CIBC Announces Fourth Quarter and Fiscal 2012 Results

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Dec 06, 2012, 05:50 ET

CIBC's 2012 audited annual consolidated financial statements and accompanying management's discussion & analysis (MD&A) will be available today at www.cibc.com, along with the supplementary financial information report which includes fourth quarter financial information.

TORONTO, Dec. 6, 2012 /CNW/ - CIBC (TSX: CM) (NYSE: CM) announced net income of $852 million for the fourth quarter ended October 31, 2012, up from $757 million for the fourth quarter of 2011. Reported diluted earnings per share (EPS) of $2.02 and adjusted diluted EPS of $2.04⁽¹⁾ for the fourth quarter of 2012, compared with reported diluted EPS of $1.79 and adjusted diluted EPS of $1.78⁽¹⁾, respectively, for the same period last year.

CIBC's results for the fourth quarter of 2012 were affected by the following items of note aggregating to a negative impact of $0.02 per share:

$57 million ($32 million after-tax, or $0.08 per share) loan losses in our exited U.S. leveraged finance portfolio;
$51 million ($37 million after-tax, or $0.09 per share) gain from the structured credit run-off business;
$33 million ($24 million after-tax, or $0.06 per share) loss relating to the change in valuation of collateralized derivatives to an overnight index swap (OIS) basis;
$24 million ($19 million after-tax, or $0.05 per share) gain on sale of interests in entities in relation to the acquisition of TMX Group Inc. by Maple Group Acquisition Corporation, net of associated expenses; and
$7 million ($6 million after-tax, or $0.02 per share) amortization of intangible assets.

CIBC's results for the fourth quarter of 2011 included items of note aggregating to a positive impact of $0.01 per share.

CIBC's net income of $852 million for the fourth quarter of 2012 compared with net income of $841 million for the third quarter ended July 31, 2012. Reported diluted EPS of $2.02 and adjusted diluted EPS of $2.04⁽¹⁾ for the fourth quarter of 2012 compared with reported diluted EPS of $2.00 and adjusted diluted EPS of $2.06⁽¹⁾ for the prior quarter.

For the year ended October 31, 2012, CIBC reported net income of $3.3 billion, reported diluted EPS of $7.85 and adjusted diluted EPS of $8.07⁽¹⁾, which included items of note aggregating to a negative impact of $0.22 per share. These results compared with net income of $2.9 billion, reported diluted EPS of $6.71 and adjusted diluted EPS of $7.57⁽¹⁾ for 2011, which included items of note aggregating to a negative impact of $0.86 per share.

CIBC's return on common shareholders' equity was 22.0% for the year ended October 31, 2012 and our Tier 1 capital and Tangible Common Equity ratios were 13.8% and 11.6%⁽¹⁾ respectively as at October 31, 2012.

"CIBC reported another year of solid progress in 2012," says Gerry McCaughey, CIBC President and Chief Executive Officer. "Our results reflect broad-based performance across our core businesses and the value of our strategy."

(1) For additional information, see the "Non-GAAP measures" section.

Performance against Objectives

Our key measures of performance	Our Objectives	2012 results
Adjusted Earnings per share (EPS)⁽¹⁾ growth	Adjusted EPS growth of 5%-10% per annum, on average, over the next 3-5 years	2012: $8.07, up 6.6% from 2011
Return on common shareholders' equity (ROE)	Return on average common equity of 20% through the cycle	22.0%
Capital strength⁽²⁾	Tier 1 capital ratio target of 8.5% Total capital ratio target of 11.5%	Tier 1 capital ratio:13.8% Total capital ratio: 17.3%
Business mix	75% retail⁽³⁾/25% wholesale (as measured by economic capital⁽¹⁾)	77%/23% retail⁽³⁾/wholesale
Risk	Maintain provision for credit losses as a percentage of average loans and acceptances (loan loss ratio⁽⁴⁾) between 50 and 65 basis points through the business cycle	53 basis points
Productivity	Achieve a median ranking within our industry group, in terms of our adjusted non-interest expense to total revenue (adjusted efficiency ratio)⁽¹⁾	55.8%
Adjusted Dividend payout ratio⁽¹⁾	40%-50% (common share dividends paid as a percentage of adjusted net income after preferred share dividends and premium on redemptions)	45.1%
Total shareholder return	Outperform the S&P/TSX Composite Banks Index (dividends reinvested) on a rolling five-year basis	Five years ended October 31, 2012: CIBC - (0.1)% Index - 25.2%

(1)		For additional information, see the "Non-GAAP measures" section.
(2)		Going forward, our capital strength will be measured by the Basel III Common Equity Tier 1 ratio to exceed the regulatory target set by the Office of the Superintendent of Financial Institutions (OSFI).
(3)		For the purpose of calculating this ratio, Retail includes Retail and Business Banking, Wealth Management and International banking operations, reported as part of Corporate and Other. The ratio represents the amount of economic capital attributed to these businesses as at the end of the period.
(4)		Going forward, our loan loss ratio target will be between 45 and 60 basis points through the business cycle.

Core business performance

Retail and Business Banking reported net income of $2.3 billion in 2012, up from $2.2 billion in 2011, as a result of volume growth across most retail products and higher fees, partially offset by narrower spreads in the low-interest environment that continues to prevail.

Retail and Business Banking continued to make strategic investments throughout 2012 in areas that are enhancing the relationship we have with, and the value we provide to, our clients:

Continuing our leadership in mobile innovations, we announced the first point-of-sale mobile credit card transaction in Canada in partnership with Rogers Communications. This new mobile payments functionality allows our clients to use their existing CIBC credit card through their smartphone to purchase goods.
We launched the CIBC Total Banking Rebate to recognize and reward clients with fee discounts for having deeper relationships with us.
We delivered CIBC Home Power Plan which combines the benefits of a traditional mortgage and a line of credit to give clients a long-term borrowing solution. In addition, we introduced Next Best Offer to enable our frontline sales teams to better understand our clients' needs and provide them with the best offer based on their current holdings.
We were named the Best Commercial Bank in Canada by World Finance magazine for our strong client focus.
We continued to invest in our branch network, with 28 new, relocated or expanded branches across the country this year and expanded hours of business.

"As we close fiscal 2012, our business is well positioned for growth," says David Williamson, Group Head, Retail and Business Banking. "We have re-positioned our focus towards building deeper relationships with our clients, built more branches, extended our branch operating hours, launched new products and reinforced our leadership position in mobile banking with our launch of mobile payments."

"To further our business in 2013 and beyond, we are continuing to invest in building deeper relationships with our clients; improving our sales and service capabilities; and acquiring and retaining clients who seek deeper and more rewarding relationships," adds Williamson.

Wealth Management had net income of $339 million in 2012, up from $279 million in 2011. Net income increased as a result of higher revenue in asset management partially offset by lower revenue in retail brokerage.

Wealth Management strengthened its business on many fronts in 2012 in support of our strategic priorities to attract and deepen client relationships, seek new sources of domestic assets and pursue acquisitions and investments. Key highlights included:

Acquired MFS McLean Budden's private wealth management business, adding approximately $1.4 billion in client assets.
Our investment in American Century Investments continues to generate solid results with positive net sales and was named Deal of the Year for its impact on the U.S. mutual fund landscape.
For the 3^rd consecutive year, achieved record long-term mutual funds net sales of $3.9 billion.
Investment performance consistently ranked amongst the Canadian leaders, as measured against median.

"We will continue to invest in our Wealth Management platform, domestically and internationally, to enhance the client experience and strengthen shareholder returns," says Victor Dodig, Group Head, Wealth Management.

Despite ongoing volatility and uncertainty in global equity markets, Wholesale Banking delivered strong results, reporting net income of $613 million, compared with $543 million in 2011.

Wholesale Banking's objective is to be the premier client-focused wholesale bank centred in Canada, with a reputation for consistent and sustainable earnings, for risk-controlled growth, and for being a well-managed firm known for excellence in everything we do. During 2012, Wholesale Banking:

Ranked among the leading foreign exchange providers globally, and was also ranked a top bank in Canadian dollar service in the FX Week Best Bank Awards 2012;
Reinforced our energy advisory business with the acquisition of Griffis & Small, LLC;
Ranked #1 overall in loan syndication by number of deals and #2 by volume;
Received Best Bank of the Year - Project Finance and Infrastructure - Canada by Deal Makers Monthly; and
Led or co-led several key transactions, most notably the Canada Housing Trust No. 1 $15 billion Canada Mortgage Bond offerings.

"Wholesale Banking delivered high quality, consistent and risk-controlled performance in 2012, despite continued volatile market conditions globally," says Richard Nesbitt, Group Head, Wholesale, International, and Technology and Operations.

While investing in our core Wholesale Banking strategy, CIBC continued to actively manage and reduce its structured credit run-off portfolio. In 2012, notional exposures declined by $4.1 billion as a result of sales and terminations of positions, as well as normal amortization. The remaining portfolio of primarily collateralized loan obligations and corporate debt has experienced minimal defaults in the underlying collateral and continues to benefit from significant levels of subordination.

Strong fundamentals

While investing in its core businesses, CIBC has continued to strengthen its key fundamentals. In 2012, CIBC maintained its capital strength, competitive productivity and sound risk management:

CIBC's capital ratios are strong, including Tier 1 and Tangible Common Equity⁽¹⁾ ratios of 13.8% and 11.6% at October 31, 2012;
Credit quality has remained stable, with CIBC's loan loss ratio of 53⁽¹⁾ basis points comparable to 51⁽¹⁾ basis points in 2011; and
Market risk, as measured by average Value-at-Risk, was $4.9 million in 2012 compared with $6.5 million in 2011.

With a pro forma Basel III Common Equity Tier 1 ratio estimated at 9.0% on a fully phased-in basis, CIBC is well in excess of the 7% minimum requirement as proposed by the Basel Committee on Banking Supervision and the Office of the Superintendent of Financial Institutions.

"CIBC's first principle is to be a lower risk bank that delivers consistent and sustainable earnings over the long term," adds McCaughey. "Within an environment that is impacted by the macro trends of uncertainty, deleveraging and re-regulation, CIBC has the right strategy to continue to deliver value."

(1) For additional information, see the "Non-GAAP measures" section.

Fourth Quarter Financial Highlights
			As at or for the three months ended									As at or for the twelve months ended
			2012			2012			2011			2012			2011
			Oct. 31			Jul. 31			Oct. 31			Oct. 31			Oct. 31
Financial results ($ millions)
Net interest income		$	2,016		$	1,883		$	1,776		$	7,494		$	7,062
Non-interest income			1,143			1,266			1,419			5,055			5,373
Total revenue			3,159			3,149			3,195			12,549			12,435
Provision for credit losses			328			317			306			1,291			1,144
Non-interest expenses			1,829			1,831			1,920			7,215			7,486
Income before taxes			1,002			1,001			969			4,043			3,805
Income taxes			150			160			212			704			927
Net income		$	852		$	841		$	757		$	3,339		$	2,878
Net income attributable to non-controlling interests		$	2		$	2		$	3		$	8		$	11
Preferred shareholders			29			29			38			158			177
Common shareholders			821			810			716			3,173			2,690
Net income attributable to equity shareholders		$	850		$	839		$	754		$	3,331		$	2,867

Financial measures
Reported efficiency ratio			57.9	%		58.1	%		60.1	%		57.5	%		60.2	%
Adjusted efficiency ratio⁽¹⁾			56.5	%		56.1	%		58.7	%		55.8	%		56.4	%
Loan loss ratio			0.53	%		0.52	%		0.52	%		0.53	%		0.51	%
Return on common shareholders' equity			21.7	%		21.8	%		22.6	%		22.0	%		22.2	%
Net interest margin			2.00	%		1.87	%		1.77	%		1.89	%		1.79	%
Net interest margin on average interest-earning assets			2.33	%		2.18	%		2.05	%		2.20	%		2.03	%
Return on average assets			0.85	%		0.84	%		0.75	%		0.84	%		0.73	%
Return on average interest-earning assets			0.99	%		0.98	%		0.87	%		0.98	%		0.83	%
Total shareholder return			8.42	%		(0.33)	%		4.19	%		9.82	%		0.43	%

Common share information
Per share	- basic earnings	$	2.02		$	2.00		$	1.80		$	7.86		$	6.79
	- reported diluted earnings		2.02			2.00			1.79			7.85			6.71
	- adjusted diluted earnings ⁽¹⁾		2.04			2.06			1.78			8.07			7.57
	- dividends		0.94			0.90			0.90			3.64			3.51
	- book value		37.48			36.57			32.88			37.48			32.88
Share price	- high		78.56			74.68			76.50			78.56			85.49
	- low		72.97			69.70			67.84			68.43			67.84
	- closing		78.56			73.35			75.10			78.56			75.10
Shares outstanding (thousands)
	- weighted-average basic		405,404			405,165			399,105			403,685			396,233
	- weighted-average diluted		405,844			405,517			401,972			404,145			406,696
	- end of period		404,485			405,626			400,534			404,485			400,534
Market capitalization ($ millions)		$	31,776		$	29,753		$	30,080		$	31,776		$	30,080

Value measures
Dividend yield (based on closing share price)			4.8	%		4.9	%		4.8	%		4.6	%		4.7	%
Reported dividend payout ratio			46.4	%		45.0	%		50.1	%		46.3	%		51.7	%
Adjusted dividend payout ratio⁽¹⁾			46.1	%		43.7	%		50.6	%		45.1	%		46.3	%
Market value to book value ratio			2.10			2.01			2.28			2.10			2.28

On- and off-balance sheet information ($ millions)
Cash, deposits with banks and securities		$	70,061		$	70,776		$	65,437		$	70,061		$	65,437
Loans and acceptances, net of allowance			252,732			253,616			248,409			252,732			248,409
Total assets			393,385			401,010			383,758			393,385			383,758
Deposits			300,344			305,096			289,220			300,344			289,220
Common shareholders' equity			15,160			14,834			13,171			15,160			13,171
Average assets			401,092			400,543			398,386			397,382			394,527
Average interest-earning assets			343,840			342,883			343,076			341,053			347,634
Average common shareholders' equity			15,077			14,760			12,599			14,442			12,145
Assets under administration			1,445,870			1,377,012			1,317,799			1,445,870			1,317,799

Balance sheet quality measures
Risk-weighted assets ($ billions)		$	115.2			$ 114.9			$ 110.0		$	115.2		$	110.0
Tangible common equity ratio⁽¹⁾			11.6	%		11.3	%		11.4	%		11.6	%		11.4	%
Tier 1 capital ratio			13.8	%		14.1	%		14.7	%		13.8	%		14.7	%
Total capital ratio			17.3	%		17.7	%		18.4	%		17.3	%		18.4	%
Other information
Retail / wholesale ratio⁽²⁾			77 % / 23	%		76 % / 24	%		77 % / 23	%		77 % / 23	%		77 % / 23	%
Full-time equivalent employees⁽³⁾			42,595			42,380			42,239			42,595			42,239

(1)		For additional information, see the "Non-GAAP measures" section.
(2)		For the purpose of calculating this ratio, Retail includes Retail and Business Banking, Wealth Management, and International banking operations (reported as part of Corporate and Other). The ratio represents the amount of economic capital attributed to these businesses as at the end of the period.
(3)		Full-time equivalent headcount is a measure that normalizes the number of full-time and part-time employees, base plus commissioned employees, and 100% commissioned employees into equivalent full-time units based on actual hours of paid work during a given period.

Review of CIBC Fourth Quarter Results

Net income was $852 million, up $95 million from the fourth quarter of 2011 and up $11 million from the prior quarter.

Net interest income of $2,016 million was up $240 million from the fourth quarter of 2011, primarily due to higher trading-related net interest income and volume growth across most retail products. Net interest income was up $133 million from the prior quarter, primarily due to higher trading-related net interest income.

Non-interest income of $1,143 million was down $276 million from the fourth quarter of 2011, primarily due to higher trading losses, including the loss relating to the methodology change in valuing collateralized derivatives shown as an item of note. The current quarter included a gain on sale of interests in relation to the acquisition of TMX Group by Maple, while the prior year quarter included a gain on sale of a merchant banking investment, both shown as items of note. Non-interest income was down $123 million from the prior quarter, primarily due to higher trading losses, including the loss relating to the methodology change in valuing collateralized derivatives noted above.

Provision for credit losses of $328 million was up $22 million from the fourth quarter of 2011. Higher losses in the exited U.S. leveraged finance portfolio, identified as an item of note, as well as higher losses in the business lending portfolio, were partially offset by lower losses in the exited European leveraged finance portfolio, identified as an item of note in the prior year quarter, lower losses in CIBC FirstCaribbean and lower write-offs and bankruptcies in our cards portfolio. In addition, net provision reversals related to the collective allowance were lower in the current quarter. Provision for credit losses was up $11 million from the prior quarter. Higher losses in the exited U.S. leveraged finance portfolio, identified as an item of note, were partially offset by lower losses in U.S. real estate finance and lower write-offs and bankruptcies in our cards portfolio.

Non-interest expenses of $1,829 million were down $91 million from the fourth quarter of 2011, primarily due to lower employee compensation and benefits. The prior year quarter included expenses relating to the sale of a merchant banking investment, which is shown as an item of note. Non-interest expenses were comparable to the prior quarter.

Income tax expense of $150 million in the fourth quarter of 2012 was down from $212 million in the fourth quarter of 2011, primarily due to higher tax-exempt income, an increase in the relative proportion of income taxed at lower income tax rates, and a lower statutory income tax rate. Income tax expense was down $10 million from the prior quarter primarily due to higher tax-exempt income.

Review of Retail and Business Banking Fourth Quarter Results

			2012			2012			2011
$ millions, for the three months ended			Oct. 31			Jul. 31			Oct. 31
Revenue
	Personal banking	$	1,616		$	1,595		$	1,568
	Business banking		378			382			358
	Other		42			108			150
Total revenue			2,036			2,085			2,076
Provision for credit losses			255			273			266
Non-interest expenses			1,030			1,035			1,023
Income before taxes			751			777			787
Income taxes			182			183			190
Net income		$	569		$	594		$	597
Net income attributable to:
	Equity shareholders (a)	$	569		$	594		$	597
Efficiency ratio			50.6	%		49.7	%		49.3	%
Return on equity⁽¹⁾			57.1	%		60.1	%		64.9	%
Charge for economic capital ⁽¹⁾ (b)		$	(126)		$	(126)		$	(122)
Economic profit ⁽¹⁾ (a+b)		$	443		$	468		$	475
Full-time equivalent employees			21,857			21,588			21,658

(1) For additional information, see the "Non-GAAP measures" section.

Net income was $569 million, down $28 million from the fourth quarter of 2011.

Revenue of $2,036 million was down $40 million from the fourth quarter of 2011. Revenue was impacted by lower Treasury allocations. Excluding the impact of Treasury, revenue was up $65 million from the fourth quarter of 2011. Personal banking and business banking revenue increased primarily due to volume growth across most lines of business, partially offset by lower spreads in deposits. Other revenue was down primarily due to lower treasury allocations.

Provision for credit losses of $255 million was down $11 million from the fourth quarter of 2011, primarily due to lower write-offs in cards, partially offset by higher losses in commercial banking.

Non-interest expenses of $1,030 million were up $7 million from the fourth quarter of 2011, primarily as a result of higher corporate support costs and employee compensation, partially offset by cost savings from operational efficiencies.

Income tax expense of $182 million was down $8 million from the fourth quarter of 2011 due to a lower pre-tax income.

Review of Wealth Management Fourth Quarter Results


			2012			2012			2011
$ millions, for the three months ended			Oct. 31			Jul. 31			Oct. 31
Revenue
	Retail brokerage	$	256		$	246		$	256
	Asset management		138			130			115
	Private wealth management		26			25			25
Total revenue			420			401			396
Non-interest expenses			308			299			299
Income before taxes			112			102			97
Income taxes			28			26			27
Net income		$	84		$	76		$	70
Net income attributable to:
	Equity shareholders (a)	$	84		$	76		$	70
Efficiency ratio			73.4	%		74.6	%		75.4	%
Return on equity⁽¹⁾			18.9	%		17.4	%		29.9	%
Charge for economic capital ⁽¹⁾(b)		$	(55)		$	(55)		$	(31)
Economic profit ⁽¹⁾ (a+b)		$	29		$	21		$	39
Full-time equivalent employees			3,783			3,708			3,731

(1) For additional information, see the "Non-GAAP measures" section.

Net Income for the quarter was $84 million, up $14 million from the fourth quarter of 2011.

Revenue of $420 million was up $24 million from the fourth quarter of 2011, primarily due to higher asset management revenue from higher average client assets under management driven by record net sales of long term mutual funds and income from our proportionate share in American Century Investments (included from September 2011).

Non-interest expenses of $308 million were up $9 million from the fourth quarter of 2011, primarily due to higher performance-based compensation.

Review of Wholesale Banking Fourth Quarter Results


			2012			2012			2011
$ millions, for the three months ended			Oct. 31			Jul. 31			Oct. 31
Revenue
	Capital markets	$	295		$	308		$	242
	Corporate and investment banking		206			223			328
	Other		74			(4)			(9)
Total revenue⁽¹⁾			575			527			561
Provision for credit losses			66			34			32
Non-interest expenses			263			284			347
Income before taxes			246			209			182
Income taxes⁽¹⁾			53			53			60
Net income		$	193		$	156		$	122
Net income attributable to:
	Equity shareholders (a)		193			156			122
Efficiency ratio			45.7	%		53.8	%		61.9
Return on equity⁽²⁾			35.0	%		27.9	%		25.9	%
Charge for economic capital ⁽²⁾ (b)		$	(70)		$	(70)		$	(61)
Economic profit ⁽²⁾ (a+b)		$	123		$	86		$	61
Full-time equivalent employees			1,268			1,274			1,206

(1)	Revenue and income taxes are reported on a TEB basis, and accordingly include a TEB adjustment of $92 million (Q3/12: $71 million; Q4/11: $56 million). The equivalent amounts are offset in Corporate and Other.
(2)	For additional information, see the "Non-GAAP measures" section.

Net income for the quarter was $193 million, compared to net income of $156 million for the third quarter.

Revenue of $575 million was up $48 million from the third quarter, primarily due to gains in the structured credit run-off business, a gain on sale of interests in entities in relation to the acquisition of TMX Group by Maple, and higher derivatives trading revenue, partially offset by a loss relating to the methodology change in valuing collateralized derivatives to an OIS basis and lower merchant banking gains.

Provision for credit losses of $66 million was up $32 million from the third quarter, mainly attributable to increased losses in our U.S. Leveraged Finance portfolio, partially offset by lower losses in our U.S. Real Estate Finance and Canadian credit portfolios.

Non-interest expenses of $263 million were down $21 million from the third quarter, primarily due to lower performance-based compensation.

Income tax expense of $53 million was comparable to the third quarter. The impact of an increased Taxable equivalent basis (TEB) adjustment on higher tax-exempt income was offset by the impact of a decrease in the relative proportion of income earned in higher tax jurisdictions.

Review of Corporate and Other Fourth Quarter Results


			2012		2012		2011
$ millions, for the three months ended			Oct. 31		Jul. 31		Oct. 31
Revenue
	International banking	$	149	$	146	$	139
	Other		(21)		(10)		23
Total revenue⁽¹⁾			128		136		162
Provision for credit losses			7		10		8
Non-interest expenses			228		213		251
Loss before taxes			(107)		(87)		(97)
Income taxes⁽¹⁾			(113)		(102)		(65)
Net income (loss)		$	6	$	15	$	(32)
Net income (loss) attributable to:
	Non-controlling interests	$	2	$	2	$	3
	Equity shareholders		4		13		(35)
Full-time equivalent employees			15,687		15,810		15,644

(1)	Wholesale Banking revenue and income taxes are reported on a TEB basis with an equivalent offset in the revenue and income taxes of Corporate and Other. Accordingly, revenue and income taxes include a TEB adjustment of $92 million (Q3/12: $71 million; Q4/11: $56 million).

Net income was up $38 million from the fourth quarter of 2011 mainly due to lower expenses.

Revenue was down $34 million from the fourth quarter of 2011 mainly due to a higher TEB adjustment.

Provision for credit losses was comparable to the fourth quarter of 2011.

Non-interest expenses were down $23 million from the fourth quarter of 2011, mainly due to lower unallocated corporate support costs.

Income tax benefit was up $48 million from the fourth quarter of 2011 mainly due to a higher TEB adjustment.

Making a Difference in Our Communities

As a leader in community investment, CIBC is committed to supporting causes that matter to its clients, employees and communities. During the fourth quarter of 2012:

CIBC continued its long term commitment to supporting breast cancer initiatives. The 2012 Canadian Breast Cancer Foundation CIBC Run for the Cure raised more than $30 million, including $3 million contributed by Team CIBC through pledges, fundraising activities and donations to the CIBC Pink Collection and more than $500,000 raised by students across Canada as part of the Post Secondary Challenge. CIBC was also proud to co-sponsor the Pink Tour, which made its final stop in October after bringing breast health education to 122 communities across Ontario over a six month period.
CIBC marked its third year as title sponsor of the CIBC 401 Bike Challenge, a three-day, 576-kilometre ride from Toronto's Hospital for Sick Children to the Montreal Children's Hospital. A number of CIBC employees and their fellow riders raised more than $276,000 to support kids with cancer and their families through the Sarah Cook Fund of the Cedars Cancer Institute.
CIBC employees joined Gerry McCaughey, CIBC's President and CEO and the 2012 United Way Toronto Campaign Chair, to kick off the United Way GTA campaign and demonstrate CIBC's commitment to building stronger, more vibrant communities through its work within the charitable sector.
CIBC presented Hope Rising, a concert benefiting the Stephen Lewis Foundation. CIBC has been a long term supporter of the Foundation, which has raised more than $40 million since 2003 to support HIV/AIDS projects in Africa.
CIBC joined the Toronto Pan Am and Parapan Am organizing committee to celebrate the ground breaking for the new Pan Am and Parapan Am Aquatics Centre and Field House presented by CIBC - the largest investment ever in Canadian amateur sport infrastructure and a lasting legacy for the University of Toronto (Scarborough) campus.

"Our performance in 2012 demonstrates the value of strategy and our further potential as we head into 2013," says Mr. McCaughey. "CIBC has the right strategy that will continue to deliver value to all our key stakeholders."

CONSOLIDATED BALANCE SHEET

		2012		2011		2010
$ millions, as at		Oct 31		Oct 31		Nov 1
ASSETS
Cash and non-interest-bearing deposits with banks	$	2,613	$	1,481	$	1,817
Interest-bearing deposits with banks		2,114		3,661		9,005
Securities
Trading		40,330		32,713		29,074
Available-for-sale (AFS)		24,700		27,118		24,369
Designated at fair value (FVO)		304		464		875
		65,334		60,295		54,318
Cash collateral on securities borrowed		3,311		1,838		2,401
Securities purchased under resale agreements		25,163		25,641		34,722
Loans
Residential mortgages		150,056		150,509		143,284
Personal		35,323		34,842		34,335
Credit card		15,153		15,744		15,914
Business and government		43,624		39,663		37,946
Allowance for credit losses		(1,860)		(1,803)		(1,886)
		242,296		238,955		229,593
Other
Derivative instruments		27,039		28,270		24,700
Customers' liability under acceptances		10,436		9,454		7,633
Land, buildings and equipment		1,683		1,580		1,568
Goodwill		1,701		1,677		1,907
Software and other intangible assets		656		633		579
Investments in equity-accounted associates and joint ventures		1,635		1,394		495
Other assets		9,404		8,879		10,570
		52,554		51,887		47,452
	$	393,385	$	383,758	$	379,308
LIABILITIES AND EQUITY
Deposits
Personal	$	118,153	$	116,592	$	113,294
Business and government		125,055		117,143		115,841
Bank		4,723		4,177		5,618
Secured borrowings		52,413		51,308		43,518
		300,344		289,220		278,271
Obligations related to securities sold short		13,035		10,316		9,673
Cash collateral on securities lent		1,593		2,850		4,306
Capital Trust securities		1,678		1,594		1,600
Obligations related to securities sold under repurchase agreements		6,631		8,564		20,651
Other
Derivative instruments		27,091		28,792		25,363
Acceptances		10,481		9,489		7,633
Other liabilities		10,671		11,704		12,239
		48,243		49,985		45,235
Subordinated indebtedness		4,823		5,138		4,773
Equity
Preferred shares		1,706		2,756		3,156
Common shares		7,769		7,376		6,804
Contributed surplus		85		93		98
Retained earnings		7,042		5,457		4,157
Accumulated other comprehensive income (AOCI)		264		245		416
Total shareholders' equity		16,866		15,927		14,631
Non-controlling interests		172		164		168
Total equity		17,038		16,091		14,799
	$	393,385	$	383,758	$	379,308



CONSOLIDATED STATEMENT OF INCOME

				For the three						For the twelve
				months ended						months ended
				2012		2012		2011		2012		2011
$ millions, except as noted				Oct. 31		Jul. 31		Oct. 31		Oct. 31		Oct. 31
Interest income
Loans			$	2,494	$	2,532	$	2,536	$	10,020	$	10,184
Securities				545		394		350		1,690		1,421
Securities borrowed or purchased under resale agreements				87		83		82		323		365
Deposits with banks				11		11		15		42		63
				3,137		3,020		2,983		12,075		12,033
Interest expense
Deposits				895		910		960		3,630		3,843
Securities sold short				84		85		89		333		388
Securities lent or sold under repurchase agreements				30		33		47		156		264
Subordinated indebtedness				52		52		52		208		215
Capital Trust securities				36		36		36		144		142
Other				24		21		23		110		119
				1,121		1,137		1,207		4,581		4,971
Net interest income				2,016		1,883		1,776		7,494		7,062
Non-interest income
Underwriting and advisory fees				118		99		94		438		514
Deposit and payment fees				194		203		192		775		756
Credit fees				111		112		97		418		379
Card fees				152		154		152		619		609
Investment management and custodial fees				110		107		104		424		411
Mutual fund fees				230		219		210		880		849
Insurance fees, net of claims				92		81		86		335		320
Commissions on securities transactions				98		96		109		402		496
Trading income (loss)				(185)		(16)		(13)		(115)		44
AFS securities gains (losses), net				61		70		236		264		397
FVO gains (losses), net				(4)		(9)		(12)		(32)		(7)
Foreign exchange other than trading				9		17		48		91		204
Income from equity-accounted associates and joint ventures				44		30		9		160		111
Other				113		103		107		396		290
				1,143		1,266		1,419		5,055		5,373
Total revenue				3,159		3,149		3,195		12,549		12,435
Provision for credit losses				328		317		306		1,291		1,144
Non-interest expenses
Employee compensation and benefits				1,001		1,036		1,054		4,044		4,052
Occupancy costs				182		170		177		697		667
Computer, software and office equipment				266		259		254		1,022		989
Communications				74		75		76		304		296
Advertising and business development				69		63		61		233		213
Professional fees				45		47		58		174		178
Business and capital taxes				12		15		5		50		38
Other				180		166		235		691		1,053
				1,829		1,831		1,920		7,215		7,486
Income before income taxes				1,002		1,001		969		4,043		3,805
Income taxes				150		160		212		704		927
Net income				852		841		757		3,339		2,878
Net income attributable to non-controlling interests				2		2		3		8		11
	Preferred shareholders			29		29		38		158		177
	Common shareholders			821		810		716		3,173		2,690
Net income attributable to equity shareholders				850		839		754		3,331		2,867
Earnings per share (in dollars)
		- Basic	$	2.02	$	2.00	$	1.80	$	7.86	$	6.79
		- Diluted	$	2.02	$	2.00	$	1.79	$	7.85	$	6.71
Dividends per common share (in dollars)			$	0.94	$	0.90	$	0.90	$	3.64	$	3.51



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

			For the three						For the twelve
			months ended						months ended
			2012		2012		2011		2012		2011
$ millions			Oct. 31		Jul. 31		Oct. 31		Oct. 31		Oct. 31
Net income		$	852	$	841	$	757	$	3,339	$	2,878
Other comprehensive income (OCI), net of tax
	Net foreign currency translation adjustments
	Net gains (losses) on investments in foreign operations		36		83		224		65		(101)
	Net (gains) losses on investments in foreign operations reclassified to net income		-		-		-		1		-
	Net gains (losses) on hedges of investments in foreign operations		(50)		(35)		(92)		(65)		13
	Net (gains) losses on hedges of investments in foreign operations reclassified to net income		-		-		-		(1)		-
			(14)		48		132		-		(88)
	Net change in AFS securities
	Net gains (losses) on AFS securities		36		89		(1)		208		182
	Net (gains) losses on AFS securities reclassified to net income		(48)		(51)		(145)		(196)		(241)
			(12)		38		(146)		12		(59)
	Net change in cash flow hedges
	Net gains (losses) on derivatives designated as cash flow hedges		21		(1)		15		20		(40)
	Net (gains) losses on derivatives designated as cash flow hedges reclassified to net income		(15)		(2)		(8)		(13)		16
			6		(3)		7		7		(24)
Total OCI		$	(20)	$	83	$	(7)	$	19	$	(171)
Comprehensive income		$	832	$	924	$	750	$	3,358	$	2,707
Comprehensive income attributable to non-controlling interests		$	2	$	2	$	3	$	8	$	11
	Preferred shareholders		29		29		38		158		177
	Common shareholders		801		893		709		3,192		2,519
Comprehensive income attributable to equity shareholders		$	830	$	922	$	747	$	3,350	$	2,696



			For the three						For the twelve
			months ended						months ended
			2012		2012		2011		2012		2011
$ millions			Oct. 31		Jul. 31		Oct. 31		Oct. 31		Oct. 31
Income tax (expense) benefit
	Net foreign currency translation adjustments
	Net gains (losses) on investments in foreign operations	$	(9)	$	(3)	$	(4)	$	(10)	$	(1)
	Net gains (losses) on hedges of investments in foreign operations		7		8		22		11		(2)
			(2)		5		18		1		(3)
	Net change in AFS securities
	Net gains (losses) on AFS securities		(7)		(20)		(10)		(49)		(82)
	Net (gains) losses on AFS securities reclassified to net income		18		7		66		65		112
			11		(13)		56		16		30
	Net change in cash flow hedges
	Net gains (losses) on derivatives designated as cash flow hedges		(4)		(1)		(6)		(4)		14
	Net (gains) losses on derivatives designated as cash flow hedges reclassified to net income		5		1		3		4		(4)
			1		-		(3)		-		10
		$	10	$	(8)	$	71	$	17	$	37



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

			For the three						For the twelve
			months ended						months ended
			2012		2012		2011		2012		2011
$ millions			Oct. 31		Jul. 31		Oct. 31		Oct. 31		Oct. 31
Preferred shares
Balance at beginning of period		$	2,006	$	2,006	$	2,756	$	2,756	$	3,156
Redemption of preferred shares			(300)		-		-		(1,050)		(400)
Balance at end of period		$	1,706	$	2,006	$	2,756	$	1,706	$	2,756
Common shares
Balance at beginning of period		$	7,744	$	7,697	$	7,254	$	7,376	$	6,804
Issue of common shares			64		49		126		430		575
Purchase of common shares for cancellation			(39)		-		-		(39)		-
Treasury shares			-		(2)		(4)		2		(3)
Balance at end of period		$	7,769	$	7,744	$	7,376	$	7,769	$	7,376
Contributed surplus
Balance at beginning of period		$	87	$	86	$	91	$	93	$	98
Stock option expense			1		2		3		7		6
Stock options exercised			(3)		(1)		(2)		(15)		(12)
Other			-		-		1		-		1
Balance at end of period		$	85	$	87	$	93	$	85	$	93
Retained earnings
Balance at beginning of period		$	6,719	$	6,276	$	5,100	$	5,457	$	4,157
Net income attributable to equity shareholders			850		839		754		3,331		2,867
Dividends
	Preferred		(29)		(29)		(38)		(128)		(165)
	Common		(381)		(365)		(359)		(1,470)		(1,391)
Premium on redemption of preferred shares			-		-		-		(30)		(12)
Premium on purchase of common shares			(118)		-		-		(118)		-
Other			1		(2)		-		-		1
Balance at end of period		$	7,042	$	6,719	$	5,457	$	7,042	$	5,457
AOCI, net of tax
Net foreign currency translation adjustments
Balance at beginning of period		$	(74)	$	(122)	$	(220)	$	(88)	$	-
Net change in foreign currency translation adjustments			(14)		48		132		-		(88)
Balance at end of period		$	(88)	$	(74)	$	(88)	$	(88)	$	(88)
Net gains (losses) on AFS securities
Balance at beginning of period		$	362	$	324	$	484	$	338	$	397
Net change in AFS securities			(12)		38		(146)		12		(59)
Balance at end of period		$	350	$	362	$	338	$	350	$	338
Net gains (losses) on cash flow hedges
Balance at beginning of period		$	(4)	$	(1)	$	(12)	$	(5)	$	19
Net change in cash flow hedges			6		(3)		7		7		(24)
Balance at end of period		$	2	$	(4)	$	(5)	$	2	$	(5)
Total AOCI, net of tax		$	264	$	284	$	245	$	264	$	245
Non-controlling interests
Balance at beginning of period		$	167	$	163	$	156	$	164	$	168
Net income attributable to non-controlling interests			2		2		3		8		11
Dividends			-		(3)		-		(5)		(8)
Other			3		5		5		5		(7)
Balance at end of period		$	172	$	167	$	164	$	172	$	164
Equity at end of period		$	17,038	$	17,007	$	16,091	$	17,038	$	16,091



CONSOLIDATED STATEMENT OF CASH FLOWS

				For the three						For the twelve
				months ended						months ended
				2012		2012		2011		2012		2011
$ millions				Oct. 31		Jul. 31		Oct. 31		Oct. 31		Oct. 31
Cash flows provided by (used in) operating activities⁽¹⁾
Net income			$	852	$	841	$	757	$	3,339	$	2,878

Adjustments to reconcile net income to cash flows provided by (used in) operating activities:
	Provision for credit losses			328		317		306		1,291		1,144
	Amortization⁽²⁾			83		91		90		357		556
	Stock option expense			1		2		3		7		6
	Deferred income taxes			15		188		34		167		518
	AFS securities (gains) losses, net			(61)		(70)		(236)		(264)		(397)
	Net (gains) losses on disposal of land, buildings and equipment			(14)		(3)		-		(17)		(5)
	Other non-cash items, net			(102)		82		212		91		381
	Net changes in operating assets and liabilities
		Interest-bearing deposits with banks		4,366		(2,523)		14,865		1,547		5,344
		Loans, net of repayments		854		(1,257)		(3,132)		(5,023)		(10,279)
		Deposits, net of withdrawals		(4,592)		8,156		(5,787)		11,339		11,644
		Obligations related to securities sold short		1,091		2,053		(489)		2,719		643
		Accrued interest receivable		(81)		96		(41)		(22)		115
		Accrued interest payable		279		(212)		224		(95)		(167)
		Derivative assets		1,721		(2,919)		(3,622)		146		(3,047)
		Derivative liabilities		(1,986)		2,955		4,757		(54)		2,616
		Trading securities		(1,183)		(1,496)		903		(7,617)		(3,639)
		FVO securities		20		33		53		160		411
		Other FVO assets and liabilities		(95)		(469)		(1,083)		(639)		(1,164)
		Current income taxes		(22)		(225)		117		(749)		191
		Cash collateral on securities lent		(691)		(757)		(2,198)		(1,257)		(1,456)

		Obligations related to securities sold under repurchase agreements		(1,896)		724		(5,949)		(1,933)		(12,087)
		Cash collateral on securities borrowed		679		(874)		1,876		(1,473)		563
		Securities purchased under resale agreements		3,842		(5,523)		5,681		516		9,081
		Other, net		(263)		(284)		219		(916)		1,253
				3,145		(1,074)		7,560		1,620		5,103
Cash provided by (used in) financing activities⁽¹⁾
Issue of subordinated indebtedness				-		-		-		-		1,500
Redemption/repurchase of subordinated indebtedness				-		(272)		(19)		(272)		(1,099)
Redemption of preferred shares				(300)		-		(412)		(1,080)		(1,016)
Issue of common shares for cash				61		48		124		415		563
Purchase of common shares for cancellation				(157)		-		-		(157)		-
Net proceeds from treasury shares				-		(2)		(4)		2		(3)
Dividends paid				(410)		(394)		(397)		(1,598)		(1,556)
				(806)		(620)		(708)		(2,690)		(1,611)
Cash flows provided by (used in) investing activities
Purchase of AFS securities				(7,691)		(7,951)		(12,672)		(38,537)		(33,645)
Proceeds from sale of AFS securities				3,608		7,995		2,249		23,815		13,514
Proceeds from maturity of AFS securities				2,147		2,048		3,957		17,421		17,400
Net cash used in acquisitions				(30)		(202)		(831)		(235)		(855)
Net cash provided by dispositions				42		-		-		42		10
Net purchase of land, buildings and equipment				(117)		(94)		(91)		(309)		(234)
				(2,041)		1,796		(7,388)		2,197		(3,810)
Effect of exchange rate changes on cash and non-interest-bearing deposits with banks				(4)		17		12		5		(18)
Net increase (decrease) in cash and non-interest-bearing deposits with banks during period				294		119		(524)		1,132		(336)
Cash and non-interest-bearing deposits with banks at beginning of period				2,319		2,200		2,005		1,481		1,817
Cash and non-interest-bearing deposits with banks at end of period			$	2,613	$	2,319	$	1,481	$	2,613	$	1,481
Cash interest paid			$	842	$	1,349	$	983	$	4,676	$	5,138
Cash income taxes paid			$	157	$	197	$	61	$	1,286	$	218
Cash interest and dividends received			$	3,056	$	3,116	$	2,942	$	12,053	$	12,148

(1)	Certain prior period information has been reclassified to conform to the presentation in the current period.
(2)	Comprises amortization of buildings, furniture, equipment, leasehold improvements, and software and other intangible assets. In addition, third quarter of 2011 includes impairment loss on goodwill.

Non-GAAP measures

We use a number of financial measures to assess the performance of our business lines. Some measures are calculated in accordance with International Financial Reporting Standards (IFRS or GAAP), while other measures do not have a standardized meaning under GAAP, and accordingly, these measures may not be comparable to similar measures used by other companies. Investors may find these non-GAAP useful in analyzing financial performance. For a more detailed discussion, see the "Non-GAAP measures" section of CIBC's 2012 Annual Report.

The following table provides a quarterly reconciliation of non-GAAP to GAAP measures related to CIBC on a consolidated basis. For an annual reconciliation of non-GAAP to GAAP measures, see the "Non-GAAP measures" section of CIBC's 2012 Annual Report.


				2012			2012			2011
$ millions, as at or for the three months ended				Oct. 31			Jul. 31			Oct. 31
Reported and adjusted diluted EPS
Reported net income attributable to diluted
	common shareholders	A	$	821		$	810		$	718
Adjusting items:
After-tax impact of items of note				6			25			(6)
Dividends on convertible preferred shares				-			-			(2)
Adjusted net income attributable to diluted
	common shareholders⁽¹⁾	B	$	827		$	835		$	710
Reported diluted weighted-average common shares
	outstanding (thousands)	C		405,844			405,517			401,972
Removal of impact of convertible preferred
	shares (thousands)			-			-			(2,235)
Adjusted diluted weighted-average shares
	outstanding (thousands) ⁽¹⁾	D		405,844			405,517			399,737
Reported diluted EPS ($)		A/C	$	2.02		$	2.00		$	1.79
Adjusted diluted EPS ($) ⁽¹⁾		B/D		2.04			2.06			1.78
Reported and adjusted efficiency ratio
Reported total revenue		E	$	3,159		$	3,149		$	3,195
Adjusting items:
	Pre-tax impact of items of note			(52)			24			(105)
	TEB			92			71			56
Adjusted total revenue ⁽¹⁾		F	$	3,199		$	3,244		$	3,146
Reported non-interest expenses		G	$	1,829		$	1,831		$	1,920
Adjusting items:
	Pre-tax impact of items of note			(21)			(9)			(72)
Adjusted non-interest expenses ⁽¹⁾		H	$	1,808		$	1,822		$	1,848
Reported efficiency ratio		G/E		57.9	%		58.1	%		60.1	%
Adjusted efficiency ratio ⁽¹⁾		H/F		56.5	%		56.1	%		58.7	%
Reported and adjusted dividend payout ratio
Reported net income attributable to common shareholders		I	$	821		$	810		$	716
Adjusting items:
	After-tax impact of items of note			6			25			(6)
Adjusted net income attributable to common shareholders ⁽¹⁾		J	$	827		$	835		$	710
Dividends paid to common shares		K	$	381		$	365		$	359
Reported dividend payout ratio		K/I		46.4	%		45.0	%		50.1	%
Adjusted dividend payout ratio ⁽¹⁾		K/J		46.1	%		43.7	%		50.6	%

(1)	Non-GAAP measure.

Basis of presentation

The interim consolidated financial information in this news release is prepared in accordance with IFRS and is unaudited whereas the annual consolidated financial information is derived from audited financial statements. These interim financial statements follow the same accounting policies and methods of application as CIBC's consolidated financial statements for the year ended October 31, 2012.

The information below forms a part of this press release.

Nothing in CIBC's corporate website (www.cibc.com) should be considered incorporated herein by reference.

(The board of directors of CIBC reviewed this press release prior to it being issued.)

A NOTE ABOUT FORWARD-LOOKING STATEMENTS
From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including in this press release, in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission and in other communications. These statements include, but are not limited to, statements made in the "Performance against Objectives", "Core business performance", "Strong Fundamentals" and "Making a Difference in Our Communities" sections of this press release, and other statements we make about our operations, business lines, financial condition, risk management, priorities, targets, ongoing objectives, strategies and outlook for 2013 and subsequent periods. Forward-looking statements are typically identified by the words "believe", "expect", "anticipate", "intend", "estimate" and other similar expressions or future or conditional verbs such as "will", "should", "would" and "could". By their nature, these statements require us to make assumptions and are subject to inherent risks and uncertainties that may be general or specific. A variety of factors, many of which are beyond our control, affect our operations, performance and results and could cause actual results to differ materially from the expectations expressed in any of our forward-looking statements. These factors include: credit, market, liquidity, strategic, operational, reputation and legal, regulatory and environmental risk; the effectiveness and adequacy of our risk management models and processes; legislative or regulatory developments in the jurisdictions where we operate; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions; the resolution of legal proceedings and related matters; the effect of changes to accounting standards, rules and interpretations; changes in our estimates of reserves and allowances; changes in tax laws; political conditions and developments; the possible effect on our business of international conflicts and the war on terror; natural disasters, public health emergencies, disruptions to public infrastructure and other catastrophic events; reliance on third parties to provide components of our business infrastructure; the accuracy and completeness of information provided to us by clients and counterparties; the failure of third parties to comply with their obligations to us and our affiliates; intensifying competition from established competitors and new entrants in the financial services industry; technological change; global capital market activity; changes in monetary and economic policy; currency value fluctuations; general economic conditions worldwide, as well as in Canada, the U.S. and other countries where we have operations; changes in market rates and prices which may adversely affect the value of financial products; our success in developing and introducing new products and services, expanding existing distribution channels, developing new distribution channels and realizing increased revenue from these channels; changes in client spending and saving habits; our ability to attract and retain key employees and executives; our ability to successfully execute our strategies and complete and integrate acquisitions and joint ventures; and our ability to anticipate and manage the risks associated with these factors. This list is not exhaustive of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. We do not undertake to update any forward-looking statement that is contained in this press release or in other communications except as required by law.

SOURCE: CIBC