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CIBC Announces Fourth Quarter and Fiscal 2018 Results

CIBC's 2018 audited annual consolidated financial statements and accompanying management's discussion & analysis (MD&A) will be available today at www.cibc.com, along with the supplementary financial information and supplementary regulatory capital reports which include fourth quarter financial information. All amounts are expressed in Canadian dollars, unless otherwise indicated.

TORONTO, Nov. 29, 2018 /CNW/ - CIBC (TSX: CM) (NYSE: CM) today announced its results for the fourth quarter and fiscal year ended October 31, 2018.

"In 2018, CIBC delivered record net income driven by strong performance across all of our strategic business units," says Victor G. Dodig, CIBC President and Chief Executive Officer. "We made excellent progress in continuing to embed a client-focused culture, investing in our cross-border platform and enhancing value for our shareholders. Looking forward, we are well positioned to continue to build a client-focused bank that delivers superior shareholder returns."

Fourth quarter highlights


Q4/18

Q4/17

Q3/18

YoY Variance

QoQ Variance

Reported Net Income

$1,268 million

$1,164 million

$1,369 million

+9%

-7%

Adjusted Net Income(1)

$1,364 million

$1,263 million

$1,399 million

+8%

-3%

Reported Diluted Earnings Per Share (EPS)

$2.80

$2.59

$3.01

+8%

-7%

Adjusted Diluted EPS(1)

$3.00

$2.81

$3.08

+7%

-3%

Reported Return on Common Shareholders' Equity (ROE)

15.3%

15.8%

16.7%



Adjusted ROE(1)

16.4%

17.2%

17.1%



Basel III Common Equity Tier 1 (CET1) Ratio (all-in basis)

11.4%

10.6%

11.3%



(1)

   For additional information, see the "Non-GAAP measures" section.

 

CIBC's results for the fourth quarter of 2018 were affected by the following items of note aggregating to a negative impact of $0.20 per share:

  • $89 million ($65 million after-tax and minority interest, or $0.15 per share) of incremental losses on debt securities and loans in FirstCaribbean International Bank Limited (CIBC FirstCaribbean) resulting from the Barbados government debt restructuring;
  • $26 million ($19 million after-tax, or $0.04 per share) amortization of acquisition-related intangible assets; and
  • $8 million ($7 million after-tax, or $0.01 per share) in transaction and integration-related costs net of purchase accounting adjustments associated with the acquisitions of The PrivateBank and Geneva Advisors.

For the year ended October 31, 2018, CIBC reported net income of $5.3 billion and adjusted net income(1) of $5.5 billion, compared with reported net income of $4.7 billion and adjusted net income(1) of $4.7 billion for 2017.

The following table summarizes our strong performance in 2018 against our key financial measures and targets:

Financial Measure

Target

2018 Reported Results

2018 Adjusted Results (1)

Diluted EPS growth

5% to 10% on average, annually

$11.65, up 4% from 2017

$12.21, up 10% from 2017

ROE

15% +

16.6%

17.4%

Efficiency ratio

55% by 2019 (2)

57.5%, an improvement of 130 basis points from 2017

55.6%, an improvement of 160 basis points from 2017

Basel III CET1 ratio

Strong buffer to regulatory
minimum

11.4%

Dividend payout ratio

40% to 50%

45.5%

43.4%

Total shareholder return

Outperform the S&P/TSX
Composite Banks Index over a
rolling five-year period

CIBC – 60.6%

S&P/TSX Composite Banks Index – 62.0%

(1)

For additional information, see the "Non-GAAP measures" section.

(2)

CIBC has set a medium-term target of achieving a run rate efficiency ratio of 52% by 2022.


 

Core business performance

F2018 Financial Highlights

(C$ million)

F2018

F2017

YoY Variance

Canadian Personal and Small Business Banking




Reported Net Income

$2,547

$2,420

up 5%

Adjusted Net Income(1)

$2,556

$2,250

up 14%





Canadian Commercial Banking and Wealth Management




Reported Net Income

$1,307

$1,138

up 15%

Adjusted Net Income(1)

$1,308

$1,139

up 15%





U.S. Commercial Banking and Wealth Management




Reported Net Income

$565

$203

up 178%

Adjusted Net Income(1)

$592

$222

up 167%





Capital Markets




Reported Net Income

$1,069

$1,090

down 2%

Adjusted Net Income(1)

$1,069

$1,090

down 2%

(1)

   For additional information, see the "Non-GAAP measures" section.

 

Strong fundamentals
While investing in core businesses, CIBC has continued to strengthen key fundamentals. In 2018, CIBC maintained its capital strength, competitive productivity and sound risk management practices:

  • CIBC's capital ratios were strong, with a Basel III CET1 ratio of 11.4% as noted above, and Tier 1 and Total capital ratios of 12.9% and 14.9% respectively, at October 31, 2018;
  • Market risk, as measured by average Value-at-Risk, was $5.3 million in 2018 compared with $6.5 million in 2017; and
  • We continued to have strong credit performance, with CIBC's loan loss ratio of 26 basis points compared with 25 basis points in 2017.

Making a difference in our Communities

CIBC is committed to building a bank that is relevant to our clients, our team members and our communities. During the fourth quarter of 2018:

  • We celebrated 22 years as title sponsor of the Canadian Cancer Society CIBC Run for the Cure and helped raise $16 million, including $3 million contributed by Team CIBC, for breast cancer research and support programs; and
  • We renewed our partnership with the Greater Toronto Airports Authority as official Financial Institution Partner at Toronto Pearson International Airport through October 2023.

Fourth quarter financial highlights























As at or for the



As at or for the






three months ended



twelve months ended



2018


2018


2017



2018


2017


Unaudited

Oct. 31


Jul. 31


Oct. 31



Oct. 31


Oct. 31


Financial results ($ millions)



Net interest income

$

2,539


$

2,577


$

2,464



$

10,065


$

8,977


Non-interest income


1,913



1,970



1,805




7,769



7,303


Total revenue


4,452



4,547



4,269




17,834



16,280


Provision for credit losses


264



241



229




870



829


Non-interest expenses


2,591



2,572



2,570




10,258



9,571


Income before income taxes


1,597



1,734



1,470




6,706



5,880


Income taxes


329



365



306




1,422



1,162


Net income

$

1,268


$

1,369


$

1,164



$

5,284


$

4,718


Net income attributable to non-controlling interests


2



4



5




17



19



Preferred shareholders



24



23



24




89



52



Common shareholders


1,242



1,342



1,135




5,178



4,647


Net income attributable to equity shareholders

$

1,266


$

1,365


$

1,159



$

5,267


$

4,699


Financial measures

















Reported efficiency ratio


58.2

%


56.6

%


60.2

%



57.5

%


58.8

%

Adjusted efficiency ratio (1)


56.2

%


55.0

%


56.5

%



55.6

%


57.2

%

Loan loss ratio  (2)


0.27

%


0.29

%


0.23

%



0.26

%


0.25

%

Reported return on common shareholders' equity


15.3

%


16.7

%


15.8

%



16.6

%


18.3

%

Adjusted return on common shareholders' equity (1)


16.4

%


17.1

%


17.2

%



17.4

%


18.1

%

Net interest margin


1.67

%


1.69

%


1.72

%



1.68

%


1.66

%

Net interest margin on average interest-earning assets


1.86

%


1.89

%


1.92

%



1.88

%


1.85

%

Return on average assets


0.83

%


0.90

%


0.81

%



0.88

%


0.87

%

Return on average interest-earning assets


0.93

%


1.00

%


0.91

%



0.99

%


0.97

%

Total shareholder return


(3.18)

%


7.39

%


6.19

%



4.70

%


18.30

%

Reported effective tax rate


20.6

%


21.0

%


20.8

%



21.2

%


19.8

%

Adjusted effective tax rate (1)


20.7

%


21.1

%


21.8

%



20.0

%


20.3

%

Common share information

















Per share ($)

- basic earnings

$

2.81


$

3.02


$

2.60



$

11.69


$

11.26



- reported diluted earnings


2.80



3.01



2.59




11.65



11.24



- adjusted diluted earnings (1)


3.00



3.08



2.81




12.21



11.11



- dividends


1.36



1.33



1.30




5.32



5.08



- book value


73.83



72.41



66.55




73.83



66.55


Share price ($)

- high


124.59



118.72



114.01




124.59



119.86



- low


112.24



112.00



104.10




110.11



97.76



- closing


113.68



118.72



113.56




113.68



113.56


Shares outstanding (thousands)

- weighted-average basic (3)


443,015



444,081



437,109

(4)



443,082



412,636

(4)


- weighted-average diluted


444,504



445,504



438,556

(4)



444,627



413,563

(4)


- end of period (3)


442,826



443,717



439,313

(4)



442,826



439,313

(4)

Market capitalization ($ millions)

$

50,341


$

52,678


$

49,888



$

50,341


$

49,888


Value measures

















Dividend yield (based on closing share price)


4.7

%


4.4

%


4.5

%



4.7

%


4.5

%

Reported dividend payout ratio


48.4

%


43.9

%


50.1

%



45.5

%


45.6

%

Adjusted dividend payout ratio (1)


45.1

%


43.0

%


46.1

%



43.4

%


46.2

%

Market value to book value ratio


1.54



1.64



1.71




1.54



1.71


On- and off-balance sheet information ($ millions)

















Cash, deposits with banks and securities

$

119,355


$

120,429


$

107,571



$

119,355


$

107,571


Loans and acceptances, net of allowance


381,661



377,310



365,558




381,661



365,558


Total assets


597,099



595,025



565,264




597,099



565,264


Deposits


461,015



459,767



439,706




461,015



439,706


Common shareholders' equity


32,693



32,131



29,238




32,693



29,238


Average assets


603,726



605,220



568,905




598,441



542,365


Average interest-earning assets


540,933



542,140



510,038




536,059



485,837


Average common shareholders' equity


32,200



31,836



28,471




31,184



25,393


Assets under administration (AUA) (5)(6)

2,303,962


2,400,407


2,192,947



2,307,116


2,192,947


Assets under management (AUM) (6)

225,379


232,915


221,571



225,379


221,571


Balance sheet quality (All-in basis) and liquidity measures

















Risk-weighted assets (RWA) ($ millions)


















Common Equity Tier 1 (CET1) capital RWA

$

216,144


$

211,820


$

203,321



$

216,144


$

203,321



Tier 1 capital RWA


216,303



211,968



203,321




216,303



203,321



Total capital RWA


216,462



212,116



203,321




216,462



203,321


Capital ratios


















CET1 ratio


11.4

%


11.3

%


10.6

%



11.4

%


10.6

%


Tier 1 capital ratio


12.9

%


12.8

%


12.1

%



12.9

%


12.1

%


Total capital ratio


14.9

%


14.8

%


13.8

%



14.9

%


13.8

%

Basel III leverage ratio


















Leverage ratio exposure ($ millions)

$

653,946


$

649,169


$

610,353



$

653,946


$

610,353



Leverage ratio


4.3

%


4.2

%


4.0

%



4.3

%


4.0

%

Liquidity coverage ratio (LCR)


128

%


126

%


120

%



n/a



n/a


Other information

















Full-time equivalent employees


44,220



45,091



44,928




44,220



44,928


(1)

For additional information, see the "Non-GAAP measures" 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. In 2018, following our adoption of IFRS 9 on November 1, 2017, provision for credit losses on impaired loans (stage 3) is calculated in accordance with IFRS 9. 2017 and prior amounts were calculated in accordance with IAS 39.

(3)

Excludes 60,764 restricted shares as at October 31, 2018 (July 31, 2018: 68,084; October 31, 2017: 190,285).

(4)

Excludes 2,010,890 common that were issued and outstanding but which have not been acquired by a third party as at October 31, 2017. These shares were issued as a component of our acquisition of The PrivateBank.

(5)

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 $1,834.0 billion (July 31, 2018: $1,915.6 billion; October 31, 2017: $1,723.9 billion).

(6)

AUM amounts are included in the amounts reported under AUA.

n/a

Not applicable.


 

Review of Canadian Personal and Small Business Banking fourth quarter results















2018



2018



2017


$ millions, for the three months ended


Oct. 31



Jul. 31



Oct. 31


Revenue











Personal and small business banking

$

2,190


$

2,165


$

2,086



Other


11



11



7


Total revenue


2,201



2,176



2,093


Provision for credit losses











Impaired (1)


182



199



181



Performing (1)


9



-



2


Total provision for credit losses


191



199



183


Non-interest expenses


1,100



1,105



1,161


Income before income taxes


910



872



749


Income taxes


242



233



198


Net income

$

668


$

639


$

551


Net income attributable to:











Equity shareholders (a)

$

668


$

639


$

551


Efficiency ratio


50.0

%


50.8

%


55.5

%

Return on equity (2)


68.9

%


66.7

%


57.8

%

Charge for economic capital (2) (b)

$

(95)


$

(94)


$

(93)


Economic profit (2) (a+b)

$

573


$

545


$

458


Full-time equivalent employees


14,086



14,425



14,709


(1)

As a result of our adoption of IFRS 9 effective November 1, 2017, we now recognize provision for credit losses on both impaired and performing loans in the SBU. In prior periods, provision for credit losses on performing loans was recognized in Corporate and Other, with the exception of provision for credit losses on: (i) performing residential mortgages greater than 90 days delinquent; and (ii) performing personal loans and scored small business loans greater than 30 days delinquent, which was recognized in Canadian Personal and Small Business Banking.

(2)

For additional information, see the "Non-GAAP measures" section.

 

Net income was $668 million, up $117 million from the fourth quarter of 2017. Adjusted net income (2) was $669 million, up $46 million from the fourth quarter of 2017.

Revenue of $2,201 million was up $108 million from the fourth quarter of 2017. Personal and small business banking revenue increased primarily due to favourable spreads, higher volumes and higher fees.

Provision for credit losses of $191 million was up $8 million from the fourth quarter of 2017, mainly due to a higher provision for credit losses on performing loans as a result of portfolio growth in the personal lending portfolio.

Non-interest expenses of $1,100 million were down $61 million from the fourth quarter of 2017, mainly due to fees and charges related to the launch of Simplii Financial and the related wind-down of President's Choice Financial in 2017, shown as an item of note, partially offset by higher spending on strategic initiatives.

Review of Canadian Commercial Banking and Wealth Management fourth quarter results




2018



2018



2017


$ millions, for the three months ended


Oct. 31



Jul. 31



Oct. 31


Revenue











Commercial banking

$

386


$

389


$

348



Wealth management


600



599



574


Total revenue


986



988



922


Provision for (reversal of) credit losses











Impaired (1)


8



2



11



Performing (1)


(1)



(6)



n/a


Total provision for (reversal of) credit loss


7



(4)



11


Non-interest expenses


521



513



520


Income before income taxes


458



479



391


Income taxes


125



129



104


Net income

$

333


$

350


$

287


Net income attributable to:











Equity shareholders (a)

$

333


$

350


$

287


Efficiency ratio


52.8

%


51.9

%


56.4

%

Return on equity  (2)


39.6

%


41.7

%


37.1

%

Charge for economic capital (2) (b)

$

(82)


$

(83)


$

(76)


Economic profit (2) (a+b)

$

251


$

267


$

211


Full-time equivalent employees


4,999



5,060



5,081


(1)

As a result of our adoption of IFRS 9 effective November 1, 2017, we now recognize provision for credit losses on both impaired and performing loans in the SBU. In prior periods, provision for credit losses on performing loans was recognized in Corporate and Other.

(2)

For additional information, see the "Non-GAAP measures" section.

n/a

Not applicable.

 

Net income for the quarter was $333 million, up $46 million from the fourth quarter of 2017. Adjusted net income(2) was $334 million, up $46 million from the fourth quarter of 2017.

Revenue of $986 million was up $64 million from the fourth quarter of 2017, driven by strong lending and deposit growth in commercial banking, and growth in fee-based revenue in our wealth management businesses.

Provision for credit losses was down $4 million from the fourth quarter of 2017, primarily due to lower losses in the commercial banking portfolio.

Non-interest expenses of $521 million were comparable with the fourth quarter of 2017.

Review of U.S. Commercial Banking and Wealth Management fourth quarter results




2018



2018



2017


$ millions, for the three months ended


Oct. 31



Jul. 31



Oct. 31(1)


Revenue











Commercial banking

$

311


$

304


$

290



Wealth management


148



144



119



Other


(2)



-



13


Total revenue (2)(3)


457



448



422


Provision for (reversal of) credit losses











Impaired (4)


22



28



15



Performing (4)


18



(14)



33


Total provision for credit losses


40



14



48


Non-interest expenses


264



246



235


Income before income taxes


153



188



139


Income taxes (2)


22



26



32


Net income

$

131


$

162


$

107


Net income attributable to:











Equity shareholders (a)

$

131


$

162


$

107


Efficiency ratio


57.6

%


55.0

%


55.7

%

Return on equity  (5)


7.2

%


9.1

%


6.4

%

Charge for economic capital (5) (b)

$

(172)


$

(170)


$

(156)


Economic profit (5) (a+b)

$

(41)


$

(8)


$

(49)


Full-time equivalent employees


1,947



1,926



1,753


(1)

Certain information was reclassified to conform to the funds transfer pricing methodology adopted in the first quarter of 2018 relating to CIBC Bank USA.

(2)

Revenue and income taxes are reported on a taxable equivalent basis (TEB) basis. Accordingly, revenue and income taxes include a TEB adjustment of nil for the quarter ended October 31, 2018 (July 31, 2018: $1 million; October 31, 2017: nil). The equivalent amounts are offset in the revenue and income taxes of Corporate and Other.

(3)

Included $9 million of accretion of the acquisition date fair value discount on the acquired loans of The PrivateBank, shown as an item of note, for the quarter ended October 31, 2018 (July 31, 2018:

$12 million; October 31, 2017: $31 million).

(4)

As a result of our adoption of IFRS 9 effective November 1, 2017, we now recognize provision for credit losses on both impaired and performing loans in the SBU. In prior periods, provision for credit losses on performing loans other than that of CIBC Bank USA was recognized in Corporate and Other.

(5)

For additional information, see the "Non-GAAP measures" section.

 

Net income for the quarter was $131 million, up $24 million from the fourth quarter of 2017. Adjusted net income(5) was $139 million, up $20 million from the fourth quarter of 2017.

Revenue of $457 million was up $35 million from the fourth quarter of 2017, primarily due to loan growth and margin expansion at CIBC Bank USA.

Provision for credit losses of $40 million was down $8 million from the fourth quarter of 2017. The provision for credit losses on impaired loans was up due to higher losses in CIBC Bank USA. The provision for credit losses on performing loans was down, primarily due to the establishment of a collective allowance (prior to our adoption of IFRS 9) for new loan originations and renewals of acquired loans relating to CIBC Bank USA in the fourth quarter of 2017, shown as an item of note.

Non-interest expenses of $264 million were up $29 million from the fourth quarter of 2017, primarily due to higher spending on growth initiatives.

Review of Capital Markets fourth quarter results




2018



2018



2017


$ millions, for the three months ended


Oct. 31



Jul. 31



Oct. 31


Revenue











Global markets

$

371


$

408


$

299



Corporate and investment banking


281



350



326



Other


(3)



(6)



(3)


Total revenue (1)


649



752



622


Provision for (reversal of) credit losses











Impaired (2)


2



1



-



Performing (2)


(6)



(2)



n/a


Total reversal of credit losses


(4)



(1)



-


Non-interest expenses


356



384



320


Income before income taxes


297



369



302


Income taxes (1)


64



104



80


Net income

$

233


$

265


$

222


Net income attributable to:











Equity shareholders (a)

$

233


$

265


$

222


Efficiency ratio


55.0

%


50.9

%


51.3

%

Return on equity (3)


35.3

%


39.1

%


30.0

%

Charge for economic capital (3) (b)

$

(65)


$

(66)


$

(72)


Economic profit (3) (a+b)

$

168


$

199


$

150


Full-time equivalent employees


1,396



1,416



1,314


(1)

Revenue and income taxes are reported on a TEB basis. Accordingly, revenue and income taxes include a TEB adjustment of $30 million for the quarter ended October 31, 2018 (July 31, 2018: $43 million; October 31, 2017: $37 million). The equivalent amounts are offset in the revenue and income taxes of Corporate and Other.

(2)

As a result of our adoption of IFRS 9 effective November 1, 2017, we now recognize provision for credit losses on both impaired and performing loans in the SBU. In prior periods, provision for credit losses on performing loans was recognized in Corporate and Other.

(3)

For additional information, see the "Non-GAAP measures" section.

n/a

Not applicable.

 

Net income for the quarter was $233 million, compared with net income of $222 million for the fourth quarter of 2017. Adjusted net income(3) for the quarter was $233 million, compared with $222 million for the prior year quarter.

Revenue of $649 million was up $27 million from the fourth quarter of 2017. In global markets, higher revenue from our equity derivatives, foreign exchange and interest rate trading businesses was partially offset by the movement in reserves related to derivative client exposures. In corporate and investment banking, lower investment portfolio revenue and lower debt underwriting revenue was partially offset by higher corporate banking and advisory revenue.

Reversal of credit losses was $4 million, compared with nil in the fourth quarter of 2017.

Non-interest expenses of $356 million were up $36 million from the fourth quarter of 2017, primarily due to higher performance and employee-related compensation.

Review of Corporate and Other fourth quarter results







2018

2018


2017

$ millions, for the three months ended

Oct. 31

Jul. 31


Oct. 31

Revenue









International banking

$

127

$

172


$

183


Other


32


11



27

Total revenue (1)


159


183



210

Provision for (reversal of) credit losses









Impaired (2)


45


44



5


Performing (2)


(15)


(11)



(18)

Total provision for (reversal of) credit losses


30


33



(13)

Non-interest expenses


350


324



334

Loss before income taxes


(221)


(174)



(111)

Income taxes (1)


(124)


(127)



(108)

Net loss

$

(97)

$

(47)


$

(3)

Net income (loss) attributable to:









Non-controlling interests

$

2

$

4


$

5


Equity shareholders


(99)


(51)



(8)

Full-time equivalent employees


21,792


22,264



22,071

(1)

Revenue and income taxes of Capital Markets and U.S. Commercial Banking and Wealth Management are reported on a TEB basis. 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 $30 million for the quarter ended October 31, 2018 (July 31, 2018: $44 million; October 31, 2017: $37 million).

(2)

As a result of our adoption of IFRS 9 effective November 1, 2017, we now recognize provision for credit losses on both impaired and performing loans in the SBUs. In prior periods, provision for credit losses on performing loans was recognized in Corporate and Other, with the exception of provision for credit losses related to CIBC Bank USA, which was recognized in U.S. Commercial Banking and Wealth Management, and provision for credit losses on: (i) performing residential mortgages greater than 90 days delinquent; and (ii) performing personal loans and scored small business loans greater than 30 days delinquent, which was recognized in Canadian Personal and Small Business Banking. Provision for credit losses related to CIBC FirstCaribbean continues to be recognized in Corporate and Other.

(3)

For additional information, see the "Non-GAAP measures" section.

 

Net loss for the quarter was $97 million, compared with a net loss of $3 million in the same quarter last year, primarily due to lower revenue, higher credit losses and higher non-interest expenses. Adjusted net loss (3) for the quarter was $11 million, compared with adjusted net income of $11 million for the prior year quarter.

Revenue of $159 million was down $51 million from the fourth quarter of 2017, primarily due to losses recognized on debt securities in CIBC FirstCaribbean as a result of the Barbados government debt restructuring.

Provision for credit losses was $30 million, compared with a reversal of credit losses of $13 million in the fourth quarter of 2017, primarily due to higher loan losses in CIBC FirstCaribbean resulting from the Barbados government debt restructuring noted above.

Non-interest expenses of $350 million were up $16 million from the fourth quarter of 2017, mainly due to increased spending on strategic initiatives.

Income tax benefit was up $16 million from the fourth quarter of 2017, mainly due to the tax impact of the items noted above.

Consolidated balance sheet










$ millions, as at October 31


2018



2017


ASSETS







Cash and non-interest-bearing deposits with banks

$

4,380


$

3,440


Interest-bearing deposits with banks


13,311



10,712


Securities (1)



101,664



93,419


Cash collateral on securities borrowed


5,488



5,035


Securities purchased under resale agreements


43,450



40,383


Loans







Residential mortgages


207,749



207,271


Personal


43,058



40,937


Credit card


12,673



12,378


Business and government


109,555



97,766


Allowance for credit losses


(1,639)



(1,618)






371,396



356,734


Other







Derivative instruments


21,431



24,342


Customers' liability under acceptances


10,265



8,824


Land, buildings and equipment


1,795



1,783


Goodwill


5,564



5,367


Software and other intangible assets


1,945



1,978


Investments in equity-accounted associates and joint ventures


526



715


Deferred tax assets


601



727


Other assets


15,283



11,805






57,410



55,541





$

597,099


$

565,264


LIABILITIES AND EQUITY







Deposits







Personal

$

163,879


$

159,327


Business and government


240,149



225,622


Bank


14,380



13,789


Secured borrowings


42,607



40,968






461,015



439,706


Obligations related to securities sold short


13,782



13,713


Cash collateral on securities lent


2,731



2,024


Obligations related to securities sold under repurchase agreements


30,840



27,971


Other







Derivative instruments


20,973



23,271


Acceptances


10,296



8,828


Deferred tax liabilities


43



30


Other liabilities


18,223



15,275






49,535



47,404


Subordinated indebtedness


4,080



3,209


Equity







Preferred shares


2,250



1,797


Common shares


13,243



12,548


Contributed surplus


136



137


Retained earnings


18,537



16,101


Accumulated other comprehensive income (AOCI)


777



452


Total shareholders' equity


34,943



31,035


Non-controlling interests


173



202


Total equity


35,116



31,237



$

597,099


$

565,264


(1)

Securities balances have been aggregated in the current year, with prior periods amended to reflect this presentation. See Note 4 to the consolidated financial statements in our 2018 Annual Report, for additional details.


 

Consolidated statement of income


For the three



For the twelve



months ended



months ended



2018

2018


2017



2018

2017


$ millions, except as noted

Oct. 31

Jul. 31


Oct. 31



Oct. 31

Oct. 31


Interest income















Loans

$

3,764

$

3,598


$

3,143



$

13,901

$

11,028


Securities


583


612



479




2,269


1,890


Securities borrowed or purchased under resale agreements


310


273



148




1,053


495


Deposits with banks


79


73



55




282


180




4,736


4,556



3,825




17,505


13,593


Interest expense















Deposits


1,852


1,659



1,174




6,240


3,953


Securities sold short


75


67



64




272


226


Securities lent or sold under repurchase agreements


224


200



73




736


254


Subordinated indebtedness


43


49



38




174


142


Other


3


4



12




18


41




2,197


1,979



1,361




7,440


4,616


Net interest income


2,539


2,577



2,464




10,065


8,977


Non-interest income















Underwriting and advisory fees


91


138



116




420


452


Deposit and payment fees


223


217



214




877


843


Credit fees


212


219



199




851


744


Card fees


128


125



119




510


463


Investment management and custodial fees


328


314



284




1,247


1,034


Mutual fund fees


406


410



396




1,624


1,573


Insurance fees, net of claims


105


109



107




431


427


Commissions on securities transactions


89


85



86




357


349


Gains from financial instruments measured/designated at fair value
















through profit or loss (FVTPL), net (2017: Trading income and

















designated at fair value (FVO) gains, net)


191


152



40

(1)



603


227

 (1)

Gains (losses) from debt securities measured at fair value through other
















comprehensive income (FVOCI) and amortized cost, net (2017:

















Available-for-sale (AFS) securities gains, net)


(58)


(9)



37




(35)


143


Foreign exchange other than trading


64


66



59




310


252


Income from equity-accounted associates and joint ventures


27


36



26




121


101


Other


107


108



122




453


695




1,913


1,970



1,805




7,769


7,303


Total revenue


4,452


4,547



4,269




17,834


16,280


Provision for credit losses


264


241



229




870


829


Non-interest expenses















Employee compensation and benefits


1,353


1,437



1,316




5,665


5,198


Occupancy costs


228


218



215




875


822


Computer, software and office equipment


467


441



450




1,742


1,630


Communications


78


77



78




315


317


Advertising and business development


95


83



89




327


282


Professional fees


71


55



71




226


229


Business and capital taxes


26


27



26




103


96


Other


273


234



325




1,005


997




2,591


2,572



2,570




10,258


9,571


Income before income taxes


1,597


1,734



1,470




6,706


5,880


Income taxes


329


365



306




1,422


1,162


Net income

$

1,268

$

1,369


$

1,164



$

5,284

$

4,718


Net income attributable to non-controlling interests

$

2

$

4


$

5



$

17

$

19



Preferred shareholders

$

24

$

23


$

24



$

89

$

52



Common shareholders


1,242


1,342



1,135




5,178


4,647


Net income attributable to equity shareholders

$

1,266

$

1,365


$

1,159



$

5,267

$

4,699


Earnings per share (in dollars)
















Basic

$

2.81

$

3.02


$

2.60



$

11.69

$

11.26



Diluted


2.80


3.01



2.59




11.65


11.24


Dividends per common share (in dollars)


1.36


1.33



1.30




5.32


5.08


(1)

Reclassified to conform to the presentation adopted in the current year.


Consolidated statement of comprehensive income




For the three


For the twelve




months ended


months ended




2018


2018


2017



2018


2017

$ millions

Oct. 31


Jul. 31


Oct. 31



Oct. 31


Oct. 31

Net income

$

1,268

$

1,369

$

1,164


$

5,284

$

4,718

Other comprehensive income (OCI), net of income tax, that is subject to subsequent













reclassification to net income













Net foreign currency translation adjustments













Net gains (losses) on investments in foreign operations


340


435


1,084



635


(1,148)


Net gains (losses) on hedges of investments in foreign operations


(159)


(284)


(653)



(349)


772





181


151


431



286


(376)


Net change in debt securities measured at FVOCI (2017: AFS debt and














equity securities)













Net gains (losses) on securities measured at FVOCI


(28)


(27)


6



(142)


6


Net (gains) losses reclassified to net income


-


(4)


(30)



(29)


(107)





(28)


(31)


(24)



(171)


(101)


Net change in cash flow hedges













Net gains (losses) on derivatives designated as cash flow hedges


(66)


62


20



(25)


70


Net (gains) losses reclassified to net income


38


(52)


(14)



(26)


(60)



(28)


10


6



(51)


10

OCI, net of income tax, that is not subject to subsequent reclassification to net income













Net gains (losses) on post-employment defined benefit plans


(95)


219


(125)



226


139


Net gains (losses) due to fair value change of FVO liabilities attributable














to changes in credit risk                                                                               


(8)


8


(3)



(2)


(10)


Net gains (losses) on equity securities designated at FVOCI


10


1


n/a



29


n/a

Total OCI (1)


32


358


285



317


(338)

Comprehensive income

$

1,300

$

1,727

$

1,449


$

5,601

$

4,380

Comprehensive income attributable to non-controlling interests

$

2

$

4

$

5


$

17

$

19


Preferred shareholders

$

24

$

23

$

24


$

89

$

52


Common shareholders


1,274


1,700


1,420



5,495


4,309

Comprehensive income attributable to equity shareholders

$

1,298

$

1,723

$

1,444


$

5,584

$

4,361

(1)

Includes $3 million of losses for the quarter ended October 31, 2018 (July 31, 2018: $4 million; October 31, 2017: $7 million), relating to our investments in equity-accounted associates and joint ventures.

n/a

Not applicable.

 




For the three


For the twelve




months ended


months ended





2018


2018


2017



2018


2017

$ millions


Oct. 31


Jul.31


Oct. 31



Oct. 31


Oct. 31

Income tax (expense) benefit allocated to each component of OCI












Subject to subsequent reclassification to net income













Net foreign currency translation adjustments













Net gains (losses) on investments in foreign operations

$

(2)

$

(33)

$

(34)


$

(31)

$

42


Net gains (losses) on hedges of investments in foreign operations


5


41


136



43


(170)





3


8


102



12


(128)


Net change in debt securities measured at FVOCI (2017: AFS debt and














equity securities)













Net gains (losses) on securities measured at FVOCI


7


(1)


(8)



18


(23)


Net (gains) losses reclassified to net income


-


1


7



8


36





7


-


(1)



26


13


Net change in cash flow hedges













Net gains (losses) on derivatives designated as cash flow hedges


22


(21)


(5)



8


(23)


Net (gains) losses reclassified to net income


(14)


18


5



9


22




8


(3)


-



17


(1)

Not subject to subsequent reclassification to net income













Net gains (losses) on post-employment defined benefit plans


30


(79)


42



(87)


(54)


Net gains (losses) due to fair value change of FVO liabilities attributable














to changes in credit risk                                                                         


3


(3)


1



1


4


Net gains (losses) on equity securities designated at FVOCI


(4)


(1)


n/a



(11)


n/a




$

47

$

(78)

$

144


$

(42)

$

(166)

n/a

Not applicable.


 

Consolidated statement of changes in equity


For the three


For the twelve



months ended


months ended




2018


2018


2017



2018


2017

$ millions


Oct. 31


Jul. 31


Oct. 31



Oct. 31


Oct. 31

Preferred shares












Balance at beginning of period

$

2,250

$

2,248

$

1,796


$

1,797

$

1,000

Issue of preferred shares


-


-


-



450


800

Treasury shares


-


2


1



3


(3)

Balance at end of period

$

2,250

$

2,250

$

1,797


$

2,250

$

1,797

Common shares












Balance at beginning of period

$

13,201

$

13,166

$

12,197


$

12,548

$

8,026

Issued pursuant to the acquisition of The PrivateBank


-


-


-



194


3,443

Issued pursuant to the acquisition of Geneva Advisors


-


-


126



-


126

Issued pursuant to the acquisition of Wellington Financial


-


-


-



47


-

Other issue of common shares


94


94


241



555


957

Purchase of common shares for cancellation


(52)


(52)


-



(104)


-

Treasury shares


-


(7)


(16)



3


(4)

Balance at end of period

$

13,243

$

13,201

$

12,548


$

13,243

$

12,548

Contributed surplus












Balance at beginning of period

$

133

$

137

$

137


$

137

$

72

Issue of replacement equity-settled awards pursuant to the acquisition of The PrivateBank


-


-


-



-


72

Compensation expense arising from equity-settled share-based awards


8


9


3



31


7

Exercise of stock options and settlement of other equity-settled share-based awards


(4)


(14)


(3)



(32)


(15)

Other


(1)


1


-



-


1

Balance at end of period

$

136

$

133

$

137


$

136

$

137

Retained earnings












Balance at beginning of period under IAS 39


n/a


n/a

$

15,535


$

16,101

$

13,584

Impact of adopting IFRS 9 at November 1, 2017


n/a


n/a


n/a



(144)


n/a

Balance at beginning of period under IFRS 9

$

18,051

$

17,412


n/a



15,957


n/a

Net income attributable to equity shareholders


1,266


1,365


1,159



5,267


4,699

Dividends













Preferred


(24)


(23)


(24)



(89)


(52)


Common


(602)


(589)


(569)



(2,356)


(2,121)

Premium on purchase of common shares for cancellation


(163)


(150)


-



(313)


-

Realized gains (losses) on equity securities designated at FVOCI reclassified from AOCI


1


15


n/a



49


n/a

Other


8

(1)

21

(1)

-



22

(1)

(9)

Balance at end of period

$

18,537

$

18,051

$

16,101


$

18,537

$

16,101

AOCI, net of income tax












AOCI, net of income tax, that is subject to subsequent reclassification to net income













Net foreign currency translation adjustments













Balance at beginning of period

$

843

$

692

$

307


$

738

$

1,114


Net change in foreign currency translation adjustments


181


151


431



286


(376)


Balance at end of period

$

1,024

$

843

$

738


$

1,024

$

738


Net gains (losses) on debt securities measured at FVOCI (2017: AFS debt and equity securities)













Balance at beginning of period under IAS 39


n/a


n/a

$

84


$

60

$

161


Impact of adopting IFRS 9 at November 1, 2017


n/a


n/a


n/a



(28)


n/a


Balance at beginning of period under IFRS 9

$

(111)

$

(80)


n/a



32


n/a


Net change in securities measured at FVOCI


(28)


(31)


(24)



(171)


(101)


Balance at end of period

$

(139)

$

(111)

$

60


$

(139)

$

60


Net gains (losses) on cash flow hedges













Balance at beginning of period

$

10

$

-

$

27


$

33

$

23


Net change in cash flow hedges


(28)


10


6



(51)


10


Balance at end of period

$

(18)

$

10

$

33


$

(18)

$

33

AOCI, net of income tax, that is not subject to subsequent reclassification to net income













Net gains (losses) on post-employment defined benefit plans













Balance at beginning of period

$

(48)

$

(267)

$

(244)


$

(369)

$

(508)


Net change in post-employment defined benefit plans


(95)


219


(125)



226


139


Balance at end of period

$

(143)

$

(48)

$

(369)


$

(143)

$

(369)


Net gains (losses) due to fair value change of FVO liabilities attributable to changes in credit risk













Balance at beginning of period

$

(4)

$

(12)

$

(7)


$

(10)

$

-


Net change attributable to changes in credit risk


(8)


8


(3)



(2)


(10)


Balance at end of period

$

(12)

$

(4)

$

(10)


$

(12)

$

(10)


Net gains (losses) on equity securities designated at FVOCI













Impact of adopting IFRS 9 at November 1, 2017


n/a


n/a


n/a


$

85


n/a


Balance at beginning of period under IFRS 9

$

56

$

70


n/a



85


n/a


Net gains (losses) on equity securities designated at FVOCI


10


1


n/a



29


n/a


Realized gains (losses) on equity securities designated at FVOCI reclassified to retained earnings (2)


(1)


(15)


n/a



(49)


n/a


Balance at end of period

$

65

$

56


n/a


$

65


n/a

Total AOCI, net of income tax

$

777

$

746

$

452


$

777

$

452

Non-controlling interests












Balance at beginning of period


n/a


n/a

$

190


$

202

$

201

Impact of adopting IFRS 9 at November 1, 2017


n/a


n/a


n/a



(4)


n/a

Balance at beginning of period under IFRS 9

$

173

$

180


n/a



198


n/a

Net income (loss) attributable to non-controlling interests


2


4


5



17


19

Dividends


(2)


(4)


-



(31)


(8)

Other


-


(7)


7



(11)


(10)

Balance at end of period

$

173

$

173

$

202


$

173

$

202

Equity at end of period

$

35,116

$

34,554

$

31,237


$

35,116

$

31,237

(1)

Includes the recognition of loss carryforwards relating to foreign exchange translation amounts on CIBC's net investment in foreign operations that were previously reclassified to retained earnings as part of our transition to IFRS in 2012.

(2)

Includes $1 million of gains reclassified to retained earnings for the quarter ended October 31, 2018 (July 31, 2018: $8 million of losses; October 31, 2017: n/a), relating to our investments in equity-accounted associates and joint ventures.

n/a

Not applicable.


 

Consolidated statement of cash flows




For the three


For the twelve




months ended


months ended





2018


2018



2017



2018


2017

$ millions


Oct. 31


Jul. 31



Oct.31



Oct. 31


Oct. 31

Cash flows provided by (used in) operating activities













Net income

$

1,268

$

1,369


$

1,164


$

5,284

$

4,718

Adjustments to reconcile net income to cash flows provided by (used in) operating activities:














Provision for credit losses


264


241



229



870


829


Amortization and impairment (1)


162


167



152



657


542


Stock options and restricted shares expense


8


9



3



31


7


Deferred income taxes


(33)


(8)



30



69


21


Losses (gains) from debt securities measured at FVOCI and amortized cost















(2017: AFS debt and equity securities (gains), net)


58


9



(37)



35


(143)


Net losses (gains) on disposal of land, buildings and equipment


-


(2)



1



(14)


(305)


Other non-cash items, net


10


(79)



(32)



(292)


(15)


Net changes in operating assets and liabilities















Interest-bearing deposits with banks


827


(2,215)



4,998



(2,599)


394



Loans, net of repayments


(4,999)


(1,971)



(7,392)



(16,155)


(30,547)



Deposits, net of withdrawals


1,151


10,502



(938)



20,770


18,407



Obligations related to securities sold short


1,630


(1,573)



1,131



69


3,375



Accrued interest receivable


(176)


37



(144)



(341)


(34)



Accrued interest payable


126


(11)



152



205


90



Derivative assets


467


2,047



2,097



2,780


3,588



Derivative liabilities


(800)


(526)



(4,881)



(2,084)


(5,549)



Securities measured at FVTPL (2017: Trading and FVO securities)


(1,786)


1,691



(2,611)



(647)


(657)



Other assets and liabilities designated at fair value (2017: Other FVO assets
















and liabilities)                                                                                                      


(452)


1,021



(234)



(380)


1,071



Current income taxes


22


61



(17)



(301)


(1,063)



Cash collateral on securities lent


269


471



(37)



707


(494)



Obligations related to securities sold under repurchase agreements


(2,145)


(5,388)



5,418



2,869


16,277



Cash collateral on securities borrowed


(405)


1,257



831



(453)


398



Securities purchased under resale agreements


1,945


(1,776)



273



(1,195)


(10,556)



Other, net 


1,377


(3,461)



1,842



(18)


2,103






(1,212)


1,872



1,998



9,867


2,457

Cash flows provided by (used in) financing activities













Issue of subordinated indebtedness


-


34



-



1,534


-

Redemption/repurchase/maturity of subordinated indebtedness


(19)


(619)



-



(638)


(55)

Issue of preferred shares, net of issuance cost


-


-



-



445


792

Issue of common shares for cash


43


34



38



186


194

Purchase of common shares for cancellation


(215)


(202)



-



(417)


-

Net sale (purchase) of treasury shares


-


(5)



(15)



6


(7)

Dividends paid


(579)


(566)



(393)



(2,109)


(1,425)






(770)


(1,324)



(370)



(993)


(501)

Cash flows provided by (used in) investing activities













Purchase of securities measured/designated at FVOCI and amortized cost














(2017: Purchase of AFS securities)


(8,676)


(8,797)



(8,975)



(33,011)


(37,864)

Proceeds from sale of securities measured/designated at FVOCI and amortized cost














(2017: Proceeds from sale of AFS securities)


6,865


3,277



1,923



12,992


18,787

Proceeds from maturity of debt securities measured at FVOCI and amortized cost














(2017: Proceeds from maturity of AFS securities)


4,619


3,467



4,645



12,402


19,368

Cash used in acquisitions, net of cash acquired


-


-



(27)



(315)


(2,517)

Net cash provided by dispositions of investments in equity-accounted associates and














joint ventures


-


51



40



200


60

Net sale (purchase) of land, buildings and equipment


(132)


(38)



(66)



(255)


201






2,676


(2,040)



(2,460)



(7,987)


(1,965)

Effect of exchange rate changes on cash and non-interest-bearing deposits with banks


23


43



65



53


(51)

Net increase (decrease) in cash and non-interest-bearing deposits with banks














during the period


717


(1,449)



(767)



940


(60)

Cash and non-interest-bearing deposits with banks at beginning of period


3,663


5,112



4,207



3,440


3,500

Cash and non-interest-bearing deposits with banks at end of period (2)

$

4,380

$

3,663


$

3,440


$

4,380

$

3,440

Cash interest paid

$

2,071

$

1,990


$

1,209


$

7,235

$

4,526

Cash interest received


4,402


4,407



3,491



16,440


12,611

Cash dividends received


158


186



191



724


949

Cash income taxes paid


340


312



293



1,654


2,204

(1)

Comprises amortization and impairment of buildings, furniture, equipment, leasehold improvements, and software and other intangible assets.

(2)

Includes restricted balance of $438 million (July 31, 2018: $407 million; October 31, 2017: $436 million).


 

Non-GAAP measures

We use a number of financial measures to assess the performance of our business lines. Some measures are calculated in accordance with International Financial Reporting Standards (IFRS or GAAP), while other measures do not have a standardized meaning under GAAP, and accordingly, these measures may not be comparable to similar measures used by other companies. Investors may find these non-GAAP measures useful in understanding how management views underlying business performance.

The following table provides a quarterly reconciliation of non-GAAP to GAAP measures related to CIBC on a consolidated basis. For a more detailed discussion and for an annual reconciliation of non-GAAP to GAAP measures, see the "Non-GAAP measures" section of CIBC's 2018 Annual Report.




As at or for the



As at or for the





three months ended



twelve months ended






2018



2018



2017




2018



2017


$ millions




Oct. 31



Jul. 31



Oct. 31




Oct. 31



Oct. 31


Reported and adjusted diluted EPS



















Reported net income attributable to common shareholders

A


$

1,242


$

1,342


$

1,135



$

5,178


$

4,647


After-tax impact of items of note (1)




91



30



99




252



(53)


Adjusted net income attributable to common shareholders (2)

B


$

1,333


$

1,372


$

1,234



$

5,430


$

4,594


Diluted weighted-average common shares outstanding (thousands)

C



444,504



445,504



438,556




444,627



413,563


Reported diluted EPS ($)

A/C


$

2.80


$

3.01


$

2.59



$

11.65


$

11.24


Adjusted diluted EPS ($) (2)

B/C



3.00



3.08



2.81




12.21



11.11


Reported and adjusted return on common shareholders' equity



















Average common shareholders' equity

D


$

32,200


$

31,836


$

28,471



$

31,184


$

25,393


Reported return on common shareholders' equity

A/D

(3)


15.3

%


16.7

%


15.8

%



16.6

%


18.3

%

Adjusted return on common shareholders' equity (2)

B/D

(3)


16.4

%


17.1

%


17.2

%



17.4

%


18.1

%





Canadian

U.S.









Canadian

Commercial

Commercial









Personal and

Banking and

Banking and









Small Business

Wealth

Wealth


Capital

Corporate

CIBC

$ millions, for the three months ended


Banking

Management

Management


Markets

and Other

Total

Oct. 31

Reported net income (loss)

$

668

$

333

$

131


$

233

$

(97)

$

1,268

2018

After-tax impact of items of note (1)


1


1


8



-


86


96


Adjusted net income (loss) (2)

$

669

$

334

$

139


$

233

$

(11)

$

1,364

Jul. 31

Reported net income (loss)

$

639

$

350

$

162


$

265

$

(47)

$

1,369

2018

After-tax impact of items of note (1)


4


-


9



-


17


30


Adjusted net income (loss) (2)

$

643

$

350

$

171


$

265

$

(30)

$

1,399

Oct. 31

Reported net income (loss)

$

551

$

287

$

107


$

222

$

(3)

$

1,164

2017

After-tax impact of items of note (1)


72


1


12



-


14


99


Adjusted net income (2)

$

623

$

288

$

119


$

222

$

11

$

1,263
















$ millions, for the twelve months ended














Oct. 31

Reported net income (loss)

$

2,547

$

1,307

$

565


$

1,069

$

(204)

$

5,284

2018

After-tax impact of items of note (1)


9


1


27



-


220


257


Adjusted net income (2)

$

2,556

$

1,308

$

592


$

1,069

$

16

$

5,541

Oct. 31

Reported net income (loss)

$

2,420

$

1,138

$

203


$

1,090

$

(133)

$

4,718

2017

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)

Reflects impact of items of note under the "Financial results" section of the 2018 Annual Report.

(2)

Non-GAAP measure.

(3)

Annualized.


 

Items of note


For the three


For the twelve

months ended


months ended

2018

2018

2017


2018

2017

$ millions

Oct. 31

Jul. 31

Oct. 31


Oct. 31

Oct. 31

Gain on the sale and lease back of certain retail properties

$

-

$

-

$

-


$

-

$

(299)

Amortization of acquisition-related intangible assets


26


31


19



115


41

Incremental losses on debt securities and loans in CIBC FirstCaribbean resulting from the Barbados government













debt restructuring


89


-


-



89


-

Fees and charges related to the launch of Simplii Financial and the related wind-down of President's Choice Financial


-


-


98



-


98

Transaction and integration-related costs as well as purchase accounting adjustments associated with the













acquisitions of The PrivateBank and Geneva Advisors (1)


8


9


46



16


104

Increase in legal provisions


-


-


-



-


45

Increase (decrease) in collective allowance recognized in Corporate and Other (2)


-


-


(18)



-


(18)

Pre-tax impact of items of note on net income


123


40


145



220


(29)


Income tax impact on above items of note


(27)


(10)


(46)



(51)


(24)


Charge from net tax adjustments resulting from U.S. tax reforms


-


-


-



88


-

After-tax impact of items of note on net income

$

96

$

30

$

99


$

257

$

(53)


After-tax impact of items of note on non-controlling interests


(5)


-


-



(5)


-

After-tax impact of items of note on net income attributable to common shareholders


91


30


99



252


(53)

(1)

Transaction costs include legal and other advisory fees, financing costs associated with pre-funding the cash component of the merger consideration, and interest adjustments relating to the obligation payable to dissenting shareholders. Integration costs 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. Purchase accounting adjustments, included as items of note beginning in the fourth quarter of 2017, 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 acquisition.

(2)

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 are all reported in the respective SBUs.


 

Basis of presentation
The interim consolidated financial information in this news release is prepared in accordance with IFRS and is unaudited whereas the annual consolidated financial information is derived from audited financial statements. These interim consolidated financial statements follow the same accounting policies and methods of application as CIBC's consolidated financial statements as at and for the year ended October 31, 2018.

Conference Call/Webcast
The conference call will be held at 8:00 a.m. (ET) and is available in English (416-340-2217, or toll-free 1-800-806-5484, passcode 8660945#) and French (514-861-2255, or toll-free 1-877-405-9213, passcode 1105464#). Participants are asked to dial in 10 minutes before the call. Immediately following the formal presentations, CIBC executives will be available to answer questions.

A live audio webcast of the conference call will also be available in English and French at www.cibc.com/en/about-cibc/investor-relations/quarterly-results.html

Details of CIBC's 2018 fourth quarter and fiscal year results, as well as a presentation to investors, will be available in English and French at www.cibc.com, Investor Relations section, prior to the conference call/webcast. We are not incorporating information contained on the website in this news release.

A telephone replay will be available in English (905-694-9451 or 1-800-408-3053, passcode 6527164#) and French (514-861-2272 or 1-800-408-3053, passcode 9609900#) until 11:59 p.m. (ET) December 6, 2018. The audio webcast will be archived at www.cibc.com/en/about-cibc/investor-relations/quarterly-results.html

About CIBC
CIBC is a leading North American financial institution with 10 million(1) personal banking, business, public sector and institutional clients. Across Personal and Small Business Banking, Commercial Banking and Wealth Management, and Capital Markets businesses, CIBC offers a full range of advice, solutions and services through its leading digital banking network, and locations across Canada, in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/en/about-cibc/media-centre.html.

(1)

    Revised to consider clients that have banking relationships with both CIBC and Simplii Financial.

______________________________________

 

The information below forms a part of this news release.

Nothing in CIBC's corporate website (www.cibc.com) should be considered incorporated herein by reference.

The Board of Directors of CIBC reviewed this news release prior to it being issued.

A NOTE ABOUT FORWARD-LOOKING STATEMENTS:

From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including in this news release, in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission and in other communications. All such statements are made pursuant to the "safe harbour" provisions of, and are intended to be forward-looking statements under applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements made in the "Core business performance", "Strong fundamentals", and "Making a difference in our Communities" sections of this news release, and the Management's Discussion and Analysis in our 2018 Annual Report under the heading "Financial performance overview – Outlook for calendar year 2019" and other statements about our operations, business lines, financial condition, risk management, priorities, targets, ongoing objectives, strategies, the regulatory environment in which we operate and outlook for calendar year 2019 and subsequent periods. Forward-looking statements are typically identified by the words "believe", "expect", "anticipate", "intend", "estimate", "forecast", "target", "objective" and other similar expressions or future or conditional verbs such as "will", "should", "would" and "could". By their nature, these statements require us to make assumptions, including the economic assumptions set out in the "Financial performance overview – Outlook for calendar year 2019" section of our 2018 Annual Report, as updated by quarterly reports, and are subject to inherent risks and uncertainties that may be general or specific. A variety of factors, many of which are beyond our control, affect our operations, performance and results, and could cause actual results to differ materially from the expectations expressed in any of our forward-looking statements. These factors include: credit, market, liquidity, strategic, insurance, operational, reputation and legal, regulatory and environmental risk; the effectiveness and adequacy of our risk management and valuation models and processes; legislative or regulatory developments in the jurisdictions where we operate, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, the Organisation for Economic Co-operation and Development Common Reporting Standard, and regulatory reforms in the United Kingdom and Europe, the Basel Committee on Banking Supervision's global standards for capital and liquidity reform, and those relating to bank recapitalization legislation and the payments system in Canada; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions, and interest rate and liquidity regulatory guidance; the resolution of legal and regulatory proceedings and related matters; the effect of changes to accounting standards, rules and interpretations; changes in our estimates of reserves and allowances; changes in tax laws; changes to our credit ratings; political conditions and developments, including changes relating to economic or trade matters; the possible effect on our business of international conflicts and terrorism; natural disasters, public health emergencies, disruptions to public infrastructure and other catastrophic events; reliance on third parties to provide components of our business infrastructure; potential disruptions to our information technology systems and services; increasing cyber security risks which may include theft of assets, unauthorized access to sensitive information, or operational disruption; social media risk; losses incurred as a result of internal or external fraud; anti-money laundering; the accuracy and completeness of information provided to us concerning clients and counterparties; the failure of third parties to comply with their obligations to us and our affiliates or associates; intensifying competition from established competitors and new entrants in the financial services industry including through internet and mobile banking; technological change; global capital market activity; changes in monetary and economic policy; currency value and interest rate fluctuations, including as a result of market and oil price volatility; general business and economic conditions worldwide, as well as in Canada, the U.S. and other countries where we have operations, including increasing Canadian household debt levels and global credit risks; our success in developing and introducing new products and services, expanding existing distribution channels, developing new distribution channels and realizing increased revenue from these channels; changes in client spending and saving habits; our ability to attract and retain key employees and executives; our ability to successfully execute our strategies and complete and integrate acquisitions and joint ventures; the risk that expected synergies and benefits of the acquisition of PrivateBancorp, Inc. will not be realized within the expected time frame or at all; and our ability to anticipate and manage the risks associated with these factors. This list is not exhaustive of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Any forward-looking statements contained in this news release represent the views of management only as of the date hereof and are presented for the purpose of assisting our shareholders and financial analysts in understanding our financial position, objectives and priorities and anticipated financial performance as at and for the periods ended on the dates presented, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statement that is contained in this news release or in other communications except as required by law.

SOURCE CIBC - Investor Relations

For further information: Investor Relations: Amy South, SVP, 416-594-7386, amy.south@cibc.com; Jason Patchett, analyst enquiries, 416-980-8691, jason.patchett@cibc.com; Alice Dunning, investor enquiries, 416-861-8870, alice.dunning@cibc.com; Media Enquiries: Erica Belling, 416-594-7251, erica.belling@cibc.com; Tom Wallis, 416-980-4048, tom.wallis@cibc.com
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