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Report to Shareholders for the Third Quarter, 2011
www.cibc.com August 31, 2011

Report of the President and Chief Executive Officer

Overview of results

CIBC today reported net income of $808 million for the third quarter ended July 31, 2011, compared with net income of $640 million for the same period last year. Diluted earnings per share (EPS) were $1.89, compared with diluted EPS of $1.53 a year ago. Cash diluted EPS were $1.91⁽¹⁾, compared with cash diluted EPS of $1.55⁽¹⁾ a year ago. Return on equity for the third quarter was 21.5%.

Results for the third quarter of 2011 were affected by the following items:

	•		$37 million ($27 million after-tax, or $0.06 per share) reduction in the general allowance; and

	•		$18 million ($13 million after-tax, or $0.03 per share) loss from the structured credit run-off business.

In addition to the above items, diluted EPS for the quarter was also impacted by:

•

$12 million ($12 million after-tax, or $0.03 per share) premium paid on preferred share redemptions.

Net income was $808 million for the third quarter compared with net income of $678 million for the prior quarter. Diluted EPS and cash diluted EPS were $1.89 and $1.91⁽¹⁾, respectively,for the third quarter compared with diluted EPS and cash diluted EPS of $1.60 and $1.62⁽¹⁾, respectively, for the prior quarter, which included items of note aggregating to a negative impact of $0.13 per share.

CIBC’s Tier 1 and Tangible Common Equity ratios at July 31, 2011 were 14.6% and 11.0%⁽¹⁾, respectively, compared to 14.7% and
10.6%⁽¹⁾, respectively, at April 30, 2011. CIBC currently exceeds the new regulatory capital requirements for global banks well ahead of the implementation timelines that have been proposed by the Basel Committee on Banking Supervision and confirmed by the Office of the Superintendent of Financial Institutions.

We are very pleased with the solid results we delivered this quarter in what continues to be a challenging economic environment worldwide. Our investment in American Century announced this quarter, and dividend increase announced today, reflect our confidence and underscore our commitment to growing CIBC, while maintaining prudent capital ratios.

Core business performance

Beginning this quarter, wealth management and international retail banking operations (including CIBC FirstCaribbean) were separated from CIBC Retail Markets and included in the newly created Wealth Management strategic business unit and Corporate and Other, respectively. Following these changes, CIBC Retail Markets, which includes the remaining businesses, was renamed Retail and Business Banking.

Retail and Business Banking reported net income of $539 million for the third quarter, compared with net income of $476 million from the prior quarter and $526 million from the same quarter last year.

Revenue of $2.0 billion was up 3% from the third quarter of 2010, primarily due to solid volume growth in personal banking, including the impact of the acquired MasterCard portfolio, and higher fees, partially offset by narrower spreads.

Provision for credit losses of $285 million was up from $281 million in the same quarter last year due to higher expected write-offs in the acquired MasterCard portfolio, partially offset by lower write-offs and bankruptcies in other credit card and personal lending portfolios, and lower provisions in commercial banking.

Wealth Management reported net income of $68 million for the third quarter, compared with net income of $70 million from the prior quarter and $53 million from the same quarter last year.

Revenue of $404 million was up 12% from the third quarter of 2010, primarily due to higher fee-based revenue and commissions from new issue and equity trading activity, higher client assets under management primarily

due to improved capital markets, and higher long-term net sales of mutual funds.

Our Retail and Business Banking business and Wealth Management franchise had several notable achievements during the third quarter.

Retail and Business Banking:

	•		We were recognized by Global Finance Magazine as “Best in Mobile Banking” among North American banks, the first time this award has been given, reflecting the rapid growth of this channel. This recognition was based on criteria including strength of strategy for attracting and servicing customers, success in driving usage of mobile apps, and overall functionality;

	•		We became the first bank to bring a mobile stock trading App to Canadian investors with the introduction of the new CIBC Mobile Brokerage App enabling clients to execute trades using their mobile device;

	•		We added Visa payWave, a contactless payment feature, on all newly issued and renewing credit cards in the Aerogold family, as well as on the CIBC Classic credit card, to further enhance the client experience;

	•		As presenting sponsor of the 2011 International Indian Film Academy Awards celebrations, we brought the creativity of Bollywood to life for Canadians of all backgrounds and helped build strong relationships with our South Asian clients; and

	•		On July 28, we kicked off the 2011 Canadian Breast Cancer Foundation CIBC Run for the Cure on CIBC National Client Appreciation Day by thanking our clients, employees and communities across Canada for running with us for the past 15 years.

Wealth Management:

•

We announced our investment in American Century Investments as part of our plan to enhance the strength of our wealth management franchise and provide a platform for further international growth.

CIBC FirstCaribbean:

•

We incorporated the financial strength of CIBC with the heritage of FirstCaribbean International Bank in rebranding our Caribbean retail and commercial banking business as “CIBC FirstCaribbean International Bank”.

Wholesale Banking reported net income of $145 million for the third quarter, up $33 million from the prior quarter.

Revenue of $454 million was up from $393 million in the prior quarter, mainly due to higher corporate and investment banking revenue.

Wholesale Banking had several notable achievements during the third quarter:

	•		We acted as joint bookrunner on Intact Financial Corporation’s $962 million common equity offering;

	•		We were lead coordinator on a $6.0 billion 5-year offering for Canada Housing Trust No. 1;

	•		We were sole lead arranger for a $1.5 billion revolving credit facility for TransAlta Corporation;

	•		We acted as exclusive financial advisor to Intact Financial Corporation on its $2.6 billion acquisition of AXA Canada; and

	•		We were joint bookrunner on Bell Canada Inc.’s $1.0 billion two-tranche debentures offering.

Our results this quarter reflect the momentum we have demonstrated throughout 2011, and are aligned to our strategic imperative of consistent, sustainable performance. We are well positioned to take advantage of growth opportunities and further strengthen our franchise for the future.

Structured credit run-off progress

We continued to reduce exposures in our structured credit run-off business, completing several transactions that in aggregate reduced the overall notional positions by US$10.8 billion, including US$9.6 billion of sales and terminations, which resulted in a net pre-tax gain of $13 million (US$13 million).

While we have taken steps to reduce our exposure, further significant losses could result, depending on the performance of both the underlying assets and the financial guarantors.

CIBC in our communities

CIBC is committed to supporting causes that matter to its clients, employees and communities. This past quarter included several notable achievements and contributions:

	•		CIBC clients and employees in British Columbia and the Yukon Territories raised more than $520,000 for the annual B.C. Children’s Hospital fundraising campaign. More than $6.6 million has been contributed to this children’s regional hospital since 1995 through CIBC corporate donations and the generosity of CIBC employees and clients;

	•		CIBC clients and employees raised a record $535,000 for Fondation Centre de cancérologie Charles-Bruneau during the 16th annual Tour CIBC Charles-Bruneau in Quebec to raise money for kids with cancer. This represents a 42% increase over last year and CIBC’s contribution helped the Tour raise $2 million in its most successful year yet;



2		CIBC Third Quarter 2011

	•		The CIBC Children’s Foundation awarded a total of $50,000 in Torch Club Grants to eight Boys and Girls Clubs from across the country to deliver the Torch Club junior leadership program. This program helps lay the foundation for pre-teens to meet the demands of citizenship with inspired leadership, compassion and concern for others. The grants were made possible through CIBC Miracle Day, the annual corporate fundraiser for the CIBC Children’s Foundation;

	•		CIBC committed $250,000 to the Oshawa Hospital Foundation’s My Health My Hospital campaign. CIBC’s donation will support the Heather Griffith Breast Assessment Centre which provides treatment and care to breast cancer patients across the region of Durham;

	•		CIBC was named one of the 2011 winners of the Bay Street Suit Challenge by Dress for Success Toronto. This registered charity collects previously worn business attire to assist individuals with limited financial means to complete a wardrobe for employment. CIBC employees donated 1,150 items and CIBC also made a donation of $5,000 to Dress for Success; and

	•		CIBC donated a total of $65,000 to Canadian Red Cross disaster relief efforts related to flooding in Manitoba and Quebec and the Slave Lake, Alberta wildfire. CIBC employees raised an additional $14,000 for fire victims in Slave Lake.

Gerald T. McCaughey

President and Chief Executive Officer


(1)		For additional information, see the “Non-GAAP measures” section.



CIBC Third Quarter 2011		3

MANAGEMENT’S DISCUSSION AND ANALYSIS

Management’s discussion and analysis (MD&A) is provided to enable readers to assess CIBC’s results of operations and financial condition for the quarter ended July 31, 2011, compared with prior quarters. The MD&A should be read in conjunction with our 2010 Annual Report and the unaudited interim consolidated financial statements included in this report, which have been prepared in accordance with Canadian generally accepted accounting principles (GAAP). Unless otherwise indicated, all amounts in the MD&A are expressed in Canadian dollars. Certain comparative amounts have been reclassified to conform with the presentation adopted in the current period. This MD&A is current as of August 30, 2011. Additional information relating to CIBC is available on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission’s (SEC) website at www.sec.gov. No information on CIBC’s website (www.cibc.com) should be considered incorporated herein by reference. A glossary of terms used throughout this quarterly report can be found on pages 184 to 187 of our 2010 Annual Report.

Contents


5		Third quarter financial highlights
6		Overview
6		Financial results
8		Significant events
8		Outlook for calender-year 2011
9		Review of quarterly financial information
10		Non-GAAP measures
10		Strategic business unit (SBU) overview
11		Retail and Business Banking
13		Wealth Management
15		Wholesale Banking
17		Corporate and Other
19		Structured credit run-off business and other selected activities
19		Structured credit run-off business
21		Other selected activities
22		Financial condition
22		Review of consolidated balance sheet
23		Capital resources
24		Off-balance sheet arrangements
25		Management of risk
25		Risk overview
25		Credit risk
27		Market risk
29		Liquidity risk
29		Other risks
30		Accounting and control matters
30		Critical accounting policies and estimates
31		Contingent liabilities
32		U.S. regulatory developments
32		Transition to International Financial Reporting Standards (IFRS)
33		Controls and procedures

A NOTE ABOUT FORWARD-LOOKING STATEMENTS: From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including in this report, in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission and in other communications. These statements include, but are not limited to, statements made in the “Structured credit run-off progress”, “Overview — Income Taxes”, “Overview — Significant Events”, “Overview — Outlook for 2011”, “Structured credit run-off business”, “Capital Resources”, and “Accounting and Control Matters” sections of this report and other statements about our operations, business lines, financial condition, risk management, priorities, targets, ongoing objectives, strategies and outlook for 2011 and subsequent periods. Forward-looking statements are typically identified by the words “believe”, “expect”, “anticipate”, “intend”, “estimate” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could”. By their nature, these statements require us to make assumptions, including the economic assumptions set out in the “Overview — Outlook for 2011” section of this report, and are subject to inherent risks and uncertainties that may be general or specific. A variety of factors, many of which are beyond our control, affect our operations, performance and results, and could cause actual results to differ materially from the expectations expressed in any of our forward-looking statements. These factors include: credit, market, liquidity, strategic, operational, reputation and legal, regulatory and environmental risk; legislative or regulatory developments in the jurisdictions where we operate; amendments to, and interpretations of, risk-based capital guidelines and reporting instructions; the resolution of legal proceedings and related matters; the effect of changes to accounting standards, rules and interpretations; changes in our estimates of reserves and allowances; changes in tax laws; changes to our credit ratings; political conditions and developments; the possible effect on our business of international conflicts and the war on terror; natural disasters, public health emergencies, disruptions to public infrastructure and other catastrophic events; reliance on third parties to provide components of our business infrastructure; the accuracy and completeness of information provided to us by clients and counterparties; the failure of third parties to comply with their obligations to us and our affiliates; intensifying competition from established competitors and new entrants in the financial services industry; technological change; global capital market activity; changes in monetary and economic policy; currency value fluctuations; general business and economic conditions worldwide, as well as in Canada, the U.S. and other countries where we have operations; changes in market rates and prices which may adversely affect the value of financial products; our success in developing and introducing new products and services, expanding existing distribution channels, developing new distribution channels and realizing increased revenue from these channels; changes in client spending and saving habits; our ability to attract and retain key employees and executives; and our ability to anticipate and manage the risks associated with these factors. This list is not exhaustive of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. We do not undertake to update any forward-looking statement that is contained in this report or in other communications except as required by law.



4		CIBC Third Quarter 2011

THIRD QUARTER FINANCIAL HIGHLIGHTS


		As at or for the									As at or for the
		three months ended									nine months ended
		2011			2011			2010			2011			2010
Unaudited		Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Financial results ($ millions)
Net interest income		$	1,607		$	1,528		$	1,548		$	4,745		$	4,559
Non-interest income			1,450			1,361			1,301			4,302			4,272

Total revenue			3,057			2,889			2,849			9,047			8,831
Provision for credit losses			195			194			221			598			896
Non-interest expenses			1,820			1,794			1,741			5,436			5,167

Income before taxes and non-controlling interests			1,042			901			887			3,013			2,768
Income tax expense			231			221			244			720			791
Non-controlling interests			3			2			3			8			25

Net income		$	808		$	678		$	640		$	2,285		$	1,952

Financial measures
Efficiency ratio			59.6	%		62.1	%		61.1	%		60.1	%		58.5	%
Cash efficiency ratio, taxable equivalent basis (TEB) ⁽¹⁾			58.3	%		60.8	%		60.6	%		58.9	%		58.0	%
Return on equity			21.5	%		19.9	%		19.8	%		21.6	%		21.1	%
Net interest margin			1.72	%		1.70	%		1.74	%		1.74	%		1.78	%
Net interest margin on average interest-earning assets ⁽²⁾			1.96	%		1.94	%		2.03	%		1.99	%		2.09	%
Return on average assets			0.86	%		0.76	%		0.72	%		0.84	%		0.76	%
Return on average interest-earning assets ⁽²⁾			0.98	%		0.86	%		0.84	%		0.96	%		0.90	%
Total shareholder return			(9.89	)%		8.52	%		(4.17	)%		(3.61	)%		18.08	%

Common share information
Per share	- basic earnings	$	1.90		$	1.61		$	1.54		$	5.43		$	4.72
	- cash basic earnings ⁽¹⁾		1.92			1.63			1.55			5.49			4.77
	- diluted earnings		1.89			1.60			1.53			5.42			4.71
	- cash diluted earnings ⁽¹⁾		1.91			1.62			1.55			5.48			4.76
	- dividends		0.87			0.87			0.87			2.61			2.61
	- book value		35.01			33.47			31.36			35.01			31.36
Share price	- high		84.45			85.49			75.40			85.49			77.19
	- low		72.75			76.75			65.91			72.75			61.96
	- closing		72.98			81.91			70.60			72.98			70.60
Shares outstanding (thousands)
	- average basic		397,232			395,373			388,815			395,265			386,706
	- average diluted		397,986			396,394			389,672			396,189			387,710
	- end of period		398,856			396,978			390,781			398,856			390,781
Market capitalization ($ millions)		$	29,109		$	32,516		$	27,589		$	29,109		$	27,589

Value measures
Dividend yield (based on closing share price)			4.7	%		4.4	%		4.9	%		4.8	%		4.9	%
Dividend payout ratio			45.9	%		54.1	%		56.7	%		48.1	%		55.3	%
Market value to book value ratio			2.08			2.45			2.25			2.08			2.25

On- and off-balance sheet information ($ millions)
Cash, deposits with banks and securities		$	95,563		$	121,486		$	92,049		$	95,563		$	92,049
Loans and acceptances, net of allowance			193,592			188,169			184,987			193,592			184,987
Total assets			362,579			384,106			349,600			362,579			349,600
Deposits			261,327			278,602			238,102			261,327			238,102
Common shareholders’ equity			13,962			13,286			12,256			13,962			12,256
Average assets			371,433			368,058			353,092			364,548			342,599
Average interest-earning assets ⁽²⁾			325,401			323,969			302,288			318,937			291,571
Average common shareholders’ equity			13,891			13,102			11,994			13,290			11,561
Assets under administration ⁽³⁾			1,380,582			1,348,229			1,216,719			1,380,582			1,216,719

Balance sheet quality measures
Risk-weighted assets ($ billions)		$	109.0		$	106.3		$	107.2		$	109.0		$	107.2
Tangible common equity ratio ⁽¹⁾			11.0	%		10.6	%		9.5	%		11.0	%		9.5	%
Tier 1 capital ratio			14.6	%		14.7	%		14.2	%		14.6	%		14.2	%
Total capital ratio			18.7	%		18.9	%		18.1	%		18.7	%		18.1	%

Other information
Retail / wholesale ratio ⁽¹⁾⁽⁴⁾			77% / 23	%		76% / 24	%		74% / 26	%		77% / 23	%		74% / 26	%
Full-time equivalent employees			42,425			41,928			42,642			42,425			42,642



(1)		For additional information, see the “Non-GAAP measures” section.

(2)		Average interest-earning assets include interest-bearing deposits with banks, securities, securities borrowed or purchased under resale agreements, and loans.

(3)		Includes assets under administration or custody of CIBC Mellon Global Securities Services Company, which is a 50/50 joint venture between CIBC and The Bank of New York Mellon.

(4)		For the purposes of calculating this ratio, Retail includes Retail and Business Banking, Wealth Management, and International Banking operations (reported as part of Corporate and Other). The ratio represents the amount of economic capital attributed to these businesses as at the end of the period.



CIBC Third Quarter 2011		5

OVERVIEW

Financial results

Net income for the quarter was $808 million, compared to net income of $640 million for the same quarter last year and net income of $678 million for the prior quarter. Net income for the nine months ended July 31, 2011 was $2,285 million, compared to $1,952 million for the same period in 2010.

Our results for the current quarter were impacted by the following items:

•

$37 million ($27 million after-tax) reduction in the general allowance; and

•

$18 million ($13 million after-tax) loss from the structured credit run-off business.

In addition to the above items, earnings per share for the quarter was also impacted by:

•

$12 million ($12 million after-tax) premium paid on preferred share redemptions.

Net interest income

Net interest income was up $59 million or 4% from the same quarter last year, largely due to solid volume growth across most retail products, including the impact of the acquisition of the MasterCard portfolio completed on September 1, 2010, partially offset by narrower spreads. In addition, trading-related net interest income was higher in the quarter.

Net interest income was up $79 million or 5% from the prior quarter as the impact of three more days in the quarter and volume growth across most retail products were partially offset by narrower spreads. The current quarter also benefited from higher treasury-related net interest income and interest income on tax reassessments.

Net interest income for the nine months ended July 31, 2011 was up $186 million or 4% from the same period in 2010, mainly due to solid volume growth across most retail products, including the impact of the acquisition of the MasterCard portfolio, partially offset by narrower spreads. The current period also benefited from higher trading-related and corporate lending net interest income. These factors were partially offset by lower treasury-related net interest income and lower net interest income in our U.S. real estate finance business.

Non-interest income

Non-interest income was up $149 million or 11% from the same quarter last year. The structured credit run-off business had gains in the current quarter compared to losses in the same quarter last year. The current quarter also benefited from higher income from securitized assets and higher fees from mutual funds and underwriting and advisory activities. These factors were partially offset by lower gains net of write-downs on available-for-sale (AFS) securities. Credit card fees were lower due to the impact of securitization activities.

Non-interest income was up $89 million or 7% from the prior quarter, mainly due to gains in the structured credit run-off business compared to losses in the prior quarter. The current quarter also had higher gains net of write-downs on AFS securities.

Non-interest income for the nine months ended July 31, 2011 was up $30 million or 1% from the same period in 2010. Higher income from securitized assets, wealth management related activities, underwriting and advisory activities, and higher credit and insurance-related fees were partially offset by lower trading revenue and lower gains net of write-downs on AFS securities. Credit card fees were lower due to the impact of securitization activities and the structured credit run-off business had losses in the current period compared to gains in the same period last year.

Provision for credit losses

The total provision for credit losses was down $26 million or 12% from the same quarter last year. The specific provision for credit losses in the consumer portfolios was down $39 million, primarily due to lower write-offs and bankruptcies in the credit card and personal lending portfolios and the favourable impact from the credit card securitizations that took place in 2011, partially offset by expected losses arising from the acquired MasterCard portfolio. The specific provision for credit losses in the business and government lending portfolio decreased $26 million, largely due to reduced losses in our U.S. real estate finance and European run-off businesses. The reduction in the general allowance was $37 million this quarter, compared with $76 million in the same quarter last year, reflective of a lower level of credit card securitization in the current quarter.

The total provision for credit losses was comparable to the prior quarter. The specific provision for credit losses in the consumer portfolios was up $3 million, mainly due to higher write-offs arising from the MasterCard portfolio as the portfolio seasons to normal levels of write-offs, partially offset by the favourable impact of the credit card securitization that took place this quarter. The specific provision for credit losses in the business and government lending portfolio was up $19 million, largely due to higher losses net of reversals in our portfolios in Canada, CIBC FirstCaribbean International Bank (CIBC FirstCaribbean) and in our U.S. real estate finance business. The change in general provision for credit losses was favourable by $21 million from the prior quarter, largely due to the impact of the credit card securitization noted above.

The total provision for credit losses was down $298 million or 33% for the nine months ended July 31, 2011, compared with the same period last year. The specific provision for credit losses in consumer portfolios was down $177 million. The decrease was mainly due to lower write-offs and bankruptcies across most products and the favourable impact of the credit card securitizations noted above. This was partially offset by expected losses arising



6		CIBC Third Quarter 2011

from the acquired MasterCard portfolio. The specific provision for credit losses in the business and government lending portfolio was down $141 million, primarily due to the improvement in our portfolios in Canada and in our U.S. real estate finance business. The change in the general provision for credit losses was unfavourable by $20 million from the same period last year, primarily due to a lower reduction in general allowance for a lower level of credit card securitizations that took place in the first nine months this year compared with the same period last year, as well as the establishment of an allowance for the acquired MasterCard portfolio.

Non-interest expenses

Non-interest expenses were up $79 million or 5% from the same quarter last year, mainly due to higher performance-based compensation and pension expenses, servicing fees related to the acquired MasterCard portfolio, and higher advertising costs. These were partially offset by lower business and capital taxes.

Non-interest expenses were up $26 million or 1% from the prior quarter, primarily due to higher performance-based compensation, higher salaries driven by three more days in the quarter, partially offset by the impact of lower litigation expenses.

Non-interest expenses for the nine months ended July 31, 2011 were up $269 million or 5% from the same period in 2010. The increase was mainly due to higher employee compensation and benefits driven largely by performance-based compensation and pension expenses, and servicing fees related to the acquired MasterCard portfolio. The harmonized sales tax (HST), which was implemented in Ontario and British Columbia on July 1, 2010, resulted in higher expense in various categories during the current period. These factors were partially offset by lower business and capital taxes. The prior period included a settlement with the Ontario Securities Commission relating to our participation in the asset-backed commercial paper (ABCP) market.

Income taxes

Income tax expense was down $13 million or 5% from the same quarter last year, primarily due to higher tax-exempt income and a lower statutory tax rate, partially offset by the tax impact of higher income.

Income tax expense was up $10 million or 5% from the prior quarter, mainly due to higher income, partially offset by the impact of an increase in the relative proportion of income subject to lower tax rates.

Income tax expense for the nine months ended July 31, 2011 was down $71 million or 9% from the same period in 2010. The current period benefited from higher tax-exempt income and a lower statutory tax rate. The prior year period included a future tax asset write-down of $25 million related to the enactment of lower Ontario corporate tax rates.

At the end of the quarter, our future income tax asset was $273 million. Included in the future income tax asset were $21 million related to Canadian capital loss carryforwards that have no expiry date, and $182 million, net of a valuation allowance, related to our U.S. operations. Accounting standards require a valuation allowance when it is more likely than not that all, or a portion of, a future income tax asset will not be realized prior to its expiration. Although realization is not assured, we believe that based on all available evidence, it is more likely than not that all of the future income tax asset, net of a valuation allowance, will be realized.

In prior years, the Canada Revenue Agency issued reassessments disallowing the deduction of approximately $3.0 billion of the 2005 Enron settlement payments and related legal expenses. The matter is currently in litigation. We believe that we will be successful in sustaining at least the amount of the accounting tax benefit recognized to date. Should we successfully defend our tax filing position in its entirety, we would be able to recognize an additional accounting tax benefit of $214 million and taxable refund interest of approximately $173 million. Should we fail to defend our position in its entirety, additional tax expense of approximately $862 million and non-deductible interest of approximately $123 million would be incurred.

Foreign exchange

The estimated impact of U.S. dollar translation on the interim consolidated statement of operations was as follows:


	For the three			For the nine
	months ended			months ended
	Jul. 31, 2011			Jul. 31, 2011
	vs.			vs.
$ millions	Jul. 31, 2010			Jul. 31, 2010

Estimated decrease in:
Total revenue	$	32		$	70
Provision for credit losses		2			4
Non-interest expense		13			32
Income taxes and non-controlling interest		2			6
Net income		15			28

C$ vs. US $ - average appreciation		8	%		6	%

The estimated impact of the changes in foreign exchange rates compared to the prior quarter was not significant.

Our results for the prior quarters were affected by the following items:

Q2, 2011

•

$70 million ($50 million after-tax) loss from the structured credit run-off business.



CIBC Third Quarter 2011		7

Q1, 2011

•

$68 million ($49 million after-tax) loss from the structured credit run-off business; and

•

$43 million ($37 million after-tax) gain on sale of CIBC Mellon Trust Company’s (CMT) Issuer Services business.

Q3, 2010

•

$138 million ($96 million after-tax) loss on the structured credit run-off business; and

•

$76 million ($53 million after-tax) reduction in the general allowance.

Q2, 2010

•

$58 million ($40 million after-tax) gain from the structured credit run-off business; and

•

$30 million ($17 million after-tax) reversal of interest expense related to the favourable conclusion of prior years’ tax audits.

Q1, 2010

•

$25 million ($17 million after-tax) gain from the structured credit run-off business;

•

$25 million future tax asset write-down resulting from the enactment of lower Ontario corporate tax rates; and

•

$17 million ($12 million after-tax) negative impact of changes in credit spreads on the mark-to-market (MTM) of credit derivatives in our corporate loan hedging programs.

Significant events

American Century Investments

On July 15, 2011 CIBC announced that, subject to obtaining regulatory approvals, CIBC would acquire a minority interest in American Century Investments (ACI), a U.S. investment management firm, for total cash consideration of approximately US$848 million. Those regulatory approvals have been obtained and the transaction is expected to close in the fourth quarter. At closing, CIBC will acquire JP Morgan Chase & Co.’s entire interest in ACI, which represents approximately 41% of ACI’s equity. In addition, CIBC will hold 10.1% of ACI’s voting rights and be entitled to nominate two directors on ACI’s 10-person board. Commencing in the fourth quarter, the investment will be accounted for using the equity method and our proportionate share in the results of ACI will be included in the Wealth Management SBU for the period subsequent to the close.

TMX Group Inc.

During the quarter, Maple Group Acquisition Corporation (Maple), a corporation whose investors comprise CIBC and 12 other leading Canadian financial institutions and pension funds, commenced an offer to acquire 100% of the TMX Group Inc. As part of the proposed transaction, CIBC has made an equity commitment of a maximum of $192 million. In addition, CIBC and certain other financial institutions have provided a commitment letter to Maple for $1.9 billion in credit facilities which would also support the acquisitions of Alpha Group and The Canadian Depository for Securities Limited.

The offer is set to expire on September 30, 2011 and is subject to obtaining the required regulatory approvals, including from securities regulatory authorities and the Competition Bureau. On August 3, 2011, Maple announced that if the required regulatory approval process has not been completed by September 30, 2011, its intention would be to further extend its offer.

Sale of CIBC Mellon Trust Company’s (CMT) Issuer Services business

Effective November 1, 2010, CMT, a 50/50 joint venture between CIBC and The Bank of New York Mellon, sold its Issuer Services business (stock transfer and employee share purchase plan services). As a result of the sale, CIBC recorded an after-tax gain of $37 million in the first quarter of 2011, which is net of estimated claw-back and post-closing adjustments that will be settled effective November 1, 2011. CMT’s Issuer Services business results were reported in CIBC’s Corporate and Other reporting segment and the results of its operations were not considered significant to CIBC’s consolidated results.

Outlook for calendar-year 2011

Both the Canadian and U.S. economies decelerated in the first half of 2011, with consumers squeezed by higher gasoline prices and manufacturing disrupted by supply chain issues after Japan’s earthquake. While we expect the U.S. economy to improve in the third quarter, a sharp downward revision to first quarter data trimmed our outlook for U.S. growth for the year to 1.7% from 2.5% a quarter ago. Canada’s economy also decelerated on softer consumer spending and energy production in the second quarter. Although financial markets have shown concern, we still expect to see a pick-up in economic data in the third quarter, helped by rebounds in auto assemblies and energy output, taking growth to 2.4% for the year. Softer growth and tame core inflation will keep interest rates low, giving some support to housing in Canada.

Retail and Business Banking is expected to face slower growth in demand for mortgages and household credit, and modest improvements in demand for business credit. The lagged impacts of the earlier recession on credit quality will continue to fade, allowing for an improvement in delinquencies and a reduction in personal bankruptcies.

Wealth Management could see a shift in investor interest towards safer, yield-bearing assets given recent volatility.

Wholesale Banking should benefit from a healthy pace of bond issuance with governments remaining heavy borrowers and businesses taking advantage of low base interest rates on government bonds. Equity issuance could slow over the balance of the fiscal year in light of recent market weakness. Merger and acquisition activity could also be affected in the near term by softer equity markets.



8		CIBC Third Quarter 2011

Corporate credit demand should be supported by growth in capital spending, although the public debt market and internal cash flows will be a competitive source of funding.

U.S. real estate finance could remain slow given an excess of vacant properties. Corporate default rates could remain contained as we move further from the prior recession.

Review of quarterly financial information


		2011						2010								2009
$ millions, except per share amounts,
for the three months ended		Jul. 31		Apr. 30		Jan. 31		Oct. 31		Jul. 31		Apr. 30		Jan. 31		Oct. 31

Revenue ⁽¹⁾
Retail and Business Banking		$	2,019	$	1,905	$	1,980	$	1,961	$	1,962	$	1,789	$	1,861	$	1,810
Wealth Management			404		420		416		378		360		370		371		372
Wholesale Banking			454		393		471		238		315		548		613		503
Corporate and Other			180		171		234		677		212		214		216		203

Total revenue			3,057		2,889		3,101		3,254		2,849		2,921		3,061		2,888
Provision for credit losses			195		194		209		150		221		316		359		424
Non-interest expenses			1,820		1,794		1,822		1,860		1,741		1,678		1,748		1,669

Income before taxes and non-controlling interests			1,042		901		1,070		1,244		887		927		954		795
Income tax expense			231		221		268		742		244		261		286		145
Non-controlling interests			3		2		3		2		3		6		16		6

Net income			808		678		799		500		640		660		652		644
Preferred share dividends and premiums			55		42		42		42		42		43		42		43

Net income applicable to common shares		$	753	$	636	$	757	$	458	$	598	$	617	$	610	$	601

Earnings per share	- basic	$	1.90	$	1.61	$	1.92	$	1.17	$	1.54	$	1.60	$	1.59	$	1.57
	- diluted	$	1.89	$	1.60	$	1.92	$	1.17	$	1.53	$	1.59	$	1.58	$	1.56


(1)		Certain prior period information has been restated to conform to the presentation in the current period.

Our quarterly results are modestly affected by seasonal factors. The first quarter is normally characterized by increased credit card purchases over the holiday period. The second quarter has fewer days as compared with the other quarters, generally leading to lower earnings. The summer months (July — third quarter and August — fourth quarter) typically experience lower levels of capital markets activity, which affects our brokerage, investment management, and wholesale banking activities.

Retail and Business Banking revenue was up over the period in the table above reflecting volume growth, offset to some extent by spread compression. The acquisition of the MasterCard portfolio in September 2010 benefited revenue starting in the fourth quarter of 2010.

Wealth Management revenue has grown over the period on improved capital market conditions and higher trading activity.

Wholesale Banking revenue is influenced to a large extent by capital market conditions. In the second half of 2010 and the first three quarters of 2011, Wholesale Banking revenue was adversely affected by losses in the structured credit run-off business.

Corporate and Other revenue included foreign exchange gains on capital repatriation activities in the fourth quarter of 2010. The gain on sale of CMT’s Issuer Services business was included in the first quarter of 2011. Revenue from CIBC FirstCaribbean has also declined over the period mainly due to the impact of a stronger Canadian dollar.

The provision for credit losses is dependent upon the credit cycle in general and on the credit performance of the loan portfolios. Losses in the credit card and personal lending portfolios improved in 2010 and 2011. Starting in the fourth quarter of 2010, we had loan losses on the acquired MasterCard portfolio. Wholesale Banking provisions also declined in 2010 and 2011, reflecting improved economic conditions in both the U.S. and Europe.

Non-interest expenses have fluctuated over the period largely due to changes in employee compensation and benefits, pension expense, and the implementation of HST in Ontario and British Columbia in July 2010.

Income taxes vary with changes in income subject to tax, and the jurisdictions in which the income is earned. Taxes can also be affected by the impact of significant items. Tax-exempt income has been trending higher since the fourth quarter of 2010. Income tax expense on capital repatriation activities was included in the fourth quarter of 2010, and a write-down of future tax assets was included in the first quarter of 2010. The fourth quarter of 2009 included a tax benefit, primarily from a positive revaluation of future tax assets.

The first quarter of 2010 included the minority interest related to the gain on the sale of a U.S. investment.



CIBC Third Quarter 2011		9

NON-GAAP MEASURES

We use a number of financial measures to assess the performance of our SBUs. Some measures are calculated in accordance with GAAP, 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 financial measures useful in analyzing financial performance. For a more detailed discussion on our non-GAAP measures, see page 42 of the 2010 Annual Report.

The following table provides a reconciliation of non-GAAP to GAAP measures related to CIBC on a consolidated basis. The reconciliations of the non-GAAP measures of our SBUs are provided in their respective sections.


		As at or for the									As at or for the
		three months ended									nine months ended
		2011			2011			2010			2011			2010
$ millions, except per share amounts		Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Net interest income		$	1,607		$	1,528		$	1,548		$	4,745		$	4,559
Non-interest income			1,450			1,361			1,301			4,302			4,272

Total revenue per interim financial statements			3,057			2,889			2,849			9,047			8,831
TEB adjustment			49			45			11			133			27

Total revenue (TEB) ⁽¹⁾	A	$	3,106		$	2,934		$	2,860		$	9,180		$	8,858

Trading revenue		$	(22	)	$	91		$	131		$	208		$	735
TEB adjustment			49			44			9			132			23

Trading revenue (TEB) ⁽¹⁾		$	27		$	135		$	140		$	340		$	758

Non-interest expenses per interim financial statements		$	1,820		$	1,794		$	1,741		$	5,436		$	5,167
Less: amortization of other intangible assets			11			9			9			31			28

Cash non-interest expenses ⁽¹⁾	B	$	1,809		$	1,785		$	1,732		$	5,405		$	5,139

Net income applicable to common shares		$	753		$	636		$	598		$	2,146		$	1,825
Add: after-tax effect of amortization of other intangible assets			8			7			7			24			22

Cash net income applicable to common shares ⁽¹⁾	C	$	761		$	643		$	605		$	2,170		$	1,847

Basic weighted-average common shares (thousands)	D		397,232			395,373			388,815			395,265			386,706
Diluted weighted-average common shares (thousands)	E		397,986			396,394			389,672			396,189			387,710

Cash efficiency ratio (TEB) ⁽¹⁾	B/A		58.3	%		60.8	%		60.6	%		58.9	%		58.0	%
Cash basic earnings per share ⁽¹⁾	C/D	$	1.92		$	1.63		$	1.55		$	5.49		$	4.77
Cash diluted earnings per share ⁽¹⁾	C/E	$	1.91		$	1.62		$	1.55		$	5.48		$	4.76


(1)		Non-GAAP measure.

SBU OVERVIEW

New organizational structure

On March 28, 2011, we announced a new organizational structure to build on the progress of implementing our business strategy and delivering strong financial performance. Beginning in the third quarter of 2011, wealth management and international banking operations (including CIBC FirstCaribbean) have been reported separately from CIBC Retail Markets and included in the newly created Wealth Management SBU and Corporate and Other, respectively. Following these changes, CIBC Retail Markets which includes the remaining businesses was renamed Retail and Business Banking. Under the new organizational structure, CIBC now has three SBUs — Retail and Business Banking, Wealth Management and Wholesale Banking. Prior period information has been restated.

Other segment reporting changes

In the third quarter of 2011, we realigned certain items from Other to Capital markets and Corporate and investment banking business lines within Wholesale Banking to better reflect the nature and management of the activities. Prior period information has been restated.

Besides the changes noted above, the key methodologies and assumptions used in reporting financial results of our SBUs remain unchanged from October 31, 2010. These are periodically reviewed by management to ensure they remain valid. For further details, see page 43 of the 2010 Annual Report.



10		CIBC Third Quarter 2011

RETAIL AND BUSINESS BANKING

Retail and Business Banking comprises personal banking and business banking businesses. We provide a full range of financial products, services and advice to nearly 10 million personal and business clients in Canada.

Results ⁽¹⁾


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
$ millions	Jul. 31			Apr. 30		⁽²⁾	Jul. 31		⁽²⁾	Jul. 31			Jul. 31		⁽²⁾

Revenue
Personal banking	$	1,630		$	1,577		$	1,569		$	4,854		$	4,645
Business banking		358			339			353			1,046			1,014
Other		31			(11	)		40			4			(47	)

Total revenue (a)		2,019			1,905			1,962			5,904			5,612
Provision for credit losses		285			260			281			806			945
Non-interest expenses (b)		1,021			1,003			968			3,031			2,825

Income before taxes		713			642			713			2,067			1,842
Income tax expense		174			166			187			522			504

Net income (c)	$	539		$	476		$	526		$	1,545		$	1,338

Efficiency ratio (b/a)		50.6	%		52.7	%		49.3	%		51.3	%		50.4	%
Amortization of other intangible assets (d)	$	3		$	3		$	—		$	8		$	—
Cash efficiency ratio ⁽³⁾ ((b-d)/a)		50.4	%		52.5	%		49.3	%		51.2	%		50.4	%
Return on equity ⁽³⁾		61.5	%		57.7	%		66.4	%		60.9	%		57.9	%
Charge for economic capital ⁽³⁾ (e)	$	(118	)	$	(111	)	$	(109	)	$	(342	)	$	(320	)
Economic profit ⁽³⁾ (c+e)	$	421		$	365		$	417		$	1,203		$	1,018
Full-time equivalent employees		21,553			21,581			21,765			21,553			21,765


(1)		For additional segmented information, see the notes to the interim consolidated financial statements.

(2)		Certain prior period information has been restated to conform to the presentation in the current period.

(3)		For additional information, see the “Non-GAAP measures” section.

Financial overview

Net income for the quarter was $539 million, an increase of $13 million or 2% from the same quarter last year. Revenue increased by 3% as a result of solid volume growth across business segments, including the impact of the acquisition of the MasterCard portfolio in the fourth quarter of 2010, and higher fees, partially offset by narrower spreads. Non-interest expenses were up 5% from the same quarter last year.

Net income was up $63 million or 13% compared with the prior quarter. Revenue increased by 6% due to three additional days in the quarter and higher treasury allocations. Non-interest expenses were up 2% compared to the prior quarter.

Net income for the nine months ended July 31, 2011 was $1,545 million, an increase of $207 million or 15% from the same period in 2010. Revenue increased by 5% as a result of volume growth across business segments and higher fees, both including the impact of the MasterCard portfolio, and higher treasury allocations, partially offset by narrower spreads. Provision for credit losses was down 15% from the same period last year while non-interest expenses were up 7%.

Revenue

Revenue was up $57 million or 3% from the same quarter last year.

Personal banking revenue was up $61 million or 4%, primarily driven by solid volume growth across most products, including the impact of the MasterCard portfolio, and higher fees, partially offset by narrower spreads.

Business banking revenue was comparable to the same quarter last year as volume growth across most products was offset by narrower spreads.

Other revenue was down $9 million mainly due to lower treasury allocations.

Revenue was up $114 million from the prior quarter.

Personal banking revenue was up $53 million, primarily due to the impact of three additional days.

Business banking revenue was up $19 million, primarily due to the impact of three additional days and volume growth.

Other revenue was up $42 million due to higher treasury allocations.

Revenue for the nine months ended July 31, 2011 was up $292 million or 5% from the same period last year.

Personal banking revenue was up $209 million or 4%, primarily driven by solid volume growth across most



CIBC Third Quarter 2011		11

products and higher fees, including the impact of the MasterCard portfolio, partially offset by narrower spreads.

Business banking revenue was up $32 million or 3%, primarily due to solid volume growth across most products, partially offset by narrower spreads.

Other revenue was up $51 million mainly due to higher treasury allocations.

Provision for credit losses

Provision for credit losses was up $4 million or 1% from the same quarter last year due to higher write-offs in the acquired MasterCard portfolio, partially offset by lower write-offs and bankruptcies in other credit card and personal lending portfolios, and lower provisions in commercial banking.

Provision for credit losses was up $25 million from the prior quarter. The increase was mainly due to the expected increases in the acquired MasterCard portfolio as the portfolio seasons to expected levels of delinquency, and higher provisions in commercial banking.

Provision for credit losses for the nine months ended July 31, 2011 was down $139 million or 15%, largely due to lower write-offs and bankruptcies across most products, partially offset by losses in the acquired MasterCard portfolio.

Non-interest expenses

Non-interest expenses were up $53 million or 5% from the same quarter last year primarily due to servicing fees related to the MasterCard portfolio, the impact of HST, and higher pension expenses and corporate support costs.

Non-interest expenses were up $18 million from the prior quarter, primarily due to higher performance-based compensation and corporate support costs.

Non-interest expenses for the nine months ended July 31, 2011 were up $206 million or 7% from the same period last year, primarily due to higher pension expenses, servicing fees related to the MasterCard portfolio, higher corporate support costs, and the impact of HST.

Income taxes

Income taxes were down $13 million from the same quarter last year mainly due to a lower Canadian statutory tax rate.

Income taxes were up $8 million from the prior quarter due to higher income.

Income taxes for the nine months ended July 31, 2011 were up $18 million from the same period last year due to higher income, partially offset by a lower Canadian statutory tax rate.



12		CIBC Third Quarter 2011

WEALTH MANAGEMENT

Wealth Management comprises asset management, retail brokerage and private wealth management businesses. Combined, these businesses offer an extensive suite of leading investment and relationship-based advisory services to meet the needs of institutional, retail, and high net worth clients.

Results ⁽¹⁾


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
$ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Revenue
Retail brokerage	$	263		$	282		$	235		$	826		$	732
Asset management		116			114			99			341			293
Private wealth management		25			24			26			73			76

Total revenue (a)		404			420			360			1,240			1,101
Provision for credit losses		1			3			—			4			—
Non-interest expenses (b)		307			318			283			934			865

Income before taxes		96			99			77			302			236
Income tax expense		28			29			24			88			65

Net income (c)	$	68		$	70		$	53		$	214		$	171

Efficiency ratio (b/a)		76.0	%		75.7	%		78.8	%		75.3	%		78.5	%
Amortization of other intangible assets (d)	$	—		$	1		$	—		$	1		$	1
Cash efficiency ratio ⁽²⁾ ((b-d)/a)		75.9	%		75.6	%		78.7	%		75.2	%		78.4	%
Return on equity ⁽²⁾		31.0	%		33.1	%		24.0	%		32.9	%		26.7	%
Charge for economic capital ⁽²⁾ (e)	$	(28	)	$	(28	)	$	(30	)	$	(85	)	$	(87	)
Economic profit ⁽²⁾ (c+e)	$	40		$	42		$	23		$	129		$	84
Full-time equivalent employees		3,675			3,614			3,566			3,675			3,566


(1)		For additional segmented information, see the notes to the interim consolidated financial statements.

(2)		For additional information, see the “Non-GAAP measures” section.

Financial overview

Net income for the quarter was $68 million, an increase of $15 million or 28% from the same quarter last year. Revenue increased by 12%, primarily due to higher revenue from retail brokerage and asset management. Non-interest expenses were up 8% from the same quarter last year.

Net income was comparable with the prior quarter.

Net income for the nine months ended July 31, 2011 was $214 million, an increase of $43 million or 25% from the same period in 2010. Revenue increased by 13% primarily due to higher revenue from retail brokerage and asset management. Non-interest expenses were up 8%.

Revenue

Revenue was up $44 million or 12% from the same quarter last year.

Retail brokerage revenue was up $28 million or 12%, primarily due to higher fee-based revenue and commissions from new issue and equity trading activity.

Asset management revenue was up $17 million or 17%, primarily due to higher client assets under management driven by improved capital markets and higher long term net sales of mutual funds.

Private wealth management revenue was comparable with the same quarter last year.

Revenue was down $16 million or 4% from the prior quarter.

Retail brokerage revenue was down $19 million or 7%, primarily due to lower commissions from equity trading and new issue activity, partially offset by higher fee-based revenue.

Asset management and private wealth management revenues were comparable to the prior quarter.

Revenue for the nine months ended July 31, 2011 was up $139 million or 13% from the same period last year.

Retail brokerage revenue was up $94 million or 13%, primarily due to higher fee-based revenue, commissions from new issue and equity trading activity, and wider spreads.

Asset management revenue was up $48 million or 16%, primarily due to higher client assets under management driven by improved capital markets and higher long term net sales of mutual funds.

Private wealth management revenue was comparable with the same period last year.



CIBC Third Quarter 2011		13

WHOLESALE BANKING

Wholesale Banking provides a wide range of credit, capital markets, investment banking, merchant banking and research products and services to government, institutional, corporate and retail clients in Canada and in key markets around the world.

Results ⁽¹⁾


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
$ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Revenue (TEB) ⁽²⁾⁽³⁾
Capital markets	$	251		$	291		$	256		$	860		$	818
Corporate and investment banking		232			164			161			618			572
Other		20			(17	)		(91	)		(27	)		113

Total revenue (TEB) ⁽³⁾ (a)		503			438			326			1,451			1,503
TEB adjustment ⁽³⁾		49			45			11			133			27

Total revenue (b)		454			393			315			1,318			1,476
Provision for credit losses		6			1			29			5			80
Non-interest expenses (c)		294			271			258			868			820

Income before taxes and non-controlling interests		154			121			28			445			576
Income tax expense		8			9			3			51			166
Non-controlling interests		1			—			—			1			12

Net income (d)	$	145		$	112		$	25		$	393		$	398

Efficiency ratio (c/b)		64.9	%		69.0	%		81.4	%		65.9	%		55.5	%
Amortization of other intangible assets (e)	$	—		$	—		$	—		$	—		$	1
Cash efficiency ratio (TEB) ⁽³⁾ ((c-e)/a)		58.5	%		62.0	%		78.9	%		59.8	%		54.5	%
Return on equity ⁽³⁾		33.0	%		25.8	%		4.4	%		29.3	%		27.9	%
Charge for economic capital ⁽³⁾ (f)	$	(57	)	$	(57	)	$	(61	)	$	(176	)	$	(193	)
Economic profit (loss) ⁽³⁾(d+f)	$	88		$	55		$	(36	)	$	217		$	205
Full-time equivalent employees		1,214			1,144			1,134			1,214			1,134


(1)		For additional segmented information, see the notes to the interim consolidated financial statements.

(2)		Certain prior period information has been restated to conform to the presentation in the current period.

(3)		For additional information, see the “Non-GAAP measures” section.

Financial overview

Net income for the quarter was $145 million, up $120 million from the same quarter last year, mainly due to lower losses in the structured credit run-off business, higher corporate and investment banking revenue, and a lower provision for credit losses. These were partially offset by higher non-interest expenses.

Net income was up $33 million from the prior quarter, mainly due to higher corporate and investment banking revenue and lower losses in the structured credit run-off business, partially offset by lower capital markets revenue and higher non-interest expenses.

Net income for the nine months ended July 31, 2011 was $393 million compared to $398 million in the same period in 2010. Higher losses in the structured credit run-off business and higher non-interest expenses were offset by a lower provision for credit losses and higher revenue from corporate and investment banking and capital markets. Income taxes were lower in the current period.

Revenue (TEB) ⁽³⁾

Revenue was up $177 million from the same quarter last year.

Capital markets revenue was down $5 million, primarily due to credit valuation adjustment (CVA) charges against credit exposures to derivative counterparties (other than financial guarantors), compared to reversals in the prior year quarter, partially offset by higher equity derivatives revenue.

Corporate and investment banking revenue was up $71 million, mainly due to higher merchant banking gains, and higher corporate lending and advisory revenue.

Other revenue was up $111 million, primarily due to gains in the structured credit run-off business compared to losses in the same quarter last year.

Revenue was up $65 million from the prior quarter.

Capital markets revenue was down $40 million, mainly due to lower revenue from fixed income, equity sales and equity new issuances.



CIBC Third Quarter 2011		15

Corporate and investment banking revenue was up $68 million, primarily due to higher merchant banking gains, and higher advisory revenue.

Other revenue was up $37 million mainly due to gains in the structured credit run-off business compared to losses in the prior quarter.

Revenue for the nine months ended July 31, 2011 was down $52 million from the same period in 2010.

Capital markets revenue was up $42 million, primarily due to higher equity derivatives revenue and higher revenue from equity issuances and sales, partially offset by lower fixed income revenue. The prior year period included a reversal of CVA charges noted above.

Corporate and investment banking revenue was up $46 million, primarily due to higher revenue from corporate lending, advisory, and equity issuances, partially offset by lower merchant banking gains and lower U.S. real estate finance revenue.

Other revenue was down $140 million, mainly due to losses in the structured credit run-off business compared to gains in the prior year period. The prior year period also included the reversal of interest expense on tax reassessments.

Provision for credit losses

Provision for credit losses was down $23 million from the same quarter last year, mainly due to lower losses in the European run-off and U.S. real estate finance portfolios as a result of relative stabilization in the U.S. commercial real estate market.

Provision for credit losses was up $5 million from the prior quarter due to higher losses in the U.S. real estate finance portfolio.

Provision for credit losses was $5 million for the nine months ended July 31, 2011 compared to $80 million in the same period in 2010, due to lower losses in the U.S. real estate finance portfolio as a result of relative stabilization in the U.S. commercial real estate market.

Non-interest expenses

Non-interest expenses were up $36 million or 14% from the same quarter last year, and up $23 million or 8% from the prior quarter, primarily due to higher performance-based compensation.

Non-interest expenses for the nine months ended July 31, 2011 were up $48 million from the same period in 2010, primarily due to higher performance-based compensation, salaries, and communication expenses, partially offset by the ABCP settlement in the prior year period.

Income taxes

Income tax expense for the quarter was on comparable levels to the same quarter last year and the prior quarter.

Income tax expense for the nine months ended July 31, 2011 was down $115 million from the same period in 2010, primarily due to the higher tax-exempt income and impact of the losses in the structured credit run-off business in the current year period.



16		CIBC Third Quarter 2011

CORPORATE AND OTHER

Corporate and Other comprises the six functional groups – Technology and Operations; Corporate Development; Finance; Treasury; Administration; and Risk Management – that support CIBC’s SBUs. The revenue, expenses and balance sheet resources of these functional groups are generally allocated to the business lines within the SBUs. It also includes our International Banking operations comprising mainly CIBC FirstCaribbean; strategic investments in the CIBC Mellon joint ventures and The Bank of N.T. Butterfield & Son Limited; and other income statement and balance sheet items, including the general allowance, not directly attributable to the business lines. The impact of securitization is also retained within Corporate and Other.

Results ⁽¹⁾


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
$ millions	Jul. 31			Apr. 30		⁽²⁾	Jul. 31		⁽²⁾	Jul. 31		⁽²⁾	Jul. 31		⁽²⁾

Revenue
International banking	$	144		$	127		$	151		$	411		$	496
Other		36			44			61			174			146

Total revenue		180			171			212			585			642
Reversal of credit losses		(97	)		(70	)		(89	)		(217	)		(129	)
Non-interest expenses		198			202			232			603			657

Income before taxes and non-controlling interests		79			39			69			199			114
Income tax expense		21			17			30			59			56
Non-controlling interests		2			2			3			7			13

Net income	$	56		$	20		$	36		$	133		$	45

Full-time equivalent employees		15,983			15,589			16,177			15,983			16,177


(1)		For additional segmented information, see the notes to the interim consolidated financial statements.

(2)		Certain prior period information has been restated to conform to the presentation in the current period.

Financial overview

Net income for the quarter was up $20 million from the same quarter last year, mainly due to lower non-interest expenses, higher unallocated treasury income and interest income on tax reassessments, partially offset by a lower reduction in the general allowance.

Net income for the quarter was up $36 million from the prior quarter, mainly due to a higher reduction in the general allowance, higher revenue from international banking, and higher interest income on tax reassessments.

Net income for the nine months ended July 31, 2011 was up $88 million from the same period in 2010, mainly due to higher unallocated treasury income, the gain on sale of CMT’s Issuer Services business, lower non-interest expenses, interest income on tax reassessments, and a lower write-down of future tax assets. These were partially offset by lower revenue from international banking and a lower reduction in the general allowance.

Revenue

Revenue was down $32 million from the same quarter last year.

International banking was down $7 million, primarily due to the impact of a stronger Canadian dollar and lower gains on sale of AFS securities in CIBC FirstCaribbean. The current quarter included a foreign exchange gain, compared to a loss in the prior year quarter, on CIBC FirstCaribbean customer deposits which did not qualify as foreign exchange hedges of AFS securities.

Other revenue was down $25 million mainly due to the impact of securitization activities, partially offset by higher unallocated treasury revenue and interest income on tax reassessments.

Revenue was up $9 million from the prior quarter.

International banking was up $17 million, primarily due to foreign exchange gains on customer deposits noted above.

Other revenue was down $8 million mainly due to the impact of securitization activities, partially offset by higher interest income on tax reassessments.

Revenue for the nine months ended July 31, 2011 was down $57 million from the same period in 2010.

International banking was down $85 million, mainly due to lower gains on sale of AFS securities and the impact of a stronger Canadian dollar in CIBC FirstCaribbean.

Other revenue was up $28 million mainly due to higher unallocated treasury revenue, the gain on sale of CMT’s Issuer Services business, and interest income on tax reassessments, partially offset by the impact of securitization activities.



CIBC Third Quarter 2011		17

Reversal of credit losses

Reversal of credit losses was up $8 million from the same quarter last year, mainly due to the impact of securitization activities, partially offset by a lower reduction in the general allowance.

Reversal of credit losses was up $27 million from the prior quarter mainly due to a higher reduction in the general allowance and the impact of securitization activities.

Reversal of credit losses for the nine months ended July 31, 2011 was up $88 million from the same period in 2010, primarily due to the impact of securitization activities, partially offset by a lower reduction in the general allowance.

Non-interest expenses

Non-interest expenses were down $34 million from the same quarter last year and down $54 million for the nine months ended July 31, 2011 from the same period in 2010, primarily due to lower unallocated corporate support costs.

Income taxes

Income tax expense was down $9 million from the same quarter last year.

Income tax expense was up $4 million from the prior quarter. The current quarter had higher income subject to lower rates of tax.

Income tax expense for the nine months ended July 31, 2011 was up $3 million from the same period in 2010. The prior period included a future tax asset write-down resulting from the enactment of lower Ontario corporate tax rates.



18		CIBC Third Quarter 2011

STRUCTURED CREDIT RUN-OFF BUSINESS & OTHER SELECTED ACTIVITIES

In response to the recommendations of the Financial Stability Board (previously Financial Stability Forum), this section provides information on our structured credit run-off business and other selected activities within our continuing and exited businesses that may be of particular interest to investors based on their risk characteristics and the current market environment. The activities are discussed in further detail on pages 50 to 57 of our 2010 Annual Report.

Structured credit run-off business

Results (pre-tax basis)

The loss for the quarter was $18 million (US$19 million), compared with a loss of $138 million (US$131 million) for the same quarter last year and a loss of $70 million (US$72 million) for the prior quarter.

The loss for the quarter was mainly due to a CVA loss relating to financial guarantors, net interest and non-interest expenses. These were partially offset by gains due to an increase in the value of receivables related to protection purchased from financial guarantors (on loan assets that are carried at amortized cost) resulting from a decrease in the MTM of the underlying positions and from transactions which were completed to reduce our positions. The total CVA loss for financial guarantors was $15 million (US$15 million) for the quarter.

During the quarter, we reduced our overall notional positions by US$10.8 billion, including US$9.6 billion of sales and terminations, which resulted in a net gain of $13 million (US$13 million).

We sold certain security positions and terminated related hedges as well as unmatched protection purchased from financial guarantors, which reduced our notional positions by US$5.4 billion.

In addition, we sold the residual interest in our U.S. residential mortgage market (USRMM) positions which had been hedged by a previously issued limited recourse note. As a result of the sale of our residual interest, we no longer have any remaining exposures to underlying collateral on investments (notional of US$2.9 billion and fair value of US$207 million) and written credit derivatives (notional of US$1.3 billion and fair value of US$1.0 billion). We have accordingly excluded these positions from the table below.

Position summary

The following table summarizes our positions within our structured credit run-off business:


									Written credit
US$ millions, as at									derivatives, liquidity				Credit protection purchased from:
July 31, 2011	Investments and loans ⁽¹⁾								and credit facilities				Financial guarantors				Other counterparties
			Fair		Fair		Carrying
			value of		value of		value of				Fair
			trading		securities		securities				value of				Fair value				Fair value
			and AFS		classified		classified				written credit				net of				net of
	Notional		securities		as loans		as loans		Notional		derivatives		Notional		CVA		Notional		CVA

USRMM — CDO	$	—	$	—	$	—	$	—	$	370	$	326	$	—	$	—	$	370	$	326
CLO		4,370		—		4,020		4,080		3,478		152		6,596		225		368		17
Corporate debt		—		—		—		—		7,788		124		—		—		7,792		128
Other		1,139		401		363		417		743		70		442		62		27		3
Unmatched		—		—		—		—		—		—		403		169		—		—

	$	5,509	$	401	$	4,383	$	4,497	$	12,379	$	672	$	7,441	$	456	$	8,557	$	474

Oct. 31, 2010	$	12,006	$	855	$	7,284	$	7,428	$	15,163	$	1,997	$	13,102	$	719	$	8,469	$	574


(1)		Excluded from the table above are equity and surplus notes that we obtained in consideration for commutation of our USRMM contracts with financial guarantors with a notional of US$239 million and a carrying value of US$17 million.

USRMM — collateralized debt obligation (CDO)

Our net USRMM position, comprising written credit derivatives, amounted to US$44 million. This position was hedged through protection purchased from a large U.S.-based diversified multinational insurance and financial services company with which we have market-standard collateral arrangements.

Collateralized loan obligation (CLO)

Our CLO positions consist of super senior tranches of CLOs backed by diversified pools of U.S. (63%) and European-based (36%) non-investment grade senior secured leveraged loans. As at July 31, 2011, approximately 9% of the total notional amount of the CLO tranches was rated equivalent to AAA, 78% was rated between the equivalent of AA+ and AA-, and the remainder was equivalent of A+. For positions hedged with financial guarantors as at July 31, 2011, approximately 13% of the underlying collateral was rated equivalent to BB- or higher, 58% was rated between the equivalent of B+ and B-, 14% was rated equivalent to CCC+ or lower, with the remainder unrated. The CLO positions that are hedged with financial guarantors have a weighted-average life of 3.0 years and average subordination of 32%.



CIBC Third Quarter 2011		19

Corporate debt

Our corporate debt positions consist of super senior synthetic CDO tranches referencing diversified indices of corporate loans and bonds. Approximately 34% of the corporate debt underlying were rated equivalent to A- or higher, 46% were rated between the equivalent of BBB+ and BBB-, 18% were rated equivalent to BB+ or lower, and the remainder were unrated. The corporate debt positions mature within two to six years and have original attachment points of 20% to 30%.

Other

Our significant positions in Other, as at July 31, 2011, include:

US$346 million notional value of CDOs consisting of trust preferred securities (TruPs) collateral, which are Tier I Innovative Capital Instruments issued by U.S. regional banks and insurers. These securities are classified as loans and had a fair value of US$245 million and carrying value of US$296 million;

US$216 million notional value of trading securities with a fair value of US$162 million, and US$417 million notional value of written protection with a fair value of US$68 million, on inflation-linked notes and CDO tranches with collateral consisting of high yield corporate debt portfolios, TruPs and non-U.S. residential mortgage-backed securities (RMBS), with 52% rated the equivalent of AA- or higher and the majority of the remaining rated equivalent of BB- or lower;

US$82 million notional value of an asset-backed security (ABS) classified as a loan, with fair value of US$68 million and carrying value of US$72 million;

Variable rate Class A-1/A-2 notes classified as trading securities with a notional value of US$303 million and a fair value of US$231 million, and tracking notes classified as AFS with a notional value of US$82 million and a fair value and carrying value of US$6 million. These notes were originally received in exchange for our non-bank sponsored ABCP in January 2009, upon the ratification of the Montreal Accord restructuring; and

US$314 million of undrawn Margin Funding Facility related to the Montreal Accord restructuring.

Unmatched

The underlying in our unmatched positions are a loan backed by film receivables and a CLO tranche.

Credit protection purchased from financial guarantors and other counterparties

The following table presents the notional amounts and fair values of credit protection purchased from financial guarantors and other counterparties by counterparty credit quality, based on external credit ratings (Standard & Poor’s and/or Moody’s Investors Service), and the underlying referenced assets. Excluded from the table below are certain performing loans and tranched securities positions in our continuing businesses, with a total notional amount of approximately US$61 million, which are partly secured by direct guarantees from financial guarantors or by bonds guaranteed by financial guarantors.


													Credit protection purchased
													from financial guarantors
	Notional amounts of referenced assets												and other counterparties
US$ millions, as at			Corporate		CDO -						Total		Fair value					Fair value
July 31, 2011	CLO		debt		USRMM		Other		Unmatched		notional		before CVA		CVA			net of CVA

Financial guarantors ⁽¹⁾
Investment grade	$	3,997	$	—	$	—	$	92	$	203	$	4,292	$	426	$	(75	)	$	351
Non-investment grade		75		—		—		254		—		329		72		(34	)		38
Unrated		2,524		—		—		96		200		2,820		129		(62	)		67

		6,596		—		—		442		403		7,441		627		(171	)		456

Other counterparties ⁽¹⁾
Investment grade		368		20		370		27		—		785		348		—			348
Unrated		—		7,772		—		—		—		7,772		128		(2	)		126

		368		7,792		370		27		—		8,557		476		(2	)		474

Total	$	6,964	$	7,792	$	370	$	469	$	403	$	15,998	$	1,103	$	(173	)	$	930

Oct. 31, 2010	$	10,355	$	8,242	$	402	$	747	$	1,825	$	21,571	$	1,587	$	(294	)	$	1,293


(1)		In cases where one credit rating agency does not provide a rating, the classification in the table is based on the rating provided by the other agency. Where ratings differ between agencies, we use the lower rating.

The unrated other counterparties are primarily Canadian conduits (Great North Trust and MAV I). These conduits are in compliance with their collateral posting arrangements and have posted collateral exceeding current market exposure. The fair value of the collateral as at July 31, 2011 was US$702 million.

Gain on reduction of unfunded commitment on a variable funding note (VFN)

In 2008, we recognized a gain of $895 million (US$841 million), resulting from the reduction to zero of our unfunded commitment on a VFN issued by a CDO. Refer to “Contingent liabilities” section for additional details.



20		CIBC Third Quarter 2011

Other selected activities

Securitization business

As at July 31, 2011, the underlying collateral for various asset types in our multi-seller conduits amounted to $1.4 billion (October 31, 2010: $2.1 billion). The estimated weighted-average life of these assets was 1.1 years (October 31, 2010: 1.5 years). Our holdings of ABCP issued by our non-consolidated sponsored multi-seller conduits that offer ABCP to external investors were $1 million (October 31, 2010: $110 million). Our committed backstop liquidity facilities to these conduits were $1.8 billion (October 31, 2010: $2.6 billion). We also provided credit facilities of $40 million (October 31, 2010: $40 million) to these conduits as at July 31, 2011.

We also participated in a syndicated facility for a 3 year commitment of $475 million to a CIBC-sponsored single-seller conduit that provides funding to franchisees of a major Canadian retailer. Our portion of the commitment is $95 million. As at July 31, 2011, we funded $74 million (October 31, 2010: $72 million) by the issuance of bankers’ acceptances.

We also securitize our mortgages and credit card receivables. Details of our consolidated variable interest entities (VIEs) and securitization transactions during the quarter are provided in Note 5 to the interim consolidated financial statements. Further details of our securitization activities are provided on pages 63 to 65 of our 2010 Annual Report.

U.S. real estate finance

As at July 31, 2011, the drawn and undrawn exposures, net of write-downs and allowance for credit losses, amounted to $2.6 billion (October 31, 2010: $1.8 billion) and $552 million (October 31, 2010: $885 million), respectively. The allowance for credit losses on these loans was $83 million (October 31, 2010: $76 million).

As at July 31, 2011, we had $161 million (October 31, 2010: $149 million) of net impaired loans. In addition, $254 million of drawn loans (October 31, 2010: $276 million) and $2 million of undrawn commitments (October 31, 2010: $4 million) were included in the credit watch list. Net provision for credit losses of $7 million and $15 million were recognized during the quarter and nine months ended July 31, 2011, respectively (provision for credit losses of $18 million and $73 million for the quarter and nine months ended July 31, 2010, respectively).

As at July 31, 2011 and October 31, 2010, we had commercial mortgage-backed securities (CMBS) inventory with a notional amount of $9 million and a fair value of less than $1 million.

Leveraged finance

The exposures in our leveraged finance activities in Europe and the U.S. are discussed below.

European leveraged finance

In 2008, management made a decision to exit our European leveraged finance business where we participated or originated non-investment grade leveraged loans and syndicated the majority of the loans, earning a fee during the process.

As at July 31, 2011, the drawn and undrawn exposures of our European leveraged loans, net of write-downs and allowance for credit losses, amounted to $471 million (October 31, 2010: $721 million) and $97 million (October 31, 2010: $140 million), respectively. Our exposure has declined primarily due to repayments during the period. The allowance for credit losses on the drawn loans was $21 million (October 31, 2010: $25 million).

As at July 31, 2011, we had net impaired loans of $29 million (October 31, 2010: $51 million). In addition, $350 million of drawn loans (October 31, 2010: $336 million) and $37 million of undrawn commitments (October 31, 2010: $43 million) were included in the credit watch list. Net reversals of credit losses were nil and $3 million for the quarter and nine months ended July 31, 2011, respectively (provision for credit losses of $12 million and $10 million for the quarter and nine months ended July 31, 2010, respectively).

U.S. leveraged finance

We sold our U.S. leveraged finance business, where we provided leveraged loans to non-investment grade customers to facilitate their buyout, acquisition and restructuring activities, as part of the sale of some of our U.S. businesses to Oppenheimer Holdings Inc. (Oppenheimer) in 2008. Under the transaction, the leveraged loans in existence at the time of the sale remained with us. These loans are being managed to maturity. In addition, under the current terms of our agreement with Oppenheimer, we agreed to provide a loan warehouse facility of up to $2.0 billion to finance and hold syndicated loans to non-investment grade customers, originated for U.S. middle market companies by Oppenheimer, to facilitate their buyout, acquisition and restructuring activities. Underwriting of any loan for inclusion in this facility is subject to joint credit approval by Oppenheimer and CIBC.

As at July 31, 2011, the drawn and undrawn exposures of our U.S. leveraged loans, including loans originated through Oppenheimer, net of write-downs and allowance for credit losses, amounted to $176 million (October 31, 2010: $232 million) and $173 million (October 31, 2010: $321 million), respectively. Our exposure has declined primarily due to repayments during the period. The allowance for credit losses on these loans was $8 million (October 31, 2010: $16 million).

As at July 31, 2011, we had $1 million (October 31, 2010: $13 million) of net impaired loans. In addition, $7 million of drawn loans (October 31, 2010: $127 million) and $11 million of undrawn commitments (October 31, 2010: $31 million) were included in the credit watch list. Net reversals of credit losses of $1 million and $7 million were recognized during the quarter and nine months ended July 31, 2011, respectively ($1 million and $4 million for the quarter and nine months ended July 31, 2010, respectively).



CIBC Third Quarter 2011		21

FINANCIAL CONDITION

Review of consolidated balance sheet


	2011		2010
$ millions, as at	Jul. 31		Oct. 31

Assets
Cash and deposits with banks	$	21,524	$	12,052
Securities		74,039		77,608
Securities borrowed or purchased under resale agreements		35,394		37,342
Loans, net of allowance		184,628		176,892
Derivative instruments		24,176		24,682
Other assets		22,818		23,464

Total assets	$	362,579	$	352,040

Liabilities and shareholders’ equity
Deposits	$	261,327	$	246,671
Derivative instruments		24,059		26,489
Obligations related to securities lent or sold short or under repurchase agreements		34,151		37,893
Other liabilities		21,015		20,256
Subordinated indebtedness		5,153		4,773
Non-controlling interests		156		168
Shareholders’ equity		16,718		15,790

Total liabilities and shareholders’ equity	$	362,579	$	352,040

Assets

As at July 31, 2011, total assets were up $10.5 billion or 3% from October 31, 2010.

Cash and deposits with banks increased by $9.5 billion mostly due to higher treasury deposit placements.

Securities decreased by $3.6 billion or 5%, due to decreases in designated at fair value (FVO) and AFS securities, partially offset by an increase in trading securities. FVO securities decreased mainly due to sale of mortgage-backed and government-issued securities. AFS securities decreased largely in government-issued short-term notes. Trading securities increased mainly in the equity portfolios, partially offset by a decrease in government-issued securities.

Securities borrowed or purchased under resale agreements decreased by $1.9 billion or 5%, primarily due to reduced client demand.

Loans increased by $7.7 billion or 4%. Residential mortgages were up $7.7 billion due to mortgage originations, partially offset by securitizations, principal repayments, and liquidations. Personal loans were up $259 million due to business growth. Credit card loans were down $2.2 billion mostly due to securitizations. Business and government loans were up $1.8 billion primarily due to growth in our domestic loan portfolio and purchase of certain retained interests relating to the credit card securitizations, partially offset by a reduction in our CLO exposure.

Derivative instruments decreased by $506 million or 2%, primarily due to a decrease in valuation of interest rate and credit derivatives, partially offset by an increase in foreign exchange derivatives valuation.

Other assets decreased by $646 million or 3%, mainly due to lower collateral pledged and future income tax assets, partially offset by higher bankers’ acceptances.

Liabilities

As at July 31, 2011, total liabilities were up $9.6 billion or 3% from October 31, 2010.

Deposits increased by $14.7 billion or 6% due to wholesale funding activity.

Derivative instruments decreased by $2.4 billion or 9% due to the reasons noted above for derivative assets.

Obligations related to securities lent or sold short or under repurchase agreements decreased by $3.7 billion or 10%, reflecting our funding requirements and client-driven activities.

Other liabilities increased by $759 million or 4%, mainly due to higher bankers’ acceptances.

Subordinated indebtedness increased by $380 million or 8%, reflecting the net issuance and redemption activities, as explained in the “Significant capital management activity” section below.

Shareholders’ equity

Shareholders’ equity increased by $928 million or 6%, primarily due to a net increase in retained earnings, and the issuance of common shares pursuant to the stock option, shareholder investment, and employee share purchase plans. These were offset in part by preferred share redemptions, as explained in the “Significant capital management activity” section below, and a decrease in accumulated other comprehensive income (AOCI) due to



22		CIBC Third Quarter 2011

foreign exchange losses net of hedges on investments in self-sustaining foreign operations.

Capital resources

We actively manage our capital to maintain a strong and efficient capital base, to maximize risk-adjusted returns to shareholders, and to meet regulatory requirements. For additional details, see pages 59 to 63 of the 2010 Annual Report.

Recent revisions to regulatory capital requirements

In order to promote a more resilient banking sector and strengthen global capital standards, the Basel Committee on Banking Supervision (BCBS) proposed significant enhancements and capital reforms to the current framework. The revised framework, referred to as Basel III, will be effective January 1, 2013 and provides lengthy periods for transitioning numerous new requirements.

Significant Basel III reforms include the following:

•

Introducing a new minimum common equity ratio (the Common Equity Tier 1 ratio). Items such as goodwill and intangible assets will be deducted from common equity for the purpose of calculating this new ratio. The deductions will be phased-in commencing January 1, 2013. Banks will be required to meet the new Common Equity Tier 1 ratio standard during a transition period beginning January 1, 2013 and ending on January 1, 2019. The minimum requirement, including a conservation buffer, increases during the transition period;

•

Increasing the minimum Tier 1 capital and Total capital ratios. These increases will also be phased-in commencing January 1, 2013 with banks expected to meet the new standards through a transition period ending on January 1, 2019;

•

Amending the rules on instruments that can be considered qualifying capital instruments for the purposes of calculating regulatory capital. In particular, Basel III requires that capital instruments be capable of absorbing loss at the point of non-viability of a financial institution. The inclusion of non-qualifying capital instruments in regulatory capital calculations will be phased-out between January 1, 2013 and January 1, 2022; and

•

Introducing a new global leverage ratio to address balance sheet leverage. The BCBS will be monitoring and refining this new ratio between 2011 and 2017 before its final implementation in 2018.

In February 2011, the Office of the Superintendent of Financial Institutions (OSFI) issued advisories confirming the adoption of Basel III in Canada and clarifying the treatment of non-qualifying capital instruments. Non-qualifying capital instruments are subject to a 10% phase-out per annum commencing 2013. Banks are expected to develop and maintain a redemption schedule for non-qualifying capital instruments that gives priority to redeeming instruments at their regular par redemption dates before exercising any regulatory event redemption rights. CIBC expects to exercise its regulatory event redemption rights in fiscal 2022 in respect of the $300 million 10.25% CIBC Tier 1 Notes — Series B due June 30, 2108 issued by CIBC Capital Trust.

On August 16, 2011, we received confirmation from OSFI that our non-cumulative Class A preferred shares, Series 26, 27 and 29 (the Convertible Preferred Shares) will be treated as non-viability contingent capital (NVCC) for the purposes of determining regulatory capital under Basel III. In connection with receiving this confirmation, we have irrevocably renounced by way of a deed poll, our rights to convert the Convertible Preferred Shares into CIBC common shares except in circumstances that would be a “Trigger Event” as described in the August 2011 NVCC Advisory issued by OSFI; and we have provided an undertaking to OSFI that we will immediately exercise our rights to convert each of the Convertible Preferred Shares into CIBC common shares upon the occurrence of a Trigger Event.

We maintain prudent capital planning practices to ensure we are adequately capitalized and continue to exceed minimum standards and internal targets. Based on our current understanding of the revised capital requirements, we expect to exceed the new requirements ahead of implementation timelines that have been proposed by BCBS and confirmed by OSFI, while continuing to invest for future growth.

Regulatory capital

Regulatory capital is determined in accordance with guidelines issued by OSFI.

The following table presents our regulatory capital measures:


	2011			2010
$ millions, as at	Jul. 31			Oct. 31

Capital
Tier 1 capital	$	15,904		$	14,851
Total regulatory capital		20,383			18,966

Risk-weighted assets (RWAs)
Credit risk	$	88,638		$	86,782
Market risk		2,069			1,625
Operational risk		18,247			18,256

Total risk-weighted assets	$	108,954		$	106,663

Capital ratios
Tier 1 capital ratio		14.6	%		13.9	%
Total capital ratio		18.7	%		17.8	%
Assets-to-capital multiple		16.8	x		17.0	x

Tier 1 capital ratio was up 0.7% and the total capital ratio was up 0.9% from October 31, 2010. The capital ratios benefited from an increase in both Tier 1 and total regulatory capital, offset by a slight increase in RWAs.



CIBC Third Quarter 2011		23

Tier 1 and total regulatory capital increased from October 31, 2010 mainly due to internal capital generation and the issuance of common shares, offset in part by the preferred share redemptions and foreign currency translation losses component of AOCI. The change in total regulatory capital also reflected the $1,500 million 3.15% Debentures issued on November 2, 2010 and the redemption of all $1,080 million of our remaining 4.55% Medium Term Notes on March 28, 2011 noted below.

RWAs increased by $2.3 billion from October 31, 2010, mainly due to increased corporate exposures, updates to advanced internal ratings-based (AIRB) model parameters, and increased market risk RWAs, partially offset by the effect of a strengthening Canadian dollar on foreign currency denominated assets.

Market risk RWAs increased in part due to the implementation of incremental sensitivity-based (ISB) enhancements to our Value-at-Risk (VaR) model in the first quarter of 2011 (refer to “Market risk” section for additional details). Also during the first quarter, we migrated our remaining structured credit run-off business exposures to the banking book for regulatory capital purposes, which resulted in a decrease in trading-related counterparty credit risk RWAs and corresponding increases in securitization-related RWAs, corporate RWAs, and regulatory capital deductions.

Significant capital management activity

On November 2, 2010, we issued $1,500 million principal amount of 3.15% Debentures (subordinated indebtedness) due November 2, 2020. The Debentures qualify as Tier 2 capital.

On March 28, 2011, we redeemed all $1,080 million of our remaining 4.55% Medium Term Notes (subordinated indebtedness) due March 28, 2016. In accordance with their terms, the Medium Term Notes were redeemed at 100% of their principal amount, plus accrued and unpaid interest thereon.

On April 28, 2011, we redeemed all 2,000 of the remaining outstanding Non-cumulative Class A Series 28 Preferred Shares with a par value of $10 each at a redemption price of $10.00 per share for cash.

On July 31, 2011, we redeemed all of our 16 million Non-cumulative Class A Series 30 Preferred Shares with a par value of $25 each at a redemption price of $25.75 per share.

Off-balance sheet arrangements

We enter into several types of off-balance sheet arrangements in the normal course of our business. These include securitization-related sales, derivatives, credit-related arrangements, and guarantees. Details of our off-balance sheet arrangements are provided on pages 63 to 65 of the 2010 Annual Report.

The following table summarizes our exposures to non-consolidated entities involved in the securitization of third-party assets (both CIBC-sponsored/structured and third-party structured). Investment and loans are stated at carrying value. Undrawn liquidity and credit facilities are notional amounts net of any investment and loans to the entities. Written credit derivatives are notional amounts of written options and total return swaps under which we assume exposures.


	2011						2010
$ millions, as at	Jul. 31						Oct. 31
			Undrawn						Undrawn
			liquidity		Written				liquidity		Written
	Investment		and credit		credit		Investment		and credit		credit
	and loans⁽¹⁾		facilities		derivatives⁽²⁾		and loans⁽¹⁾		facilities		derivatives⁽²⁾

CIBC-sponsored conduits	$	75	$	1,401	$	—	$	182	$	2,182	$	—
CIBC-structured CDO vehicles		320		32		291		448		50		389
Third-party structured vehicles — structured credit run-off		4,557		432		4,825		7,696		585		5,128
Third-party structured vehicles — continuing		2,466		12		—		1,778		—		—


(1)		Excludes securities issued by, retained in, and derivatives with entities established by Canada Mortgage and Housing Corporation (CMHC), Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), Government National Mortgage Association (Ginnie Mae), Federal Home Loan Banks, Federal Farm Credit Bank, and Student Loan Marketing Association (Sallie Mae). $3.8 billion (October 31, 2010: $6.4 billion) of the exposures related to CIBC-structured CDO and third-party structured vehicles were hedged.

(2)		The negative fair value recorded on the interim consolidated balance sheet was $1.5 billion (October 31, 2010: $1.1 billion). Notional of $3.6 billion (October 31, 2010: $4.7 billion) were hedged with credit derivatives protection from third parties. The fair value of these hedges net of CVA was $0.4 billion (October 31, 2010: $0.5 billion). Accumulated fair value losses amount to nil (October 31, 2010: $0.5 billion) on unhedged written credit derivatives.

Additional details of our own asset securitization activities and our exposures to VIEs are provided in Note 5 to the interim consolidated financial statements.



24		CIBC Third Quarter 2011

MANAGEMENT OF RISK

Our approach to management of risk has not changed significantly from that described on pages 66 to 85 of the 2010 Annual Report.

Risk overview

We manage risk and related balance sheet resources within tolerance levels established by our management committees and approved by the Board of Directors and its committees. Key risk management policies are approved or renewed by the applicable Board and management committees annually. Further details on the Board and management committees, as applicable to the management of risk, are provided on pages 66 and 67 of the 2010 Annual Report.

The five key groups within Risk Management, independent of the originating businesses, contribute to our management of risk:

•

Capital Markets Risk Management — This unit provides independent oversight of the measurement, monitoring and control of market risks (both trading and non-trading), trading credit risk and trading operational risk across CIBC’s portfolios;

•

Card Products Risk Management — This unit oversees the management of credit risk in the card products portfolio, including the optimization of lending profitability;

•

Retail Lending and Wealth Risk Management — This unit primarily oversees the management of credit and fraud risk in the retail lines of credit and loans, residential mortgage, and small business loan portfolios, including the optimization of lending profitability. This unit is also responsible for overall risk management oversight of wealth management activities;

•

Wholesale Credit and Investment Risk Management — This unit is responsible for the adjudication and oversight of credit risks associated with our commercial and wholesale lending activities globally, management of the risks of our investment portfolios, as well as management of the special loans portfolios; and

•

Risk Services — This unit is responsible for regulatory and economic capital reporting, operational risk management, and enterprise-wide risk and stress analysis and reporting. Risk Services is also responsible for policies associated with credit and operational risks, including reputation and legal risks.

Liquidity and funding risks are managed by Treasury. The measurement, monitoring and control of liquidity and funding risk is addressed in collaboration with Risk Management with oversight provided by the Asset Liability Committee.

Credit risk

Credit risk primarily arises from our direct lending activities, and from our trading, investment and hedging activities. Credit risk is defined as the risk of financial loss due to a borrower or counterparty failing to meet its obligations in accordance with contractual terms.

Exposure to credit risk

Our gross credit exposure measured as exposure at default (EAD) for on- and off-balance sheet financial instruments was $514.8 billion as at July 31, 2011 (October 31, 2010: $500.4 billion). Overall exposure was up $14.3 billion, primarily due to an increase in retail exposures, as well as the increase in securitization exposures resulting from the migration of the remaining exposures in the structured credit run-off business in the first quarter of 2011, from the trading book to the banking book, for regulatory capital purposes. The following table shows the gross EAD, before credit risk mitigation:


	2011		2010
$ millions, as at	Jul. 31		Oct. 31

Business and government portfolios-AIRB approach
Drawn	$	96,118	$	92,190
Undrawn commitments		28,394		27,256
Repo-style transactions		70,800		81,065
Other off-balance sheet		51,353		47,031
OTC derivatives		14,862		14,580

Gross EAD on business and government portfolios	$	261,527	$	262,122

Retail portfolios-AIRB approach
Drawn		145,805		137,562
Undrawn commitments		70,066		68,188
Other off-balance sheet		411		399

Gross EAD on retail portfolios	$	216,282	$	206,149


Standardized portfolios		14,565		14,571
Securitization exposures		22,394		17,592

Gross EAD	$	514,768	$	500,434



CIBC Third Quarter 2011		25

Included in the business and government portfolios-AIRB approach is EAD of $484 million in the probability of default band considered watch list as at July 31, 2011 (October 31, 2010: $607 million). The decrease in watch list exposures was across the portfolio.

Exposure to certain countries and regions

Several European countries especially Greece, Ireland, Italy, Portugal, and Spain have continued to experience credit concerns. We have no direct sovereign exposure to any of these countries (October 31, 2010: $43 million). We have no direct non-sovereign exposure to Greece and Portugal. Our direct non-sovereign exposure to borrowers within the other countries is materially all to investment grade banks, with nil in deposits with banks (October 31, 2010: $232 million), $39 million (October 31, 2010: $49 million) in derivative MTM receivables (net of collateral held), and $2 million (October 31, 2010: $12 million) in letters of credit.

Our exposure to counterparties in selected countries in the Middle East and North Africa (Algeria, Bahrain, Egypt, Jordan, Lebanon, Libya, Morocco, Oman, Saudi Arabia, Syria, Tunisia, and Yemen) that have either experienced or may be at risk of unrest is $4 million (October 31, 2010: $4 million) in letters of credit and $1 million (October 31, 2010: $5 million) in derivative MTM receivables (net of collateral held).

We also have indirect exposures through CLO securities in our structured-credit run-off portfolio (where we benefit from significant subordination to our position) to the European countries noted above. These amounted to $477 million (October 31, 2010: $640 million). We have no exposure to the Middle East and North African countries noted above through these CLO securities.

Counterparty credit exposure

We have counterparty credit exposure that arises from our interest rate, foreign exchange, equity, commodity, and credit derivatives trading, hedging, and portfolio management activities, as explained in Note 14 to the consolidated financial statements in our 2010 Annual Report.

We establish a CVA for expected future credit losses from each of our derivative counterparties. As at July 31, 2011, the CVA for all derivative counterparties was $186 million (October 31, 2010: $325 million).

The following tables show the rating profile of derivative MTM receivables (after CVA and derivative master netting agreements but before any collateral), impaired loans, and allowance for credit losses.


	2011				2010
$ billions, as at	Jul. 31				Oct. 31
	Exposure
Standard & Poor’s rating equivalent
AAA to BBB-	$	6.71	90.0	%	$	6.45	86.7	%
BB+ to B-		0.72	9.7			0.82	11.0
CCC+ to CCC-		0.01	0.1			0.01	0.1
Below CCC-		0.01	0.1			0.02	0.3
Unrated		0.01	0.1			0.14	1.9

	$	7.46	100.0	%	$	7.44	100.0	%


	2011		2010
$ millions, as at	Jul. 31		Oct. 31

Gross impaired loans
Consumer	$	710	$	756
Business and government ⁽¹⁾		1,057		1,080

Total gross impaired loans	$	1,767	$	1,836

Allowance for credit losses
Consumer ⁽²⁾	$	930	$	1,034
Business and government ⁽¹⁾⁽²⁾		720		686

Total allowance for credit losses	$	1,650	$	1,720

Comprises:
Specific allowance for loans	$	619	$	631
General allowance for loans⁽³⁾		1,031		1,089

Total allowance for credit losses	$	1,650	$	1,720


(1)		Includes scored small business portfolios which are managed on a pool basis under Basel II.

(2)		During the first quarter, we securitized $1.7 billion of credit card receivables and purchased all of the retained interests, in the form of notes, relating to the securitization, which have been included within business and government loans. Accordingly, we reclassified a related general allowance of $61 million from credit card to business and government loans.

(3)		Excludes allowance on undrawn credit facilities of $49 million (October 31, 2010: $64 million).

Gross impaired loans were down $69 million or 4% from October 31, 2010. Consumer gross impaired loans were down $46 million or 6% due to lower new classifications in residential mortgages and personal lending. Business and government gross impaired loans were down $23 million or 2%, attributable to a decrease in the publishing, printing and broadcasting, manufacturing, oil and gas, and transportation sectors, partially offset by an increase in the agriculture and retail and business services sectors.

The total allowance for credit losses was down $70 million or 4% from October 31, 2010. Canadian and U.S. allowances for credit losses make up 76% and 10%, respectively, of the total allowance. The specific allowance was down $12 million or 2% from October 31, 2010, mainly driven by personal lending, reflective of improving delinquencies. The general allowance for credit losses was down $58 million, or 5% from October 31, 2010. Improvement in the business and government and Visa portfolios have been offset somewhat by a build up of the general allowance applicable to the acquired MasterCard portfolio. Since we acquired only performing accounts, the build up in general allowance is due to the portfolio seasoning to normal levels of delinquency.

For details on the provision for credit losses, see the “Overview” section.



26		CIBC Third Quarter 2011

Market risk

Market risk arises from positions in currencies, securities and derivatives held in our trading portfolios, and from our retail banking business, investment portfolios, and other non-trading activities. Market risk is defined as the potential for financial loss from adverse changes in underlying market factors, including interest and foreign exchange rates, credit spreads, and equity and commodity prices.

In the first quarter of 2012, we will implement the Market Risk Amendment (MRA) and the Incremental Risk Charge (IRC) as required by OSFI under the Basel market risk framework. As a result, we expect an increase in the VaR measure and capital requirements. In the first quarter of 2011, we implemented ISB enhancements to our VaR. The ISB risk measures included in our internal VaR model are equity skew vega risk, commodity skew vega risk, interest rate basis risk, dividend risk, and correlation risk.

Trading activities

The following table shows VaR by risk type for CIBC’s trading activities.

The VaR for the three months ended July 31, 2011 and comparative periods, disclosed in the table and backtesting chart below, exclude our exposures in our structured credit run-off business as described on pages 50 to 56 of the 2010 Annual Report. Commencing in the first quarter of 2011, the structured credit run-off business is reported as part of our non-trading business for regulatory capital purposes. Previously these positions were reported in our trading business.

Total average risk was down 21% from the last quarter, driven mainly by a reduction in our interest rate, equity, foreign exchange and commodities risks, partly offset by an increase in debt specific risk.

Actual market loss experience may differ from that implied by the VaR measure for a variety of reasons. Fluctuations in market rates and prices may differ from those in the past that are used to compute the VaR measure. Additionally, the VaR measure does not account for any losses that may occur beyond the 99% confidence level.

VaR by risk type — trading portfolio


	As at or for the																						For the nine
	three months ended																						months ended
								2011						2011						2010			2011			2010
								Jul. 31⁽¹⁾						Apr. 30⁽¹⁾						Jul. 31			Jul. 31⁽¹⁾			Jul. 31
$ millions	High⁽²⁾		Low⁽²⁾		As at			Average			As at			Average			As at			Average			Average			Average

Interest rate risk	$	6.1	$	1.6	$	1.9		$	3.2		$	4.8		$	4.3		$	4.0		$	3.6		$	3.7		$	3.5
Credit spread risk		1.7		0.7		0.8			1.2			1.1			1.1			0.6			0.6			1.1			0.5
Equity risk		3.5		1.5		1.5			2.6			3.5			4.4			0.9			0.8			3.6			1.2
Foreign exchange risk		1.7		0.2		0.6			0.5			0.5			1.2			1.0			0.8			1.0			1.0
Commodity risk		1.6		0.4		0.5			1.0			1.4			1.4			0.6			0.5			1.0			0.5
Debt specific risk		5.2		2.1		2.1			3.4			2.4			2.5			1.5			1.9			2.8			1.6
Diversification effect ⁽³⁾		n/m		n/m		(3.9	)		(5.8	)		(6.4	)		(7.2	)		(3.8	)		(3.7	)		(6.1	)		(3.9	)

Total risk	$	8.7	$	3.4	$	3.5		$	6.1		$	7.3		$	7.7		$	4.8		$	4.5		$	7.1		$	4.4


(1)		Commencing in the first quarter of 2011, reflects ISB risk measures including equity skew vega risk, commodity skew vega risk, interest rate basis risk, dividend risk, and correlation risk relating to trading activities. Comparative information for these measures prior to the first quarter of 2011 is not available.

(2)		Balances for respective risk types were calculated on different business days during the quarter.

(3)		Aggregate VaR is less than the sum of the VaR of the different market risk types due to risk offsets resulting from portfolio diversification effect.

n/m		Not meaningful. It is not meaningful to compute a diversification effect because the high and low may occur on different days for different risk types.



CIBC Third Quarter 2011		27

Trading revenue

The trading revenue (TEB)⁽¹⁾ and VaR backtesting graph below compares the current quarter and the three previous quarters’ actual daily trading revenue (TEB)⁽¹⁾ with the previous day’s VaR measures.

Trading revenue (TEB)⁽¹⁾was positive for 83% of the days in the quarter. Trading losses did not exceed VaR during the quarter. Average daily trading revenue (TEB)⁽¹⁾ was $2 million during the quarter.

Backtesting of trading revenue (TEB)⁽¹⁾ versus VaR

(1) For additional information, see the “Non-GAAP measures” section.

Non-trading activities

Interest rate risk

Non-trading interest rate risk consists primarily of risk inherent in Asset Liability Management activities and the activities of domestic and foreign subsidiaries. Interest rate risk results from differences in the maturities or repricing dates of assets and liabilities, both on- and off-balance sheet, as well as from embedded optionality in retail products. A variety of cash instruments and derivatives, principally interest rate swaps, futures and options, are used to manage and control these risks.

The following table shows the potential impact over the next 12 months, adjusted for estimated prepayments, of an immediate 100 and 200 basis points increase or decrease in interest rates. In addition, we have a floor in place in the downward shock to accommodate for the current low interest rate environment.

Interest rate sensitivity — non-trading (after-tax)


							2011									2011									2010
$ millions, as at							Jul. 31									Apr. 30									Jul. 31
	C$			US$			Other			C$			US$			Other			C$			US$			Other

100 basis points increase in interest rates
Increase (decrease) in net income	$	189		$	(7	)	$	3		$	181		$	(2	)	$	5		$	110		$	(43	)	$	4
Decrease in present value of shareholders’ equity		(22	)		(39	)		(34	)		(12	)		(154	)		(30	)		(54	)		(25	)		(7	)
100 basis points decrease in interest rates
Increase (decrease) in net income		(252	)		6			(3	)		(198	)		10			(5	)		(173	)		21			(4	)
Decrease (increase) in present value of shareholders’ equity		(74	)		21			34			(28	)		148			30			54			25			7

200 basis points increase in interest rates
Increase (decrease) in net income	$	348		$	(14	)	$	6		$	358		$	(5	)	$	10		$	219		$	(86	)	$	8
Increase (decrease) in present value of shareholders’ equity		(91	)		(78	)		(67	)		(33	)		(308	)		(59	)		(108	)		(50	)		(14	)
200 basis points decrease in interest rates
Increase (decrease) in net income		(363	)		7			(6	)		(345	)		21			(10	)		(216	)		20			(3	)
Decrease (increase) in present value of shareholders’ equity		(77	)		27			52			(77	)		288			49			141			(5	)		16



28		CIBC Third Quarter 2011

Liquidity risk

Liquidity risk arises from our general funding activities and in the course of managing our assets and liabilities. It is the risk of having insufficient cash resources to meet current financial obligations without raising funds at unfavourable rates or selling assets on a forced basis.

Our liquidity risk management strategies seek to maintain sufficient liquid financial resources to continually fund our balance sheet under both normal and stressed market environments.

We obtain funding through both wholesale and retail sources. Core personal deposits remain a primary source of retail funding and totalled $109.7 billion as at July 31, 2011 (October 31, 2010: $108.6 billion).

Strategies for managing liquidity risk include maintaining diversified sources of wholesale term funding, asset securitization initiatives, and maintenance of segregated pools of high-quality liquid assets that can be sold or pledged as security to provide a ready source of cash. Collectively, these strategies result in lower dependency on short-term wholesale funding.

Balance sheet liquid assets are summarized in the following table:


	2011		2010
$ billions, as at	Jul. 31		Oct. 31

Cash	$	1.3	$	1.3
Deposits with banks		20.2		10.7
Securities issued by Canadian governments ⁽¹⁾		5.1		5.4
Mortgage-backed securities ⁽¹⁾		16.0		20.1
Other securities ⁽²⁾		42.4		40.9
Securities borrowed or purchased under resale agreements		35.4		37.3

Total assets	$	120.4	$	115.7


(1)		Represent securities with residual term to contractual maturity of more than one year.

(2)		Comprise of AFS and FVO securities with residual term to contractual maturity within one year and trading securities.

In the course of our regular business activities, certain assets are pledged as part of collateral management, including those necessary for day-to-day clearing and settlement of payments and securities. Pledged assets, including those for covered bonds and securities borrowed or financed through repurchase agreements, as at July 31, 2011 totalled $30.8 billion (October 31, 2010: $33.5 billion).

Access to wholesale funding sources and the cost of funds are dependent on various factors including credit ratings. Fitch Ratings changed CIBC’s outlook from negative to stable on December 15, 2010. During the quarter, on July 28, 2011, Moody’s Investors Service changed CIBC’s outlook from negative to stable, and there were no other changes to our credit ratings or outlook at the major rating agencies.

Our funding and liquidity levels remained stable and sound over the period and we do not anticipate any events, commitments or demands that will materially impact our liquidity risk position.

Contractual obligations

Contractual obligations give rise to commitments of future payments affecting our short- and long-term liquidity and capital resource needs. These obligations include financial liabilities, credit and liquidity commitments, and other contractual obligations.

Details of our contractual obligations are provided on pages 83 to 84 of the 2010 Annual Report. There were no significant changes to contractual obligations that were not in the ordinary course of our business.

Other risks

We also have policies and processes to measure, monitor and control other risks, including operational, reputation and legal, regulatory, strategic, and environmental risks.

For additional details, see pages 84 to 85 of the 2010 Annual Report.



CIBC Third Quarter 2011		29

ACCOUNTING AND CONTROL MATTERS

Critical accounting policies and estimates

A summary of significant accounting policies is presented in Note 1 to the consolidated financial statements of the 2010 Annual Report. Certain accounting policies of CIBC are critical to understanding the results of operations and financial condition of CIBC. These critical accounting policies require management to make certain judgments and estimates, some of which may relate to matters that are uncertain. For a description of the judgments and estimates involved in the application of critical accounting policies and assumptions, see pages 86 to 91 of the 2010 Annual Report.

Valuation of financial instruments

Debt and equity trading securities, obligations related to securities sold short, all derivative contracts, AFS securities other than private equities, and FVO financial instruments are carried at fair value. FVO financial instruments include debt securities, business and government loans, and business and government deposits.

The determination of fair value requires judgment and is based on market information, where available and appropriate. Fair value is defined as the amount at which a financial instrument could be exchanged between knowledgeable and willing parties in an orderly arm’s length transaction motivated by normal business considerations. Fair value measurements are categorized into levels within a fair value hierarchy based on the nature of the valuation inputs (Level 1, 2 or 3) as outlined below. Fair value is best evidenced by an independent quoted market price for the same instrument in an active market (Level 1).

If a market price in an active market is not available, the fair value is estimated on the basis of valuation models. Observable market inputs are utilized for valuation purposes to the extent possible and appropriate.

Valuation models may utilize predominantly observable market inputs (Level 2), including: interest rates, foreign currency rates, equity and equivalent synthetic instrument prices, index levels, credit spreads, counterparty credit quality, corresponding market volatility levels, and other market-based pricing factors, as well as any appropriate, highly correlated proxy market valuation data. Valuation models may also utilize predominantly non-observable market inputs (Level 3).

The following table presents amounts, in each category of financial instruments, which are fair valued using valuation techniques based on non-observable market inputs (Level 3), for the structured credit run-off business and consolidated CIBC:


	Structured credit
$ millions, as at	run-off		Total		Total
July 31, 2011	business		CIBC		CIBC⁽¹⁾

Assets
Trading securities	$	574	$	580		1.7	%
AFS securities		6		2,700		11.8
FVO securities and loans		—		10		0.1
Derivative instruments		896		981		4.1

Liabilities
Deposits ⁽²⁾	$	450	$	680		19.1	%
Derivative instruments		1,604		2,441		10.1


(1)		Represents percentage of Level 3 assets and liabilities in each reported category on our interim consolidated balance sheet.

(2)		Includes FVO deposits and bifurcated embedded derivatives.

Sensitivity of Level 3 financial assets and liabilities

Much of our structured credit run-off business requires the application of valuation techniques using non-observable market inputs. In an inactive market, indicative broker quotes, proxy valuation from comparable financial instruments, and other internal models using our own assumptions of how market participants would price a market transaction on the measurement date (all of which we consider to be non-observable market inputs), are predominantly used for the valuation of these positions. We also consider whether a CVA is required to recognize the risk that any given counterparty to which we are exposed may not ultimately be able to fulfill its obligations.

For credit derivatives purchased from financial guarantors, our CVA is driven off market-observed credit spreads, where available and appropriate. For financial guarantors that do not have observable credit spreads or where observable credit spreads are available but do not reflect an orderly market (i.e., not representative of fair value), a proxy market credit spread is used. The proxy market credit spread is based on our internal credit rating for the particular financial guarantor. Credit spreads contain information on market (or proxy market) expectations of probability of default as well as loss given default. The credit spreads are applied in relation to the weighted-average life of our exposure to the counterparties. For financial guarantor counterparties where a proxy market credit spread is used, we also make an adjustment to reflect additional financial guarantor risk over an equivalently rated non-financial guarantor counterparty. The amount of the adjustment is dependent on all available internal and external market information for financial guarantors. The final CVA takes into account the expected correlation between the future performance of the underlying reference assets and that of the counterparties, except for high-quality reference assets where we have neither experienced nor expect future credit losses.

Where appropriate, on certain financial guarantors, we determined the CVA based on estimated recoverable amounts.



30		CIBC Third Quarter 2011

Interest-only strips from the sale of securitized assets are valued using prepayment rates, which we consider to be a non-observable market input.

Swap arrangements related to the sale of securitized assets are valued using liquidity rates, which we consider to be a non-observable market input.

ABS are sensitive to credit and liquidity spreads, which we consider to be non-observable market inputs.

FVO deposits that are not managed as part of our structured credit run-off business are sensitive to non-observable credit spreads, which are derived using extrapolation and correlation assumptions.

Certain bifurcated embedded derivatives, due to the complexity and unique structure of the instruments, require significant assumptions and judgment to be applied to both the inputs and valuation techniques, which we consider to be non-observable.

The effect of changing one or more of the assumptions to fair value these instruments to reasonably possible alternatives would impact net income or other comprehensive income (OCI) as described below.

Our unhedged non-USRMM structured credit positions are sensitive to changes in MTM, generally as derived from indicative broker quotes and internal models as described above. A 10% adverse change in MTM of the underlyings would result in losses of approximately $81 million, excluding unhedged non-USRMM positions classified as loans which are carried at amortized cost.

For our hedged positions, there are two categories of sensitivities, the first relates to our hedged loan portfolio and the second relates to our hedged fair valued exposures. Since on-balance sheet hedged loans are carried at amortized cost whereas the related credit derivatives are fair valued, a 10% increase in the MTM of credit derivatives in our hedged structured credit positions would result in a net gain of approximately $17 million, assuming current CVA ratios remain unchanged. A 10% reduction in the MTM of our on-balance sheet fair valued exposures and a 10% increase in the MTM of all credit derivatives in our hedged structured credit positions would result in a net loss of approximately $8 million, assuming current CVA ratios remain unchanged.

The impact of a 10% increase in the MTM of unmatched credit derivatives, where we have purchased protection but do not have exposure to the underlying, would not result in a significant net gain or loss, assuming current CVA ratios remain unchanged.

The impact of a 10% reduction in receivables, net of CVA from financial guarantors, would result in a net loss of approximately $43 million.

A 10% increase in prepayment rates pertaining to our retained interests related to the interest-only strip, resulting from the sale of securitized assets, would result in a net loss of approximately $19 million.

A 10 basis point decrease in liquidity rates used to fair value our derivatives related to the sale of securitized assets would result in a loss of approximately $96 million.

A 10% reduction in the MTM of our on-balance sheet ABS that are valued using non-observable credit and liquidity spreads would result in a decrease in OCI of approximately $170 million.

A 10% reduction in the MTM of certain FVO deposits which are not managed as part of our structured credit run-off business and are valued using non-observable inputs, including correlation and extrapolated credit spreads, would result in a gain of approximately $4 million.

A 10% reduction in the MTM of certain bifurcated embedded derivatives, valued using internally vetted valuation techniques, would result in a gain of approximately $19 million.

Net losses of $211 million and $148 million, for the quarter and nine months ended July 31, 2011, respectively (net losses of $561 million and $177 million for the quarter and nine months ended July 31, 2010, respectively) were recognized in the interim consolidated statement of operations, on the financial instruments for which fair value was estimated using valuation techniques requiring non-observable market parameters.

The following table summarizes our valuation adjustments:


	2011		2010
$ millions, as at	Jul. 31		Oct. 31

Trading securities
Market risk	$	1	$	2
Derivatives
Market risk		48		64
Credit risk		186		325
Administration costs		5		6

Total valuation adjustments	$	240	$	397

Risk factors related to fair value adjustments

We believe that we have made appropriate fair value adjustments and have taken appropriate write-downs to date. The establishment of fair value adjustments and the determination of the amount of write-downs involve estimates that are based on accounting processes and judgments by management. We evaluate the adequacy of the fair value adjustments and the amount of write-downs on an ongoing basis. Fair value adjustments and write-downs may change as events warrant and may not reflect ultimate realizable amounts.

Contingent liabilities

CIBC is a party to a number of legal proceedings, including regulatory investigations, in the ordinary course of its business. While it is inherently difficult to predict the outcome of such matters, based on current knowledge and consultation with legal counsel, we do not expect that the outcome of any of these matters, individually or in aggregate, would have a material adverse effect on our consolidated financial position. However, the outcome of any such matters, individually or in aggregate, may be material to our operating results for a particular period.



CIBC Third Quarter 2011		31

In the fourth quarter of 2008, we recognized a gain of $895 million (US$841 million), resulting from the reduction to zero of our unfunded commitment on a VFN issued by a CDO. This reduction followed certain actions of the indenture trustee for the CDO following the September 15, 2008 bankruptcy filing of Lehman Brothers Holdings, Inc. (Lehman), the guarantor of a related credit default swap agreement with the CDO.

Although there can be no certainty regarding any eventual outcome, we believe that the CDO indenture trustee’s actions in reducing the unfunded commitment on our VFN to zero, were fully supported by the terms of the governing contracts and the relevant legal standards and CIBC intends to vigorously contest the adversary proceeding.

U.S. regulatory developments

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was enacted in the U.S. in July 2010. The Dodd-Frank Act contains financial reforms, including increased consumer protection, regulation of the over-the-counter (OTC) derivative markets, heightened capital and prudential standards, and restrictions on proprietary trading by banks. The Dodd-Frank Act will affect every financial institution in the U.S., and many financial institutions that operate outside the U.S. As many aspects of the Dodd-Frank Act are subject to rulemaking and will be implemented over several years, the impact on CIBC is difficult to anticipate until the implementing regulations are finalized and released. At this point, we do not expect the Dodd-Frank Act to have a significant impact on our results.

Transition to IFRS

Canadian publicly accountable enterprises must transition to IFRS for fiscal years beginning on or after January 1, 2011. As a result, we will adopt IFRS commencing November 1, 2011 and will publish our first interim consolidated financial statements, prepared in accordance with IFRS, for the quarter ending January 31, 2012. Upon adoption, we will provide fiscal 2011 comparative financial information, also prepared in accordance with IFRS, including an opening IFRS consolidated balance sheet as at November 1, 2010.

The transition to IFRS represents a significant initiative for CIBC and is supported by a formal governance structure with an enterprise view and a dedicated project team. Our IFRS transition program has been divided into three phases: (i) discovery; (ii) execution; and (iii) conversion. The discovery phase included an accounting diagnostic, which identified the accounting standards that are relevant to CIBC, and the identification and planning for the execution phase. The execution phase, which we are currently in, commenced with a detailed analysis of the IFRS standards and continues through to the preparation of the policies, processes, technologies, strategies, and reporting for the upcoming transition. The final conversion phase will report on the new IFRS standards in 2012 and reconcile Canadian GAAP to IFRS with fiscal 2011 comparative information under IFRS.

Our IFRS transition project continues to progress on track with our transition plan. We have appropriately engaged our external and internal auditors to review key milestones and activities as we progress through the transition. The opening IFRS consolidated balance sheet is in the process of being audited, which will be completed during the remainder of fiscal 2011.

Process, financial reporting controls, and technology

Consistent with our work effort in the last two quarters of fiscal 2010, we completed a significant amount of the development of the business processes and internal controls over financial reporting to enable us to prepare our comparative opening November 1, 2010 consolidated balance sheet and restate our comparative fiscal 2011 consolidated financial statements to IFRS, while at the same time preparing normal course fiscal 2011 Canadian GAAP financial information. Our technology-based comparative year reporting facility is currently being utilized to track 2011 comparative IFRS financial information.

In the first and second quarters of fiscal 2011, the focus was on preparing the IFRS opening November 1, 2010 consolidated balance sheet and our first comparative quarter of 2011. In the third quarter, we focused on the preparation of the statement of operations for the second quarter of 2011. Throughout 2011, we have been preparing the IFRS 1, “First-Time Adoption of International Financial Reporting Standards”, transition note with the accompanying financial statement reconciliations that will be included in our first published IFRS financial statements for the quarter ending January 31, 2012. We used our comparative year reporting facility together with our surrounding controls and processes to prepare these IFRS financial statement reconciliations.

We continue to develop the business processes and controls related to transactional level accounting, including those related to the greater use of on-balance sheet accounting as a result of IFRS differences concerning the derecognition of financial assets. While we identified additional resource and process requirements during fiscal 2010 as part of our assessment and execution work, we do not require any significant modifications to our supporting



32		CIBC Third Quarter 2011

information technology systems, nor do we expect any significant changes to our business activities. Identified technology impacts continue to include the realignment of system feeds to more efficiently report our securitized mortgages on the consolidated balance sheet. The streamlining of the system feeds is expected to be completed next quarter in line with our plans.

Concurrent with preparing for the impact of IFRS on our financial reporting, we have also continued to focus on preparing CIBC for impacts that IFRS will have on the financial statements of our clients and counterparties, including impacts to our loan management processes, controls, and risk rating system.

Communications and training

Information regarding the progress of the project continued to be communicated to internal stakeholders throughout fiscal 2011, including our Audit Committee, senior executives and the Program Steering Committee, and to external stakeholders including our external auditor. Communications to external stakeholders will continue through the quarterly and annual reports. We also participated in an industry-sponsored IFRS education event to communicate the broad impacts of IFRS on the banking industry to analysts and investors. We have also communicated IFRS impacts to rating agencies.

We believe we have the financial reporting expertise to support our transition to IFRS. We have accounting policy staff dedicated to assessing the impact of IFRS and consulting with external advisors as necessary. In 2009, we launched an enterprise-wide training program to raise the level of awareness of IFRS throughout CIBC, and to prepare staff to perform in an IFRS environment. We completed the delivery of our training program during fiscal 2010, which included separate learning paths for: (i) groups that need to understand and execute on the impact of IFRS on CIBC and its subsidiaries; and (ii) groups, such as Risk Management and the businesses, that need to understand the impact of transitioning away from Canadian GAAP on CIBC as well as our Canadian clients and counterparties.

While the training was completed during fiscal 2010, refresh sessions were delivered during the first quarter of fiscal 2011, and will continue to be provided in 2011 as required.

Financial impacts

The requirements concerning the transition to IFRS are set out in IFRS 1, which generally requires that changes from Canadian GAAP be applied retroactively and reflected in our opening November 1, 2010 comparative IFRS consolidated balance sheet. However, there are a number of transitional elections, some of which entail an exemption from full restatement, available under the transitional rules that we continue to evaluate. We did finalize the transitional election related to the November 1, 2010 classification of financial instruments, including the designation of $350 million carrying value of TruPs classified as loans and receivables under Canadian GAAP (fair value of $270 million) as fair value through profit and loss under IFRS. We expect to finalize our other transitional elections during the next quarter.

IFRS will result in accounting policy differences in many areas. Based on existing IFRS and the assessment of our transitional elections to date, the areas that will have the most significant impact to our financial and capital reporting include derecognition of financial instruments and the accounting for employment benefits. Other areas include, but are not limited to, consolidations, accounting for share-based compensation, measurement and impairment of equity instruments, accounting for foreign exchange, accounting for joint ventures, and measurement of loss contingencies. For more information on financial impacts, refer to pages 94 and 95 of our 2010 Annual Report.

Future changes

Proposed changes to the IFRS accounting standards which may be significant for us include changes in the areas of employee benefits, loan loss provisioning, the classification and measurement of financial instruments, and hedge accounting. The changes arising from the proposed standards will not be effective for us until the years following our IFRS transition in fiscal 2012. During the first three quarters of fiscal 2011, we continued to monitor these proposed changes to IFRS, as well as potential changes in the interpretation of existing IFRS on our assessment of the financial, capital, and business implications of the transition to IFRS.

The impact of IFRS to us at transition will ultimately depend on the IFRS standards and capital reporting rules in effect at the time, transition elections that we expect to finalize over the next quarter, and the prevailing business and economic facts and circumstances. The evolving nature of IFRS will likely also result in additional accounting changes, some of which may be significant, in the years following our initial transition. We continue to monitor changes in the standards and to adjust our plans accordingly.

Controls and procedures

Disclosure controls and procedures

CIBC’s management, with the participation of the President and Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness, as at July 31, 2011, of CIBC’s disclosure controls and procedures (as defined in the rules of the SEC and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures were effective.

Changes in internal control over financial reporting

There have been no changes in CIBC’s internal control over financial reporting during the quarter ended July 31, 2011, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.



CIBC Third Quarter 2011		33

CONSOLIDATED BALANCE SHEET


	2011			2010
Unaudited, $ millions, as at	Jul. 31			Oct. 31

ASSETS
Cash and non-interest-bearing deposits with banks	$	2,217		$	2,190

Interest-bearing deposits with banks		19,307			9,862

Securities (Note 3)
Trading		33,540			28,557
Available-for-sale (AFS)		22,881			26,621
Designated at fair value (FVO)		17,618			22,430

		74,039			77,608

Securities borrowed or purchased under resale agreements		35,394			37,342

Loans
Residential mortgages		101,293			93,568
Personal		34,594			34,335
Credit card		9,960			12,127
Business and government		40,431			38,582
Allowance for credit losses (Note 4)		(1,650	)		(1,720	)

		184,628			176,892

Other
Derivative instruments		24,176			24,682
Customers’ liability under acceptances		8,964			7,684
Land, buildings and equipment		1,612			1,660
Goodwill		1,855			1,913
Software and other intangible assets		628			609
Other assets		9,759			11,598

		46,994			48,146

	$	362,579		$	352,040

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Personal	$	115,063		$	113,294
Business and government		139,308			127,759
Bank		6,956			5,618

		261,327			246,671

Other
Derivative instruments		24,059			26,489
Acceptances		8,964			7,684
Obligations related to securities sold short		10,805			9,673
Obligations related to securities lent or sold under repurchase agreements		23,346			28,220
Other liabilities		12,051			12,572

		79,225			84,638

Subordinated indebtedness (Note 6)		5,153			4,773

Non-controlling interests		156			168

Shareholders’ equity
Preferred shares (Note 7)		2,756			3,156
Common shares (Note 7)		7,254			6,804
Contributed surplus		89			96
Retained earnings		7,208			6,095
Accumulated other comprehensive income (AOCI)		(589	)		(361	)

		16,718			15,790

	$	362,579		$	352,040

The accompanying notes are an integral part of these interim consolidated financial statements.


CIBC Third Quarter 2011		35

CONSOLIDATED STATEMENT OF OPERATIONS


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
Unaudited, $ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Interest income
Loans	$	1,938		$	1,865		$	1,868		$	5,774		$	5,349
Securities borrowed or purchased under resale agreements		100			87			49			283			111
Securities		495			493			381			1,490			1,105
Deposits with banks		16			14			14			48			34

		2,549			2,459			2,312			7,595			6,599

Interest expense
Deposits		688			690			558			2,100			1,556
Other liabilities		201			186			145			587			321
Subordinated indebtedness		53			55			54			163			140
Preferred share liabilities		—			—			7			—			23

		942			931			764			2,850			2,040

Net interest income		1,607			1,528			1,548			4,745			4,559

Non-interest income
Underwriting and advisory fees		130			128			108			420			339
Deposit and payment fees		195			183			194			564			568
Credit fees		98			93			87			283			251
Card fees		15			17			72			88			242
Investment management and custodial fees		123			122			117			364			344
Mutual fund fees		218			214			188			639			556
Insurance fees, net of claims		82			73			72			234			205
Commissions on securities transactions		110			138			108			387			349
Trading (loss) income, net		(101	)		10			84			(38	)		595
AFS securities gains, net		65			40			123			169			281
FVO gains (losses), net (Note 1)		61			(81	)		(146	)		(118	)		(439	)
Income from securitized assets		278			270			150			763			421
Foreign exchange other than trading		58			32			88			160			231
Other		118			122			56			387			329

		1,450			1,361			1,301			4,302			4,272

Total revenue		3,057			2,889			2,849			9,047			8,831

Provision for credit losses (Note 4)		195			194			221			598			896

Non-interest expenses
Employee compensation and benefits (Note 10)		1,044			995			973			3,096			2,877
Occupancy costs		161			165			161			487			475
Computer, software and office equipment		249			246			246			739			729
Communications		70			76			73			221			218
Advertising and business development		55			51			43			153			132
Professional fees		44			42			53			122			144
Business and capital taxes		11			10			22			33			66
Other		186			209			170			585			526

		1,820			1,794			1,741			5,436			5,167

Income before income taxes and non-controlling interests		1,042			901			887			3,013			2,768
Income tax expense		231			221			244			720			791

		811			680			643			2,293			1,977
Non-controlling interests		3			2			3			8			25

Net income		808			678			640			2,285			1,952
Preferred share dividends and premiums		55			42			42			139			127

Net income applicable to common shares	$	753		$	636		$	598		$	2,146		$	1,825

Weighted-average common shares outstanding (thousands)
- Basic		397,232			395,373			388,815			395,265			386,706
- Diluted		397,986			396,394			389,672			396,189			387,710
Earnings per share (in dollars) (Note 11)
- Basic	$	1.90		$	1.61		$	1.54		$	5.43		$	4.72
- Diluted	$	1.89		$	1.60		$	1.53		$	5.42		$	4.71
Dividends per common share (in dollars)	$	0.87		$	0.87		$	0.87		$	2.61		$	2.61

The accompanying notes are an integral part of these interim consolidated financial statements.


36		CIBC Third Quarter 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
Unaudited, $ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Net income	$	808		$	678		$	640		$	2,285		$	1,952
Other comprehensive income (OCI), net of tax
Net foreign currency translation adjustments
Net gains (losses) on investments in self-sustaining foreign operations		41			(273	)		60			(326	)		(254	)
Net gains (losses) on investments in self-sustaining foreign operations reclassified to net income		—			—			21			—			21
Net gains (losses) on hedges of investments in self-sustaining foreign operations		(8	)		84			(17	)		105			77
Net gains (losses) on hedges of investments in self-sustaining foreign operations reclassified to net income		—			—			(16	)		—			(16	)

		33			(189	)		48			(221	)		(172	)

Net change in AFS securities
Net unrealized gains (losses) on AFS securities		141			22			255			95			209
Net (gains) losses on AFS securities reclassified to net income		(30	)		(16	)		(109	)		(75	)		(151	)

		111			6			146			20			58

Net change in cash flow hedges
Net gains (losses) on derivatives designated as cash flow hedges		(25	)		(10	)		(9	)		(51	)		(11	)
Net (gains) losses on derivatives designated as cash flow hedges reclassified to net income		13			7			3			24			21

		(12	)		(3	)		(6	)		(27	)		10

Total OCI	$	132		$	(186	)	$	188		$	(228	)	$	(104	)

Comprehensive income	$	940		$	492		$	828		$	2,057		$	1,848

The income tax allocated to each component of OCI is presented in the table below:


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
Unaudited, $ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Income tax (expense) benefit
Net foreign currency translation adjustments
Net gains (losses) on investments in self-sustaining foreign operations	$	2		$	1		$	(5	)	$	3		$	—
Net gains (losses) on hedges of investments in self-sustaining foreign operations		1			(18	)		4			(24	)		(18	)
Net gains (losses) on hedges of investments in self-sustaining foreign operations reclassified to net income		—			—			8			—			8

		3			(17	)		7			(21	)		(10	)

Net change in AFS securities
Net unrealized gains (losses) on AFS securities		(36	)		2			(96	)		(12	)		(77	)
Net (gains) losses on AFS securities reclassified to net income		5			8			21			26			41

		(31	)		10			(75	)		14			(36	)

Net change in cash flow hedges
Net gains (losses) on derivatives designated as cash flow hedges		9			2			4			19			4
Net (gains) losses on derivatives designated as cash flow hedges reclassified to net income		(4	)		—			—			(7	)		(2	)

		5			2			4			12			2

	$	(23	)	$	(5	)	$	(64	)	$	5		$	(44	)

The accompanying notes are an integral part of these interim consolidated financial statements.


CIBC Third Quarter 2011		37

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
Unaudited, $ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Preferred shares
Balance at beginning of period	$	3,156		$	3,156		$	3,156		$	3,156		$	3,156
Redemption of preferred shares		(400	)		—			—			(400	)		—

Balance at end of period	$	2,756		$	3,156		$	3,156		$	2,756		$	3,156

Common shares
Balance at beginning of period	$	7,116		$	6,951		$	6,509		$	6,804		$	6,241
Issue of common shares		137			165			150			449			418
Treasury shares		1			—			3			1			3

Balance at end of period	$	7,254		$	7,116		$	6,662		$	7,254		$	6,662

Contributed surplus
Balance at beginning of period	$	90		$	96		$	94		$	96		$	92
Stock option expense		1			1			2			4			8
Stock options exercised		(1	)		(7	)		—			(10	)		(2	)
Other		(1	)		—			—			(1	)		(2	)

Balance at end of period	$	89		$	90		$	96		$	89		$	96

Retained earnings
Balance at beginning of period	$	6,801		$	6,509		$	5,713		$	6,095		$	5,156
Net income		808			678			640			2,285			1,952
Dividends
Preferred		(43	)		(42	)		(42	)		(127	)		(127	)
Common		(346	)		(344	)		(338	)		(1,032	)		(1,009	)
Premium on redemption of preferred shares		(12	)		—			—			(12	)		—
Other		—			—			(1	)		(1	)		—

Balance at end of period	$	7,208		$	6,801		$	5,972		$	7,208		$	5,972

AOCI, net of tax
Net foreign currency translation adjustments
Balance at beginning of period	$	(829	)	$	(640	)	$	(715	)	$	(575	)	$	(495	)
Net gains (losses) on translation of net foreign operations		33			(189	)		48			(221	)		(172	)

Balance at end of period	$	(796	)	$	(829	)	$	(667	)	$	(796	)	$	(667	)

Net unrealized gains (losses) on AFS securities
Balance at beginning of period	$	106		$	100		$	36		$	197		$	124
Net change in unrealized gains (losses) on AFS securities		111			6			146			20			58

Balance at end of period	$	217		$	106		$	182		$	217		$	182

Net gains (losses) on cash flow hedges
Balance at beginning of period	$	2		$	5		$	17		$	17		$	1
Net change in unrealized gains (losses) on cash flow hedges		(12	)		(3	)		(6	)		(27	)		10

Balance at end of period	$	(10	)	$	2		$	11		$	(10	)	$	11

Total AOCI, net of tax	$	(589	)	$	(721	)	$	(474	)	$	(589	)	$	(474	)

Retained earnings and AOCI	$	6,619		$	6,080		$	5,498		$	6,619		$	5,498

Shareholders’ equity at end of period	$	16,718		$	16,442		$	15,412		$	16,718		$	15,412

The accompanying notes are an integral part of these interim consolidated financial statements.


38		CIBC Third Quarter 2011

CONSOLIDATED STATEMENT OF CASH FLOWS


	For the three									For the nine
	months ended									months ended
	2011			2011			2010			2011			2010
Unaudited, $ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Cash flows provided by (used in) operating activities
Net income	$	808		$	678		$	640		$	2,285		$	1,952
Adjustments to reconcile net income to cash flows provided by (used in) operating activities:
Provision for credit losses		195			194			221			598			896
Amortization⁽¹⁾		87			87			91			264			279
Stock option expense		1			1			2			4			8
Future income taxes		106			129			186			466			621
AFS securities gains, net		(65	)		(40	)		(123	)		(169	)		(281	)
(Gains) losses on disposal of land, buildings and equipment		(1	)		(1	)		(1	)		(5	)		1
Other non-cash items, net		177			56			760			132			523
Changes in operating assets and liabilities
Accrued interest receivable		61			(65	)		(7	)		142			77
Accrued interest payable		(152	)		136			49			(317	)		(29	)
Amounts receivable on derivative contracts		(2,495	)		(1,797	)		(2,209	)		869			547
Amounts payable on derivative contracts		1,021			1,791			2,203			(2,592	)		(540	)
Net change in trading securities		3,797			(5,431	)		(2,999	)		(4,983	)		(5,728	)
Net change in FVO securities		3,265			1,386			(22	)		4,812			3,545
Net change in other FVO assets and liabilities		(1,380	)		(326	)		(813	)		(1,483	)		(1,767	)
Current income taxes		140			39			73			76			(156	)
Other, net		(450	)		410			(709	)		979			1,040

		5,115			(2,753	)		(2,658	)		1,078			988

Cash flows provided by (used in) financing activities
Deposits, net of withdrawals		(17,433	)		20,006			12,690			15,381			17,657
Obligations related to securities sold short		(561	)		1,259			(1,304	)		1,716			2,292
Net obligations related to securities lent or sold under repurchase agreements		(4,554	)		(2,289	)		(1,587	)		(4,874	)		(2,631	)
Issue of subordinated indebtedness		—			—			—			1,500			1,100
Redemption/repurchase of subordinated indebtedness		—			(1,080	)		—			(1,080	)		(95	)
Redemption of preferred shares		—			—			—			(604	)		—
Issue of common shares, net		137			165			150			449			418
Net proceeds from treasury shares sold		1			—			3			1			3
Dividends		(389	)		(386	)		(380	)		(1,159	)		(1,136	)
Other, net		(32	)		144			1,232			(120	)		(1,392	)

		(22,831	)		17,819			10,804			11,210			16,216

Cash flows provided by (used in) investing activities
Interest-bearing deposits with banks		15,965			(15,996	)		(6,017	)		(9,445	)		(7,195	)
Loans, net of repayments		(8,619	)		(6,218	)		(5,488	)		(18,808	)		(21,624	)
Net proceeds from securitizations		3,909			3,580			3,883			10,508			9,467
Purchase of AFS securities		(5,698	)		(7,629	)		(18,531	)		(22,675	)		(46,144	)
Proceeds from sale of AFS securities		4,501			5,127			6,637			12,274			29,158
Proceeds from maturity of AFS securities		4,339			4,501			4,520			14,072			19,157
Net securities borrowed or purchased under resale agreements		3,459			2,158			7,382			1,948			667
Net cash provided by dispositions		—			—			—			54			(297	)
Net purchase of land, buildings and equipment		(63	)		(54	)		(81	)		(144	)		(149	)

		17,793			(14,531	)		(7,695	)		(12,216	)		(16,960	)

Effect of exchange rate changes on cash and non-interest- bearing deposits with banks		7			(41	)		9			(45	)		(33	)

Net increase (decrease) in cash and non-interest- bearing deposits with banks during period		84			494			460			27			211
Cash and non-interest-bearing deposits with banks at beginning of period		2,133			1,639			1,563			2,190			1,812

Cash and non-interest-bearing deposits with banks at end of period⁽²⁾	$	2,217	⁽³⁾	$	2,133		$	2,023		$	2,217	⁽³⁾	$	2,023

Cash interest paid	$	1,094		$	795		$	715		$	3,167		$	2,069
Cash income taxes (recovered) paid	$	(15	)	$	54		$	(15	)	$	178		$	327


(1)		Includes amortization of buildings, furniture, equipment, leasehold improvements, software and other intangible assets.

(2)		Includes restricted cash balances of $240 million (April 30, 2011: $238 million; July 31, 2010: $255 million).

(3)		Includes cash reserved for payment on redemption of non-cumulative preferred shares (Note 7).

The accompanying notes are an integral part of these interim consolidated financial statements.


CIBC Third Quarter 2011		39

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The unaudited interim consolidated financial statements of Canadian Imperial Bank of Commerce (CIBC) have been prepared in accordance with Canadian generally accepted accounting principles (GAAP). These financial statements follow the same accounting policies and their methods of application as CIBC’s consolidated financial statements for the year ended October 31, 2010. CIBC’s interim consolidated financial statements do not include all disclosures required by Canadian GAAP for annual financial statements and accordingly, should be read in conjunction with the consolidated financial statements for the year ended October 31, 2010, as set out on pages 104 to 179 of the 2010 Annual Report.

1. Fair value of financial instruments

The table below presents the level in the fair value hierarchy into which the fair values of financial instruments that are carried at fair value on the interim consolidated balance sheet are categorized:


				Level 1						Level 2						Level 3
										Valuation technique-						Valuation technique-
				Quoted						observable						non-observable
				market price						market inputs						market inputs			Total			Total
	2011			2010			2011			2010			2011			2010			2011			2010
$ millions, as at	Jul. 31			Oct. 31			Jul. 31			Oct. 31			Jul. 31			Oct. 31			Jul. 31			Oct. 31

Financial assets
Trading securities and loans
Government issued or guaranteed securities	$	4,954		$	4,158		$	7,170		$	8,463		$	—		$	—		$	12,124		$	12,621
Corporate equity		16,349			11,818			1,960			1,090			—			—			18,309			12,908
Corporate debt		—			—			1,589			1,039			6			20			1,595			1,059
Mortgage- and asset- backed securities		—			—			938			342			574			1,627			1,512			1,969
Business and government loans ⁽¹⁾		540			1,000			—			—			—			—			540			1,000

	$	21,843		$	16,976		$	11,657		$	10,934		$	580		$	1,647		$	34,080		$	29,557

AFS securities
Government issued or guaranteed securities	$	2,651		$	7,398		$	10,030		$	9,310		$	—		$	—		$	12,681		$	16,708
Corporate public equity		120			108			—			5			—			—			120			113
Corporate debt		—			—			3,753			2,713			9			23			3,762			2,736
Mortgage- and asset- backed securities		—			—			3,146			3,656			2,691			2,826			5,837			6,482

	$	2,771		$	7,506		$	16,929		$	15,684		$	2,700		$	2,849		$	22,400		$	26,039

FVO securities and loans	$	74		$	307		$	17,544		$	22,124		$	10		$	20		$	17,628		$	22,451
Derivative instruments		222			272			22,973			22,949			981			1,461			24,176			24,682

Total financial assets	$	24,910		$	25,061		$	69,103		$	71,691		$	4,271		$	5,977		$	98,284		$	102,729

Financial liabilities
Deposits	$	—		$	—		$	(2,872	)	$	(2,397	)	$	(680	)	$	(1,428	)	$(3,552)⁽²⁾				$(3,825	)⁽²⁾
Derivative instruments		(191	)		(265	)		(21,427	)		(23,148	)		(2,441	)		(3,076	)		(24,059	)		(26,489	)
Obligations related to securities sold short		(4,260	)		(3,793	)		(6,545	)		(5,880	)		—			—			(10,805	)		(9,673	)

Total financial liabilities	$	(4,451	)	$	(4,058	)	$	(30,844	)	$	(31,425	)	$	(3,121	)	$	(4,504	)	$	(38,416	)	$	(39,987	)


(1)		Beginning this quarter, we have reported trading loans carried at fair value within business and government loans. Previously these were classified as part of amortized loans. Prior period information has been restated.

(2)		Comprises FVO deposits of $3,286 million (October 31, 2010: $3,530 million) and bifurcated embedded derivatives of $266 million (October 31, 2010: $295 million).

There were no transfers of financial instruments between the levels during the quarter and nine months ended July 31, 2011.

The net losses recognized in the interim consolidated statement of operations on the financial instruments, for which fair value was estimated using valuation techniques requiring non-observable market parameters, were $211 million and $148 million for quarter and nine months ended July 31, 2011, respectively (net losses of $561 million and $177 million for the quarter and nine months ended July 31, 2010, respectively).

The following table presents the changes in fair value of assets, liabilities, and the net derivative assets and liabilities in Level 3. These instruments are measured at fair value utilizing non-observable market inputs. We often hedge positions with offsetting positions that may be classified in a different level. As a result, the gains and losses for assets and liabilities in the Level 3 category presented in the table below do not reflect the effect of offsetting gains and losses on the related hedging instruments that are classified in Level 1 and Level 2.


40		CIBC Third Quarter 2011


				Net gains/(losses)
				included in income
										Net unrealized
										gains/(losses)			Transfer			Transfer			Purchases
$ millions, as at or for the	Opening									included			in to			out of			and			Sales and			Closing
three months ended	balance			Realized⁽¹⁾			Unrealized⁽¹⁾⁽²⁾			in OCI			Level 3			Level 3			issuances			settlements			balance

Jul. 31, 2011
Trading securities	$	1,441		$	13		$	(34	)	$	—		$	—		$	—		$	257		$	(1,097	)	$	580
AFS securities		3,023			19			—			5			—			—			125			(472	)		2,700
FVO securities and loans		11			—			(1	)		—			—			—			—			—			10

Total financial assets	$	4,475		$	32		$	(35	)	$	5		$	—		$	—		$	382		$	(1,569	)	$	3,290

Deposits ⁽³⁾	$	(1,324	)	$	(6	)	$	207		$	—		$	—		$	—		$	(90	)	$	533		$	(680	)
Derivative instruments (net)		(1,288	)		(236	)		(173	)		—			—			—			—			237			(1,460	)

Total financial liabilities	$	(2,612	)	$	(242	)	$	34		$	—		$	—		$	—		$	(90	)	$	770		$	(2,140	)

Oct. 31, 2010
Trading securities	$	1,518		$	70		$	129		$	—		$	—		$	—		$	342		$	(412	)	$	1,647
AFS securities		3,239			16			1			(56	)		2			(1	)		326			(678	)		2,849
FVO securities and loans		39			9			(5	)		—			—			—			—			(23	)		20

Total financial assets	$	4,796		$	95		$	125		$	(56	)	$	2		$	(1	)	$	668		$	(1,113	)	$	4,516

Deposits ⁽³⁾	$	(925	)	$	(57	)	$	(141	)	$	—		$	(203	)⁽⁴⁾	$	—		$	(119	)	$	17		$	(1,428	)
Derivative instruments (net)		(2,014	)		(32	)		(302	)		—			(6	)		(14	)		4			749			(1,615	)

Total financial liabilities	$	(2,939	)	$	(89	)	$	(443	)	$	—		$	(209	)	$	(14	)	$	(115	)	$	766		$	(3,043	)


(1)		Includes foreign currency gains and losses.

(2)		Unrealized gains and losses relating to these assets and liabilities held at the end of the reporting period.

(3)		Comprises FVO deposits of $493 million (October 31, 2010: $1,188 million) and bifurcated embedded derivatives of $187 million (October 31, 2010: $240 million).

(4)		Transfer-in pertains to structured deposit notes containing bifurcated embedded derivatives carried at fair value.

Sensitivity of Level 3 financial assets and liabilities

Our approach for fair valuation of financial instruments is presented in Note 2 to the 2010 consolidated financial statements.

Valuation techniques using non-observable market inputs are used for a number of financial instruments including our structured credit run-off business.

Interest-only strips from the sale of securitized assets are valued using prepayment rates, which we consider to be a non-observable market input.

Swap arrangements related to the sale of securitized assets are valued using liquidity rates, which we consider to be a non-observable market input.

Asset-backed securities (ABS) are sensitive to credit and liquidity spreads, which we consider to be non-observable market inputs.

FVO deposits that are not managed as part of our structured credit run-off business are sensitive to non-observable credit spreads, which are derived using extrapolation and correlation assumptions.

The effect of changing one or more of the assumptions to fair value these instruments to reasonably possible alternatives would impact net income or OCI as described below.

Our unhedged non-U.S. residential mortgage market (USRMM) structured credit positions are sensitive to changes in mark-to-market (MTM),

generally as derived from indicative broker quotes and internal models. A 10% adverse change in MTM of the underlyings would result in losses of approximately $81 million, excluding unhedged non-USRMM positions classified as loans which are carried at amortized cost.

For our hedged positions, there are two categories of sensitivities; the first relates to our hedged loan portfolio and the second relates to our hedged fair valued exposures. Since on-balance sheet hedged loans are carried at amortized cost whereas the related credit derivatives are fair valued, a 10% increase in the MTM of credit derivatives in our hedged structured credit positions would result in a net gain of approximately $17 million, assuming current credit valuation adjustment (CVA) ratios remain unchanged. A 10% reduction in the MTM of our on-balance sheet fair valued exposures and a 10% increase in the MTM of all credit derivatives in our hedged structured credit positions would result in a net loss of approximately $8 million, assuming current CVA ratios remain unchanged.

The impact of a 10% reduction in receivables, net of CVA from financial guarantors, would result in a net loss of approximately $43 million.


CIBC Third Quarter 2011		41

A 10 basis point decrease in liquidity rates used to fair value our derivatives related to the sale of securitized assets would result in a loss of approximately $96 million.

A 10% reduction in the MTM of our on-balance sheet ABS that are valued using non-observable credit and liquidity spreads would result in a decrease in OCI of approximately $170 million.

A 10% reduction in the MTM of certain bifurcated embedded derivatives, valued using internally vetted valuation techniques, would result in a gain of approximately $19 million.

Fair value option

FVO designated assets and liabilities are those that (i) would otherwise cause measurement inconsistencies with hedging derivatives and securities sold short that are carried at fair value; or (ii) are managed on a fair value basis in accordance with a documented trading strategy and reported to key management personnel on that basis.

The fair values of the FVO designated assets and liabilities (excluding hedges) were $17,628 million and $3,286 million, respectively, as at July 31, 2011 ($22,451 million and $3,530 million, respectively, as at October 31, 2010).

The impact on the interim consolidated statement of operations from FVO designated instruments and related hedges and the impact of changes in credit spreads on FVO designated loans and liabilities are provided in the following table:


				For the three						For the nine
	months ended									months ended ⁽¹⁾
	2011			2011			2010			2011			2010
$ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Impact of FVO designated instruments and related hedges
Net interest income	$	55		$	59		$	65		$	168		$	201
Non-interest income — FVO gains (losses)		61			(81	)		(146	)		(118	)		(439	)

Net gains (losses)	$	116		$	(22	)	$	(81	)	$	50		$	(238	)

Gain (loss) from changes in credit spreads
FVO designated loans	$	—		$	—		$	(1	)	$	—		$	1
FVO designated loans, net of related hedges		—			—			(1	)		—			1
FVO designated deposits		(1	)		1			(1	)		—			—


(1)		Change in the fair value of FVO financial instruments, held by CIBC at the end of the reporting period, since they were designated as FVO.

2. Significant acquisition and disposition

American Century Investments

Sale of CIBC Mellon Trust Company’s Issuer Services business

Effective November 1, 2010, CIBC Mellon Trust Company (CMT), a 50/50 joint venture between CIBC and The Bank of New York Mellon, sold its Issuer Services business (stock transfer and employee share purchase plan services). As a result of the sale, CIBC recorded an after-tax gain of $37 million in the first quarter of 2011 which is net of estimated claw-back and post-closing adjustments that will be settled effective November 1, 2011. CMT’s Issuer Services business results were reported in CIBC’s Corporate and Other reporting segment and the results of its operations were not considered significant to CIBC’s consolidated results.


42		CIBC Third Quarter 2011

3. Securities

Fair value of AFS securities


								2011									2010
$ millions, as at								Jul. 31									Oct. 31
			Gross		Gross							Gross		Gross
	Amortized		unrealized		unrealized			Fair		Amortized		unrealized		unrealized			Fair
	cost		gains		losses			value		cost		gains		losses			value

AFS securities
Securities issued or guaranteed by:
Canadian federal government	$	1,979	$	24	$	—		$	2,003	$	5,385	$	8	$	(2	)	$	5,391
Other Canadian governments		4,086		40		—			4,126		4,602		86		—			4,688
U.S. Treasury		2,798		59		(1	)		2,856		3,343		5		—			3,348
Other foreign governments		3,660		42		(6	)		3,696		3,251		47		(17	)		3,281
Mortgage-backed securities		4,037		79		(1	)		4,115		4,627		103		(3	)		4,727
Asset-backed securities		1,696		26		—			1,722		1,758		34		(37	)		1,755
Corporate public debt		3,727		11		(9	)		3,729		2,659		18		(1	)		2,676
Corporate public equity		115		9		(4	)		120		114		8		(9	)		113
Corporate private debt		33		—		—			33		52		9		(1	)		60
Corporate private equity ⁽¹⁾		481		451		(9	)		923		582		337		(9	)		910

	$	22,612	$	741	$	(30	)	$	23,323	$	26,373	$	655	$	(79	)	$	26,949


(1)		Carried at cost on the interim consolidated balance sheet as these do not have quoted market values in an active market.

As at July 31, 2011, the amortized cost of 141 AFS securities that are in a gross unrealized loss position (October 31, 2010: 170 securities) exceeded their fair value by $30 million (October 31, 2010: $79 million). The securities that have been in a gross unrealized loss position for more than a year include 13 AFS securities (October 31, 2010: nine AFS securities), with a gross unrealized loss of $5 million (October 31, 2010: $13 million). We have determined that the unrealized losses on these AFS securities are temporary in nature.

Reclassification of financial instruments

In October 2008, amendments made to the CICA handbook sections 3855 “Financial Instruments — Recognition and Measurement” and 3862 “Financial Instruments — Disclosures” permitted certain trading financial assets to be reclassified to held-to-maturity (HTM) and AFS in rare circumstances. In July 2009, amendments made to section 3855 resulted in the reclassification of these HTM securities to loans effective November 1, 2008. During the nine months period ended July 31, 2011, we have not reclassified any securities.

The following tables show the carrying values, fair values, and income or loss impact of the assets reclassified in prior years to date:


			2011				2010
$ millions, as at			Jul. 31				Oct. 31
	Fair		Carrying		Fair		Carrying
	value		value		value		value
Trading assets previously reclassified to HTM (currently in loans)	$	4,007	$	4,113	$	5,525	$	5,699
Trading assets previously reclassified to AFS		38		38		55		55

Total financial assets reclassified	$	4,045	$	4,151	$	5,580	$	5,754


				For the three						For the nine
				months ended						months ended
	2011			2011			2010			2011			2010
$ millions	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31
Net income (loss) before taxes, recognized on securities reclassified
Gross income recognized in income statement	$	20		$	15		$	38		$	43		$	120
Funding related interest expense		(13	)		(14	)		(16	)		(45	)		(58	)

Net income (loss) recognized, before taxes	$	7		$	1		$	22		$	(2	)	$	62

Impact on net income (loss) if reclassification had not been made
On trading assets previously reclassified to HTM (currently in loans)	$	(30	)	$	46		$	42		$	67		$	(153	)
On trading assets previously reclassified to AFS		1			2			(7	)		3			(5	)

Increase (decrease) in income, before taxes	$	(29	)	$	48		$	35		$	70		$	(158	)


CIBC Third Quarter 2011		43

4. Loans

Allowance for credit losses


													As at or for the						As at or for the
													three months ended						nine months ended
							2011			2011			2010			2011			2010
							Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31
	Specific			General			Total			Total			Total			Total			Total
$ millions	allowance			allowance			allowance			allowance			allowance			allowance			allowance
Balance at beginning of period	$	618		$	1,117		$	1,735		$	1,763		$	2,070		$	1,784		$	2,043
Provision for (reversal of) credit losses		232			(37	)		195			194			221			598			896
Write-offs		(259	)		—			(259	)		(230	)		(295	)		(744	)		(984	)
Recoveries		27			—			27			27			31			85			95
Other		1			—			1			(19	)		10			(24	)		(13	)

Balance at end of period	$	619		$	1,080		$	1,699		$	1,735		$	2,037		$	1,699		$	2,037

Comprises:
Loans	$	619		$	1,031		$	1,650		$	1,686		$	1,973		$	1,650		$	1,973
Undrawn credit facilities ⁽¹⁾		—			49			49			49			64			49			64


(1)		Included in Other liabilities.

Impaired loans


					2011						2010
$ millions, as at					Jul. 31						Oct. 31
	Gross		Specific		Net		Gross		Specific		Net
	amount		allowance		total		amount		allowance		total

Residential mortgages	$	425	$	29	$	396	$	452	$	30	$	422
Personal		285		211		74		304		224		80
Business and government		1,057		379		678		1,080		377		703

Total impaired loans ⁽¹⁾	$	1,767	$	619	$	1,148	$	1,836	$	631	$	1,205


(1)		Average balance of gross impaired loans for the quarter ended July 31, 2011 totalled $1,751 million (for the quarter ended October 31, 2010: $1,994 million).

Contractually past due loans but not impaired


							2011		2010
							Jul. 31		Oct. 31
	Less than		31 to		Over
$ millions, as at	31 days		90 days		90 days		Total		Total

Residential mortgages	$	1,457	$	479	$	169	$	2,105	$	2,375
Personal		439		116		28		583		591
Credit card		633		168		103		904		1,021

Business and government		190		118		14		322		555
	$	2,719	$	881	$	314	$	3,914	$	4,542


44		CIBC Third Quarter 2011

5. Securitizations and variable interest entities

Securitizations

The following table summarizes our securitization and sales activity:

For the three

For the nine

months ended

2011

2011

2010

2011

2010

Jul. 31

Apr. 30

Jul. 31

Jul. 31

Jul. 31

Residential

Credit

Residential

Residential

Credit

Residential

$ millions

mortgages

card

mortgages

mortgages

card⁽¹⁾⁽²⁾

mortgages

Securitized ⁽³⁾

2,671

642

2,992

6,285

9,971

2,313

9,989

Sold ⁽³⁾

3,264

642

3,598

3,846

9,875

2,313

9,410

Net cash proceeds

3,267

642

3,580

3,883

9,866

2,313

9,467

Retained interests

126

143

127

391

1,715

371

Gain on sale, net of transaction costs

208

182

Retained interest assumptions (%) ⁽⁴⁾

Weighted-average remaining

life (in years)

2.8

0.2

2.8

3.0

2.8

0.2

3.2

Prepayment/payment rate

15.0-18.0

38.3

15.0-18.0

15.0-18.0

38.3

15.0-18.0

Internal rate of return

2.1-8.9

3.7

2.4-9.1

2.5-8.7

1.4-9.3

3.7

1.6-9.3

Expected credit losses

0.0-0.4

4.9

0.0-0.4

0.0-0.4

4.9

0.0-0.4


(1)		Reinvestment in revolving securitizations is not included.

(2)		During the first quarter, we securitized $1.7 billion of credit card receivables and purchased all of the retained interests, in the form of notes, relating to the securitization.

(3)		Includes $53 million (April 30, 2011: $51 million; July 31, 2010: $101 million) of uninsured fixed-rate mortgages securitized to a qualifying special purpose entity (QSPE).

(4)		These retained interest assumptions are applicable only to interest-only strips.

The following table provides details on our securitization exposures:


				Residential mortgages
	CMB/NHA		Prime and Near
	auction		Prime/Alt-A		Credit		Commercial
$ millions, as at	program ⁽¹⁾		program ⁽²⁾		card		mortgages

Jul. 31, 2011 Retained interests in securitized assets sold ⁽³⁾	$	903	$	132	$	2,095	$	11
Assets securitized and not sold		16,638		—		—		—
Liquidity facilities ⁽⁴⁾		—		817		—		—

Oct. 31, 2010 Retained interests in securitized assets sold ⁽³⁾	$	961	$	331	$	591	$	5
Assets securitized and not sold		19,651		—		—		—
Liquidity facilities ⁽⁴⁾		—		772		—		—


(1)		Includes balances related to Canada Mortgage Bond and Government of Canada National Housing Act MBS Auction process and other Canada Mortgage and Housing Corporation (CMHC) and mortgage-backed securities (MBS) programs. Credit losses are not expected as the mortgages are insured.

(2)		The Near-Prime/Alt-A mortgages have an average loss rate over the past five years of 42 basis points (October 31, 2010: 37 basis points) and an average loan-to-value ratio of 74% (October 31, 2010: 74%). Total assets in the QSPE were $908 million (October 31, 2010: $1,019 million), which include $297 million (October 31, 2010: $352 million) of Prime mortgages and $558 million (October 31, 2010: $586 million) of Near-Prime/Alt-A mortgages.

(3)		Includes retained interest purchased subsequent to the initial securitization.

(4)		Net of investments in our securitization vehicles.

Variable interest entities (VIEs)

The details of our VIEs are provided on pages 135 and 136 of the 2010 Annual Report. We consolidate VIEs where we are considered to be the primary beneficiary. During the quarter, we determined that we were no longer the primary beneficiary to certain VIEs subsequent to the sale of our residual interest in those VIEs.

VIEs that are consolidated

The table below provides details on the assets that support the obligations of the consolidated VIEs:


	2011		2010
$ millions, as at	Jul. 31		Oct. 31

Trading securities	$	—	$	818
AFS securities		69		85
Residential mortgages		96		62
Other assets		—		1

Total assets	$	165	$	966


CIBC Third Quarter 2011		45

VIEs that are not consolidated

Our on-balance sheet amounts and maximum exposure to loss related to VIEs that are not consolidated are set out in the table below. The maximum exposure comprises the carrying value for investments, the notional amounts for liquidity and credit facilities, and the notional amounts less accumulated fair value losses for written credit derivatives on VIE reference assets less hedged positions excluding the impact of CVA.


	CIBC-		CIBC-				Third-party
	sponsored		structured				structured vehicles
$ millions, as at July 31, 2011	conduits⁽¹⁾		CDO vehicles		Run-off		Continuing		Total

On-balance sheet assets ⁽²⁾
Trading securities	$	1	$	—	$	574	$	763	$	1,338
AFS securities		—		—		6		1,570		1,576
FVO		—		—		—		97		97
Loans		74		320		3,977		36		4,407
Derivatives⁽³⁾		—		—		—		86		86

Total assets	$	75	$	320	$	4,557	$	2,552	$	7,504

Oct. 31, 2010	$	182	$	448	$	7,696	$	1,962	$	10,288

On-balance sheet liabilities
Derivatives ⁽³⁾	$	—	$	29	$	1,428	$	29	$	1,486

Total liabilities	$	—	$	29	$	1,428	$	29	$	1,486

Oct. 31, 2010	$	—	$	36	$	1,084	$	2	$	1,122


Maximum exposure to loss, net of hedges
Maximum exposure to loss before hedge positions									$	12,954
Less: notional of protection purchased on hedges relating to written credit derivatives, less gross receivable on those hedges										(3,341	)
Less: carrying value of hedged securities and loans										(4,612	)

Maximum exposure to loss, net of hedges									$	5,001

Oct. 31, 2010									$	6,164


(1)		We sponsor several multi-seller conduits. Total assets of these conduits amounted to $1.4 billion (October 31, 2010: $2.3 billion). Certain of our conduits hold commercial paper issued by our other conduits. The underlying collateral amounts totalled $1.4 billion (October 31, 2010: $2.1 billion) and are included in total assets in the above table. We also sponsor a single-seller conduit. Total assets of this conduit amounted to $414 million (October 31, 2010: $403 million).

(2)		Excludes securities issued by, retained interests in, and derivatives with entities established by Canada Mortgage and Housing Corporation (CMHC), Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), Government National Mortgage Association (Ginnie Mae), Federal Home Loan Banks, Federal Farm Credit Bank, and Student Loan Marketing Association (Sallie Mae).

(3)		Comprises credit derivatives (written options and total return swaps) under which we assume exposures and excludes all other derivatives.

6. Subordinated indebtedness

On November 2, 2010, we issued $1,500 million principal amount of 3.15% Debentures (subordinated indebtedness) due November 2, 2020. The Debentures qualify as Tier 2 capital.

7. Share capital

Preferred shares

On July 31, 2011, we redeemed all of our 16 million Non-cumulative Class A Series 30 Preferred Shares with a par value of $25 each at a redemption price of $25.75 per share. Other liabilities include $412 million in respect of principal and premium amounts payable to holders. The payment was made subsequent to the quarter end on August 2, 2011.


46		CIBC Third Quarter 2011

Common shares


									As at or for the								As at or for the
									three months ended								nine months ended
			2011				2011				2010				2011				2010
			Jul. 31				Apr. 30				Jul. 31				Jul. 31				Jul. 31
	Number				Number				Number				Number				Number
	of shares				of shares				of shares				of shares				of shares
$ millions	(millions)		Amount		(millions)		Amount		(millions)		Amount		(millions)		Amount		(millions)		Amount

Balance at beginning of period		396.9	$	7,116		394.8	$	6,951		388.5	$	6,509		392.7	$	6,804		384.0	$	6,241
Issuance pursuant to:
Stock option plans		0.1		4		0.6		40		0.2		12		1.2		70		1.7		76
Shareholder Investment Plan ⁽¹⁾		1.5		110		1.3		105		1.8		116		4.1		314		4.6		305
Employee Share Purchase Plan		0.3		23		0.2		20		0.3		22		0.8		65		0.5		37

		398.8		7,253		396.9		7,116		390.8		6,659		398.8		7,253		390.8		6,659
Net sales of treasury shares		—		1		—		—		—		3		—		1		—		3

Balance at end of period		398.8	$	7,254		396.9	$	7,116		390.8	$	6,662		398.8	$	7,254		390.8	$	6,662


(1)		Commencing with dividends paid on April 28, 2011, the participants in the Dividend Reinvestment Option and Stock Dividend Option of the Shareholder Investment Plan receive a 2% discount from average market price on the reinvested dividends in additional common shares. Previously, the shares were issued at a 3% discount.

Regulatory capital and ratios

Our capital ratios and assets-to-capital multiple are presented in the following table:


	2011			2010
$ millions, as at	Jul. 31			Oct. 31

Capital
Tier 1 capital	$	15,904		$	14,851
Total regulatory capital		20,383			18,966

Risk-weighted assets
Credit risk	$	88,638		$	86,782
Market risk		2,069			1,625
Operational risk		18,247			18,256

Total risk-weighted assets	$	108,954		$	106,663

Capital ratios
Tier 1 capital ratio		14.6	%		13.9	%
Total capital ratio		18.7	%		17.8	%
Assets-to-capital multiple		16.8	x		17.0	x

During the quarter and nine months ended July 31, 2011, we have complied in full with all of our regulatory capital requirements.

8. Financial guarantors

We have derivative contracts with financial guarantors to hedge our exposure on various reference assets. During the quarter and nine months ended July 31, 2011, we recorded a net loss of $15 million and net recovery of $31 million, respectively (a net loss of $116 million and net recovery of $602 million for the quarter and nine months ended July 31, 2010, respectively) on the hedging contracts provided by financial guarantors in trading revenue. Separately, we recorded a net loss of $61 million and $100 million on termination of contracts with financial guarantors for the quarter and nine months ended July 31, 2011, respectively (a net recovery of $51 million and net loss of $110 million for the quarter and nine months ended July 31, 2010, respectively).

The fair value of derivative contracts with financial guarantors, net of valuation adjustments, was $435 million as at July 31, 2011 (October 31, 2010: $734 million). The related valuation adjustments were $163 million as at July 31, 2011 (October 31, 2010: $291 million).

We believe that we have made appropriate fair value adjustments to date. The establishment of fair value adjustments involves estimates that are based on accounting processes and judgments by management.

We evaluate the adequacy of the fair value adjustments on an ongoing basis. Market and economic conditions relating to these counterparties may change in the future, which could result in significant future losses.


CIBC Third Quarter 2011		47

9. Income taxes

Future income tax asset

As at July 31, 2011, our future income tax asset, net of a valuation allowance, was $273 million (October 31, 2010: $767 million). Included in the future income tax asset as at July 31, 2011 were $21 million (October 31, 2010: $54 million) related to Canadian capital loss carryforwards that have no expiry date, and $182 million (October 31, 2010: $267 million), net of a valuation allowance, related to our U.S. operations.

Accounting standards require a valuation allowance when it is more likely than not that all or a portion of a future income tax asset will not be realized prior to its expiration. Although realization is not assured, we believe that based on all available evidence, it is more likely than not that all of the future income tax asset, net of a valuation allowance, will be realized.

Enron

Should we successfully defend our tax filing position in its entirety, we would be able to recognize an additional accounting tax benefit of $214 million and taxable refund interest of approximately $173 million. Should we fail to defend our position in its entirety, additional tax expense of approximately $862 million and non-deductible interest of approximately $123 million would be incurred.

10. Employee future benefit expenses


			For the three				For the nine
			months ended				months ended
	2011		2011		2010		2011		2010
$ millions	Jul. 31		Apr. 30		Jul. 31		Jul. 31		Jul. 31

Defined benefit plans
Pension benefit plans	$	64	$	65	$	44	$	194	$	132
Other benefit plans		10		9		10		29		29

Total defined benefit expense	$	74	$	74	$	54	$	223	$	161

Defined contribution plans
CIBC’s pension plans	$	2	$	3	$	2	$	8	$	8
Government pension plans ⁽¹⁾		20		19		18		59		55

Total defined contribution expense	$	22	$	22	$	20	$	67	$	63


(1)		Includes Canada Pension Plan, Quebec Pension Plan, and U.S. Federal Insurance Contributions Act.

11. Earnings per share (EPS)


				For the three						For the nine
				months ended						months ended
	2011			2011			2010			2011			2010
$ millions, except per share amounts	Jul. 31			Apr. 30			Jul. 31			Jul. 31			Jul. 31

Basic EPS
Net income	$	808		$	678		$	640		$	2,285		$	1,952
Preferred share dividends and premiums		(55	)		(42	)		(42	)		(139	)		(127	)

Net income applicable to common shares	$	753		$	636		$	598		$	2,146		$	1,825

Weighted-average common shares outstanding (thousands)		397,232			395,373			388,815			395,265			386,706

Basic EPS	$	1.90		$	1.61		$	1.54		$	5.43		$	4.72

Diluted EPS
Net income applicable to common shares	$	753		$	636		$	598		$	2,146		$	1,825

Weighted-average common shares outstanding (thousands)		397,232			395,373			388,815			395,265			386,706
Add: stock options potentially exercisable ⁽¹⁾ (thousands)		754			1,021			857			924			1,004

Weighted-average diluted common shares outstanding ⁽²⁾ (thousands)		397,986			396,394			389,672			396,189			387,710

Diluted EPS	$	1.89		$	1.60		$	1.53		$	5.42		$	4.71


(1)		Excludes average options outstanding of 1,285,471 with a weighted-average exercise price of $83.67; average options outstanding of 346,600 with a weighted-average exercise price of $96.00; and average options outstanding of 2,603,128 with a weighted-average exercise price of $76.96 for the quarter ended July 31, 2011, April 30, 2011, and July 31, 2010, respectively, as the options’ exercise prices were greater than the average market price of CIBC’s common shares.

(2)		Convertible preferred shares and preferred share liabilities have not been included in the calculation because in the past either we have settled preferred shares for cash or we have not exercised our conversion right.


48		CIBC Third Quarter 2011

12. Guarantees

2011

2010

$ millions, as at

Jul. 31

Oct. 31

Maximum

Maximum

potential

Carrying

potential

Carrying

future payment⁽¹⁾

amount

future payment ⁽¹⁾

amount

Securities lending with indemnification ⁽²⁾

46,398

—

42,527

—

Standby and performance letters of credit

6,342

5,721

Credit derivatives

Written options

10,186

1,483

12,080

1,884

Swap contracts written protection

2,538

114

2,982

156

Other derivative written options

⁽³⁾

1,291

⁽³⁾

1,593

Other indemnification agreements

⁽³⁾

—

⁽³⁾

—


(1)		The total collateral available relating to these guarantees was $50.3 billion (October 31, 2010: $45.5 billion).

(2)		Securities lending with indemnification is the full contract amount of custodial client securities lent by CIBC Mellon Global Securities Services Company, which is a 50/50 joint venture between CIBC and The Bank of New York Mellon.

(3)		See narrative on page 163 of the 2010 consolidated financial statements for further information.

13. Contingent liabilities

In the fourth quarter of 2008, we recognized a gain of $895 million (US$841 million), resulting from the reduction to zero of our unfunded commitment on a variable funding note (VFN) issued by a collateralized debt obligation (CDO). This reduction followed certain actions of the indenture trustee for the CDO following the September 15, 2008 bankruptcy filing of Lehman Brothers Holdings, Inc. (Lehman), the guarantor of a related credit default swap agreement with the CDO.

In September 2010, just prior to the expiration of a statute of limitations, the Lehman Estate instituted an adversary proceeding against numerous financial institutions, indenture trustees and note holders, including CIBC, related to this and more than 40 other CDOs. The Lehman Estate seeks a declaration that the indenture trustee’s actions were improper and that CIBC remains obligated to fund the VFN. At the request of the Lehman Estate, the bankruptcy court issued an order staying all proceedings in the action until January 20, 2012. Although there can be no certainty regarding any eventual outcome, we believe that the CDO indenture trustee’s actions in reducing the unfunded commitment on our VFN to zero, were fully supported by the terms of the governing contracts and the relevant legal standards and CIBC intends to vigorously contest the adversary proceeding.

14. Segmented information

New organizational structure

On March 28, 2011, we announced a new organizational structure to build on the progress of implementing our business strategy and delivering strong financial performance. Beginning in the third quarter of 2011, wealth management and international banking operations (including CIBC FirstCaribbean International Bank (CIBC FirstCaribbean)) have been reported separately from CIBC Retail Markets and included in the newly created Wealth Management SBU and Corporate and Other, respectively. Following these changes, CIBC Retail Markets which includes the remaining businesses was renamed Retail and Business Banking. Under the new organizational structure, CIBC now has three SBUs — Retail and Business Banking, Wealth Management and Wholesale Banking. Prior period information has been restated.

These SBUs are supported by six functional groups — Technology and Operations; Corporate Development; Finance; Treasury; Administration; and Risk Management which form part of Corporate and Other. The revenue, expenses and balance sheet resources of these functional groups are generally allocated to the business lines within the SBUs. It also includes our International Banking operations comprising mainly CIBC FirstCaribbean; strategic investments in the CIBC Mellon joint ventures and The Bank of N.T. Butterfield & Son Limited; and other income statement and balance sheet items, including the general allowance, not directly attributable to the business lines. The impact of securitization is also retained within Corporate and Other.


CIBC Third Quarter 2011		49

Other segment reporting changes

Beginning in the first quarter of 2011, general allowance for credit losses related to CIBC FirstCaribbean has been included within Corporate and Other. This allowance was previously reported within CIBC Retail Markets. Prior period information was restated. The nature of transfer pricing and treasury allocation methodologies is such that the presentation of certain line items in segmented results is different compared to consolidated CIBC results.


		Retail and
		Business		Wealth			Wholesale		Corporate			CIBC
$ millions, for the three months ended		Banking		Management			Banking		and Other			Total

Jul. 31, 2011	Net interest income (expense)	$	1,500	$	45		$	179	$	(117	)	$	1,607
	Non-interest income		447		431			275		297			1,450
	Intersegment revenue		72		(72	)		—		—			—

	Total revenue		2,019		404			454		180			3,057
	Provision for (reversal of) credit losses		285		1			6		(97	)		195
	Amortization ⁽¹⁾		21		2			—		64			87
	Other non-interest expenses		1,000		305			294		134			1,733

	Income before income taxes and non-controlling interests		713		96			154		79			1,042
	Income tax expense		174		28			8		21			231
	Non-controlling interests		—		—			1		2			3

	Net income	$	539	$	68		$	145	$	56		$	808

	Average assets ⁽²⁾	$	259,368	$	3,203		$	115,658	$	(6,796	)	$	371,433

Apr. 30, 2011 ⁽³⁾	Net interest income (expense)	$	1,439	$	43		$	172	$	(126	)	$	1,528
	Non-interest income		394		449			221		297			1,361
	Intersegment revenue		72		(72	)		—		—			—
	Total revenue		1,905		420			393		171			2,889
	Provision for (reversal of) credit losses		260		3			1		(70	)		194
	Amortization ⁽¹⁾		20		2			1		64			87
	Other non-interest expenses		983		316			270		138			1,707

	Income before income taxes and non-controlling interests		642		99			121		39			901
	Income tax expense		166		29			9		17			221
	Non-controlling interests		—		—			—		2			2

	Net income	$	476	$	70		$	112	$	20		$	678

	Average assets ⁽²⁾	$	259,282	$	3,230		$	111,879	$	(6,333	)	$	368,058

Jul. 31, 2010 ⁽³⁾	Net interest income (expense)	$	1,373	$	41		$	145	$	(11	)	$	1,548
	Non-interest income		523		385			170		223			1,301
	Intersegment revenue		66		(66	)		—		—			—

	Total revenue		1,962		360			315		212			2,849
	Provision for (reversal of) credit losses		281		—			29		(89	)		221
	Amortization ⁽¹⁾		19		2			1		69			91
	Other non-interest expenses		949		281			257		163			1,650

	Income before income taxes and non-controlling interests		713		77			28		69			887
	Income tax expense		187		24			3		30			244
	Non-controlling interests		—		—			—		3			3

	Net income	$	526	$	53		$	25	$	36		$	640

	Average assets ⁽²⁾	$	258,441	$	3,079		$	106,710	$	(15,138	)	$	353,092


50		CIBC Third Quarter 2011


		Retail and
		Business		Wealth			Wholesale		Corporate			CIBC
$ millions, for the nine months ended		Banking		Management			Banking		and Other			Total

Jul. 31, 2011	Net interest income (expense)	$	4,392	$	134		$	531	$	(312	)	$	4,745
	Non-interest income		1,299		1,319			787		897			4,302
	Intersegment revenue		213		(213	)		—		—			—

	Total revenue		5,904		1,240			1,318		585			9,047
	Provision for (reversal of) credit losses		806		4			5		(217	)		598
	Amortization ⁽¹⁾		61		5			2		196			264
	Other non-interest expenses		2,970		929			866		407			5,172

	Income before income taxes and non-controlling interests		2,067		302			445		199			3,013
	Income tax expense		522		88			51		59			720
	Non-controlling interests		—		—			1		7			8

	Net income	$	1,545	$	214		$	393	$	133		$	2,285

	Average assets ⁽²⁾	$	254,854	$	3,214		$	111,735	$	(5,255	)	$	364,548

Jul. 31, 2010 ⁽³⁾	Net interest income (expense)	$	4,026	$	116		$	464	$	(47	)	$	4,559
	Non-interest income		1,387		1,184			1,012		689			4,272
	Intersegment revenue		199		(199	)		—		—			—

	Total revenue		5,612		1,101			1,476		642			8,831
	Provision for (reversal of) credit losses		945		—			80		(129	)		896
	Amortization ⁽¹⁾		44		6			3		226			279
	Other non-interest expenses		2,781		859			817		431			4,888

	Income before income taxes and non-controlling interests		1,842		236			576		114			2,768
	Income tax expense		504		65			166		56			791
	Non-controlling interests		—		—			12		13			25

	Net income	$	1,338	$	171		$	398	$	45		$	1,952

	Average assets ⁽²⁾	$	252,240	$	3,001		$	102,721	$	(15,363	)	$	342,599


(1)		Includes amortization of buildings, furniture, equipment, leasehold improvements, software and other intangible assets.

(2)		Assets are disclosed on an average basis as this measure is most relevant to a financial institution and is the measure reviewed by management.

(3)		Certain prior period information has been restated to conform to the presentation in the current period.

15. Accounting developments

Transition to International Financial Reporting Standards (IFRS)

The transition to IFRS represents a significant initiative for us and is supported by a formal governance structure with an enterprise-wide view and a dedicated project team.

The requirements concerning the transition to IFRS are set out in IFRS 1, “First-Time Adoption of International Financial Reporting Standards”, which generally requires that changes from Canadian GAAP be applied retroactively and reflected in our opening November 1, 2010 comparative IFRS consolidated balance sheet. However, there are a number of transitional elections, some of which entail an exemption from retroactive application, available under the transitional rules that we expect to finalize in the next quarter.

IFRS is expected to result in accounting policy differences in many areas. Based on existing IFRS and the assessment of our transitional elections to date, the areas that have the potential for the most significant impact to our financial and capital reporting include derecognition of financial instruments and the accounting for post-employment benefits as described on page 179 of our 2010 Annual Report.

Future changes

Proposed changes to the IFRS accounting standards may introduce additional significant accounting differences, although we expect that most of the changes arising from the proposed standards will not be effective for us until the years following our initial IFRS transition in fiscal 2012.


CIBC Third Quarter 2011		51

TO REACH US:

Corporate Secretary: Shareholders may call 416-980-3096, fax 416-980-7012, or e-mail: michelle.caturay@cibc.com

Investor Relations: Financial analysts, portfolio managers and other investors requiring financial information may call 416-980-5093, fax 416-980-5028, or e-mail: geoffrey.weiss@cibc.com

Communications and Public Affairs: Financial, business and trade media may call 416-980-4111, fax 416-363-5347, or e-mail: marylou.frazer@cibc.com

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.

Online Investor Presentations: Supplementary financial information and a presentation to investors and analysts are available at www.cibc.com; About CIBC.

Earnings Conference Call: CIBC’s third quarter conference call with analysts and investors will take place on Wednesday, August 31, 2011 at 8:00 a.m. (ET). The call will be available in English (416-695-6622 in Toronto, or toll-free 1-800-766-6630 throughout the rest of North America) and French (514-392-1478 in Montreal, or toll-free 1-877-922-4773). A telephone replay of the conference call will be available in English and French until midnight (ET) September 14, 2011. To access the replay in English, call 905-694-9451 or 1-800-408-3053, passcode 4748452#. To access the call in French, call 514-861-2272 or 1-800-408-3053, passcode 8453330#.

Audio Webcast: A live audio webcast of CIBC’s third quarter results conference call will take place on Wednesday, August 31, 2011 at 8:00 a.m. (ET) in English and French. To access the audio webcast, go to www.cibc.com; About CIBC. An archived version of the audio webcast will also be available in English and French following the call on www.cibc.com; About CIBC.

Nothing in CIBC’s website www.cibc.com should be considered incorporated herein by reference.

DIRECT DIVIDEND DEPOSIT SERVICE

Canadian-resident holders of common shares may have their dividends deposited directly into their account at any financial institution which is a member of the Canadian Payments Association. To arrange, please write to CIBC Mellon Trust Company, P.O. Box 7010, Adelaide Street Postal Station, Toronto, Ontario M5C 2W9, or e-mail: inquiries@cibcmellon.com

SHAREHOLDER INVESTMENT PLAN

Registered holders of CIBC common shares wishing to acquire additional common shares may participate in the Shareholder Investment Plan and pay no brokerage commissions or service charges.

PRICE OF COMMON SHARES
ISSUED UNDER THE
SHAREHOLDER INVESTMENT PLAN


	Share		Dividend
Dates	purchase		reinvestment & stock
issued	option		dividend options

May. 2/11	$	81.08
Jun. 1/11	$	80.97
Jul. 4/11	$	76.17
Jul. 28/11			$	72.59

For a copy of the offering circular, contact CIBC Mellon Trust at 416-643-5500, or toll-free at 1-800-387-0825, or fax 416-643-5501.

Canadian Imperial Bank of Commerce
Head Office: Commerce Court, Toronto, Ontario, Canada M5L 1A2 (416) 980-2211
www.cibc.com