Retail and Business Banking – 2016 Financial Review

  • Revenue(1A)
    ($ billions)
     
    2014: 8.2, 2015: 8.4, 2016: 8.9
  • Net income(1A)
    ($ billions)
     
    2014: 2.5, 2015: 2.5, 2016: 2.7
  • Average loans and acceptances(1A)(2A)
    ($ billions)
    2014: 231.3, 2015: 244.6, 2016: 266.0
  • Average deposits(1A)
    ($ billions)
     
    2014: 162.5, 2015: 172.2, 2016: 186.0
  • Efficiency ratio(1A)
    (%)
     
    2014: 51.3, 2015: 51.3, 2016: 50.5

Personal banking

  • Total average loans and acceptances growth of 13% (excluding FirstLine mortgages)
  • Total average deposits growth of 7%
  • Leading mortgage market share growth
  • Increased the number of Mobile Sales Advisors by 17% in the year
  • 60% of our clients are now engaged with CIBC digitally, and growing
  • Product use count of new clients 12 months after joining up 50% since 2013
  • Average loans and acceptances(2A)
    ($ billions)
    2014: 192.5, 2015: 201.4, 2016: 217.1
  • Average deposits
    ($ billions)
     
    2014: 113.6, 2015: 119.8, 2016: 128.2

Business banking

  • Total average loans and acceptances growth of 13%
  • Total average deposit growth of 10%
  • Leading market share growth in both business deposits and business loans
  • Average loans and acceptances(1A)
    ($ billions)
    2014: 38.8, 2015: 43.2, 2016: 48.9
  • Average deposits(1A)
    ($ billions)
     
    2014: 48.9, 2015: 52.4, 2016: 57.8
(1A)
Certain prior period information has been reclassified to conform to the presentation adopted in the current year. See “External reporting changes” for additional details.
(2B)
Total average loans and acceptances includes FirstLine mortgages.

Results(1B)

Table of Results for Retail and Business Banking for the last three years from 2016 to 2014.
$ millions, for the year ended October 31 2016 2015(2B) 2014(2B)
Revenue
Personal banking $ 7,066 $ 6,693 $ 6,305
Business banking 1,726 1,623 1,531
Other 63 90 387
Total revenue 8,855 8,406 8,223
Provision for credit losses 765 670 731
Non-interest expenses 4,472 4,309 4,219
Income before income taxes 3,618 3,427 3,273
Income taxes 929 897 814
Net income $ 2,689 $ 2,530 $ 2,459
Net income attributable to:
Equity shareholders (a) $ 2,689 $ 2,530 $ 2,459
Efficiency ratio 50.5 % 51.3 % 51.3 %
Return on equity(3B) 51.0 % 55.6 % 62.6 %
Charge for economic capital(3B) (b) $ (513) $ (547) $ (485)
Economic profit(3B) (a+b) $ 2,176 $ 1,983 $ 1,974
Average assets ($ billions) $ 265.8 $ 243.8 $ 230.5
Average loans and acceptances ($ billions) $ 266.0   $ 244.6   $ 231.3
Average deposits ($ billions) $ 186.0 $ 172.2 $ 162.5
Full-time equivalent employees 20,280 21,532 21,862
(1B)
For additional segmented information, see Note 28 to the consolidated financial statements.
(2B)
Certain information has been reclassified to conform to the presentation adopted in the current year. See “External reporting changes” for additional details.
(3B)
For additional information, see the “Non-GAAP measures” section.

Financial overview

Net income was up $159 million or 6% from 2015, primarily due to higher revenue, partially offset by higher non-interest expenses, and a higher provision for credit losses.

Revenue

Revenue was up $449 million or 5% from 2015.

Personal banking revenue was up $373 million or 6%, primarily due to volume growth, favourable pricing, higher fees, and an additional day in the current year. The prior year included a gain arising from accounting adjustments on credit card-related balance sheet amounts, shown as an item of note.

Business banking revenue was up $103 million or 6%, primarily due to volume growth, and higher fees, partially offset by narrower spreads.

Other revenue was down $27 million or 30%, mainly due to lower revenue from our exited FirstLine mortgage broker business.

Provision for credit losses

Provision for credit losses was up $95 million or 14% from 2015, primarily due to higher write-offs and bankruptcies in the card and personal lending portfolios, and higher losses in the business banking portfolio.

Non-interest expenses

Non-interest expenses were up $163 million or 4% from 2015, primarily due to higher spending on strategic initiatives, including innovation to further our retail transformation.

Income taxes

Income taxes were up $32 million or 4% from 2015, primarily due to higher income, partially offset by an income tax recovery from the settlement of transfer pricing-related matters, shown as an item of note.

Average assets

Average assets were up $22 billion or 9% from 2015 due to growth across all products.