CIBC(US:CM)2022-11-30 16:00Financial Performance - In 2022, the company reported revenue of $21.8 billion, an increase from $20.0 billion in 2021, representing a growth of 9%[13] - Reported net income was $6.2 billion, with adjusted net income at $6.6 billion, down from $6.4 billion and $6.7 billion respectively in 2021[13] - The diluted earnings per share (EPS) was $6.68, a decrease of 4% from $6.96 in 2021, with adjusted EPS at $7.05, down 2% from $7.23[14] - CIBC reported earnings of $6.2 billion or $6.68 per share for 2022, with adjusted earnings of $6.6 billion or $7.05 per share, consistent with the previous year[37] - Revenue increased by 9% to $21.8 billion, and adjusted pre-provision, pre-tax earnings rose by 7% to $9.4 billion, driven by robust volume growth across all businesses[38] - CIBC reported a strong performance in 2022, with a focus on delivering superior client experience and top-tier shareholder returns[71] - CIBC's financial measures focus on earnings growth, operating leverage, profitability, and balance sheet strength, with targets set for a three to five-year cycle[71] - CIBC's total shareholder return of 40.6% over five years outperformed the S&P/TSX Composite Banks Index[14] Credit Losses and Provisions - The provision for credit losses was $1.1 billion in 2022, compared to $0.2 billion in 2021, indicating a significant increase in risk provisioning[13] - Provision for credit losses significantly rose to $1,057 million in 2022, compared to $158 million in 2021, reflecting a substantial increase in credit risk[75] - Provision for credit losses for 2022 was $876 million, compared to $350 million in 2021, indicating an increase of 150.3%[101] - Provision for credit losses increased by $526 million or 150% from 2021, reflecting an unfavorable change in the economic outlook[111] Capital and Liquidity - The CET1 ratio was reported at 11.7%, indicating a strong capital buffer[14] - The Common Equity Tier 1 (CET1) ratio for the year ended October 31, 2022, was 11.7%, down from 12.4% in 2021, but still above regulatory requirements[74] - The liquidity coverage ratio (LCR) for the quarter ended October 31, 2022, was 129%, compared to 127% for the same period last year, indicating strong liquidity[74] - CIBC's total capital ratio as of October 31, 2022, was 14.0%, which includes all buffer requirements[145] - CIBC's capital management policy is reviewed annually, establishing targets for capital strength and adequacy based on regulatory requirements and risk appetite[141] Market and Economic Conditions - Economic challenges in 2022, including geopolitical tensions and supply-chain disruptions, impacted the bank's ability to meet certain performance objectives[71] - Real GDP growth in Canada is expected to decelerate to 0.6% in 2023, down from approximately 3.5% in 2022[77] - The unemployment rate in Canada is projected to rise to nearly 6% by the end of 2023, up from an average of 5.3% in 2022[77] - The ongoing conflict in Ukraine and sanctions on Russia have led to elevated volatility in commodity prices, particularly in oil and gas markets[191] Strategic Initiatives - The company launched a new Black Entrepreneur Program with a commitment of $15 million in business loans over four years (2022-2025) to support Black-owned businesses[16] - The bank aims to mobilize $300 billion in sustainable finance by 2030, focusing on renewable energy and sustainable infrastructure[19] - CIBC plans to increase its minimum entry wage to $25 per hour by 2025, reflecting its commitment to employee welfare[55] - CIBC's commitment to creating enduring value for stakeholders is reflected in its purpose-driven culture and community contributions[70] Risk Management - CIBC's risk management framework includes regular risk reports to identify and communicate risk levels, stress testing, and proactive risk mitigation options[168] - The Risk Management group is responsible for setting risk strategies and providing independent oversight of business activities[170] - CIBC's risk appetite statement is reviewed annually to ensure alignment with strategic, financial, and capital planning cycles[172] - Credit risk is managed through a three lines of defence model, with oversight from Risk Management and internal audit[201] Client Experience and Growth - The bank achieved its strongest net client growth since 2017, growing market share in deposits and loans, and was ranked first in online banking by J.D. Power among Canadian peers[39] - The Direct Financial Services business, including Simplii Financial, was ranked number one in client experience by Ipsos, indicating strong growth potential[53] - CIBC Smart Start was introduced, offering no-fee banking for youth and students until the age of 25[105] - CIBC Wood Gundy achieved a 57% increase in net flows compared to the previous year, reflecting a client-focused approach[113] Environmental, Social, and Governance (ESG) - The bank is committed to achieving net-zero greenhouse gas emissions by 2050 and has set interim targets for emissions reduction by 2030[55] - The bank's ESG strategy includes tying executive compensation to ESG performance, ensuring accountability in sustainability efforts[58] - CIBC aims to achieve and maintain an AA rating while meeting stakeholders' expectations regarding ESG criteria, including net zero greenhouse gas emissions[172] - CIBC is enhancing its climate-related disclosures in alignment with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations[189]