Management’s discussion and analysis |
2 |
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2 |
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2 | Our strategy | |
2 | Performance against objectives | |
5 |
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6 |
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6 | Year in review – 2021 | |
6 | Outlook for calendar year 2022 | |
7 |
CIBC 2021 |
|
1 |
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Management’s discussion and analysis |
• | Simplii Financial and CIBC Investor’s Edge, previously reported in Canadian Personal and Business Banking, are now part of the newly-created Direct Financial Services line of business in Capital Markets, along with certain other direct payment services that were previously in Capital Markets. This change was made to align with the mandates of the relevant strategic business units (SBUs). |
• | The financial results associated with U.S. treasury activities in U.S. Commercial Banking and Wealth Management are now included within Treasury in Corporate and Other. In addition, the transfer pricing methodology between U.S. Commercial Banking and Wealth Management and Treasury in Corporate and Other has been enhanced. Both changes align the treatment of U.S. Commercial Banking and Wealth Management with our other SBUs, and allow for better management of interest rate and liquidity risks. |
• | Further strengthening our Canadian consumer franchise; |
• | Maintaining and growing our resilient North American Commercial Banking, Wealth Management, and Capital Markets businesses; and |
• | Accelerating ongoing investments in growth initiatives. |
Earnings growth To assess our earnings growth, we monitor our earnings per share (EPS). Our target of 5% to 10% growth reflects a simple average of annual adjusted (1) EPS growth. In 2021, against a backdrop of an improving economic environment, year-over-year reported and adjusted(1) diluted EPS increased by 69% and 49%, respectively.Going forward, we are maintaining our target to deliver average annual adjusted (1) EPS growth of 5% to 10%. |
Reported diluted EPS ($) |
Adjusted diluted EPS (1) ($) |
(1) | Adjusted measures are non-GAAP measures. For additional information, see the “Non-GAAP measures” section. |
2 |
CIBC 2021 |
Management’s discussion and analysis |
Operating leverage Operating leverage, defined as the difference between the year-over-year percentage change in revenue and year-over-year percentage change in non-interest expenses, is a measure of the relative growth rates of revenue and expenses. In 2021, our reported and adjusted (1) operating leverage was 5.3% and 0.7%, respectively, compared with (4.0)% and (0.6)%, respectively in 2020.Going forward, our target is to deliver positive adjusted (1) operating leverage. |
Reported operating leverage (%) |
Adjusted operating leverage (1) (%) | ||
Profitability We have three metrics to measure profitability, including two shareholder value targets: 1. Return on common shareholders’ equity (ROE) ROE, defined as the ratio of net income to average (2) common shareholders’ equity, is a key measure of profitability. In 2021, our reported and adjusted(1) ROE were at 16.1% and 16.7%, respectively, compared with 10.0% and 11.7%, respectively, in 2020.Going forward, we will continue to target a strong adjusted (1) ROE of at least 15%. |
Reported return on common shareholders’ equity (%) |
Adjusted return on common shareholders’ equity (1) (%) | ||
2. Dividend payout ratio Dividend payout ratio is defined as the ratio of common share dividends paid as a percentage of net income after preferred share dividends, premium on preferred share redemptions, and distributions on other equity instruments. Our key criteria for considering dividend increases are our current level of payout relative to our target and our view on the sustainability of our current earnings level. In 2021, our reported and adjusted (1) dividend payout ratios were 41.8% and 40.3%, respectively, compared with 70.7% and 60.0%, respectively, in 2020. In response to the COVID-19 pandemic, effective March 2020, the Office of the Superintendent of Financial Institutions (OSFI) directed that all federally regulated financial institutions halt share buybacks and dividend increases until further notice. The temporary measure was lifted effective November 4, 2021.Going forward, we will continue to target an adjusted (1) dividend payout ratio of 40% to 50%. |
Reported dividend payout ratio (%) |
Adjusted dividend payout ratio (1) (%) |
3. Total shareholder return (TSR) TSR is the ultimate measure of shareholder value, and the output of delivering against the financial targets within our control. We have an objective to deliver a TSR that exceeds the industry average, which we have defined as the Standard & Poor’s (S&P)/Toronto Stock Exchange (TSX) Composite Banks Index, over a rolling five-year period. For the five years ended October 31, 2021, our TSR was 91.9% (2020: 27.7%), which was above the S&P/TSX Composite Banks Index return over the same period of 80.4%. |
Rolling five-year TSR (%) |
(1) | Adjusted measures are non-GAAP measures. For additional information, see the “Non-GAAP measures” section. |
(2) | Average balances are calculated as a weighted average of daily closing balances. |
CIBC 2021 |
|
3 |
|
Management’s discussion and analysis |
Balance sheet strength Maintaining a strong balance sheet is foundational to our long-term success. Our goal is to maintain strong capital and liquidity positions. We look to constantly balance our objectives of holding a prudent amount of excess capital for unexpected events and environmental uncertainties, investing in our core businesses, growing through acquisitions and returning capital to our shareholders. 1. Basel III Common Equity Tier 1 (CET1) ratio For the year ended October 31, 2021, our Basel III CET1 (1) ratio was 12.4%, compared with 12.1% in 2020, well above the current regulatory target set by OSFI of 10.5%.In response to the COVID-19 pandemic, effective March 2020, OSFI directed that all federally regulated financial institutions halt share buybacks and dividend increases until further notice. The temporary measure was lifted effective November 4, 2021. 2. Liquidity coverage ratio (LCR) Our ability to meet our financial obligations is measured through the LCR ratio. It measures unencumbered high-quality liquid assets (HQLA) that can be converted into cash to meet liquidity needs for a 30-calendar-day liquidity stress scenario. The LCR standard requires that, absent a situation of financial stress, the value of the ratio be no lower than 100%. For the quarter ended October 31, 2021, our three-month daily average LCR (1) was 127% compared to 145% for the same period last year. The decrease returns our LCR to pre-pandemic levels. |
CET1 ratio (%) Liquidity coverage ratio (%) |
(1) | CET1 is calculated pursuant to OSFI’s Capital Adequacy Requirements (CAR) Guideline and LCR is calculated pursuant to OSFI’s Liquidity Adequacy Requirements (LAR) Guideline, which are both based on Basel Committee on Banking Supervision (BCBS) standards. |
4 |
CIBC 2021 |
Management’s discussion and analysis |
As at or for the year ended October 31 | 2021 |
2020 | 2019 | 2018 | 2017 | |||||||||||||||||
Financial results |
||||||||||||||||||||||
Net interest income |
$ |
11,459 |
$ | 11,044 | $ | 10,551 | $ | 10,065 | $ | 8,977 | ||||||||||||
Non-interest income |
8,556 |
7,697 | 8,060 | 7,769 | 7,303 | |||||||||||||||||
Total revenue |
20,015 |
18,741 | 18,611 | 17,834 | 16,280 | |||||||||||||||||
Provision for credit losses |
158 |
2,489 | 1,286 | 870 | 829 | |||||||||||||||||
Non-interest expenses |
11,535 |
11,362 | 10,856 | 10,258 | 9,571 | |||||||||||||||||
Income before income taxes |
8,322 |
4,890 | 6,469 | 6,706 | 5,880 | |||||||||||||||||
Income taxes |
1,876 |
1,098 | 1,348 | 1,422 | 1,162 | |||||||||||||||||
Net income |
$ |
6,446 |
$ | 3,792 | $ | 5,121 | $ | 5,284 | $ | 4,718 | ||||||||||||
Net income attributable to non-controlling interests |
17 |
2 | 25 | 17 | 19 | |||||||||||||||||
Preferred shareholders and other equity instrument holders |
158 |
122 | 111 | 89 | 52 | |||||||||||||||||
Common shareholders |
6,271 |
3,668 | 4,985 | 5,178 | 4,647 | |||||||||||||||||
Net income attributable to equity shareholders |
$ |
6,429 |
$ | 3,790 | $ | 5,096 | $ | 5,267 | $ | 4,699 | ||||||||||||
Financial measures |
||||||||||||||||||||||
Reported efficiency ratio (1) |
57.6 |
% |
60.6 | % | 58.3 | % | 57.5 | % | 58.8 | % | ||||||||||||
Reported operating leverage (1) |
5.3 |
% |
(4.0 | )% | (1.5 | )% | 2.4 | % | 1.6 | % | ||||||||||||
Loan loss ratio (2) |
0.16 |
% |
0.26 | % | 0.29 | % | 0.26 | % | 0.25 | % | ||||||||||||
Reported return on common shareholders’ equity (1) |
16.1 |
% |
10.0 | % | 14.5 | % | 16.6 | % | 18.3 | % | ||||||||||||
Net interest margin (1) |
1.42 |
% |
1.50 | % | 1.65 | % | 1.68 | % | 1.66 | % | ||||||||||||
Net interest margin on average interest-earning assets (3)(4) |
1.59 |
% |
1.69 | % | 1.84 | % | 1.88 | % | 1.85 | % | ||||||||||||
Return on average assets (4)(5) |
0.80 |
% |
0.52 | % | 0.80 | % | 0.88 | % | 0.87 | % | ||||||||||||
Return on average interest-earning assets (3)(4)(5) |
0.89 |
% |
0.58 | % | 0.89 | % | 0.99 | % | 0.97 | % | ||||||||||||
Reported effective tax rate |
22.5 |
% |
22.5 | % | 20.8 | % | 21.2 | % | 19.8 | % | ||||||||||||
Common share information |
||||||||||||||||||||||
Per share ($) |
– basic earnings |
$ |
13.97 |
$ | 8.23 | $ | 11.22 | $ | 11.69 | $ | 11.26 | |||||||||||
– reported diluted earnings |
13.93 |
8.22 | 11.19 | 11.65 | 11.24 | |||||||||||||||||
– dividends |
5.84 |
5.82 | 5.60 | 5.32 | 5.08 | |||||||||||||||||
– book value (6) |
91.66 |
84.05 | 79.87 | 73.83 | 66.55 | |||||||||||||||||
Closing share price ($) |
150.17 |
99.38 | 112.31 | 113.68 | 113.56 | |||||||||||||||||
Shares outstanding (thousands) |
– weighted-average basic |
448,953 |
445,435 | 444,324 | 443,082 | 412,636 | ||||||||||||||||
– weighted-average diluted |
450,183 |
446,021 | 445,457 | 444,627 | 413,563 | |||||||||||||||||
– end of period |
450,828 |
447,085 | 445,342 | 442,826 | 439,313 | |||||||||||||||||
Market capitalization ($ millions) |
$ |
67,701 |
$ | 44,431 | $ | 50,016 | $ | 50,341 | $ | 49,888 | ||||||||||||
Value measures |
||||||||||||||||||||||
Total shareholder return |
58.03 |
% |
(5.90 | )% | 4.19 | % | 4.70 | % | 18.30 | % | ||||||||||||
Dividend yield (based on closing share price) |
3.9 |
% |
5.9 | % | 5.0 | % | 4.7 | % | 4.5 | % | ||||||||||||
Reported dividend payout ratio (1) |
41.8 |
% |
70.7 | % | 49.9 | % | 45.5 | % | 45.6 | % | ||||||||||||
Market value to book value ratio |
1.64 |
1.18 | 1.41 | 1.54 | 1.71 | |||||||||||||||||
Selected financial measures – adjusted (7) |
||||||||||||||||||||||
Adjusted efficiency ratio (8) |
55.4 |
% |
55.8 | % | 55.5 | % | 55.6 | % | 57.2 | % | ||||||||||||
Adjusted operating leverage (8) |
0.7 |
% |
(0.6 | )% | 0.2 | % | 3.2 | % | 1.6 | % | ||||||||||||
Adjusted return on common shareholders’ equity |
16.7 |
% |
11.7 | % | 15.4 | % | 17.4 | % | 18.1 | % | ||||||||||||
Adjusted effective tax rate |
22.7 |
% |
21.8 | % | 20.6 | % | 20.0 | % | 20.3 | % | ||||||||||||
Adjusted diluted earnings per share ($) |
$ |
14.47 |
$ | 9.69 | $ | 11.92 | $ | 12.21 | $ | 11.11 | ||||||||||||
Adjusted dividend payout ratio |
40.3 |
% |
60.0 | % | 46.9 | % | 43.4 | % | 46.2 | % | ||||||||||||
On- and off-balance sheet information |
||||||||||||||||||||||
Cash, deposits with banks and securities |
$ |
218,398 |
$ | 211,564 | $ | 138,669 | $ | 119,355 | $ | 107,571 | ||||||||||||
Loans and acceptances, net of allowance for credit losses |
462,879 |
416,388 | 398,108 | 381,661 | 365,558 | |||||||||||||||||
Total assets |
837,683 |
769,551 | 651,604 | 597,099 | 565,264 | |||||||||||||||||
Deposits |
621,158 |
570,740 | 485,712 | 461,015 | 439,706 | |||||||||||||||||
Common shareholders’ equity (1) |
41,323 |
37,579 | 35,569 | 32,693 | 29,238 | |||||||||||||||||
Average assets (4) |
809,621 |
735,492 | 639,716 | 598,441 | 542,365 | |||||||||||||||||
Average interest-earning assets (3)(4) |
721,686 |
654,142 | 572,677 | 536,059 | 485,837 | |||||||||||||||||
Average common shareholders’ equity (1)(4) |
38,881 |
36,792 | 34,467 | 31,184 | 25,393 | |||||||||||||||||
Assets under administration (AUA) (1)(9)(10)(11) |
2,963,221 |
2,364,005 | (8) |
2,423,240 | (8) |
2,303,962 | 2,192,947 | |||||||||||||||
Assets under management (AUM) (1)(10)(11) |
316,834 |
261,037 | (8) |
249,596 | (8) |
225,379 | 221,571 | |||||||||||||||
Balance sheet quality (All-in basis) and liquidity measures (12) |
||||||||||||||||||||||
Risk-weighted assets (RWA) ($ millions) |
||||||||||||||||||||||
Total RWA |
$ |
272,814 |
$ | 254,871 | $ | 239,863 | n/a | n/a | ||||||||||||||
CET1 capital RWA |
n/a |
n/a | n/a | $ | 216,144 | $ | 203,321 | |||||||||||||||
Tier 1 capital RWA |
n/a |
n/a | n/a | 216,303 | 203,321 | |||||||||||||||||
Total capital RWA |
n/a |
n/a | n/a | 216,462 | 203,321 | |||||||||||||||||
Capital ratios |
||||||||||||||||||||||
CET1 ratio (13) |
12.4 |
% |
12.1 | % | 11.6 | % | 11.4 | % | 10.6 | % | ||||||||||||
Tier 1 capital ratio (13) |
14.1 |
% |
13.6 | % | 12.9 | % | 12.9 | % | 12.1 | % | ||||||||||||
Total capital ratio (13) |
16.2 |
% |
16.1 | % | 15.0 | % | 14.9 | % | 13.8 | % | ||||||||||||
Leverage ratio |
4.7 |
% |
4.7 | % | 4.3 | % | 4.3 | % | 4.0 | % | ||||||||||||
LCR (14) |
127 |
% |
145 | % | 125 | % | 128 | % | 120 | % | ||||||||||||
Other information |
||||||||||||||||||||||
Full-time equivalent employees |
45,282 |
43,853 | 45,157 | 44,220 | 44,928 |
(1) | For additional information on the composition, see the “Glossary” section. |
(2) | The ratio is calculated as the provision for credit losses on impaired loans to average loans and acceptances, net of allowance for credit losses. |
(3) | Average interest-earning assets include interest-bearing deposits with banks, interest-bearing demand deposits with Bank of Canada, securities, cash collateral on securities borrowed, securities purchased under resale agreements, loans net of allowance for credit losses, and certain sublease-related assets. |
(4) | Average balances are calculated as a weighted average of daily closing balances. |
(5) | Net income expressed as a percentage of average assets or average interest-earning assets. |
(6) | Common shareholders’ equity divided by the number of common shares issued and outstanding at end of period. |
(7) | Adjusted measures are non-GAAP measures. Adjusted measures are calculated in the same manner as reported measures, except that financial information included in the calculation of adjusted measures is adjusted to exclude the impact of items of note. For additional information and a reconciliation of reported results to adjusted results, see the “Non-GAAP measures” section. |
(8) | Calculated on a taxable equivalent basis (TEB). |
(9) | Includes the full contract amount of AUA or custody under a 50/50 joint venture between CIBC and The Bank of New York Mellon of $2,341.1 billion as at October 31, 2021 (2020: $1,861.5 billion). |
(10) | AUM amounts are included in the amounts reported under AUA. |
(11) | Certain prior year information has been restated. |
(12) | RWA and our capital ratios are calculated pursuant to OSFI’s CAR Guideline, the leverage ratio is calculated pursuant to OSFI’s Leverage Requirements Guideline, and LCR is calculated pursuant to OSFI’s LAR Guideline, all of which are based on BCBS standards. For additional information, see the “Capital management” and “Liquidity risk” sections. |
(13) | Effective beginning in the second quarter of 2020, ratios reflect the expected credit loss (ECL) transitional arrangement announced by OSFI on March 27, 2020 in response to the onset of the COVID-19 pandemic. |
(14) | Average for the three months ended October 31 for each respective year. |
n/a | Not applicable. |
CIBC 2021 |
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5 |
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Management’s discussion and analysis |
6 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
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7 |
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Management’s discussion and analysis |
• | $125 million ($92 million after-tax) increase in legal provisions (Corporate and Other); |
• | $109 million ($80 million after-tax) charge related to the consolidation of our real estate portfolio (Corporate and Other); |
• | $79 million ($60 million after-tax) amortization of acquisition-related intangible assets ($50 million after-tax in U.S. Commercial Banking and Wealth Management and $10 million after-tax in Corporate and Other); and |
• | $12 million ($9 million after-tax) in transaction and integration-related costs (2) associated with the acquisition of the Canadian Costco credit card portfolio (Canadian Personal and Business Banking). |
• | $339 million ($250 million after-tax) restructuring charge primarily related to employee severance (Corporate and Other); |
• | $248 million ($248 million after-tax) goodwill impairment charges related to our controlling interest in CIBC FirstCaribbean of which $28 million was recognized in the second quarter and $220 million was recognized in the fourth quarter (Corporate and Other); |
• | $114 million ($84 million after-tax) charge related to the consolidation of our real estate portfolio (Corporate and Other); |
• | $105 million ($80 million after-tax) amortization of acquisition-related intangible assets ($6 million after-tax in Canadian Personal and Business Banking, $1 million after-tax in Canadian Commercial Banking and Wealth Management, $61 million after-tax in U.S. Commercial Banking and Wealth Management, and $12 million after-tax in Corporate and Other); |
• | $79 million ($58 million after-tax) gain as a result of plan amendments related to pension and other post-employment plans (Corporate and Other); and |
• | $70 million ($51 million after-tax) increase in legal provisions (Corporate and Other). |
(1) | Adjusted measures are non-GAAP measures. For additional information, see the “Non-GAAP measures” section. |
(2) | Transaction and integration costs are comprised of direct and incremental costs incurred as part of planning for and executing the integration of the Canadian Costco credit card portfolio, including enabling cross-sell opportunities, the upgrade and conversion of systems and processes, project management and communication costs. |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Average interest-earning assets |
$ |
721,686 |
$ | 654,142 | $ | 572,677 | ||||||
Net interest income |
11,459 |
11,044 | 10,551 | |||||||||
Net interest margin on average interest-earning assets |
1.59 |
% |
1.69 | % | 1.84 | % |
8 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Underwriting and advisory fees |
$ |
713 |
$ | 468 | $ | 475 | ||||||
Deposit and payment fees |
797 |
781 | 908 | |||||||||
Credit fees |
1,152 |
1,020 | 958 | |||||||||
Card fees |
460 |
410 | 458 | |||||||||
Investment management and custodial fees (1)(2) |
1,621 |
1,382 | 1,305 | |||||||||
Mutual fund fees (2) |
1,772 |
1,586 | 1,595 | |||||||||
Insurance fees, net of claims |
358 |
386 | 430 | |||||||||
Commissions on securities transactions |
426 |
362 | 313 | |||||||||
Gains (losses) from financial instruments measured/designated at fair value through profit or loss (FVTPL), net (3) |
607 |
694 | 761 | |||||||||
Gains (losses) from debt securities measured at fair value through other comprehensive income (FVOCI) and amortized cost, net |
90 |
9 | 34 | |||||||||
Foreign exchange other than trading |
276 |
234 | 304 | |||||||||
Income from equity-accounted associates and joint ventures (1) |
55 |
79 | 92 | |||||||||
Other |
229 |
286 | 427 | |||||||||
$ |
8,556 |
$ | 7,697 | $ | 8,060 |
(1) | Custodial fees directly recognized by CIBC are included in Investment management and custodial fees. Our proportionate share of the custodial fees from the joint ventures which CIBC has with The Bank of New York Mellon are included within Income from equity-accounted associates and joint ventures. |
(2) | Investment management fees and mutual fund fees are driven by various factors, including the amount of AUM. Investment management fees in our asset management and private wealth management businesses are generally driven by the amount of AUM, while investment management fees in our retail brokerage business are driven by a combination of the amount of AUA and, to a lesser extent, other factors not directly related to the amount of AUA (e.g., flat fees on a per account basis). |
(3) | Includes $87 million of loss (2020: $31 million of loss; 2019: $54 million of loss) relating to non-trading financial instruments measured/designated at FVTPL. |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Trading revenue consists of: |
||||||||||||
Net interest income (1) |
$ |
1,020 |
$ | 904 | $ | 633 | ||||||
Non-interest income (3) |
694 |
725 | 815 | |||||||||
$ |
1,714 |
$ | 1,629 | $ | 1,448 | |||||||
Trading revenue by product line: |
||||||||||||
Interest rates |
$ |
328 |
$ | 528 | $ | 300 | ||||||
Foreign exchange |
651 |
674 | 585 | |||||||||
Equities (1) |
548 |
280 | 386 | |||||||||
Commodities |
158 |
182 | 117 | |||||||||
Other |
29 |
(35 | ) | 60 | ||||||||
$ |
1,714 |
$ | 1,629 | $ | 1,448 |
(1) | Includes a TEB adjustment of $204 million (2020: $183 million; 2019: $177 million) reported within Capital Markets. Excludes a TEB adjustment of nil (2020: nil; 2019: $2 million) on non-trading activities reported within U.S. Commercial Banking and Wealth Management. See “Strategic business units overview” section and Note 31 to our consolidated financial statements for further details. |
(2) | Trading activities is based on the risk definition of trading for regulatory capital and trading market risk management purposes. Positions in a trading book are considered trading provided the book and positions continue to meet OSFI defined trading book criteria set out in OSFI’s Capital Adequacy Requirements. |
(3) | Gains (losses) from financial instruments measured/designated at FVTPL of $607 million (2020: $694 million; 2019: $761 million) consists of a gain of $694 million (2020: $725 million; 2019: $815 million) related to trading financial instruments measured/designated at FVTPL and a loss of $87 million (2020: $31 million; 2019: $54 million) relating to non-trading financial instruments measured/designated at FVTPL. |
CIBC 2021 |
|
9 |
|
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Provision for (reversal of) credit losses – impaired |
||||||||||||
Canadian Personal and Business Banking |
$ |
484 |
$ | 625 | $ | 790 | ||||||
Canadian Commercial Banking and Wealth Management |
6 |
162 | 159 | |||||||||
U.S. Commercial Banking and Wealth Management |
104 |
133 | 68 | |||||||||
Capital Markets |
32 |
121 | 109 | |||||||||
Corporate and Other |
76 |
24 | 21 | |||||||||
702 |
1,065 | 1,147 | ||||||||||
Provision for (reversal of) credit losses – performing |
||||||||||||
Canadian Personal and Business Banking |
(134 |
) |
564 | 99 | ||||||||
Canadian Commercial Banking and Wealth Management |
(45 |
) |
141 | 4 | ||||||||
U.S. Commercial Banking and Wealth Management |
(179 |
) |
354 | 5 | ||||||||
Capital Markets |
(132 |
) |
190 | 51 | ||||||||
Corporate and Other |
(54 |
) |
175 | (20 | ) | |||||||
(544 |
) |
1,424 | 139 | |||||||||
$ |
158 |
$ | 2,489 | $ | 1,286 |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Employee compensation and benefits |
||||||||||||
Salaries |
$ |
3,213 |
$ | 3,529 | $ | 3,081 | ||||||
Performance-based compensation |
2,329 |
1,948 | 1,873 | |||||||||
Benefits |
908 |
782 | 772 | |||||||||
6,450 |
6,259 | 5,726 | ||||||||||
Occupancy costs (1) |
916 |
944 | 892 | |||||||||
Computer, software and office equipment |
2,030 |
1,939 | 1,874 | |||||||||
Communications |
318 |
308 | 303 | |||||||||
Advertising and business development |
237 |
271 | 359 | |||||||||
Professional fees |
277 |
203 | 226 | |||||||||
Business and capital taxes |
111 |
117 | 110 | |||||||||
Other |
1,196 |
1,321 | 1,366 | |||||||||
$ |
11,535 |
$ | 11,362 | $ | 10,856 |
(1) | In 2021 and 2020, occupancy costs include charges of $109 million and $114 million, respectively, related to the consolidation of our real estate portfolio, shown as items of note. |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Income taxes |
$ |
1,876 |
$ | 1,098 | $ | 1,348 | ||||||
Indirect taxes (1) |
||||||||||||
Goods and Services Tax (GST), Harmonized Sales Tax (HST) and sales taxes |
403 |
411 | 418 | |||||||||
Payroll taxes |
306 |
292 | 271 | |||||||||
Capital taxes |
77 |
79 | 76 | |||||||||
Property and business taxes |
70 |
76 | 72 | |||||||||
Total indirect taxes |
856 |
858 | 837 | |||||||||
Total taxes |
$ |
2,732 |
$ | 1,956 | $ | 2,185 | ||||||
Reported effective tax rate |
22.5 |
% |
22.5 | % | 20.8 | % | ||||||
Total taxes as a percentage of net income before deduction of total taxes |
29.8 |
% |
34.0 | % | 29.9 | % |
(1) | Certain amounts are based on a paid or payable basis and do not factor in capitalization and subsequent amortization. |
10 |
CIBC 2021 |
|
Management’s discussion and analysis |
2021 |
2020 | 2019 | ||||||||||
vs. |
vs. | vs. | ||||||||||
$ millions, for the year ended October 31 |
2020 |
2019 | 2018 | |||||||||
Estimated increase (decrease) in: |
||||||||||||
Total revenue |
$ |
(307 |
) |
$ | 50 | $ | 124 | |||||
Provision for credit losses |
13 |
9 | 7 | |||||||||
Non-interest expenses |
(141 |
) |
26 | 66 | ||||||||
Income taxes |
(26 |
) |
3 | 5 | ||||||||
Net income |
(153 |
) |
12 | 46 | ||||||||
Impact on EPS: |
||||||||||||
Basic |
$ |
(0.34 |
) |
$ | 0.03 | $ | 0.10 | |||||
Diluted |
(0.34 |
) |
0.03 | 0.10 | ||||||||
Average USD appreciation relative to CAD |
(6.6 |
)% |
1.1 | % | 3.2 | % |
$ millions, except per share amounts, for the three months ended |
2021 |
2020 (1) |
||||||||||||||||||||||||||||||||
Oct. 31 |
Jul. 31 |
Apr. 30 |
Jan. 31 |
Oct. 31 | Jul. 31 | Apr. 30 | Jan. 31 | |||||||||||||||||||||||||||
Revenue |
||||||||||||||||||||||||||||||||||
Canadian Personal and Business Banking |
$ |
2,128 |
$ |
2,056 |
$ |
1,941 |
$ |
2,025 |
$ | 1,997 | $ | 1,910 | $ | 1,936 | $ | 2,079 | ||||||||||||||||||
Canadian Commercial Banking and Wealth Management |
1,240 |
1,207 |
1,135 |
1,088 |
1,028 | 1,013 | 1,025 | 1,055 | ||||||||||||||||||||||||||
U.S. Commercial Banking and Wealth Management |
562 |
539 |
532 |
561 |
519 | 512 | 511 | 501 | ||||||||||||||||||||||||||
Capital Markets (2) |
1,012 |
1,140 |
1,194 |
1,174 |
934 | 1,146 | 967 | 1,006 | ||||||||||||||||||||||||||
Corporate and Other (2) |
122 |
114 |
130 |
115 |
122 | 127 | 139 | 214 | ||||||||||||||||||||||||||
Total revenue |
$ |
5,064 |
$ |
5,056 |
$ |
4,932 |
$ |
4,963 |
$ | 4,600 | $ | 4,708 | $ | 4,578 | $ | 4,855 | ||||||||||||||||||
Net interest income |
$ |
2,980 |
$ |
2,893 |
$ |
2,747 |
$ |
2,839 |
$ | 2,792 | $ | 2,729 | $ | 2,762 | $ | 2,761 | ||||||||||||||||||
Non-interest income |
2,084 |
2,163 |
2,185 |
2,124 |
1,808 | 1,979 | 1,816 | 2,094 | ||||||||||||||||||||||||||
Total revenue |
5,064 |
5,056 |
4,932 |
4,963 |
4,600 | 4,708 | 4,578 | 4,855 | ||||||||||||||||||||||||||
Provision for (reversal of) credit losses |
78 |
(99 |
) |
32 |
147 |
291 | 525 | 1,412 | 261 | |||||||||||||||||||||||||
Non-interest expenses |
3,135 |
2,918 |
2,756 |
2,726 |
2,891 | 2,702 | 2,704 | 3,065 | ||||||||||||||||||||||||||
Income before income taxes |
1,851 |
2,237 |
2,144 |
2,090 |
1,418 | 1,481 | 462 | 1,529 | ||||||||||||||||||||||||||
Income taxes |
411 |
507 |
493 |
465 |
402 | 309 | 70 | 317 | ||||||||||||||||||||||||||
Net income |
$ |
1,440 |
$ |
1,730 |
$ |
1,651 |
$ |
1,625 |
$ | 1,016 | $ | 1,172 | $ | 392 | $ | 1,212 | ||||||||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||||||||||||||||
Non-controlling interests |
$ |
4 |
$ |
5 |
$ |
4 |
$ |
4 |
$ | 1 | $ | 2 | $ | (8 | ) | $ | 7 | |||||||||||||||||
Equity shareholders |
1,436 |
1,725 |
1,647 |
1,621 |
1,015 | 1,170 | 400 | 1,205 | ||||||||||||||||||||||||||
EPS |
– basic |
$ |
3.08 |
$ |
3.77 |
$ |
3.56 |
$ |
3.56 |
$ | 2.21 | $ | 2.56 | $ | 0.83 | $ | 2.64 | |||||||||||||||||
– diluted |
3.07 |
3.76 |
3.55 |
3.55 |
2.20 | 2.55 | 0.83 | 2.63 |
(1) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(2) | Capital Markets revenue and income taxes are reported on a TEB with an equivalent offset in the revenue and income taxes of Corporate and Other. |
CIBC 2021 |
|
11 |
|
Management’s discussion and analysis |
12 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, for the year ended October 31 | Canadian Personal and Business Banking |
Canadian Commercial Banking and Wealth Management |
U.S. Commercial Banking and Wealth Management (1) |
Capital Markets (1) |
Corporate and Other (1) |
CIBC Total |
||||||||||||||||||||
2020 (2) |
Net interest income |
$ | 5,849 | $ | 1,248 | $ | 1,422 | $ | 2,354 | $ | 171 | $ | 11,044 | |||||||||||||
Non-interest income |
2,073 | 2,873 | 621 | 1,699 | 431 | 7,697 | ||||||||||||||||||||
Total revenue |
7,922 | 4,121 | 2,043 | 4,053 | 602 | 18,741 | ||||||||||||||||||||
Provision for credit losses |
1,189 | 303 | 487 | 311 | 199 | 2,489 | ||||||||||||||||||||
Non-interest expenses |
4,308 | 2,179 | 1,126 | 1,929 | 1,820 | 11,362 | ||||||||||||||||||||
Income (loss) before income taxes |
2,425 | 1,639 | 430 | 1,813 | (1,417 | ) | 4,890 | |||||||||||||||||||
Income taxes |
640 | 437 | 55 | 505 | (539 | ) | 1,098 | |||||||||||||||||||
Net income (loss) |
$ | 1,785 | $ | 1,202 | $ | 375 | $ | 1,308 | $ | (878 | ) | $ | 3,792 | |||||||||||||
Net income (loss) attributable to: | ||||||||||||||||||||||||||
Non-controlling interests |
$ | – | $ | – | $ | – | $ | – | $ | 2 | $ | 2 | ||||||||||||||
Equity shareholders |
1,785 | 1,202 | 375 | 1,308 | (880 | ) | 3,790 | |||||||||||||||||||
2019 (2) |
Net interest income |
$ | 5,944 | $ | 1,205 | $ | 1,327 | $ | 1,681 | $ | 394 | $ | 10,551 | |||||||||||||
Non-interest income |
2,296 | 2,822 | 584 | 1,794 | 564 | 8,060 | ||||||||||||||||||||
Total revenue |
8,240 | 4,027 | 1,911 | 3,475 | 958 | 18,611 | ||||||||||||||||||||
Provision for credit losses |
889 | 163 | 73 | 160 | 1 | 1,286 | ||||||||||||||||||||
Non-interest expenses |
4,459 | 2,106 | 1,114 | 1,802 | 1,375 | 10,856 | ||||||||||||||||||||
Income (loss) before income taxes |
2,892 | 1,758 | 724 | 1,513 | (418 | ) | 6,469 | |||||||||||||||||||
Income taxes |
766 | 471 | 76 | 396 | (361 | ) | 1,348 | |||||||||||||||||||
Net income (loss) |
$ | 2,126 | $ | 1,287 | $ | 648 | $ | 1,117 | $ | (57 | ) | $ | 5,121 | |||||||||||||
Net income (loss) attributable to: |
||||||||||||||||||||||||||
Non-controlling interests |
$ | – | $ | – | $ | – | $ | – | $ | 25 | $ | 25 | ||||||||||||||
Equity shareholders |
2,126 | 1,287 | 648 | 1,117 | (82 | ) | 5,096 |
(1) | Capital Markets revenue and income taxes are reported on a TEB, as were U.S. Commercial Banking and Wealth Management revenue and income taxes in 2019, with an equivalent offset in the revenue and income taxes of Corporate and Other. |
(2) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
CIBC 2021 |
|
13 |
|
Management’s discussion and analysis |
(1) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
14 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
|
15 |
|
|
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | 2018 | 2017 | |||||||||||||||
Operating results – reported |
||||||||||||||||||||
Total revenue |
$ |
20,015 |
$ | 18,741 | $ | 18,611 | $ | 17,834 | $ | 16,280 | ||||||||||
Provision for credit losses |
158 |
2,489 | 1,286 | 870 | 829 | |||||||||||||||
Non-interest expenses |
11,535 |
11,362 | 10,856 | 10,258 | 9,571 | |||||||||||||||
Income before income taxes |
8,322 |
4,890 | 6,469 | 6,706 | 5,880 | |||||||||||||||
Income taxes |
1,876 |
1,098 | 1,348 | 1,422 | 1,162 | |||||||||||||||
Net income |
6,446 |
3,792 | 5,121 | 5,284 | 4,718 | |||||||||||||||
Net income attributable to non-controlling interests |
17 |
2 | 25 | 17 | 19 | |||||||||||||||
Net income attributable to equity shareholders |
6,429 |
3,790 | 5,096 | 5,267 | 4,699 | |||||||||||||||
Diluted EPS ($) |
$ |
13.93 |
$ | 8.22 | $ | 11.19 | $ | 11.65 | $ | 11.24 | ||||||||||
Impact of items of note (1) |
||||||||||||||||||||
Revenue |
||||||||||||||||||||
Settlement of certain income tax matters (2) |
$ |
– |
$ | – | $ | (67 | ) | $ | – | $ | – | |||||||||
Purchase accounting adjustments (3) |
– |
– | (34 | ) | (63 | ) | (9 | ) | ||||||||||||
Incremental losses on debt securities and loans in CIBC FirstCaribbean resulting from the Barbados government debt restructuring (2) |
– |
– | – | 61 | – | |||||||||||||||
Gain on the sale and lease back of certain retail properties |
– |
– | – | – | (299 | ) | ||||||||||||||
Fees and charges related to the launch of Simplii Financial and the related wind-down of President’s Choice Financial |
– |
– | – | – | 3 | |||||||||||||||
Impact of items of note on revenue |
– |
– | (101 | ) | (2 | ) | (305 | ) | ||||||||||||
Provision for (reversal of) credit losses |
||||||||||||||||||||
Incremental losses on debt securities and loans in CIBC FirstCaribbean resulting from the Barbados government debt restructuring (2) |
– |
– | – | (28 | ) | – | ||||||||||||||
Transaction and integration-related costs as well as purchase accounting adjustments (3) |
– |
– | – | – | (35 | ) | ||||||||||||||
Increase (decrease) in collective allowance (4) |
– |
– | – | – | 18 | |||||||||||||||
Impact of items of note on provision for (reversal of) credit losses |
– |
– | – | (28 | ) | (17 | ) | |||||||||||||
Non-interest expenses |
||||||||||||||||||||
Amortization of acquisition-related intangible assets (5) |
(79 |
) |
(105 | ) | (109 | ) | (115 | ) | (41 | ) | ||||||||||
Transaction and integration-related costs as well as purchase accounting adjustments (3) |
(12 |
) |
– | 11 | (79 | ) | (78 | ) | ||||||||||||
Charge related to the consolidation of our real estate portfolio (2) |
(109 |
) |
(114 | ) | – | – | – | |||||||||||||
Gain as a result of plan amendments related to pension and other post-employment plans (2) |
– |
79 | – | – | – | |||||||||||||||
Restructuring charge (6) |
– |
(339 | ) | – | – | – | ||||||||||||||
Goodwill impairment (7) |
– |
(248 | ) | (135 | ) | – | – | |||||||||||||
Increase in legal provisions (2) |
(125 |
) |
(70 | ) | (28 | ) | – | (45 | ) | |||||||||||
Charge for payment made to Air Canada (8) |
– |
– | (227 | ) | – | – | ||||||||||||||
Fees and charges related to the launch of Simplii Financial and the related wind-down of President’s Choice Financial |
– |
– | – | – | (95 | ) | ||||||||||||||
Impact of items of note on non-interest expenses |
(325 |
) |
(797 | ) | (488 | ) | (194 | ) | (259 | ) | ||||||||||
Total pre-tax impact of items of note on pre-provision, pre-tax earnings and net income |
325 |
797 | 387 | 220 | (29 | ) | ||||||||||||||
Settlement of certain income tax matters (2) |
– |
– | (18 | ) | – | – | ||||||||||||||
Amortization of acquisition-related intangible assets (5) |
19 |
25 | 27 | 30 | 13 | |||||||||||||||
Transaction and integration-related costs as well as purchase accounting adjustments (3) |
3 |
– | (12 | ) | 2 | 31 | ||||||||||||||
Charge related to the consolidation of our real estate portfolio |
29 |
30 | – | – | – | |||||||||||||||
Gain as a result of plan amendments related to pension and other post-employment plans |
– |
(21 | ) | – | – | – | ||||||||||||||
Restructuring charge (6) |
– |
89 | – | – | – | |||||||||||||||
Increase in legal provisions (2) |
33 |
19 | 7 | – | 12 | |||||||||||||||
Charge for payment made to Air Canada (8) |
– |
– | 60 | – | – | |||||||||||||||
Incremental losses on debt securities and loans in CIBC FirstCaribbean resulting from the Barbados government debt restructuring (2) |
– |
– | – | 19 | – | |||||||||||||||
Charge from net tax adjustments resulting from U.S. tax reforms (2) |
– |
– | – | (88 | ) | – | ||||||||||||||
Gain on the sale and lease back of certain retail properties |
– |
– | – | – | (54 | ) | ||||||||||||||
Fees and charges related to the launch of Simplii Financial and the related wind-down of President’s Choice Financial |
– |
– | – | – | 27 | |||||||||||||||
Increase (decrease) in collective allowance (4) |
– |
– | – | – | (5 | ) | ||||||||||||||
Impact of items of note on income taxes |
84 |
142 | 64 | (37 | ) | 24 | ||||||||||||||
Total after-tax impact of items of note on net income |
241 |
655 | 323 | 257 | (53 | ) | ||||||||||||||
After-tax impact of items of note on non-controlling interests |
– |
– | – | 5 | – | |||||||||||||||
After-tax impact of items of note on net income attributable to equity shareholders |
241 |
655 | 323 | 252 | (53 | ) | ||||||||||||||
Impact of items of note on diluted EPS ($) |
$ |
0.54 |
$ | 1.47 | $ | 0.73 | $ | 0.56 | $ | (0.13 | ) |
16 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | 2018 | 2017 | |||||||||||||||
Operating results – adjusted (9) |
||||||||||||||||||||
Total revenue – adjusted (10) |
$ |
20,015 |
$ | 18,741 | $ | 18,510 | $ | 17,832 | $ | 15,975 | ||||||||||
Provision for credit losses – adjusted |
158 |
2,489 | 1,286 | 842 | 812 | |||||||||||||||
Non-interest expenses – adjusted |
11,210 |
10,565 | 10,368 | 10,064 | 9,312 | |||||||||||||||
Income before income taxes – adjusted |
8,647 |
5,687 | 6,856 | 6,926 | 5,851 | |||||||||||||||
Income taxes – adjusted |
1,960 |
1,240 | 1,412 | 1,385 | 1,186 | |||||||||||||||
Net income – adjusted |
6,687 |
4,447 | 5,444 | 5,541 | 4,665 | |||||||||||||||
Net income attributable to non-controlling interests – adjusted |
17 |
2 | 25 | 22 | 19 | |||||||||||||||
Net income attributable to equity shareholders – adjusted |
6,670 |
4,445 | 5,419 | 5,519 | 4,646 | |||||||||||||||
Adjusted diluted EPS ($) |
$ |
14.47 |
$ | 9.69 | $ | 11.92 | $ | 12.21 | $ | 11.11 |
(1) | Items of note are removed from reported results to calculate adjusted results. |
(2) | Recognized in Corporate and Other. |
(3) | This item of note comprises integration costs, transaction costs and purchase accounting adjustments for various acquisitions. Transaction and integration costs, shown as an item of note starting in the fourth quarter of 2021, are comprised of direct and incremental costs incurred as part of planning for and executing the integration of the Canadian Costco credit card portfolio, including enabling cross-sell opportunities, the upgrade and conversion of systems and processes, project management and communication costs. Integration costs, shown as an item of note from second quarter of 2017 to fourth quarter of 2019, are comprised of direct and incremental costs incurred as part of planning for and executing the integration of the businesses of The PrivateBank (subsequently rebranded as CIBC Bank USA) and Geneva Advisors with CIBC, including enabling cross-sell opportunities and expansion of services in the U.S. market, the upgrade and conversion of systems and processes, project management, integration-related travel, severance, consulting fees and marketing costs related to rebranding activities. Transaction costs, shown as an item of note from second quarter of 2017 to fourth quarter of 2019, included legal and other advisory fees, as well as financing costs associated with pre-funding the cash component of the merger consideration, and interest adjustments relating to the obligation payable to dissenting shareholders. Purchase accounting adjustments, shown as an item of note from fourth quarter of 2017 to fourth quarter of 2019, include the accretion of the acquisition date fair value discount on the acquired loans of The PrivateBank, the collective allowance established for new loan originations and renewals of acquired loans (prior to the adoption of IFRS 9 in the first quarter of 2018), and changes in the fair value of contingent consideration relating to the Geneva Advisors and Wellington Financial acquisitions. |
(4) | Relates to collective allowance (prior to the adoption of IFRS 9), except for: (i) residential mortgages greater than 90 days delinquent; (ii) personal loans and scored small business loans greater than 30 days delinquent; (iii) net write-offs for the card portfolio; and (iv) the collective allowance related to CIBC Bank USA, which were all reported in the respective SBUs. |
(5) | Amortization of acquisition-related intangible assets is recognized in the SBU of the acquired business or Corporate and Other. A summary is provided in the table below. |
Canadian Personal and Business Banking (pre-tax) |
$ – |
$ (8 | ) | $ (9 | ) | $ (12 | ) | $ (5 | ) | |||||||||||
Canadian Personal and Business Banking (after-tax) |
– |
(6 | ) | (7 | ) | (9 | ) | (4 | ) | |||||||||||
Canadian Commercial Banking and Wealth Management (pre-tax) |
– |
(1 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||||||
Canadian Commercial Banking and Wealth Management (after-tax) |
– |
(1 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||||||
U.S. Commercial Banking and Wealth Management (pre-tax) |
(68 |
) |
(83 | ) | (88 | ) | (91 | ) | (27 | ) | ||||||||||
U.S. Commercial Banking and Wealth Management (after-tax) |
(50 |
) |
(61 | ) | (65 | ) | (65 | ) | (16 | ) | ||||||||||
Corporate and Other (pre-tax) |
(11 |
) |
(13 | ) | (11 | ) | (11 | ) | (8 | ) | ||||||||||
Corporate and Other (after-tax) |
(10 |
) |
(12 | ) | (9 | ) | (10 | ) | (7 | ) |
(6) | Restructuring charge associated with ongoing efforts to transform our cost structure and simplify our bank. This charge consists primarily of employee severance and related costs and was recognized in Corporate and Other. |
(7) | Goodwill impairment charge related to our controlling interest in CIBC FirstCaribbean recognized in Corporate and Other with $28 million recognized in the second quarter of 2020, $220 million recognized in the fourth quarter of 2020 and $135 million recognized in the fourth quarter of 2019. |
(8) | Charge for a payment made to Air Canada, including related sales tax and transaction costs, to secure our participation in its new loyalty program recognized in Canadian Personal and Business Banking. |
(9) | Adjusted to exclude the impact of items of note. |
(10) | Excludes TEB adjustments of $204 million (2020: $183 million; 2019: $179 million). Our adjusted operating leverage and efficiency ratio are calculated on a TEB. |
$ millions, for the year ended October 31 |
Canadian Personal and Business Banking |
Canadian Commercial Banking and Wealth Management |
U.S. Commercial Banking and Wealth Management |
Capital Markets |
Corporate and Other |
CIBC Total |
||||||||||||||||||
2021 Reported net income (loss) |
$ |
2,494 |
$ |
1,665 |
$ |
926 |
$ |
1,857 |
$ |
(496 |
) |
$ |
6,446 |
|||||||||||
After-tax impact of items of note (1) |
9 |
– |
50 |
– |
182 |
241 |
||||||||||||||||||
Adjusted net income (loss) (2) |
$ |
2,503 |
$ |
1,665 |
$ |
976 |
$ |
1,857 |
$ |
(314 |
) |
$ |
6,687 |
|||||||||||
2020 (3) Reported net income (loss) |
$ | 1,785 | $ | 1,202 | $ | 375 | $ | 1,308 | $ | (878 | ) | $ | 3,792 | |||||||||||
After-tax impact of items of note (1) |
6 | 1 | 61 | – | 587 | 655 | ||||||||||||||||||
Adjusted net income (loss) (2) |
$ | 1,791 | $ | 1,203 | $ | 436 | $ | 1,308 | $ | (291 | ) | $ | 4,447 | |||||||||||
2019 (3) Reported net income (loss) |
$ | 2,126 | $ | 1,287 | $ | 648 | $ | 1,117 | $ | (57 | ) | $ | 5,121 | |||||||||||
After-tax impact of items of note (1) |
174 | 1 | 40 | – | 108 | 323 | ||||||||||||||||||
Adjusted net income (loss) (2) |
$ | 2,300 | $ | 1,288 | $ | 688 | $ | 1,117 | $ | 51 | $ | 5,444 | ||||||||||||
2018 Reported net income (loss) |
$ | 2,540 | $ | 1,286 | $ | 561 | $ | 1,086 | $ | (189 | ) | $ | 5,284 | |||||||||||
After-tax impact of items of note (1) |
9 | 1 | 27 | – | 220 | 257 | ||||||||||||||||||
Adjusted net income (loss) (2) |
$ | 2,549 | $ | 1,287 | $ | 588 | $ | 1,086 | $ | 31 | $ | 5,541 | ||||||||||||
2017 Reported net income (loss) |
$ | 2,420 | $ | 1,138 | $ | 203 | $ | 1,090 | $ | (133 | ) | $ | 4,718 | |||||||||||
After-tax impact of items of note (1) |
(170 | ) | 1 | 19 | – | 97 | (53 | ) | ||||||||||||||||
Adjusted net income (loss) (2) |
$ | 2,250 | $ | 1,139 | $ | 222 | $ | 1,090 | $ | (36 | ) | $ | 4,665 |
(1) | Items of note are removed from reported results to calculate adjusted results. |
(2) | Non-GAAP measure. |
(3) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
CIBC 2021 |
|
17 |
|
Management’s discussion and analysis |
18 |
CIBC 2021 |
Management’s discussion and analysis |
• | Introducing more opportunities for our clients to deal with us digitally by investing in digital and real-time remote capabilities; |
• | Providing our team with the tools to deliver an excellent experience for our clients consistent with a one-team approach; and |
• | Delivering personalized advice and experiences to our clients in a way that is meaningful and relevant to each of them. |
• | Ranked #1 again in Digital Satisfaction for Mobile Banking by J.D. Power; #1 in mobile banking experience in Surviscor’s 2021 Mobile Banking Review; #1 ranking in Forrester’s Digital Experience Review: Canadian Mobile Banking App Review; and named Best Consumer Digital Bank in North America by Global Finance for the second consecutive year. |
• | Launched CIBC Virtual Assistant for online and mobile clients, helping them answer their everyday banking questions in real-time. |
• | Introduced CIBC Insights, a digital financial coach that provides recommendations to help clients keep a pulse on their day-to-day finances. |
• | Launched Digital Identity Verification and FastApp, streamlining how clients open chequing and savings accounts, a personal line of credit, or a credit card digitally. |
• | Introduced more digital options for clients to renew their mortgage online, including an enhanced online pre-qualification tool. |
• | Enabled digital card issuance, so clients can receive a new or replacement digital credit card within minutes in the event their card is lost or stolen. |
• | Continued the rollout of CIBC GoalPlanner, a digitally enabled goal setting platform, allowing our Imperial Service advisors to better understand our clients’ ambitions and to spend more time with them developing plans. |
• | Introduced a new client relationship management tool, enabling advisors to offer more personalized advice and deepen client relationships. |
• | Delivered a more integrated advice experience at our banking centres, including introducing a new Associate Financial Advisor role to support clients with complex financial needs. |
• | Extended our newcomer banking offer to include foreign workers and expanded our outreach, including a Newcomer Financial Guide in partnership with Canadian Immigrant magazine. |
• | Refreshed our Dividend Visa Cards with a new set of cashback categories, and introduced on-demand points redemption. |
• | Announced an agreement to become the exclusive issuer of Costco-branded Mastercards in Canada, expected to close in the first half of fiscal 2022, and the acquisition of the existing Canadian Costco credit card portfolio, reflecting our focus on growing our Canadian consumer franchise. |
• | Expanded our business banking specialist team in support of our focus on entrepreneurs at all life stages, including the launch of Canada’s first banking platform for Black-owned businesses. |
• | Helped clients build financial knowledge and confidence by offering virtual seminars and education focused on a range of topics such as, women and wealth, home ownership, as well as tax and estate planning for the LGBTQ+ community. |
• | Grew our mobile mortgage advisor workforce while strengthening our market position through a strategic partnership with REMAX. |
• | Ranked #1 on Investment Executive |
• | Helped our clients meet their personal climate ambitions with solutions such as offering a carbon offset for their gas purchases through the Parkland Journie Rewards program. |
CIBC 2021 |
|
19 |
|
Management’s discussion and analysis |
Revenue (1) ($ billions) |
Net income (1) ($ millions) |
Operating leverage (%) |
Average loans and acceptances (1)(2)(3) ($ billions) |
Average deposits (1)(3) ($ billions) | ||||
(1) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(2) | Loan amounts are stated before any related allowances. |
(3) | Average balances are calculated as a weighted average of daily closing balances. |
• | Introduce more opportunities for our clients to deal with us digitally; |
• | Provide our team with the tools to deliver an excellent experience for our clients; and |
• | Deliver personalized advice to our clients in a way that is meaningful to them. |
$ millions, for the year ended October 31 |
2021 |
2020 (2) |
2019 (2) |
|||||||||
Revenue |
$ |
8,150 |
$ | 7,922 | $ | 8,240 | ||||||
Provision for (reversal of) credit losses |
||||||||||||
Impaired |
484 |
625 | 790 | |||||||||
Performing |
(134 |
) |
564 | 99 | ||||||||
Provision for credit losses |
350 |
1,189 | 889 | |||||||||
Non-interest expenses |
4,414 |
4,308 | 4,459 | |||||||||
Income before income taxes |
3,386 |
2,425 | 2,892 | |||||||||
Income taxes |
892 |
640 | 766 | |||||||||
Net income |
$ |
2,494 |
$ | 1,785 | $ | 2,126 | ||||||
Net income attributable to: |
||||||||||||
Equity shareholders |
$ |
2,494 |
$ | 1,785 | $ | 2,126 | ||||||
Efficiency ratio |
54.2 |
% |
54.4 | % | 54.1 | % | ||||||
Operating leverage |
0.4 |
% |
(0.5 | )% | (5.9 | )% | ||||||
Return on equity (3) |
38.1 |
% |
27.1 | % | 34.3 | % | ||||||
Average allocated common equity (3) |
$ |
6,554 |
$ | 6,591 | $ | 6,192 | ||||||
Average assets ($ billions) (4) |
$ |
272.6 |
$ | 253.0 | $ | 249.5 | ||||||
Average loans and acceptances ($ billions) (4) |
$ |
270.3 |
$ | 250.3 | $ | 247.1 | ||||||
Average deposits ($ billions) (4) |
$ |
187.9 |
$ | 170.8 | $ | 156.8 | ||||||
Full-time equivalent employees |
12,629 |
12,437 | 13,013 |
(1) | For additional segmented information, see Note 31 to the consolidated financial statements. |
(2) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(3) | For additional information, see the “Non-GAAP measures” section. |
(4) | Average balances are calculated as a weighted average of daily closing balances. |
20 |
CIBC 2021 |
Management’s discussion and analysis |
• | Accelerating the growth of Private Wealth Management; |
• | Evolving our Asset Management business in response to client needs; and |
• | Delivering focused, risk-controlled growth in our Commercial Bank. |
• | Increased recruitment of top talent across Private Wealth Management to broaden and deepen client relationships and accelerate market share growth. |
• | Launched exclusive banking offers for clients in key market segments to deepen existing and onboard new relationships. |
• | Launched CIBC Family Office services to support ultra-high net worth clients through wealth transitions within the family and through privately-owned business sales. |
• | Increased partner referrals activity across the bank to help clients fulfill their broader wealth needs. |
• | The Globe and Mail |
• | Met the investment needs of our mass affluent, core banking and high net worth clients, resulting in record net flows in long-term mutual fund sales. |
• | Launched Sustainable Investment Solution mutual funds to align with our bank-wide ESG efforts, as well as client demand, where a percentage of our revenues are donated to organizations supporting climate transition activities. |
• | Founding signatory of Climate Engagement Canada and the Responsible Investment Association Canadian Investor Statement on Climate Change as part of our bank’s ongoing efforts to address global climate change and to support investor demand for ESG-focused products. |
• | Refinitiv Lipper Funds Awards recognized four CIBC Asset Management funds for industry-leading performance. |
• | Enhanced our offers to address the needs of the smaller end of the commercial banking market in high growth industries such as healthcare, technology, business services and franchising. |
• | Further expanded CIBC Innovation Banking across Canada, the U.S., and most recently in the U.K., to meet the needs of fast-growing and innovative industries such as technology, life sciences and venture capital funds. |
• | Global Finance Magazine named CIBC Canada’s Best Treasury and Cash Management Bank for the sixth time. |
Revenue ($ billions) |
Net income ($ millions) |
Operating leverage (%) |
Average loans (1)(2) ($ billions) |
Average deposits (2) ($ billions) | ||||
Average commercial banking loans (1)(2)(3) ($ billions) |
Average commercial banking deposits (2) ($ billions) |
Assets under administration and management (4) ($ billions) |
Canadian retail mutual funds and exchange-traded funds ($ billions) | |||||
|
|
|
(1) | Loan amounts are stated before any related allowances. |
(2) | Average balances are calculated as a weighted average of daily closing balances. |
(3) | Comprises loans and acceptances and notional amount of letters of credit. |
(4) | AUM amounts are included in the amounts reported under AUA. |
CIBC 2021 |
21 |
Management’s discussion and analysis |
• | Accelerate the growth of Private Wealth Management to broaden and deepen client relationships; |
• | Evolve our Asset Management business to increase connectivity within our own bank channels and continue to extend our investment capabilities and fee structures to meet evolving client needs; and |
• | Delivering risk-controlled growth in our Commercial Bank, while fostering strong referrals across CIBC. |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Revenue |
||||||||||||
Commercial banking |
$ |
1,827 |
$ | 1,663 | $ | 1,633 | ||||||
Wealth management |
2,843 |
2,458 | 2,394 | |||||||||
Total revenue |
4,670 |
4,121 | 4,027 | |||||||||
Provision for (reversal of) credit losses |
||||||||||||
Impaired |
6 |
162 | 159 | |||||||||
Performing |
(45 |
) |
141 | 4 | ||||||||
Provision for (reversal of) credit losses |
(39 |
) |
303 | 163 | ||||||||
Non-interest expenses |
2,443 |
2,179 | 2,106 | |||||||||
Income before income taxes |
2,266 |
1,639 | 1,758 | |||||||||
Income taxes |
601 |
437 | 471 | |||||||||
Net income |
$ |
1,665 |
$ | 1,202 | $ | 1,287 | ||||||
Net income attributable to: |
||||||||||||
Equity shareholders |
$ |
1,665 |
$ | 1,202 | $ | 1,287 | ||||||
Efficiency ratio |
52.3 |
% |
52.9 | % | 52.3 | % | ||||||
Operating leverage |
1.2 |
% |
(1.1 | )% | 3.1 | % | ||||||
Return on equity (2) |
24.5 |
% |
18.6 | % | 21.7 | % | ||||||
Average allocated common equity (2) |
$ |
6,794 |
$ | 6,454 | $ | 5,929 | ||||||
Average assets ($ billions) (3) |
$ |
70.1 |
$ | 65.8 | $ | 62.6 | ||||||
Average loans ($ billions) (3) |
$ |
72.8 |
$ | 68.2 | $ | 64.7 | ||||||
Average deposits ($ billions) (3) |
$ |
83.6 |
$ | 71.1 | $ | 60.2 | ||||||
AUA ($ billions) |
$ |
356.6 |
$ | 287.7 | $ | 289.1 | ||||||
AUM ($ billions) |
$ |
230.3 |
$ | 188.9 | $ | 182.4 | ||||||
Full-time equivalent employees |
5,241 |
4,984 | 5,048 |
(1) | For additional segmented information, see Note 31 to the consolidated financial statements. |
(2) | For additional information, see the “Non-GAAP measures” section. |
(3) | Average balances are calculated as a weighted average of daily closing balances. |
22 |
CIBC 2021 |
Management’s discussion and analysis |
• | Building and deepening client relationships; |
• | Strengthening and diversifying our deposit base; |
• | Improving efficiency through data and technology; and |
• | Advancing the growth and transformation of our business. |
• | Drove solid loan and deposit growth given market conditions, including continued expansion of our private banking business with existing commercial and wealth clients. |
• | Supported our clients who faced continued headwinds as a result of the pandemic with an additional $500 million of Paycheck Protection Program (PPP) financing in the first half of fiscal 2021. |
• | Generated strong growth in AUM and AUA, bolstered by the performance of our investment strategies and net inflows, driving asset management fees to nearly 50% of non-interest income for the year. |
• | Leveraged our strong partnership with our Capital Markets franchise to provide a wider range of products and services to U.S. commercial and wealth clients. |
• | Recognized as Retail Banking and Commercial Banking Client Experience leaders by Coalition Greenwich. |
• | Ranked as a Top Five Registered Investment Advisor by Barron’s |
• | Maintained a diversified funding strategy through our commercial, private banking and retail clients. |
• | Continued growth in private banking, expanding the team and introducing online account opening for private banking clients. |
• | Expanded deposit gathering, including with our specialty commercial banking and institutional real estate clients. |
• | Advanced the implementation of customer relationship management (CRM) and data strategy initiatives to further the connectivity between teams, provide a consolidated view of our businesses and support a strong risk management infrastructure. |
• | Continued to refine client-facing processes, making it easier for clients to bank with us, including adding online account opening capabilities for consumer clients, introducing card control features to consumer mobile banking and enhancing our servicing platform for our commercial banking clients. |
• | Expanded Commercial Real Estate banking in the southeast U.S. region. |
• | Further enhanced our risk and change management infrastructure to support our growth. |
CIBC 2021 ANNUAL REPORT |
23 |
Management’s discussion and analysis |
Revenue (1) (US$ billions) |
Net income (1) ($ millions) |
Net income (1) (US$ millions) |
Operating leverage (% in U.S. dollars) | |||
|
||||||
Average loans (1)(2)(3) (US$ billions) |
Average deposits (1)(3) (US$ billions) |
Average commercial banking loans (2)(3) (US$ billions) |
Assets under administration and management (4) (US$ billions) | |||
|
|
|
(1) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(2) | Loan amounts are stated before any related allowances. |
(3) | Average balances are calculated as a weighted average of daily closing balances. |
(4) | AUM amounts are included in the amounts reported under AUA. |
• | Building and deepening client relationships through referral activity across all businesses, disciplined growth in Commercial Banking and greater scale in Private Wealth Management; |
• | Strengthen and diversify our deposit base by leveraging private banking services for commercial and wealth clients and continued growth in regional expansion markets such as Florida and Texas; |
• | Improve efficiency through data and technology to support growth, modernizing consumer and commercial digital platforms and enhancing data-driven decision making; and |
• | Advance the transformation of our business through continued investment in people, infrastructure and growth initiatives. |
24 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 (2) |
2019 (2) |
|||||||||
Revenue |
||||||||||||
Commercial banking |
$ |
1,444 |
$ | 1,421 | $ | 1,300 | ||||||
Wealth management (3) |
750 |
622 | 611 | |||||||||
Total revenue (4)(5) |
2,194 |
2,043 | 1,911 | |||||||||
Provision for (reversal of) credit losses |
||||||||||||
Impaired |
104 |
133 | 68 | |||||||||
Performing |
(179 |
) |
354 | 5 | ||||||||
Provision for (reversal of) credit losses |
(75 |
) |
487 | 73 | ||||||||
Non-interest expenses |
1,121 |
1,126 | 1,114 | |||||||||
Income before income taxes |
1,148 |
430 | 724 | |||||||||
Income taxes (5) |
222 |
55 | 76 | |||||||||
Net income |
$ |
926 |
$ | 375 | $ | 648 | ||||||
Net income attributable to: |
||||||||||||
Equity shareholders |
$ |
926 |
$ | 375 | $ | 648 | ||||||
Average allocated common equity (6) |
$ |
8,975 |
$ | 9,196 | $ | 8,533 | ||||||
Average assets ($ billions) (7) |
$ |
46.7 |
$ | 48.2 | $ | 41.2 | ||||||
Average loans ($ billions) (7) |
$ |
41.4 |
$ | 42.5 | $ | 35.7 | ||||||
Average deposits ($ billions) (7) |
$ |
41.4 |
$ | 34.6 | $ | 26.1 | ||||||
AUA ($ billions) (8) |
$ |
124.5 |
$ | 97.6 | $ | 89.7 | ||||||
AUM ($ billions) (8) |
$ |
96.4 |
$ | 76.4 | $ | 68.8 | ||||||
Full-time equivalent employees |
2,170 |
2,085 | 2,095 |
(1) | For additional segmented information, see Note 31 to the consolidated financial statements. |
(2) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(3) | Includes revenue related to the U.S. Paycheck Protection Program. |
(4) | Included $15 million of income relating to the accretion of the acquisition date fair value discount on the acquired loans of The PrivateBank (2020: $20 million; 2019: $35 million). |
(5) | Revenue and income taxes are reported on a TEB. Accordingly, revenue and income taxes include a TEB adjustment of nil (2020: nil; 2019: $2 million). The equivalent amounts are offset in the revenue and income taxes of Corporate and Other. |
(6) | For additional information, see the “Non-GAAP measures” section. |
(7) | Average balances are calculated as a weighted average of daily closing balances. |
(8) | Includes certain Canadian Commercial Banking and Wealth Management assets that U.S. Commercial Banking and Wealth Management provides sub-advisory services for. |
US$ millions, for the year ended October 31 |
2021 |
2020 (2) |
2019 (2) |
|||||||||
Revenue |
||||||||||||
Commercial banking |
$ |
1,151 |
$ | 1,056 | $ | 978 | ||||||
Wealth management (3) |
597 |
464 | 460 | |||||||||
Total revenue (4)(5) |
1,748 |
1,520 | 1,438 | |||||||||
Provision for (reversal of) credit losses |
||||||||||||
Impaired |
82 |
99 | 52 | |||||||||
Performing |
(143 |
) |
259 | 3 | ||||||||
Provision for (reversal of) credit losses |
(61 |
) |
358 | 55 | ||||||||
Non-interest expenses |
893 |
838 | 838 | |||||||||
Income before income taxes |
916 |
324 | 545 | |||||||||
Income taxes (5) |
177 |
42 | 58 | |||||||||
Net income |
$ |
739 |
$ | 282 | $ | 487 | ||||||
Net income attributable to: |
||||||||||||
Equity shareholders |
$ |
739 |
$ | 282 | $ | 487 | ||||||
Efficiency ratio |
51.1 |
% |
55.1 | % | 58.3 | % | ||||||
Operating leverage |
8.5 |
% |
5.6 | % | (0.3 | ) % | ||||||
Return on equity (6) |
10.3 |
% |
4.1 | % | 7.6 | % | ||||||
Average allocated common equity (6) |
$ |
7,149.0 |
$ | 6,841.0 | $ | 6,419.0 | ||||||
Average assets ($ billions) (7) |
$ |
37.2 |
$ | 35.9 | $ | 31.0 | ||||||
Average loans ($ billions) (7) |
$ |
33.0 |
$ | 31.6 | $ | 26.9 | ||||||
Average deposits ($ billions) (7) |
$ |
33.0 |
$ | 25.7 | $ | 19.7 | ||||||
AUA ($ billions) (8) |
$ |
100.6 |
$ | 73.3 | $ | 68.1 | ||||||
AUM ($ billions) (8) |
$ |
77.9 |
$ | 57.4 | $ | 52.2 |
(1) | For additional segmented information, see Note 31 to the consolidated financial statements. |
(2) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(3) | Includes revenue related to the U.S. Paycheck Protection Program. |
(4) | Included US$12 million of income relating to the accretion of the acquisition date fair value discount on the acquired loans of The PrivateBank (2020: US$15 million; 2019: US$25 million). |
(5) | Revenue and income taxes are reported on a TEB. Accordingly, revenue and income taxes include a TEB adjustment of nil (2020: nil; 2019: US$2 million). The equivalent amounts are offset in the revenue and income taxes of Corporate and Other. |
(6) | For additional information, see the “Non-GAAP measures” section. |
(7) | Average balances are calculated as a weighted average of daily closing balances. |
(8) | Includes certain Canadian Commercial Banking and Wealth Management assets that U.S. Commercial Banking and Wealth Management provides sub-advisory services for. |
CIBC 2021 ANNUAL REPORT |
25 |
|
Management’s discussion and analysis |
26 |
CIBC 2021 |
Management’s discussion and analysis |
• | Being the leading capital markets platform in Canada for our core clients; |
• | Building a North American client platform with global capabilities; and |
• | Increasing connectivity across CIBC to deliver greater value and a better experience for our clients. |
• | Established a new Energy, Infrastructure and Transition investment banking group with a global focus on delivering industry-leading advice and capital markets solutions to clients across the full infrastructure and energy spectrum, and enabling the transition to a lower carbon future. |
• | Continued to support the growth ambitions of our clients emerging from the pandemic, managing their funding and liquidity needs with expert advice for the long-term. |
• | Strengthened our platform by continuing to invest in talent and technology, including investments in simplifying processes and promoting talent to foster our client-focused culture. |
• | Recognized as a leader in bond trading in 2021, ranked #1 or #2 in the Investment Industry Regulatory Organization of Canada (IIROC)’s Monthly Bond Trading Volumes. |
• | Made a strategic investment in Chicago-headquartered financial services firm Loop Capital, which is aligned with our strategy to accelerate our momentum in the U.S. |
• | Established a leadership position in sustainable finance, acting as a Sustainability Agent on eight sustainability-linked loans (“SLLs”) during the year and ranking first on the Bloomberg SLL league tables for Canadian issuances for 2021. |
• | Achieved top 10 ranking in financing for the renewable industry across North America for transactions that closed from January 1, 2021 to September 30, 2021 (North American Renewables League Tables by Inframation). |
• | Partnered with three global banks to launch Project Carbon, a platform that brings liquidity and transparency to the market for carbon credits, helping to enable the sustainability ambitions of our clients. |
• | Launched the industry-first Canadian Depositary Receipts (CDRs) as part of our ongoing commitment to developing innovative, market-based solutions that meet investor needs. |
• | Broadened the banking services available to clients through Simplii Financial, including the introduction of a U.S. dollar account and the rollout of Visa Direct. |
• | Continued to enhance our offerings to clients with services such as Global Money Transfer, and further expanded the capabilities of our International Student Pay program. |
• | Recognized as a 2021 Canadian FX Service Quality Leader as measured by the Greenwich Quality Index by Canadian Corporations and Financial Institutional clients. |
• | Financial advisor to Husky Energy on its combination with Cenovus Energy in an all-stock transaction valued at approximately $23.6 billion (including debt) to create a resilient integrated energy leader that is well positioned to provide superior returns for investors over the long term, as well as strong environmental, social and governance performance. |
• | Financial Advisor to Intact Financial Corporation (Company) on its acquisition, together with Tryg A/S, of international P&C insurer RSA Insurance Group Plc for a transaction value of approximately $12.3 billion; joint bookrunner on the underwritten financing package including £1.465 billion in bridge facilities and a £350 million term loan, sole bookrunner on an increase to the Company’s existing revolving credit facility from $750 million to $1.5 billion and lead left bookrunner on a $1.25 billion issue of subscription receipts and an aggregate $1.85 billion of notes. |
• | Joint bookrunner and joint lead arranger on a US$1.825 billion 7-year term loan B, US$700 million of 7-year senior secured notes, and US$1.035 billion of 8-year senior unsecured notes in connection with an acquisition financing and refinancing for Madison IAQ, a portfolio company of Madison Industries. |
• | Bookrunner on the two largest Canadian initial public offerings (IPOs) of the year: Joint bookrunner on a US$1.1 billion IPO of subordinate voting shares for TELUS International (Cda) Inc. consisting of a treasury offering and a secondary offering from TELUS Corporation and Barings Private Equity Asia Group Limited, the largest technology IPO, and lead on a $719 million IPO of subordinate voting shares for dentalcorp Holdings Ltd., the largest healthcare IPO in Canada. |
• | Joint bookrunner on a number of corporate green bonds including Allied Properties REIT’s $600 million and $500 million green debentures, Algonquin Power Co.’s $400 million green debentures and BCI Quadreal Realty’s $400 million green notes offerings as well as joint lead manager for the Province of Ontario’s $1.25 billion green bond and European Investment Bank’s $1 billion maple green bond offerings. |
CIBC 2021 |
|
27 |
|
Management’s discussion and analysis |
• | Led the structuring and execution of a number of SLLs in Canada, including acting as the administrative agent, joint bookrunner, and co-sustainability structuring agent for Enbridge’s $1 billion SLL, the first SLL for a Canadian energy infrastructure client, and acting as administrative agent, sole bookrunner, and sole sustainability structuring agent for TransAlta Corporation’s $1.25 billion SLL and Enerplus Corporation’s US$900 million SLL. |
Revenue (1) ($ billions) |
Net income (1) ($ millions) |
Operating leverage (%) |
||||||
Average loans and acceptances (1) ($ billions) |
Average deposits (1) ($ billions) |
Average value-at-risk (VaR) ($ millions) |
Revenue – Direct financial services ($ millions) | |||
(1) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
• | Maintaining our focused approach to client coverage in Canada; |
• | Growing our North American platform by further expanding our U.S. reach and broadening the services offered to clients; and |
• | Strengthening our connectivity, technology and innovation efforts to bring more of our bank’s offerings to our clients. |
28 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 (2) |
2019 (2) |
|||||||||
Revenue |
||||||||||||
Global markets |
$ |
2,076 |
$ | 1,999 | $ | 1,583 | ||||||
Corporate and investment banking |
1,616 |
1,344 | 1,231 | |||||||||
Direct financial services |
828 |
710 | 661 | |||||||||
Total revenue (3) |
4,520 |
4,053 | 3,475 | |||||||||
Provision for (reversal of) credit losses |
||||||||||||
Impaired |
32 |
121 | 109 | |||||||||
Performing |
(132 |
) |
190 | 51 | ||||||||
Provision for (reversal of) credit losses |
(100 |
) |
311 | 160 | ||||||||
Non-interest expenses |
2,117 |
1,929 | 1,802 | |||||||||
Income before income taxes |
2,503 |
1,813 | 1,513 | |||||||||
Income taxes (3) |
646 |
505 | 396 | |||||||||
Net income |
$ |
1,857 |
$ | 1,308 | $ | 1,117 | ||||||
Net income attributable to: |
||||||||||||
Equity shareholders |
$ |
1,857 |
$ | 1,308 | $ | 1,117 | ||||||
Efficiency ratio |
46.8 |
% |
47.6 | % | 51.8 | % | ||||||
Operating leverage |
1.7 |
% |
9.6 | % | (2.0 | )% | ||||||
Return on equity (4) |
25.6 |
% |
18.8 | % | 17.5 | % | ||||||
Average allocated common equity (4) |
$ |
7,241 |
$ | 6,948 | $ | 6,399 | ||||||
Average assets ($ billions) (5) |
$ |
255.1 |
$ | 230.2 | $ | 194.1 | ||||||
Average loans and acceptances ($ billions) (5) |
$ |
47.8 |
$ | 45.2 | $ | 40.3 | ||||||
Average deposits ($ billions) (5) |
$ |
86.0 |
$ | 68.0 | $ | 53.9 | ||||||
Full-time equivalent employees (6) |
2,225 |
1,912 | 1,867 |
(1) | For additional segmented information, see Note 31 to the consolidated financial statements. |
(2) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(3) | Revenue and income taxes are reported on a TEB. Accordingly, revenue and income taxes include a TEB adjustment of $204 million (2020: $183 million; 2019: $177 million). The equivalent amounts are offset in the revenue and income taxes of Corporate and Other. |
(4) | For additional information, see the “Non-GAAP measures” section. |
(5) | Average balances are calculated as a weighted average of daily closing balances. |
(6) | In 2021, 79 full-time equivalent employees related to Simplii Financial’s call centre operations were transferred to Capital Markets from Corporate and Other, with no financial impact as the costs were previously allocated to Direct financial services. |
CIBC 2021 |
|
29 |
|
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 (2) |
2019 (2) |
|||||||||
Revenue |
||||||||||||
International banking |
$ |
687 |
$ | 734 | $ | 798 | ||||||
Other |
(206 |
) |
(132 | ) | 160 | |||||||
Total revenue (3) |
481 |
602 | 958 | |||||||||
Provision for (reversal of) credit losses |
||||||||||||
Impaired |
76 |
24 | 21 | |||||||||
Performing |
(54 |
) |
175 | (20 | ) | |||||||
Provision for credit losses |
22 |
199 | 1 | |||||||||
Non-interest expenses |
1,440 |
1,820 | 1,375 | |||||||||
Loss before income taxes |
(981 |
) |
(1,417 | ) | (418 | ) | ||||||
Income taxes (3) |
(485 |
) |
(539 | ) | (361 | ) | ||||||
Net income (loss) |
$ |
(496 |
) |
$ | (878 | ) | $ | (57 | ) | |||
Net income (loss) attributable to: |
||||||||||||
Non-controlling interests |
$ |
17 |
$ | 2 | $ | 25 | ||||||
Equity shareholders |
(513 |
) |
(880 | ) | (82 | ) | ||||||
Full-time equivalent employees |
23,017 |
22,435 | 23,134 |
(1) | For additional segmented information, see Note 31 to the consolidated financial statements. |
(2) | Certain prior period information has been revised. See the “External reporting changes” section for additional details. |
(3) | Revenue and income taxes of Capital Markets and U.S. Commercial Banking and Wealth Management are reported on a TEB. The equivalent amounts are offset in the revenue and income taxes of Corporate and Other. Accordingly, revenue and income taxes include a TEB adjustment of $204 million (2020: $183 million; 2019: $179 million). |
30 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at October 31 |
2021 |
2020 | ||||||
Assets |
||||||||
Cash and deposits with banks |
$ |
56,997 |
$ | 62,518 | ||||
Securities |
161,401 |
149,046 | ||||||
Securities borrowed and purchased under resale agreements |
79,940 |
74,142 | ||||||
Loans and acceptances |
462,879 |
416,388 | ||||||
Derivative instruments |
35,912 |
32,730 | ||||||
Other assets |
40,554 |
34,727 | ||||||
$ |
837,683 |
$ | 769,551 | |||||
Liabilities and equity |
||||||||
Deposits |
$ |
621,158 |
$ | 570,740 | ||||
Obligations related to securities lent, sold short and under repurchase agreements |
97,133 |
89,440 | ||||||
Derivative instruments |
32,101 |
30,508 | ||||||
Acceptances |
10,961 |
9,649 | ||||||
Other liabilities |
24,961 |
22,167 | ||||||
Subordinated indebtedness |
5,539 |
5,712 | ||||||
Equity |
45,830 |
41,335 | ||||||
$ |
837,683 |
$ | 769,551 |
CIBC 2021 |
|
31 |
|
Management’s discussion and analysis |
• | Acts as a buffer to absorb unexpected losses while providing sustainable returns to our shareholders; |
• | Enables our businesses to grow and execute on our strategy; |
• | Demonstrates balance sheet strength and our commitment to prudent balance sheet management; and |
• | Supports us in maintaining a favourable credit standing and raising additional capital or other funding on attractive terms. |
32 |
CIBC 2021 |
Management’s discussion and analysis |
(1) | Excluding AOCI relating to cash flow hedges and changes to fair value option (FVO) liabilities attributable to changes in own credit risk. |
(2) | OSFI has provided regulatory flexibility by implementing transitional arrangements for the treatment of expected loss provisioning, such that part of the allowances that would otherwise be included in Tier 2 capital will instead qualify for inclusion in CET1 capital subject to certain scalars and limitations until fiscal 2022. See the “Continuous enhancement to regulatory capital requirements” section for additional details. |
As at October 31, 2021 |
Minimum |
Capital conservation buffer |
D-SIB buffer |
Pillar 1 targets (1) |
Domestic Stability Buffer (2) |
Target including all buffer requirements |
||||||||||||||||||
CET1 ratio |
4.5 |
% |
2.5 |
% |
1.0 |
% |
8.0 |
% |
2.5 |
% |
10.5 |
% | ||||||||||||
Tier 1 capital ratio |
6.0 |
% |
2.5 |
% |
1.0 |
% |
9.5 |
% |
2.5 |
% |
12.0 |
% | ||||||||||||
Total capital ratio |
8.0 |
% |
2.5 |
% |
1.0 |
% |
11.5 |
% |
2.5 |
% |
14.0 |
% |
(1) | The countercyclical capital buffer applicable to CIBC is insignificant as at October 31, 2021. |
(2) | The DSB was increased to 2.5% effective October 31, 2021. See the “Continuous enhancement to regulatory capital requirements” section for additional details. |
CIBC 2021 |
|
33 |
|
Management’s discussion and analysis |
Risk category |
Permissible regulatory capital approaches |
Approach adopted by CIBC | ||
Credit risk (1) |
Basel provides three approaches for calculating credit risk capital requirements: • Standardized • Foundation • Advanced internal ratings-based (AIRB) OSFI expects financial institutions in Canada with Total capital in excess of $5 billion to use the AIRB approach for all material portfolios and credit businesses. |
We have adopted the AIRB approach for the majority of our credit portfolios. Under this methodology, we utilize our own internal estimates to determine probability of default (PD), loss given default (LGD), maturity, and exposure at default (EAD) for lending products and securities. We utilize the Standardized Approach for credit portfolios within CIBC Bank USA and CIBC FirstCaribbean. We periodically review portfolios under the Standardized Approach for consideration of adoption of the AIRB approach. | ||
OSFI provides two approaches for calculating counterparty credit risk (CCR) for derivatives transactions: • Standardized Approach (SA-CCR) • Internal Model Method (IMM) |
Effective April 30, 2020, CIBC has adopted the IMM approach for calculating CCR exposure for qualifying derivative transactions. Certain transactions remain under the SA-CCR approach. | |||
OSFI provides four approaches for calculating CCR for repo-style transactions: • Comprehensive approach, with supervisory haircuts • Comprehensive approach, with own estimate haircuts • Repo VaR approach • IMM |
The comprehensive approach, with supervisory haircuts, is used for credit risk mitigation for repo-style transactions. | |||
Permitted approaches for equity positions in the banking book (which includes equity investments in funds) include: • Standardized • Market-based • Look-through • Mandate-based • Fall-back |
We use the standardized approach for equity positions in the banking book and both the look-through and mandate-based approaches for equity investments in funds. | |||
Basel provides the following approaches for calculating capital requirements for securitization positions: • Internal Ratings-Based Approach (SEC-IRBA) • Internal Assessment Approach (SEC-IAA) • External Ratings-Based Approach (SEC-ERBA) • Standardized Approach (SEC-SA) |
We use SEC-IRBA, SEC-IAA, SEC-ERBA and SEC-SA for securitization exposures in the banking book. | |||
Market risk | Market risk capital requirements can be determined under the following approaches: • Standardized • Internal models Internal models involve the use of internal VaR models to measure market risk and determine the appropriate capital requirement. The stressed VaR and incremental risk charge (IRC) also form part of the internal models approach. |
We use the internal models approach to calculate market risk capital. Our internal market risk models comprise VaR, stressed VaR, IRC and a capital charge for risk not captured in VaR. We also use SEC-ERBA for trading book securitization positions. | ||
Operational risk | Operational risk capital requirements can be determined under the following approaches: • Basic indicator approach • Standardized approach |
We use the standardized approach based on OSFI rules to calculate operational risk capital. |
(1) | Includes CCR. |
34 |
CIBC 2021 |
Management’s discussion and analysis |
• | Revisions to both the IRB and Standardized Approach to credit risk; |
• | Revised operational, market risk, and CVA frameworks; |
• | Updated CET1 capital deductions for certain assets; |
• | An updated capital output floor based on the revised Standardized Approach noted above, with the phase-in of the floor factor over three years beginning in 2023; and |
• | Modification to the Leverage Ratio framework, including a buffer requirement for D-SIBs. |
CIBC 2021 |
|
35 |
|
Management’s discussion and analysis |
$ millions, as at October 31 |
2021 |
2020 | ||||||
Common Equity Tier 1 (CET1) capital: instruments and reserves |
||||||||
Directly issued qualifying common share capital plus related stock surplus |
$ |
14,461 |
$ | 14,025 | ||||
Retained earnings |
25,793 |
22,119 | ||||||
AOCI (and other reserves) |
1,069 |
1,435 | ||||||
Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1) |
116 |
128 | ||||||
CET1 capital before regulatory adjustments |
41,439 |
37,707 | ||||||
CET1 capital: regulatory adjustments |
||||||||
Prudential valuation adjustments |
18 |
24 | ||||||
Goodwill (net of related tax liabilities) |
4,877 |
5,177 | ||||||
Other intangibles other than mortgage-servicing rights (net of related tax liabilities) |
1,737 |
1,662 | ||||||
Deferred tax assets excluding those arising from temporary differences (net of related tax liabilities) |
7 |
24 | ||||||
Defined benefit pension fund net assets (net of related tax liabilities) |
1,051 |
206 | ||||||
Other deductions or regulatory adjustments to CET1 as determined by OSFI (1) |
(209 |
) |
(592 | ) | ||||
Other |
207 |
330 | ||||||
Total regulatory adjustments to CET1 capital |
7,688 |
6,831 | ||||||
CET1 capital |
33,751 |
30,876 | ||||||
Additional Tier 1 (AT1) capital: instruments |
||||||||
Directly issued qualifying AT1 instruments plus related stock surplus (2) |
4,325 |
3,575 | ||||||
Directly issued capital instruments subject to phase out from AT1 (3) |
251 |
302 | ||||||
AT1 instruments issued by subsidiaries and held by third parties (amount allowed in AT1) |
17 |
22 | ||||||
AT1 capital |
4,593 |
3,899 | ||||||
Tier 1 capital (T1 = CET1 + AT1) |
38,344 |
34,775 | ||||||
Tier 2 capital: instruments and provisions |
||||||||
Directly issued qualifying Tier 2 instruments plus related stock surplus (4) |
4,945 |
5,035 | ||||||
Directly issued capital instruments subject to phase out from Tier 2 |
451 |
628 | ||||||
Tier 2 instruments issued by subsidiaries and held by third parties (amount allowed in Tier 2) |
22 |
29 | ||||||
General allowances |
440 |
502 | ||||||
Tier 2 capital (T2) |
5,858 |
6,194 | ||||||
Total capital (TC = T1 + T2) |
$ |
44,202 |
$ | 40,969 | ||||
Total RWA |
$ |
272,814 |
$ | 254,871 | ||||
Capital ratios |
||||||||
CET1 ratio |
12.4 |
% |
12.1 | % | ||||
Tier 1 capital ratio |
14.1 |
% |
13.6 | % | ||||
Total capital ratio |
16.2 |
% |
16.1 | % |
(1) | Beginning in the second quarter of 2020, includes the impact of the ECL transitional arrangement announced by OSFI on March 27, 2020 in response to the onset of the COVID-19 pandemic. The transitional arrangement results in a portion of ECL allowances that would otherwise be included in Tier 2 capital qualifying for inclusion in CET1 capital. The amount is subject to certain adjustments and limitations until 2022. |
(2) | Comprised of non-viability contingent capital (NVCC) preferred shares and LRCN. |
(3) | Comprised of CIBC Tier 1 Notes – Series B due June 30, 2108. On November 1, 2021, CIBC Capital Trust redeemed all $300 million of its Tier 1 Notes – Series B. |
(4) | Comprised of certain debentures which qualify as NVCC. |
36 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, for the year ended October 31 |
2021 |
2020 | ||||||
CET1 capital |
| |||||||
Balance at beginning of year |
$ |
30,876 |
$ | 27,707 | ||||
Shares issued in lieu of cash dividends (add back) |
132 |
144 | ||||||
Other issue of common shares |
326 |
227 | ||||||
Purchase of common shares for cancellation |
– |
(68 | ) | |||||
Premium on purchase of common shares for cancellation |
– |
(166 | ) | |||||
Net income attributable to equity shareholders |
6,429 |
3,790 | ||||||
Preferred and common share dividends and distributions |
(2,780 |
) |
(2,714 | ) | ||||
Change in AOCI balances included in regulatory capital |
||||||||
Net foreign currency translation adjustments |
(1,115 |
) |
180 | |||||
Net change in securities measured at FVOCI |
(43 |
) |
189 | |||||
Net change in cash flow hedges |
(137 |
) |
161 | |||||
Net change in post-employment defined benefit plans |
917 |
80 | ||||||
Change in shortfall of allowance to expected losses |
– |
575 | ||||||
Change in goodwill and other intangible assets |
225 |
194 | ||||||
Other, including change in regulatory adjustments (1)(2) |
(1,079 |
) |
577 | |||||
CET 1 capital balance at end of year |
$ |
33,751 |
$ | 30,876 | ||||
AT1 capital |
| |||||||
Balance at beginning of year |
$ |
3,899 |
$ | 3,144 | ||||
AT1 eligible capital issues |
750 |
750 | ||||||
Phase-out of innovative Tier 1 notes |
(51 |
) |
– | |||||
Redeemed |
– |
– | ||||||
Other, including change in regulatory adjustments (2) |
(5 |
) |
5 | |||||
AT1 capital balance at end of year |
$ |
4,593 |
$ | 3,899 | ||||
Tier 2 capital |
| |||||||
Balance at beginning of year |
$ |
6,194 |
$ | 5,003 | ||||
New Tier 2 eligible capital issues |
1,000 |
1,000 | ||||||
Redeemed |
(1,000 |
) |
(32 | ) | ||||
Other, including change in regulatory adjustments (2) |
(336 |
) |
223 | |||||
Tier 2 capital balance at end of year |
$ |
5,858 |
$ | 6,194 | ||||
Total capital balance at end of year |
$ |
44,202 |
$ | 40,969 |
(1) | Includes the net impact on retained earnings as at November 1, 2019 from the adoption of IFRS 16. See Note 1 to the consolidated financial statements for additional details. |
(2) | Beginning in the second quarter of 2020, includes the impact of the ECL transitional arrangement announced by OSFI on March 27, 2020 in response to the onset of the COVID-19 pandemic. The transitional arrangement results in a portion of ECL allowances that would otherwise be included in Tier 2 capital qualifying for inclusion in CET1 capital. The amount is subject to certain adjustments and limitations until 2022. |
CIBC 2021 |
|
37 |
|
Management’s discussion and analysis |
$ millions, as at October 31 |
2021 |
2020 | ||||||||||||||
RWA |
Minimum total capital required (1) |
RWA | Minimum total capital required (1) |
|||||||||||||
Credit risk (2) |
||||||||||||||||
Standardized approach |
||||||||||||||||
Corporate |
$ |
43,768 |
$ |
3,501 |
$ | 41,836 | $ | 3,347 | ||||||||
Sovereign |
1,418 |
113 |
2,460 | 197 | ||||||||||||
Banks |
382 |
31 |
326 | 26 | ||||||||||||
Real estate secured personal lending |
2,153 |
172 |
2,859 | 229 | ||||||||||||
Other retail |
976 |
78 |
939 | 75 | ||||||||||||
Trading book |
416 |
33 |
787 | 63 | ||||||||||||
Equity |
654 |
52 |
494 | 40 | ||||||||||||
Securitization |
768 |
61 |
1,031 | 82 | ||||||||||||
50,535 |
4,041 |
50,732 | 4,059 | |||||||||||||
AIRB approach (3) |
||||||||||||||||
Corporate |
92,808 |
7,425 |
83,326 | 6,666 | ||||||||||||
Sovereign (4) |
3,125 |
250 |
2,911 | 233 | ||||||||||||
Banks |
3,711 |
297 |
2,995 | 240 | ||||||||||||
Real estate secured personal lending |
22,508 |
1,801 |
20,228 | 1,618 | ||||||||||||
Qualifying revolving retail |
13,636 |
1,091 |
14,484 | 1,159 | ||||||||||||
Other retail |
9,525 |
762 |
9,022 | 722 | ||||||||||||
Equity |
564 |
45 |
423 | 34 | ||||||||||||
Trading book |
5,484 |
439 |
5,200 | 416 | ||||||||||||
Securitization |
1,246 |
100 |
1,704 | 136 | ||||||||||||
Adjustment for scaling factor |
9,082 |
727 |
8,315 | 665 | ||||||||||||
161,689 |
12,937 |
148,608 | 11,889 | |||||||||||||
Other credit RWA (5) |
12,913 |
1,033 |
12,152 | 972 | ||||||||||||
Total credit risk (before adjustment for CVA phase-in) |
225,137 |
18,011 |
211,492 | 16,920 | ||||||||||||
Market risk (Internal Models and IRB Approach) |
||||||||||||||||
VaR |
1,575 |
126 |
1,309 | 105 | ||||||||||||
Stressed VaR |
3,887 |
311 |
1,626 | 130 | ||||||||||||
Incremental risk charge |
2,583 |
206 |
2,192 | 175 | ||||||||||||
Securitization and other |
1,061 |
85 |
731 | 58 | ||||||||||||
Total market risk |
9,106 |
728 |
5,858 | 468 | ||||||||||||
Operational risk |
31,397 |
2,512 |
30,319 | 2,426 | ||||||||||||
Total RWA before adjustments for CVA phase-in |
$ |
265,640 |
$ |
21,251 |
$ | 247,669 | $ | 19,814 | ||||||||
CVA capital charge |
||||||||||||||||
Total RWA |
$ |
7,174 |
$ |
574 |
$ | 7,202 | $ | 576 | ||||||||
Total RWA after adjustments for CVA phase-in |
||||||||||||||||
Total RWA |
$ |
272,814 |
$ |
21,825 |
$ | 254,871 | $ | 20,390 |
(1) | Refers to the minimum standard established by the BCBS before the application of the capital conservation buffer and any other capital buffers that may be established by regulators from time to time. It is calculated by multiplying RWA by 8%. |
(2) | Credit risk includes CCR, which comprises derivative and repo-style transactions. Credit risk for CIBC Bank USA and CIBC FirstCaribbean are calculated under the standardized approach. |
(3) | Includes RWA relating to equity investments in funds and certain commercial loans which are determined using the supervisory slotting approach. |
(4) | Includes residential mortgages insured by Canada Mortgage and Housing Corporation (CMHC), an agency of the Government of Canada, and government-guaranteed student loans. |
(5) | Comprises RWA relating to derivative and repo-style transactions cleared through qualified central counterparties (QCCPs), settlement risk, and other assets that are subject to the credit risk framework but are not included in the standardized or IRB frameworks, including other balance sheet assets that are risk-weighted at 100%, significant investments in the capital of non-financial institutions that are risk-weighted at 1250%, and amounts below the thresholds for deduction that are risk-weighted at 250%. |
38 |
CIBC 2021 |
Management’s discussion and analysis |
(i) | On-balance sheet assets less Tier 1 capital regulatory adjustments; |
(ii) | Derivative exposures; |
(iii) | Securities financing transaction exposures; and |
(iv) | Off-balance sheet exposures (such as commitments, direct credit substitutes, letters of credit, and securitization exposures). |
$ millions, as at October 31 |
2021 |
2020 | ||||||
Tier 1 capital |
$ |
38,344 |
$ | 34,775 | ||||
Leverage ratio exposure |
823,343 |
741,760 | ||||||
Leverage ratio |
4.7 |
% |
4.7 | % |
CIBC 2021 |
|
39 |
|
Management’s discussion and analysis |
Shares outstanding |
Minimum conversion price per common share |
Maximum number of common shares issuable on conversion/exercise |
||||||||||||||
$ millions, except number of shares and per share amounts, as at November 26, 2021 |
Number of shares |
Amount |
||||||||||||||
Common shares |
450,917,565 |
$ |
14,363 |
|||||||||||||
Treasury shares – common shares |
76,771 |
12 |
||||||||||||||
Preferred shares (1)(2) |
||||||||||||||||
Series 39 (NVCC) |
16,000,000 |
$ |
400 |
$ |
5.00 |
80,000,000 |
||||||||||
Series 41 (NVCC) |
12,000,000 |
300 |
5.00 |
60,000,000 |
||||||||||||
Series 43 (NVCC) |
12,000,000 |
300 |
5.00 |
60,000,000 |
||||||||||||
Series 45 (NVCC) |
32,000,000 |
800 |
5.00 |
160,000,000 |
||||||||||||
Series 47 (NVCC) |
18,000,000 |
450 |
5.00 |
90,000,000 |
||||||||||||
Series 49 (NVCC) |
13,000,000 |
325 |
5.00 |
65,000,000 |
||||||||||||
Series 51 (NVCC) |
10,000,000 |
250 |
5.00 |
50,000,000 |
||||||||||||
Treasury shares – preferred shares (1)(2) |
(20 |
) |
– |
|||||||||||||
Limited recourse capital notes (2)(3) |
||||||||||||||||
4.375% Limited recourse capital notes Series 1 (NVCC) |
n/a |
750 |
5.00 |
150,000,000 |
||||||||||||
4.000% Limited recourse capital notes Series 2 (NVCC) |
n/a |
750 |
5.00 |
150,000,000 |
||||||||||||
Subordinated indebtedness (2)(4) |
||||||||||||||||
3.45% Debentures due April 4, 2028 (NVCC) |
n/a |
1,500 |
5.00 |
450,000,000 |
||||||||||||
2.95% Debentures due June 19, 2029 (NVCC) |
n/a |
1,500 |
5.00 |
450,000,000 |
||||||||||||
2.01% Debentures due July 21, 2030 (NVCC) |
n/a |
1,000 |
5.00 |
300,000,000 |
||||||||||||
1.96% Debentures due April 21, 2031 (NVCC) |
n/a |
1,000 |
5.00 |
300,000,000 |
||||||||||||
Stock options outstanding |
5,134,436 |
(1) | Upon the occurrence of a Trigger Event, each share is convertible into a number of common shares, determined by dividing the par value of $25.00 plus declared and unpaid dividends by the average common share price (as defined in the relevant prospectus supplement) subject to a minimum price per share (subject to adjustment in certain events as defined in the relevant prospectus supplement). Preferred shareholders do not have the right to convert their shares into common shares. |
(2) | The maximum number of common shares issuable on conversion excludes the impact of declared but unpaid dividends and accrued interest. |
(3) | Upon the occurrence of a Trigger Event, the Series 53 and 54 Preferred Shares held in the Limited Recourse Trust in support of the corresponding LRCN Notes are convertible into a number of common shares, determined by dividing the par value of $1,000 by the average common share price (as defined in the relevant prospectus supplement) subject to a minimum price per common share (subject to adjustment in certain events as defined in the relevant prospectus supplement). See Note 16 to the consolidated financial statements for details on our preferred share and other equity instruments rights and privileges. |
(4) | Upon the occurrence of a Trigger Event, the Debentures are convertible into a number of common shares, determined by dividing 150% of the par value plus accrued and unpaid interest by the average common share price (as defined in the relevant prospectus supplement) subject to a minimum price per common share (subject to adjustment in certain events as defined in the relevant prospectus supplement). |
n/a | Not applicable. |
40 |
CIBC 2021 |
|
Management’s discussion and analysis |
$ millions, as at October 31 |
2021 |
2020 | ||||||||||||||||||||||
Investments and loans (1) |
Liquidity, credit facilities and commitments |
Written credit derivatives (2) |
Investments and loans (1) |
Liquidity, credit facilities and commitments |
Written credit derivatives (2) |
|||||||||||||||||||
Single-seller and multi-seller conduits |
$ |
141 |
$ |
7,539 |
(3) |
$ |
– |
$ | 107 | $ | 8,390 | (3) |
$ | – | ||||||||||
Third-party structured vehicles |
3,838 |
2,016 |
– |
3,165 | 2,517 | – | ||||||||||||||||||
Loan warehouse financing |
3,245 |
921 |
– |
395 | 363 | – | ||||||||||||||||||
Other |
394 |
129 |
87 |
343 | 153 | 130 |
(1) |
Excludes securities issued by, retained interest in, and derivatives with entities established by CMHC, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Government National Mortgage Association, Federal Home Loan Banks, Federal Farm Credit Bank, and Student Loan Marketing Association. $3 million (2020: $3 million) of the exposures related to structured vehicles run-off were hedged. |
(2) |
Disclosed amounts reflect the outstanding notional of written credit derivatives. The negative fair value recorded on the consolidated balance sheet was $54 million (2020: $107 million). Notional of $82 million (2020: $123 million) was hedged with credit derivatives protection from third parties. The fair value of these hedges net of CVA was $49 million (2020: $98 million). An additional notional of $5 million (2020: $7 million) was hedged through a limited recourse note. |
(3) |
Excludes an additional $3.0 billion (2020: $2.1 billion) relating to our backstop liquidity facilities provided to the multi-seller conduits as part of their commitment to fund purchases of additional assets. Also excludes $35 million (2020: $12 million) of our direct investments in the multi-seller conduits which we consider investment exposure. |
CIBC 2021 A NNUAL REPORT |
41 |
Management’s discussion and analysis |
42 |
CIBC 2021 |
Management’s discussion and analysis |
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82 |
• | CIBC, SBU, functional group-level and regional risk appetite statements; |
• | Risk frameworks, policies, procedures and limits to align activities with our risk appetite; |
• | Regular risk reports to identify and communicate risk levels; |
• | An independent control framework to identify and test the design and operating effectiveness of our key controls; |
• | Stress testing to consider the potential impact of changes in the business environment on capital, liquidity and earnings; |
• | Proactive consideration of risk mitigation options in order to optimize results; and |
• | Oversight through our risk-focused committees and governance structure. |
(i) | As the first line of defence, CIBC’s SBUs and functional groups own the risks and are accountable and responsible for identifying and assessing risks inherent in their activities in accordance with the CIBC risk appetite. In addition, they establish and maintain controls to mitigate such risks. The first line of defence may include governance groups within the relevant area to facilitate the control framework and other risk-related processes. Control groups provide subject matter expertise to the business lines and/or implement and maintain enterprise-wide control programs and activities. While control groups collaborate with the lines of business in identifying and managing risk, they also challenge risk decisions and risk mitigation strategies. |
(ii) | The second line of defence is independent from the first line of defence and provides an enterprise-wide view of specific risk types, guidance and effective challenge to risk and control activities. Risk Management is the primary second line of defence. Risk Management may leverage or rely on subject matter expertise of other groups (e.g., third parties or control groups) to better inform their independent assessments, as appropriate. |
(iii) | As the third line of defence, CIBC’s internal audit function provides reasonable assurance to senior management and the Audit Committee of the Board on the effectiveness of CIBC’s governance practices, risk management processes, and internal controls as a part of its risk-based audit plan and in accordance with its mandate as described in the Internal Audit Charter. |
CIBC 2021 ANNUAL REPORT |
43 |
Management’s discussion and analysis |
• | Global Asset Liability Committee (GALCO): |
• | Global Risk Committee (GRC): |
44 |
CIBC 2021 |
Management’s discussion and analysis |
• |
Developing our risk appetite and associated management control metrics; |
• |
Setting risk strategy to manage risks in alignment with our risk appetite and business strategy; |
• |
Establishing and communicating risk frameworks, policies, procedures and limits to mitigate risks in alignment with risk strategy; |
• |
Measuring, monitoring and reporting on risk levels; |
• |
Identifying and assessing emerging and potential strategic risks; |
• |
Reviewing transactions that fall outside of risk limits delegated to business lines; and |
• |
Ensuring compliance with applicable regulatory and anti-money laundering (AML) requirements. |
• |
Capital Markets Risk Management – This group provides independent oversight of the measurement, monitoring and control of market risks (both trading and non-trading), and trading credit risk (also called counterparty credit risk) across CIBC’s portfolios, and effective challenge and sound risk management oversight to Treasury, including with respect to liquidity and funding risk management and structural interest rate risk management. |
• |
Global Credit Risk Management – This group is responsible for the adjudication and oversight of credit risks associated with our commercial, corporate and wealth management activities, management of the risks in our investment portfolios, as well as management of special loan portfolios. |
• |
Global Operational Risk Management – This group is responsible for designing and implementing effective operational risk management and control programs, and providing effective challenge to and monitoring of all operational risks globally, including (but not limited to) technology risk, information security risk, fraud risk, model risk, and third-party risk. In addition, the team has global accountability for corporate risk insurance programs, reputation risks, risk policy and governance, and risk transformation programs. |
• |
Risk Analytics and Credit Decisioning – This group manages credit risk in personal and business products (such as residential mortgages, credit cards, personal loans/lines of credit, small business loans) offered through various distribution channels and performs analytics to optimize retail credit performance, along with collections and AML outcomes. |
• |
Enterprise Risk Management – This group is responsible for enterprise-wide analysis, including the measuring and monitoring of risk appetite, enterprise-wide stress testing and reporting, credit loss reporting, risk models and model quantification, economic and regulatory capital methodologies, as well as risk data management. In addition, this group identifies and manages environmental risk, including transaction-specific environmental and related social risk, and the physical and transition risks associated with climate change. |
• |
Compliance and Global Regulatory Affairs – This group is responsible for designing and implementing an effective enterprise-wide framework to manage and mitigate regulatory compliance risk. In addition, it provides oversight of conduct and culture risk (including sales practice risk), performs effective challenge on compensation plan changes, and conducts examinations on business units/activities using a risk-based approach. This group also builds and maintains credible relationships with our prudential, market, conduct and securities regulators and acts as a liaison between the regulators and CIBC. |
CIBC 2021 |
45 |
Management’s discussion and analysis |
• | Enterprise Anti-Money Laundering – This group is responsible for all aspects of compliance with and oversight of requirements relating to AML, anti-terrorist financing (ATF), and sanctions measures. Enterprise Anti-Money Laundering provides advice to all businesses and functional groups globally and is responsible for providing an enterprise-wide view of money laundering, terrorist financing and sanctions risks, as well as guidance and effective independent challenge to control activities. Furthermore, Enterprise Anti-Money Laundering executes a risk-based approach to deter, detect and report suspected money laundering, terrorist financing and sanctioned activities, in accordance with their policies and supporting standards. |
• | U.S. Risk Management – This group carries out the mandate of CIBC Risk Management at a regional level under the leadership of the U.S. CRO, with oversight from the Risk Management Committee of the Board and the Risk Committees of the Boards of CIBC Bank USA and CIBC Bancorp USA Inc. The group provides independent oversight for the identification, management, measurement, monitoring and mitigation of risks in the U.S. Commercial Banking and Wealth Management SBU. |
• | Safeguarding our reputation and brand; |
• | Doing the right thing for our clients/stakeholders; |
• | Engaging in client-oriented businesses that we understand; |
• | Make our client’s goals our own in a professional and radically simple manner; |
• | Maintaining a balance between risk and returns; |
• | Retaining a prudent attitude towards tail and event risk; |
• | Meeting regulatory expectations and/or identifying and having plans in place to address any issues in a timely manner; |
• | Achieving/maintaining an AA rating; and |
• | Meeting/exceeding stakeholders’ expectations with respect to the ESG criteria including achieving net zero greenhouse gas emissions. |
• | Promoting, through both formal and informal channels, a shared accountability of risk identification, management and mitigation; |
• | Cultivating an environment of transparency, open communication and robust discussion of risk; |
• | Setting the appropriate “tone at the top” through clear communication and reinforcement; and |
• | Identifying behaviours that are and are not aligned with risk appetite, and reinforcing appropriate behaviours. |
46 |
CIBC 2021 |
Management’s discussion and analysis |
• | Approving CIBC’s compensation philosophy and any material changes to CIBC’s compensation principles or practices; |
• | Approving new material compensation policies and material changes to existing material compensation policies; |
• | Reviewing and recommending for Board approval new material compensation plans or changes to existing material compensation plans; |
• | Assessing the appropriateness and alignment of compensation relative to actual business performance and risks; |
• | Reviewing and recommending for Board approval incentive compensation funding and allocations, based on an assessment of business performance and risk; |
• | Reviewing and recommending for Board approval individual compensation target and compensation for the ExCo, including the CEO and other key officers; and |
• | Approving individual compensation for employees with total direct compensation above a certain materiality threshold. |
CIBC 2021 |
|
47 |
|
Management’s discussion and analysis |
• | Regular assessment of risks associated with lending and trading credit exposures; |
• | Ongoing monitoring of trading and non-trading portfolios; |
• | Assessment of risks in new business activities and processes; |
• | Assessment of risks in complex and unusual business transactions; and |
• | Regular monitoring of the overall risk profile considering market developments and trends, and external and internal events. |
48 |
CIBC 2021 |
Management’s discussion and analysis |
• | Governance and oversight by management committees, including the Model and Parameter Risk Committee (MPRC), senior management and the Board; |
• | Policies, procedures and standards to outline applicable roles and responsibilities of the various oversight groups and to provide guidance to identify, measure, control and monitor model risk throughout the model’s life cycle; and |
• | Controls for key operational aspects of model risk management including maintaining a model inventory, model risk ranking, model risk attestation and ongoing monitoring and reporting. |
• | Review of model documentation; |
• | Comprehensive, systematic testing of key model parameters on implementation to ensure results are as expected; |
• | Replication of the risk quantification process to determine whether the model implementation is faithful to the model specifications; |
• | Review of whether the model/parameter concepts and assumptions are appropriate and robust; |
• | Accuracy testing to assess the calibration and accuracy of the risk components including, for example, the discriminative power of rating systems and the reasonableness of capital parameters; |
• | Sensitivity testing to analyze the sensitivity of model/parameter outputs to model/parameter assumptions and key inputs; |
• | Scenario and stress testing of the model outputs to key inputs; |
• | Back-testing by comparing actual results with model-generated risk measures; |
• | Benchmarking to other models and comparable internal and external data; |
• | Review of the internal usage of the model/parameter applications to ensure consistency of application; |
• | Reporting of model status to the MPRC, supported through an up-to-date |
• | A quarterly attestation process for model owners in order to ensure compliance with the Model Risk and Validation Policy; and |
• | A comprehensive validation report that identifies the conditions for valid application of the model and summarizes these findings to the model owners, developers and users. |
CIBC 2021 |
|
49 |
|
Management’s discussion and analysis |
• | Global uncertainty and market repercussions pertaining to the spread of COVID-19 as discussed above; |
• | Ongoing U.S., Canada and China relations and trade issues; |
• | Implications of the U.S. “Buy American” policy; |
• | Relations between the U.S. and Iran; |
• | Tensions in the Middle East; and |
• | Concerns following the agreed-upon Brexit deal. |
50 |
CIBC 2021 |
|
Management’s discussion and analysis |
CIBC 2021 |
51 |
Management’s discussion and analysis |
52 |
CIBC 2021 |
Management’s discussion and analysis |
(1) |
Average balances are calculated as a weighted average of daily closing balances. |
(2) |
Includes CCR of $79 million, which comprises derivatives and repo-style transactions. |
(3) |
Includes CCR of $17,733 million, which comprises derivatives and repo-style transactions. |
(4) |
Includes CCR of $237 million, which comprises derivatives and repo-style transactions. |
(5) |
Average allocated common equity is a non-GAAP measure. For additional information on the composition of this non-GAAP measure, see the “Non-GAAP measures” section. |
(6) |
Represents average allocated common equity relating to capital deductions, such as goodwill and intangible assets, in accordance with the rules in OSFI’s CAR Guideline. |
CIBC 2021 |
53 |
Management’s discussion and analysis |
54 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
55 |
Management’s discussion and analysis |
• | PD – the probability that the obligor will default within the next 12 months. |
• | EAD – the estimate of the amount that will be drawn at the time of default. |
• | LGD – the expected severity of loss as the result of the default, expressed as a percentage of the EAD. |
(1) | These parameters differ from those used in the calculation of ECL under IFRS 9. See the “Accounting and control matters” section for further details. |
CIBC |
S&P |
Moody’s |
||||||||||
Grade |
rating |
equivalent |
equivalent |
|||||||||
Investment grade |
||||||||||||
Non-investment grade |
||||||||||||
Watch list |
||||||||||||
Default |
56 |
CIBC 2021 |
Management’s discussion and analysis |
Risk level |
PD bands |
|||
Exceptionally low |
||||
Very low |
||||
Low |
||||
Medium |
||||
High |
||||
Default |
CIBC 2021 ANNUAL REPOR T |
57 |
Management’s discussion and analysis |
$ millions, as at October 31 |
2021 |
2020 | ||||||||||||||||||||||
AIRB approach |
Standardized approach |
Total |
AIRB approach (1) |
Standardized approach |
Total | |||||||||||||||||||
Business and government portfolios |
||||||||||||||||||||||||
Corporate |
||||||||||||||||||||||||
Drawn |
$ |
$ |
$ |
$ | $ | $ | ||||||||||||||||||
Undrawn commitments |
||||||||||||||||||||||||
Repo-style transactions |
– |
– | ||||||||||||||||||||||
Other off-balance sheet |
||||||||||||||||||||||||
OTC derivatives |
||||||||||||||||||||||||
Sovereign |
||||||||||||||||||||||||
Drawn |
||||||||||||||||||||||||
Undrawn commitments |
– |
– | ||||||||||||||||||||||
Repo-style transactions |
– |
– | ||||||||||||||||||||||
Other off-balance sheet |
– |
– | ||||||||||||||||||||||
OTC derivatives |
||||||||||||||||||||||||
Banks |
||||||||||||||||||||||||
Drawn |
||||||||||||||||||||||||
Undrawn commitments |
||||||||||||||||||||||||
Repo-style transactions |
– |
– | ||||||||||||||||||||||
Other off-balance sheet |
– |
– | ||||||||||||||||||||||
OTC derivatives |
||||||||||||||||||||||||
Gross business and government portfolios |
||||||||||||||||||||||||
Less: collateral held for repo-style transactions |
– |
– | ||||||||||||||||||||||
Net business and government portfolios |
||||||||||||||||||||||||
Retail portfolios |
||||||||||||||||||||||||
Real estate secured personal lending |
||||||||||||||||||||||||
Drawn |
||||||||||||||||||||||||
Undrawn commitments |
– |
– | ||||||||||||||||||||||
Qualifying revolving retail |
||||||||||||||||||||||||
Drawn |
– |
– | ||||||||||||||||||||||
Undrawn commitments |
– |
– | ||||||||||||||||||||||
Other off-balance sheet |
– |
– | ||||||||||||||||||||||
– |
– | |||||||||||||||||||||||
Other retail |
||||||||||||||||||||||||
Drawn |
||||||||||||||||||||||||
Undrawn commitments |
||||||||||||||||||||||||
Other off-balance sheet |
– |
– | ||||||||||||||||||||||
Total retail portfolios |
||||||||||||||||||||||||
Securitization exposures |
||||||||||||||||||||||||
Gross credit exposure |
||||||||||||||||||||||||
Less: collateral held for repo-style transactions |
– |
– | ||||||||||||||||||||||
Net credit exposure ( 2 ) |
$ |
$ |
$ |
$ | |
$ | |
$ | |
(1) |
Includes exposures subject to the supervisory slotting approach. |
(2) |
Excludes exposures arising from derivative and repo-style transactions that are cleared through QCCPs as well as credit risk exposures arising from other assets that are subject to the credit risk framework but are not included in the standardized or IRB frameworks, including other balance sheet assets that are risk-weighted at 100%, significant investments in the capital of non-financial institutions that are risk-weighted at 1,250%, settlement risk, and amounts below the thresholds for deduction that are risk-weighted at 250%. |
58 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at October 31 |
Risk-weight category |
2021 |
2020 | |||||||||||||||||||||||||||||||||
0% |
20% |
35% |
50% |
75% |
100% |
150% |
Total |
Total | ||||||||||||||||||||||||||||
Corporate |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
$ |
$ |
$ | ||||||||||||||||||||||
Sovereign |
– |
– |
– |
|||||||||||||||||||||||||||||||||
Banks |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||||
Real estate secured personal lending |
– |
– |
– |
|||||||||||||||||||||||||||||||||
Other retail |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ | |
(1) | See “Securitization exposures” section for securitization exposures that are subject to the standardized approach. |
$ billions, as at October 31 |
2021 |
2020 | ||||||||||||||
Exposure (1) |
||||||||||||||||
Investment grade |
$ |
% |
$ | % | ||||||||||||
Non-investment grade |
||||||||||||||||
Watch list |
||||||||||||||||
Default |
– |
– |
||||||||||||||
Unrated |
– |
– |
– | – | ||||||||||||
$ |
% |
$ | |
% |
(1) | MTM of the OTC derivative contracts is after the impact of master netting agreements, but before any collateral. |
CIBC 2021 ANNUAL REPORT |
|
59 |
Management’s discussion and analysis |
$ millions, as at October 31, 2021 |
Canada | U.S. | Europe | Other | Total | |||||||||||||||
Drawn |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Undrawn commitments |
||||||||||||||||||||
Repo-style transactions |
||||||||||||||||||||
Other off-balance sheet |
||||||||||||||||||||
OTC derivatives |
||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
October 31, 2020 |
$ | |
$ | |
$ | |
$ | |
$ | |
(1) | Classification by country is primarily based on domicile of debtor or customer. |
Undrawn |
Repo-style |
Other off- |
OTC |
2021 |
2020 | |||||||||||||||||||||||
$ millions, as at October 31 |
Drawn |
commitments |
transactions |
balance sheet |
derivatives |
Total |
Total | |||||||||||||||||||||
Commercial mortgages |
$ |
$ |
$ |
– |
$ |
– |
$ |
– |
$ |
$ | ||||||||||||||||||
Financial institutions |
||||||||||||||||||||||||||||
Retail and wholesale |
– |
|||||||||||||||||||||||||||
Business services |
||||||||||||||||||||||||||||
Manufacturing – capital goods |
– |
|||||||||||||||||||||||||||
Manufacturing – consumer goods |
– |
|||||||||||||||||||||||||||
Real estate and construction |
||||||||||||||||||||||||||||
Agriculture |
– |
|||||||||||||||||||||||||||
Oil and gas |
– |
|||||||||||||||||||||||||||
Mining |
– |
|||||||||||||||||||||||||||
Forest products |
– |
|||||||||||||||||||||||||||
Hardware and software |
– |
|||||||||||||||||||||||||||
Telecommunications and cable |
– |
|||||||||||||||||||||||||||
Broadcasting, publishing and printing |
– |
|||||||||||||||||||||||||||
Transportation |
– |
|||||||||||||||||||||||||||
Utilities |
– |
|||||||||||||||||||||||||||
Education, health, and social services |
||||||||||||||||||||||||||||
Governments |
||||||||||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
$ |
$ | |
(1) | In the third quarter of 2021, certain amounts by sector were revised from those previously presented to align with our revised sector definition, or to better match the borrowers’ risk profiles with the relevant sectors. |
$ millions, as at October 31 |
2021 |
2020 | ||||||||||||||||||
EAD |
||||||||||||||||||||
Risk level | Real estate secured personal lending |
Qualifying revolving retail |
Other retail |
Total |
Total | |||||||||||||||
Exceptionally low |
$ |
$ |
$ |
$ |
$ | |||||||||||||||
Very low |
||||||||||||||||||||
Low |
||||||||||||||||||||
Medium |
||||||||||||||||||||
High |
||||||||||||||||||||
Default |
||||||||||||||||||||
$ |
$ |
$ |
$ |
$ | |
$ millions, as at October 31 |
2021 |
2020 | ||||||
EAD | ||||||||
Exposures under the AIRB approach |
||||||||
S&P rating equivalent |
||||||||
AAA to BBB- |
$ |
$ | ||||||
BB+ to BB- |
– |
– | ||||||
Below BB- |
– |
– | ||||||
Unrated |
– |
– | ||||||
Exposures under the standardized approach |
||||||||
Total securitization exposures |
$ |
$ | |
60 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 ANNUAL REPORT |
61 |
Management’s discussion and analysis |
Residential mortgages (1) |
HELOC (2) |
Total |
||||||||||||||||||||||||||||||||||||||||||||||
$ billions, as at October 31, 2021 |
Insured |
Uninsured |
Uninsured |
Insured |
Uninsured |
|||||||||||||||||||||||||||||||||||||||||||
Ontario (3) |
$ |
25.2 |
19 |
% |
$ |
106.7 |
81 |
% |
$ |
10.2 |
100 |
% |
$ |
25.2 |
18 |
% |
$ |
116.9 |
82 |
% | ||||||||||||||||||||||||||||
British Columbia and territories (4) |
8.7 |
18 |
40.6 |
82 |
3.9 |
100 |
8.7 |
16 |
44.5 |
84 |
||||||||||||||||||||||||||||||||||||||
Alberta |
12.9 |
49 |
13.6 |
51 |
2.2 |
100 |
12.9 |
45 |
15.8 |
55 |
||||||||||||||||||||||||||||||||||||||
Quebec |
5.6 |
30 |
13.2 |
70 |
1.2 |
100 |
5.6 |
28 |
14.4 |
72 |
||||||||||||||||||||||||||||||||||||||
Central prairie provinces |
3.5 |
46 |
4.1 |
54 |
0.6 |
100 |
3.5 |
43 |
4.7 |
57 |
||||||||||||||||||||||||||||||||||||||
Atlantic provinces |
3.7 |
42 |
5.1 |
58 |
0.7 |
100 |
3.7 |
39 |
5.8 |
61 |
||||||||||||||||||||||||||||||||||||||
Canadian portfolio (5)(6) |
59.6 |
25 |
183.3 |
75 |
18.8 |
100 |
59.6 |
23 |
202.1 |
77 |
||||||||||||||||||||||||||||||||||||||
U.S. portfolio (5) |
– |
– |
2.1 |
100 |
– |
– |
– |
– |
2.1 |
100 |
||||||||||||||||||||||||||||||||||||||
Other international portfolio (5) |
– |
– |
2.5 |
100 |
– |
– |
– |
– |
2.5 |
100 |
||||||||||||||||||||||||||||||||||||||
Total portfolio |
$ |
59.6 |
24 |
% |
$ |
187.9 |
76 |
% |
$ |
18.8 |
100 |
% |
$ |
59.6 |
22 |
% |
$ |
206.7 |
78 |
% | ||||||||||||||||||||||||||||
October 31, 2020 |
$ |
67.0 |
31 |
% |
$ |
149.0 |
69 |
% |
$ |
19.6 |
100 |
% |
$ |
67.0 |
28 |
% |
$ |
168.6 |
72 |
% |
(1) |
Balances reflect principal values. |
(2) |
We did not have any insured HELOCs as at October 31, 2021 and 2020. |
(3) |
Includes $11.7 billion (2020: $13.8 billion) of insured residential mortgages, $67.7 billion (2020: $53.4 billion) of uninsured residential mortgages, and $6.0 billion (2020: $6.1 billion) of HELOCs in the Greater Toronto Area (GTA). |
(4) |
Includes $3.8 billion (2020: $4.5 billion) of insured residential mortgages, $27.9 billion (2020: $22.9 billion) of uninsured residential mortgages, and $2.4 billion (2020: $2.5 billion) of HELOCs in the Greater Vancouver Area (GVA). |
(5) |
Geographic location is based on the address of the property. |
(6) |
64% (2020: 71%) of insurance on Canadian residential mortgages is provided by CMHC and the remaining by two private Canadian insurers, both rated at least AA (low) by DBRS. |
For the year ended October 31 |
2021 |
2020 |
||||||||||||||
Residential mortgages |
HELOC |
Residential mortgages |
HELOC |
|||||||||||||
Ontario (2) |
64 |
% |
68 |
% |
63 |
% |
68 |
% | ||||||||
British Columbia and territories (3) |
61 |
65 |
60 |
65 |
||||||||||||
Alberta |
69 |
73 |
68 |
73 |
||||||||||||
Quebec |
68 |
73 |
68 |
73 |
||||||||||||
Central prairie provinces |
69 |
74 |
68 |
74 |
||||||||||||
Atlantic provinces |
69 |
73 |
71 |
74 |
||||||||||||
Canadian portfolio (4) |
64 |
68 |
63 |
68 |
||||||||||||
U.S. portfolio (4) |
63 |
65 |
65 |
63 |
||||||||||||
Other international portfolio (4) |
75 |
% |
n/m |
72 |
% |
n/m |
(1) |
LTV ratios for newly originated and acquired residential mortgages and HELOCs are calculated based on weighted average. |
(2) |
Average LTV ratios for our uninsured GTA residential mortgages originated during the year were 64% (2020: 62%). |
(3) |
Average LTV ratios for our uninsured GVA residential mortgages originated during the year were 61% (2020: 58%). |
(4) |
Geographic location is based on the address of the property. |
n/m |
Not meaningful. |
Insured |
Uninsured |
|||||||
October 31, 2021 (1)(2) |
51 |
% |
49 |
% | ||||
October 31, 2020 (1)(2) |
55 |
% |
52 |
% |
(1) |
LTV ratios for residential mortgages are calculated based on weighted average. The house price estimates for October 31, 2021 and 2020 are based on the Forward Sortation Area (FSA) level indices from the Teranet – National Bank National Composite House Price Index (Teranet) as of September 30, 2021 and 2020, respectively. Teranet is an independent estimate of the rate of change in Canadian home prices. |
(2) |
Average LTV ratio on our uninsured GTA residential mortgage portfolio was 47% (2020: 48%). Average LTV ratio on our uninsured GVA residential mortgage portfolio was 45% (2020: 46%). |
62 |
CIBC 2021 |
Management’s discussion and analysis |
0–5 years |
>5–10 years |
>10–15 years |
>15–20 years |
>20–25 years |
>25–30 years |
>30–35 years |
>35 years |
|||||||||||||||||||||||||
Canadian portfolio |
||||||||||||||||||||||||||||||||
October 31, 2021 |
1 |
% |
3 |
% |
7 |
% |
17 |
% |
45 |
% |
27 |
% |
– |
% |
– |
% | ||||||||||||||||
October 31, 2020 |
2 |
% |
4 |
% |
7 |
% |
18 |
% |
44 |
% |
25 |
% |
– |
% |
– |
% | ||||||||||||||||
U.S. portfolio |
||||||||||||||||||||||||||||||||
October 31, 2021 |
1 |
% |
3 |
% |
6 |
% |
9 |
% |
10 |
% |
71 |
% |
– |
% |
– |
% | ||||||||||||||||
October 31, 2020 |
2 |
% |
3 |
% |
7 |
% |
10 |
% |
10 |
% |
68 |
% |
– |
% |
– |
% | ||||||||||||||||
Other international portfolio |
||||||||||||||||||||||||||||||||
October 31, 2021 |
7 |
% |
12 |
% |
21 |
% |
24 |
% |
19 |
% |
15 |
% |
1 |
% |
– |
% | ||||||||||||||||
October 31, 2020 |
7 |
% |
13 |
% |
22 |
% |
23 |
% |
19 |
% |
14 |
% |
2 |
% |
– |
% |
$ millions, as at or for the year ended October 31 |
2021 |
2020 |
||||||||||||||||||||||
Business and government loans |
Consumer loans |
Total |
Business and government loans |
Consumer loans |
Total |
|||||||||||||||||||
Gross impaired loans |
||||||||||||||||||||||||
Balance at beginning of year |
$ |
1,359 |
$ |
990 |
$ |
2,349 |
$ |
911 |
$ |
955 |
$ |
1,866 |
||||||||||||
Classified as impaired during the year |
750 |
1,686 |
2,436 |
1,256 |
1,933 |
3,189 |
||||||||||||||||||
Transferred to performing during the year |
(235 |
) |
(574 |
) |
(809 |
) |
(109 |
) |
(580 |
) |
(689 |
) | ||||||||||||
Net repayments |
(480 |
) |
(579 |
) |
(1,059 |
) |
(547 |
) |
(543 |
) |
(1,090 |
) | ||||||||||||
Amounts written off |
(279 |
) |
(707 |
) |
(986 |
) |
(157 |
) |
(778 |
) |
(935 |
) | ||||||||||||
Disposals of loans |
(31 |
) |
– |
(31 |
) |
– |
– |
– |
||||||||||||||||
Foreign exchange and other |
(51 |
) |
(16 |
) |
(67 |
) |
5 |
3 |
8 |
|||||||||||||||
Balance at end of year |
$ |
1,033 |
$ |
800 |
$ |
1,833 |
$ |
1,359 |
$ |
990 |
$ |
2,349 |
||||||||||||
Allowance for credit losses – impaired loans |
$ |
508 |
$ |
264 |
$ |
772 |
$ |
650 |
$ |
264 |
$ |
914 |
||||||||||||
Net impaired loans (1) |
||||||||||||||||||||||||
Balance at beginning of year |
$ |
709 |
$ |
726 |
$ |
1,435 |
$ |
535 |
$ |
687 |
$ |
1,222 |
||||||||||||
Net change in gross impaired |
(326 |
) |
(190 |
) |
(516 |
) |
448 |
35 |
483 |
|||||||||||||||
Net change in allowance |
142 |
– |
142 |
(274 |
) |
4 |
(270 |
) | ||||||||||||||||
Balance at end of year |
$ |
525 |
$ |
536 |
$ |
1,061 |
$ |
709 |
$ |
726 |
$ |
1,435 |
||||||||||||
Net impaired loans as a percentage of net loans and acceptances |
0.23 |
% |
0.34 |
% |
(1) |
Net impaired loans are gross impaired loans net of stage 3 allowance for credit losses. |
CIBC 2021 |
63 |
Management’s discussion and analysis |
$ millions, as at October 31 |
31 to 90 days |
Over 90 days |
2021 Total |
2020 Total (1) |
||||||||||||
Residential mortgages |
$ |
$ |
– |
$ |
$ | |||||||||||
Personal |
– |
|||||||||||||||
Credit card |
||||||||||||||||
Business and government |
– |
|||||||||||||||
$ |
$ |
$ |
$ | |
(1) | Excludes loans less than 30 days past due as such loans are not generally indicative of the borrowers’ ability to repay. |
Direct exposures |
||||||||||||||||||||||||||||||||||||||||||||||||
Funded |
Unfunded |
Derivative MTM receivables and repo-style transactions (1) |
||||||||||||||||||||||||||||||||||||||||||||||
$ millions, as at October 31, |
Corporate |
Sovereign |
Banks |
Total funded (A) |
Corporate |
Banks |
Total unfunded (B) |
Corporate |
Sovereign |
Banks |
Net exposure (C) |
Total direct exposure (A)+(B)+(C) |
||||||||||||||||||||||||||||||||||||
Austria |
$ |
– |
$ |
514 |
$ |
135 |
$ |
649 |
$ |
– |
$ |
2 |
$ |
2 |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
651 |
||||||||||||||||||||||||
Finland |
67 |
328 |
758 |
1,153 |
97 |
5 |
102 |
– |
– |
7 |
7 |
1,262 |
||||||||||||||||||||||||||||||||||||
France |
62 |
161 |
152 |
375 |
336 |
103 |
439 |
– |
– |
34 |
34 |
848 |
||||||||||||||||||||||||||||||||||||
Germany |
432 |
917 |
751 |
2,100 |
321 |
130 |
451 |
49 |
– |
51 |
100 |
2,651 |
||||||||||||||||||||||||||||||||||||
Ireland |
206 |
– |
153 |
359 |
43 |
– |
43 |
– |
– |
226 |
226 |
628 |
||||||||||||||||||||||||||||||||||||
Luxembourg |
151 |
1,812 |
156 |
2,119 |
61 |
108 |
169 |
– |
– |
124 |
124 |
2,412 |
||||||||||||||||||||||||||||||||||||
Netherlands |
552 |
730 |
147 |
1,429 |
568 |
275 |
843 |
28 |
– |
12 |
40 |
2,312 |
||||||||||||||||||||||||||||||||||||
Norway |
187 |
186 |
195 |
568 |
714 |
– |
714 |
– |
– |
– |
– |
1,282 |
||||||||||||||||||||||||||||||||||||
Spain |
87 |
– |
21 |
108 |
7 |
25 |
32 |
– |
– |
– |
– |
140 |
||||||||||||||||||||||||||||||||||||
Sweden |
452 |
900 |
174 |
1,526 |
137 |
– |
137 |
17 |
– |
– |
17 |
1,680 |
||||||||||||||||||||||||||||||||||||
Switzerland |
234 |
– |
31 |
265 |
93 |
– |
93 |
11 |
– |
84 |
95 |
453 |
||||||||||||||||||||||||||||||||||||
United Kingdom |
2,655 |
2,494 |
1,002 |
6,151 |
3,174 |
349 |
3,523 |
690 |
17 |
423 |
1,130 |
10,804 |
||||||||||||||||||||||||||||||||||||
Other European countries |
61 |
311 |
55 |
427 |
12 |
83 |
95 |
– |
127 |
9 |
136 |
658 |
||||||||||||||||||||||||||||||||||||
Total Europe |
$ |
5,146 |
$ |
8,353 |
$ |
3,730 |
$ |
17,229 |
$ |
5,563 |
$ |
1,080 |
$ |
6,643 |
$ |
795 |
$ |
144 |
$ |
970 |
$ |
1,909 |
$ |
25,781 |
||||||||||||||||||||||||
October 31, 2020 (2) |
$ |
4,275 |
$ |
5,211 |
$ |
3,544 |
$ |
13,030 |
$ |
5,063 |
$ |
968 |
$ |
6,031 |
$ |
788 |
$ |
92 |
$ |
835 |
$ |
1,715 |
$ |
20,776 |
(1) |
The amounts shown are net of CVA and collateral. Collateral on derivative MTM receivables was $1.9 billion (2020: $1.8 billion), collateral on repo-style transactions was $30.5 billion (2020: $30.3 billion), and both comprise cash and investment grade debt securities. |
(2) |
Certain prior period balances have been revised to conform to current year presentation. |
64 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 ANNUAL REPORT |
65 |
Management’s discussion and analysis |
• | Board limits control consolidated market risk; |
• | Management limits control market risk for CIBC overall and are lower than the Board limits to allow for a buffer in the event of extreme market moves and/or extraordinary client needs; |
• | Tier 2 limits control market risk at the business unit level; and |
• | Tier 3 limits control market risk at the sub-business unit or desk level. |
• | VaR enables the meaningful comparison of the risks in different businesses and asset classes. VaR is determined by the combined modelling of VaR for each of interest rate, credit spread, equity, foreign exchange, commodity, and debt specific risks, along with the portfolio effect arising from the interrelationship of the different risks (diversification effect): |
• | Interest rate risk measures the impact of changes in interest rates and volatilities on cash instruments and derivatives. |
• | Credit spread risk measures the impact of changes in credit spreads of provincial, municipal and agency bonds, sovereign bonds, corporate bonds, securitized products, and credit derivatives such as credit default swaps. |
• | Equity risk measures the impact of changes in equity prices and volatilities. |
• | Foreign exchange risk measures the impact of changes in foreign exchange rates and volatilities. |
• | Commodity risk measures the impact of changes in commodity prices and volatilities, including the basis between related commodities. |
• | Debt specific risk measures the impact of changes in the volatility of the yield of a debt instrument as compared with the volatility of the yield of a representative bond index. |
• | Diversification effect reflects the risk reduction achieved across various financial instrument types, counterparties, currencies and regions. The extent of the diversification benefit depends on the correlation between the assets and risk factors in the portfolio at a particular time. |
• | Price sensitivity measures the change in value of a portfolio to a small change in a given underlying parameter, so that component risks may be examined in isolation, and the portfolio rebalanced accordingly to achieve a desired exposure. |
• | Stressed VaR enables the meaningful comparison of the risks in different businesses and asset classes under stressful conditions. Changes to rates, prices, volatilities, and spreads over a |
• | IRC measures the required capital due to credit migration and default risk for debt securities held in the trading portfolios. |
• | Back-testing validates the effectiveness of risk measurement through analysis of observed and theoretical profit and loss outcomes. |
• | Stress testing and scenario analysis provide insight into portfolio behaviour under extreme circumstances. |
66 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at October 31 |
2021 |
2020 |
||||||||||||||||||||||||||||||||||
Subject to market risk (1) |
Subject to market risk (1) |
|||||||||||||||||||||||||||||||||||
Consolidated balance sheet |
Trading |
Non- trading |
Not subject to market risk |
Consolidated balance sheet |
Trading |
Non- trading |
Not subject to market risk |
Non-traded riskprimary risk sensitivity |
||||||||||||||||||||||||||||
Cash and non-interest-bearing deposits with banks |
$ |
34,573 |
$ |
– |
$ |
2,661 |
$ |
31,912 |
$ |
43,531 |
$ |
– |
$ |
2,445 |
$ |
41,086 |
Foreign exchange |
|||||||||||||||||||
Interest-bearing deposits with banks |
22,424 |
19 |
22,405 |
– |
18,987 |
75 |
18,912 |
– |
Interest rate |
|||||||||||||||||||||||||||
Securities |
161,401 |
56,028 |
105,373 |
– |
149,046 |
45,825 |
103,221 |
– |
Interest rate, equity |
|||||||||||||||||||||||||||
Cash collateral on securities borrowed |
12,368 |
– |
12,368 |
– |
8,547 |
– |
8,547 |
– |
Interest rate |
|||||||||||||||||||||||||||
Securities purchased under resale agreements |
67,572 |
– |
67,572 |
– |
65,595 |
– |
65,595 |
– |
Interest rate |
|||||||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||||||||||
Residential mortgages |
251,526 |
– |
251,526 |
– |
221,165 |
– |
221,165 |
– |
Interest rate |
|||||||||||||||||||||||||||
Personal |
41,897 |
– |
41,897 |
– |
42,222 |
– |
42,222 |
– |
Interest rate |
|||||||||||||||||||||||||||
Credit card |
11,134 |
– |
11,134 |
– |
11,389 |
– |
11,389 |
– |
Interest rate |
|||||||||||||||||||||||||||
Business and government |
150,213 |
24,780 |
(2) |
125,433 |
– |
135,546 |
22,643 |
(2) |
112,903 |
– |
Interest rate |
|||||||||||||||||||||||||
Allowance for credit losses |
(2,849 |
) |
– |
(2,849 |
) |
– |
(3,540 |
) |
– |
(3,540 |
) |
– |
Interest rate |
|||||||||||||||||||||||
Derivative instruments |
35,912 |
34,589 |
1,323 |
– |
32,730 |
31,244 |
1,486 |
– |
Interest rate, |
|||||||||||||||||||||||||||
foreign exchange |
||||||||||||||||||||||||||||||||||||
Customers’ liability under acceptances |
10,958 |
– |
10,958 |
– |
9,606 |
– |
9,606 |
– |
Interest rate |
|||||||||||||||||||||||||||
Other assets |
40,554 |
2,977 |
26,743 |
10,834 |
34,727 |
3,364 |
20,613 |
10,750 |
Interest rate, equity, |
|||||||||||||||||||||||||||
foreign exchange |
||||||||||||||||||||||||||||||||||||
$ |
837,683 |
$ |
118,393 |
$ |
676,544 |
$ |
42,746 |
$ |
769,551 |
$ |
103,151 |
$ |
614,564 |
$ |
51,836 |
|||||||||||||||||||||
Deposits |
$ |
621,158 |
$ |
609 |
(3) |
$ |
548,419 |
$ |
72,130 |
$ |
570,740 |
$ |
484 |
(3) |
$ |
510,788 |
$ |
59,468 |
Interest rate |
|||||||||||||||||
Obligations related to securities sold short |
22,790 |
19,472 |
3,318 |
– |
15,963 |
13,795 |
2,168 |
– |
Interest rate |
|||||||||||||||||||||||||||
Cash collateral on securities lent |
2,463 |
– |
2,463 |
– |
1,824 |
– |
1,824 |
– |
Interest rate |
|||||||||||||||||||||||||||
Obligations related to securities sold under repurchase agreements |
71,880 |
– |
71,880 |
– |
71,653 |
– |
71,653 |
– |
Interest rate |
|||||||||||||||||||||||||||
Derivative instruments |
32,101 |
30,882 |
1,219 |
– |
30,508 |
29,436 |
1,072 |
– |
Interest rate, |
|||||||||||||||||||||||||||
foreign exchange |
||||||||||||||||||||||||||||||||||||
Acceptances |
10,961 |
– |
10,961 |
– |
9,649 |
– |
9,649 |
– |
Interest rate |
|||||||||||||||||||||||||||
Other liabilities |
24,961 |
2,705 |
11,344 |
10,912 |
22,167 |
2,386 |
10,926 |
8,855 |
Interest rate |
|||||||||||||||||||||||||||
Subordinated indebtedness |
5,539 |
– |
5,539 |
– |
5,712 |
– |
5,712 |
– |
Interest rate |
|||||||||||||||||||||||||||
$ |
791,853 |
$ |
53,668 |
$ |
655,143 |
$ |
83,042 |
$ |
728,216 |
$ |
46,101 |
$ |
613,792 |
$ |
68,323 |
(1) |
Funding valuation adjustment (FVA) exposures are excluded from trading activities for regulatory capital purposes, with related derivative hedges to these FVA exposures also excluded beginning from the second quarter of 2020. |
(2) |
Excludes $48 million (2020: $291 million) of loans that are warehoused for future securitization purposes. These are considered non-trading for market risk purposes. |
(3) |
Comprises FVO deposits which are considered trading for market risk purposes. |
• | The use of historical data for estimating future events will not encompass all potential events, particularly those that are extreme in nature. |
• | The use of a one-day period may be insufficient to liquidate or hedge all positions fully. |
• | The use of a 99% confidence level does not take into account losses that might occur beyond this level of confidence. |
• | VaR is calculated on the basis of exposures outstanding at the close of business and assumes no management action to mitigate losses. |
CIBC 2021 ANNUAL REPORT |
67 |
Management’s discussion and analysis |
$ millions, as at or for the year ended October 31 |
2021 |
2020 | ||||||||||||||||||||||||||||||
High |
Low |
As at |
Average |
High | Low | As at | Average | |||||||||||||||||||||||||
Interest rate risk |
$ |
$ |
$ |
$ |
$ | $ | $ | $ | ||||||||||||||||||||||||
Credit spread risk |
||||||||||||||||||||||||||||||||
Equity risk |
||||||||||||||||||||||||||||||||
Foreign exchange risk |
||||||||||||||||||||||||||||||||
Commodity risk |
||||||||||||||||||||||||||||||||
Debt specific risk |
||||||||||||||||||||||||||||||||
Diversification effect (1) |
n/m |
n/m |
( |
) |
( |
) |
n/m | n/m | ( |
) | ( |
) | ||||||||||||||||||||
Total VaR (one-day measure) |
$ |
$ |
$ |
$ |
$ | |
$ | |
$ | |
$ | |
||||||||||||||||||||
Stressed total VaR (one-day measure) |
$ |
$ |
$ |
$ |
$ | $ | $ | $ | ||||||||||||||||||||||||
IRC (one-year measure) (2) |
$ |
$ |
$ |
$ |
$ | $ | $ | $ |
(1) | Total VaR is less than the sum of the VaR of the different market risk types due to risk offsets resulting from a portfolio diversification effect. |
(2) | High and low IRC are not equal to the sum of the constituent parts, because the highs and lows of the constituent parts may occur on different days. |
n/m | Not meaningful. It is not meaningful to compute a diversification effect because the high and low may occur on different days for different risk types. |
|
68 |
CIBC 2021 |
Management’s discussion and analysis |
(1) | Excludes certain month-end transfer pricing and other miscellaneous adjustments. |
(2) | Fair value adjustments are excluded from trading activities for regulatory capital purposes, with related derivative hedges to these fair value adjustments also excluded, beginning from the second quarter of 2020 . |
CIBC 2021 ANNUAL REPORT |
69 |
Management’s discussion and analysis |
• Subprime crisis traded |
• Canadian market crisis |
• Quantitative easing tapering and asset price correction | ||
• U.S. Federal Reserve tightening – 1994 |
• U.S. protectionism | |||
• U.S. sovereign debt default and downgrade |
• Eurozone bank crisis |
• Oil crisis | ||
• Chinese hard landing |
• Pandemic first wave |
$ millions (pre-tax), as at October 31 |
2021 |
2020 | ||||||||||||||
CAD (1) |
USD |
CAD (1) |
USD | |||||||||||||
100 basis point increase in interest rates |
||||||||||||||||
Increase (decrease) in net interest income | $ |
$ |
$ | |
$ | |
||||||||||
Increase (decrease) in EVE | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
25 basis point decrease in interest rates |
||||||||||||||||
Increase (decrease) in net interest income | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Increase (decrease) in EVE |
(1) | Includes CAD and other currency exposures. |
70 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at October 31 |
Cost | Fair value | ||||||||
2021 |
Equity securities designated at FVOCI |
$ |
$ |
|||||||
Equity-accounted investments in associates (1) |
||||||||||
$ |
$ |
|||||||||
2020 | Equity securities designated at FVOCI |
$ | |
$ | |
|||||
Equity-accounted investments in associates (1) |
||||||||||
$ | $ |
(1) | Excludes our equity-accounted joint ventures. See Note 26 to the consolidated financial statements for further details. |
CIBC 2021 |
71 |
Management’s discussion and analysis |
72 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at October 31 |
Bank owned liquid assets |
Securities received as collateral |
Total liquid assets |
Encumbered liquid assets |
Unencumbered liquid assets (1) |
|||||||||||||||||
2021 |
Cash and deposits with banks |
$ |
$ |
– |
$ |
$ |
$ |
|||||||||||||||
Securities issued or guaranteed by sovereigns, central banks, and multilateral development banks |
||||||||||||||||||||||
Other debt securities |
||||||||||||||||||||||
Equities |
||||||||||||||||||||||
Canadian government guaranteed National Housing Act mortgage-backed securities |
||||||||||||||||||||||
Other liquid assets (2) |
||||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||
2020 |
Cash and deposits with banks | $ | $ | – | $ | $ | $ | |||||||||||||||
Securities issued or guaranteed by sovereigns, central banks, and multilateral development banks |
||||||||||||||||||||||
Other debt securities | ||||||||||||||||||||||
Equities | ||||||||||||||||||||||
Canadian government guaranteed National Housing Act mortgage-backed securities |
||||||||||||||||||||||
Other liquid assets (2) |
||||||||||||||||||||||
$ | |
$ | |
$ | |
$ | |
$ | |
(1) | Unencumbered liquid assets are defined as on-balance sheet assets, assets borrowed or purchased under resale agreements, and other off-balance sheet collateral received less encumbered liquid assets. |
(2) | Includes cash pledged as collateral for derivatives transactions, select ABS and precious metals. |
$ millions, as at October 31 |
2021 |
2020 |
||||||
CIBC (parent) |
$ |
153,971 |
$ |
170,936 |
||||
Domestic subsidiaries |
12,271 |
12,355 |
||||||
Foreign subsidiaries |
47,557 |
39,381 |
||||||
$ |
213,799 |
$ |
222,672 |
Encumbered |
Unencumbered |
Total assets |
||||||||||||||||||||
$ millions, as at October 31 |
Pledged as collateral |
Other (1) |
Available as collateral |
Other (2) |
||||||||||||||||||
2021 |
Cash and deposits with banks |
$ |
– |
$ |
252 |
$ |
56,745 |
$ |
– |
$ |
56,997 |
|||||||||||
Securities (3) |
154,382 |
1,817 |
134,018 |
– |
290,217 |
|||||||||||||||||
Loans, net of allowance for credit losses (4) |
1,488 |
44,615 |
29,331 |
376,487 |
451,921 |
|||||||||||||||||
Other assets |
6,599 |
– |
3,005 |
77,820 |
87,424 |
|||||||||||||||||
$ |
162,469 |
$ |
46,684 |
$ |
223,099 |
$ |
454,307 |
$ |
886,559 |
|||||||||||||
2020 |
Cash and deposits with banks |
$ |
– |
$ |
133 |
$ |
62,385 |
$ |
– |
$ |
62,518 |
|||||||||||
Securities (3) |
127,974 |
678 |
132,493 |
– |
261,145 |
|||||||||||||||||
Loans, net of allowance for credit losses (4) |
7,946 |
42,291 |
34,103 |
322,441 |
406,781 |
|||||||||||||||||
Other assets |
4,950 |
– |
2,731 |
69,382 |
77,063 |
|||||||||||||||||
$ |
140,870 |
$ |
43,102 |
$ |
231,712 |
$ |
391,823 |
$ |
807,507 |
(1) |
Includes assets supporting CIBC’s long-term funding activities and assets restricted for legal or other reasons, such as restricted cash. |
(2) |
Other unencumbered assets are not subject to any restrictions on their use to secure funding or as collateral, however they are not considered immediately available to existing borrowing programs. |
(3) |
Total securities comprise certain on-balance sheet securities, as well as off-balance sheet securities received under resale agreements, secured borrowings transactions, and collateral-for-collateral transactions. |
(4) |
Loans included as available as collateral represent the loans underlying National Housing Act mortgage-backed securities and Federal Home Loan Banks eligible loans. |
CIBC 2021 ANNUAL REPORT |
73 |
Management’s discussion and analysis |
$ millions, average of the three months ended October 31, 2021 |
Total unweighted value (1) |
Total weighted value (2) |
||||||||
HQLA |
||||||||||
1 |
HQLA |
n/a |
$ |
174,728 |
||||||
Cash outflows |
||||||||||
2 |
Retail deposits and deposits from small business customers, of which: |
$ |
214,521 |
15,759 |
||||||
3 |
Stable deposits |
95,749 |
2,872 |
|||||||
4 |
Less stable deposits |
118,772 |
12,887 |
|||||||
5 |
Unsecured wholesale funding, of which: |
211,789 |
102,507 |
|||||||
6 |
Operational deposits (all counterparties) and deposits in networks of cooperative banks |
81,800 |
20,016 |
|||||||
7 |
Non-operational deposits (all counterparties) |
103,701 |
56,203 |
|||||||
8 |
Unsecured debt |
26,288 |
26,288 |
|||||||
9 |
Secured wholesale funding |
n/a |
4,558 |
|||||||
10 |
Additional requirements, of which: |
135,763 |
32,528 |
|||||||
11 |
Outflows related to derivative exposures and other collateral requirements |
20,194 |
11,374 |
|||||||
12 |
Outflows related to loss of funding on debt products |
2,330 |
2,330 |
|||||||
13 |
Credit and liquidity facilities |
113,239 |
18,824 |
|||||||
14 |
Other contractual funding obligations |
3,301 |
3,301 |
|||||||
15 |
Other contingent funding obligations |
332,834 |
6,435 |
|||||||
16 |
Total cash outflows |
n/a |
165,088 |
|||||||
Cash inflows |
||||||||||
17 |
Secured lending (e.g. reverse repos) |
81,977 |
13,792 |
|||||||
18 |
Inflows from fully performing exposures |
18,030 |
8,509 |
|||||||
19 |
Other cash inflows |
4,917 |
4,917 |
|||||||
20 |
Total cash inflows |
$ |
104,924 |
$ |
27,218 |
|||||
Total adjusted value |
||||||||||
21 |
Total HQLA |
n/a |
$ |
174,728 |
||||||
22 |
Total net cash outflows |
n/a |
$ |
137,870 |
||||||
23 |
LCR |
n/a |
127 |
% | ||||||
$ millions, average of the three months ended July 31, 2021 |
Total adjusted value |
|||||||||
24 |
Total HQLA |
n/a |
$ |
168,259 |
||||||
25 |
Total net cash outflows |
n/a |
$ |
133,491 |
||||||
26 |
LCR |
n/a |
126 |
% |
(1) |
Unweighted inflow and outflow values are calculated as outstanding balances maturing or callable within 30 days of various categories or types of liabilities, off-balance sheet items or contractual receivables. |
(2) |
Weighted values are calculated after the application of haircuts (for HQLA) and inflow and outflow rates prescribed by OSFI. |
n/a |
Not applicable as per the LCR common disclosure template. |
74 |
CIBC 2021 |
Management’s discussion and analysis |
a |
b |
c |
d |
|
e |
|
||||||||||||||||||||||||
Unweighted value by residual maturity |
||||||||||||||||||||||||||||||
$ millions, as at October 31, 2021 |
No maturity |
<6 months |
6 months to <1 year |
>1 year |
Weighted value |
|||||||||||||||||||||||||
ASF item |
||||||||||||||||||||||||||||||
1 |
Capital |
$ |
46,972 |
$ |
– |
$ |
– |
$ |
4,945 |
$ |
51,916 |
|||||||||||||||||||
2 |
Regulatory capital |
46,972 |
– |
– |
4,945 |
51,916 |
||||||||||||||||||||||||
3 |
Other capital instruments |
– |
– |
– |
– |
– |
||||||||||||||||||||||||
4 |
Retail deposits and deposits from small business customers |
197,887 |
30,121 |
7,967 |
10,103 |
227,177 |
||||||||||||||||||||||||
5 |
Stable deposits |
92,198 |
12,748 |
4,797 |
6,530 |
110,785 |
||||||||||||||||||||||||
6 |
Less stable deposits |
105,689 |
17,373 |
3,170 |
3,573 |
116,392 |
||||||||||||||||||||||||
7 |
Wholesale funding |
157,812 |
158,071 |
41,263 |
67,193 |
185,956 |
||||||||||||||||||||||||
8 |
Operational deposits |
81,359 |
3,025 |
– |
– |
42,192 |
||||||||||||||||||||||||
9 |
Other wholesale funding |
76,453 |
155,046 |
41,263 |
67,193 |
143,764 |
||||||||||||||||||||||||
10 |
Liabilities with matching interdependent assets |
– |
1,627 |
892 |
14,276 |
– |
||||||||||||||||||||||||
11 |
Other liabilities |
– |
82,324 (1) |
7,469 |
||||||||||||||||||||||||||
12 |
NSFR derivative liabilities |
7,020 (1) |
||||||||||||||||||||||||||||
13 |
All other liabilities and equity not included in the above categories |
– |
49,449 |
145 |
25,710 |
7,469 |
||||||||||||||||||||||||
14 |
Total ASF |
472,518 |
||||||||||||||||||||||||||||
RSF item |
||||||||||||||||||||||||||||||
15 |
Total NSFR HQLA |
15,052 |
||||||||||||||||||||||||||||
16 |
Deposits held at other financial institutions for operational purposes |
– |
2,553 |
– |
5 |
1,282 |
||||||||||||||||||||||||
17 |
Performing loans and securities |
58,465 |
97,988 |
48,154 |
300,559 |
325,693 |
||||||||||||||||||||||||
18 |
Performing loans to financial institutions secured by Level 1 HQLA |
– |
25,608 |
2,457 |
1,596 |
4,412 |
||||||||||||||||||||||||
19 |
Performing loans to financial institutions secured by non-Level 1 HQLA and unsecured performing loans to financial institutions |
698 |
28,233 |
6,338 |
12,324 |
19,288 |
||||||||||||||||||||||||
20 |
Performing loans to non-financial corporate clients, loans to retail and small business customers, and loans to sovereigns, central banks and public sector entities, of which: |
27,221 |
31,121 |
17,718 |
102,108 |
134,812 |
||||||||||||||||||||||||
21 |
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk |
– |
– |
– |
– |
– |
||||||||||||||||||||||||
22 |
Performing residential mortgages, of which: |
17,910 |
11,503 |
21,036 |
180,548 |
151,991 |
||||||||||||||||||||||||
23 |
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk |
17,910 |
11,427 |
20,959 |
176,049 |
148,091 |
||||||||||||||||||||||||
24 |
Securities that are not in default and do not qualify as HQLA, including exchange-traded equities |
12,636 |
1,523 |
605 |
3,983 |
15,190 |
||||||||||||||||||||||||
25 |
Assets with matching interdependent liabilities |
– |
1,627 |
892 |
14,276 |
– |
||||||||||||||||||||||||
26 |
Other assets |
13,137 |
80,203 (1) |
47,512 |
||||||||||||||||||||||||||
27 |
Physical traded commodities, including gold |
3,005 |
2,554 |
|||||||||||||||||||||||||||
28 |
Assets posted as initial margin for derivative contracts and contributions to default funds of central counterparties |
8,693 (1) |
7,389 |
|||||||||||||||||||||||||||
29 |
NSFR derivative assets |
11,914 (1) |
4,893 |
|||||||||||||||||||||||||||
30 |
NSFR derivative liabilities before deduction of variation margin posted |
15,982 (1) |
799 |
|||||||||||||||||||||||||||
31 |
All other assets not included in the above categories |
10,132 |
38,538 |
83 |
4,993 |
31,877 |
||||||||||||||||||||||||
32 |
Off-balance sheet items |
336,705 (1) |
11,823 |
|||||||||||||||||||||||||||
33 |
Total RSF |
$ |
401,362 |
|||||||||||||||||||||||||||
34 |
NSFR |
118 |
% |
|||||||||||||||||||||||||||
$ millions, as at July 31, 2021 |
Weighted value |
|||||||||||||||||||||||||||||
35 |
Total ASF |
$ |
454,792 |
|||||||||||||||||||||||||||
36 |
Total RSF |
$ |
389,814 |
|||||||||||||||||||||||||||
37 |
NSFR |
117 |
% |
(1) |
No assigned time period per disclosure template design. |
CIBC 2021 ANNUAL REPORT |
75 |
Management’s discussion and analysis |
$ millions, as at October 31, 2021 |
Less than 1 month |
1–3 months |
3–6 months |
6–12 months |
Less than 1 year total |
1–2 years |
Over 2 years |
Total |
||||||||||||||||||||||||
Deposits from banks (1) |
$ |
5,642 |
$ |
358 |
$ |
422 |
$ |
304 |
$ |
6,726 |
$ |
– |
$ |
– |
$ |
6,726 |
||||||||||||||||
Certificates of deposit and commercial paper |
8,566 |
18,998 |
11,808 |
22,349 |
61,721 |
496 |
– |
62,217 |
||||||||||||||||||||||||
Bearer deposit notes and bankers’ acceptances |
978 |
2,065 |
1,588 |
257 |
4,888 |
– |
– |
4,888 |
||||||||||||||||||||||||
Senior unsecured medium-term notes (2) |
1,485 |
865 |
1,290 |
5,211 |
8,851 |
16,360 |
23,192 |
48,403 |
||||||||||||||||||||||||
Senior unsecured structured notes |
– |
– |
– |
31 |
31 |
187 |
62 |
280 |
||||||||||||||||||||||||
Covered bonds/asset-backed securities |
||||||||||||||||||||||||||||||||
Mortgage securitization |
– |
352 |
1,279 |
895 |
2,526 |
4,069 |
10,447 |
17,042 |
||||||||||||||||||||||||
Covered bonds |
– |
1,058 |
– |
6,850 |
7,908 |
4,376 |
11,545 |
23,829 |
||||||||||||||||||||||||
Cards securitization |
– |
– |
– |
– |
– |
– |
1,721 |
1,721 |
||||||||||||||||||||||||
Subordinated liabilities |
– |
– |
– |
– |
– |
– |
5,539 |
5,539 |
||||||||||||||||||||||||
Other |
– |
– |
– |
247 |
247 |
– |
8 |
255 |
||||||||||||||||||||||||
$ |
16,671 |
$ |
23,696 |
$ |
16,387 |
$ |
36,144 |
$ |
92,898 |
$ |
25,488 |
$ |
52,514 |
$ |
170,900 |
|||||||||||||||||
Of which: |
||||||||||||||||||||||||||||||||
Secured |
$ |
– |
$ |
1,410 |
$ |
1,279 |
$ |
7,745 |
$ |
10,434 |
$ |
8,445 |
$ |
23,713 |
$ |
42,592 |
||||||||||||||||
Unsecured |
16,671 |
22,286 |
15,108 |
28,399 |
82,464 |
17,043 |
28,801 |
128,308 |
||||||||||||||||||||||||
$ |
16,671 |
$ |
23,696 |
$ |
16,387 |
$ |
36,144 |
$ |
92,898 |
$ |
25,488 |
$ |
52,514 |
$ |
170,900 |
|||||||||||||||||
October 31, 2020 |
$ |
17,139 |
$ |
15,400 |
$ |
12,670 |
$ |
35,224 |
$ |
80,433 |
$ |
17,648 |
$ |
54,253 |
$ |
152,334 |
(1) |
Includes non-negotiable term deposits from banks. |
(2) |
Includes wholesale funding liabilities which are subject to conversion under bail-in regulations. See the “Capital management” section for additional details. |
$ billions, as at October 31 |
2021 |
2020 |
||||||||||||||
CAD |
$ |
48.0 |
28 |
% |
$ |
50.8 |
33 |
% | ||||||||
USD |
91.5 |
54 |
75.4 |
50 |
||||||||||||
Other |
31.4 |
18 |
26.1 |
17 |
||||||||||||
$ |
170.9 |
100 |
% |
$ |
152.3 |
100 |
% |
76 |
CIBC 2021 |
Management’s discussion and analysis |
As at October 31, 2021 |
DBRS |
Fitch |
Moody’s |
S&P |
||||||||||||||||||||||||||||
Deposit/Counterparty (1) |
AA |
AA |
Aa2 |
A+ |
||||||||||||||||||||||||||||
Legacy senior debt (2) |
AA |
AA |
Aa2 |
A+ |
||||||||||||||||||||||||||||
Senior debt (3) |
AA(L) |
AA- |
A2 |
BBB+ |
||||||||||||||||||||||||||||
Subordinated indebtedness |
A(H) |
A |
Baa1 |
BBB+ |
||||||||||||||||||||||||||||
Subordinated indebtedness – NVCC (4) |
A(L) |
A |
Baa1 |
BBB |
||||||||||||||||||||||||||||
Limited recourse capital notes – NVCC (4) |
BBB(H) |
n/a |
Baa3 |
BB+ |
||||||||||||||||||||||||||||
Preferred shares – NVCC (4) |
Pfd-2 |
n/a |
Baa3 |
P-3(H) |
||||||||||||||||||||||||||||
Short-term debt |
R-1(H) |
F1+ |
P-1 |
A-1 |
||||||||||||||||||||||||||||
Outlook |
Stable |
Stable |
Stable |
Stable |
(1) |
DBRS Long-Term Issuer Rating; Fitch Long-Term Deposit Rating and Derivative Counterparty Rating; Moody’s Long-Term Deposit and Counterparty Risk Assessment Rating; S&P’s Issuer Credit Rating. |
(2) |
Includes senior debt issued prior to September 23, 2018 as well as senior debt issued on or after September 23, 2018 which is not subject to bail-in regulations. |
(3) |
Comprises liabilities which are subject to conversion under bail-in regulations. See the “Capital management” section for additional details. |
(4) |
Comprises instruments which are treated as NVCC in accordance with OSFI’s CAR Guideline. |
n/a |
Not applicable. |
$ billions, as at October 31 |
2021 |
2020 |
||||||
One-notch downgrade |
$ |
0.1 |
$ |
0.1 |
||||
Two-notch downgrade |
0.2 |
0.2 |
||||||
Three-notch downgrade |
0.3 |
0.3 |
CIBC 2021 ANNUAL REPORT |
77 |
Management’s discussion and analysis |
$ millions, as at October 31, 2021 | Less than 1 month |
1–3 months |
3–6 months |
6–9 months |
9–12 months |
1–2 years |
2–5 years |
Over 5 years |
No specified maturity |
Total | ||||||||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||||||||||
Cash and non-interest-bearing deposits with banks (1) |
$ |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
– |
$ |
||||||||||||||||||||||
Interest-bearing deposits with banks |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Securities |
||||||||||||||||||||||||||||||||||||||||
Cash collateral on securities borrowed |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Securities purchased under resale agreements |
– |
– |
– |
|||||||||||||||||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
– |
|||||||||||||||||||||||||||||||||||||||
Personal |
||||||||||||||||||||||||||||||||||||||||
Credit card |
– |
– |
||||||||||||||||||||||||||||||||||||||
Business and government |
||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses |
– |
– |
– |
– |
– |
– |
– |
– |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Derivative instruments |
– |
|||||||||||||||||||||||||||||||||||||||
Customers’ liability under acceptances |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||||
Other assets |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||
October 31, 2020 (2) |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||||||||||
Deposits ( 3 ) |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||||||||
Obligations related to securities sold short |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Cash collateral on securities lent |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Obligations related to securities sold under repurchase agreements |
– |
– |
– |
|||||||||||||||||||||||||||||||||||||
Derivative instruments |
– |
|||||||||||||||||||||||||||||||||||||||
Acceptances |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||||
Other liabilities |
||||||||||||||||||||||||||||||||||||||||
Subordinated indebtedness |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Equity |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||
October 31, 2020 |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |
$ | |
(1) |
Cash includes interest-bearing demand deposits with the Bank of Canada. |
(2) |
Restated from amounts previously presented. |
(3) |
Comprises $ |
$ millions, as at October 31, 2021 |
Less than 1 month |
1–3 months |
3–6 months |
6–9 months |
9–12 months |
1–2 years |
2–5 years |
Over 5 years |
No specified maturity (1) |
Total | ||||||||||||||||||||||||||||||
Unutilized credit commitments |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||||||||
Securities lending (2) |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||||
Standby and performance letters of credit |
– |
|||||||||||||||||||||||||||||||||||||||
Backstop liquidity facilities |
– |
– |
– |
|||||||||||||||||||||||||||||||||||||
Documentary and commercial letters of credit |
– |
– |
||||||||||||||||||||||||||||||||||||||
Other |
– |
– |
– |
– |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||
October 31, 2020 |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
(1) | Includes $ |
(2) | Excludes securities lending of $ |
78 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at October 31, 2021 (1) |
Less than 1 month |
1–3 months |
3–6 months |
6–9 months |
9–12 months |
1–2 years |
2–5 years |
Over 5 years |
Total | |||||||||||||||||||||||||||
Purchase obligations (2) |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||||
Future lease commitments (1) |
– |
– |
||||||||||||||||||||||||||||||||||
Investment commitments |
– |
– |
– |
– |
||||||||||||||||||||||||||||||||
Underwriting commitments |
– |
– |
– |
– |
– |
– |
– |
|||||||||||||||||||||||||||||
Pension contributions (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
|
|
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||||||
October 31, 2020 |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
(1) |
Excludes operating lease obligations that are accounted for under IFRS 16, which are typically recognized on the consolidated balance sheet, and operating and tax expenses relating to lease commitments. The table includes lease obligations that are not accounted for under IFRS 16, including those related to future starting lease commitments for which we have not yet recognized a lease liability and right-of-use |
(2) |
Obligations that are legally binding agreements whereby we agree to purchase products or services with specific minimum or baseline quantities defined at fixed, minimum or variable prices over a specified period of time are defined as purchase obligations. Purchase obligations are included through to the termination date specified in the respective agreements, even if the contract is renewable. Many of the purchase agreements for goods and services include clauses that would allow us to cancel the agreement prior to expiration of the contract within a specific notice period. However, the amount above includes our obligations without regard to such termination clauses (unless actual notice of our intention to terminate the agreement has been communicated to the counterparty). The table excludes purchases of debt and equity instruments that settle within standard market time frames. |
(3) |
Includes estimated minimum funding contributions for our funded defined benefit pension plans in Canada, the U.S., the U.K., and the Caribbean. Estimated minimum funding contributions are included only for the next annual period as the minimum contributions are affected by various factors, such as market performance and regulatory requirements, and are therefore subject to significant variability. |
CIBC 2021 |
79 |
Management’s discussion and analysis |
(i) | As the first line of defence, our SBUs and functional groups own the risks and are accountable and responsible for identifying and assessing risks inherent in their activities in accordance with the CIBC risk appetite. In addition, they establish and maintain controls to mitigate such risks. The first line of defence may include governance groups within the relevant area to facilitate the control framework and other risk-related processes. Control groups provide subject matter expertise to the business lines and/or implement and maintain enterprise-wide control programs and activities. While control groups collaborate with the lines of business in identifying and managing risk, they also challenge risk decisions and risk mitigation strategies. |
(ii) | The second line of defence is independent from the first line of defence and provides an enterprise-wide view of specific risk types, guidance and effective challenge to risk and control activities. Risk Management is the primary second line of defence. Risk Management may leverage the subject matter expertise of other groups (e.g., third parties or control groups) to inform their independent assessments, as appropriate. |
(iii) | As the third line of defence, CIBC’s internal audit function provides reasonable assurance to senior management and the Audit Committee of the Board on the effectiveness of CIBC’s governance practices, risk management processes, and internal control as part of its risk-based audit plan and in accordance with its mandate as described in the Internal Audit Charter. |
80 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
81 |
Management’s discussion and analysis |
82 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
83 |
Management’s discussion and analysis |
84 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at October 31 |
2021 |
2020 |
||||||||||||||
Level 3 |
Total (1) |
Level 3 |
Total (1) |
|||||||||||||
Assets |
||||||||||||||||
Securities mandatorily measured and designated at FVTPL and loans mandatorily measured at FVTPL |
$ |
1,099 |
1.1 |
% |
$ |
802 |
0.9 |
% | ||||||||
Debt securities measured at FVOCI and equity securities designated at FVOCI |
392 |
0.7 |
240 |
0.4 |
||||||||||||
Derivative instruments |
97 |
0.3 |
358 |
1.1 |
||||||||||||
$ |
1,588 |
0.8 |
% |
$ |
1,400 |
0.8 |
% | |||||||||
Liabilities |
||||||||||||||||
Deposits and other liabilities (2) |
$ |
742 |
3.8 |
% |
$ |
(4 |
) |
– |
% | |||||||
Derivative instruments |
267 |
0.8 |
298 |
1.0 |
||||||||||||
$ |
1,009 |
1.3 |
% |
$ |
294 |
0.4 |
% |
(1) |
Represents the percentage of Level 3 assets and liabilities over total assets and liabilities for each reported category that are carried on the consolidated balance sheet at fair value. |
(2) |
Includes FVO deposits and bifurcated embedded derivatives. |
• |
Determining when a significant increase in credit risk of a loan has occurred; |
• |
Measuring both 12-month and lifetime credit losses; and |
• |
Forecasting forward-looking information for multiple scenarios and determining the probability weighting of each scenario. |
CIBC 2021 |
85 |
Management’s discussion and analysis |
Regulatory Capital |
IFRS 9 | |||
PD | Through-the-cycle long-run average PD throughout a full economic cycle |
Point-in-time 12-month or lifetime PD based on current conditions and relevant forward-looking assumptions | ||
LGD | Downturn LGD based on losses that would be expected in an economic downturn and subject to certain regulatory floors Discounted using the cost of capital |
Unbiased probability-weighted LGD based on estimated LGD including impact of relevant forward-looking assumptions such as changes in collateral value Discounted using the original effective interest rate | ||
EAD | Based on the drawn balance plus expected utilization of any undrawn portion prior to default, and cannot be lower than the drawn balance | Amortization and repayment of principal and interest from the balance sheet date to the default date is also captured | ||
Other | ECL is discounted from the default date to the reporting date |
• | We have transferred substantially all the risks and rewards of the asset; or |
• | We have neither transferred nor retained substantially all the risks and rewards of the asset, but have transferred control of the asset. |
86 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
|
87 |
|
Management’s discussion and analysis |
88 |
CIBC 2021 |
Management’s discussion and analysis |
• | Ensuring key project milestones are met; |
• | Providing direction and guidance on a holistic basis; |
• | Reviewing and resolving key issues and risks; and |
• | Ensuring that our transition strategies and any transition actions remain consistent with CIBC’s overall strategy, risk appetite, and control framework. |
CIBC 2021 |
|
89 |
|
Management’s discussion and analysis |
(1) | Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of CIBC directly or indirectly and comprise the members of the Board (referred to as directors), ExCo and certain named officers per the Bank Act |
90 |
CIBC 2021 |
|
Management’s discussion and analysis |
CIBC 2021 |
|
91 |
|
Management’s discussion and analysis |
Average balance (1) |
Interest | Average rate | ||||||||||||||||||||||||||||||||||||
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | 2021 |
2020 | 2019 | 2021 |
2020 | 2019 | |||||||||||||||||||||||||||||
Domestic assets (2) |
||||||||||||||||||||||||||||||||||||||
Cash and deposits with banks |
$ |
37,527 |
$ | 30,232 | $ | 7,156 | $ |
95 |
$ | 150 | $ | 164 | 0.25 |
% |
0.50 | % | 2.29 | % | ||||||||||||||||||||
Securities |
82,262 |
76,063 | 66,954 | 1,567 |
1,776 | 1,852 | 1.90 |
2.33 | 2.77 | |||||||||||||||||||||||||||||
Securities borrowed or purchased under resale agreements |
27,203 |
26,498 | 23,950 | 154 |
290 | 496 | 0.57 |
1.09 | 2.07 | |||||||||||||||||||||||||||||
Loans |
Residential mortgages |
230,606 |
208,811 | 203,575 | 5,141 |
5,581 | 6,347 | 2.23 |
2.67 | 3.12 | ||||||||||||||||||||||||||||
Personal and credit card |
50,110 |
51,948 | 53,490 | 2,962 |
3,433 | 4,012 | 5.91 |
6.61 | 7.50 | |||||||||||||||||||||||||||||
Business and government |
70,755 |
68,072 | 63,131 | 1,712 |
2,043 | 2,434 | 2.42 |
3.00 | 3.86 | |||||||||||||||||||||||||||||
Total loans |
351,471 |
328,831 | 320,196 | 9,815 |
11,057 | 12,793 | 2.79 |
3.36 | 4.00 | |||||||||||||||||||||||||||||
Other interest-bearing assets |
8,901 |
5,194 | 3,837 | 45 |
62 | 128 | 0.51 |
1.19 | 3.34 | |||||||||||||||||||||||||||||
Derivative instruments |
11,382 |
14,334 | 10,248 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Customers’ liability under acceptances |
10,613 |
9,560 | 10,170 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Other non-interest-bearing assets |
21,371 |
19,641 | 17,386 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Total domestic assets |
550,730 |
510,353 | 459,897 | 11,676 |
13,335 | 15,433 | 2.12 |
2.61 | 3.36 | |||||||||||||||||||||||||||||
Foreign assets (2) |
||||||||||||||||||||||||||||||||||||||
Cash and deposits with banks |
30,270 |
20,050 | 13,305 | 36 |
99 | 232 | 0.12 |
0.49 | 1.74 | |||||||||||||||||||||||||||||
Securities |
72,870 |
62,014 | 49,059 | 574 |
792 | 927 | 0.79 |
1.28 | 1.89 | |||||||||||||||||||||||||||||
Securities borrowed or purchased under resale agreements |
51,157 |
42,199 | 35,491 | 165 |
552 | 978 | 0.32 |
1.31 | 2.76 | |||||||||||||||||||||||||||||
Loans |
Residential mortgages |
4,501 |
4,429 | 3,815 | 157 |
176 | 201 | 3.49 |
3.97 | 5.27 | ||||||||||||||||||||||||||||
Personal and credit card |
1,321 |
1,309 | 1,435 | 83 |
97 | 105 | 6.28 |
7.41 | 7.32 | |||||||||||||||||||||||||||||
Business and government |
66,677 |
66,015 | 55,443 | 1,995 |
2,416 | 2,819 | 2.99 |
3.66 | 5.08 | |||||||||||||||||||||||||||||
Total loans |
72,499 |
71,753 | 60,693 | 2,235 |
2,689 | 3,125 | 3.08 |
3.75 | 5.15 | |||||||||||||||||||||||||||||
Other interest-bearing assets |
923 |
701 | 555 | 55 |
55 | 2 | 5.96 |
7.85 | 0.36 | |||||||||||||||||||||||||||||
Derivative instruments |
24,186 |
20,629 | 13,419 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Customers’ liability under acceptances |
1 |
1 | – | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Other non-interest-bearing assets |
6,985 |
7,792 | 7,297 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Total foreign assets |
258,891 |
225,139 | 179,819 | 3,065 |
4,187 | 5,264 | 1.18 |
1.86 | 2.93 | |||||||||||||||||||||||||||||
Total assets |
$ |
809,621 |
$ | 735,492 | $ | 639,716 | $ |
14,741 |
$ | 17,522 | $ | 20,697 | 1.82 |
% |
2.38 | % | 3.24 | % | ||||||||||||||||||||
Domestic liabilities (2) |
||||||||||||||||||||||||||||||||||||||
Deposits |
Personal |
$ |
189,599 |
$ | 172,913 | $ | 157,537 | $ |
734 |
$ | 1,405 | $ | 1,861 | 0.39 |
% |
0.81 | % | 1.18 | % | |||||||||||||||||||
Business and government |
198,978 |
178,476 | 153,092 | 1,170 |
2,019 | 3,033 | 0.59 |
1.13 | 1.98 | |||||||||||||||||||||||||||||
Bank |
2,220 |
2,105 | 1,915 | 3 |
13 | 29 | 0.14 |
0.62 | 1.51 | |||||||||||||||||||||||||||||
Secured borrowings |
37,893 |
39,076 | 39,111 | 378 |
668 | 1,037 | 1.00 |
1.71 | 2.65 | |||||||||||||||||||||||||||||
Total deposits |
428,690 |
392,570 | 351,655 | 2,285 |
4,105 | 5,960 | 0.53 |
1.05 | 1.69 | |||||||||||||||||||||||||||||
Derivative instruments |
10,621 |
14,398 | 10,790 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Acceptances |
10,614 |
9,563 | 10,171 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Obligations related to securities sold short |
19,018 |
16,794 | 15,412 | 229 |
251 | 285 | 1.20 |
1.49 | 1.85 | |||||||||||||||||||||||||||||
Obligations related to securities lent or sold under repurchase agreements |
26,349 |
27,374 | 15,995 | 151 |
220 | 477 | 0.57 |
0.80 | 2.98 | |||||||||||||||||||||||||||||
Other liabilities |
20,432 |
6,464 | 14,621 | 36 |
49 | 9 | 0.18 |
0.76 | 0.06 | |||||||||||||||||||||||||||||
Subordinated indebtedness |
5,340 |
4,891 | 4,549 | 120 |
152 | 193 | 2.25 |
3.11 | 4.24 | |||||||||||||||||||||||||||||
Total domestic liabilities |
521,064 |
472,054 | 423,193 | 2,821 |
4,777 | 6,924 | 0.54 |
1.01 | 1.64 | |||||||||||||||||||||||||||||
Foreign liabilities (2) |
||||||||||||||||||||||||||||||||||||||
Deposits |
Personal |
16,795 |
16,974 | 15,543 | 62 |
142 | 193 | 0.37 |
0.84 | 1.24 | ||||||||||||||||||||||||||||
Business and government |
134,038 |
113,877 | 97,429 | 268 |
964 | 2,068 | 0.20 |
0.85 | 2.12 | |||||||||||||||||||||||||||||
Bank |
16,848 |
13,891 | 12,277 | 20 |
100 | 197 | 0.12 |
0.72 | 1.60 | |||||||||||||||||||||||||||||
Secured borrowings |
1,883 |
1,322 | 226 | 16 |
15 | 4 | 0.85 |
1.13 | 1.77 | |||||||||||||||||||||||||||||
Total deposits |
169,564 |
146,064 | 125,475 | 366 |
1,221 | 2,462 | 0.22 |
0.84 | 1.96 | |||||||||||||||||||||||||||||
Derivative instruments |
22,571 |
20,718 | 14,130 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Acceptances |
1 |
1 | – | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Obligations related to securities sold short |
1,050 |
1,047 | 1,089 | 7 |
3 | 6 | 0.67 |
0.29 | 0.55 | |||||||||||||||||||||||||||||
Obligations related to securities lent or sold under repurchase agreements |
50,142 |
41,881 | 35,413 | 57 |
436 | 721 | 0.11 |
1.04 | 2.04 | |||||||||||||||||||||||||||||
Other liabilities |
2,395 |
13,706 | 3,014 | 29 |
34 | 28 | 1.21 |
0.25 | 0.93 | |||||||||||||||||||||||||||||
Subordinated indebtedness |
96 |
152 | 150 | 2 |
7 | 5 | 2.08 |
4.61 | 3.33 | |||||||||||||||||||||||||||||
Total foreign liabilities |
245,819 |
223,569 | 179,271 | 461 |
1,701 | 3,222 | 0.19 |
0.76 | 1.80 | |||||||||||||||||||||||||||||
Total liabilities |
766,883 |
695,623 | 602,464 | 3,282 |
6,478 | 10,146 | 0.43 |
0.93 | 1.68 | |||||||||||||||||||||||||||||
Shareholders’ equity |
42,563 |
39,682 | 37,072 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Non-controlling interests |
175 |
187 | 180 | – |
– | – | – |
– | – | |||||||||||||||||||||||||||||
Total liabilities and equity |
$ |
809,621 |
$ | 735,492 | $ | 639,716 | $ |
3,282 |
$ | 6,478 | $ | 10,146 | 0.41 |
% |
0.88 | % | 1.59 | % | ||||||||||||||||||||
Net interest income and net interest margin (3) |
$ |
11,459 |
$ | 11,044 | $ | 10,551 | 1.42 |
% |
1.50 | % | 1.65 | % | ||||||||||||||||||||||||||
Additional disclosures: Non-interest-bearing deposit liabilities |
|
|||||||||||||||||||||||||||||||||||||
Domestic |
$ |
76,224 |
$ | 59,862 | $ | 48,478 | ||||||||||||||||||||||||||||||||
Foreign |
22,396 |
18,430 | 14,582 |
(1) | Average balances are calculated as a weighted average of daily closing balances. |
(2) | Classification as domestic or foreign is based on domicile of debtor or customer. |
(3) | Net interest income as a percentage of average assets. |
92 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions |
2021/2020 |
2020/2019 | ||||||||||||||||||||||||
Increase (decrease) due to change in: |
Increase (decrease) due to change in: | |||||||||||||||||||||||||
Average balance |
Average rate |
Total |
Average balance |
Average rate |
Total | |||||||||||||||||||||
Domestic assets (1) |
||||||||||||||||||||||||||
Cash and deposits with banks |
$ |
36 |
$ |
(91 |
) |
$ |
(55 |
) |
$ | 529 | $ | (543 | ) | $ | (14 | ) | ||||||||||
Securities |
145 |
(354 |
) |
(209 |
) |
252 | (328 | ) | (76 | ) | ||||||||||||||||
Securities borrowed or purchased under resale agreements |
8 |
(144 |
) |
(136 |
) |
53 | (259 | ) | (206 | ) | ||||||||||||||||
Loans |
Residential mortgages |
583 |
(1,023 |
) |
(440 |
) |
163 | (929 | ) | (766 | ) | |||||||||||||||
Personal and credit card |
(121 |
) |
(350 |
) |
(471 |
) |
(116 | ) | (463 | ) | (579 | ) | ||||||||||||||
Business and government |
81 |
(412 |
) |
(331 |
) |
190 | (581 | ) | (391 | ) | ||||||||||||||||
Total loans |
543 |
(1,785 |
) |
(1,242 |
) |
237 | (1,973 | ) | (1,736 | ) | ||||||||||||||||
Other interest-bearing assets |
44 |
(61 |
) |
(17 |
) |
45 | (111 | ) | (66 | ) | ||||||||||||||||
Change in domestic interest income |
776 |
(2,435 |
) |
(1,659 |
) |
1,116 | (3,214 | ) | (2,098 | ) | ||||||||||||||||
Foreign assets (1) |
||||||||||||||||||||||||||
Cash and deposits with banks |
50 |
(113 |
) |
(63 |
) |
118 | (251 | ) | (133 | ) | ||||||||||||||||
Securities |
139 |
(357 |
) |
(218 |
) |
245 | (380 | ) | (135 | ) | ||||||||||||||||
Securities borrowed or purchased under resale agreements |
117 |
(504 |
) |
(387 |
) |
185 | (611 | ) | (426 | ) | ||||||||||||||||
Loans |
Residential mortgages |
3 |
(22 |
) |
(19 |
) |
32 | (57 | ) | (25 | ) | |||||||||||||||
Personal and credit card |
1 |
(15 |
) |
(14 |
) |
(9 | ) | 1 | (8 | ) | ||||||||||||||||
Business and government |
24 |
(445 |
) |
(421 |
) |
538 | (941 | ) | (403 | ) | ||||||||||||||||
Total loans |
28 |
(482 |
) |
(454 |
) |
561 | (997 | ) | (436 | ) | ||||||||||||||||
Other interest-bearing assets |
17 |
(17 |
) |
– |
1 | 52 | 53 | |||||||||||||||||||
Change in foreign interest income |
351 |
(1,473 |
) |
(1,122 |
) |
1,110 | (2,187 | ) | (1,077 | ) | ||||||||||||||||
Total change in interest income |
$ |
1,127 |
$ |
(3,908 |
) |
$ |
(2,781 |
) |
$ | 2,226 | $ | (5,401 | ) | $ | (3,175 | ) | ||||||||||
Domestic liabilities (1) |
||||||||||||||||||||||||||
Deposits |
Personal |
$ |
136 |
$ |
(807 |
) |
$ |
(671 |
) |
$ | 182 | $ | (638 | ) | $ | (456 | ) | |||||||||
Business and government |
232 |
(1,081 |
) |
(849 |
) |
503 | (1,517 | ) | (1,014 | ) | ||||||||||||||||
Bank |
1 |
(11 |
) |
(10 |
) |
3 | (19 | ) | (16 | ) | ||||||||||||||||
Secured borrowings |
(20 |
) |
(270 |
) |
(290 |
) |
(1 | ) | (368 | ) | (369 | ) | ||||||||||||||
Total deposits |
349 |
(2,169 |
) |
(1,820 |
) |
687 | (2,542 | ) | (1,855 | ) | ||||||||||||||||
Obligations related to securities sold short |
33 |
(55 |
) |
(22 |
) |
26 | (60 | ) | (34 | ) | ||||||||||||||||
Obligations related to securities lent or sold under repurchase agreements |
(8 |
) |
(61 |
) |
(69 |
) |
339 | (596 | ) | (257 | ) | |||||||||||||||
Other liabilities |
106 |
(119 |
) |
(13 |
) |
(5 | ) | 45 | 40 | |||||||||||||||||
Subordinated indebtedness |
14 |
(46 |
) |
(32 |
) |
15 | (56 | ) | (41 | ) | ||||||||||||||||
Change in domestic interest expense |
494 |
(2,450 |
) |
(1,956 |
) |
1,062 | (3,209 | ) | (2,147 | ) | ||||||||||||||||
Foreign liabilities (1) |
||||||||||||||||||||||||||
Deposits |
Personal |
(1 |
) |
(79 |
) |
(80 |
) |
18 | (69 | ) | (51 | ) | ||||||||||||||
Business and government |
171 |
(867 |
) |
(696 |
) |
349 | (1,453 | ) | (1,104 | ) | ||||||||||||||||
Bank |
21 |
(101 |
) |
(80 |
) |
26 | (123 | ) | (97 | ) | ||||||||||||||||
Secured borrowings |
6 |
(5 |
) |
1 |
19 | (8 | ) | 11 | ||||||||||||||||||
Total deposits |
197 |
(1,052 |
) |
(855 |
) |
412 | (1,653 | ) | (1,241 | ) | ||||||||||||||||
Obligations related to securities sold short |
– |
4 |
4 |
– | (3 | ) | (3 | ) | ||||||||||||||||||
Obligations related to securities lent or sold under repurchase agreements |
86 |
(465 |
) |
(379 |
) |
132 | (417 | ) | (285 | ) | ||||||||||||||||
Other liabilities |
(28 |
) |
23 |
(5 |
) |
99 | (93 | ) | 6 | |||||||||||||||||
Subordinated indebtedness |
(3 |
) |
(2 |
) |
(5 |
) |
– | 2 | 2 | |||||||||||||||||
Change in foreign interest expense |
252 |
(1,492 |
) |
(1,240 |
) |
643 | (2,164 | ) | (1,521 | ) | ||||||||||||||||
Total change in interest expense |
$ |
746 |
$ |
(3,942 |
) |
$ |
(3,196 |
) |
$ | 1,705 | $ | (5,373 | ) | $ | (3,668 | ) | ||||||||||
Change in total net interest income |
$ |
381 |
$ |
34 |
$ |
415 |
$ | 521 | $ | (28 | ) | $ | 493 |
(1) | Classification as domestic or foreign is based on domicile of debtor or customer. |
CIBC 2021 |
|
93 |
|
|
Management’s discussion and analysis |
Canada (2) |
U.S. (2) |
|||||||||||||||||||||||||||||||||||||||||||
$ millions, as at October 31 | 2021 |
2020 | 2019 | 2018 | 2017 | 2021 |
2020 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
246,581 |
$ | 216,215 | $ | 204,383 | $ | 203,930 | $ | 203,787 | $ |
2,071 |
$ | 2,000 | $ | 1,527 | $ | 1,152 | $ | 902 | ||||||||||||||||||||||||
Personal |
39,940 |
40,317 | 41,906 | 41,506 | 39,533 | 542 |
409 | 435 | 356 | 326 | ||||||||||||||||||||||||||||||||||
Credit card |
10,362 |
10,550 | 12,143 | 12,060 | 11,805 | 22 |
27 | 35 | 36 | 35 | ||||||||||||||||||||||||||||||||||
Total net consumer loans |
296,883 |
267,082 | 258,432 | 257,496 | 255,125 | 2,635 |
2,436 | 1,997 | 1,544 | 1,263 | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
6,259 |
5,844 | 6,064 | 6,426 | 6,481 | 48 |
292 | 115 | 39 | 95 | ||||||||||||||||||||||||||||||||||
Financial institutions |
11,407 |
9,434 | 7,565 | 6,885 | 5,403 | 13,705 |
7,560 | 8,111 | 5,529 | 3,248 | ||||||||||||||||||||||||||||||||||
Retail and wholesale |
6,549 |
5,442 | 6,548 | 6,000 | 5,186 | 2,449 |
2,089 | 2,215 | 2,013 | 1,904 | ||||||||||||||||||||||||||||||||||
Business services |
6,663 |
6,824 | 6,975 | 6,969 | 6,237 | 4,808 |
5,095 | 4,398 | 3,720 | 3,567 | ||||||||||||||||||||||||||||||||||
Manufacturing – capital goods |
2,222 |
2,115 | 2,465 | 2,318 | 1,912 | 2,500 |
2,547 | 2,399 | 2,143 | 1,559 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer goods |
3,430 |
3,326 | 3,972 | 3,294 | 3,019 | 1,283 |
1,057 | 958 | 695 | 702 | ||||||||||||||||||||||||||||||||||
Real estate and construction (3) |
25,151 |
20,782 | 18,465 | 16,297 | 13,293 | 18,138 |
18,750 | 16,871 | 14,559 | 13,761 | ||||||||||||||||||||||||||||||||||
Agriculture |
7,242 |
6,829 | 6,965 | 6,011 | 5,558 | 129 |
103 | 124 | 79 | 107 | ||||||||||||||||||||||||||||||||||
Oil and gas |
2,539 |
3,627 | 3,648 | 3,246 | 3,159 | 1,818 |
2,364 | 2,447 | 1,852 | 1,838 | ||||||||||||||||||||||||||||||||||
Mining |
415 |
610 | 1,024 | 824 | 668 | 127 |
142 | 154 | 60 | 87 | ||||||||||||||||||||||||||||||||||
Forest products |
283 |
474 | 628 | 446 | 464 | 165 |
141 | 162 | 215 | 209 | ||||||||||||||||||||||||||||||||||
Hardware and software |
589 |
608 | 713 | 624 | 539 | 2,275 |
1,939 | 1,387 | 1,202 | 883 | ||||||||||||||||||||||||||||||||||
Telecommunications and cable |
238 |
108 | 191 | 275 | 281 | 1,196 |
1,015 | 314 | 887 | 756 | ||||||||||||||||||||||||||||||||||
Publishing, printing, and broadcasting |
343 |
406 | 557 | 527 | 291 | 71 |
99 | 92 | 102 | 117 | ||||||||||||||||||||||||||||||||||
Transportation |
2,526 |
2,218 | 2,193 | 1,880 | 1,818 | 1,255 |
1,283 | 1,263 | 893 | 602 | ||||||||||||||||||||||||||||||||||
Utilities |
4,397 |
3,783 | 3,027 | 3,328 | 2,840 | 3,654 |
3,332 | 2,353 | 1,650 | 1,713 | ||||||||||||||||||||||||||||||||||
Education, health and social services |
3,664 |
3,333 | 3,221 | 2,870 | 2,937 | 3,927 |
4,203 | 2,941 | 3,040 | 3,099 | ||||||||||||||||||||||||||||||||||
Governments |
1,666 |
1,173 | 857 | 954 | 869 | 229 |
216 | 127 | 92 | 7 | ||||||||||||||||||||||||||||||||||
Others |
– |
– | – | – | – | – |
– | – | – | 12 | ||||||||||||||||||||||||||||||||||
Stage 1 and 2 allowance for credit losses (2017: Collective allowance allocated to business and government loans) (3)(4) |
(245 |
) |
(341 | ) | (144 | ) | (98 | ) | (195 | ) | (282 |
) |
(536 | ) | (138 | ) | (108 | ) | (83 | ) | ||||||||||||||||||||||||
Total net business and government loans, including acceptances |
85,338 |
76,595 | 74,934 | 69,076 | 60,760 | 57,495 |
51,691 | 46,293 | 38,662 | 34,183 | ||||||||||||||||||||||||||||||||||
Total net loans and acceptances |
$ |
382,221 |
$ | 343,677 | $ | 333,366 | $ | 326,572 | $ | 315,885 | $ |
60,130 |
$ | 54,127 | $ | 48,290 | $ | 40,206 | $ | 35,446 |
Other (2) |
Total | |||||||||||||||||||||||||||||||||||||||||||
$ millions, as at October 31 | 2021 |
2020 | 2019 | 2018 | 2017 | 2021 |
2020 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
2,594 |
$ | 2,587 | $ | 2,531 | $ | 2,453 | $ | 2,379 | $ |
251,246 |
$ | 220,802 | $ | 208,441 | $ | 207,535 | $ | 207,068 | ||||||||||||||||||||||||
Personal |
647 |
664 | 757 | 715 | 583 | 41,129 |
41,390 | 43,098 | 42,577 | 40,442 | ||||||||||||||||||||||||||||||||||
Credit card |
125 |
145 | 157 | 159 | 152 | 10,509 |
10,722 | 12,335 | 12,255 | 11,992 | ||||||||||||||||||||||||||||||||||
Total net consumer loans |
3,366 |
3,396 | 3,445 | 3,327 | 3,114 | 302,884 |
272,914 | 263,874 | 262,367 | 259,502 | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
268 |
252 | 258 | 266 | 218 | 6,575 |
6,388 | 6,437 | 6,731 | 6,794 | ||||||||||||||||||||||||||||||||||
Financial institutions |
3,896 |
2,227 | 2,103 | 2,043 | 841 | 29,008 |
19,221 | 17,779 | 14,457 | 9,492 | ||||||||||||||||||||||||||||||||||
Retail and wholesale |
596 |
517 | 510 | 618 | 706 | 9,594 |
8,048 | 9,273 | 8,631 | 7,796 | ||||||||||||||||||||||||||||||||||
Business services |
1,789 |
1,758 | 1,801 | 1,675 | 1,736 | 13,260 |
13,677 | 13,174 | 12,364 | 11,540 | ||||||||||||||||||||||||||||||||||
Manufacturing – capital goods |
93 |
49 | 128 | 125 | 432 | 4,815 |
4,711 | 4,992 | 4,586 | 3,903 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer goods |
91 |
97 | 61 | 92 | 111 | 4,804 |
4,480 | 4,991 | 4,081 | 3,832 | ||||||||||||||||||||||||||||||||||
Real estate and construction (3) |
1,264 |
1,312 | 1,529 | 1,624 | 1,325 | 44,553 |
40,844 | 36,865 | 32,480 | 28,379 | ||||||||||||||||||||||||||||||||||
Agriculture |
36 |
147 | 104 | 25 | 22 | 7,407 |
7,079 | 7,193 | 6,115 | 5,687 | ||||||||||||||||||||||||||||||||||
Oil and gas |
238 |
346 | 28 | 74 | 185 | 4,595 |
6,337 | 6,123 | 5,172 | 5,182 | ||||||||||||||||||||||||||||||||||
Mining |
490 |
507 | 642 | 710 | 784 | 1,032 |
1,259 | 1,820 | 1,594 | 1,539 | ||||||||||||||||||||||||||||||||||
Forest products |
– |
– | – | – | – | 448 |
615 | 790 | 661 | 673 | ||||||||||||||||||||||||||||||||||
Hardware and software |
130 |
107 | 21 | – | 20 | 2,994 |
2,654 | 2,121 | 1,826 | 1,442 | ||||||||||||||||||||||||||||||||||
Telecommunications and cable |
130 |
140 | 185 | 208 | 301 | 1,564 |
1,263 | 690 | 1,370 | 1,338 | ||||||||||||||||||||||||||||||||||
Publishing, printing, and broadcasting |
95 |
58 | 81 | 85 | 89 | 509 |
563 | 730 | 714 | 497 | ||||||||||||||||||||||||||||||||||
Transportation |
2,909 |
3,033 | 2,012 | 1,642 | 1,847 | 6,690 |
6,534 | 5,468 | 4,415 | 4,267 | ||||||||||||||||||||||||||||||||||
Utilities |
3,519 |
2,945 | 1,926 | 833 | 878 | 11,570 |
10,060 | 7,306 | 5,811 | 5,431 | ||||||||||||||||||||||||||||||||||
Education, health and social services |
23 |
27 | 34 | 28 | 29 | 7,614 |
7,563 | 6,196 | 5,938 | 6,065 | ||||||||||||||||||||||||||||||||||
Governments |
1,736 |
1,817 | 1,657 | 1,598 | 1,662 | 3,631 |
3,206 | 2,641 | 2,644 | 2,538 | ||||||||||||||||||||||||||||||||||
Others |
– |
– | – | – | – | – |
– | – | – | 12 | ||||||||||||||||||||||||||||||||||
Stage 1 and 2 allowance for credit losses (2017: Collective allowance allocated to business and government loans) (3)(4) |
(141 |
) |
(151 | ) | (73 | ) | (90 | ) | (73 | ) | (668 |
) |
(1,028 | ) | (355 | ) | (296 | ) | (351 | ) | ||||||||||||||||||||||||
Total net business and government loans, including acceptances |
17,162 |
15,188 | 13,007 | 11,556 | 11,113 | 159,995 |
143,474 | 134,234 | 119,294 | 106,056 | ||||||||||||||||||||||||||||||||||
Total net loans and acceptances |
$ |
20,528 |
$ | 18,584 | $ | 16,452 | $ | 14,883 | $ | 14,227 | $ |
462,879 |
$ | 416,388 | $ | 398,108 | $ | 381,661 | $ | 365,558 |
(1) | In the third quarter of 2021, certain amounts by sector were revised from those previously presented to align with our revised sector definition, or to better match the borrowers’ risk profiles with the relevant sectors. |
(2) | Classification by country is primarily based on domicile of debtor or customer. |
(3) | Stage 3 allowance for credit losses (2017: individual allowance under IAS 39) is allocated to business and government loans, including acceptances, by category above. |
(4) | Stage 1 and 2 allowance (2017: collective allowance under IAS 39) are primarily allocated based on the geographic location where they are recorded. |
94 |
CIBC 2021 |
Management’s discussion and analysis |
$ millions, as at or for the year ended October 31 |
2021 |
2020 | 2019 | 2018 (1) |
2017 | |||||||||||||||
Balance at beginning of year under IAS 39 |
n/a |
n/a | n/a | $ | 1,737 | $ | 1,813 | |||||||||||||
Impact of adopting IFRS 9 at November 1, 2017 |
n/a |
n/a | n/a | 63 | n/a | |||||||||||||||
Balance at beginning of year under IFRS 9 |
$ |
3,722 |
$ | 2,044 | $ | 1,741 | 1,800 | n/a | ||||||||||||
Provision for credit losses |
158 |
2,489 | 1,286 | 870 | 829 | |||||||||||||||
Write-offs |
||||||||||||||||||||
Domestic (2) |
||||||||||||||||||||
Residential mortgages |
26 |
15 | 22 | 19 | 21 | |||||||||||||||
Personal and credit card |
663 |
755 | 897 | 866 | 869 | |||||||||||||||
Other business and government |
126 |
43 | 30 | 37 | 51 | |||||||||||||||
Foreign (2) |
||||||||||||||||||||
Residential mortgages |
1 |
1 | 7 | 35 | 17 | |||||||||||||||
Personal and credit card |
17 |
7 | 14 | 14 | 19 | |||||||||||||||
Other business and government |
153 |
114 | 160 | 79 | 80 | |||||||||||||||
Total write-offs |
986 |
935 | 1,130 | 1,050 | 1,057 | |||||||||||||||
Recoveries |
||||||||||||||||||||
Domestic (2) |
||||||||||||||||||||
Personal and credit card |
185 |
170 | 173 | 174 | 168 | |||||||||||||||
Other business and government |
5 |
4 | 6 | 6 | 15 | |||||||||||||||
Foreign (2) |
||||||||||||||||||||
Residential mortgages |
3 |
6 | 2 | – | – | |||||||||||||||
Personal and credit card |
4 |
7 | 6 | 4 | 5 | |||||||||||||||
Other business and government |
9 |
5 | 7 | 6 | 5 | |||||||||||||||
Total recoveries |
206 |
192 | 194 | 190 | 193 | |||||||||||||||
Net write-offs |
780 |
743 | 936 | 860 | 864 | |||||||||||||||
Interest income on impaired loans |
(41 |
) |
(45 | ) | (40 | ) | (23 | ) | (26 | ) | ||||||||||
Foreign exchange and other |
(89 |
) |
(23 | ) | (7 | ) | (46 | ) | (15 | ) | ||||||||||
Balance at end of year |
$ |
2,970 |
$ | 3,722 | $ | 2,044 | $ | 1,741 | $ | 1,737 | ||||||||||
Comprises: |
||||||||||||||||||||
Loans |
$ |
2,849 |
$ | 3,540 | $ | 1,915 | $ | 1,639 | $ | 1,618 | ||||||||||
Undrawn credit facilities and other off-balance sheet exposures |
121 |
182 | 129 | 102 | 119 | |||||||||||||||
Ratio of net write-offs during the year to average loans outstanding during the year |
0.18 |
% |
0.19 | % | 0.25 | % | 0.24 | % | 0.26 | % |
(1) | Effective November 1, 2017, all loans that are contractually 90 days in arrears are automatically classified as impaired and as stage 3 under IFRS 9, except for credit card loans which are classified as impaired and are fully written off when payments are contractually 180 days in arrears or at the earlier of the notice of bankruptcy, settlement proposal, or enlistment of credit counselling services. The determination of impairment was generally the same under IAS 39, except (i) residential mortgages guaranteed or insured by a Canadian government (federal or provincial) or a Canadian government agency were not classified as impaired until payments were contractually 365 days in arrears, and (ii) residential mortgages guaranteed or insured by a private insurer, or loans that were fully secured and in the process of collection were not classified as impaired until payments were contractually 180 days in arrears. |
(2) | Classification as domestic or foreign is primarily based on domicile of debtor or customer. |
n/a | Not applicable. |
Allowance for credit losses (1) |
Allowance as a % of gross impaired loans |
|||||||||||||||||||||||||||||||||||||||
$ millions, as at October 31 |
2021 |
2020 | 2019 | 2018 (2) |
2017 (3) |
2021 |
2020 | 2019 | 2018 (2) |
2017 (3) |
||||||||||||||||||||||||||||||
Domestic (4) |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
54 |
$ | 69 | $ | 61 | $ | 54 | $ | 22 | 12.7 |
% |
10.8 | % | 10.5 | % | 10.9 | % | 7.5 | % | ||||||||||||||||||||
Personal loans |
64 |
80 | 98 | 79 | 110 | 61.5 |
60.2 | 62.4 | 57.7 | 94.8 | ||||||||||||||||||||||||||||||
Business and government |
344 |
406 | 217 | 56 | 43 | 72.9 |
62.6 | 45.8 | 41.5 | 41.7 | ||||||||||||||||||||||||||||||
Total domestic |
462 |
555 | 376 | 189 | 175 | 46.2 |
39.1 | 31.0 | 24.6 | 34.2 | ||||||||||||||||||||||||||||||
Foreign (4) |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
104 |
82 | 79 | 89 | 123 | 48.8 |
47.7 | 46.5 | 49.4 | 55.7 | ||||||||||||||||||||||||||||||
Personal loans |
42 |
33 | 30 | 30 | 31 | 72.4 |
68.8 | 63.8 | 66.7 | 56.4 | ||||||||||||||||||||||||||||||
Business and government |
164 |
244 | 159 | 174 | 148 | 29.2 |
34.4 | 36.4 | 35.8 | 28.3 | ||||||||||||||||||||||||||||||
Total foreign |
310 |
359 | 268 | 293 | 302 | 37.3 |
38.6 | 41.0 | 41.2 | 37.8 | ||||||||||||||||||||||||||||||
Total allowance |
$ |
772 |
$ | 914 | $ | 644 | $ | 482 | $ | 477 | 42.1 |
% |
38.9 | % | 34.5 | % | 32.6 | % | 36.4 | % |
(1) | Excludes allowance on undrawn credit facilities and other off-balance sheet exposures. |
(2) | Effective November 1, 2017, all loans that are contractually 90 days in arrears are automatically classified as impaired and as stage 3 under IFRS 9, except for credit card loans which are classified as impaired and are fully written off when payments are contractually 180 days in arrears or at the earlier of the notice of bankruptcy, settlement proposal, or enlistment of credit counselling services. The determination of impairment was generally the same under IAS 39, except (i) residential mortgages guaranteed or insured by a Canadian government (federal or provincial) or a Canadian government agency were not classified as impaired until payments were contractually 365 days in arrears, and (ii) residential mortgages guaranteed or insured by a private insurer, or loans that were fully secured and in the process of collection were not classified as impaired until payments were contractually 180 days in arrears. |
(3) | Under IAS 39, comprises individual allowance, and collective allowance related to personal, scored small business, and mortgage impaired loans that are greater than 90 days delinquent. |
(4) | Classification as domestic or foreign is primarily based on domicile of debtor or customer. |
CIBC 2021 |
|
95 |
|
|
Management’s discussion and analysis |
Allowance for credit losses (1)(2) |
Allowance as a % of net loans and acceptances |
|||||||||||||||||||||||||||||||||||||||
$ millions, as at October 31 |
2021 |
2020 | 2019 | 2018 (3) |
2017 | 2021 |
2020 | 2019 | 2018 (3) |
2017 | ||||||||||||||||||||||||||||||
Domestic |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
65 |
$ | 89 | $ | 38 | $ | 29 | $ | 34 | – |
% |
– | % | – | % | – | % | – | % | ||||||||||||||||||||
Personal loans |
647 |
697 | 415 | 362 | 345 | 1.6 |
1.7 | 1.0 | 0.9 | 0.9 | ||||||||||||||||||||||||||||||
Credit cards |
619 |
659 | 413 | 415 | 383 | 6.0 |
6.2 | 3.4 | 3.4 | 3.2 | ||||||||||||||||||||||||||||||
Business and government |
245 |
341 | 144 | 98 | 187 | 0.3 |
0.4 | 0.2 | 0.1 | 0.3 | ||||||||||||||||||||||||||||||
Total domestic |
1,576 |
1,786 | 1,010 | 904 | 949 | 0.4 |
0.5 | 0.3 | 0.3 | 0.3 | ||||||||||||||||||||||||||||||
Foreign |
||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
57 |
123 | 33 | 42 | 24 | 1.2 |
2.7 | 0.8 | 1.2 | 0.7 | ||||||||||||||||||||||||||||||
Personal loans |
15 |
22 | 10 | 10 | 9 | 1.3 |
2.1 | 0.8 | 0.9 | 1.0 | ||||||||||||||||||||||||||||||
Credit cards |
6 |
8 | 7 | 3 | 3 | 4.1 |
4.7 | 3.6 | 1.5 | 1.6 | ||||||||||||||||||||||||||||||
Business and government |
423 |
687 | 211 | 198 | 156 | 0.6 |
1.0 | 0.4 | 0.4 | 0.3 | ||||||||||||||||||||||||||||||
Total foreign |
501 |
840 | 261 | 253 | 192 | 0.6 |
1.2 | 0.4 | 0.5 | 0.4 | ||||||||||||||||||||||||||||||
Total stage 1 and 2 allowance (2017: total allowance) |
$ |
2,077 |
$ | 2,626 | $ | 1,271 | $ | 1,157 | $ | 1,141 | 0.4 |
% |
0.6 | % | 0.3 | % | 0.3 | % | 0.3 | % |
(1) | Excludes allowance on undrawn credit facilities and other off-balance sheet exposures. |
(2) | Stage 1 and 2 allowance (2017: collective allowance under IAS 39) are primarily allocated based on the geographic location where they are recorded. |
(3) | Effective November 1, 2017, all loans that are contractually 90 days in arrears are automatically classified as impaired and as stage 3 under IFRS 9, except for credit card loans which are classified as impaired and are fully written off when payments are contractually 180 days in arrears or at the earlier of the notice of bankruptcy, settlement proposal, or enlistment of credit counselling services. The determination of impairment was generally the same under IAS 39, except (i) residential mortgages guaranteed or insured by a Canadian government (federal or provincial) or a Canadian government agency were not classified as impaired until payments were contractually 365 days in arrears, and (ii) residential mortgages guaranteed or insured by a private insurer, or loans that were fully secured and in the process of collection were not classified as impaired until payments were contractually 180 days in arrears. |
$ millions, as at October 31 |
2021 |
2020 | 2019 | 2018 | 2017 | |||||||||||||||
Canada |
||||||||||||||||||||
Atlantic provinces |
$ |
14,898 |
$ | 14,685 | $ | 14,578 | $ | 14,036 | $ | 14,194 | ||||||||||
Quebec |
35,092 |
30,916 | 30,113 | 28,598 | 27,027 | |||||||||||||||
Ontario |
202,789 |
176,915 | 169,073 | 165,592 | 157,987 | |||||||||||||||
Prairie provinces |
15,092 |
14,710 | 14,680 | 13,947 | 13,746 | |||||||||||||||
Alberta, Northwest Territories and Nunavut |
46,816 |
46,133 | 45,103 | 44,896 | 44,354 | |||||||||||||||
British Columbia and Yukon |
69,110 |
62,104 | 60,829 | 60,407 | 59,479 | |||||||||||||||
Stage 1 and 2 allowance (2017: collective allowance) allocated to Canada (2) |
(1,576 |
) (3) |
(1,786 | ) (3) |
(1,010 | ) (3) |
(904 | ) (3) |
(902 | ) (4) | ||||||||||
Total Canada |
382,221 |
343,677 | 333,366 | 326,572 | 315,885 | |||||||||||||||
U.S. |
60,130 |
54,127 | 48,290 | 40,206 | 35,446 | |||||||||||||||
Other countries |
20,528 |
18,584 | 16,452 | 14,883 | 14,227 | |||||||||||||||
Total net loans and acceptances |
$ |
462,879 |
$ | 416,388 | $ | 398,108 | $ | 381,661 | $ | 365,558 |
(1) | Classification by country is primarily based on domicile of debtor or customer. |
(2) | Stage 1 and 2 allowance (2017: collective allowance under IAS 39) are primarily allocated based on the geographic location where they are recorded. |
(3) | Stage 3 allowance for credit losses (2017: individual allowance under IAS 39) is allocated to provinces above, including acceptances. |
(4) | Under IAS 39, relates to collective allowance, except for: (i) residential mortgages greater than 90 days delinquent; and (ii) personal loans and scored small business loans greater than 30 days delinquent. |
96 |
CIBC 2021 |
Management’s discussion and analysis |
Canada (1) |
U.S. (1) |
|||||||||||||||||||||||||||||||||||||||||||
$ millions, as at October 31 |
2021 |
2020 | 2019 | 2018 (2) |
2017 | 2021 |
2020 | 2019 | 2018 (2) |
2017 | ||||||||||||||||||||||||||||||||||
Gross impaired loans |
||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
425 |
$ | 637 | $ | 581 | $ | 497 | $ | 292 | $ |
18 |
$ | 17 | $ | 16 | $ | 13 | $ | 9 | ||||||||||||||||||||||||
Personal |
104 |
133 | 157 | 137 | 116 | 3 |
5 | 5 | 2 | 2 | ||||||||||||||||||||||||||||||||||
Total gross impaired consumer loans |
529 |
770 | 738 | 634 | 408 | 21 |
22 | 21 | 15 | 11 | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
2 |
15 | 3 | 3 | 7 | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Financial institutions |
4 |
8 | 2 | 5 | – | 70 |
34 | 37 | 65 | 8 | ||||||||||||||||||||||||||||||||||
Retail, wholesale and business services |
192 |
383 | 283 | 62 | 38 | 55 |
98 | 89 | 44 | 52 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer and capital goods |
24 |
5 | 6 | 7 | 6 | 51 |
65 | 35 | 14 | 1 | ||||||||||||||||||||||||||||||||||
Real estate and construction |
16 |
39 | 38 | 39 | 33 | 239 |
169 | 46 | 90 | 137 | ||||||||||||||||||||||||||||||||||
Agriculture |
10 |
27 | 53 | 8 | 9 | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Resource-based industries |
50 |
124 | 46 | 1 | 2 | 7 |
135 | 69 | 54 | 114 | ||||||||||||||||||||||||||||||||||
Telecommunications, media and technology |
4 |
1 | 2 | 2 | 3 | 6 |
6 | 2 | 2 | 2 | ||||||||||||||||||||||||||||||||||
Transportation |
6 |
4 | 4 | 3 | 2 | – |
– | – | 1 | – | ||||||||||||||||||||||||||||||||||
Utilities |
93 |
38 | 32 | – | – | – |
34 | – | – | – | ||||||||||||||||||||||||||||||||||
Other |
71 |
5 | 5 | 5 | 3 | 8 |
21 | 23 | 56 | 45 | ||||||||||||||||||||||||||||||||||
Total gross impaired – business and government loans |
472 |
649 | 474 | 135 | 103 | 436 |
562 | 301 | 326 | 359 | ||||||||||||||||||||||||||||||||||
Total gross impaired loans |
1,001 |
1,419 | 1,212 | 769 | 511 | 457 |
584 | 322 | 341 | 370 | ||||||||||||||||||||||||||||||||||
Other past due loans (3) |
64 |
127 | 96 | 100 | 337 | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Total gross impaired and other past due loans |
$ |
1,065 |
$ | 1,546 | $ | 1,308 | $ | 869 | $ | 848 | $ |
457 |
$ | 584 | $ | 322 | $ | 341 | $ | 370 | ||||||||||||||||||||||||
Allowance for credit losses |
||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
54 |
$ | 69 | $ | 61 | $ | 54 | $ | 22 | $ |
5 |
$ | 3 | $ | 3 | $ | 2 | $ | – | ||||||||||||||||||||||||
Personal |
64 |
80 | 98 | 79 | 110 | 2 |
2 | 1 | – | – | ||||||||||||||||||||||||||||||||||
Total allowance – consumer loans |
118 |
149 | 159 | 133 | 132 | 7 |
5 | 4 | 2 | – | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
– |
– | – | – | 2 | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Financial institutions |
1 |
4 | 1 | – | – | 15 |
8 | 1 | 14 | – | ||||||||||||||||||||||||||||||||||
Retail, wholesale and business services |
177 |
289 | 151 | 26 | 18 | 19 |
24 | 28 | 27 | 16 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer and capital goods |
9 |
3 | 4 | 4 | 5 | 3 |
29 | – | 1 | – | ||||||||||||||||||||||||||||||||||
Real estate and construction |
8 |
11 | 16 | 15 | 9 | 62 |
58 | 28 | 41 | 41 | ||||||||||||||||||||||||||||||||||
Agriculture |
7 |
22 | 24 | 4 | – | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Resource-based industries |
33 |
56 | 11 | 1 | 2 | 1 |
48 | 34 | 5 | 8 | ||||||||||||||||||||||||||||||||||
Telecommunications, media and technology |
3 |
– | – | 1 | 2 | 1 |
2 | – | – | – | ||||||||||||||||||||||||||||||||||
Transportation |
3 |
2 | 2 | 2 | 2 | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Utilities |
79 |
17 | 5 | – | – | – |
5 | – | – | – | ||||||||||||||||||||||||||||||||||
Other |
24 |
2 | 3 | 3 | 3 | – |
1 | 10 | – | – | ||||||||||||||||||||||||||||||||||
Total allowance – business and government loans |
344 |
406 | 217 | 56 | 43 | 101 |
175 | 101 | 88 | 65 | ||||||||||||||||||||||||||||||||||
Total allowance |
$ |
462 |
$ | 555 | $ | 376 | $ | 189 | $ | 175 | $ |
108 |
$ | 180 | $ | 105 | $ | 90 | $ | 65 | ||||||||||||||||||||||||
Net impaired loans |
||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
371 |
$ | 568 | $ | 520 | $ | 443 | $ | 270 | $ |
13 |
$ | 14 | $ | 13 | $ | 11 | $ | 9 | ||||||||||||||||||||||||
Personal |
40 |
53 | 59 | 58 | 6 | 1 |
3 | 4 | 2 | 2 | ||||||||||||||||||||||||||||||||||
Total net impaired consumer loans |
411 |
621 | 579 | 501 | 276 | 14 |
17 | 17 | 13 | 11 | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
2 |
15 | 3 | 3 | 5 | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Financial institutions |
3 |
4 | 1 | 5 | – | 55 |
26 | 36 | 51 | 8 | ||||||||||||||||||||||||||||||||||
Retail, wholesale and business services |
15 |
94 | 132 | 36 | 20 | 36 |
74 | 61 | 17 | 36 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer and capital goods |
15 |
2 | 2 | 3 | 1 | 48 |
36 | 35 | 13 | 1 | ||||||||||||||||||||||||||||||||||
Real estate and construction |
8 |
28 | 22 | 24 | 24 | 177 |
111 | 18 | 49 | 96 | ||||||||||||||||||||||||||||||||||
Agriculture |
3 |
5 | 29 | 4 | 9 | – |
– | – | – | – | ||||||||||||||||||||||||||||||||||
Resource-based industries |
17 |
68 | 35 | – | – | 6 |
87 | 35 | 49 | 106 | ||||||||||||||||||||||||||||||||||
Telecommunications, media and technology |
1 |
1 | 2 | 1 | 1 | 5 |
4 | 2 | 2 | 2 | ||||||||||||||||||||||||||||||||||
Transportation |
3 |
2 | 2 | 1 | – | – |
– | – | 1 | – | ||||||||||||||||||||||||||||||||||
Utilities |
14 |
21 | 27 | – | – | – |
29 | – | – | – | ||||||||||||||||||||||||||||||||||
Other |
47 |
3 | 2 | 2 | – | 8 |
20 | 13 | 56 | 45 | ||||||||||||||||||||||||||||||||||
Total net impaired – business and government loans |
128 |
243 | 257 | 79 | 60 | 335 |
387 | 200 | 238 | 294 | ||||||||||||||||||||||||||||||||||
Total net impaired loans |
$ |
539 |
$ | 864 | $ | 836 | $ | 580 | $ | 336 | $ |
349 |
$ | 404 | $ | 217 | $ | 251 | $ | 305 |
(1) | Classification by country is primarily based on domicile of debtor or customer. |
(2) | Effective November 1, 2017, all loans that are contractually 90 days in arrears are automatically classified as impaired and as stage 3 under IFRS 9, except for credit card loans which are classified as impaired and are fully written off when payments are contractually 180 days in arrears or at the earlier of the notice of bankruptcy, settlement proposal, or enlistment of credit counselling services. The determination of impairment was generally the same under IAS 39, except (i) residential mortgages guaranteed or insured by a Canadian government (federal or provincial) or a Canadian government agency were not classified as impaired until payments were contractually 365 days in arrears, and (ii) residential mortgages guaranteed or insured by a private insurer, or loans that were fully secured and in the process of collection were not classified as impaired until payments were contractually 180 days in arrears. |
(3) | Represents loans where repayment of principal or payment of interest is contractually in arrears between 90 and 180 days. |
CIBC 2021 |
|
97 |
|
Management’s discussion and analysis |
Other (1) |
Total | |||||||||||||||||||||||||||||||||||||||||||
$ millions, as at October 31 |
2021 |
2020 | 2019 | 2018 (2) |
2017 | 2021 |
2020 | 2019 | 2018 (2) |
2017 | ||||||||||||||||||||||||||||||||||
Gross impaired loans |
||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
195 |
$ | 155 | $ | 154 | $ | 167 | $ | 212 | $ |
638 |
$ | 809 | $ | 751 | $ | 677 | $ | 513 | ||||||||||||||||||||||||
Personal |
55 |
43 | 42 | 43 | 53 | 162 |
181 | 204 | 182 | 171 | ||||||||||||||||||||||||||||||||||
Total gross impaired consumer loans |
250 |
198 | 196 | 210 | 265 | 800 |
990 | 955 | 859 | 684 | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
11 |
11 | 17 | 15 | 17 | 13 |
26 | 20 | 18 | 24 | ||||||||||||||||||||||||||||||||||
Financial institutions |
1 |
1 | – | 1 | 2 | 75 |
43 | 39 | 71 | 10 | ||||||||||||||||||||||||||||||||||
Retail, wholesale and business services |
53 |
49 | 43 | 52 | 57 | 300 |
530 | 415 | 158 | 147 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer and capital goods |
16 |
3 | 4 | 4 | 5 | 91 |
73 | 45 | 25 | 12 | ||||||||||||||||||||||||||||||||||
Real estate and construction |
42 |
55 | 59 | 72 | 78 | 297 |
263 | 143 | 201 | 248 | ||||||||||||||||||||||||||||||||||
Agriculture |
– |
– | – | 1 | 1 | 10 |
27 | 53 | 9 | 10 | ||||||||||||||||||||||||||||||||||
Resource-based industries |
– |
27 | – | – | – | 57 |
286 | 115 | 55 | 116 | ||||||||||||||||||||||||||||||||||
Telecommunications, media and technology |
– |
– | – | – | – | 10 |
7 | 4 | 4 | 5 | ||||||||||||||||||||||||||||||||||
Transportation |
2 |
2 | 2 | 3 | 4 | 8 |
6 | 6 | 7 | 6 | ||||||||||||||||||||||||||||||||||
Utilities |
– |
– | – | – | – | 93 |
72 | 32 | – | – | ||||||||||||||||||||||||||||||||||
Other |
– |
– | 11 | 12 | – | 79 |
26 | 39 | 73 | 48 | ||||||||||||||||||||||||||||||||||
Total gross impaired – business and government loans |
125 |
148 | 136 | 160 | 164 | 1,033 |
1,359 | 911 | 621 | 626 | ||||||||||||||||||||||||||||||||||
Total gross impaired loans |
375 |
346 | 332 | 370 | 429 | 1,833 |
2,349 | 1,866 | 1,480 | 1,310 | ||||||||||||||||||||||||||||||||||
Other past due loans (3) |
2 |
5 | 3 | 3 | 3 | 66 |
132 | 99 | 103 | 340 | ||||||||||||||||||||||||||||||||||
Total gross impaired and other past due loans |
$ |
377 |
$ | 351 | $ | 335 | $ | 373 | $ | 432 | $ |
1,899 |
$ | 2,481 | $ | 1,965 | $ | 1,583 | $ | 1,650 | ||||||||||||||||||||||||
Allowance for credit losses |
||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
99 |
$ | 79 | $ | 76 | $ | 87 | $ | 123 | $ |
158 |
$ | 151 | $ | 140 | $ | 143 | $ | 145 | ||||||||||||||||||||||||
Personal |
40 |
31 | 29 | 30 | 31 | 106 |
113 | 128 | 109 | 141 | ||||||||||||||||||||||||||||||||||
Total allowance – consumer loans |
139 |
110 | 105 | 117 | 154 | 264 |
264 | 268 | 252 | 286 | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
2 |
2 | 5 | 7 | 9 | 2 |
2 | 5 | 7 | 11 | ||||||||||||||||||||||||||||||||||
Financial institutions |
1 |
1 | – | 1 | – | 17 |
13 | 2 | 15 | – | ||||||||||||||||||||||||||||||||||
Retail, wholesale and business services |
33 |
21 | 18 | 28 | 29 | 229 |
334 | 197 | 81 | 63 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer and capital goods |
4 |
2 | 2 | 3 | 3 | 16 |
34 | 6 | 8 | 8 | ||||||||||||||||||||||||||||||||||
Real estate and construction |
22 |
29 | 30 | 39 | 39 | 92 |
98 | 74 | 95 | 89 | ||||||||||||||||||||||||||||||||||
Agriculture |
– |
– | – | 1 | 1 | 7 |
22 | 24 | 5 | 1 | ||||||||||||||||||||||||||||||||||
Resource-based industries |
– |
13 | – | – | – | 34 |
117 | 45 | 6 | 10 | ||||||||||||||||||||||||||||||||||
Telecommunications, media and technology |
– |
– | – | – | – | 4 |
2 | – | 1 | 2 | ||||||||||||||||||||||||||||||||||
Transportation |
1 |
1 | 1 | 2 | 2 | 4 |
3 | 3 | 4 | 4 | ||||||||||||||||||||||||||||||||||
Utilities |
– |
– | – | – | – | 79 |
22 | 5 | – | – | ||||||||||||||||||||||||||||||||||
Other |
– |
– | 2 | 5 | – | 24 |
3 | 15 | 8 | 3 | ||||||||||||||||||||||||||||||||||
Total allowance – business and government loans |
63 |
69 | 58 | 86 | 83 | 508 |
650 | 376 | 230 | 191 | ||||||||||||||||||||||||||||||||||
Total allowance |
$ |
202 |
$ | 179 | $ | 163 | $ | 203 | $ | 237 | $ |
772 |
$ | 914 | $ | 644 | $ | 482 | $ | 477 | ||||||||||||||||||||||||
Net impaired loans |
||||||||||||||||||||||||||||||||||||||||||||
Residential mortgages |
$ |
96 |
$ | 76 | $ | 78 | $ | 80 | $ | 89 | $ |
480 |
$ | 658 | $ | 611 | $ | 534 | $ | 368 | ||||||||||||||||||||||||
Personal |
15 |
12 | 13 | 13 | 22 | 56 |
68 | 76 | 73 | 30 | ||||||||||||||||||||||||||||||||||
Total net impaired consumer loans |
111 |
88 | 91 | 93 | 111 | 536 |
726 | 687 | 607 | 398 | ||||||||||||||||||||||||||||||||||
Non-residential mortgages |
9 |
9 | 12 | 8 | 8 | 11 |
24 | 15 | 11 | 13 | ||||||||||||||||||||||||||||||||||
Financial institutions |
– |
– | – | – | 2 | 58 |
30 | 37 | 56 | 10 | ||||||||||||||||||||||||||||||||||
Retail, wholesale and business services |
20 |
28 | 25 | 24 | 28 | 71 |
196 | 218 | 77 | 84 | ||||||||||||||||||||||||||||||||||
Manufacturing – consumer and capital goods |
12 |
1 | 2 | 1 | 2 | 75 |
39 | 39 | 17 | 4 | ||||||||||||||||||||||||||||||||||
Real estate and construction |
20 |
26 | 29 | 33 | 39 | 205 |
165 | 69 | 106 | 159 | ||||||||||||||||||||||||||||||||||
Agriculture |
– |
– | – | – | – | 3 |
5 | 29 | 4 | 9 | ||||||||||||||||||||||||||||||||||
Resource-based industries |
– |
14 | – | – | – | 23 |
169 | 70 | 49 | 106 | ||||||||||||||||||||||||||||||||||
Telecommunications, media and technology |
– |
– | – | – | – | 6 |
5 | 4 | 3 | 3 | ||||||||||||||||||||||||||||||||||
Transportation |
1 |
1 | 1 | 1 | 2 | 4 |
3 | 3 | 3 | 2 | ||||||||||||||||||||||||||||||||||
Utilities |
– |
– | – | – | – | 14 |
50 | 27 | – | – | ||||||||||||||||||||||||||||||||||
Other |
– |
– | 9 | 7 | – | 55 |
23 | 24 | 65 | 45 | ||||||||||||||||||||||||||||||||||
Total net impaired – business and government loans |
62 |
79 | 78 | 74 | 81 | 525 |
709 | 535 | 391 | 435 | ||||||||||||||||||||||||||||||||||
Total net impaired loans |
$ |
173 |
$ | 167 | $ | 169 | $ | 167 | $ | 192 | $ |
1,061 |
$ | 1,435 | $ | 1,222 | $ | 998 | $ | 833 |
(1) | Classification by country is primarily based on domicile of debtor or customer. |
(2) | Effective November 1, 2017, all loans that are contractually 90 days in arrears are automatically classified as impaired and as stage 3 under IFRS 9, except for credit card loans which are classified as impaired and are fully written off when payments are contractually 180 days in arrears or at the earlier of the notice of bankruptcy, settlement proposal, or enlistment of credit counselling services. The determination of impairment was generally the same under IAS 39, except (i) residential mortgages guaranteed or insured by a Canadian government (federal or provincial) or a Canadian government agency were not classified as impaired until payments were contractually 365 days in arrears, and (ii) residential mortgages guaranteed or insured by a private insurer, or loans that were fully secured and in the process of collection were not classified as impaired until payments were contractually 180 days in arrears. |
(3) | Represents loans where repayment of principal or payment of interest is contractually in arrears between 90 and 180 days. |
98 |
CIBC 2021 |
|
Management’s discussion and analysis |
Average balance (1) |
Interest | Rate | ||||||||||||||||||||||||||||||||||
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | 2021 |
2020 | 2019 | 2021 |
2020 | 2019 | |||||||||||||||||||||||||||
Deposits in domestic bank offices (2) |
||||||||||||||||||||||||||||||||||||
Payable on demand |
||||||||||||||||||||||||||||||||||||
Personal |
$ |
12,820 |
$ | 11,945 | $ | 9,939 | $ |
5 |
$ | 14 | $ | 17 | 0.04 |
% |
0.12 | % | 0.17 | % | ||||||||||||||||||
Business and government |
67,233 |
50,683 | 43,539 | 164 |
305 | 585 | 0.24 |
0.60 | 1.34 | |||||||||||||||||||||||||||
Bank |
8,881 |
5,761 | 4,517 | – |
1 | 3 | – |
0.02 | 0.07 | |||||||||||||||||||||||||||
Payable after notice |
||||||||||||||||||||||||||||||||||||
Personal |
130,636 |
109,856 | 99,859 | 194 |
460 | 855 | 0.15 |
0.42 | 0.86 | |||||||||||||||||||||||||||
Business and government |
64,661 |
56,758 | 44,691 | 390 |
659 | 927 | 0.60 |
1.16 | 2.07 | |||||||||||||||||||||||||||
Bank |
351 |
276 | 256 | 2 |
2 | 4 | 0.57 |
0.72 | 1.56 | |||||||||||||||||||||||||||
Payable on a fixed date |
||||||||||||||||||||||||||||||||||||
Personal |
50,479 |
55,164 | 51,522 | 552 |
969 | 1,040 | 1.09 |
1.76 | 2.02 | |||||||||||||||||||||||||||
Business and government |
105,251 |
102,953 | 85,978 | 684 |
1,358 | 2,063 | 0.65 |
1.32 | 2.40 | |||||||||||||||||||||||||||
Bank |
2,167 |
2,078 | 1,161 | 2 |
20 | 23 | 0.09 |
0.96 | 1.98 | |||||||||||||||||||||||||||
Secured borrowings |
37,893 |
39,076 | 39,111 | 378 |
668 | 1,037 | 1.00 |
1.71 | 2.65 | |||||||||||||||||||||||||||
Total domestic |
480,372 |
434,550 | 380,573 | 2,371 |
4,456 | 6,554 | 0.49 |
1.03 | 1.72 | |||||||||||||||||||||||||||
Deposits in foreign bank offices |
||||||||||||||||||||||||||||||||||||
Payable on demand |
||||||||||||||||||||||||||||||||||||
Personal |
2,213 |
1,971 | 1,687 | 1 |
2 | 2 | 0.05 |
0.10 | 0.12 | |||||||||||||||||||||||||||
Business and government |
24,156 |
20,454 | 15,687 | 8 |
32 | 70 | 0.03 |
0.16 | 0.45 | |||||||||||||||||||||||||||
Bank |
37 |
31 | 13 | 1 |
1 | – | 2.70 |
3.23 | – | |||||||||||||||||||||||||||
Payable after notice |
||||||||||||||||||||||||||||||||||||
Personal |
8,305 |
8,119 | 6,909 | 33 |
66 | 82 | 0.40 |
0.81 | 1.19 | |||||||||||||||||||||||||||
Business and government |
16,623 |
12,825 | 9,544 | 26 |
83 | 185 | 0.16 |
0.65 | 1.94 | |||||||||||||||||||||||||||
Payable on a fixed date |
||||||||||||||||||||||||||||||||||||
Personal |
1,941 |
2,832 | 3,164 | 11 |
36 | 58 | 0.57 |
1.27 | 1.83 | |||||||||||||||||||||||||||
Business and government |
55,092 |
48,680 | 51,082 | 166 |
546 | 1,271 | 0.30 |
1.12 | 2.49 | |||||||||||||||||||||||||||
Bank |
7,632 |
7,850 | 8,245 | 18 |
89 | 196 | 0.24 |
1.13 | 2.38 | |||||||||||||||||||||||||||
Secured borrowings |
1,883 |
1,322 | 226 | 16 |
15 | 4 | 0.85 |
1.13 | 1.77 | |||||||||||||||||||||||||||
Total foreign |
117,882 |
104,084 | 96,557 | 280 |
870 | 1,868 | 0.24 |
0.84 | 1.93 | |||||||||||||||||||||||||||
Total deposits |
$ |
598,254 |
$ | 538,634 | $ | 477,130 | $ |
2,651 |
$ | 5,326 | $ | 8,422 | 0.44 |
% |
0.99 | % | 1.77 | % |
(1) | Average balances are calculated as a weighted average of daily closing balances. |
(2) | Deposits by foreign depositors in our domestic bank offices amounted to $51.9 billion (2020: $42.2 billion; 2019: $29.3 billion). |
$ millions, as at or for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Amounts outstanding at end of year |
||||||||||||
Obligations related to securities sold short |
$ |
22,790 |
$ | 15,963 | $ | 15,635 | ||||||
Obligations related to securities lent or sold under repurchase agreements |
74,343 |
73,477 | 53,623 | |||||||||
Total short-term borrowings |
$ |
97,133 |
$ | 89,440 | $ | 69,258 | ||||||
Obligations related to securities sold short |
||||||||||||
Average balance (1) |
$ |
20,068 |
$ | 17,841 | $ | 16,501 | ||||||
Maximum month-end balance |
22,790 |
22,467 | 18,448 | |||||||||
Average interest rate |
1.18 |
% |
1.42 | % | 1.76 | % | ||||||
Obligations related to securities lent or sold under repurchase agreements |
||||||||||||
Average balance (1) |
$ |
76,491 |
$ | 69,255 | $ | 51,408 | ||||||
Maximum month-end balance |
83,664 |
81,349 | 57,346 | |||||||||
Average interest rate |
0.27 |
% |
0.95 | % | 2.33 | % |
(1) | Average balances are calculated as a weighted average of daily closing balances. |
$ millions, for the year ended October 31 |
2021 |
2020 | 2019 | |||||||||
Audit fees (1) |
$ |
23.1 |
$ | 24.0 | $ | 22.3 | ||||||
Audit-related fees (2) |
2.3 |
2.2 | 1.7 | |||||||||
Tax fees (3) |
1.3 |
1.4 | 1.9 | |||||||||
All other fees (4) |
– |
– | 0.1 | |||||||||
Total |
$ |
26.7 |
$ | 27.6 | $ | 26.0 |
(1) | For the audit of CIBC’s annual financial statements and the audit of certain of our subsidiaries, as well as other services normally provided by the principal auditor in connection with CIBC’s statutory and regulatory filings. Audit fees also include the audit of internal control over financial reporting under the standards of the Public Company Accounting Oversight Board (United States). |
(2) | For the assurance and related services that are reasonably related to the performance of the audit or review of CIBC’s consolidated financial statements, including accounting consultation, various agreed upon procedures and translation of financial reports. |
(3) | For tax compliance and advisory services. |
(4) | Includes fees for non-audit services. |
CIBC 2021 |
|
99 |
|
Management’s discussion and analysis |
100 |
CIBC 2021 |
|
Management’s discussion and analysis |
CIBC 2021 |
|
101 |
|
Management’s discussion and analysis |
102 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
|
103 |
|
Management’s discussion and analysis |
104 |
CIBC 2021 |
Management’s discussion and analysis |
CIBC 2021 |
|
105 |
|
Management’s discussion and analysis |
106 |
CIBC 2021 |