TIDMBH29
RNS Number : 9745Y
Canadian Imperial Bank of Commerce
08 March 2012
CIBC Announces First Quarter 2012 Results
Toronto, ON - March 8, 2012 - CIBC (TSX: CM) (NYSE: CM) reported
today net income of $835 million for the first quarter ended
January 31, 2012, compared with net income of $763 million for the
same period last year. Reported diluted earnings per share (EPS)
were $1.93, compared with reported diluted EPS of $1.80 a year ago.
Adjusted diluted EPS were $1.97(1) , compared with adjusted diluted
EPS of $2.04(1) a year ago. Return on common shareholders' equity
for the first quarter was 22.4%.
Results for the first quarter of 2012 were affected by the
following items of note netting to a negative impact of $0.04 per
share:
-- $37 million ($35 million after-tax, or $0.09 per share) gain
relating to an equity-accounted investment in our Wealth Management
strategic business unit;
-- $35 million ($26 million after-tax, or $0.06 per share) loss
from the structured credit run-off business;
-- $18 million ($0.05 per share) premium paid on preferred share redemptions; and
-- $9 million ($7 million after-tax, or $0.02 per share) on amortization of intangible assets.
Reported net income of $835 million for the first quarter
compared with reported net income of $757 million for the prior
quarter. Reported diluted EPS and adjusted diluted EPS of $1.93 and
$1.97(1) , respectively, for the first quarter compared with
reported diluted EPS and adjusted diluted EPS of $1.79 and $1.78(1)
, respectively, for the prior quarter.
CIBC's Tier 1 and Tangible Common Equity ratios at January 31,
2012 were 14.3% and 10.8%(1) , respectively, compared to 14.7% and
11.4%(1) , respectively, at October 31, 2011. Based on our current
understanding of the revised capital requirements, we expect to
exceed the minimum requirements as proposed by the Basel Committee
on Banking Supervision, while continuing to invest for future
growth. The Office of the Superintendent of Financial Institutions
has confirmed that it intends to incorporate the Basel III
revisions into its guidelines for capital adequacy in Canada, and
will issue its own domestic Basel III guidance during 2012.
"The first quarter reflected broad-based performance across our
core businesses in Retail and Business Banking, Wealth Management
and Wholesale Banking," says Gerry McCaughey, CIBC President and
Chief Executive Officer. "Our financial results reflect our first
principle and strategic imperative which is to be a lower risk bank
targeting value creation for our shareholders by delivering
consistent, sustainable earnings over the long term."
Core business performance
Retail and Business Bankingreported net income of $567 million
for the first quarter, up from $540 million for the same quarter
last year.
Revenue of $2.0 billion was up 1% from the first quarter of
2011, primarily due to volume growth in both personal banking and
business banking, and higher treasury allocations, partly offset by
narrower spreads.
Provision for credit losses of $281 million was up from $272
million in the same quarter last year due to the expected higher
write-offs in the MasterCard portfolio, partially offset by lower
write-offs in the other cards portfolio and lower provisions in
commercial banking.
The strategic focus across Retail and Business Banking is to
accelerate profitable revenue growth and enhance the client
experience by shifting to a client focus. A priority which is
fundamental to achieving this shift is the development of deeper
client relationships. The benefits of deeper client relationships
are lower rates of attrition and higher client satisfaction,
resulting in higher net interest margins (NIMs), and the ability to
derive more revenue from our existing base of clients while more
fully engaging both sides of our balance sheet.
Consistent with this strategic focus, CIBC has been increasing
emphasis on its branch and related CIBC branded channels and
de-emphasizing its non-branded channels.
Aligned with this, CIBC is announcing this morning its decision
to explore options, including a potential sale, of its broker
mortgage brand, called FirstLine, where clients are sold single
products and where margins are generally lower relative to CIBC's
branded channels.
"We do not expect this process will be a lengthy one," says
David Williamson, Senior Executive Vice-President, CIBC, and Group
Head, Retail and Business Banking. "Once this process is complete,
we plan to increase renewals into our CIBC brand from the FirstLine
platform over time. Benefits of this will include higher NIMs and
deeper relationships as these clients enter into CIBC branded
channels."
Mr. Williamson adds, "We believe the time is right for us to
make this move. Over the past number of years, we have invested in
our branch-based mortgage business, including a substantial build
of our mortgage advisors. The results of these investments are
paying off as evidenced by our growth rates over the past year.
CIBC branded mortgages have grown at a rate of 10% over the past
year compared to the industry average of 7%."
During the first quarter of 2012, our retail business continued
to make progress against our strategy to continually strengthen our
focus as a client-centric organization, by building deeper
relationships with our clients, improving our sales and service
capabilities and acquiring and retaining clients who seek deeper
and more rewarding relationships:
-- We continued to lead in mobile innovations, launching a new
mobile version of CIBC.com that optimizes the user experience on
any mobile device, making it easier for our clients to get
information and advice on the go;
-- We enhanced our market-leading advice offering with the CIBC
Advice Centre. The new online tool brings our advice capabilities
together into a comprehensive resource centre to provide Canadians
with important financial advice throughout different life stages;
and
-- As part of our commitment to building the CIBC brand, we
launched a new marketing campaign to highlight our market-leading
Imperial Service offer, and continued our brand campaign with new
ads that focus on the importance of a strong financial foundation
to help Canadians achieve their financial goals at any stage of
life.
Wealth Managementreported net income of $100 million for the
first quarter, up from $66 million for the same quarter last
year.
Revenue of $435 million was up 5% from the first quarter of
2011, primarily due to higher asset management revenue including
the item of note discussed above, partially offset by lower
commissions from equity trading and new issues activity.
During the first quarter of 2012, our wealth management business
continued to make progress against its objective to be a leader in
wealth management solutions in markets where we offer advice and to
be a leading global asset manager by delivering exceptional value
for our clients, our employees, our shareholders and our
communities:
-- CIBC Asset Management Inc. added American Century Investments
(ACI) as sub-advisor to CIBC Mutual Funds and the Imperial U.S.
Equity Pool, leveraging our equity stake in ACI and the strength of
the firm's proven investment management expertise to further
enhance the quality of our client offering; and
-- CIBC Global Asset Management Inc. expanded its institutional
offering with new and enhanced pools that span Canadian, U.S. and
global equities, as well as Canadian fixed income to provide a
range of investment management solutions to meet the evolving needs
of our clients.
Wholesale Bankingreported net income of $133 million for the
first quarter, up from $122 million for the prior quarter.
Revenue of $438 million was down from $505 million in the prior
quarter, primarily driven by lower corporate and investment banking
revenue, partially offset by higher revenue from fixed income and
debt new issue activity, as well as lower losses from the
structured credit run-off business.
Wholesale Banking had several notable achievements during the
first quarter that supported its objective to be the premier
client-focused wholesale bank centred in Canada:
-- Joint lead and lead coordinator ("Lead of Leads") on Canada
Housing Trust's $5.5 billion 5-year bond offering;
-- Co-lead arranger for Suncor Energy's $5.0 billion corporate revolving facility;
-- Exclusive financial advisor to Rogers Communications Inc., on
its joint acquisition of the Ontario Teachers' Pension Plan's 79.5%
stake in Maple Leaf Sports & Entertainment for $1.3
billion;
-- Joint bookrunner on Ford Credit Canada Limited's $450 million bond offering; and
-- Joint bookrunner on a $263 million common share financing for Vermillion Energy Inc.
Structured credit run-off progress
While delivering a strong quarter of results in our core
businesses, we continued to reduce exposures in our structured
credit run-off business, completing transactions that in aggregate
reduced the notional amount of underlying positions by
approximately $2.8 billion (US$2.8 billion) with a minimal impact
on earnings.
While we have taken steps to reduce our exposure, further
significant losses could result, depending on the performance of
both the underlying assets and the financial guarantors.
"CIBC delivered another solid performance during the first
quarter," says Mr. McCaughey. "The investments we are making in our
retail and business banking, wealth management and wholesale
banking businesses are furthering our strength in Canada and
positioning us well for the future."
CIBC in our communities
CIBC is committed to supporting causes that matter to our
clients, our employees and our communities. During the quarter:
-- CIBC's 2011 United Way campaign raised a record $8.5 million
across Canada which includes a record contribution of $5.3 million
raised through the generosity of CIBC employees and retirees;
-- On December 7, 2011, CIBC'sWholesale Banking employees and
participating CIBC Wood Gundy advisors once again donated their
fees and commissions to help kids in need, raising a record of more
than $4.1 million for CIBC Miracle Day - the largest amount in its
27-year history. Since inception, CIBC Miracle Day has raised over
$64 million for children's charities across Canada and $214 million
globally;
-- CIBC employees raised nearly $700,000 in support of Prostate
Cancer Canada through the 2011 Movember campaign. CIBC was named
the top fundraising team in the world and the top Canadian
fundraising team for the fourth consecutive year; and
-- As part of our ongoing commitment to support and celebrate
programs that embrace and enrich Canadian cultural diversity, CIBC
was the proud presenting sponsor of CIBC LunarFest - Canada's
premier festival of contemporary expression in Asian arts and
culture - and of world renowned classical pianist Lang Lang's
performances with the Toronto Symphony Orchestra and Vancouver
Symphony Orchestra.
________________________________________________
(1) For additional information, see the "Non-GAAP measures" section.
Investor and analyst inquiries should be directed to Geoff
Weiss, Vice-President, Investor Relations, at 416-980-5093. Media
inquiries should be directed to Mary Lou Frazer, Senior Director,
Investor & Financial Communications, at 416-980-4111.
________________________________________________
The information on the following pages forms a part of this
press release.
(The board of directors of CIBC reviewed this press release
prior to it being issued. CIBC's controls and procedures support
the ability of the President and Chief Executive Officer and the
Chief Financial Officer of CIBC to certify CIBC's first quarter
financial report and controls and procedures. CIBC's CEO and CFO
will voluntarily provide to the Securities and Exchange Commission
a certification relating to CIBC's first quarter financial
information, including the attached unaudited interim consolidated
financial statements, and will provide the same certification to
the Canadian Securities Administrators.)
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END
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