CIBC announces fourth quarter and fiscal 2022 results

CIBC's 2022 audited annual consolidated financial statements and accompanying management's discussion and 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. Our 2022 Annual Report is available on SEDAR at www.sedar.com. All amounts are expressed in Canadian dollars, unless otherwise indicated.

TORONTO, Dec.1, 2022 /CNW/ - CIBC (TSX: CM) (NYSE: CM) today announced its results for the fourth quarter and fiscal year ended October 31, 2022.

CIBC Logo (CNW Group/CIBC)
CIBC Logo (CNW Group/CIBC)

"In 2022, we delivered solid financial performance and furthered the strong momentum across our bank through the execution of our client-focused strategy, thanks to the efforts of our CIBC team who live our purpose each day – to help make your ambition a reality," said Victor Dodig, President and CEO, CIBC. "We enter the new fiscal year as a modern, relationship-oriented bank with a strong capital position and focus on growing in key client segments, elevating the client experience, and investing in future differentiators that build long-term competitive advantages. Our bank is well-diversified and resilient, and our proven ability to navigate in an uncertain operating environment will enable us to continue to deliver value to our stakeholders and contribute meaningfully to a more sustainable future," concluded Mr. Dodig.

Fourth quarter highlights


Q4/22

Q4/21

Q3/22

YoY
Variance

QoQ
Variance

Revenue

$5,388 million

$5,064 million

$5,571 million

+6 %

-3 %

Reported Net Income

$1,185 million

$1,440 million

$1,666 million

-18 %

-29 %

Adjusted Net Income (1)

$1,308 million

$1,573 million

$1,724 million

-17 %

-24 %

Adjusted pre-provision, pre-tax earnings (1)

$2,072 million

$2,109 million

$2,465 million

-2 %

-16 %

Reported Diluted Earnings Per Share (EPS) (2)

$1.26

$1.54

$1.78

-18 %

-29 %

Adjusted Diluted EPS (1)(2)

$1.39

$1.68

$1.85

-17 %

-25 %

Reported Return on Common Shareholders' Equity (ROE) (3)

10.1 %

13.4 %

14.6 %


Adjusted ROE (1)

11.2 %

14.7 %

15.1 %

Common Equity Tier 1 (CET1) Ratio (4)

11.7 %

12.4 %

11.8 %

 

CIBC's results for the fourth quarter of 2022 were affected by the following items of note aggregating to a negative impact of $0.13 per share:

  • $91 million ($67 million after-tax) increase in legal provisions;

  • $37 million ($27 million after-tax) charge related to the consolidation of our real estate portfolio;

  • $27 million ($21 million after-tax) amortization of acquisition-related intangible assets; and

  • $12 million ($8 million after-tax) in acquisition and integration-related costs as well as purchase accounting adjustments(5) associated with the acquisition of the Canadian Costco credit card portfolio.

For the year ended October 31, 2022, CIBC reported net income of $6.2 billion and adjusted net income(1) of $6.6 billion, compared with reported net income of $6.4 billion and adjusted net income(1) of $6.7 billion for 2021, and adjusted pre-provision, pre-tax earnings(1) of $9.4 billion, compared with $8.8 billion for 2021.

(1)

This measure is a non-GAAP measure. For additional information, see the "Non-GAAP measures" section.

(2)

On April 7, 2022, CIBC shareholders approved a two-for-one share split (Share Split) of CIBC's issued and outstanding common shares. Each shareholder of record at the close of business on May 6, 2022 (Record Date) received one additional share on May 13, 2022 (Payment Date) for every one share held on the Record Date. All common share numbers and per common share amounts have been adjusted to reflect the Share Split as if it was retroactively applied to all periods presented.

(3)

For additional information on the composition of these specified financial measures, see the "Fourth quarter financial highlights" section.

(4)

Our capital ratios are calculated pursuant to the Office of the Superintendent of Financial Institution's (OSFI's) Capital Adequacy Requirements (CAR) Guideline, which are based on the Basel Committee on Banking Supervision (BCBS) standards. For additional information, see the "Capital management" section of our 2022 Annual Report available on SEDAR at www.sedar.com.

(5)

Acquisition and integration costs are comprised of incremental costs incurred as part of planning for and executing the integration of the Canadian Costco credit card portfolio, including enabling franchising opportunities, the upgrade and conversion of systems and processes, project delivery, communication costs and client welcome bonuses. Purchase accounting adjustments include the accretion of the acquisition date fair value discount on the acquired Canadian Costco credit card receivables.

 

The following table summarizes our performance in 2022 against our key financial measures and targets, set over the medium term, which we define as three to five years, assuming a normal business environment and credit cycle.

Financial Measure

2022 Target

2022 Reported Results

2022 Adjusted Results (2)

Diluted EPS growth (3)

5%–10% annually (1)

$6.68, down 4% from 2021

3-year CAGR(4) = 6.1%

5-year CAGR = 3.5%

$7.05, down 2% from 2021

3-year CAGR = 5.8%

5-year CAGR = 4.9%

ROE (5)

At least 15% (1)

14.0%

3-year average = 13.4%

5-year average = 14.2%

14.7%

3-year average = 14.4%

5-year average = 15.2%

Operating leverage (5)

Positive (1)

(1.9)%, a decrease of 720 basis points from 2021

3-year average = (0.2)%

5-year average = 0.1%

(1.9)%, a decrease of 260
basis points from 2021

3-year average = (0.6)%

5-year average = 0.5%

CET1 ratio

Strong buffer to regulatory requirement

11.7 %

Dividend payout ratio (5)

40%–50% (1)

48.8%

3-year average = 53.8%

5-year average = 51.3%

46.3%

3-year average = 48.9%

5-year average = 47.4%

Total shareholder return

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

                                                           3-year               5-year

CIBC:                                                 28.5%               40.2%

S&P/TSX Composite Banks Index:   29.0%               40.6%

 

Core business performance
F2022 Financial Highlights

(C$ million)

F2022

F2021

YoY Variance

Canadian Personal and Business Banking




Reported Net Income

$2,249

$2,494

down 10%

Adjusted Net Income (2)

$2,396

$2,503

down 4%

Pre-provision, pre-tax earnings (2)

$3,934

$3,736

up 5%

Adjusted pre-provision, pre-tax earnings (2)

$4,039

$3,748

up 8%





Canadian Commercial Banking and Wealth Management




Reported Net Income

$1,895

$1,665

up 14%

Adjusted Net Income (2)

$1,895

$1,665

up 14%

Pre-provision, pre-tax earnings (2)

$2,598

$2,227

up 17%

Adjusted pre-provision, pre-tax earnings (2)

$2,598

$2,227

up 17%





U.S. Commercial Banking and Wealth Management




Reported Net Income

$760

$926

down 18%

Adjusted Net Income (2)

$810

$976

down 17%

Pre-provision, pre-tax earnings (2)

$1,129

$1,073

up 5%

Adjusted pre-provision, pre-tax earnings (2)

$1,197

$1,141

up 5%





Capital Markets




Reported Net Income

$1,908

$1,857

up 3%

Adjusted Net Income (2)

$1,908

$1,857

up 3%

Pre-provision, pre-tax earnings (2)

$2,564

$2,403

up 7%

Adjusted pre-provision, pre-tax earnings (2)

$2,564

$2,403

up 7%

 

(1)

Based on adjusted results. Adjusted measures are non-GAAP measures. For additional information, see the "Non-GAAP measures" section.

(2)

This measure is a non-GAAP measure. For additional information, see the "Non-GAAP measures" section.

(3)

On April 7, 2022, CIBC shareholders approved a two-for-one share split (Share Split) of CIBC's issued and outstanding common shares. Each shareholder of record at the close of business on May 6, 2022 (Record Date) received one additional share on May 13, 2022 (Payment Date) for every one share held on the Record Date. All common share numbers and per common share amounts have been adjusted to reflect the Share Split as if it was retroactively applied to all periods presented.

(4)

The 3-year compound annual growth rate (CAGR) is calculated from 2019 to 2022 and the 5-year CAGR is calculated from 2017 to 2022.

(5)

For additional information on the composition of these specified financial measures, see the "Fourth quarter financial highlights" section.

 

Strong fundamentals

While investing in core businesses, CIBC has continued to strengthen key fundamentals. In 2022, CIBC maintained its capital strength and sound risk management practices:

  • Capital ratios were strong, with a CET1 ratio(1) of 11.7% as noted above, and Tier 1(1) and Total capital ratios(1) of 13.3% and 15.3%, respectively, at October 31, 2022;

  • Market risk, as measured by average Value-at-Risk, was $8.7 million in 2022 compared with $7.6 million in 2021;

  • We continued to have solid credit performance, with a loan loss ratio(2) of 14 basis points compared with 16 basis points in 2021;

  • Liquidity Coverage Ratio(1) was 129% for the three months ended October 31, 2022; and

  • Leverage Ratio(1) was 4.4% at October 31, 2022.

CIBC announced an increase in its quarterly common share dividend from $0.83 per share to $0.85 per share for the quarter ending January 31, 2023.

(1)

Our capital ratios are calculated pursuant to the OSFI's CAR Guideline and the leverage ratio is calculated pursuant to OSFI's Leverage Requirements Guideline, and liquidity coverage ratio is calculated pursuant to OSFI's Liquidity Adequacy Requirements Guideline, all of which are based on the BCBS standards. For additional information, see the "Capital management" and "Liquidity risk" sections of our 2022 Annual Report available on SEDAR at www.sedar.com.

(2)

For additional information on the composition of these specified financial measures, see the "Fourth quarter financial highlights" section.

Credit quality

Provision for credit losses was $436 million for the fourth quarter, up $358 million or 459% from the same quarter last year. The current quarter included a provision for credit losses on performing loans of $217 million mainly due to an unfavourable change in our economic outlook, while the same quarter last year included a provision reversal of $34 million reflective of a favourable change in our economic outlook, partially offset by model parameter updates. Provision for credit losses on impaired loans was up $107 million, mainly attributable to Canadian Personal and Business Banking, and U.S. Commercial Banking and Wealth Management.

Making a difference in our Communities

At CIBC, we believe there should be no limits to ambition. We invest our time and resources to remove barriers to ambitions and demonstrate that when we come together, positive change happens that helps our communities thrive. This quarter:

  • We joined more than 45,000 Canadians, including nearly 10,000 team members, in support of the Canadian Cancer Society CIBC Run for the Cure. In total, more than $13 million was raised to help advance breast cancer research, education and support programs – including over $2 million by Team CIBC.

  • In response to numerous domestic and international disasters, we provided timely donations to support communities with their recovery efforts. CIBC donated more than $450,000 to community organizations in response to Hurricane Ian, Hurricane Fiona, flooding in Pakistan, and the tragedy in James Smith Cree Nation.

  • CIBC Foundation announced a new Social Impact Alliance launched together with Microsoft Canada, which will focus on closing the digital skills gap by providing new education and employment opportunities in the technology sector, and ensuring equal access for all communities across the country. To support this goal, CIBC Foundation and Microsoft will be working with NPower Canada and March of Dimes Canada to accelerate skills training and development, as well as to create access to careers in technology.

In the first year of its operation, CIBC Foundation disbursed $3.5 million of new, incremental and impactful funding to 68 charitable organizations in Canada.

Fourth quarter financial highlights


As at or for the





As at or for the







three months ended





twelve months ended




2022

2022


2021




2022

2021



Unaudited

Oct. 31

Jul. 31


Oct. 31




Oct. 31

Oct. 31



Financial results ($ millions)



Net interest income

$

3,185


$

3,236


$

2,980




$

12,641


$

11,459



Non-interest income


2,203



2,335



2,084





9,192



8,556



Total revenue


5,388



5,571



5,064





21,833



20,015



Provision for credit losses


436



243



78





1,057



158



Non-interest expenses


3,483



3,183



3,135





12,803



11,535



Income before income taxes


1,469



2,145



1,851





7,973



8,322



Income taxes


284



479



411





1,730



1,876



Net income

$

1,185


$

1,666


$

1,440




$

6,243


$

6,446



Net income attributable to non-controlling interests


7



6



4





23



17




Preferred shareholders and other equity instrument holders


37



46



47





171



158




Common shareholders


1,141



1,614



1,389





6,049



6,271



Net income attributable to equity shareholders

$

1,178


$

1,660


$

1,436




$

6,220


$

6,429



Financial measures



















Reported efficiency ratio (1)


64.6

%


57.1

%


61.9

%




58.6

%


57.6

%


Reported operating leverage (1)


(4.7)

%


1.1

%


1.7

%




(1.9)

%


5.3

%


Loan loss ratio (2)


0.16

%


0.12

%


0.10

%




0.14

%


0.16

%


Reported return on common shareholders' equity (1)(3)


10.1

%


14.6

%


13.4

%




14.0

%


16.1

%


Net interest margin (1)


1.33

%


1.43

%


1.41

%




1.40

%


1.42

%


Net interest margin on average interest-earning assets (1)(4)


1.51

%


1.61

%


1.58

%




1.58

%


1.59

%


Return on average assets (1)(4)


0.50

%


0.73

%


0.68