Commercial banking

  • Strong loan and deposit growth reflecting our continued focus on building client relationships
  • Asset quality remained strong, with nonperforming assets representing 0.6% of total assets at year end

Wealth management

  • 29% growth in AUM and 27% growth in AUA during the fourth quarter, largely due to the acquisition of Geneva Advisors
  • CIBC Atlantic Trust was recognized with two Private Asset Management awards for our industry-leading performance

Results(1A)

Table of Results for U.S. Commercial Banking and Wealth Management for the last three years from 2017 to 2015.
$ millions, for the year ended October 31 2017 2016(2A) 2015(2A)
Revenue
Commercial banking $ 523 $ 166 $ 212
Wealth management 318 217 226
Other 35 2 1
Total revenue(3A) 876 385 439
Provision for (reversal of) credit losses 84 (2) 11
Non-interest expenses 534 288 294
Income before income taxes 258 99 134
Income taxes(3A) 55 12 30
Net income $ 203 $ 87 $ 104
Net income attributable to:
Equity shareholders (a) $ 203 $ 87 $ 104
Efficiency ratio 61.0 % 74.8 % 67.0 %
Return on equity(4A) 7.5 % 17.6 % 20.7 %
Charge for economic capital(4A) (b) $ (256) $ (48) $ (60)
Economic profit(4A) (a+b) $ (53) $ 39 $ 44
Average assets ($ billions) $ 19.9 $ 8.4 $ 7.6
Average loans ($ billions) $ 15.9   $ 8.0   $ 7.2
Average deposits ($ billions) $ 7.6 $ 0.1 $ 0.1
AUA ($ billions) $ 74.0 $ 44.1 $ 41.3
AUM ($ billions) $ 58.7 $ 38.0 $ 35.6
Full-time equivalent employees 1,753 310 308
(1A)
For additional segmented information, see Note 28 to the consolidated financial statements.
(2A)
Certain information has been reclassified to conform to the presentation adopted in the current year. See “External reporting changes” for additional details.
(3A)
Revenue and income taxes are reported on a TEB basis. Accordingly, revenue and income taxes include a TEB adjustment of $2 million (2016: nil; 2015: nil). The equivalent amounts are offset in the revenue and income taxes of Corporate and Other.
(4A)
For additional information, see the “Non-GAAP measures” section.

Financial overview

Net income was up $116 million or 133% from 2016. CIBC Bank USA contributed $96 million to net income during the year.

Revenue

Revenue was up $491 million or 128% from 2016. CIBC Bank USA contributed $448 million to revenue during the year.

Commercial banking revenue was up $357 million or 215%, primarily due to the inclusion of the results of CIBC Bank USA, and higher revenue in U.S. real estate finance. In addition, the current year included accretion of the acquisition date fair value discount on the acquired loans of The PrivateBank(1B).

Wealth management revenue was up $101 million or 47%, primarily due to the inclusion of the results of CIBC Bank USA, and growth in average AUM mainly due to the acquisition of Geneva Advisors. In addition, the current year included accretion of the acquisition date fair value discount on the acquired loans of The PrivateBank(1B).

Other revenue primarily includes the Treasury activities of CIBC Bank USA.

Provision for credit losses

Provision for credit losses was $84 million, compared with a reversal of credit losses of $2 million in 2016. The increase was primarily due to the establishment of a $48 million collective allowance for new loan originations and renewals of acquired loans relating to CIBC Bank USA, of which $35 million was shown as an item of note in the fourth quarter of 2017. In addition, the current year included losses in our pre-existing U.S. real estate finance portfolio.

Non-interest expenses

Non-interest expenses were up $246 million or 85% from 2016, primarily due to the inclusion of the results of CIBC Bank USA of $244 million, which included compensation expenses of $40 million related to the retention of key employees.

Income taxes

Income taxes were up $43 million or 358% from 2016, primarily due to higher income from the inclusion of the results of CIBC Bank USA.

Average assets

Average assets were up $11.5 billion or 137% from 2016 due to the inclusion of the balances of CIBC Bank USA.

Assets under administration

AUA were up $29.9 billion or 68% from 2016 due to the inclusion of the balances of CIBC Bank USA and Geneva Advisors.

(1B)
2017 included $45 million of accretion of the acquisition date fair value discount on the acquired loans of The PrivateBank, of which $31 million was included as an item of note in the fourth quarter of 2017.