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CIBC 1004_’03_e_GateFold
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Corporate Information
Measuring Performance
Monitoring Our Progress
Financial Targets
Medium-term Objectives (3–5 years)
Financial Targets
Total Shareholder
Return
Measurement
2003 Results/Comments
Best total return of the major Canadian banks,
CIBC delivered the best total shareholder return
based on capital appreciation, plus common share
of the major Canadian banks for the year ended
dividends, reinvested quarterly
October 31, 2003.
Share Price
While CIBC met this objective for the first two years of its target
Best total return to shareholders
timeframe, events of the past year have resulted in a disappointing
among the major Canadian
14% to 18% return on average common
CIBC’s ROE of 19.3% benefited from the net effect of
comparative result.
In spite
of items
an overall
return
to shareholders of
banks,
equity, beginning
calculated asNovember
net income1,after tax
several
unusual
detailed
in Management’s
34.1%,
our
relative
positionand
fellAnalysis,
from first
to fourth
among the major
1999
less preferred share dividends divided by
Discussion
Overview
section.
average common shareholders’ equity Canadian banks. Generating the best total shareholder return continues
to be our #1 priority.
Return on Equity (ROE)
Earnings Growth
Retail & Wealth
Productivity and Efficiency
Capital
Business Mix
Return on equity (ROE)
2003 Results
Comments
34.1%
Operating earnings increased 6.6%, falling short of
our target rate of growth, largely due to higher loan
loss provisions.
6.6%(1)
10
Revenue increased by 5%, while expenses fell by 11%.
CIBC’s expense to revenue ratio fell from 82.7% to
70.2%. Results in both 2003 and 2002 were affected
by several unusual items, as detailed in Management’s
Discussion and Analysis, Overview section.
Revenue growth
exceeded expense
growth.
Expense to revenue
ratio: 70.2%
Tier 1 capital ratio of not less than 8.5%
Total capital ratio of not less than 11.5%,
based on regulatory capital as a percentage of
risk-weighted assets
Regulatory capital ratios were above the upper end of
the target ranges established for the year. CIBC intends
to maintain prudent capital levels at all times, and has
removed the upper end of the target range.
Tier 1 capital ratio – 10.8%
Total capital ratio – 13.0%
70% retail/30% wholesale
CIBC continues to reallocate resources to consumer
businesses, increasing capital allocated to the retail,
wealth and commercial banking businesses from 50%
at the end of 2002, to 64% at the end of 2003.
64%/36%
Retail/wholesale
Revenue growth to exceed expense growth,
and ratio of non-interest expenses to total revenue
of 60%
5
Reduce capital allocated to the large corporate
loan portfolio and the carrying value of
the merchant banking portfolio by one-third
by 2005
In the second quarter of 2002, CIBC undertook to
reduce capital allocated to its large corporate loan book
by one-third and the carrying value of its merchant
banking portfolio by one-third. Both were to be
achieved by 2005. Steady progress was made in 2003.
Incorporation
Canadian Imperial Bank of Commerce (CIBC) is a
diversified financial institution governed by the
Bank Act (Canada). CIBC was formed through the
amalgamation of The Canadian Bank of
Commerce and Imperial Bank of Canada in 1961.
The Canadian Bank of Commerce was originally
incorporated as Bank of Canada by special Act of
the legislature of the Province of Canada in 1858.
Subsequently, the name was changed to The
Canadian Bank of Commerce and it opened for
business under that name in 1867. Imperial Bank
of Canada was incorporated in 1875 by special
act of the Parliament of Canada and commenced
operations in that year.
12
9
3
6
2
5
3
1
03
03
0
0
99
00
01
02
0
99
03
00
01
EPS
02
03
99
00
01
02
03
Dividends
EPS diluted was $5.18 in 2003, compared to
$1.35 in 2002. EPS is a measure of net income
less dividends and premiums on preferred
shares, divided by weighted-average diluted
common shares for the year. CIBC’s dividends
per common share for 2003 were $1.64, as
compared to $1.60 in 2002.
ROE was 19.3% in 2003 compared to 5.1% in 2002.
ROE is a key measure of bank profitability.
It is calculated as net income after preferred
dividends divided by common shareholders’ equity.
Annual meeting
Shareholders are invited to attend the CIBC
Annual Meeting on Thursday, February 26, 2004
at 10 a.m. (Central Standard Time) at
The Fairmont Hotel, 2 Lombard Place,
Winnipeg, Manitoba.
CIBC Annual Report
Additional print copies of the Annual Report may
be obtained by calling 416-980-4523 or e-mailing
[email protected]
The Annual Report is also available online at
www.cibc.com
La version française: Sur simple demande, nous
nous ferons un plaisir de vous faire parvenir la
version française du présent rapport. Veuillez
composer le 416-980-4523 ou nous faire
parvenir un courriel [email protected]
Le rapport annuel est aussi disponible en ligne
www.cibc.com
Total revenue was $11.6 billion in 2003,
compared to $11.0 billion in 2002. Total revenue
comprises interest and dividends earned on
assets, net of interest paid on liabilities, plus
non-interest income.
Please visit our site.
Risk-weighted assets and
total assets
Efficiency ratio
(%)
Investor Relations: Financial analysts, portfolio
managers and other investors requiring
financial information may call Kathryn Humber
at 416-980-8306 or fax 416-980-5028.
Communications & Public Affairs: Financial,
business and trade media may call Robert Waite
at 416-980-4523 or fax 416-363-5347.
CIBC telephone banking: As part of our
commitment to our customers, information
about CIBC products and services is available by
calling 1-800-465-2422 toll free across Canada.
Office of the CIBC Ombudsman: CIBC
Ombudsman Lachlan MacLachlan can be reached
by telephone at 1-800-308-6859 (Toronto
416-861-3313), or by fax at 1-800-308-6861
(Toronto 416-980-3754).
Borrowing & Credit
(%)
($ billions)
Large corporate loans:
42% reduction
Merchant banking portfolio:
19% reduction
Further information
Corporate Secretary: Shareholders may
call Michelle Caturay at 416-980-3096 or
fax 416-980-7012.
Bank Accounts
Capital ratios
Investing
15
300
100
Reducing Risk
15
4
15
10% per year in retail and wealth
earnings, based on operating earnings(1),
including commercial banking earnings
($ billions)
6
20
from November 1, 1999
(1)
Total revenue
($)
25
19.3%
Earnings per share (EPS)
and dividends
(%)
Results
57.8%
(year
ended Oct. 31, 2002)
CIBC head office
Commerce Court, Toronto, Ontario,
Canada M5L 1A2
Telephone number: 416-980-2211
Telex number: 065 24116
Cable address: CANBANKTOR
Website address: www.cibc.com
Personal Banking
Insurance
250
80
12
Wealth Services
200
9
60
Communities
150
6
40
30–40%
Increased to 40–50% effective in 2004
Common share dividends as a percentage of net
income after preferred share dividends.
Results were affected by several unusual items as
detailed in Management’s Discussion and Analysis,
Overview section. CIBC has raised its dividend payout
target range to 40–50%, demonstrating its confidence
in the underlying quality of its earnings.
31.4%
100
20
03
0
99
(1) The term “operating earnings” does not have a standardized meaning under generally accepted accounting principles (GAAP) and may not be comparable to similar measures used by other companies. Generally,
operating earnings consist of net income excluding items which, in management’s opinion, are either unusual in nature or relate to substantial strategic investments. There is further explanation about this measure
in the Management’s Discussion and Analysis, How CIBC reports section. The calculation of this measure is consistent with that used when this performance target was established, as described in CIBC’s 2002
Annual Report, and is provided to assist shareholders in assessing CIBC’s performance against these targets. A reconciliation of operating to reported earnings of CIBC Retail & Wealth, including Commercial
Banking, is detailed below.
Since the time CIBC established this objective, the U.S. Securities and Exchange Commission has enacted rules, and the Canadian Securities Administrators have issued guidance which limits the ability of
management to designate and report items as unusual. The effect of these rules and guidance is that starting in 2004, CIBC will no longer use this measure in its report on performance against objectives.
2003
2002
863
366
1,229
92
$ 1,321
$ 1,073
197
1,270
85
$ 1,355
$
$
$ millions, for years ended October 31
Net income
CIBC Retail Markets
CIBC Wealth Management
Commercial banking
$
3
(81)
32
(21)
$ 1,388
(36)
–
200
(112)
$ 1,303
01
02
99
00
01
Risk-weighted assets
02
99
03
Total assets
00
01
Tier 1
02
03
Commercial Banking
Business Services
Large Corporate
Total capital
CIBC continues to be a strongly capitalized bank.
At year-end, our Tier 1 capital ratio was 10.8%
and our total capital ratio was 13.0%.
Risk-weighted assets were $116.3 billion in 2003,
compared to $126.5 billion in 2002. Risk-weighted
assets are calculated by applying weighting factors
as specified by the industry regulator to all balance
sheet assets and off-balance sheet exposures.
CIBC’s total assets were $277.1 billion in 2003,
compared to $273.3 billion in 2002.
The efficiency ratio, which is a measure
of non-interest expenses divided by total
revenue, improved from 82.7% in 2002
to 70.2% in 2003.
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CIBC Share Price Performance
CIBC’s total return to shareholders over
the past four years was 111.7%, ahead of
the Bank Index and well ahead of the broader
market. In 2003, CIBC shares rose 52.8%
which, combined with dividend yield, resulted
in a total return to shareholders of 57.8% –
the best of the major Canadian banks.
Less:
Restructuring reversal (charge)
Write-down relating to Air Canada contract
Gain on sales of corporate assets
Merrill Lynch integration costs
Operating earnings
00
Small Business
3
50
120%
100%
80%
60%
40%
20%
0%
-20%
CIBC manages its commercial banking within CIBC World Markets. This table sets out the effect of including
CIBC’s commercial banking operations in CIBC Retail Markets and CIBC Wealth Management earnings.
Oct ’99
Feb ’00
Jun ’00
Oct ’00
Feb ’01
TSX 300
Jun ’01
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Bank Index
Jun ’02
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Feb ’03
Jun ’03
Oct ’03
CIBC (TSX: CM) Share Price
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