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CIBC Announces Fourth Quarter and Fiscal 2016 Results
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Canada NewsWire
TORONTO, Dec. 1, 2016
| CIBC's 2016 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. 1, 2016 /CNW/ - CIBC (TSX: CM) (NYSE: CM) today announced its results for the fourth quarter and fiscal year ended October 31, 2016.
Fourth quarter highlights
- Reported net income of $931 million, compared with $778 million for the fourth quarter a year ago, and $1,441 million for the prior quarter; adjusted net income(1) of $1,041 million, compared with $952 million for the fourth quarter a year ago, and $1,072 million for the prior quarter.
- Reported diluted earnings per share (EPS) of $2.32, compared with $1.93 for the fourth quarter a year ago, and $3.61 for the prior quarter; adjusted diluted EPS(1) of $2.60, compared with $2.36 for the fourth quarter a year ago, and $2.67 for the prior quarter.
- Reported return on common shareholders' equity (ROE) of 16.8% and adjusted ROE(1) of 18.8%.
- Basel III Common Equity Tier 1 ratio on an all-in basis (CET1 ratio) of 11.3%, compared with 10.8% a year ago.
- Announced a quarterly dividend increase of three cents to $1.24 per common share.
CIBC's results for the fourth quarter of 2016 were affected by the following items of note aggregating to a negative impact of $0.28 per share:
- $134 million ($98 million after-tax, or $0.25 per share) in restructuring charges primarily relating to employee severance;
- $9 million ($7 million after-tax, or $0.02 per share) loss from the structured credit run-off business; and
- $7 million ($5 million after-tax, or $0.01 per share) amortization of intangible assets.
For the year ended October 31, 2016, CIBC reported net income of $4.3 billion and adjusted net income(1) of $4.1 billion, compared with reported net income of $3.6 billion and adjusted net income(1) of $3.8 billion for 2015.
Subsequent to year end, CIBC entered into an agreement to sell and lease back 89 retail properties located mainly in Ontario and British Columbia. The closing of the agreement is expected to occur during the first quarter of 2017 and result in an after-tax gain of $247 million that would add approximately 15 basis points to CIBC's CET1 ratio on an all-in basis.
The following table summarizes our strong performance in 2016 against our key financial measures and targets:
| Financial Measure | Target | 2016 Reported Results | 2016 Adjusted Results (1) |
| Diluted EPS growth | 5% to 10% on average, annually (2) | $10.70, up 21% from 2015 | $10.22, up 8% from 2015 |
| ROE | 18% to 20% (2) | 19.9% | 19.0% |
| Efficiency ratio | 55% by 2019 | 59.7%, an improvement of 420 | 58.0%, an improvement of 160 |
| Basel III CET1 ratio | Strong buffer to regulatory minimum | 11.3% | |
| Dividend payout ratio | Approximately 50% | 44.3% | 46.4% |
| Total shareholder return | Outperform the S&P/TSX Composite | CIBC – 68.6% Banks Index – 85.9% | |
| (1) | For additional information, see the "Non-GAAP measures" section. |
| (2) | Going forward, our medium term EPS and ROE targets are at least 5% and at least 15%, respectively. |
"In 2016, CIBC delivered record net income, industry-leading capital strength and the highest return on equity of the major North American banks," says Victor G. Dodig, CIBC President and Chief Executive Officer. "Our transformation to build a strong, innovative, relationship-oriented bank by executing on our three integrated bank-wide priorities of client focus, innovation and simplification gained momentum this year."
Core business performance
Retail and Business Banking reported net income of $2,689 million in 2016, compared with $2,530 million in 2015. Excluding items of note(1), adjusted net income was $2,664 million, up $162 million or 6% from $2,502 million in 2015.
In 2016, Retail and Business Banking continued to make progress against its objectives of enhancing the client experience and accelerating profitable revenue growth. Key highlights included:
- Delivering products that fit the lives of our clients, including the CIBC SmartTM account and the CIBC SmartTM Prepaid Travel Visa Card, and transforming our physical banking centres to emphasize relationships and advice;
- Continuing our leadership in innovation for our clients by launching Apple Pay, Digital Account Open, and the CIBC Hello HomeTM app, to meet the needs of our clients who prefer to bank through their mobile devices;
- Partnering with fintechs to simplify our processes and enhance client experience, including our recent partnership with Borrowell that provides qualified clients with a faster and easier loan process; and
- Formed a unique strategic alliance with National Australia Bank and Israel's Bank Leumi focused on delivering new and innovative ways to enhance client experience.
In November 2016, we were the first bank in Canada to bring Samsung Pay to our clients, providing them with another mobile payment option.
"We continued to build momentum in 2016 towards becoming the number one retail and business bank in Canada in client experience, and we delivered above-market growth in both lending and deposits," says David Williamson, SEVP and Group Head, Retail and Business Banking. "We will accelerate our transformation in the year ahead by maintaining our focus on deepening relationships with our clients, developing innovative products and services, and making it easier to bank when, where and how our clients want."
Wealth Management reported net income of $864 million in 2016, compared with $518 million in 2015. Excluding the gain on the sale of our investment in American Century Investments (ACI) in 2016 and other items of note(1), adjusted net income was $490 million in 2016, down $46 million or 9% from $536 million in 2015. Further adjusting for net income from ACI of $15 million and $101 million for 2016 and 2015, respectively, net income from our continuing businesses was up $40 million, or 9% from 2015.
Wealth Management made good progress in 2016 against its objectives of enhancing the client experience, driving asset growth, and simplifying and optimizing its business platform. Key highlights included:
- Aligning our Canadian private wealth management and Wood Gundy businesses under one leadership structure to elevate our high net worth client experience and better meet client needs;
- Launching several successful products including Renaissance Flexible Yield Fund, Renaissance Private Investment Program, and PPS Income Generation Portfolios to meet the changing needs of investors; and
- Reporting progress in the most recent J.D. Power Canadian Investor Satisfaction Surveys for our Investor's Edge and Wood Gundy businesses, reflecting our commitment to client relationships.
"Our Wealth Management businesses delivered solid results this year thanks to a clear focus on our clients," says Steve Geist, SEVP and Group Head, Wealth Management. "In 2017, we will continue to enhance our investment advice and solutions, with an emphasis on delivering an integrated wealth management experience to meet the complex needs of high net worth Canadian families."
Capital Markets reported net income of $1,076 million in 2016, compared with $957 million in 2015. Excluding items of note(1), adjusted net income was $1,104 million, up $139 million or 14% from $965 million in 2015.
Capital Markets provides integrated global markets products and services, investment banking advisory and execution, corporate banking services and top-ranked research to corporate, government and institutional clients around the world. During 2016, Capital Markets was:
- Financial advisor to Suncor Energy Inc. on its $7 billion acquisition of Canadian Oil Sands Limited and joint bookrunner on Suncor's $2.9 billion bought common share offering, one of the largest-ever equity bought deals in Canada;
- Financial advisor, financing co-underwriter and lead agent on related foreign exchange to Lowe's Companies Inc. on its $3.2 billion acquisition of RONA Inc.;
- Financial advisor, lead bookrunner on $525 million of subscription receipts, sole lead arranger, underwriter and bookrunner on $1.8 billion of credit facilities and sole foreign exchange provider supporting Stantec's acquisition of MWH Global Inc.;
- Exclusive financial advisor, administrative agent and joint bookrunner on $925 million in credit facilities supporting Cheung Kong Infrastructure Holdings Limited's and Power Assets Holdings Limited's acquisition of a 65% interest in midstream assets from Husky Energy Inc.; and
- Introduced CIBC Air Canada® AC ConversionTM Visa Prepaid Card, a first-of-its-kind in Canada, allowing travellers to purchase and store up to 10 currencies on a single card that can be used at retailers around the globe.
"In 2016, we launched specialized new advisory teams to add value for clients in the areas of technology and innovation, private capital and corporate finance solutions," says Harry Culham, SEVP and Group Head, Capital Markets. "We also expanded our product capabilities to help meet client needs at home and abroad, while delivering innovative financial solutions to clients across CIBC in areas such as foreign exchange and precious metals."
| (1) | For additional information, see the "Non-GAAP measures" section. |
Strong fundamentals
While investing in core businesses, CIBC has continued to strengthen key fundamentals. In 2016, CIBC maintained its capital strength, competitive productivity and sound risk management practices:
- CIBC's capital ratios were strong, with a Basel III CET1 ratio of 11.3% as noted above, and Tier 1 and Total capital ratios of 12.8% and 14.8% respectively, at October 31, 2016;
- Market risk, as measured by average Value-at-Risk, was $5.8 million in 2016 compared with $4.0 million in 2015; and
- We continued to have strong credit performance, with CIBC's loan loss ratio of 31 basis points compared with 27 basis points in 2015.
Making a difference in our Communities
CIBC is committed to investing in the social and economic development of communities across Canada. During the fourth quarter of 2016, CIBC:
- Marked 20 years of partnership with the Canadian Breast Cancer Foundation (CBCF) and helped to raise an estimated $17 million for breast cancer research, education and support programs through the 2016 CBCF CIBC Run for the Cure, including the nearly $3 million contributed by Team CIBC;
- Partnered with the Canadian Paralympic Committee (CPC) to host seven Welcome Home events at CIBC banking centres across the country as Premier Partner of the Canadian Paralympic Team, celebrating and honouring athletes returning home from the 2016 Paralympic Games; and
- Announced a 5-year partnership with the Canadian Hockey League (CHL), solidifying CIBC as the Official Bank of the CHL, its three regional leagues, and 23 teams.
During the quarter, CIBC was:
- Ranked among the Top 10 Safest Banks in North America by Global Finance magazine;
- Recipient of four awards at ACT Canada's IVIE Awards, including Silver for Most Innovative Organization; and
- Recognized by Mediacorp as one of Canada's Top 100 Employers for a fifth consecutive year.
CIBC was once again named a constituent of the following widely regarded indices:
- Dow Jones Sustainability North American Index since its inception in 2005;
- FTSE4Good Index since 2001; and
- Jantzi Social Index since 2000.
Fourth quarter financial highlights
| | As at or for the | | | As at or for the | | |||||||||||||
| | three months ended | | | twelve months ended | | |||||||||||||
| | 2016 | 2016 | | 2015 | | | 2016 | 2015 | | |||||||||
| Unaudited | Oct. 31 | Jul. 31 | | Oct. 31 | | | Oct. 31 | Oct. 31 | | |||||||||
| Financial results ($ millions) | | | | | | | | | | | | | | | | |||
| Net interest income | $ | 2,110 | | $ | 2,113 | | $ | 2,043 | | | $ | 8,366 | | $ | 7,915 | | ||
| Non-interest income | | 1,571 | | | 2,023 | | | 1,440 | | | | 6,669 | | | 5,941 | | ||
| Total revenue | | 3,681 | | | 4,136 | | | 3,483 | | | | 15,035 Werbung Mehr Nachrichten zur Canadian Imperial Bank of Commerce Aktie kostenlos abonnieren
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