Loans (Tables)

12 Months Ended

Oct. 31, 2018


	In accordance with IFRS 9										In accordance with IAS 39
$ millions, as at October 31									2018										2017
	Gross amount		Stage 3 allowance		Stages 1 and 2 allowance		Total allowance		Net total		Gross amount		Individual allowance		Collective allowance		Total allowance		Net total
Residential mortgages⁽³⁾	$	207,749	$	143	$	71	$	214	$	207,535	$	207,271	$	2	$	201	$	203	$	207,068
Personal⁽⁴⁾		43,058		109		372		481		42,577		40,937		7		488		495		40,442
Credit card		12,673		–		418		418		12,255		12,378		–		386		386		11,992
Business and government⁽³⁾		109,555		230		296		526		109,029		97,766		183		351		534		97,232
	$	373,035	$	482	$	1,157	$	1,639	$	371,396	$	358,352	$	192	$	1,426	$	1,618	$	356,734

(1)	Loans are net of unearned income of $421 million (2017: $376 million).

(2)	Includes gross loans of $61.0 billion (2017: $53.1 billion) denominated in U.S. dollars and $4.8 billion (2017: $4.8 billion) denominated in other foreign currencies.

(3)	Includes $12 million of residential mortgages (2017: $12 million) and $16,424 million of business and government loans (2017: $14,010 million) that are measured at FVTPL (2017: Trading loans).

(4)

Includes $42 million (2017: $47 million) related to loans provided to certain individuals while employed by CIBC to finance a portion of their participation in funds which make private equity investments on a side-by-side basis with CIBC and its affiliates. These loans are secured by the borrowers’ interest in the funds. Of the total amount outstanding, $41 million (2017: $47 million) relates to individuals who are no longer employed by CIBC.

Summary of Allowance for Credit Losses

Allowance for credit losses⁽¹⁾

The following table provides a reconciliation of the opening balance to the closing balance of the ECL allowance under IFRS 9:


$ millions, as at or for the year ended October 31	2018
	Stage 1			Stage 2			Stage 3			In accordance with IFRS 9
	Collective provision 12-month ECL performing			Collective provision lifetime ECL performing			Collective and individual provision lifetime ECL credit-impaired ⁽²⁾			Total
Residential mortgages
Balance at beginning of year	$	28		$	43		$	151		$	222
Originations net of repayments and other derecognitions		7			(6	)		(13	)		(12	)
Changes in model		(2	)		1			22			21
Net remeasurement ⁽³⁾		(25	)		13			60			48
Transfers ⁽³⁾
– to 12-month ECL		20			(16	)		(4	)		–
– to lifetime ECL performing		(1	)		9			(8	)		–
– to lifetime ECL credit-impaired		–			(2	)		2			–
Provision for (reversal of) credit losses ⁽⁴⁾		(1	)		(1	)		59			57
Write-offs ⁽⁵⁾		–			–			(54	)		(54	)
Recoveries		–			–			–			–
Interest income on impaired loans		–			–			(10	)		(10	)
Foreign exchange and other		–			2			(3	)		(1	)
Balance at end of year	$	27		$	44		$	143		$	214
Personal
Balance at beginning of year	$	164		$	202		$	110		$	476
Originations net of repayments and other derecognitions		34			(22	)		(5	)		7
Changes in model		(2	)		–			–			(2	)
Net remeasurement ⁽³⁾		(116	)		148			299			331
Transfers ⁽³⁾
– to 12-month ECL		151			(148	)		(3	)		–
– to lifetime ECL performing		(40	)		49			(9	)		–
– to lifetime ECL credit-impaired		–			(31	)		31			–
Provision for (reversal of) credit losses ⁽⁴⁾		27			(4	)		313			336
Write-offs ⁽⁵⁾		–			–			(368	)		(368	)
Recoveries		–			–			58			58
Interest income on impaired loans		–			–			(3	)		(3	)
Foreign exchange and other		(1	)		1			(1	)		(1	)
Balance at end of year	$	190		$	199		$	109		$	498
Credit card
Balance at beginning of year	$	101		$	413		$	–		$	514
Originations net of repayments and other derecognitions		–			(24	)		–			(24	)
Changes in model		–			2			–			2
Net remeasurement ⁽³⁾		(143	)		370			145			372
Transfers ⁽³⁾
– to 12-month ECL		179			(179	)		–			–
– to lifetime ECL performing		(35	)		35			–			–
– to lifetime ECL credit-impaired		–			(247	)		247			–
Provision for (reversal of) credit losses ⁽⁴⁾		1			(43	)		392			350
Write-offs ⁽⁵⁾		–			–			(512	)		(512	)
Recoveries		–			–			120			120
Interest income on impaired loans		–			–			–			–
Foreign exchange and other		–			–			–			–
Balance at end of year	$	102		$	370		$	–		$	472
Business and government
Balance at beginning of year	$	234		$	150		$	204		$	588
Originations net of repayments and other derecognitions		19			(10	)		(15	)		(6	)
Changes in model		(11	)		(7	)		1			(17	)
Net remeasurement ⁽³⁾		(109	)		72			187			150
Transfers ⁽³⁾
– to 12-month ECL		66			(60	)		(6	)		–
– to lifetime ECL performing		(21	)		25			(4	)		–
– to lifetime ECL credit-impaired		(1	)		(24	)		25			–
Provision for (reversal of) credit losses ⁽⁴⁾		(57	)		(4	)		188			127
Write-offs ⁽⁵⁾		–			–			(116	)		(116	)
Recoveries		–			–			12			12
Interest income on impaired loans		–			–			(10	)		(10	)
Foreign exchange and other		3			1			(48	) ⁽⁶⁾		(44	)
Balance at end of year	$	180		$	147		$	230		$	557
Total ECL allowance ⁽¹⁾	$	499		$	760		$	482		$	1,741
Comprises:
Loans	$	450		$	707		$	482		$	1,639
Undrawn credit facilities and other off-balance sheet exposures ⁽⁷⁾		49			53			–			102

(1)

See Note 4 for the ECL allowance on debt securities measured at FVOCI. The ECL allowances for other financial assets classified at amortized cost were immaterial as at October 31, 2018 and were excluded from the table above. Other financial assets classified at amortized cost are presented on our consolidated balance sheet net of ECL allowances.

(2)	Includes the ECL allowance for purchased credit-impaired loans from the acquisition of The PrivateBank.

(3)

Transfers represent stage movements of prior year ECL allowances to the current year stage classification. Net remeasurement represents the current year change of ECL allowances for transfers, net write-offs, changes in forecasts of forward-looking information, parameter updates, and partial repayments in the year.

(4)	Provision for (reversal of) credit losses for loans and undrawn credit facilities and other off-balance sheet exposures is presented as provision for (reversal of) credit losses on our consolidated statement of income.

(5)	We generally continue to pursue collection on the amounts that were written off. The degree of collection efforts varies from one jurisdiction to another, depending on the local regulations and original agreements with customers.

(6)	Includes ECL of $48 million relating to Barbados loans that were derecognized in the fourth quarter of 2018 as a result of a debt restructuring agreement completed with the Government of Barbados.

(7)	Included in other liabilities on our consolidated balance sheet.

Allowance for credit losses

The following table provides a reconciliation of the opening balance to the closing balance of allowance for credit losses under IAS 39:


$ millions, as at or for the year ended October 31	2017
							In accordance with IAS 39
	Individual allowance			Collective allowance			Total
Residential mortgages
Balance at beginning of year	$	1		$	220		$	221
Provision for (reversal of) credit losses		–			39			39
Write-offs		–			(38	)		(38	)
Recoveries		–			–			–
Interest income on impaired loans		–			(8	)		(8	)
Foreign exchange and other		1			(12	)		(11	)
Balance at end of year	$	2		$	201		$	203
Personal
Balance at beginning of year	$	8		$	489		$	497
Provision for (reversal of) credit losses		–			308			308
Write-offs		–			(359	)		(359	)
Recoveries		–			54			54
Interest income on impaired loans		–			–			–
Foreign exchange and other		(1	)		(4	)		(5	)
Balance at end of year	$	7		$	488		$	495
Credit card
Balance at beginning of year	$	–		$	386		$	386
Provision for (reversal of) credit losses		–			410			410
Write-offs		–			(529	)		(529	)
Recoveries		–			119			119
Interest income on impaired loans		–			–			–
Foreign exchange and other		–			–			–
Balance at end of year	$	–		$	386		$	386
Business and government
Balance at beginning of year	$	249		$	460		$	709
Provision for (reversal of) credit losses		61			11			72
Write-offs		(107	)		(24	)		(131	)
Recoveries		15			5			20
Interest income on impaired loans		(18	)		–			(18	)
Foreign exchange and other		(17	)		18			1
Balance at end of year	$	183		$	470		$	653
Total allowance for credit losses	$	192		$	1,545		$	1,737
Comprises:
Loans	$	192		$	1,426		$	1,618
Undrawn credit facilities and other off–balance sheet exposures ⁽¹⁾		–			119			119

(1)	Included in other liabilities on our consolidated balance sheet.

Summary of Base Case Forecasts for Select Forward Looking Information Variables Used to Estimate our Expected Credit Losses

The following table provides the base case, upside case and downside case scenario forecasts for select forward-looking information variables used to estimate our October 31, 2018 ECL. The base case amounts shown represent the average value of the forecasts over the respective projection horizons. The upside case and downside case amounts shown represent the average value of the forecasts over the entire projection horizon.


	Base case						Upside case			Downside case
$ millions, as at October 31, 2018	Average value over the next 12 months			Average value over the remaining forecast period			Average value over the forecast period			Average value over the forecast period
Canadian GDP year-over-year growth ⁽¹⁾		1.9	%		1.4	%		2.3	%		1.2	%
Canadian unemployment rate ⁽¹⁾		5.8	%		6.0	%		5.3	%		6.4	%
Canadian Housing Price Index growth ⁽¹⁾		2.2	%		2.3	%		6.4	%		(1.2	)%
S&P 500 Index growth rate		4.6	%		(1.4	)%		11.3	%		(10.8	)%
West Texas Intermediate Oil Price ($US)	$	67		$	65		$	78			$ 52

(1)

Federal level forward-looking forecasts are presented in the table above, which represent the aggregation of the provincial level forecasts used to estimate our ECL. Housing Price Index growth rates are also forecasted at the municipal level in some cases. As a result, the forecasts for individual provinces or municipalities reflected in our ECLs will differ from the federal forecasts presented above.

Summary of Carrying Amount of Loans Based on Internal Risk Rating Grades

The following tables provide the gross carrying amount of loans, and the contractual amounts of undrawn credit facilities and other off–balance sheet exposures based on the application of our 12-month point in time PDs under IFRS 9 to our risk management PD bands for retail exposures, and based on our internal risk ratings for business and government exposures. Refer to “Credit risk” section of the MD&A for details on the CIBC risk categories.

Loans⁽¹⁾

$ millions, as at October 31

2018

Stage 1

Stage 2

Stage 3 ^(2)(3)(4)

Total

Residential mortgages

– Exceptionally low

141,556

–

141,556

– Very low

40,225

–

40,225

– Low

15,321

798

–

16,119

– Medium

859

4,905

–

5,764

– High

–

996

–

996

– Default

–

510

– Not rated

2,163

249

167

2,579

Gross residential mortgages⁽⁵⁾⁽⁶⁾

200,124

6,948

677

207,749

ECL allowance

143

214

Net residential mortgages

200,097

6,904

534

207,535

Personal

– Exceptionally low

23,808

–

23,808

– Very low

3,813

1,374

–

5,187

– Low

5,954

702

–

6,656

– Medium

4,428

1,151

–

5,579

– High

245

691

–

936

– Default

–

142

– Not rated

677

750

Gross personal ⁽⁶⁾

38,925

3,951

182

43,058

ECL allowance

176

196

109

481

Net personal

38,749

3,755

42,577

Credit card

– Exceptionally low

3,405

–

3,405

– Very low

1,747

–

1,797

– Low

3,809

710

–

4,519

– Medium

1,011

1,241

–

2,252

– High

528

–

538

– Default

–

– Not rated

162

–

162

Gross credit card

10,144

2,529

–

12,673

ECL allowance

330

–

418

Net credit card

10,056

2,199

–

12,255

Business and government

– Investment grade

42,532

221

–

42,753

– Non-investment grade

68,798

3,818

–

72,616

– Watchlist

145

1,120

–

1,265

– Default

–

504

– Not rated

2,397

168

117

2,682

Gross business and government⁽⁵⁾⁽⁷⁾

113,872

5,327

621

119,820

ECL allowance

159

137

230

526

Net business and government

113,713

5,190

391

119,294

Total net amount of loans

362,615

18,048

998

381,661

(1)	Other financial assets classified at amortized cost were excluded from the table above as their ECL allowances were immaterial as at October 31, 2018. In addition, the table excludes debt securities measured at FVOCI, for which ECL allowances of $23 million were recognized in AOCI.

(2)	Includes purchased credit–impaired loans from the acquisition of The PrivateBank.

(3)	Excludes foreclosed assets of $14 million which were included in Other assets on our consolidated balance sheet.

(4)	As at October 31, 2018, 89% of stage 3 impaired loans were either fully or partially collateralized.

(5)	Includes $12 million of residential mortgages and $16,424 million of business and government loans that are measured at FVTPL.

(6)

The internal risk rating grades presented for residential mortgages and certain personal loans do not take into account loan guarantees or insurance issued by the Canadian government (federal or provincial), Canadian government agencies, or private insurers, as the significant increase in credit risk of these loans is based on relative changes in the loans’ lifetime PD without considering collateral or other credit enhancements.

(7)	Includes customers’ liability under acceptances of $10,265 million.

Undrawn credit facilities and other off-balance sheet exposures

$ millions, as at October 31

2018

Stage 1

Stage 2

Stage 3

Total

Retail

– Exceptionally low

100,772

–

100,772

– Very low

10,217

1,014

–

11,231

– Low

7,873

1,612

–

9,485

– Medium

1,729

1,188

–

2,917

– High

234

417

–

651

– Default

–

– Not rated

348

–

381

Gross retail

121,173

4,264

125,450

ECL allowance

–

Net retail

121,145

4,221

125,379

Business and government

– Investment grade

78,672

390

–

79,062

– Non-investment grade

41,727

1,198

–

42,925

– Watchlist

402

–

477

– Default

–

– Not rated

735

–

786

Gross business and government

121,209

2,041

123,257

ECL allowance

–

Net business and government

121,188

2,031

123,226

Total net undrawn credit facilities and other off-balance sheet exposures

242,333

6,252

248,605

Summary of Credit Quality of Business and Government Loans and Acceptances and Retail Loans by Carrying Value

Net business and government loans and acceptances


$ millions, for the year ended October 31									2017
Grade	CIBC rating		Corporate		Sovereign		Banks		Total
Investment grade		00 – 47	$	37,800	$	1,943	$	719	$	40,462
Non-investment grade		51 – 67		38,946		472		188		39,606
Watch list		70 – 80		745		–		–		745
Default		90		257		–		–		257
Total AIRB exposure			$	77,748	$	2,415	$	907	$	81,070
Strong			$	765	$	–	$	–	$	765
Good				126		–		–		126
Satisfactory				9		–		–		9
Weak				–		–		–		–
Default				4		–		–		4
Total slotted exposure			$	904	$	–	$	–	$	904
Standardized exposure			$	23,761	$	213	$	451	$	24,425
			$	102,413	$	2,628	$	1,358	$	106,399
Less: collective allowance on performing loans									$	343
Net business and government loans and acceptances⁽¹⁾									$	106,056

(1)	Includes customers’ liability under acceptances of $8,824 million.

Net retail loans


$ millions, for the year ended October 31									2017
Risk level	PD bands		Residential mortgages		Personal		Credit cards		Total
Exceptionally low		0.01% – 0.20%	$	158,372	$	22,384	$	3,257	$	184,013
Very low		0.21% – 0.50%		22,512		4,107		1,767		28,386
Low		0.51% – 2.00%		19,223		6,307		4,031		29,561
Medium		2.01% – 10.00%		3,076		6,222		2,482		11,780
High		10.01% – 99.99%		340		895		686		1,921
Default		100%		176		8		–		184
Total AIRB exposure			$	203,699	$	39,923	$	12,223	$	255,845
Strong			$	104	$	–	$	–	$	104
Good				4		–		–		4
Satisfactory				12		–		–		12
Weak				–		–		–		–
Default				1		–		–		1
Total slotted exposure			$	121	$	–	$	–	$	121
Standardized exposure			$	3,306	$	873	$	155	$	4,334
			$	207,126	$	40,796	$	12,378	$	260,300
Less: collective allowance on performing loans			$	58	$	354	$	386	$	798
Net retail loans			$	207,068	$	40,442	$	11,992	$	259,502

Summary of Impaired Loans

Impaired loans


	In accordance with IFRS 9						In accordance with IAS 39
$ millions, as at October 31					2018								2017
	Gross impaired		Stage 3 allowance		Net impaired		Gross impaired		Individual allowance		Collective allowance ⁽¹⁾		Net impaired
Residential mortgages	$	677	$	143	$	534	$	513	$	2	$	143	$	368
Personal		182		109		73		171		7		134		30
Business and government		621		230		391		626		183		8		435
Total impaired loans ⁽²⁾⁽³⁾	$	1,480	$	482	$	998	$	1,310	$	192	$	285	$	833

(1)	Includes collective allowance relating to personal, scored small business and mortgage impaired loans that are greater than 90 days delinquent. In addition, we have a collective allowance of $1,260 million on balances and commitments which are not impaired.

(2)	Average balance of gross impaired loans was $1,333 million (2017: $1,376 million).

(3)	Foreclosed assets of $14 million (2017: $21 million) were included in Other assets on the consolidated balance sheet.

Summary of Purchased Credit Impaired Loans

The following table provides details of our purchased credit-impaired loans resulting from the acquisition of The PrivateBank:


$ millions, as at October 31	2018			2017
Unpaid principal balance ⁽¹⁾	$	20		$	81
Credit related fair value adjustments		(3	)		(15	)
Time value of money		(1	)		(3	)
Carrying value		16			63
Stage 3 allowance (2017: Individually assessed allowance)		(2	)		(2	)
Carrying value net of related allowance	$	14		$	61

(1)	Represents principal amount owed net of write-offs since the acquisition of the loan.

Schedule of Loans Past Due But Not Impaired

The comprises loans where repayment of principal or payment of interest is contractually in arrears. The following table provides an aging analysis of the contractually past due loans:

$ millions, as at October 31

Less than
31 days

31 to

90 days

Over

90 days

2018 ⁽¹⁾

Total

2017

Total

Residential mortgages

2,505

849

–

3,354

3,546

Personal

751

186

–

937

915

Credit card

547

172

103

822

853

Business and government

525

158

–

683

811

4,328

1,365

103

5,796

6,125

(1)

Effective November 1, 2017, all loans that are contractually 90 days in arrears are automatically classified as impaired and as stage 3 under IFRS 9, except for credit card loans which are classified as impaired and are fully written off when payments are contractually 180 days in arrears or at the earlier of the notice of bankruptcy, settlement proposal, or enlistment of credit counselling services. The determination of impairment was generally the same under IAS 39, except (i) residential mortgages guaranteed or insured by a Canadian government (federal or provincial) or a Canadian government agency were not classified as impaired until payments were contractually 365 days in arrears, and (ii) residential mortgages guaranteed or insured by a private insurer, or loans that were fully secured and in the process of collection were not classified as impaired until payments were contractually 180 days in arrears.

Schedule of Net Interest Income After Provision for Credit Losses

Net interest income after provision for credit losses


$ millions, for the year ended October 31	2018		2017		2016
Interest income	$	17,505	$	13,593	$	12,092
Interest expense		7,440		4,616		3,726
Net interest income		10,065		8,977		8,366
Provision for credit losses		870		829		1,051
Net interest income after provision for credit losses	$	9,195	$	8,148	$	7,315