CIBC Announces First Quarter 2022 Results
Press Release
TORONTO, Feb. 25, 2022 – CIBC (TSX: CM) (NYSE: CM) today announced its financial results for the first quarter ended January 31, 2022.
First quarter highlights
|
Q1/22 |
Q1/21 |
Q4/21 |
YoY Variance |
QoQ Variance |
|
|
Reported Net Income |
$1,869 million |
$1,625 million |
$1,440 million |
+15% |
+30% |
|
Adjusted Net Income (1) |
$1,894 million |
$1,640 million |
$1,573 million |
+15% |
+20% |
|
Reported Diluted Earnings Per Share (EPS) |
$4.03 |
$3.55 |
$3.07 |
+14% |
+31% |
|
Adjusted Diluted EPS (1) |
$4.08 |
$3.58 |
$3.37 |
+14% |
+21% |
|
Reported Return on Common Shareholders’ Equity (ROE) (2) |
17.4% |
17.0% |
13.4% |
||
|
Adjusted ROE (1)(2) |
17.6% |
17.2% |
14.7% |
||
|
Common Equity Tier 1 (CET1) Ratio (2) |
12.2% |
12.3% |
12.4% |
||
“In the first quarter, the continued execution of our strategy and ongoing investments in our bank enabled us to deliver strong financial results,” said Victor G. Dodig, CIBC President and Chief Executive Officer. “Our highly connected and engaged team is guided by our purpose of helping make our clients’ ambitions a reality each and every day, which is attracting new business to our bank, deepening existing relationships, and driving strong top line growth across all of our businesses. To support our clear momentum and long-term growth, we continue to invest in our technology and talent to create a modern and exceptional experience for our clients and team, and we’re activating our resources to create positive change for our stakeholders as we contribute to a more sustainable, inclusive future.”
Results for the first quarter of 2022 were affected by the following items of note aggregating to a negative impact of $0.05 per share:
- $20 million ($15 million after-tax) amortization of acquisition-related intangible assets; and
- $13 million ($10 million after-tax) in transaction and integration-related costs(3) associated with the acquisition of the Canadian Costco credit card portfolio.
Our CET1 ratio(2) was 12.2% at January 31, 2022, compared with 12.4% at the end of the prior quarter. CIBC’s leverage ratio(2) at January 31, 2022 was 4.3%.
Core business performance
Canadian Personal and Business Banking reported net income of $687 million for the first quarter, up $35 million or 5% from the first quarter a year ago, mainly due to higher revenue, partially offset by higher expenses and provision for credit losses. Adjusted pre-provision, pre-tax earnings(1) were $1,044 million, up $105 million from the first quarter a year ago, mainly due to higher revenue driven by volume growth and higher fee income, partially offset by higher expenses.
Canadian Commercial Banking and Wealth Management reported net income of $462 million for the first quarter, up $108 million or 31% from the first quarter a year ago, primarily due to higher revenue, partially offset by higher expenses. Adjusted pre-provision, pre-tax earnings(1) were $624 million, up $108 million from the first quarter a year ago, primarily due to strong volume growth and higher fee revenue in commercial banking, while wealth management revenue benefitted from significant growth in asset balances driven by market appreciation, net sales, and an increased level of investment activity by clients. Higher expenses were primarily driven by revenue-based variable compensation reflecting favourable business results and spending on strategic initiatives.
U.S. Commercial Banking and Wealth Management reported net income of $226 million (US$178 million) for the first quarter, up $38 million (up US$32 million) from the first quarter a year ago, primarily due to higher revenue and lower provision for credit losses, partially offset by higher expenses. Adjusted pre-provision, pre-tax earnings(1) were $308 million (US$242 million), up $10 million (up US$10 million) from the first quarter a year ago due to higher revenue, primarily driven by volume growth and higher fees, partially offset by higher employee-related expenses.
Capital Markets reported net income of $543 million for the first quarter, up $50 million or 10% from the first quarter a year ago, primarily due to higher revenue and a reversal of loan loss provisions, partially offset by higher expenses. Adjusted pre-provision, pre-tax earnings(1) were up $56 million or 9% from the first quarter a year ago, due to higher revenue from our global markets, corporate and investment banking and direct financial services businesses, partially offset by higher expenses.
|
(1) |
This measure is a non-GAAP measure. For additional information, see the “Non-GAAP measures” section. |
|
(2) |
For additional information on the composition of these specified financial measures, see the “First quarter financial highlights” section of our Report to Shareholders for the first quarter of 2022. |
|
(3) |
Transaction and integration costs are comprised of direct and incremental costs incurred as part of planning for and executing the integration of the Canadian Costco credit card portfolio, including enabling franchising opportunities, the upgrade and conversion of systems and processes, project delivery and communication costs. |
Credit quality
Provision for credit losses was $75 million, down $72 million or 49% from the same quarter last year. Provision reversal on performing loans was down as the same quarter last year included a higher degree of favourable change in the overall economic outlook. Provision for credit losses on impaired loans was down due to lower net impairments across all strategic business units.
Share split subject to shareholder approval
In February 2022, CIBC’s Board of Directors approved a two-for-one share split (Share Split) of CIBC’s issued and outstanding common shares to be effected through an amendment to CIBC’s by-laws. The Share Split is subject to the approval of CIBC shareholders at the Annual and Special Meeting of Shareholders scheduled to be held on April 7, 2022 and to the requirements of the Toronto Stock Exchange and New York Stock Exchange. If approved by CIBC shareholders and the stock exchanges and implemented by CIBC’s Board, each shareholder of record at the close of business on May 6, 2022 (Record Date) will receive one additional share on May 13, 2022 (Payment Date) for every one share held on the Record Date.
Non-GAAP measures
We use a number of financial measures to assess the performance of our business lines as described below. Some measures are calculated in accordance with GAAP (International Financial Reporting Standards), 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, which include non-GAAP financial measures and non-GAAP ratios as defined in National Instrument 52-112 “Non-GAAP and Other Financial Measures Disclosure”, useful in understanding how management views underlying business performance.
Management assesses results on a reported and adjusted basis and considers both as useful measures of performance. Adjusted measures, which include adjusted total revenue, adjusted provision for credit losses, adjusted non-interest expenses, adjusted income before income taxes, adjusted income taxes, adjusted net income and adjusted pre-provision, pre-tax earnings, remove items of note from reported results to calculate our adjusted results. Adjusted measures represent non-GAAP measures.
Certain additional disclosures for these specified financial measures have been incorporated by reference and can be found in the “Non-GAAP measures” section of our Report to Shareholders for the first quarter of 2022 available on SEDAR at www.sedar.com.
Read More: https://cibc.mediaroom.com/2022-02-25-CIBC-Announces-First-Quarter-2022-Results
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