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CIBC announces fourth quarter and fiscal 2021 results

CIBC's 2021 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 2021 Annual Report is available on SEDAR at www.sedar.com. All amounts are expressed in Canadian dollars, unless otherwise indicated.

TORONTO, Dec. 2, 2021 /CNW/ - CIBC (TSX: CM) (NYSE: CM) today announced its results for the fourth quarter and fiscal year ended October 31, 2021.

CIBC logo (CNW Group/CIBC)
CIBC logo (CNW Group/CIBC)

"We delivered strong financial performance in 2021 with growth across all of our strategic business units as our entire team focused on helping our clients achieve their ambitions," said Victor Dodig, President and CEO, CIBC. "Against the backdrop of the ongoing global pandemic, our bank continued to invest for the future, including expanding our platform and capabilities in the U.S., accelerating the growth of our Canadian consumer franchise, and making foundational investments in cloud technology and other capabilities that will enable us to do more for clients in 2022 and beyond. We also launched our new brand, a statement on the bank we've become by living our purpose, and a symbol of the opportunities that lie ahead. We enter the new fiscal year well positioned for growth with a strong capital position, clear momentum across our business, and the full commitment of our team as we contribute to an equitable and sustainable future for our clients, our communities and our planet."

Fourth quarter highlights


Q4/21

Q4/20

Q3/21

YoY Variance

QoQ Variance

Reported Net Income

$1,440 million

$1,016 million

$1,730 million

+42%

-17%

Adjusted Net Income (1)

$1,573 million

$1,280 million

$1,808 million

+23%

-13%

Reported Diluted Earnings Per Share (EPS)

$3.07

$2.20

$3.76

+40%

-18%

Adjusted Diluted EPS (1)

$3.37

$2.79

$3.93

+21%

-14%

Reported Return on Common Shareholders' Equity (ROE) (2)

13.4%

10.7%

17.1%


Adjusted ROE (1)(2)

14.7%

13.5%

17.9%

Common Equity Tier 1 (CET1) Ratio (2)

12.4%

12.1%

12.3%

CIBC's results for the fourth quarter of 2021 were affected by the following items of note aggregating to a negative impact of $0.30 per share:

  • $109 million ($80 million after-tax) charge related to the consolidation of our real estate portfolio;

  • $40 million ($29 million after-tax) increase in legal provisions;

  • $19 million ($15 million after-tax) amortization of acquisition-related intangible assets; and

  • $12 million ($9 million after-tax) in transaction and integration-related costs(3) associated with the acquisition of the Canadian Costco credit card portfolio.

For the year ended October 31, 2021, CIBC reported net income of $6.4 billion and adjusted net income(1) of $6.7 billion, compared with reported net income of $3.8 billion and adjusted net income(1) of $4.4 billion for 2020.

The following table summarizes our performance in 2021 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

Target (4)

2021 Reported Results

2021 Adjusted Results (1)

Diluted EPS growth

5% to 10% annually

$13.93, up 69% from 2020

$14.47, up 49% from 2020

ROE (2)

15% +

16.1%

16.7%

Operating leverage (2)

Positive

5.3%, an increase of 930 basis points from 2020

0.7%, an increase of 130 basis points from 2020

CET1 ratio (2)

Strong buffer to regulatory minimum

12.4%

Dividend payout ratio (2)

40% to 50%

41.8%

40.3%

Total shareholder return

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

CIBC – 91.9%

S&P/TSX Composite Banks Index – 80.4%

(1)

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

(2)

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

(3)

Transaction and integration costs are comprised of direct and incremental costs incurred as part of planning for and executing the integration of the Canadian Costco credit card portfolio, including enabling cross-sell opportunities, the upgrade and conversion of systems and processes, project management, and communication costs. These items are recognized in Canadian Personal and Business Banking.

(4)

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


Core business performance
F2021 Financial Highlights

(C$ million)

F2021

F2020

YoY Variance

Canadian Personal and Business Banking (1)




Reported Net Income

$2,494

$1,785

up 40%

Adjusted Net Income (2)

$2,503

$1,791

up 40%

Pre-provision, pre-tax earnings (2)

$3,736

$3,614

up 3%

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

$3,748

$3,622

up 3%





Canadian Commercial Banking and Wealth Management




Reported Net Income

$1,665

$1,202

up 39%

Adjusted Net Income (2)

$1,665

$1,203

up 38%

Pre-provision, pre-tax earnings (2)

$2,227

$1,942

up 15%

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

$2,227

$1,943

up 15%





U.S. Commercial Banking and Wealth Management (1)




Reported Net Income

$926

$375

up 147%

Adjusted Net Income (2)

$976

$436

up 124%

Pre-provision, pre-tax earnings (2)

$1,073

$917

up 17%

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

$1,141

$1,000

up 14%





Capital Markets (1)




Reported Net Income

$1,857

$1,308

up 42%

Adjusted Net Income (2)

$1,857

$1,308

up 42%

Pre-provision, pre-tax earnings (2)

$2,403

$2,124

up 13%

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

$2,403

$2,124

up 13%

(1)

Certain prior period information has been revised. See the "External reporting changes" section of our 2021 Annual Report for additional details.

(2)

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

Strong fundamentals
While investing in core businesses, CIBC has continued to strengthen key fundamentals. In 2021, CIBC maintained its capital strength and sound risk management practices:

  • Capital ratios were strong, with a Basel III CET1 ratio(1) of 12.4% as noted above, and Tier 1(1) and Total capital ratios(1) of 14.1% and 16.2%, respectively, at October 31, 2021;

  • Market risk, as measured by average Value-at-Risk, was $7.6 million in 2021 compared with $8.5 million in 2020;

  • We continued to have solid credit performance, with a loan loss ratio(1) of 16 basis points compared with 26 basis points in 2020;

  • Liquidity Coverage Ratio(1) was 127% for the three months ended October 31, 2021; and

  • Leverage Ratio(1) was 4.7% at October 31, 2021.

CIBC announced an increase in its quarterly common share dividend from $1.46 per share to $1.61 per share for the quarter ending January 31, 2022.

Today we announced our intention to purchase for cancellation up to 10 million common shares, or approximately 2.2% of our outstanding common shares under a new normal course issuer bid, subject to the approval of the Toronto Stock Exchange.

(1)

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 $78 million for the fourth quarter, down $213 million or 73% from the same quarter last year. The current quarter included a provision reversal on performing loans of $34 million, while the same quarter last year included a provision for credit losses of $113 million. Provision for credit losses on impaired loans was down $66 million as the prior year quarter was adversely impacted by the COVID-19 pandemic.

Making a difference in our Communities
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 further strengthened our communities through the following initiatives:

  • Supported cancer research and care as Team CIBC participated in the annual Ride to Conquer Cancer and Weekend to Conquer Cancer benefitting the Princess Margaret Cancer Foundation, and celebrated our 25th anniversary as title partner of the CIBC Run for the Cure as we worked with the Canadian Cancer Society to support innovative breast cancer research and support programs.

  • Recognized the inaugural National Day for Truth and Reconciliation and announced initiatives supporting economic prosperity for Indigenous peoples in Canada. We announced further commitments to our newly launched Reconciliation Framework and donated $50,000 to the Orange Shirt Society, an organization working to support Survivors of the residential school system in Canada.

  • CIBC and the BlackNorth Initiative announced that applications are now being accepted for the Youth Accelerator, in partnership with BGC Canada, that will provide students from the Black community $50,000 over four years for tuition, mentorship, financial education and opportunities to secure paid internships or co-ops.

  • Together with our clients and team members, we responded to several global crises including donations to earthquake relief in Haiti, relief efforts following Hurricane Ida, clean drinking water for Iqaluit, and immediate aid to vulnerable groups in Afghanistan, including support for the evacuation and resettlement of Afghan women and families landing in Canada, and journalists fleeing persecution.

In 2021, corporate and employee giving to more than 4,000 charities was $132.7 million(1), while employee volunteering totalled more than 99,000 hours.

Subsequent to the end of the quarter, we announced the CIBC Foundation, which will serve our commitment to advance inclusion for a more equitable society and help make ambitions real for communities. To support this goal, we have made donations totalling $70 million in fiscal 2021 to launch the foundation, with plans to grow to $155 million over time.

(1)

Includes corporate giving, including $70 million to CIBC Foundation, corporate sponsorships and employee giving and fundraising.


Fourth quarter financial highlights


As at or for the




As at or for the







three months ended




twelve months ended



2021

2021


2020



2021

2020


Unaudited

Oct. 31

Jul. 31


Oct. 31



Oct. 31

Oct. 31


Financial results ($ millions)



Net interest income

$

2,980


$

2,893


$

2,792



$

11,459


$

11,044


Non-interest income


2,084



2,163



1,808




8,556



7,697


Total revenue


5,064



5,056



4,600




20,015



18,741


Provision for (reversal of) credit losses


78



(99)



291




158



2,489


Non-interest expenses


3,135



2,918



2,891




11,535



11,362


Income before income taxes


1,851



2,237



1,418




8,322



4,890


Income taxes


411



507



402




1,876



1,098


Net income

$

1,440


$

1,730


$

1,016



$

6,446


$

3,792


Net income attributable to non-controlling interests


4



5



1




17



2



Preferred shareholders and other equity instrument holders


47



30



30




158



122



Common shareholders


1,389



1,695



985




6,271



3,668


Net income attributable to equity shareholders

$

1,436


$

1,725


$

1,015



$

6,429


$

3,790


Financial measures

















Reported efficiency ratio (1)


61.9

%


57.7

%


62.9

%



57.6

%


60.6

%

Reported operating leverage (1)


1.7

%


(0.6)

%


(5.5)

%



5.3

%


(4.0)

%

Loan loss ratio (2)


0.10

%


0.10

%


0.17

%



0.16

%


0.26

%

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


13.4

%


17.1

%


10.7

%



16.1

%


10.0

%

Net interest margin (1)


1.41

%


1.42

%


1.43

%



1.42

%


1.50

%

Net interest margin on average interest-earning assets (4)(5)


1.58

%


1.60

%


1.60

%



1.59

%


1.69

%

Return on average assets (5)(6)


0.68

%


0.85

%


0.52

%



0.80

%


0.52

%

Return on average interest-earning assets (4)(5)(6)


0.77

%


0.96

%


0.58

%



0.89

%


0.58

%

Reported effective tax rate


22.2

%


22.7

%


28.3

%



22.5

%


22.5

%

Common share information

















Per share ($)

- basic earnings

$

3.08


$

3.77


$

2.21



$

13.97


$

8.23




- reported diluted earnings


3.07



3.76



2.20




13.93



8.22




- dividends


1.46



1.46



1.46




5.84



5.82




- book value (7)


91.66



90.06



84.05




91.66



84.05


Closing share price ($)


150.17



145.07



99.38




150.17



99.38


Shares outstanding (thousands)

- weighted-average basic


450,469



449,590



446,321




448,953



445,435




- weighted-average diluted


452,028



451,148



446,877




450,183



446,021




- end of period


450,828



450,082



447,085




450,828



447,085


Market capitalization ($ millions)

$

67,701


$

65,293


$

44,431



$

67,701


$

44,431


Value measures

















Total shareholder return


4.55

%


14.68

%


8.74

%



58.03

%


(5.90)

%

Dividend yield (based on closing share price)


3.9

%


4.0

%


5.8

%



3.9

%


5.9

%

Reported dividend payout ratio (1)


47.3

%


38.7

%


66.2

%



41.8

%


70.7

%

Market value to book value ratio


1.64



1.61



1.18




1.64



1.18


Selected financial measures - adjusted (8)

















Adjusted efficiency ratio (9)


57.8

%


55.1

%


56.4

%



55.4

%


55.8

%

Adjusted operating leverage (9)


(2.8)

%


(0.6)

%


(0.7)

%



0.7

%


(0.6)

%

Adjusted return on common shareholders' equity (3)


14.7

%


17.9

%


13.5

%



16.7

%


11.7

%

Adjusted effective tax rate


22.5

%


22.8

%


24.5

%



22.7

%


21.8

%

Adjusted diluted earnings per share

$

3.37


$

3.93


$

2.79



$

14.47


$

9.69


Adjusted dividend payout ratio


43.2

%


37.0

%


52.2

%



40.3

%


60.0

%

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

















Cash, deposits with banks and securities

$

218,398


$

207,774


$

211,564



$

218,398


$

211,564


Loans and acceptances, net of allowance for credit losses


462,879



449,167



416,388




462,879



416,388


Total assets


837,683



806,067



769,551




837,683



769,551


Deposits


621,158



602,969



570,740




621,158



570,740


Common shareholders' equity (1)


41,323



40,533



37,579




41,323



37,579


Average assets (5)


835,931



806,768



778,933




809,621



735,492


Average interest-earning assets (4)(5)


747,009



718,403



692,465




721,686



654,142


Average common shareholders' equity (1)(5)


40,984



39,263



36,762




38,881



36,792


Assets under administration (AUA) (1)(10)(11)(12)

2,963,221


2,982,469


2,364,005



2,963,221


2,364,005


Assets under management (AUM) (1)(11)(12)

316,834


310,560


261,037



316,834


261,037


Balance sheet quality and liquidity measures (13)

















Risk-weighted assets (RWA) ($ millions)

$

272,814


$

268,999


$

254,871



$

272,814


$

254,871


CET1 ratio (14)


12.4

%


12.3

%


12.1

%



12.4

%


12.1

%

...