business |
|
|
|
Wealth |
|
|
|
Wholesale |
|
|
|
Corporate |
|
|
|
|
|
CIBC |
$ millions, for the
three months ended |
|
|
|
|
|
Banking |
|
|
Management |
|
|
|
Banking |
|
|
|
and Other |
|
|
|
|
|
Total |
2015 |
Reported net income
(loss) |
|
|
|
|
$ |
583 |
|
|
$ |
129 |
|
|
$ |
250 |
|
|
$ |
(51) |
|
|
$ |
|
|
911 |
Apr. 30 |
After-tax impact of items of
note (1) |
|
|
|
|
|
1 |
|
|
|
5 |
|
|
|
5 |
|
|
|
2 |
|
|
|
|
|
13 |
|
Adjusted net income (loss)
(2) |
|
|
|
|
$ |
584 |
|
|
$ |
134 |
|
|
$ |
255 |
|
|
$ |
(49) |
|
|
$ |
|
|
924 |
2015 |
Reported net income (loss) |
|
|
|
|
$ |
650 |
|
|
$ |
128 |
|
|
$ |
275 |
|
|
$ |
(130) |
|
|
$ |
|
|
923 |
Jan. 31 |
After-tax impact of items of note
(1) |
|
|
|
|
|
(32) |
|
|
|
4 |
|
|
|
(4) |
|
|
|
65 |
|
|
|
|
|
33 |
|
Adjusted net income (loss)
(2) |
|
|
|
|
$ |
618 |
|
|
$ |
132 |
|
|
$ |
271 |
|
|
$ |
(65) |
|
|
$ |
|
|
956 |
2014 |
Reported net income (loss) |
|
|
|
|
$ |
546 |
|
|
$ |
117 |
|
|
$ |
213 |
|
|
$ |
(570) |
|
|
$ |
|
|
306 |
Apr. 30 |
After-tax impact of items of note
(1) |
|
|
|
|
|
17 |
|
|
|
4 |
|
|
|
15 |
|
|
|
545 |
|
|
|
|
|
581 |
|
Adjusted net income (loss)
(2) |
|
|
|
|
$ |
563 |
|
|
$ |
121 |
|
|
$ |
228 |
|
|
$ |
(25) |
|
|
$ |
|
|
887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ millions, for the
six months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 |
Reported net income
(loss) |
|
|
|
|
$ |
1,233 |
|
|
$ |
257 |
|
|
$ |
525 |
|
|
$ |
(181) |
|
|
$ |
|
|
1,834 |
Apr. 30 |
After-tax impact of items of
note (1) |
|
|
|
|
|
(31) |
|
|
|
9 |
|
|
|
1 |
|
|
|
67 |
|
|
|
|
|
46 |
|
Adjusted net income (loss)
(2) |
|
|
|
|
$ |
1,202 |
|
|
$ |
266 |
|
|
$ |
526 |
|
|
$ |
(114) |
|
|
$ |
|
|
1,880 |
2014 |
Reported net income (loss) |
|
|
|
|
$ |
1,292 |
|
|
$ |
231 |
|
|
$ |
477 |
|
|
$ |
(517) |
|
|
$ |
|
|
1,483 |
Apr. 30 |
After-tax impact of items of note
(1) |
|
|
|
|
|
(86) |
|
|
|
7 |
|
|
|
(34) |
|
|
|
468 |
|
|
|
|
|
355 |
|
Adjusted net income
(2) |
|
|
|
|
$ |
1,206 |
|
|
$ |
238 |
|
|
$ |
443 |
|
|
$ |
(49) |
|
|
$ |
|
|
1,838 |
(1) |
|
Reflects impact of items of note
under "Financial results" section. |
(2) |
|
Non-GAAP measure. |
Items of note |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at or for the three |
|
|
As at or for the
six |
|
|
|
|
months
ending |
|
|
months ending |
|
|
|
|
|
2015 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
$ millions |
|
|
|
|
Apr. 30 |
|
|
|
Jan. 31 |
|
|
|
Apr. 30 |
|
|
|
Apr. 30 |
|
|
|
Apr. 30 |
Gain arising from accounting adjustments on credit
card-related balance sheet amounts |
|
|
|
$ |
- |
|
|
$ |
(46) |
|
|
$ |
- |
|
|
$ |
(46) |
|
|
$ |
- |
Gain on sale of an investment in our merchant
banking portfolio |
|
|
|
|
- |
|
|
|
(23) |
|
|
|
- |
|
|
|
(23) |
|
|
|
- |
Gain in respect of the Aeroplan transactions with
Aimia Canada Inc. and TD, net of costs
relating to the development of our enhanced travel
rewards program |
|
|
|
|
- |
|
|
|
- |
|
|
|
22 |
|
|
|
- |
|
|
|
(217) |
Loss from the structured credit run-off
business |
|
|
|
|
8 |
|
|
|
12 |
|
|
|
4 |
|
|
|
20 |
|
|
|
15 |
Amortization of intangible assets |
|
|
|
|
10 |
|
|
|
11 |
|
|
|
9 |
|
|
|
21 |
|
|
|
17 |
Decrease in collective allowance
(1) recognized in Corporate and Other |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(26) |
Charge resulting from operational
changes in the processing of write-offs in Retail and
Business Banking |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
26 |
Gain in our exited European leveraged finance
portfolio |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(78) |
Loan losses in our exited U.S. leveraged finance
portfolio |
|
|
|
|
- |
|
|
|
- |
|
|
|
22 |
|
|
|
- |
|
|
|
22 |
Restructuring charges related to ongoing efforts
to align resources to better serve our clients |
|
|
|
|
- |
|
|
|
85 |
|
|
|
- |
|
|
|
85 |
|
|
|
- |
Charges relating to CIBC
FirstCaribbean |
|
|
|
|
- |
|
|
|
- |
|
|
|
543 |
|
|
|
- |
|
|
|
543 |
Pre-tax impact of items of note on net income |
|
|
|
|
18 |
|
|
|
39 |
|
|
|
600 |
|
|
|
57 |
|
|
|
302 |
Income tax impact
on above items of note |
|
|
|
|
(5) |
|
|
|
(6) |
|
|
|
(19) |
|
|
|
(11) |
|
|
|
53 |
After-tax impact of items of note on net
income |
|
|
|
|
13 |
|
|
|
33 |
|
|
|
581 |
|
|
|
46 |
|
|
|
355 |
After-tax impact
of items of note on non-controlling interests |
|
|
|
|
- |
|
|
|
- |
|
|
|
10 |
|
|
|
- |
|
|
|
10 |
After-tax impact of
items of note on net income attributable to common
shareholders |
|
|
|
$ |
13 |
|
|
$ |
33 |
|
|
$ |
571 |
|
|
$ |
46 |
|
|
$ |
345 |
(1) |
|
Relates to the collective allowance, except for
(i) residential mortgages greater than 90 days delinquent; (ii)
personal loans and scored small business
loans greater than 30 days delinquent; and (iii) net write-offs for
the cards portfolio, which are all reported in the respective
SBUs. |
Making a difference in our Communities
CIBC is committed to building a bank that is relevant to our
clients, our team members and communities, and supports causes that
matter to them. During the quarter we:
- Marked International Women's Day with a new $500,000 donation to the Canadian Women's
Foundation to help women living in poverty gain the skills they
need to succeed; and
- Celebrated the 100-day countdowns to the TORONTO 2015 Pan Am and Parapan Am Games, the
largest international multi-sport event ever to be held in
Canada, as well as the opening of
the CIBC Pan Am/Parapan Am Athletes' Village.
During the quarter, CIBC was named:
- One of the Best Workplaces in Canada;
- One of Canada's Best Diversity
Employers; and
- One of Canada's Top Employers
for Young People.
(The board of directors of CIBC reviewed this news release prior
to it being issued. CIBC's controls and procedures support the
ability of the President and Chief Executive Officer and the Chief
Financial Officer of CIBC to certify CIBC's second quarter
financial report and controls and procedures. CIBC's CEO and CFO
will voluntarily provide to the Securities and Exchange Commission
a certification relating to CIBC's second quarter financial
information, including the unaudited interim consolidated financial
statements, and will provide the same certification to the Canadian
Securities Administrators).
All amounts are in Canadian dollars and are based on financial
statements prepared in compliance with International Accounting
Standard 34 Interim Financial Reporting, unless otherwise
noted.
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 news release, 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 in the "Core business performance"
and "Making a difference in our Communities" sections of this news
release, and the Management's Discussion and Analysis in our 2014
Annual Report under the heading "Financial performance overview -
Outlook for calendar year 2015" and other statements about our
operations, business lines, financial condition, risk management,
priorities, targets, ongoing objectives, strategies and outlook for
calendar year 2015 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, including
the economic assumptions set out in the "Financial performance
overview - Outlook for calendar year 2015" section of our 2014
Annual Report, as updated by quarterly reports, 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. Additional information about these
factors can be found in the "Management of risk" section starting
on page 40 of our 2014 Annual Report. Any forward-looking
statements contained in this news release 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 news release or in other
communications except as required by law.
Conference Call/Webcast
The conference call will be held at 8:30
a.m. (ET) and is available in English (416-340-2217, or
toll-free 1-877-405-9213, passcode 6272962#) and French
(514-861-2255, or toll-free 1-877-405-9213, passcode 1883806#).
Participants are asked to dial in 10 minutes before the call.
Immediately following the formal presentations, CIBC executives
will be available to answer questions.
A live audio webcast of the conference call will also be
available in English and French at
www.cibc.com/ca/investor-relations/quarterly-results.html.
Details of CIBC's fiscal 2015 second quarter results, as well as
a presentation to investors, will be available in English and
French at www.cibc.com, Investor Relations section, prior to the
conference call/webcast. We are not incorporating information
contained on the website in this news release.
A telephone replay will be available in English (905-694-9451 or
1-800-408-3053, passcode 6371479#) and French (514-861-2272 or
1-800-408-3053, passcode 8556162#) until 23:59 (ET) June 4, 2015. The audio webcast will be archived
at www.cibc.com/ca/investor-relations/quarterly-results.html.
About CIBC
CIBC is a leading Canadian-based global financial institution with
nearly 11 million personal banking and business clients. Through
our three major business units - Retail and Business Banking,
Wealth Management and Wholesale Banking - CIBC offers a full range
of products and services through its comprehensive electronic
banking network, branches and offices across Canada with offices in the United States and around the world. You
can find other news releases and information about CIBC in our
Media Centre on our corporate website at
www.cibc.com/ca/media-centre/.
SOURCE CIBC - Investor Relations