CIBC Announces Fourth Quarter and Fiscal 2013 Results

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Dec 05, 2013, 05:20 ET

CIBC's 2013 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. 5, 2013 /CNW/ - CIBC (TSX: CM) (NYSE: CM) announced net income of $836 million for the fourth quarter ended October 31, 2013, compared with $852 million for the fourth quarter of 2012. Adjusted net income⁽¹⁾ of $905 million for the quarter was up from $858 million for the fourth quarter of 2012. Reported diluted earnings per share (EPS) of $2.05 and adjusted diluted EPS⁽¹⁾ of $2.22 for the fourth quarter of 2013, compared with reported diluted EPS of $2.02 and adjusted diluted EPS⁽¹⁾ of $2.04, respectively, for the same period last year.

CIBC's results for the fourth quarter of 2013 were affected by the following items of note aggregating to a negative impact of $0.17 per share:

$39 million ($37 million after-tax, or $0.09 per share) restructuring charge relating to FirstCaribbean International Bank Limited (CIBC FirstCaribbean);
$35 million ($19 million after-tax, or $0.05 per share) impairment of an equity position associated with our exited U.S. leveraged finance portfolio;
$24 million ($18 million after-tax, or $0.05 per share) expenses relating to the development and marketing of our enhanced proprietary travel rewards program and to the proposed Aeroplan transactions with Aimia Canada Inc. (Aimia) and The Toronto-Dominion Bank Group (TD) in the first quarter of 2014;
$15 million ($11 million after-tax, or $0.03 per share) gain from the structured credit run-off business; and
$7 million ($6 million after-tax, or $0.01 per share) amortization of intangible assets.

CIBC's reported net income of $836 million and adjusted net income⁽¹⁾ of $905 million for the fourth quarter of 2013 compared with reported net income of $890 million and adjusted net income⁽¹⁾ of $943 million for the third quarter ended July 31, 2013. Reported diluted EPS of $2.05 and adjusted diluted EPS⁽¹⁾ of $2.22 for the fourth quarter of 2013 compared with reported diluted EPS of $2.16 and adjusted diluted EPS⁽¹⁾ of $2.29 for the prior quarter.

For the year ended October 31, 2013, CIBC reported net income of $3.4 billion and adjusted net income⁽¹⁾ of $3.6 billion, compared with reported net income of $3.3 billion and adjusted net income⁽¹⁾ of $3.4 billion for 2012. Reported diluted EPS of $8.23 and adjusted diluted EPS⁽¹⁾ of $8.78 for 2013 compared with reported diluted EPS of $7.85 and adjusted diluted EPS⁽¹⁾ of $8.07 for 2012.

CIBC's adjusted return on common shareholders' equity⁽¹⁾ was 22.3% for the year ended October 31, 2013 and the Basel III Common Equity Tier 1 ratio was 9.4% as at October 31, 2013.

"CIBC reported another year of solid progress in 2013," says Gerry McCaughey, CIBC President and Chief Executive Officer. "Our results reflect the strength of our client-focused strategy."

"Within an environment that continues to be challenging, CIBC has the right strategy to continue to deliver value," adds McCaughey. "In 2014, we will continue to focus on cultivating deeper relationships with our clients and pursing strategic growth."

Performance against Objectives

Our key measures of performance	Our Objectives	2013 results
Adjusted Earnings per share (EPS) ⁽¹⁾ growth	Adjusted EPS growth of 5%-10% per annum, on average, over the next 3-5 years	2013: $8.78, up 9% from 2012
Adjusted Return on common shareholders' equity (ROE) ⁽¹⁾	Adjusted return on common shareholders' equity of 20% through the cycle	22.3%
Capital Strength	Basel III Common Equity Tier 1 ratio to exceed the regulatory target set by Office of the Superintendent of Financial Institutions (OSFI)	Basel III Common Equity Tier 1 ratio of 9.4%
Business mix	75% Retail ⁽²⁾/25% wholesale (as measured by economic capital ⁽¹⁾)	77%/23% Retail ⁽²⁾/wholesale
Risk ⁽³⁾	Maintain provision for credit losses as a percentage of average loans and acceptances (loan loss ratio) between 45 and 60 basis points through the business cycle	44 basis points
Productivity	Achieve a median ranking within our industry group, in terms of adjusted non-interest expenses to total revenue (adjusted efficiency ratio) ⁽¹⁾	56.2%
Adjusted Dividend payout ratio ⁽¹⁾	40%-50% (common share dividends as a percentage of adjusted net income after preferred share dividends and premium on redemptions)	43.2%
Total shareholder return	Outperform the S&P/TSX Composite Banks Index (dividends reinvested) on a rolling five-year basis	Five years ended October 31, 2013: CIBC - 109.3% Index - 99.0%

Core business performance
Retail and Business Banking reported net income of $2.5 billion in 2013, up from $2.3 billion in 2012, as a result of wider spreads, volume growth across most retail products and higher fees.

Retail and Business Banking continued to make strategic investments throughout 2013 in areas that are enhancing the relationship we have with, and the value we provide to, our clients:

As part of CIBC's commitment to provide our clients with the market leading travel rewards credit card, CIBC launched an enhanced Aventura card and signed a 10-year extension with Aimia to continue to offer our clients Aeroplan credit cards. Combined, our clients have the largest offering of choice in the Canadian marketplace.
We became the first and remain the only bank to launch a new mobile payments App for clients, the CIBC Mobile Payment App.
We introduced the CIBC Mobile Business App, offering online cash management solutions for our business banking clients.
More than one million active clients are now using our award-winning mobile banking App to perform many of their everyday banking transactions from their mobile device.
We launched the CIBC Everyday Banking Bundle and the CIBC Premium Banking Bundle to make it easier for our clients to bank with us and reward them for doing so.
The ongoing conversion of our FirstLine mortgage clients into CIBC-brand mortgages continues to exceed targets, and supports our focus on client retention by introducing these clients to the benefits of a broader banking relationship with CIBC.

Today, CIBC and the Greater Toronto Airport Authority (GTAA) announced an innovative multi-year partnership that establishes CIBC as the exclusive financial services provider of full service banking for the 35 million people who pass through Toronto Pearson Airport each year.

"We made good progress against our priorities in 2013 of building deeper relationships with our clients, enhancing our sales and service capabilities, and acquiring and retaining clients," says David Williamson, Group Head, Retail and Business Banking. "As a result, we accelerated revenue, increased our margins and improved our client satisfaction scores."

Wealth Management reported net income of $388 million in 2013, compared with $339 million in 2012. Adjusting for items of note⁽¹⁾, net income of $392 million was up $87 million from $305 million in 2012. Net income increased as a result of higher revenue across all businesses.

Wealth Management strengthened its business on many fronts in 2013 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:

Announcement of our intent to acquire Atlantic Trust, a U.S. private wealth management firm, as part of our strategic plan to grow our North American wealth management business. We are on track with our transition plans and expect to complete this acquisition in the first quarter of fiscal 2014 following regulatory approvals.
We achieved our 19^th consecutive quarter of positive retail net sales of long-term mutual funds and had record long-term net sales of $4.8 billion.
CIBC Private Wealth Management and CIBC Wood Gundy successfully attracted new clients and assets to the Wealth Management platform at an accelerated rate during the second half of the year.
We made significant enhancements to the CIBC Investor's Edge platform, with the launch of a new online interface to provide clients with additional tools and functionality to monitor their investment portfolios, including a new Exchange Traded Funds (ETF) Centre and enhanced research centre that includes equity reports from Morningstar and Thomson-Reuters.
CIBC Wood Gundy and CIBC Investor's Edge continue to strengthen client satisfaction indicators.

"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 uncertainty in global markets, Wholesale Banking delivered strong results, reporting net income of $716 million, compared with $613 million in 2012. Adjusting for items of note⁽¹⁾, net income of $834 million in 2013 compared with net income of $680 million in 2012.

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 sound risk management, and for being a well-managed firm known for excellence in everything we do. During 2013, Wholesale Banking:

Ranked as #1 in Canadian equity markets in the annual Brendan Wood International survey by institutional investors who recognized the leadership demonstrated by CIBC's equity research, sales and trading teams and investor conferences.
Named top forecaster of Australian and Canadian dollars by Bloomberg for the four quarters ended June 30, 2013.
Ranked #1 in Canadian equity trading by volume, value and number of trades by TSX and ATS Market Share Report, 2009-present.
Led or co-led several key transactions, most notably Choice Properties Real Estate Investment Trust's $460 million IPO of Trust Units, $600 million inaugural bond offering and $500 million senior unsecured credit facility.

Subsequent to the quarter-end, on November 29, 2013, CIBC sold an equity investment that was previously acquired through a loan restructuring in CIBC's exited European leveraged finance business. The transaction will result in an after-tax gain, net of associated expenses, of approximately $50 million in the first quarter of 2014.

"Wholesale Banking delivered high quality and consistent performance in 2013, despite continued challenging market conditions globally," says Richard Nesbitt, Chief Operating Officer.

While investing in our core Wholesale Banking strategy, CIBC continued to actively manage and reduce its structured credit run-off portfolio. In 2013, notional exposures declined by $5.5 billion as a result of sales and terminations of positions, as well as normal amortization.

(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)	Going forward, our target will be to maintain a loan loss ratio of less than 60 basis points.

Strong fundamentals
While investing in its core businesses, CIBC has continued to strengthen its key fundamentals. In 2013, CIBC maintained its capital strength, competitive productivity and sound risk management:

CIBC's capital ratios are strong, including Basel III Common equity Tier 1 ratio of 9.4%, and Tier 1 and Total capital ratios of 11.6% and 14.6% at October 31, 2013;
Credit quality has remained stable, with CIBC's loan loss ratio of 44 basis points compared with 53 basis points in 2012; and
Market risk, as measured by average Value-at-Risk, was $4.6 million in 2013 compared with $4.9 million in 2012.

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 2013:

CIBC continued its long-term commitment to supporting breast cancer initiatives. The 2013 Canadian Breast Cancer Foundation CIBC Run for the Cure raised $27 million, including more than $3 million contributed by Team CIBC through pledges, fundraising activities and donations to the CIBC Pink Collection and close to $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 90 communities across Ontario.
CIBC marked its fourth 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 $274,000 to support kids with cancer and their families through the Sarah Cook Fund of the Cedars Cancer Institute.
In support of Canada's para athletes, CIBC marked the two-year countdown to the 2015 TORONTO Parapan Am Games and announced its multi-year commitment as the Official Banking Partner of the Canadian Paralympic Committee.

During the quarter, CIBC was ranked among the top 10 Safest Banks in North America by Global Finance magazine. CIBC was recognized by Mediacorp as one of Canada's Top 100 Employers for a second consecutive year and as one of Canada's Top Employers for Young People. CIBC was also once again named a constituent of the following widely regarded indices:

Dow Jones Sustainability World Index for a 12th consecutive year, and in the Dow Jones Sustainability North American Index since its inception in 2005;
FTSE4Good Index since 2001; and
Jantzi Social Index since 2000.

"We are proud of the contributions we have made and the recognition we have received," says Mr. McCaughey. "I would like to thank our employees for the work that they do in serving our clients, supporting our communities and helping CIBC achieve business success."

Fourth quarter financial highlights

		As at or for the									As at or for the
					three months ended						twelve months ended
		2013			2013			2012			2013		2012
		Oct. 31			Jul. 31			Oct. 31		⁽¹⁾	Oct. 31		Oct. 31			⁽¹⁾
Financial results ($ millions)
Net interest income		$	1,894		$	1,883		$	1,848		$	7,455		$	7,326
Non-interest income			1,306			1,380			1,311			5,328			5,223
Total revenue			3,200			3,263			3,159			12,783			12,549
Provision for credit losses			271			320			328			1,121			1,291
Non-interest expenses			1,932			1,874			1,829			7,614			7,215
Income before taxes			997			1,069			1,002			4,048			4,043
Income taxes			161			179			150			648			704
Net income		$	836		$	890		$	852		$	3,400		$	3,339
Net income (loss) attributable to non-controlling interests			(7)			-			2			(3)			8
Preferred shareholders			24			25			29			99			158
Common shareholders			819			865			821			3,304			3,173
Net income attributable to equity shareholders		$	843		$	890		$	850		$	3,403		$	3,331
Financial measures
Reported efficiency ratio			60.4	%		57.4	%		57.9	%		59.6	%		57.5	%
Adjusted efficiency ratio ⁽²⁾			56.4	%		55.6	%		56.5	%		56.2	%		55.8	%
Loan loss ratio			0.41	%		0.45	%		0.53	%		0.44	%		0.53	%
Reported return on common shareholders' equity			19.9	%		21.6	%		21.7	%		20.9	%		22.0	%
Adjusted return on common shareholders' equity ⁽²⁾			21.5	%		22.9	%		21.8	%		22.3	%		22.6	%
Net interest margin			1.85	%		1.85	%		1.83	%		1.85	%		1.84	%
Net interest margin on average interest-earning assets			2.10	%		2.12	%		2.14	%		2.12	%		2.15	%
Return on average assets			0.82	%		0.88	%		0.85	%		0.84	%		0.84	%
Return on average interest-earning assets			0.93	%		1.01	%		0.99	%		0.97	%		0.98	%
Total shareholder return			15.15	%		(2.04)	%		8.42	%		18.41	%		9.82	%
Reported effective tax rate			16.2	%		16.7	%		15.0	%		16.0	%		17.4	%
Adjusted effective tax rate⁽²⁾			16.8	%		17.2	%		16.2	%		16.7	%		18.1	%
Common share information
Per share ($)	- basic earnings	$	2.05		$	2.16		$	2.02		$	8.24		$	7.86
	- reported diluted earnings		2.05			2.16			2.02			8.23			7.85
	- adjusted diluted earnings ⁽²⁾		2.22			2.29			2.04			8.78			8.07
	- dividends		0.96			0.96			0.94			3.80			3.64
	- book value		41.44			40.11			37.48			41.44			37.48
Share price ($)	- high		88.70			80.64			78.56			88.70			78.56
	- low		76.91			74.10			72.97			74.10			68.43
	- closing		88.70			77.93			78.56			88.70			78.56
Shares outstanding (thousands)	- weighted-average basic		399,819			399,952			405,404			400,880			403,685
	- weighted-average diluted		400,255			400,258			405,844			401,261			404,145
	- end of period		399,250			399,992			404,485			399,250			404,485
Market capitalization ($ millions)		$	35,413		$	31,171		$	31,776		$	35,413		$	31,776
Value measures
Dividend yield (based on closing share price)			4.3	%		4.9	%		4.8	%		4.3	%		4.6	%
Reported dividend payout ratio			46.9	%		44.4	%		46.4	%		46.1	%		46.3	%
Adjusted dividend payout ratio ⁽²⁾			43.2	%		41.8	%		46.1	%		43.2	%		45.1	%
Market value to book value ratio			2.14			1.94			2.10			2.14			2.10
On- and off-balance sheet information ($ millions)
Cash, deposits with banks and securities		$	78,361		$	76,451		$	70,061		$	78,361		$	70,061
Loans and acceptances, net of allowance			256,374			254,221			252,732			256,374			252,732
Total assets			398,389			397,547			393,385			398,389			393,385
Deposits			313,528			311,490			300,344			313,528			300,344
Common shareholders' equity			16,546			16,044			15,160			16,546			15,160
Average assets			405,634			403,081			401,092			403,946			397,382
Average interest-earning assets			357,749			351,753			343,840			351,677			341,053
Average common shareholders' equity			16,355			15,921			15,077			15,807			14,442
Assets under administration			1,513,126			1,460,311			1,445,870			1,513,126			1,445,870
Balance sheet quality measures
Basel III - Transitional basis
Risk-weighted assets (RWA) ($ millions)		$	151,338		$	152,176			n/a		$	151,338			n/a
Common Equity Tier 1 (CET1) ratio			11.0	%		10.7	%		n/a			11.0	%		n/a
Tier 1 capital ratio			11.8	%		11.4	%		n/a			11.8	%		n/a
Total capital ratio			14.3	%		14.0	%		n/a			14.3	%		n/a
Basel III - All-in basis
RWA ($ millions)		$	136,747		$	133,994			n/a		$	136,747			n/a
CET1 ratio			9.4	%		9.3	%		n/a			9.4	%		n/a
Tier 1 capital ratio			11.6	%		11.6	%		n/a			11.6	%		n/a
Total capital ratio			14.6	%		14.7	%		n/a			14.6	%		n/a
Basel II
RWA ($ millions)			n/a			n/a		$	115,229			n/a		$	115,229
Tier 1 capital ratio			n/a			n/a			13.8	%		n/a			13.8	%
Total capital ratio			n/a			n/a			17.3	%		n/a			17.3	%
Other information
Retail / wholesale ratio			77 % / 23	%		77 % / 23	%		77 % / 23	%		77 % / 23	%		77 % / 23	%
Full-time equivalent employees			43,039			43,516			42,595			43,039			42,595

(1)

Certain information has been reclassified to conform to the presentation adopted in the current period.

(2)

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

n/a

Not applicable.

Review of Retail and Business Banking fourth quarter results


			2013			2013			2012
$ millions, for the three months ended			Oct. 31			Jul. 31			Oct. 31
Revenue
	Personal banking	$	1,695		$	1,672		$	1,616
	Business banking		384			384			378
	Other		25			58			42
Total revenue			2,104			2,114			2,036
Provision for credit losses			215			241			255
Non-interest expenses			1,085			1,033			1,030
Income before taxes			804			840			751
Income taxes			194			202			182
Net income		$	610		$	638		$	569
Net income attributable to:
	Equity shareholders (a)	$	610		$	638		$	569
Efficiency ratio			51.5	%		48.9	%		50.6	%
Return on equity ⁽¹⁾			55.3	%		60.5	%		57.1	%
Charge for economic capital ⁽¹⁾ (b)		$	(137)		$	(132)		$	(126)
Economic profit ⁽¹⁾ (a+b)		$	473		$	506		$	443
Full-time equivalent employees			21,781			22,186			21,857

(1)

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

Net income was $610 million, up $41 million from the fourth quarter of 2012. Adjusted net income⁽¹⁾ was $629 million, up $58 million from the fourth quarter of 2012.

Revenue of $2,104 million was up $68 million from the fourth quarter of 2012. Excluding the impact of Treasury allocations, revenue was up $75 million from the fourth quarter of 2012. Personal banking and business banking revenue increased primarily due to volume growth across most products and higher fees, partially offset by lower spreads in business deposits. Other revenue was down primarily due to lower treasury allocations and lower revenue in our exited FirstLine mortgage broker business.

Provision for credit losses of $215 million was down $40 million from the fourth quarter of 2012, primarily due to lower write-offs in cards, partially offset by higher losses in commercial banking.

Non-interest expenses of $1,085 million were up $55 million from the fourth quarter of 2012, mainly due to higher employee-related compensation relating to an increased number of client-facing employees, and expenses relating to the development and marketing of our enhanced proprietary travel rewards program and to the proposed Aeroplan transactions with Aimia and TD in the first quarter of 2014.

Income tax expense of $194 million was up $12 million from the fourth quarter of 2012 due to higher income.

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

Review of Wealth Management fourth quarter results



			2013			2013			2012
$ millions, for the three months ended			Oct. 31			Jul. 31			Oct. 31
Revenue
	Retail brokerage	$	272		$	267		$	256
	Asset management		165			159			138
	Private wealth management		33			32			26
Total revenue			470			458			420
Provision for credit losses			1			-			-
Non-interest expenses			334			325			308
Income before taxes			135			133			112
Income taxes			31			31			28
Net income		$	104		$	102		$	84
Net income attributable to:
	Equity shareholders (a)	$	104		$	102		$	84
Efficiency ratio			71.2	%		71.0	%		73.4	%
Return on equity ⁽¹⁾			21.6	%		21.4	%		18.9	%
Charge for economic capital ⁽¹⁾ (b)		$	(59)		$	(58)		$	(55)
Economic profit ⁽¹⁾ (a+b)		$	45		$	44		$	29
Full-time equivalent employees			3,840			3,837			3,783

(1)

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

Net Income for the quarter was $104 million, up $20 million from the fourth quarter of 2012.

Revenue of $470 million was up $50 million from the fourth quarter of 2012, primarily due to higher average client assets under management driven by market appreciation and higher net sales of long-term mutual funds, higher contribution from our investment in American Century Investments, and higher fee-based revenue.

Non-interest expenses of $334 million were up $26 million from the fourth quarter of 2012, primarily due to higher performance-based compensation.

Review of Wholesale Banking fourth quarter results

			2013			2013			2012
$ millions, for the three months ended			Oct. 31			Jul. 31			Oct. 31
Revenue
	Capital markets	$	279		$	349		$	295
	Corporate and investment banking		249			243			206
	Other		(6)			4			74
Total revenue ⁽¹⁾			522			596			575
Provision for (reversal of) credit losses			(1)			14			66
Non-interest expenses			272			303			263
Income before taxes			251			279			246
Income taxes ⁽¹⁾			41			62			53
Net income		$	210		$	217		$	193
Net income attributable to:
	Equity shareholders (a)	$	210		$	217		$	193
Efficiency ratio			52.1	%		50.9	%		45.7	%
Return on equity ⁽²⁾			36.1	%		38.7	%		35.0	%
Charge for economic capital ⁽²⁾ (b)		$	(72)		$	(70)		$	(70)
Economic profit ⁽²⁾ (a+b)		$	138		$	147		$	123
Full-time equivalent employees			1,273			1,302			1,268

(1)	Revenue and income taxes are reported on a taxable equivalent basis (TEB). Accordingly, revenue and income taxes include a TEB adjustment of $78 million for the quarter ended October 31, 2013 (July 31, 2013: $90 million; October 31, 2012: $92 million).
(2)	For additional information, see the "Non-GAAP measures" section.

Net income for the quarter was $210 million, compared with net income of $217 million for the third quarter of 2013. Adjusted net income⁽¹⁾ for the quarter was $218 million, compared with $223 million for the prior quarter.

Revenue of $522 million was down $74 million from the third quarter, primarily due lower Capital Markets revenue and a loss related to impairment of an equity position associated with our exited U.S. leveraged finance portfolio, partially offset by higher revenue in U.S. Real Estate Finance and the Structured Credit Run-Off business.

Net reversal of credit losses of $1 million compared with a provision for credit losses of $14 million from the third quarter, mainly due to losses in our U.S. Leveraged Finance portfolio in the prior quarter.

Non-interest expenses of $272 million were down $31 million from the third quarter, primarily due to lower performance-based compensation.

Income tax expense of $41 million was down $21 million from the third quarter, due to lower income and a decrease in the relative proportion of income earned in higher tax jurisdictions.

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

Review of Corporate and Other fourth quarter results

		2013		2013		2012
$ millions, for the three months ended		Oct. 31		Jul. 31		Oct. 31
Revenue
	International banking	$	148	$	142	$	149
	Other		(44)		(47)		(21)
Total revenue ⁽¹⁾			104		95		128
Provision for credit losses			56		65		7
Non-interest expenses			241		213		228
Loss before taxes			(193)		(183)		(107)
Income taxes ⁽¹⁾			(105)		(116)		(113)
Net income (loss)		$	(88)	$	(67)	$	6
Net income (loss) attributable to:
	Non-controlling interests	$	(7)	$	-	$	2
	Equity shareholders		(81)		(67)		4
Full-time equivalent employees			16,145		16,191		15,687

(1)

TEB adjusted. See footnote 1 in "Wholesale Banking" section for additional details.

Net income was down $94 million from the fourth quarter of 2012 as a result of lower Other revenue, a higher provision for credit losses and higher non-interest expenses.

Revenue was down $24 million from the fourth quarter of 2012 mainly due to lower unallocated treasury revenue.

Provision for credit losses was up $49 million from the fourth quarter of 2012 primarily due to higher losses in CIBC FirstCaribbean.

Non-interest expenses were up $13 million from the fourth quarter of 2012 mainly due to a restructuring charge relating to CIBC FirstCaribbean.

Income tax benefit was down $8 million from the fourth quarter of 2012 mainly due to a lower TEB adjustment.

Consolidated balance sheet

$ millions, as at October 31		2013		2012
ASSETS
Cash and non-interest-bearing deposits with banks	$	2,211	$	2,613
Interest-bearing deposits with banks		4,168		2,114
Securities
Trading		44,068		40,330
Available-for-sale (AFS)		27,627		24,700
Designated at fair value (FVO)		287		304
		71,982		65,334
Cash collateral on securities borrowed		3,417		3,311
Securities purchased under resale agreements		25,311		25,163
Loans
Residential mortgages		150,938		150,056
Personal		34,441		35,323
Credit card		14,772		15,153
Business and government		48,201		43,624
Allowance for credit losses		(1,698)		(1,860)
		246,654		242,296
Other
Derivative instruments		19,947		27,039
Customers' liability under acceptances		9,720		10,436
Land, buildings and equipment		1,719		1,683
Goodwill		1,733		1,701
Software and other intangible assets		756		656
Investments in equity-accounted associates and joint ventures		1,713		1,635
Other assets		9,058		9,404
		44,646		52,554
	$	398,389	$	393,385
LIABILITIES AND EQUITY
Deposits
Personal	$	125,034	$	118,153
Business and government		133,100		125,055
Bank		5,592		4,723
Secured borrowings		49,802		52,413
		313,528		300,344
Obligations related to securities sold short		13,327		13,035
Cash collateral on securities lent		2,099		1,593
Capital Trust securities		1,638		1,678
Obligations related to securities sold under repurchase agreements		4,887		6,631
Other
Derivative instruments		19,724		27,091
Acceptances		9,721		10,481
Other liabilities		10,808		10,671
		40,253		48,243
Subordinated indebtedness		4,228		4,823
Equity
Preferred shares		1,706		1,706
Common shares		7,753		7,769
Contributed surplus		82		85
Retained earnings		8,402		7,042
Accumulated other comprehensive income (AOCI)		309		264
Total shareholders' equity		18,252		16,866
Non-controlling interests		177		172
Total equity		18,429		17,038
	$	398,389	$	393,385

Consolidated statement of income


		For the three							For the twelve
		months ended							months ended
		2013		2013		2012			2013		2012
$ millions, except as noted		Oct. 31		Jul. 31		Oct. 31		⁽¹⁾	Oct. 31		Oct. 31		⁽¹⁾
Interest income
Loans		$	2,453	$	2,479	$	2,494		$	9,795	$	10,020
Securities			407		412		377			1,631		1,522
Securities borrowed or purchased under resale agreements			91		82		87			347		323
Deposits with banks			8		9		11			38		42
			2,959		2,982		2,969			11,811		11,907
Interest expense
Deposits			867		904		895			3,541		3,630
Securities sold short			84		85		84			334		333
Securities lent or sold under repurchase agreements			25		20		30			102		156
Subordinated indebtedness			45		46		52			193		208
Capital Trust securities			35		31		36			136		144
Other			9		13		24			50		110
			1,065		1,099		1,121			4,356		4,581
Net interest income			1,894		1,883		1,848			7,455		7,326
Non-interest income
Underwriting and advisory fees			88		98		118			389		438
Deposit and payment fees			215		223		194			824		775
Credit fees			117		118		111			462		418
Card fees			150		151		152			599		619
Investment management and custodial fees			126		119		110			474		424
Mutual fund fees			267		258		230			1,014		880
Insurance fees, net of claims			93		94		92			358		335
Commissions on securities transactions			98		106		98			412		402
Trading income (loss)			(9)		24		(17)			28		53
AFS securities gains, net			9		48		61			212		264
FVO gains (losses), net			6		2		(4)			5		(32)
Foreign exchange other than trading			5		18		9			44		91
Income from equity-accounted associates and joint ventures			45		40		44			139		160
Other			96		81		113			368		396
			1,306		1,380		1,311			5,328		5,223
Total revenue			3,200		3,263		3,159			12,783		12,549
Provision for credit losses			271		320		328			1,121		1,291
Non-interest expenses
Employee compensation and benefits			1,055		1,079		1,001			4,253		4,044
Occupancy costs			181		171		182			700		697
Computer, software and office equipment			285		269		266			1,052		1,022
Communications			75		75		74			307		304
Advertising and business development			79		59		69			236		233
Professional fees			59		45		45			179		174
Business and capital taxes			16		15		12			62		50
Other			182		161		180			825		691
			1,932		1,874		1,829			7,614		7,215
Income before income taxes			997		1,069		1,002			4,048		4,043
Income taxes			161		179		150			648		704
Net income		$	836	$	890	$	852		$	3,400	$	3,339
Net income (loss) attributable to non-controlling interests		$	(7)	$	-	$	2		$	(3)	$	8
	Preferred shareholders	$	24	$	25	$	29		$	99	$	158
	Common shareholders		819		865		821			3,304		3,173
Net income attributable to equity shareholders		$	843	$	890	$	850		$	3,403	$	3,331
Earnings per share (in dollars)
	Basic	$	2.05	$	2.16	$	2.02		$	8.24	$	7.86
	Diluted		2.05		2.16		2.02			8.23		7.85
Dividends per common share (in dollars)			0.96		0.96		0.94			3.80		3.64

(1)

Certain information has been reclassified to conform to the presentation adopted in the current period.

Consolidated statement of comprehensive income


			For the three						For the twelve
			months ended						months ended
				2013		2013		2012		2013		2012
$ millions				Oct. 31		Jul. 31		Oct. 31		Oct. 31		Oct. 31
Net income			$	836	$	890	$	852	$	3,400	$	3,339
Other comprehensive income (OCI), net of tax, that is subject to subsequent
	reclassification to net income
	Net foreign currency translation adjustments
	Net gains (losses) on investments in foreign operations			143		165		36		369		65
	Net (gains) losses on investments in foreign operations reclassified to net income			-		-		-		-		1
	Net gains (losses) on hedges of investments in foreign operations			(93)		(102)		(50)		(237)		(65)
	Net (gains) losses on hedges of investments in foreign operations reclassified to
		net income		-		-		-		-		(1)
				50		63		(14)		132		-
	Net change in AFS securities
	Net gains (losses) on AFS securities			74		(114)		36		57		208
	Net (gains) losses on AFS securities reclassified to net income			(7)		(36)		(48)		(155)		(196)
				67		(150)		(12)		(98)		12
	Net change in cash flow hedges
	Net gains (losses) on derivatives designated as cash flow hedges			60		7		21		62		20
	Net (gains) losses on derivatives designated as cash flow hedges reclassified to
		net income		(47)		(11)		(15)		(51)		(13)
				13		(4)		6		11		7
Total OCI				130		(91)		(20)		45		19
Comprehensive income			$	966	$	799	$	832	$	3,445	$	3,358
Comprehensive income (loss) attributable to non-controlling interests			$	(7)	$	-	$	2	$	(3)	$	8
	Preferred shareholders		$	24	$	25	$	29	$	99	$	158
	Common shareholders			949		774		801		3,349		3,192
Comprehensive income attributable to equity shareholders			$	973	$	799	$	830	$	3,448	$	3,350


			For the three						For the twelve
			months ended						months ended
				2013		2013		2012		2013		2012
$ 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)	$	(12)	$	(9)	$	(26)	$	(10)
	Net gains (losses) on hedges of investments in foreign operations			19		17		7		44		11
				10		5		(2)		18		1
	Net change in AFS securities
	Net gains (losses) on AFS securities			(14)		(6)		(7)		(51)		(49)
	Net (gains) losses on AFS securities reclassified to net income			2		13		18		57		65
				(12)		7		11		6		16
	Net change in cash flow hedges
	Net gains (losses) on derivatives designated as cash flow hedges			(22)		(2)		(4)		(22)		(4)
	Net (gains) losses on derivatives designated as cash flow hedges reclassified to
		net income		17		4		5		18		4
				(5)		2		1		(4)		-
			$	(7)	$	14	$	10	$	20	$	17

Consolidated statement of changes in equity


		For the three						For the twelve
		months ended						months ended
			2013		2013		2012		2013		2012
$ millions			Oct. 31		Jul. 31		Oct. 31		Oct. 31		Oct. 31
Preferred shares
Balance at beginning of period		$	1,706	$	1,706	$	2,006	$	1,706	$	2,756
Redemption of preferred shares			-		-		(300)		-		(1,050)
Balance at end of period		$	1,706	$	1,706	$	1,706	$	1,706	$	1,706
Common shares
Balance at beginning of period		$	7,757	$	7,743	$	7,744	$	7,769	$	7,376
Issue of common shares			14		15		64		114		430
Purchase of common shares for cancellation			(18)		-		(39)		(130)		(39)
Treasury shares			-		(1)		-		-		2
Balance at end of period		$	7,753	$	7,757	$	7,769	$	7,753	$	7,769
Contributed surplus
Balance at beginning of period		$	82	$	80	$	87	$	85	$	93
Stock option expense			1		2		1		5		7
Stock options exercised			(2)		-		(3)		(9)		(15)
Other			1		-		-		1		-
Balance at end of period		$	82	$	82	$	85	$	82	$	85
Retained earnings
Balance at beginning of period		$	8,026	$	7,545	$	6,719	$	7,042	$	5,457
Net income attributable to equity shareholders			843		890		850		3,403		3,331
Dividends
	Preferred		(24)		(25)		(29)		(99)		(128)
	Common		(384)		(384)		(381)		(1,523)		(1,470)
Premium on redemption of preferred shares			-		-		-		-		(30)
Premium on purchase of common shares for cancellation			(59)		-		(118)		(422)		(118)
Other			-		-		1		1		-
Balance at end of period		$	8,402	$	8,026	$	7,042	$	8,402	$	7,042
AOCI, net of tax
	Net foreign currency translation adjustments
	Balance at beginning of period	$	(6)	$	(69)	$	(74)	$	(88)	$	(88)
	Net change in foreign currency translation adjustments		50		63		(14)		132		-
	Balance at end of period	$	44	$	(6)	$	(88)	$	44	$	(88)
	Net gains (losses) on AFS securities
	Balance at beginning of period	$	185	$	335	$	362	$	350	$	338
	Net change in AFS securities		67		(150)		(12)		(98)		12
	Balance at end of period	$	252	$	185	$	350	$	252	$	350
	Net gains (losses) on cash flow hedges
	Balance at beginning of period	$	-	$	4	$	(4)	$	2	$	(5)
	Net change in cash flow hedges		13		(4)		6		11		7
	Balance at end of period	$	13	$	-	$	2	$	13	$	2
Total AOCI, net of tax		$	309	$	179	$	264	$	309	$	264
Non-controlling interests
Balance at beginning of period		$	168	$	168	$	167	$	172	$	164
Net income (loss) attributable to non-controlling interests			(7)		-		2		(3)		8
Dividends			-		(2)		-		(4)		(5)
Other			16		2		3		12		5
Balance at end of period		$	177	$	168	$	172	$	177	$	172
Equity at end of period		$	18,429	$	17,918	$	17,038	$	18,429	$	17,038

Consolidated statement of cash flows


			For the three							For the twelve
			months ended							months ended
				2013		2013			2012		2013		2012
$ millions				Oct. 31		Jul. 31	⁽¹⁾		Oct. 31		Oct. 31		Oct. 31
Cash flows provided by (used in) operating activities
Net income			$	836	$	890		$	852	$	3,400	$	3,339
Adjustments to reconcile net income to cash flows provided by (used in) operating activities:
	Provision for credit losses			271		320			328		1,121		1,291
	Amortization and impairment⁽²⁾			95		91			83		354		357
	Stock option expense			1		2			1		5		7
	Deferred income taxes			(14)		4			15		71		167
	AFS securities gains, net			(9)		(48)			(61)		(212)		(264)
	Net (losses (gains) on disposal of land, buildings and equipment			1		-			(14)		(2)		(17)
	Other non-cash items, net			(128)		(93)			(102)		(336)		91
	Net changes in operating assets and liabilities

		Interest-bearing deposits with banks		1,734		(1,538)			4,366		(2,054)		1,547

		Loans, net of repayments		(3,393)		(1,399)			854		(5,889)		(5,023)
		Deposits, net of withdrawals		1,887		4,630			(4,592)		13,459		11,339
		Obligations related to securities sold short		76		(315)			1,091		292		2,719
		Accrued interest receivable		(51)		58			(81)		44		(22)
		Accrued interest payable		260		(276)			279		(147)		(95)
		Derivative assets		644		4,701			1,721		6,917		146

		Derivative liabilities		(636)		(4,570)			(1,986)		(7,241)		(54)
		Trading securities		(1,182)		2,920			(1,183)		(3,738)		(7,617)
		FVO securities		(1)		22			20		17		160
		Other FVO assets and liabilities		69		66			(95)		349		(639)
		Current income taxes		29		(24)			(22)		(532)		(749)
		Cash collateral on securities lent		399		119			(691)		506		(1,257)
		Obligations related to securities sold under repurchase agreements		(1,461)		646			(1,896)		(1,744)		(1,933)
		Cash collateral on securities borrowed		1,001		(711)			679		(106)		(1,473)

		Securities purchased under resale agreements		1,768		(4,338)			3,842		(186)		516
		Other, net		747		(604)			(263)		838		(916)
				2,943		553			3,145		5,186		1,620
Cash flows provided by (used in) financing activities
Redemption/repurchase of subordinated indebtedness				-		(550)			-		(561)		(272)
Redemption of preferred shares				-		-			(300)		-		(1,080)
Issue of common shares for cash				12		15			61		105		415
Purchase of common shares for cancellation				(77)		-			(157)		(552)		(157)
Net proceeds from treasury shares				-		(1)			-		-		2
Dividends paid				(408)		(409)			(410)		(1,622)		(1,598)
				(473)		(945)			(806)		(2,630)		(2,690)
Cash flows provided by (used in) investing activities

Purchase of AFS securities				(7,821)		(6,894)			(7,691)		(27,451)		(38,537)
Proceeds from sale of AFS securities				2,674		4,408			3,608		14,094		23,815
Proceeds from maturity of AFS securities				2,516		2,780			2,147		10,550		17,421
Net cash used in acquisitions				-		-			(30)		-		(235)
Net cash provided by dispositions				3		5			42		49		42
Net purchase of land, buildings and equipment				(110)		(52)			(117)		(248)		(309)
				(2,738)		247			(2,041)		(3,006)		2,197
Effect of exchange rate changes on cash and non-interest-bearing deposits with banks				17		21			(4)		48		5
Net increase (decrease) in cash and non-interest-bearing deposits with banks
during period				(251)		(124)			294		(402)		1,132
Cash and non-interest-bearing deposits with banks at beginning of period				2,462		2,586			2,319		2,613		1,481
Cash and non-interest-bearing deposits with banks at end of period			$	2,211	$	2,462		$	2,613	$	2,211	$	2,613
Cash interest paid			$	805	$	1,375		$	842	$	4,503	$	4,676
Cash income taxes paid				146		199			157		1,109		1,286
Cash interest and dividends received				2,908		3,040			3,056		11,855		12,053

(1)

Certain amounts have been reclassified to conform to the presentation adopted in the current period.

(2)

Comprises amortization and impairment of buildings, furniture, equipment, leasehold improvements, and software and other intangible assets.

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 measures useful in analyzing financial performance. For a more detailed discussion, see the "Non-GAAP measures" section of CIBC's 2013 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 2013 Annual Report.

			2013			2013			2012
$ millions, as at or for three months ended			Oct. 31			Jul. 31			Oct. 31
Reported and adjusted diluted EPS
Reported net income attributable to diluted common shareholders	A	$	819		$	865		$	821
After-tax impact of items of note			69			53			6
Adjusted net income attributable to diluted common shareholders⁽¹⁾	B	$	888		$	918		$	827
Diluted weighted-average common shares outstanding (thousands)	C		400,255			400,258			405,844
Reported diluted EPS ($)	A/C	$	2.05		$	2.16		$	2.02
Adjusted diluted EPS ($) ⁽¹⁾	B/C		2.22			2.29			2.04
Reported and adjusted efficiency ratio
Reported total revenue	D	$	3,200		$	3,263		$	3,159
Pre-tax impact of items of note			20			7			(52)
TEB			78			90			92
Adjusted total revenue ⁽¹⁾	E	$	3,298		$	3,360		$	3,199
Reported non-interest expenses	F	$	1,932		$	1,874		$	1,829
Pre-tax impact of items of note			(70)			(6)			(21)
Adjusted non-interest expenses ⁽¹⁾	G	$	1,862		$	1,868		$	1,808
Reported efficiency ratio	F/D		60.4	%		57.4	%		57.9	%
Adjusted efficiency ratio ⁽¹⁾	G/E		56.4	%		55.6	%		56.5	%
Reported and adjusted dividend payout ratio
Reported net income attributable to common shareholders	H	$	819		$	865		$	821
After-tax impact of items of note			69			53			6
Adjusted net income attributable to common shareholders⁽¹⁾	I	$	888		$	918		$	827
Dividends paid to common shareholders	J	$	384		$	384		$	381
Reported dividend payout ratio	J/H		46.9	%		44.4	%		46.4	%
Adjusted dividend payout ratio ⁽¹⁾	J/I		43.2	%		41.8	%		46.1	%
Reported and adjusted return on common shareholders' equity
Average common shareholders' equity	L	$	16,355		$	15,921		$	15,077
Reported return on common shareholders' equity (%)	I / L		19.9	%		21.6	%		21.7	%
Adjusted return on common shareholders' equity (%) ⁽¹⁾	J / L		21.5	%		22.9	%		21.8	%
Reported and adjusted effective tax
Reported income before income taxes	M	$	997		$	1,069		$	1,002
Pre-tax impact of items of note			90			71			22
Adjusted income before income taxes ⁽¹⁾	N	$	1,087		$	1,140		$	1,024
Reported income taxes	O	$	161		$	179		$	150
Tax impact of items of note			21			18			16
Adjusted income taxes ⁽¹⁾	P	$	182		$	197		$	166
Reported effective tax rate (%)	O / M		16.2	%		16.7	%		15.0	%
Adjusted effective tax rate (%) ⁽¹⁾	P / N		16.8	%		17.2	%		16.2	%
(1) Non-GAAP measure.

		Retail and
		Business			Wealth	Wholesale		Corporate		CIBC
$ millions, for the three months ended		Banking		Management		Banking		and Other		Total
Oct. 31	Reported net income (loss)	$	610	$	104	$	210	$	(88)	$	836
2013	After-tax impact of items of note⁽¹⁾		19		2		8		40		69
	Adjusted net income (loss)⁽²⁾	$	629	$	106	$	218	$	(48)	$	905
Jul. 31	Reported net income (loss)	$	638	$	102	$	217	$	(67)	$	890
2013	After-tax impact of items of note⁽¹⁾		16		1		6		30		53
	Adjusted net income (loss)⁽²⁾	$	654	$	103	$	223	$	(37)	$	943
Oct. 31	Reported net income	$	569	$	84	$	193	$	6	$	852
2012	After-tax impact of items of note⁽¹⁾		2		-		(1)		5		6
	Adjusted net income⁽²⁾	$	571	$	84	$	192	$	11	$	858
(1) Reflects impact of items of note under "Financial results" section.
(2) 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, 2013.

_______________________________________________

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. All such statements are made pursuant to the "safe harbour" provisions of, and are intended to be forward-looking statements under, applicable Canadian and U.S. securities legislation, including the U.S. Private Securities Litigation Reform Act of 1995. 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 2014 and subsequent periods. Forward-looking statements are typically identified by the words "believe", "expect", "anticipate", "intend", "estimate", "forecast", target", "objective" 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, insurance, operational, reputation and legal, regulatory and environmental risk; the effectiveness and adequacy of our risk management models and valuation models and processes; legislative or regulatory developments in the jurisdictions where we operate, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, the Basel Committee on Banking Supervision's (BCBS) global standards for capital and liquidity reform and those relating to the payments system in Canada; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions, and interest rate and liquidity regulatory guidance; the resolution of legal and regulatory 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; potential disruptions to our information technology systems and services, including the evolving risk of cyber attack; losses incurred as a result of internal or external fraud; the accuracy and completeness of information provided to us concerning 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 and interest rate fluctuations; general economic conditions worldwide, as well as in Canada, the U.S. and other countries where we have operations, including increasing Canadian household debt levels and Europe's sovereign debt crisis; 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