Presentation to the Investment Community
CIBC Wealth Management
Presentation to the Investment Community
Gerry McCaughey Vice Chair Wealth Management March 7, 2003
Overview of Wealth Management Revenue FY 2002
CIBC Families of Mutual Funds $249MM Fixed-Term Investments $138MM Wood Gundy $771MM Imperial Service $718MM Private Wealth Management $159MM
AUA AUM Revenue NIAT
TAL Global $62MM
$ 249 billion $ 81 billion $ 2,854 million $ 197 million
Investor’s Edge $60MM
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Presentation to the Investment Community
Wealth Management’s Strategy
Our Integrated Strategy • Maintain leadership in advice-based distribution • Extend capability in product development and packaging • Drive continuous scale efficiencies Our Competitive Advantages • Leading advisor force, the scarce resource in wealth management • Fully scaled platform with strong operational leverage • Excellence in product development, packaging, and marketing • Market leading cost position
Trends • Growing demand for advice • More affluent households and concentration of wealth • Shift to feebased, sophisticated products
5-year Aspirations
• Become the fastest growing by profit of the Canadian wealth management players • Achieve market leading NIAT & ROE
We are a Key Player in all Major Advisor Channels
Distribution of total assets Percent CIBC Wealth Management channel Imperial Service CIBC Wood Gundy Imperial Service/CIBC Wood Gundy Imperial Service/CIBC Wood Gundy Investor’s Edge Private Wealth Management
Bank branches Full-service brokers Independent advisors Dedicated sales force Online/discount brokers Private client mgmt 6 7 7 11 30
34
Source: Investor Economics; Statistics Canada; National Balance sheet; team analysis
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Presentation to the Investment Community
Leadership in Advice-Based Distribution
2,650
700
Developing full licensing capability for our branchbased sales force (Imperial Service) Acquired established fullservice brokerage sales force from Merrill Lynch
1999
2003
The Source of Profit Capture
Money Management
Packaging
Distribution
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Presentation to the Investment Community
The Source of Profit Capture
Distribution Packaging Money Management
The Source of Profit Capture
Distribution
Packaging Money Management
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Presentation to the Investment Community
Initiatives Focused on Executing Against Our Strategy
Maintain leadership in advice-based distribution Extend capability in product development and packaging Drive scale efficiencies
Sources of Growth
Market Growth
2/3
Strategic Initiatives
1/3
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Presentation to the Investment Community
Wealth Management’s Strategy in Action
Acquired Merrill Lynch Investment Management January 2002
CIBC Suisse S.A. sold July 2000
100% ownership of TAL October 2001
Sold CIBC Oppenheimer PCD and AMD January 2003
June July 2001 1999 CIBC New Guernsey management sold team for CIBC Wealth
December 2001 Acquired Merrill Lynch retail brokerage
2003 - 2005 Continue to evaluate new acquisition opportunities
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Presentation to the Investment Community
CIBC Asset Management
Presentation to the Investment Community
Sonia Baxendale Executive Vice President Asset Management & Global Private Banking March 7, 2003
Leading Provider of Asset Management Products
ASSET MANAGEMENT Fixed Term CIBCMutual Investments Funds & PPS $33.7B Deposits Pooled Programs $24.8B AUM Talvest Mutual Funds $3.8B AUM Renaissance MF & Frontiers Pooled Program $4.3B AUM Investment Consulting Service (ICS) $3.7B AUM
GICs
CIBC Families of Mutual Funds
Separate Account Program
3rd largest mutual fund provider in Canada Largest pooled program in Canada 2nd largest separate account program in Canada
Assets as at January 31, 2003
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Presentation to the Investment Community
Leader in Mutual Fund Market
CIBC is a Leader in Net Sales
(in C$ Billions)
Doubled Mutual Fund Market Share
(in Percentage)
$4 $3 $2 $1 $0 -$1 -$2
CIBC #3 CIBC #1 CIBC #1 CIBC #1
7.2
8.5
8.5% 1.0
4.1
5.4
5.5
5.5
1.0
1.1
7.2%
6.2
6.4
Mergers & Acquisitions Internal Growth
1999 2000 2001 2002
CIBC TD RBC Scotia BMO
1997 1998 1999 2000 2001 2002 CIBC Talvest CM
Led the top 5 banks in 2002 in net sales Led the Canadian mutual fund market in January 2003 in net sales Doubled mutual fund market share over the last 5 years
Assets as at January 31, 2003 Sources: IFIC & CIBC Analysis
CIBC Dominates the Fee-Based Market in Canada
Amount $ Billions Name 6.7 1. CIBC Personal Portfolio Services1 2. Investors Group Portfolio Funds 3. BMO MatchMaker 4. TDAM Managed Assets Program 5. Assante Optima Strategy 6. CIBC Managed Portfolio Services2 2.7 7. Frank Russell Sovereign Investment 8. Great West Life Discovery 9. Royal Select Portfolios 10. BMO Nesbitt Burns Quadrant – CM Frontiers 0.7 Total 52.9 Fee-based programs, 12/02 Top fund wraps Separate Account Programs by AUM Amount $ Billions Name 1. BMO Nesbitt Burns Advance 3.8 2. CIBC Investment Consulting Service 3. RBC Dominion Access 4. Scotia McLeod Summit 5. Raymond James Partners 6. TD Gateway 3rd Party Manager 7. National Bank Financial Ambassador
Total
10.9
CIBC represents 19% share of the fund wrap market
1 2
CIBC represents 35% share of the separately managed wrap market
Includes Multi-Manager and Index PPS Includes PRS, Index PRS and MPS Source: Investor Economics and CIBC Analysis
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Presentation to the Investment Community
Strong Competitive Investment Solutions
70% of CIBC families of mutual funds AUM* are ranked in the top 2 performance quartiles based on 1 year return.
Quartile 1&2 3&4
AUM 1 Yr 70% 30% 3 Yr 64% 37%
CIBC families of mutual funds has 42 mutual funds with a 4-5 star Morningstar ranking, leading the bank mutual fund market.
MORNINGSTAR RANKING CIBC Families of Mutual Funds TD Funds BMO, Guardian Funds Royal Bank Mutual Funds Scotia Funds
*Does not include pooled programs. Data source: IFIC and CIBC Analysis, Morningstar at Feb. 2003
7 9 6 3 2
35 32 18 9 3
TOTAL 42 41 24 12 5
% of total funds 32% 24% 22% 17% 11%
CIBC Asset Management is Poised for Strong Sustainable Growth
Optimize distribution by channel
Leveraging individual fund families Aggressive wholesaling
Industry leading product offering
Prepackaged solutions Centralized due diligence expertise Balance of internal and external managers
Improved efficiencies and synergies through common infrastructure
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Presentation to the Investment Community
CIBC Distribution Channels
Presentation to the Investment Community
Steve McNair - Executive Vice President CIBC Imperial Service Tom Monahan - Managing Director CIBC Wood Gundy
March 7, 2003
Distribution - Client Preference is Key
Private Wealth Management
Seeking customized banking and investment solutions
CIBC Wood Gundy
Imperial Service
Seeking holistic advice and solutions
Retail Banking
Basic banking
Mass < $100k
Affluent Mass Affluent $100k - $500k $500k $1mm
HNW $1mm $3mm
VHNW $3mm+
Wealth Level
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Client Behaviour
Seasoned, sophisticated, seeking investment recommendations
Presentation to the Investment Community
Imperial Service
A Unique Market Position
k Ba n s
Fin
anc ial P l
ann e
rs
Most highly accredited bank sales force
1,000 Registered Reps
Actively managing both sides of the balance sheet Proprietary & 3rd party investment products
One dedicated Financial Adviser All services traditionally provided by banks + non-proprietary products Personalized objective planning and advice for all financial needs
Imperial Service
Financial Adviser Capability
887
$44.9 $46.8
Productivity
Revenue & Funds Managed Per FA
$56.3
$514.1
319
$584.0
$400.7
27 2000 2001 Registered Reps 2002
2000 2001 2002 Funds Managed / FA (million) REV. / FA (thousands)
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Presentation to the Investment Community
Imperial Service
Funds Managed Growth of +8% CAGR Net PPS/MPS Sales
(millions)
$1,616 $1,308
12% CAGR
Funds Managed $
$959 $102
$349
$1,334
$237
$-135
2001
$282
2% CAGR
2002 2007
2000
2002 MPS launched Feb 02
Debt
Investment/Deposit Accounts
Imperial Service
CIBC (Imperial Service excluded)
Opportunity
The mass affluent market is anticipated to grow over 7% per annum over the next 5 years Capitalize on our unique market position Double total investable assets over 5 years
* E & Y Report 2000, Mass Affluent Credit: Investors Economics, 2002
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Presentation to the Investment Community
CIBC Wood Gundy – Top Tier Player
Number one by advisors - 1,541
1,541 1,432 1,410 96 83 800 61 750 425 50 35 30
Number two in AUA ñ $83b
BMO Nesbitt Burns
National Bank Financial
RBC Private Client
TD Waterhouse
BMO Nesbitt Burns
CIBC Wood Gundy
National Bank Financial
Insurance
Scotia McLeod
RBC Private Client
CIBC Wood Gundy – Fee Based Revenue Growth
2003
Fee Based
14.5%
Mutual Fund Trailers
2007
Fee Based
Interest/Ancillary
Interest/Ancillary
20.9% 20.9%
Mutual Fund Trailers
Insurance Transaction-based Transaction-based
CIBC Wood Gundy 2003 Plan - 2007 Forecasted.
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TD Waterhouse
CIBC Wood Gundy
Scotia McLeod
Presentation to the Investment Community
Aggressively Moving to Fee Based Proprietary Product AUA
15.2%
5.0%
CAGR 10%
10.1%
Proprietary Mutual Funds Fee Based Products 4.9% 5.2% 10.2%
CAGR 26%
2002
2007
CIBC Wood Gundy Proprietary Fee Based and Mutual Funds AUA as a Percentage of Total AUA (2002 actual/2007 estimate)
Wealth Management
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Presentation to the Investment Community
CIBC Card Products, Collections and Lending
Presentation to the Investment Community
March 7, 2003
Card Products, Collections and Lending
Card Products $9B in Balances $42B in Purchase Volume #1 Market Share Small Business Lending
• • •
Retail Lending
• • •
$16B in Balances High Quality Portfolio Low Loan Losses <.50 bpts
National Collections
• • •
$10B in Balances High Quality Portfolio Reengineering all loan processes
$3.1M in Collections Centralized for all retail portfolios Low delinquency and write off rates
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Presentation to the Investment Community
CARD PRODUCTS
Presentation to the Investment Community
Christine Croucher, Executive Vice President Card Products, Collections and Retail and Small Business Lending March 7, 2003
Credit Card Issuing
Is a Large and Complex Business . . .
3.5 million active customers 600,000 new customers/year $42B in purchase volume $9B in outstanding balances 2 businesses
– Electronic payments – Unsecured Lending
. . . and One that is Highly Attractive
Above average returns Low NIX ratio Steady stable growth Strong contributor to bank profits #1 Market Share
– 33% Purchase Volume – 21% Outstanding Volume
Technology business
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Presentation to the Investment Community
What It Takes to be Successful
Revenue Growth Fraud Management Portfolio Management Call Centre Excellence Receivables Management High Performance Organization
Top Tier Capabilities
CIBC’s Card Products “High Growth Strategy” is Paying Off…
Doubled the business 2 years ahead of schedule and Maintained our dominant #1 position in the credit card market.
>2X
2.64 NIBT INDEX 1.00 1.23 1.68
Base Year 1999
2000
2001
2002
Our success is based on a series of strategic initiatives
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Presentation to the Investment Community
Our Success is Based on a Series of Strategic Initiatives
2.64 1.68 NIBT Index 1.23 1.00 • Accountable Organization • Revenue Growth • Aerogold Contract • Receivables Management • Fraud Management Base Year 1999 2000 2001 2002
We had the strategy, understood the complexity but didn’t have all the capabilities to grow
We have People in Place, Building Tools and Capabilities
2.64 1.68 NIBT Index 1.23 1.00 • Call Centre • Internet • Portfolio Management Base Year 1999 2000 2001 2002
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Presentation to the Investment Community
Focus on Core Competencies
2.64 1.68 NIBT Index 1.23 1.00 • Shoppers Partnership • Amex Partnership • Processing Platform Base Year 1999 2000 2001 2002
Future Prospects for Cards
Regulatory Pressures Competitive Threats Consumer Behaviour Public Pressure
Industry is maturing
– Acquisition Response Rates are falling – Competitive pressure on margins – Consolidation expected
Cards will continue to grow organically but at a slower rate Maintain #1 market share while preserving customer profitability
Tougher Market
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Presentation to the Investment Community
Well Positioned to Face New Marketplace Challenges
Aggressive Strategy Built Capabilities Successful Implementation Delivered Results Well Positioned for Future Success
CIBC will continue to Dominate the Marketplace and Cards will continue to be a Major Contributor to CIBC’s Profits
Q&A
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