CIBC(CM) - 2023 Q4 - Annual Report

Financial Performance - Adjusted net income for 2023 was $6.5 billion, compared to$6.6 billion in 2022[19] - Reported revenue increased to $23.3 billion in 2023, up from$21.8 billion in 2022[19] - Adjusted earnings per share were $6.72 in 2023, compared to$7.05 in 2022[19] - Net income increased by $109 million or 5$498 million or 6% from 2022, primarily due to higher net interest margin and volume growth[97] - Net interest income rose by $590 million or 9$316.7 billion in 2023, up from $302.1 billion in 2022[90] - Average deposits increased to$218.4 billion in 2023, compared to $204.0 billion in 2022[90] - Provision for credit losses increased by$110 million or 13% from 2022, driven by higher write-offs in credit cards and personal lending[100] - Non-interest expenses rose by $199 million or 4$80 million or 10% from 2022, largely due to higher income and a 1.5% tax rate increase from the 2022 Canadian Federal budget[102] - Average assets grew by $14.7 billion or 5$5,033 million, down from $6,243 million in 2022, with a reported efficiency ratio of 61.5$23,323 million, with net interest income contributing $12,825 million and non-interest income at$10,498 million[109] - Total shareholder return for 2023 was -15.85%, reflecting broader economic challenges and market conditions[109] - Revenue decreased by $34 million, non-interest expenses increased by$1,176 million, and income taxes increased by $218 million, resulting in a net income decrease of$1,428 million[114] - CIBC's 2023 net income was $5,033 million, with a provision for credit losses of$2,010 million and income taxes of $1,931 million[120] - Adjusted pre-provision, pre-tax earnings for 2023 were$10,184 million, compared to $9,388 million in 2022 and$8,805 million in 2021[120] - Total revenue for the year ended October 31, 2023 was $23,323 million, with a provision for credit losses of$1,994 million and non-interest expenses of $14,349 million[147] - Net income (loss) attributable to equity shareholders was$4,995 million, with a diluted EPS of $5.16[147] - Adjusted total revenue was$23,357 million, with adjusted non-interest expenses of $13,173 million and adjusted net income (loss) of$6,423 million[147] - Adjusted diluted EPS was $6.72, reflecting a 30$1,428 million after-tax, with a significant increase in legal provisions of $1,055 million[147] - The U.S. Commercial Banking and Wealth Management segment reported a net income (loss) of$280 million in US$millions[147] - The Canadian Federal budget impact included a commodity tax charge of$34 million and an income tax charge of $545 million[147] - The amortization and impairment of acquisition-related intangible assets impacted non-interest expenses by$121 million[147] - The adjusted income (loss) before income taxes was $8,174 million, compared to the reported$6,964 million[147] - The adjusted income taxes were $1,713 million, reflecting a decrease of$218 million due to the impact of items of note[147] - Total revenue for the year ended October 31, 2022, was $21.833 billion, with Canadian Personal Banking contributing$8.909 billion and U.S. Commercial Banking and Wealth Management contributing $1.902 billion[149] - Net income attributable to equity shareholders was$6.220 billion, with Canadian Personal Banking contributing $2.249 billion and U.S. Commercial Banking and Wealth Management contributing$588 million[149] - Adjusted diluted EPS for the year was $7.05, reflecting adjustments for items of note such as acquisition and integration-related costs[149] - Provision for credit losses was$1.057 billion, with Canadian Personal Banking accounting for $876 million and U.S. Commercial Banking and Wealth Management accounting for$169 million[149] - Non-interest expenses totaled $12.803 billion, with Canadian Personal Banking accounting for$4.975 billion and U.S. Commercial Banking and Wealth Management accounting for $1.028 billion[149] - Adjusted net income attributable to equity shareholders was$6.555 billion, reflecting adjustments for items of note[149] - Total pre-tax impact of items of note on net income was $452 million, with significant contributions from amortization and impairment of acquisition-related intangible assets[149] - Adjusted total revenue was$21.817 billion, slightly lower than the reported total revenue due to adjustments for items of note[149] - Adjusted provision for credit losses was $963 million, reflecting adjustments for items of note[149] - Adjusted non-interest expenses were$12.429 billion, reflecting adjustments for items of note such as acquisition and integration-related costs[149] - Total revenue for the year ended October 31, 2021 was $20,015 million, with Canadian Personal Banking contributing$8,150 million and Canadian Commercial Banking and Wealth Management contributing $4,670 million[151] - Net income attributable to equity shareholders was$6,429 million, with diluted EPS of $6.96[151] - Adjusted net income attributable to equity shareholders was$6,670 million, with adjusted diluted EPS of $7.23[151] - Provision for credit losses was$158 million, with reversals in Canadian Commercial Banking and Wealth Management ($39 million) and U.S. Commercial Banking and Wealth Management ($100 million)[151] - Non-interest expenses were $11,535 million, with adjustments for items of note reducing expenses by$325 million[151] - Income before income taxes was $8,322 million, with adjusted income before taxes at$8,647 million[151] - The impact of items of note on net income was $241 million after-tax, with a$0.27 impact on diluted EPS[151] - Corporate and Other segment reported a net loss of $496 million, with an adjusted net loss of$314 million[151] - Total pre-tax impact of items of note on net income was $325 million, primarily due to real estate consolidation and legal provisions[151] - Adjusted non-interest expenses were$11,210 million, reflecting cost management efforts[151] - Total revenue for the year ended October 31, 2020 was $18.741 billion, with Canadian Personal Banking contributing$7.922 billion and U.S. Banking contributing $1.520 billion[153] - Provision for credit losses totaled$2.489 billion, with Canadian Personal Banking accounting for $1.189 billion and U.S. Banking accounting for$358 million[153] - Net income (loss) attributable to equity shareholders was $3.790 billion, with Canadian Personal Banking contributing$1.785 billion and U.S. Banking contributing $282 million[153] - Non-interest expenses were$11.362 billion, with Canadian Personal Banking accounting for $4.308 billion and U.S. Banking accounting for$838 million[153] - Adjusted net income (loss) attributable to equity shareholders was $4.445 billion, with Canadian Personal Banking contributing$1.791 billion and U.S. Banking contributing $327 million[153] - Adjusted diluted EPS was$4.85, reflecting the impact of adjustments on net income[153] - The company incurred a goodwill impairment charge of $248 million related to its controlling interest in CIBC FirstCaribbean[153] - Restructuring charges, primarily relating to employee severance and related costs, amounted to$339 million[153] - The company reported a gain of $79 million as a result of plan amendments related to pension and other post-employment plans[153] - The total after-tax impact of items of note on net income was$655 million, with U.S. Commercial Banking and Wealth Management contributing $587 million[153] - Total revenue for the year ended October 31, 2019 was$18.611 billion, with Canadian Personal Banking contributing $8.240 billion and U.S. Commercial Banking and Wealth Management contributing$1.911 billion[155] - Net income attributable to equity shareholders was $5.096 billion, with Canadian Personal Banking contributing$2.126 billion and U.S. Commercial Banking and Wealth Management contributing $648 million[155] - Provision for credit losses totaled$1.286 billion, with Canadian Personal Banking accounting for $889 million and U.S. Commercial Banking and Wealth Management accounting for$73 million[155] - Non-interest expenses were $10.856 billion, with Canadian Personal Banking accounting for$4.459 billion and U.S. Commercial Banking and Wealth Management accounting for $1.114 billion[155] - Net interest income increased by$1,182 million or 10% from 2021, driven by volume growth across businesses, partially offset by lower trading income[162] - Non-interest income rose by $636 million or 7$899 million or 569% from 2021, reflecting an unfavorable economic outlook change in 2022 compared to 2021's recovery-driven favorable outlook[164] - Canadian Commercial Banking and Wealth Management revenue increased by $263 million or 12$246 million or 12% from 2021, primarily due to higher foreign exchange and equity derivatives trading revenue[167] - International banking revenue increased by $91 million, benefiting from foreign exchange translation and higher net product spreads[168] - Non-interest expenses rose by$1,268 million or 11% from 2021, driven by higher employee compensation, strategic initiatives, and legal provisions[193] - Canadian Personal and Business Banking revenue increased by $759 million or 9$1 billion in financing over the next three years to support decarbonizing the economy[27] - CIBC aims to achieve net-zero greenhouse gas (GHG) emissions from operational and financing activities by 2050, with progress toward 2030 targets for oil and gas and power generation portfolios[12] - CIBC's sustainable finance initiatives include partnerships with McGill University, Schulich School of Business, and the University of Calgary's Energy Transition Centre[58] Cybersecurity and Technology - CIBC's cyber security strategy includes robust security processes, rigorous monitoring, and employee awareness training to ensure the confidentiality, availability, and integrity of client information[7] - CIBC launched Digital Personal Identification Number (PIN) Reset in 2023, eliminating the need for a call to reset credit or debit card PINs[60] - CIBC launched the CIBC Investment Platform, enhancing advisor productivity and client reporting capabilities[191] Capital Management and Financial Strength - CIBC's CET1 ratio increased steadily through 2023, reflecting proactive capital management[31] - CIBC's Common Equity Tier 1 ratio increased steadily through 2023 due to proactive capital management[62] - CIBC's robust and well-diversified balance sheet supported clients effectively during global banking sector disruptions in 2023[62] - CIBC's CET1 ratio stood at 12.4% in 2023, up from 11.7% in 2022, indicating improved capital strength[109] - CIBC issued $750 million principal amount of 5.35$800M over the next 10 years (2023–2032) for corporate giving, community sponsorships, and employee giving and fundraising[55] - CIBC's employee engagement scores are world-class, and the company was named the top company in Canada for gender equality by Equileap[71] Market and Economic Outlook - Mortgage growth in Canadian Personal and Business Banking is expected to remain soft through at least the first half of 2024 due to weaker home sales and higher interest rates[84] - CIBC forecasts Canadian GDP growth of less than 1% for 2024, with unemployment expected to peak above 6%[84] - The U.S. GDP growth is projected at roughly 1% in 2024, with unemployment expected to climb modestly over 4%[84] - The unemployment rate in Canada is expected to rise to just under 6% by the end of 2023, impacting consumer spending and mortgage demand[110] Legal and Regulatory Matters - CIBC paid $770 million to settle litigation with Cerberus Capital Management, resulting in a pre-tax charge of$1,055 million and an after-tax charge of $762 million[85] - CIBC FirstCaribbean completed the sale of banking assets in Aruba, St. Vincent, and Grenada in February 2022, March 2023, and July 2023, respectively, while ceasing operations in Dominica on January 31, 2023[112] - The sale of banking assets in Curaçao and Sint Maarten is expected to be finalized in fiscal 2024, pending regulatory approvals[112] Business Segments Performance - CIBC reported a$5.40B revenue in Canadian Commercial Banking and Wealth Management for 2023[64] - CIBC's U.S. operations delivered double-digit revenue growth in 2023, driven by its capital markets platform[69] - Canadian Personal and Business Banking benefited from loan and deposit growth over the last eight quarters, driven by organic client growth and the acquisition of the Canadian Costco credit card portfolio in Q2 2022[157] - U.S. Commercial Banking and Wealth Management saw increased loan volumes and fee income, but was offset by market-related headwinds in wealth management due to market volatility[157] - Capital Markets and Direct Financial Services experienced lower trading revenue in Q3 and Q4 of 2022 and 2023, but higher trading revenue in Q1 2023 due to robust market conditions[157] - Provision for credit losses in Canadian Personal and Business Banking was impacted by lower insolvencies and write-offs in credit cards relative to pre-pandemic levels in Q1 and Q2 2022[158] - U.S. Commercial Banking and Wealth Management saw higher provisions on impaired loans in Q2, Q3, and Q4 of 2023, mainly attributable to the real estate and construction sector[158] - Non-interest expenses fluctuated due to changes in employee compensation, strategic investments, and foreign exchange rates, with increases in legal provisions in Q2 and Q4 2022 and Q1 2023[159] - CIBC's net income for the quarter increased by $53 million or 4$43 million or 1% year-over-year, primarily due to lower spending on strategic initiatives[132] - CIBC's income tax expense increased by $96 million or 34$584 million or 13% year-over-year, with commercial banking revenue up $451 million or 25$133 million or 5% year-over-year, driven by higher fee-based revenue and net interest income[141] - CIBC's provision for credit losses on performing loans decreased by $154 million year-over-year, due to a more unfavorable economic outlook in the prior year[132] - The U.S. Commercial Banking and Wealth Management segment reported a net income (loss) of$280 million in US$millions[147] - Total revenue for the year ended October 31, 2022, was$21.833 billion, with Canadian Personal Banking contributing $8.909 billion and U.S. Commercial Banking and Wealth Management contributing$1.902 billion[149] - Net income attributable to equity shareholders was $6.220 billion, with Canadian Personal Banking contributing$2.249 billion and U.S. Commercial Banking and Wealth Management contributing $588 million[149] - Total revenue for the year ended October 31, 2021 was$20,015 million, with Canadian Personal Banking contributing $8,150 million and Canadian Commercial Banking and Wealth Management contributing$4,670 million[151] - Net income attributable to equity shareholders was $6,429 million, with diluted EPS of$6.96[151